Exhibit 10.4

 

 

SALE-PURCHASE AGREEMENT

between

PAVILION LLC,

a Maryland limited liability company,

as “Seller”,

and

ANGELO GORDON REAL ESTATE INC.,

a Delaware corporation,

as “Purchaser”.

Premises:

Real Property and Improvements thereon

commonly known as The Monterey;

located at Rockville Pike and Montrose Road,

Rockville, Maryland.

 

 

 

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TABLE OF CONTENTS

 

          PAGES 1.    Sale-Purchase.    1 2.    Purchase Price.    2 3.   
Escrow.    3 4.    Permitted Exceptions; Violations of Law.    5 5.    Closing
Date.    6 6.    Apportionments    6 7.    Title Insurance and Survey.    8 8.
   Closing Deliveries.    9 9.    Representations and Warranties.    12 10.   
Seller’s and Purchaser’s Covenants.    15 11.    Broker.    18 12.   
Condemnation and Destruction.    18 13.    Conditions Precedent.    19 14.   
Termination of Agreement; Default.    21 15.    Indemnification by AG
Indemnitor.    22 16.    Reserved.    23 17.    Expenses.    23 18.    Reserved.
   23 19.    Access To Property.    23 20.    Notices.    24 21.    Entire
Agreement.    25 22.    Amendments.    25 23.    Waiver.    25 24.    Successors
and Assigns.    25 25.    Section Headings.    25 26.    Governing Law.    25
27.    Submission To Jurisdiction.    25 28.    Waiver Of Jury Trial.    26 29.
   Enforceability.    26 30.    Attorneys’ Fees.    26 31.    Assignment.    26
32.    Counterparts.    26 33.    Further Assurances.    27 34.    Certain
Definitions.    27 35.    Reserved.    27 36.    Publicity and Confidentiality.
   27 37.    Calculation of Time Periods; Time of the Essence.    27 38.   
Acquisition and Assumption of the Existing Loan.    27 39.    Reserved.    27
40.    Seller Indemnity.    27 41.    Montgomery County’s Rights.    30 42.   
Arbitration.    31 43.    Seller Estoppel Certificate.    32 44.    Consent to
Relief from Automatic Stay.    32

 

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EXHIBITS

 

Exhibit A    Legal Description Exhibit B    Schedule of Personal Property
Exhibit C    Form of Seller Estoppel Certificate and Agreement Exhibit D    Form
of Assumption and Release Agreement Exhibit E    Rent Roll Exhibit F    Form of
Deed Exhibit G    Form of Bill of Sale Exhibit H    Form Assignment and
Assumption of Leases Exhibit I    Form of Tenant Notification Letter Exhibit J
   Form Assignment and Assumption of Contracts Exhibit K    Form of Assigned
Contract Notification Letters Exhibit L    Form of FIRPTA Certification Exhibit
M    Reserved Exhibit N    Form of Assignment of Rights Under Public Offering
Statement for The Monterey Condominium Exhibit O    Form of Owner’s Affidavit
Exhibit P    Schedule of Environmental Reports Exhibit Q    The Existing Loan
Purchase Agreement Exhibit R    2005 Certificate of Compliance Exhibit S   
Approved Trade Agreements Exhibit T    Outstanding Trade Payables Exhibit U   
Assignment and Assumption of Intangible Property Exhibit V    List of Existing
Loan Documents Exhibit W    Schedule of Litigation

 

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SALE-PURCHASE AGREEMENT

THIS SALE-PURCHASE AGREEMENT (this “Agreement”), made as of the 14th day of
January, 2008 (the “Effective Date”), between PAVILION LLC, a Maryland limited
liability company, having an office at c/o CBRE Realty Finance TRS, LLC, 185
Asylum Street, City Place, 31st Floor, Hartford, Connecticut 06103 (“Seller”),
and ANGELO GORDON REAL ESTATE INC., a Delaware corporation, having an office at
c/o Angelo, Gordon & Co., L.P., 245 Park Avenue, 26th Floor, New York, New York
10167 (“Purchaser”).

W I T N E S S E T H:

WHEREAS, Seller is the owner of the Property (as hereinafter defined) and
desires to sell the Property to Purchaser;

WHEREAS, Purchaser desires to purchase the Property from Seller on the terms and
conditions hereinafter set forth; and

WHEREAS, concurrently with the consummation of the transactions contemplated
herein, an affiliate of Purchaser (such affiliate, the “Existing Loan
Purchaser”) intends to purchase the lender’s interest in the Existing Loan (as
hereinafter defined) pursuant to a separate agreement being entered into
concurrently herewith by the Existing Loan Purchaser and the Existing Lender (as
hereinafter defined) (as such agreement may hereafter be amended or otherwise
modified from time to time, the “Existing Loan Purchase Agreement”). A copy of
the Existing Loan Purchase Agreement is attached hereto as Exhibit Q.

NOW, THEREFORE, in consideration of the foregoing recitals, One Hundred and
00/100 Dollars ($100.00) (the “Independent Contract Consideration”) and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser hereby agree as follows:

1. Sale-Purchase.

Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase
from Seller, upon the terms and conditions herein set forth, the following
(collectively, the “Property”):

(a) all that certain plot, piece and parcel of land located in the City of
Rockville, County of Montgomery and the State of Maryland, (the “Land”), which
Land contains approximately 3.2701 acres of land and is commonly known as “The
Monterey” located at Rockville Pike and Montrose Road, as such land is further
described in Exhibit A attached hereto and made a part hereof, including,
without limitation, (i) all easements, rights of way, privileges, appurtenances
and other rights, if any, pertaining thereto, (ii) all right, title and interest
of Seller, if any, in and to any land lying in the bed of any street, road or
avenue opened or proposed, public or private, in front of or adjoining the Land,
to the center line thereof, and (iii) all right, title and interest of Seller in
and to any award made or to be made in lieu thereof and in and to any unpaid
award for damage to the Land by reason of change of grade of any street, and the
buildings and improvements located thereon and Seller shall execute and deliver
to Purchaser at the Closing (as hereinafter defined) all proper instruments for
the conveyance of such title and the assignment and collection of any such
award;

(b) all buildings and improvements located on the Land, the foregoing to
include, without limitation, the building commonly known as “The Monterey” and
known by the street address of 5901 Montrose Road, Rockville, Maryland,
containing 432 rental apartment units (collectively, the “Improvements”;
together with the Land, the “Real Estate”);

 

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(c) all of Seller’s right, title and interest in and to any and all tangible
personal property, including, without limitation, all furniture, fixtures,
fittings, apparatus, appliances, vehicles, equipment and machinery and other
articles of personal property located on, attached to, appurtenant to or used or
usable in connection with any part of the Real Estate, including, without
limitation, the personal property listed in the inventory attached hereto as
Exhibit B (collectively, the “Personal Property”);

(d) to the extent assignable, all of Seller’s right, title and interest in and
to any and all intangible property relating to the Real Estate and the Personal
Property, including, without limitation, all warranties and guaranties
pertaining to the Real Estate, or any Personal Property or any fixture attached
to the Real Estate, and all tradenames (including, without limitation, the name
“The Monterey”), and trademarks, service marks, copyrights, and goodwill
relating to the ownership and operation of the Real Estate (collectively, the
“Intangible Property”);

(e) subject to the terms hereof, all of (i) Seller’s right, title and interest
in and to the contracts and agreements pertaining to the Real Estate, including
all leases in which Seller is the lessee of equipment used in the operation or
maintenance of the Real Estate, all concession agreements, service contracts and
construction contracts pertaining to the Real Estate, and all agreements of any
kind or nature pertaining to the Real Estate (the “Contracts”), which Purchaser
opts to assume (it being acknowledged, for the avoidance of doubt, that
Purchaser shall have the right to assume or not assume any of the Contracts at
Closing for any reason or no reason, in Purchaser’s sole discretion) and
(ii) CBF’s (as hereinafter defined) rights in and to that certain Intercreditor
Agreement, dated as of November 10, 2005, by and between Fremont (as hereinafter
defined) and CBF, but only to the extent described in Exhibit J;

(f) subject to the terms hereof, all of Seller’s right, title and interest in
and to any and all existing licenses, franchises, permits, certificates of
occupancy, authorizations and approvals used in or relating to the ownership,
occupancy or operation of any part of the Real Estate (the “Permits”); and

(g) subject to the terms hereof, all of Seller’s right, title and interest in
and to all leases, licenses and other agreements (written or oral) for the
occupancy of the retail or any other space within the Improvements (the
“Leases”), including, without limitation, the Leases described in the rent roll
(the “Rent Roll”) attached hereto as Exhibit E.

2. Purchase Price.

2.1. The purchase price for the Property (the “Purchase Price”) is One and
00/100 dollar ($1.00), plus Three Hundred and Fifty Thousand and 00/100 Dollars
($350,000.00), which is payable as reimbursement to Seller of certain expenses
it has heretofore incurred, plus assumption of the matters described in
Section 2.4, in each case, payable as follows:

(a) Three Hundred and Fifty Thousand and 00/100 Dollars ($350,000) (the
“Deposit”), at the option of Purchaser, either by (i) check payable to the order
of Linowes and Blocher LLP, as agent for Lawyers Title Insurance Corporation
(the “Title Company”), having an office at 7200 Wisconsin Avenue, Suite 800,
Bethesda, Maryland 20814-4842, as escrow agent (in such capacity, “Escrow
Agent”), or (ii) current or federal funds wire transferred to a bank account
designated by Escrow Agent not later than one (1) Business Day (as hereinafter
defined) after the execution and acceptance of this Agreement by Seller and
Purchaser; and

(b) The remainder, if any, of the Purchase Price, as adjusted for prorations and
apportionments as herein provided (such funds, the “Closing Funds”), upon the
delivery of the Deed (as hereinafter defined) in accordance with the terms
hereof, at the option of Purchaser, either by (i) a

 

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certified or official bank check payable to the order of Seller, (ii) current or
federal funds transferred to a bank account of Seller (to be designated by
Seller in writing not less than three (3) Business Days prior to the Closing
Date (as hereinafter defined)), or (iii) by wire transfer of funds to Escrow
Agent at the Closing (as hereinafter defined) with instructions to Escrow Agent
to release the Closing Funds so transferred to or as directed by Seller upon the
consummation of the Closing.

2.2. The Deposit shall be held and disbursed by Escrow Agent in accordance with
the provisions of Section 3 of this Agreement. For purposes hereof, the Deposit,
together with all interest earned thereon, shall be collectively referred to
herein as the “Downpayment”.

2.3. Notwithstanding anything to the contrary herein, the parties acknowledge
and agree that the Independent Contract Consideration (receipt of which is
hereby acknowledged by Seller) (a) is not deemed a portion of the Purchase
Price, (b) constitutes separate and independent consideration from Purchaser to
Seller for the execution of this Agreement by Seller and delivery thereof to
Purchaser, and (c) shall not be refundable by Seller to Purchaser
notwithstanding any termination of this Agreement by Purchaser or Seller.

2.4. In addition to the foregoing and as an integral part of the total
consideration given by Purchaser for the transactions contemplated by this
Agreement, at Closing, Purchaser shall assume (a) liability for the trade
payables listed on Exhibit T attached hereto and made a part hereof
(collectively, the “Outstanding Trade Payables”), but only to the extent that
the amount of any such individual Outstanding Trade Payable does not exceed the
line item amount therefor set forth on Exhibit T (each, a “Maximum Line Item
Amount”) and only to the extent that the aggregate amount of such Outstanding
Trade Payables does not exceed Four Million Nine Hundred Ninety Three Thousand
Eight Hundred Ninety and 00/100 dollars ($4,993,890) (the “Maximum Trade
Payables Exposure”) (it being agreed, for the avoidance of doubt, that (x) under
no circumstances shall Purchaser be responsible for payment of the Outstanding
Trade Payables beyond the Maximum Line Item Amount, for any individual
Outstanding Trade Payable, or the Maximum Trade Payables Exposure, with respect
to the aggregate Outstanding Trade Payables, (y) Seller is retaining liability
for the Outstanding Trade Payables, to the extent that the amount thereof
exceeds (I) the Maximum Line Item Amount, for any individual Outstanding Trade
Payable, or (II) the Maximum Trade Payables Exposure, with respect to all
Outstanding Trade Payables) and (z) Purchaser’s assumption of such Outstanding
Trade Payables shall include assumption by Purchaser of the benefit (if any) of
any reduced costs or credits for purchased materials which are located at the
Property, or are otherwise in the possession of Seller or any trade creditor),
and (b) both Seller’s and Existing Loan Borrower’s (as hereinafter defined)
rights and obligations as IDOT guarantor and borrower, as applicable, under the
Existing Loan (the outstanding principal balance of which is $103,571,973.51),
to the extent arising from and after the Closing Date, in accordance with an
Assumption and Release Agreement (the “Assumption and Release Agreement”) to be
executed and delivered by Purchaser and the Existing Loan Purchaser, in the form
of Exhibit D attached hereto and made a part hereof.

2.5. The Seller acknowledges that the Purchase Price stated herein represents at
least reasonably equivalent value and fair consideration for the Property.

3. Escrow.

The Downpayment shall be held by Escrow Agent, in trust, on the terms
hereinafter set forth:

3.1. Escrow Agent shall deposit the Deposit in an interest bearing day of
deposit-day of withdrawal bank account, with a Federally insured financial
institution.

 

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3.2. Escrow Agent shall not commingle the Downpayment with any other funds of
Escrow Agent or others and shall promptly advise Purchaser and Seller of the
number of any bank account in which the Deposit has been deposited.

3.3. If the Closing takes place under this Agreement, then Escrow Agent shall
disburse the Downpayment on the Closing Date to Seller and Purchaser shall
receive a credit against the Purchase Price in an amount equal to the
Downpayment.

3.4. If this Agreement is terminated in accordance with the terms hereof or if
the Closing does not take place under this Agreement by reason of the failure of
Purchaser or Seller to comply with its obligations hereunder, then Escrow Agent
shall pay the Downpayment as required by the terms of this Agreement, provided,
however, that notwithstanding the foregoing, Escrow Agent shall not pay over the
Downpayment to any party hereunder unless and until the following procedure is
complied with: The party requesting disbursement of the Downpayment (the
“Requesting Party”) shall deliver notice to Escrow Agent and all other parties
hereto requesting such disbursement. Within five (5) days after receipt of such
notice of request, Escrow Agent shall deliver notice to all other parties hereto
stating that the Requesting Party has requested such disbursement (and including
a copy of the Requesting Party’s notice). Within ten (10) days after receipt of
Escrow Agent’s notice, the non-requesting party shall either: (a) agree to
permit such disbursement by Escrow Agent or (b) inform Escrow Agent that the
non-requesting party does not agree to permit such disbursement. If the
non-requesting party acts under clause (a), then Escrow Agent shall make the
disbursement as requested by the Requesting Party. If the non-requesting party
acts under clause (b), then Escrow Agent shall not make any disbursement except
as provided in Section 3.6 below. If the non-requesting party fails to respond
during the foregoing ten (10) day period, same shall be deemed to be the
response of the non-requesting party under clause (a) on the last day of such
ten (10) day period.

3.5. It is agreed that the duties of Escrow Agent are only as herein
specifically provided, and, subject to the provisions of Section 3.6 hereof, are
purely ministerial in nature, and that Escrow Agent shall incur no liability
whatever except for willful misconduct or gross negligence, as long as Escrow
Agent has acted in good faith. Seller and Purchaser each release Escrow Agent
from any act done or omitted to be done by Escrow Agent in good faith in the
performance of its duties hereunder.

3.6. Escrow Agent is acting as a stakeholder only with respect to the
Downpayment. If there is any dispute as to whether Escrow Agent is obligated to
deliver the Downpayment as to whom the Downpayment is to be delivered, Escrow
Agent shall not make any delivery, but in such event Escrow Agent shall hold
same until receipt by Escrow Agent of an authorization in writing, signed by all
the parties having an interest in such dispute, directing the disposition of
same, or, in the absence of such authorization, Escrow Agent shall hold the
Downpayment until the final determination of the rights of the parties in an
appropriate proceeding. If such written authorization is not given, or
proceedings for such determination are not begun within thirty (30) days after
the Closing Date and diligently continued, Escrow Agent may bring an appropriate
action or proceeding for leave to deposit the Downpayment in court pending such
determination. Escrow Agent shall be reimbursed for all costs and expenses of
such action or proceeding including, without limitation, reasonable attorneys’
fees and disbursements, by the party determined not to be entitled to the
Downpayment. Upon making delivery of the Downpayment in the manner herein
provided, Escrow Agent shall have no further liability hereunder.

3.7. Escrow Agent has executed this Agreement in order to confirm that Escrow
Agent has received the Deposit, and that Escrow Agent will hold the Downpayment
in escrow, pursuant to the provisions hereof.

 

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3.8. Purchaser shall pay any and all costs and expenses incurred by Escrow Agent
as a result of this transaction.

4. Permitted Exceptions; Violations of Law.

4.1. At Closing, the Property shall be sold, and good and marketable title
thereto is to be conveyed, subject only to (a) the Leases with the tenants,
subtenants, licenses and other parties having rights of occupancy in any portion
of the Property (collectively, the “Tenants”) reflected on the Rent Roll,
(b) the Permitted Title Exceptions (as hereinafter defined), and (c) the
Permitted Survey Conditions (as hereinafter defined) (such Leases, the Permitted
Title Exceptions, and the Permitted Survey Conditions being hereinafter
collectively referred to as the “Permitted Exceptions”).

4.2. Title to the Property shall be good and marketable and shall be insurable
by the Title Company, at its regular rates, without exceptions or reservations
of any type or kind, except the Permitted Exceptions.

4.3. Purchaser shall accept title to the Premises subject to all violations of
law or municipal ordinances, orders or requirements issued by the departments of
buildings, fire, labor, health or other federal, state, county, municipal or
other departments and governmental agencies having jurisdiction against or
affecting the Premises (collectively, the “Governmental Authorities”), and any
outstanding work orders, noticed and outstanding on the Effective Date (each, an
“Existing Violation”). Any violation that is noticed (i.e., issued by the
applicable Governmental Authority) after the Effective Date and which will cost,
as determined by Purchaser, in excess of $250,000 to cure is referred to herein
as a “New Violation”. The Existing Violations and the New Violations are
referred to herein, collectively, as the “Violations”. Purchaser and Seller
agree that the following shall apply in respect of any Violation:

(a) In respect of Existing Violations and other violations which do not meet the
threshold of $250,000 for cure as set forth in this Section 4.3 above, Seller
shall have no restoration, repair or other obligation or liability of any kind
or nature with respect thereto.

(b) In respect of New Violations:

(i) Purchaser shall deliver notice to Seller (“Purchaser’s New Violations
Notice”) on or before the earlier of one (1) day prior to the Closing Date or
five (5) days after it becomes aware of the existence of any New Violation (it
being acknowledged and agreed by Purchaser that Purchaser’s failure to deliver
Purchaser’s New Violations Notice within such time period shall be deemed to be
Purchaser’s waiver of any rights under this Section 4.3(b)).

(ii) Within five (5) Business Days after Seller receives Purchaser’s New
Violations Notice (and if the expiration of such five (5) Business Day period is
after the Closing Date, then the Closing shall be adjourned to the date three
(3) Business Days after the expiration of such five (5) Business Day period),
Seller shall deliver notice to Purchaser (“Seller’s New Violations Response
Notice”) stating either (x) that Seller agrees to cure such New Violation prior
to the Closing or (y) that Seller does not elect to cure such New Violation.
Seller’s failure to deliver Seller’s New Violations Response Notice within such
five (5) Business Day period shall be deemed to be Seller’s election under
clause (y) at 5:00 p.m. (New York time) on the last day of such five
(5) Business Day period.

(iii) If, in Seller’s New Violations Response Notice, Seller makes the election
under clause (x) of Section 4.3(b)(ii) above, then Seller shall cause the
applicable New Violation to be reasonably cured prior to the Closing. If Seller
agrees to cure a New Violation as aforesaid and thereafter

 

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fails so to do within the above time period, then the Closing shall take place
and Seller shall grant Purchaser a credit against the Purchase Price in the
amount required to complete such cure (it being agreed that disputes regarding
the amount of such credit shall be resolved in accordance with Section 42). If,
in Seller’s New Violations Response Notice, Seller makes the election under
clause (y) of Section 4.3(b)(ii) above, then by the earlier of one (1) day prior
to the Closing Date, or five (5) days after Purchaser receives Seller’s New
Violations Response Notice making such election, Purchaser shall deliver notice
to Seller (“Purchaser’s New Violations Response Notice”) stating either (x) that
Purchaser elects to accept title to the Premises subject to the applicable New
Violation, in which event the Closing hereunder shall occur without any further
obligation of Seller under this Section 4.3, or (y) that Purchaser elects to
terminate this Agreement, in which event this Agreement shall terminate and no
party hereto shall have any further rights or obligations under this Agreement,
except for the Surviving Obligations, which shall survive such termination (and
if Purchaser fails to deliver any such notice on or before the expiration of
such five (5) days period, Purchaser shall be deemed to have elected to proceed
under clause (x) above).

5. Closing Date.

The closing for the transactions under this Agreement (the “Closing”) shall take
place in escrow at 11:00 A.M. (New York time) at the offices of the Title
Company, on the date that is 10 days following the later to occur of the date
upon which (a) each of the Financing Conditions (as hereinafter defined) are
satisfied and (b) such time periods following the Effective Date have elapsed as
are necessary in order to for Purchaser and Seller to have complied with (x) any
procedures related to any applicable right of first refusal in favor of
Montgomery County, Maryland, the Housing Opportunities Commission of Montgomery
County or any tenants’ association now or hereafter formed at the Property and
(y) without duplication of the matters described in clause (x), the terms of
Section 41. The date upon which the Closing is to occur is referred to herein as
the “Closing Date”. Notwithstanding the foregoing, in the event that the Closing
Date does not occur within 140 days after the Effective Date (such date, the
“Outside Closing Date”), then either Purchaser or Seller may terminate this
Agreement, by written notice to the other, and in such event, the Downpayment
shall be returned to Purchaser, and upon such return, no party shall have any
further obligation under this Agreement, except for the Surviving Obligations
(as hereinafter defined), which shall survive such termination. The respective
attorneys for the parties hereto are hereby authorized to agree (on behalf of
their respective clients) in writing to adjournments and relocations of the
Closing. Upon satisfaction of the conditions described in clauses (a) and
(b) above, Purchaser shall deliver notice thereof to Seller. The parties
acknowledge, for the avoidance of doubt, that notwithstanding the foregoing, it
is the intent of the parties that the transactions contemplated by the Existing
Loan Purchase Agreement close simultaneously with the transactions contemplated
by this Agreement and accordingly, so long as the Closing is not scheduled after
the Outside Closing Date, agree to schedule the date and location of the Closing
so as to coincide with the closing under the Existing Loan Purchase Agreement.

6. Apportionments.

6.1. The following are to be apportioned as of the Closing Date:

(a) All real and personal property taxes and other taxes and charges, including,
without limitation, sewer taxes and rents, Washington Suburban Sanitary
Commission front foot benefit charges, annual assessments shown on the real
property tax bill for the Property, and common areas charges, imposed on the
owner of the Property and not paid by others. Apportionments of real property
taxes, water rates and charges and sewer taxes and rents shall be made on the
basis of the fiscal year for which assessed. If the Closing Date shall occur
before the real property tax rate is fixed, the apportionment of taxes shall be
made on the basis of the tax rate for the preceding year applied to the

 

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latest assessed valuation. After the real property taxes, water rates and
charges are finally fixed, Seller and Purchaser shall make a recalculation of
the apportionment of same, and Seller or Purchaser, as the case may be, shall
promptly make an appropriate payment to the other based on such recalculation.

(b) Utility charges payable by the owner of the Property.

(c) All rents and any other similar payment, with respect to any and all leases,
subleases, licenses, and other occupancy agreements, if, as and when collected.

(d) Annual license, permit and inspection fees provided that same are
transferable to Purchaser.

(e) Charges under the Assigned Contracts (as hereinafter defined).

(f) Deposits, if any, on account with utility companies servicing the Property
(and Seller and Purchaser each agrees to cooperate to effectuate the transfer of
any such deposits), provided that at Purchaser’s option Seller will obtain a
refund of any such utility deposits in effect and Purchaser shall provide its
own utility deposits directly to the applicable utility companies. The parties
acknowledge that as of the Effective Date, Seller has no deposits on account
with any such utility companies.

(g) Such other items as are customarily prorated in transactions similar to the
transaction contemplated by this Agreement.

6.2. Documentation Regarding Rents and Expenses. Periodically upon Purchaser’s
request following the Effective Date and on the Closing Date, Seller shall
furnish Purchaser with a comprehensive and complete statement of prepaid rents
and uncollected rents on the form provided by Seller’s property manager.

6.3. Assessments. If on the Closing Date all or any portion of the Property
shall be or shall have been affected by assessments, other than those to be
apportioned pursuant to Section 6.1(a), which are, or which may become, payable
in annual installments, of which the first installment is then a charge or lien
or has been paid or if any of the improvements to be paid for thereby are in
place or commenced, then for purposes of this Agreement all of the unpaid
installments of any such assessments, including those which are to become due
and payable after the Closing Date, shall be deemed to be due and payable and to
be liens upon the Property affected thereby and Seller shall pay and discharge
such assessments on the Closing Date.

6.4. Rents Paid After Closing. To the extent that Purchaser receives any late
rent or other similar payments under any Lease or other occupancy arrangements
after the Closing Date, Purchaser shall render an accounting to Seller with
respect to such late payments, and such rents or payments shall be applied in
the following order of priority, to the extent such calendar months have not
been paid: (i) first to any calendar month or months following the calendar
month in which the Closing occurred until the Tenant under such Lease is current
with respect to all rents payable after the Closing Date, (ii) then to the
calendar month in which the Closing occurred, and (iii) then to calendar months
prior to the month in which the Closing occurred.

6.5. Books and Records Available. To the extent within Seller’s reasonable
possession or control, Seller agrees to make available for Purchaser’s
examination, promptly after the Effective Date, and thereafter from time to
time, all records, statements and accounts bearing on or relating to (a) rents
and revenues and the collection thereof, and (b) the operation of the Property
and expenditures made in connection therewith.

 

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6.6. Security Deposits. At Closing, Seller will transfer to Purchaser all
accounts in which are held the security deposits under the Leases or other
occupancy arrangements.

6.7. Operating Expenses and Trade Accounts. Subject to Purchaser’s obligations
set forth in Section 2.4, Seller shall be responsible for all operating expenses
and trade accounts of the Property (including charges and fees under the
Contracts) up to and including 11:59 P.M. on the night preceding the Closing
Date (the “Cut-Off Time”). Seller agrees to indemnify and hold harmless
Purchaser from and against any claim, loss, damage or liability (including,
without limitation, reasonable attorneys’ fees and costs of enforcement of the
foregoing indemnification obligation) arising out of Seller’s failure to pay
such amounts.

6.8. Reconciliation of Apportionments. In the event the Closing occurs, either
party shall have the right, during the 30-day period following the Closing to
require that errors related to computations and calculations under this
Section 6 be corrected and the parties agree that any errors not raised prior to
the expiration of such 30 day period shall be deemed to be waived.

6.9. The provisions of this Section 6 shall survive the Closing.

7. Title Insurance and Survey.

7.1. Purchaser acknowledges that prior to the Effective Date, Purchaser has
obtained (x) a title commitment (the “Title Commitment”) for the Property from
the Title Company bearing an effective date of November 30, 2007, last updated
January 10, 2008, and commitment number CTIC-07158 and (y) a pro forma title
insurance policy having case number 07158 (the “Pro Forma”). The exceptions to
title shown in the Pro Forma shall be hereinafter referred to as “Permitted
Title Exceptions”. Without limiting the terms of Sections 8.1, 10.1 and 13.1,
Seller shall take all commercially reasonable actions necessary (other than the
payment of Purchaser’s title insurance premium) to cause the Title Company to
issue to Purchaser at Closing a title insurance policy in respect of the
Property, in an amount equal to $108,915,864.51.

7.2. Purchaser acknowledges that prior to the Effective Date, Purchaser has
obtained an ALTA survey (the “Survey”), prepared by Greenhorne & O’Mara, dated
October 21, 2005, and last revised January 11, 2008. The matters shown on the
Survey shall be hereinafter referred to as “Permitted Survey Conditions”.

7.3. If any subsequent update of the Title Commitment, the Pro Forma or the
Survey prior to the Closing Date discloses new exceptions, matters or conditions
which are not acceptable to Purchaser in Purchaser’s sole discretion, then
Purchaser shall give Seller notice thereof. Seller shall have the earlier of
five (5) Business Days following the receipt of any such notice or the Closing
Date in which to give Purchaser notice that Seller will either (a) cause such
new exception, matter or condition to be deleted as an exception from the Title
Commitment and Pro Forma or deleted from the Survey or otherwise cured in the
manner requested by Purchaser or (b) refuse to cause such new exception, matter
or condition to be deleted as an exception from the Title Commitment and Pro
Forma or deleted from the Survey or otherwise cured in the manner requested by
Purchaser, provided that Seller shall be required to cause such new exception,
matter or condition to be deleted as an exception from the Title Commitment and
Pro Forma or deleted from the Survey or otherwise cured in the manner requested
by Purchaser to the extent required by Section 7.4 (and in the event Seller
fails to deliver such notice within such five (5) Business Day (or earlier)
period, Seller shall be deemed to have elected under clause (a)). With respect
to

 

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any such notice, (i) if Seller gives (or is deemed to have given) notice that it
will cause any or all of the new exceptions, matters or conditions referenced in
such notice to be deleted from the Title Commitment and Pro Forma or deleted
from the Survey or otherwise cured in the manner requested by Purchaser, then
Seller shall cause the Title Company to delete all such new exceptions, matters
or conditions from the Title Commitment and Pro Forma or deleted from the Survey
or otherwise cured in the manner requested by Purchaser, and (ii) if Seller
gives notice that it will not cause any or all of the new exceptions, matters or
conditions to be deleted from the Title Commitment and Pro Forma or deleted from
the Survey or otherwise cured in the manner requested by Purchaser, then
Purchaser will thereafter have the right, as its sole remedy, to either
(x) terminate this Agreement as a result of any such new exceptions, matters or
conditions (in which event the Downpayment shall be returned to Purchaser, and
upon such return no party shall have any further obligation under this
Agreement, except for the Surviving Obligations, which shall survive such
termination) or (y) waive the right to terminate this Agreement on account of
such new exceptions, matters or conditions and proceed to Closing without
abatement of the Purchase Price (in which event, for purposes hereof, any such
waived new exceptions, matters or conditions previously objected to by Purchaser
shall become “Permitted Title Exceptions” or “Permitted Survey Conditions”, as
applicable). Notwithstanding the foregoing, in the event any such update of the
Title Commitment or Survey is obtained on or after the date five (5) Business
Days prior to the Closing Date, Purchaser shall have the right, at its option,
on or prior to the Closing Date, to extend the Closing Date to the third
(3rd) Business Day after such original Closing Date (even if such date is beyond
the Outside Closing Date). Seller acknowledges that Purchaser shall have the
right to elect under either of the foregoing clauses (x) or (y) in its sole and
absolute discretion.

7.4. Notwithstanding the foregoing, if at the Closing there shall be any liens,
encumbrances or charges affecting the Property, other than those which Purchaser
is required by the terms hereof to accept or which Purchaser chooses to accept,
Seller shall have no obligation to cure same, provided, that Seller shall be
obligated to (a) cause any mortgage, deed of trust or other encumbrance
evidencing outstanding indebtedness (other than the Existing Loan Documents (as
hereinafter defined)) to be satisfied of record (or, at Purchaser’s option and
without making of any payment by Seller, assigned to Purchaser’s lender),
(b) cause any judgments, mechanic’s, materialman’s or supplier’s liens to be
satisfied of record (to the extent that the aggregate amount of such mechanics’
liens exceeds the Maximum Trade Payables Exposure, with respect to all
Outstanding Trade Payables, or to the extent that the amount of any individual
mechanic’s lien exceeds the Maximum Line Item Amount, with respect to such
individual Outstanding Trade Payable), (c) cause to be removed of record any
lien or encumbrance placed upon the Property subsequent to the Effective Date
with Seller’s consent or as a result of Seller’s action or omission, and
(d) cause to be removed of record any lien or encumbrance placed upon the
Property subsequent to the Effective Date without Seller’s consent and not as a
result of Seller’s action or omission (other than with respect to the matters
described on Exhibit T, and only to the extent in an amount (x) less than the
Maximum Line Item Amount, with respect to any individual Outstanding Trade
Payable or (y) less than the Maximum Trade Payables Exposure, with respect to
all Outstanding Trade Payables), provided, however, the total amount required to
be expended by Seller in respect of this Section 7.4(d) shall not exceed
$50,000.

8. Closing Deliveries.

8.1. At the Closing, Seller, at its sole cost and expense, shall deliver to
Purchaser the following items and documents (which documents shall be in form
and substance reasonably satisfactory to Purchaser’s attorneys):

(a) a Special Warranty Deed in the form attached hereto as Exhibit F (the
“Deed”), duly executed by Seller and acknowledged on behalf of Seller;

 

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(b) a Bill of Sale in the form attached hereto as Exhibit G (the “Bill of Sale”)
conveying, transferring and selling to Purchaser all right, title and interest
of Seller in and to all of the Personal Property, executed by Seller;

(c) an Assignment and Assumption of Leases, in the form attached hereto as
Exhibit H (the “Assignment and Assumption of Leases”), executed by Seller;

(d) a signed notice to each Tenant advising it of the within sale and directing
it to pay rent to Purchaser or, at Purchaser’s option, to Purchaser’s designee
in the form attached hereto as Exhibit I (the “Tenant Notification Letters”),
executed by Seller;

(e) subject to the terms of Section 2.4, evidence of the termination of each
Contract which Purchaser notifies Seller it does not desire to assume (any such
Contract being referred to as a “Terminated Contract” and all other Contracts
being referred to as the “Assigned Contracts”);

(f) to the extent within Seller’s possession or control, all (i) original
licenses and permits pertaining to the Property and which may be required for
the use or occupancy thereof (the “Licenses and Permits”), (ii) required
permanent certificates of occupancy for the Improvements relating to such
Property (“Certificates of Occupancy”), to the extent existing, and
(iii) records and other documents pertaining to the ownership, operation and
maintenance of the Property (the “Property Documents”);

(g) to the extent within Seller’s possession or control, all assignable
guaranties and warranties which Seller has received in connection with any work
or services performed, or to be performed with respect to, or equipment
installed in the Property, and Seller shall cooperate with Purchaser at
Purchaser’s expense in enforcing any such guaranties and warranties not
assignable, which obligation shall survive the Closing (the “Guaranties and
Warranties”);

(h) an Assignment and Assumption of the Assigned Contracts, Licenses and
Permits, Certificates of Occupancy, Property Documents and Guaranties and
Warranties in the form attached hereto as Exhibit J (the “Assignment and
Assumption of Contracts”), executed by Seller;

(i) an Assignment and Assumption of Intangible Property, in the form attached
hereto as Exhibit U (the “Assignment and Assumption of Intangible Property”),
executed by Seller;

(j) a signed notice to each contract party (other than Seller), or service or
materials provider or supplier under the Assigned Contracts advising it of the
within sale and directing it to address all correspondence and bills to
Purchaser or, at Purchaser’s option, to Purchaser’s designee in the form
attached hereto as Exhibit K (the “Assigned Contract Notification Letters”),
executed by Seller;

(k) an executed Affidavit of Non-Foreign Status, in the form attached hereto as
Exhibit L, executed by Seller, certifying that Seller is not a “foreign person”
pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder;

(l) an executed IRS Form 1099;

(m) copies of such organizational documents and consents of Seller and its
managing member, including, without limitation, good standing certificates, as
Purchaser or the Title Company shall reasonably require;

 

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(n) to the extent within Seller’s possession or control, all keys to entrance
doors to, and equipment and utility rooms located in, the Property, which keys
shall be properly tagged for identification;

(o) any and all documents, affidavits and/or instruments required to be filed by
Seller in connection with the imposition and/or payment of any and all
applicable federal, state, county, municipal or other transfer taxes with
respect to the transactions set forth herein (collectively, “Transfer Tax
Documentation”), in proper form for submission, prepared, executed and
acknowledged by Seller;

(p) such reasonable and customary affidavits, indemnities and other deliveries
as are required by the Title Insurance Company to deliver so-called “extended
coverage”, executed by Seller (or such other persons as may be required by the
Title Company), it being agreed that the affidavit attached as Exhibit O is
deemed reasonable and customary;

(q) to the extent within Seller’s possession or control, all books, records,
property maintenance and other files (on computer disc, if available) maintained
by Seller, or by Seller’s agents, with respect to the Property;

(r) to the extent within Seller’s possession or control, any and all plans and
specifications pertaining to the Property;

(s) all deliveries required to be made pursuant to the provisions of Section 6.6
of this Agreement;

(t) a certification updating the representations and warranties given by Seller
pursuant to Section 9.1 hereof, executed by Seller;

(u) to the extent within Seller’s possession or control, the lessor’s original
executed counterparts of all Leases and Assigned Contracts, together with all
lease files maintained in connection therewith and all books, records, property
maintenance and other files (on computer disc, if available) maintained by
Seller, or by Seller’s agents, with respect to the Property, including, without
limitation, originals of all amendments and modifications of the Leases and
original counterparts of all guarantees thereunder, and copies of all
correspondence and other contents of Seller’s Lease files for all Tenants;

(v) evidence of termination of any and all leases, or other occupancy,
operational, or other arrangements in effect between Seller and any affiliate of
or party related to Seller;

(w) the Seller Estoppel Certificate (as hereinafter defined);

(x) such other documents as may be reasonably required to effectuate the
transactions contemplated by this Agreement, the transactions contemplated by
the Existing Loan Purchase Agreement (it being agreed that documents required to
be executed and delivered by Seller, Existing Loan Borrower, CBF or their
respective affiliates in accordance with the terms of the Existing Loan Purchase
Agreement (as it exists on the Effective Date) shall be deemed reasonably
required), and/or to effectuate the closing of the transaction contemplated
hereunder (including, without limitation, the documentation described in
Section 13.1); and

 

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(y) if requested by Purchaser, an assignment of Seller’s right to pursue to
conclusion the condominium conversion process triggered by filing of the Public
Offering Statement, in the form attached hereto as Exhibit N (the “Assignment of
Rights Under Public Offering Statement”).

8.2. At the Closing, Purchaser, at its sole cost and expense, shall deliver to
Seller the following, each document hereafter mentioned to be in form and
substance reasonably satisfactory to Seller’s attorneys:

(a) the balance of the Purchase Price;

(b) the Assignment and Assumption of Leases, executed by Purchaser;

(c) the Assignment and Assumption of Contracts, executed by Purchaser;

(d) the Assignment and Assumption of Intangible Property, executed by Purchaser;

(e) a certification updating the representations and warranties given by
Purchaser pursuant to Section 9.2 of this Agreement, executed by Purchaser;

(f) the Tenant Notification Letters, executed by Purchaser;

(g) the Assumed Contract Notification Letters, executed by Purchaser;

(h) the Transfer Tax Documentation, if applicable, executed by Purchaser (if
required by law);

(i) such other documents as may be reasonably required to effectuate the
transaction contemplated by the Agreement and/or to effectuate the closing of
the transaction contemplated hereunder; and

(j) the Assumption and Release Agreement, executed by Purchaser and the Existing
Loan Purchaser.

9. Representations and Warranties.

9.1. Representations and Warranties of Seller. Seller represents and warrants to
Purchaser that:

(a) Leases, Rents, Tenant Matters, etc. To Seller’s knowledge: (i) All of the
Tenants are listed on the Rent Roll, which includes a description of the space
leased to each Tenant, the Lease expiration dates, the security and other
deposits, any prepaid rents, the rental (whether fixed, minimum, escalation,
percentage or additional) for leased space, and a complete index of all Leases
and all amendments thereto. The data set forth on the Rent Roll is true and
correct. All Tenants are in possession of the premises leased by them unless
otherwise noted on the Rent Roll. Each of the Leases is valid and enforceable in
accordance with its terms, is in full force and effect, and neither the lessor
under the Leases nor any of the Tenants is in default of any of its obligations
under any of the Leases. No notice of any default of the lessor under the Leases
has been given or, to the best of Seller’s knowledge, is pending.

 

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(ii) To the extent within Seller’s possession or control, Seller has made
available a true, correct and complete copy of each Lease (including, without
limitation, any and all modifications, extensions and amendments thereto) to
Purchaser.

(iii) Except pursuant to the Existing Loan, Seller has not assigned, mortgaged,
pledged, hypothecated or otherwise encumbered any of Seller’s rights or
interests under any of the Leases.

(b) No Litigation. To Seller’s knowledge, except as set forth on Exhibit W,
there is no action or proceeding or governmental investigation pending, or
threatened in writing, against or relating to (A) the Property, (B) this
transaction or (C) Seller.

(c) Authorization of Agreement, etc.; Prior Business Name. Seller (a) is a
limited liability company duly organized, validly existing and in good standing
in the State of Maryland, and (b) is entitled to own its property and to carry
on its business in the State of Maryland. The execution and performance of this
Agreement have been duly authorized by all necessary corporate and/or limited
liability company action, and the execution and performance of this Agreement
will not violate any term of Seller’s certificate of formation, operating
agreement, or any other agreement, judicial decree, statute or regulation to
which Seller is a party or by which Seller or the Property may be bound or
affected. Seller has not been registered under, been known by, or conducted
business under any name other than the name of Seller as same appears in the
preamble to this Agreement.

(d) No Foreign Status. Seller is not a “foreign person” within the meaning of
Section 1445 of the Internal Revenue Code of 1986, as amended.

(e) No Options to Purchase. To Seller’s knowledge, Seller has not granted to any
person or entity any option or other right to purchase to the Property and no
person or entity has any option or other right to purchase the Property, other
than the ROFR Parties, in accordance with the rights described in Section 41.

(f) Consents and Approvals. Other than as set forth in Section 41, there are no
consents or approvals of any third persons, or any federal, state or local
governmental authorities, including, without limitation, any internal board of
directors or other approval process, that are required in connection with the
performance by Seller of its obligations under this Agreement, other than such
of the foregoing as have been obtained or will be obtained by the Closing Date.

(g) Environmental Reports. To Seller’s knowledge, Exhibit P attached hereto and
made a part hereof sets forth all environmental reports (the “Environmental
Reports”) obtained by or in the possession or control of Seller with respect to
the Property, and Seller has delivered a true, correct and complete copy of each
Environmental Report to Purchaser on or prior to the Effective Date.

(h) ERISA. The Property is not a “plan asset” as defined in the Employment
Retirement Income Security Act of 1974, as amended (“ERISA”) and the sale of the
Property by Seller is not a “prohibited transaction” under ERISA.

(i) Financial Obligations. Neither Seller nor Existing Loan Borrower has
(i) made a general assignment for the benefit of its creditors; (ii) admitted in
writing its inability to pay its debts as they mature; (iii) other than as
expressly set forth on Exhibit T, had an attachment, execution or other judicial
seizure of any property interest which remains in effect; or (iv) other than
with respect to its obligations under the Existing Loan, become generally unable
to meet its financial obligations as they mature.

 

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(j) Bankruptcy Matters. There is not pending any case, proceeding or other
action seeking reorganization, arrangement, adjustment, liquidation, dissolution
or recomposition of Seller or Existing Loan Borrower, or the debts of Seller or
Existing Loan Borrower, under any law relating to bankruptcy, insolvency,
reorganization or the relief of debtors, or seeking the appointment of a
receiver, trustee, custodian or other similar official for Seller or the
Property.

9.2. Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller that (a) Purchaser is a corporation duly formed, validly
existing and in good standing in the State of Delaware, entitled to own its
property and to carry on its business in the State of Delaware, (b) Purchaser
has duly authorized the execution and performance of this Agreement, and (c) the
execution and performance of this Agreement will not violate any term of
Purchaser’s certificate of incorporation or bylaws, or any other agreement,
judicial decree, statute or regulation to which Purchaser is a party or by which
Purchaser may be bound or affected.

9.3. Materiality. Seller acknowledges that each of the representations,
warranties and agreements made by it in Section 9.1 above and elsewhere in this
Agreement is material to Purchaser. Purchaser acknowledges that each of the
representations, warranties and agreements made by it in Section 9.2 above and
elsewhere in this Agreement is material to Seller.

9.4. Survival. All of the representations and warranties of Seller set forth
herein and elsewhere in this Agreement shall be true upon the execution of this
Agreement, shall be deemed to be repeated at and as of the Closing Date (it
being understood that Seller may, prior to Closing, update its representations
set forth in (i) Section 9.1(a), to reflect (a) defaults under any of the Leases
due to matters not within Seller’s control, and (b) new Leases executed in
accordance with Section 10.1(b), and (ii) Section 9.1(b), to reflect new
litigations first arising after the Effective Date, which would not adversely
affect either (x) the transactions contemplated by this Agreement,
(y) Purchaser’s title to the Property, or (z) Purchaser or any of its
affiliates, except, in each case, to the extent fully covered by insurance) and
shall survive the Closing for a period of time ending on December 31, 2008. All
of the representations and warranties of Purchaser set forth herein and
elsewhere in this Agreement shall be true upon the execution of this Agreement,
shall be deemed to be repeated at and as of the Closing Date and shall survive
the Closing for a period of time ending on December 31, 2008.

9.5. Accuracy of Representations is a Condition to Purchaser’s Obligation to
Close. Without limiting any of the rights of Purchaser elsewhere provided for in
this Agreement, it is agreed that the obligation of Purchaser to close title
under this Agreement is conditioned upon the accuracy in all material respects
of all of Seller’s warranties and representations and the due compliance by
Seller of all of its agreements set forth herein and elsewhere in this
Agreement. If, on or before the Closing Date, Purchaser determines that any of
Seller’s representations or warranties are untrue or Seller has not complied
with any of the said agreements, then, in addition to any other legal remedies
available to Purchaser, Purchaser shall have the right to either (a) exercise
its rights granted to it in Section 14.2 or (b) to proceed to consummate the
Closing hereunder and receive an abatement of the Purchase Price in an amount
equal to the diminution of value of the Property caused by such untrue
representation or warranty. For purposes of this Agreement, the terms “Seller’s
knowledge”, “Seller’s best knowledge” and other statements of similar import
shall mean (i) the actual knowledge of Mary Alice Haft, after having made
reasonable inquiry, to the extent such statement is made regarding the Property,
and (ii) the actual knowledge of both Seller and Mary Alice Haft, in each case,
after having made reasonable inquiry, to the extent such statement is made
regarding matters other than the Property.

9.6. Accuracy of Representations is a Condition to Seller’s Obligation to Close.
Without limiting any of the rights of Seller elsewhere provided for in this
Agreement, it is agreed that the

 

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obligation of Seller to close title under this Agreement is conditioned upon the
accuracy in all material respects of all of Purchaser’s warranties and
representations and the due compliance by Purchaser of all of its agreements set
forth herein and elsewhere in this Agreement. If, on or before the Closing Date,
Seller determines that any of Purchaser’s representations or warranties are
untrue or Purchaser has not complied with any of the said agreements, then
Seller shall be entitled to terminate this Agreement by notice given to
Purchaser, whereupon the provisions of Section 14.1 hereof shall apply.

10. Seller’s and Purchaser’s Covenants.

10.1. Seller covenants that, between the Effective Date and the Closing Date:

(a) Performance Under Leases. Seller shall perform all of Seller’s obligations
as landlord under the Leases and will enforce all of the obligations of the
Tenants under the Leases.

(b) No Modification to Leases; Leasing Guidelines. Subject to any applicable
law, Seller shall not modify, cancel, extend, renew or otherwise change in any
manner any of the terms, covenants or conditions of any of the Leases or enter
into any new leases of space in the Property or any other occupancy agreements
affecting the Property, or grant any consent to any matter requiring the consent
of Seller under any Lease, each without the prior written consent of Purchaser.
Notwithstanding the foregoing, Seller may enter into new leases of residential
apartment units at the Property, so long as such leases are (i) entered into in
compliance with applicable law (including, without limitation, all applicable
Montgomery County rules and regulations), (ii) are for a term of no more than 1
year, (iii) require market rate rental payments, (iv) do not have non-market
concessions (it being agreed that Seller will use commercially reasonable
efforts to only enter into leases which are on month to month terms), and
(v) are written on a form of lease reasonably approved by Purchaser, and to the
extent permitted by law, containing such waivers (by such tenants) of their
respective rights to purchase condominium units at the Property, as shall be
reasonably acceptable to Purchaser.

(c) No Modification to Contracts. Seller shall not modify, cancel, extend, renew
or otherwise change in any manner any of the terms, covenants or conditions of
any of the Contracts affecting the Property or enter into any new agreement
affecting the Property, or grant any consent to any matter requiring the consent
of Seller under any Contract, each without the prior written consent of
Purchaser, provided that subject to the terms of clause (q) Seller shall be
permitted to terminate (and shall terminate at Seller’s sole cost and expense)
all of the Contracts other than the Assigned Contracts. Seller shall provide
Purchaser with evidence of termination of any Contracts Purchaser has elected
not to assume at Closing. Notwithstanding the foregoing, Seller shall not
terminate any Contract prior to Closing, if doing so would, in Purchaser’s sole
discretion, adversely affect any ongoing Trade Negotiations or any Trade
Agreement (as such terms are hereinafter defined).

(d) No Employment Contracts. Seller will not enter into any employment contract,
service contract or any other agreement in respect of the Property without the
prior written consent of Purchaser.

(e) Reserved.

(f) Operation of Property. Seller will maintain and operate the Property
substantially in the same manner as same has been maintained and operated prior
to the Effective Date, and will make such repairs and replacements as may be
necessary to continue such standard of operation and maintenance through
Closing, ordinary wear and tear and casualty damage excepted (it being agreed
that the foregoing shall not obligate Seller to perform capital expenditures or
perform repairs to the

 

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Property, so long as Seller continues to perform such maintenance and repairs to
the Property as are sufficient to address life safety issues and ordinary course
Property operations). From and after the Effective Date, through Closing, Seller
shall grant Purchaser and/or Purchaser’s designees (i) reasonable access to the
Property, subject, in each case, to the qualifications and conditions
established in Section 19, and (ii) the right (but not the obligation) to
consult with and advise Seller on the construction, maintenance and operation
thereof.

(g) Maintain Insurance. Seller shall keep the Property insured in accordance
with Seller’s existing insurance program.

(h) Make Records Available. To the extent within Seller’s possession and
control, Seller shall make available to Purchaser all records, statements and
accounts bearing on or relating to the Property, including, without limitation,
the operation thereof.

(i) Cooperation with Purchaser’s Due Diligence. Without limiting the terms of
clause (f), Seller shall cooperate with Purchaser in connection with Purchaser’s
due diligence, such cooperation to include such due diligence conducted by
Purchaser pursuant to the terms of this Agreement, including, without
limitation, the terms of Section 19 hereof.

(j) No Marketing of Property; No Encumbrances; No Zoning Changes. (i) Seller
shall terminate all negotiations with any other parties concerning the sale of
the Property, any interest therein or any interest in Seller, and shall deal
exclusively with Purchaser with respect thereto, (ii) Seller shall not show or
otherwise offer for sale the Property, or, subject to clause (b), any interest
therein or any interest in Seller, (iii) Seller shall not commit, agree to, or
acquiesce in, any act which could, in any way, affect or impair Purchaser’s
intended use and occupancy of the Property, including, but not limited to, but
subject to clause (b), leasing space or contracting for service or property
improvements or encumbering the Property or any interest therein, (iv) Seller
will not take any action which would encumber or affect the marketability of
title to the Property or any interest therein, including, without limitation,
leasing space or contracting for services or property improvements (other than
as provided in clause (b)) and (v) Seller shall not initiate, consent to,
approve or otherwise take any action with respect to the zoning, or any other
governmental rule or regulation, currently applicable to all or any part of the
Property.

(k) Reserved.

(l) The Existing Loan. Except as expressly set forth in its acknowledgment to
the Existing Loan Purchase Agreement, Seller shall not (and shall not permit its
affiliates to) take any action with respect to the Existing Loan which would
result in the termination of the Existing Lender’s forbearance from enforcing
its remedies set forth in the Existing Loan Purchase Agreement, provided,
however, that nothing herein provided shall be deemed to require Seller to make
any payments or accommodations to the Existing Lender, other than any as may be
expressly set forth in the Existing Loan Purchase Agreement on the Effective
Date. Seller shall deliver to Purchaser notice of any receipt or delivery of any
notice thereunder (including, without limitation, any notice of default
thereunder). Seller shall not modify, amend, renew, extend or otherwise alter
the Existing Loan, the Existing Loan Documents or any other documents or
instruments relating to the Existing Loan.

(m) Violation Notices. Seller shall immediately provide Purchaser with a copy of
any Violation issued by any Governmental Authorities having jurisdiction over or
affecting the business of Seller or the Property and received by Seller.

 

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(n) Financial Statements. From time to time as reasonably requested by
Purchaser, Seller shall deliver to Purchaser updated balance sheets, income
statements and other financial statements with respect to the Property, to the
extent prepared by Seller’s property manager in the ordinary course.

(o) Personal Property. Without Purchaser’s prior written consent, which consent
may be granted or withheld in Purchaser’s sole and absolute discretion, Seller
shall not remove from the Real Estate any article of Personal Property, except
as may be necessary for repairs, or the discarding of worn out or useless items
by (and at the expense of) Seller pursuant to the terms of this Agreement.

(p) Bankruptcy. So long as (x) Purchaser is not in default of this Agreement
beyond any applicable notice or cure period and (y) this Agreement otherwise
remains in full force and effect then Seller shall not permit Existing Borrower
to file a voluntary bankruptcy, or take any similar local law action, challenge
(or permit the challenge by anyone under its direction or control) any
foreclosure instituted by Purchaser or its affiliates, or otherwise collude in
or cooperate with an involuntary bankruptcy (collectively, a “Bankruptcy
Event”), in each case, from and after the Effective Date, and continuing for a
period of ninety one (91) days after the Closing. In the event that an
involuntary bankruptcy (or similar proceeding or action) is filed against or
with respect to Seller or Existing Loan Borrower, then Seller and Existing Loan
Borrower shall take all commercially reasonable actions required to contest,
oppose and seek dismissal of such involuntary bankruptcy (or similar proceeding
or action); provided, however, that Seller shall not be under any obligation to
contest, oppose, or seek dismissal of any involuntary bankruptcy proceeding or
other similar action in which neither Seller nor its affiliates has colluded or
cooperated, although Seller and Existing Loan Borrower shall reasonably
cooperate with Purchaser in seeking a dismissal of any such involuntary
bankruptcy proceeding or similar action. This Section 10.1(p) shall survive the
Closing.

(q) Outstanding Trade Payables. From and after the Effective Date, Seller will
reasonably cooperate with and assist Purchaser and its affiliates in
negotiations with the creditors under and other parties in interest with respect
to the Outstanding Trade Payables (such parties, the “Trade Creditors”). Without
limiting the foregoing, Seller hereby acknowledges, consents to and approves
Purchaser and its agents, from and after the Effective Date, (i) contacting and
holding meetings, discussions and other negotiations from time to time (“Trade
Negotiations”) with one or more of the Trade Creditors and (ii) entering into
such agreements, arrangements, settlements or other transactions (each, a “Trade
Agreement”) as Purchaser or its representatives may determine, but subject to
reasonable review and approval of Seller and upon the express conditions that
(A) Seller shall have the right to attend, in person or by conference call (in
its sole discretion) any such Trade Negotiations and (B) any such Trade
Agreement is not made binding upon, or creates obligations or liability on,
Seller or its affiliates, without Seller’s consent. In connection therewith,
Purchaser (I) shall diligently pursue resolution of the Outstanding Trade
Payables and (II) shall not settle or compromise any Outstanding Trade Payable
for less than the face amount thereof, unless in connection with such settlement
or compromise, Seller, the Existing Loan Borrower and CBRE Realty Finance TRS,
LLC (“CBF”) shall be released by the applicable Trade Creditor from any
liability in respect of such Outstanding Trade Payable. Seller hereby
(1) acknowledges that prior to the Effective Date, Purchaser has engaged in
Trade Negotiations and entered into Trade Agreements with certain of the Trade
Creditors and (2) confirms that Seller has heretofore approved all of such Trade
Negotiations and Trade Agreements (per the list of approved Trade Agreements and
copies thereof, attached hereto as Exhibit S). This Section 10.1(q) shall
survive the Closing.

(r) The 2005 Certificate of Compliance. Seller acknowledges and agrees that at
any time after the Effective Date, Purchaser may cause to be recorded in the
land records of Montgomery County, Maryland, that certain Certificate of
Compliance, dated August 16, 2005, made by Montgomery County, Maryland, a copy
of which is attached hereto as Exhibit R.

 

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11. Broker.

Purchaser represents and warrants that Purchaser has not dealt with any broker,
agent, finder or similar party in connection with the transaction contemplated
hereby and Purchaser hereby indemnifies and holds harmless Seller and Seller’s
affiliates, members, managers, partners, shareholders, officers, directors and
agents from any liability, cost or expense (including, without limitation,
reasonable attorneys’ fees and costs of enforcement of the foregoing indemnity)
arising out of the falsity of the foregoing representation. Seller represents
and warrants that Seller has not dealt with any broker, agent, finder or similar
party in connection with the transaction contemplated hereby. Seller hereby
indemnifies and holds harmless Purchaser and Purchaser’s affiliates, members,
managers, partners, shareholders, officers, directors and agents from any
liability, cost or expense (including, without limitation, reasonable attorneys’
fees and costs of enforcement of the foregoing indemnity) arising out of the
falsity of the foregoing representation. Seller shall pay any brokerage
commission due in connection with the transactions contemplated by this
Agreement to the extent that a broker makes a claim for compensation as a result
of its dealings with Seller, and Purchaser shall pay any brokerage commission
due in connection with the transactions contemplated by this Agreement to the
extent that a broker makes a claim for compensation as a result of its dealings
with Purchaser. The provisions of this Section 11 shall survive the Closing or
any earlier termination of this Agreement.

12. Condemnation and Destruction.

12.1. Takings. If, prior to the Closing Date, a Non-Material Taking (as
hereinafter defined) occurs, then (a) Seller shall notify Purchaser of such
fact, (b) Purchaser shall not have any right or option to terminate this
Agreement and this Agreement shall continue in effect, (c) at the Closing,
Purchaser shall accept the Property subject to such Non-Material Taking or so
much of the Property as remains after such Non-Material Taking, as the case may
be, with no abatement of the Purchase Price, and (d) at the Closing, Seller
shall assign and turn over to Purchaser, and Purchaser shall be entitled to
receive and keep, all of Seller’s interest in and to all awards for such
Non-Material Taking (and Seller shall execute and deliver to Purchaser any and
all instruments or documentation required by Purchaser to effectuate such
assignment). If, prior to the Closing Date, a Material Taking (as hereinafter
defined) occurs, then (i) Seller shall notify Purchaser of such fact and
(ii) Purchaser shall have the right to terminate this Agreement by delivering
notice of such termination to Seller within ten (10) days after it receives such
notice from Seller. In the event that Purchaser fails to exercise such
termination right due to such Material Taking within such ten (10) day period,
Purchaser shall be deemed to have waived such termination right, in which event
the provisions of the first sentence of this Section 12.1 shall apply to such
Material Taking. In the event that Purchaser delivers a notice of termination
within such ten (10) day period, Escrow Agent shall refund the Downpayment to
Purchaser, whereupon this Agreement shall terminate and neither party shall have
any further rights or obligations hereunder except for the Surviving
Obligations, which shall survive such termination.

12.2. Casualties. If, prior to the Closing Date a Non-Material Casualty (as
hereinafter defined) occurs, then (a) Seller shall notify Purchaser of such
fact, (b) Purchaser shall not have any right or option to terminate this
Agreement and this Agreement shall continue in effect, (c) at the Closing
Purchaser shall accept the Premises subject to such Non-Material Casualty, with
no abatement of the Purchase Price, and (d) at the Closing, Seller shall assign
and turn over to Purchaser, and Purchaser shall be entitled to receive and keep,
all of Seller’s interest in and to all insurance proceeds payable in connection
with such Casualty, and Purchaser shall receive a credit against the Purchase
Price at the Closing in the amount of any loss deductible payable in connection
with such insurance proceeds (and

 

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Seller shall execute and deliver to Purchaser any and all instruments or
documentation required by Purchaser to effectuate such assignment). If, prior to
the Closing Date, a Material Casualty (as hereinafter defined) occurs, then
(i) Seller shall notify Purchaser of such fact and (ii) Purchaser shall have the
right, within ten (10) days after it receives such notice from Seller to
terminate this Agreement by delivering notice of such termination to Seller. In
the event that Purchaser fails to exercise such termination right within such
ten (10) day period, Purchaser shall be deemed to have waived such termination
right, in which event the provisions of the first sentence of this Section 12.2
shall apply to such Material Casualty. In the event that Purchaser delivers a
notice of termination within such ten (10) day period, Escrow Agent shall refund
the Downpayment to Purchaser, whereupon this Agreement shall terminate and no
party shall have any further rights or obligations hereunder except for the
Surviving Obligations, which shall survive such termination.

12.3. Certain Definitions. As used herein, the following terms shall have the
following meanings:

“Casualty” means the destruction of all or a portion of the Improvements by fire
or other casualty.

“Material Casualty” means a Casualty that, in Purchaser’s reasonable judgment,
would cost more than $500,000 to repair.

“Material Taking” means a Taking (a) affecting more than two percent
(2%) percent of the Land or affecting any portion of the Improvements,
(b) affecting the parking areas or driveways thereon, or (c) affecting any means
of ingress thereto or egress therefrom.

“Non-Material Casualty” means any Casualty, other than a Material Casualty.

“Non-Material Taking” means any Taking, other than a Material Taking.

“Taking” means any taking of any portion of the Land or the Improvements by
condemnation or eminent domain.

13. Conditions Precedent.

13.1. Conditions to Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions precedent, as determined by Purchaser:

(a) Seller shall have performed or otherwise complied with all of its
obligations under this Agreement;

(b) the representations and warranties of Seller contained in this Agreement
shall be true, correct and accurate on the Closing Date in all material
respects, as if first made on the Closing Date;

(c) Seller shall have delivered all documents and instruments required to be
delivered by Seller pursuant to the provisions of this Agreement;

(d) Purchaser shall have received the Title Commitment and the Pro Forma
(appropriately executed) from the Title Company in compliance with the
requirements of Section 7 hereof, which shall (i) show no exceptions other than
the Permitted Title Exceptions and (ii) contain such endorsements or affirmative
coverages as are requested by Purchaser;

 

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(e) Purchaser shall have received the Survey in compliance with the requirements
of Section 7 hereof, which shall (i) show no exceptions other than the Permitted
Survey Conditions and (ii) contain such certifications as are requested by
Purchaser;

(f) Seller shall have obtained fully-executed and effective releases from all
contract purchasers of condominium units at the Property, terminating their
respective purchase contracts and otherwise waiving any rights with respect
thereto (including, without limitation, rights to purchase such units)
(Purchaser hereby acknowledges receipt of fully-executed and effective releases
from all contract purchasers of condominium units at the Property other than the
contracts relating to Unit 327 and Unit 502 (the “Outstanding Unit Purchase
Contracts”));

(g) Purchaser shall have received the Seller Estoppel Certificate, as required
by Section 43 of this Agreement, with the Seller Estoppel Certificate down-dated
to the Closing Date;

(h) Purchaser shall have confirmed that no person has any written or oral right
to remain in possession of any portion of the Property after the Closing Date
other than Tenants under Leases identified on the Rent Roll;

(i) the Financing Conditions shall have been satisfied;

(j) each of the conditions set forth in Section 41 shall have been satisfied;

(k) Purchaser shall have received from Seller the following documentation, in
each case, in form acceptable to Purchaser:

(i) a new Certificate of Compliance in accordance with Chapters 11A/53A of the
Montgomery County Code (the “County Code”), in connection with the transactions
contemplated by this Agreement as more fully described in Section 41, which
Certificate of Compliance shall not be based upon a rental agreement; and

(ii) the Assignment of Rights Under Public Offering Statement;

(l) no litigation, investigation, contest or other proceeding (including,
without limitation, foreclosure proceedings in respect of the Existing Loan)
shall have been commenced or imminent which, in any case, could restrain, delay,
enjoin or otherwise prohibit or make illegal the consummation of any of the
transactions contemplated by this Agreement; and

(m) Purchaser shall have received an original title policy of title insurance
with respect to the Property, in form and with endorsements reasonably
acceptable to Purchaser, and otherwise identical to the Pro Forma and showing
only the Permitted Title Exceptions and the Permitted Survey Conditions.

If any of the foregoing conditions are not satisfied on the Closing Date,
Purchaser shall have the right (in addition to any right Purchaser may have
under Section 14 in the event that the non-satisfaction of a condition is as a
result of a breach or default by Seller), to (x) terminate this Agreement by
notice given to Seller, whereupon the entire Downpayment shall be refunded to
Purchaser and upon such refund, no party hereto shall have any rights or
obligations hereunder except for the Surviving Obligations, which shall survive
such termination, or (y) at Purchaser’s sole option, to waive any unsatisfied
condition and

 

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consummate the transactions contemplated hereby. Notwithstanding the foregoing,
if the condition described in Section 13.1(f) is not satisfied on the Closing
Date, Purchaser’s sole options shall be to either (A) waive the condition and
consummate the transactions contemplated hereby, or (B) to accept the agreement
of the Seller Indemnitors, which agreement is set forth in this clause (B), to
indemnify, defend and hold Purchaser and its affiliates harmless from and
against any and all loss, cost and expense (including, without limitation,
attorneys’ fees and disbursements) arising out of Seller’s failure to satisfy
such condition (including, without limitation, any claims made by the
prospective purchasers of Units 327 and 502 at the Property), which indemnity
shall survive the Closing.

13.2. Conditions to Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions precedent:

(a) Purchaser shall have performed or observed all of its obligations under this
Agreement;

(b) Purchaser shall have delivered all documents and instruments required to be
delivered by Purchaser pursuant to the provisions of this Agreement;

(c) Purchaser shall have paid to Seller the full Purchase Price, subject to
proration and adjustment in accordance with the provisions hereof; and

(d) Existing Lender shall have executed and delivered to Seller the release and
indemnity agreement attached to the Existing Loan Purchase Agreement as Exhibit
5 thereto.

If any of the foregoing conditions are not satisfied on the Closing Date, Seller
shall have the right (in addition to any right Seller may have under Section 14
in the event that the non-satisfaction of a condition is as a result of a breach
or default by Purchaser) to (x) terminate this Agreement by notice given to
Purchaser, whereupon, if Purchaser is not then in default under this Agreement,
the entire Downpayment shall be refunded to Purchaser and upon such refund, no
party hereto shall have any rights or obligations hereunder except for the
Surviving Obligations, which shall survive such termination, or (y) at Seller’s
sole option, to waive any unsatisfied condition and consummate the transactions
contemplated hereby.

14. Termination of Agreement; Default.

14.1. By Purchaser. If Purchaser shall default hereunder (including, without
limitation, a default hereunder based on breach by Purchaser of any of its
representations and warranties contained herein that is discovered prior to the
Closing) or shall fail or refuse to perform its obligation to purchase the
Property in accordance with this Agreement, Seller, as its sole and exclusive
remedy, shall have the right to cause Escrow Agent to deliver to Seller the
Downpayment as is then maintained in escrow by Escrow Agent, as and for its
liquidated damages (the parties hereto acknowledging that it would be difficult
or impossible to accurately ascertain the amount of Seller’s damages). THE
PARTIES AGREE THAT SELLER’S DAMAGES IN THE EVENT OF PURCHASER’S DEFAULT
HEREUNDER WOULD BE DIFFICULT AND IMPRACTICAL TO CALCULATE AND THAT THE FOREGOING
PAYMENT (A) HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES REASONABLE
ESTIMATE OF SELLER’S DAMAGES, (B) REPRESENTS A FAIR AND ADEQUATE MEASURE OF
DAMAGES, AND (C) REPRESENTS SELLER’S SOLE AND EXCLUSIVE REMEDY AGAINST
PURCHASER, AT LAW OR IN EQUITY, IN THE EVENT OF A DEFAULT UNDER THIS AGREEMENT
ON THE PART OF PURCHASER.

 

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14.2. By Seller. If Seller shall default hereunder (including, without
limitation, a default hereunder based on breach by Seller of any of its
representations and warranties contained herein that is discovered prior to the
Closing), then, subject to any indemnity obligations of Seller or its affiliates
set forth in Section 40, Purchaser, as its sole and exclusive remedy against
Seller, may either:

(a) terminate this Agreement by notice given to Seller, whereupon the entire
Downpayment shall be refunded to Purchaser and upon such refund, no party hereto
shall have any rights or obligations hereunder except for the Surviving
Obligations, which shall survive such termination; or

(b) bring an action against Seller to seek specific performance of Seller’s
obligations hereunder.

14.3. Subsequent to Closing. If Seller or Purchaser fails to comply with any
obligation hereunder that survives the Closing (including, without limitation,
any representation or warranty contained herein), then the parties shall have
all rights available to them at law or in equity without limitation.

15. Indemnification by AG Indemnitor.

At Closing, Purchaser and AG Core Plus II Corp., a Delaware corporation (“Core
Plus II”) and AG Core Plus II (AU) Holdings Corp., a Delaware corporation (“Core
Plus II (AU)”, together with Core Plus II, the “AG Indemnitor”) shall each
severally (and not jointly and severally) indemnify, defend and hold Seller and
CBF harmless from and against trade creditors’ claims arising out of the
non-payment by Purchaser of the Outstanding Trade Payables (the “AG Indemnity”);
provided, that (a) the AG Indemnitor’s and Purchaser’s aggregate liability in
respect of the AG Indemnity shall under no circumstances exceed the Maximum Line
Item Amount, with respect to any individual Outstanding Trade Payable, and the
Maximum Trade Payables Exposure, with respect to the aggregate of all
Outstanding Trade Payables (the “Indemnity Cap”), (b) Seller and CBF shall
forbear from asserting any claims in respect of the AG Indemnity for a period of
eighteen (18) months following the Closing (the “Forbearance Period”), so that
Purchaser will have the full benefit of the Forbearance Period in which to
resolve remaining claims in respect of the Outstanding Trade Payables that would
otherwise be covered by the AG Indemnity, (c) the amount of the Indemnity Cap
shall decrease, on a dollar for dollar basis, as Purchaser resolves claims
relating to the Outstanding Trade Payables (by entering into Trade Agreements,
or otherwise) (for example, if (x) Purchaser resolves aggregate claims in
respect of the Outstanding Trade Payables in an amount equal to $1,000,000, then
the Indemnity Cap shall automatically decrease by $1,000,000 or, (y) Purchaser
resolves an individual claim in respect of an individual Outstanding Trade
Payable in an amount equal to $1,000,000, then the Indemnity Cap shall
automatically decrease by $1,000,000), and (d) the AG Indemnity shall
automatically terminate on the date which is eighteen (18) months following the
expiration of the Forbearance Period. Notwithstanding the foregoing, the AG
Indemnity shall be inapplicable with respect to claims in respect of or
otherwise arising from (i) any individual or aggregate Outstanding Trade
Payables in excess of the applicable Indemnity Cap (as same may be reduced from
time to time, in accordance with the terms of this Section 15), (ii) any written
Trade Agreement which has been executed or otherwise approved by Seller or CBF,
(iii) the outcome of any Trade Negotiation, to the extent that Seller or CBF has
approved the actions taken by or on behalf of Purchaser in connection with such
Trade Negotiation, (iv) any actions taken by Seller, CBF, or any affiliate of
either of them with respect to any Outstanding Trade Payables, in violation of
this Agreement or (v) any actions taken by Seller, CBF, or any affiliate of
either of them with respect to any Outstanding Trade Payables, to the extent
such actions are contrary to or in conflict with actions taken by Purchaser in
connection with its Trade Negotiations (to the extent that Purchaser is
conducting such Trade Negotiations on a commercially reasonably basis, and
otherwise in compliance with the terms of this Agreement, it being agreed that
such commercially reasonable efforts shall not require Purchaser to reveal

 

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the existence of the AG Indemnity to any Person). Without limiting the
foregoing, the parties agree that any liability of the AG Indemnitor under the
AG Indemnity shall be allocated (x) 93.6245% to Core Plus II and (y) 6.3755% to
Core Plus II (AU). Neither Seller nor any of its affiliates shall disclose the
existence of the AG Indemnity to any third party, except (a) for the purposes of
enforcement of the indemnification obligations hereunder; (b) to the ROFR
Parties, as described in Section 41 of this Agreement; and (c) for disclosures
mandated by law.

16. Reserved.

17. Expenses.

(a) Seller shall be obligated to pay (i) one hundred percent (100%) of the cost
of satisfying Seller’s obligations under Section 7, and (ii) one hundred percent
(100%) of any other costs or expenses stated in this Agreement to be the
obligation of Seller.

(b) Purchaser shall be obligated to pay (i) one hundred percent (100%) of the
cost of the Survey, (ii) one hundred percent (100%) of all Transfer Taxes
(including any sales tax arising out of any transfer of any personal property
hereunder), (iii) one hundred percent (100%) of the cost of its title insurance
policy, (iv) one hundred percent (100%) of all recording fees, (v) one hundred
percent (100%) of any escrow fees, and (vi) one hundred percent (100%) of any
other costs or expenses stated in this Agreement to be the obligation of
Purchaser.

(c) Purchaser and Seller shall each be obligated to pay their own respective
legal fees.

(d) Except as otherwise provided in this Section 17 and elsewhere in this
Agreement, Purchaser and Seller shall allocate all other expenses in connection
with this Agreement in accordance with the custom and practices of the
jurisdiction in which the Property is located.

18. Reserved.

19. Access to Property. Purchaser acknowledges that it is acquiring the Property
“AS IS and WHERE IS” with all faults, based upon its inspection of the Property
prior to the Effective Date. Purchaser and its designated agent and
representatives shall have a reasonable right of entry upon the Property from
and after the Effective Date, through the Closing Date, subject to the rights of
Tenants under their existing Leases, and subject to all applicable laws and
reasonable advance notice to Seller’s property manager and/or construction
consultant, as appropriate. In furtherance of the foregoing, Purchaser shall
have the right to review all of the materials provided by Seller, and to conduct
such further due diligence as is deemed necessary or appropriate by Purchaser in
connection with the transactions contemplated by this Agreement, including,
without limitation, non-invasive or invasive environmental testing or
engineering surveys of the Real Estate (provided that Phase II environmental
testing shall be subject to Seller’s prior consent), interviews with the lessees
under the Leases, and such other due diligence as is customarily conducted by
purchasers of real property. Purchaser and/or the persons or entities conducting
any testing and investigations shall not commit waste at the Property, and
Purchaser shall restore the Property to its condition existing immediately prior
to Purchaser’s inspection thereof, and Purchaser shall be liable for all damage
or injury to any person or property resulting from, relating to or arising out
of any inspection, whether occasioned by the acts of Purchaser or any of its
employees, agents, representatives or contractors, and Purchaser shall indemnify
and hold harmless Seller and its agents, employees, officers, directors,
affiliates and asset managers from any liability resulting therefrom. This
indemnification by Purchaser shall survive the Closing or the termination of
this Agreement, as applicable. In connection with the foregoing, Seller
acknowledges that Purchaser has heretofore provided Seller and CBF with a
certificate of insurance, naming Seller and CBF as additional insureds on its
property damage and liability insurance policies.

 

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20. Notices.

All notices, demands or requests made pursuant to, under or by virtue of this
Agreement must be in writing and sent to the party to which the notice, demand
or request is being made by (i) certified or registered mail, return receipt
requested, (ii) by nationally recognized overnight courier delivery, (iii) by
hand delivery, or (iv) by facsimile transmission as follows:

To Seller:

c/o CBRE Realty Finance

185 Asylum Street

City Place I, 31st Floor

Hartford, Connecticut 06103

Attention: Paul Martin

Facsimile Number: (860) 275-6225

with copy to:

Ballard Spahr Andrews & Ingersoll, LLP

4800 Montgomery Lane, 7th Floor

Bethesda, Maryland 20814-3401

Attention: Roger D. Winston

Facsimile Number: (866) 415-6014

To Purchaser:

c/o Angelo, Gordon & Co., L.P.

245 Park Avenue, 26th Floor

New York, New York 10167

Attention: Dana Roffman

Facsimile Number: (212) 867-5436

with a copy to:

Federal Capital Partners

1000 Potomac Street, NW, Suite 120

Washington, D.C. 20007

Attention: Lacy I. Rice III

Facsimile Number: (202) 333-6098

and an additional copy to:

Duval & Stachenfeld LLP

300 East 42nd Street, 3rd Floor

New York, New York 10017

Attention: Terri L. Adler, Esq.

Facsimile Number: (212) 883-8883

 

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To Escrow Agent:

c/o Linowes and Blocher, LLP

7200 Wisconsin Avenue, Suite 800

Bethesda, Maryland 20814-4842

Attention: William M. Hoffman, Esq.

Facsimile Number: (301) 654-2801

or to such other address as is specified by a party by notice to the other party
given in accordance with the provisions of this Section 20. Any notice given in
accordance with the provisions of this Section 20 shall be deemed given
(i) three (3) Business Days after mailing (if sent by certified mail), (ii) one
(1) Business Day after deposit of same with a nationally recognized overnight
courier service (if delivered by nationally recognized overnight courier
service), (iii) on the date delivery is made (if delivered by hand), or (iv) on
the date delivery is made as confirmed by telephonic answerback (if delivered by
facsimile transmission).

21. Entire Agreement.

This Agreement contains all of the terms agreed upon between the parties with
respect to the subject matter hereof, and all prior agreements, understandings,
representations and statements, oral or written, are merged into this Agreement.

22. Amendments.

This Agreement may not be changed, modified or terminated, except by an
instrument executed by the parties hereto who are or will be affected by the
terms of such instrument.

23. Waiver.

No waiver by either party of any failure or refusal to comply with its
obligations shall be deemed a waiver of any other or subsequent failure or
refusal to so comply.

24. Successors and Assigns.

The stipulations aforesaid shall inure to the benefit of, and shall bind, the
heirs, executors, administrators, successors and assigns of the respective
parties.

25. Section Headings.

The headings of the various paragraphs of this Agreement have been inserted only
for the purposes of convenience, and are not part of this Agreement and shall
not be deemed in any manner to modify, explain, expand or restrict any of the
provisions of this Agreement.

26. Governing Law.

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

27. Submission To Jurisdiction.

PURCHASER AND SELLER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY
MARYLAND STATE COURT OR FEDERAL COURT SITTING IN THE DISTRICT OF

 

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MARYLAND, SOUTHERN DIVISION, OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND AGREE THAT VENUE FOR ANY SUCH ACTION OR
PROCEEDING SHALL BE IN MONTGOMERY COUNTY, MARYLAND. PURCHASER AND SELLER EACH
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE TO SUCH VENUE AS BEING AN INCONVENIENT FORUM.

28. Waiver Of Jury Trial.

PURCHASER AND SELLER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
AGREEMENT OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY PURCHASER AND SELLER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY
EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. SELLER OR PURCHASER, AS APPLICABLE, IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY PURCHASER OR SELLER, AS APPLICABLE.

29. Enforceability.

In the event that any portion of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.

30. Attorneys’ Fees.

In the event of any litigation arising out of this Agreement, and
notwithstanding any other limitations on liability set forth in this Agreement,
the prevailing party shall be entitled to receive from the losing party an
amount equal to the prevailing party’s costs incurred in such litigation,
including, without limitation, the prevailing party’s attorneys’ fees, costs and
disbursements. The provisions of this Section 30 shall survive the Closing or
termination of this Agreement.

31. Assignment.

Purchaser may not assign this Agreement without the consent of Seller, provided,
however, Purchaser may assign this Agreement without the consent of Seller to
one or more corporations, partnerships, limited liability companies or other
entities, provided that such entities are controlled by principals or affiliates
of, or funds invested with or managed by (A) Angelo, Gordon & Co., L.P. (or
affiliates thereof), (B) R&K Partners, LLC, d/b/a Federal Capital Partners (or
affiliates thereof), or (C) a combination of the entities referenced in clauses
(A) and (B). Upon any assignment that does not require the consent of Seller as
provided in this Section 31, the party named as Purchaser herein shall be
released from further liability under this Agreement. Purchaser shall provide
Seller with a copy of any assignment of this Agreement prior to Closing.

32. Counterparts.

This Agreement may be executed in two or more counterparts, each of which, when
taken together, shall constitute the same instrument and one original. Executed
counterpart signatures may be

 

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delivered by either party to the other by facsimile or e-mail with “PDF”
attachment, and signatures delivered by either such method shall be deemed
enforceable as original signatures (it being agreed that if signatures to this
Agreement are delivered by either such method, then upon request, each party
shall submit to the other party original signatures, provided that the failure
by any party to deliver such original signatures shall not affect the
effectiveness or enforceability of this Agreement).

33. Further Assurances.

Subsequent to the Closing Date, each party shall execute and deliver to the
other such further documents and instruments as either party may request of the
other in order to confirm or implement the terms of this Agreement.

34. Certain Definitions.

As used herein the following terms shall have the following definitions:

“Business Day” shall mean a day on which banks are required to be open for
business within the State of Maryland and the State of New York, and shall not
include (i) any Saturday or Sunday, (ii) any national holiday, or (iii) any
holiday within the State of Maryland or the State of New York.

“Surviving Obligations” shall mean the obligations of Purchaser and/or Seller
set forth in this Agreement that are expressly stated to survive the termination
of this Agreement, including, without limitation, such obligations as are set
forth in Sections 6, 8.1(g), 9, 10.1(p), 10.1(q), 11, 19, 30 and 40 of this
Agreement.

35. Reserved.

36. Publicity and Confidentiality.

36.1. Unless and until the Closing occurs hereunder, neither Purchaser nor
Seller will make, or permit anyone to make on their behalf, any public statement
or public comment with respect to this Agreement, the transactions contemplated
hereby, that is intended for public distribution or made to any newspaper, trade
publication, or other print or other media, without the approval by the other
party as to such disclosure and the information to be disclosed, which approval
shall not be unreasonably withheld or delayed.

36.2. Unless and until the Closing occurs hereunder, Purchaser and its agents
shall maintain the confidentiality of all documents, instruments and information
obtained by Purchaser or such agents hereunder or otherwise in connection with
the proposed acquisition of the Property and shall not, without Seller’s prior
written consent, which consent shall not be unreasonably withheld or delayed,
disclose any of such information to any other person or use any of such
information for any purpose other than as contemplated herein. Notwithstanding
the foregoing, Purchaser may disclose any of such information to its proposed
investors and lenders and its officers, directors, employees, agents, attorneys,
accountants, consultants and other professionals to whom such disclosure is
reasonably necessary for the consummation of the transactions contemplated
hereby, provided that each such person maintains such information in a
confidential manner.

37. Calculation of Time Periods; Time of the Essence.

In the event any time for performance of any obligation under this Agreement
expires or the expiration or termination of any time period provided in this
Agreement for any consent, response or

 

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notice occurs, on a day other than a Business Day, the time for performance
shall be extended to the next succeeding day which is a Business Day. Time is of
the essence of Seller’s and Purchaser’s obligations under this Agreement.

38. Acquisition and Assumption of the Existing Loan.

38.1. Seller and Existing Loan Borrower are parties to that certain mortgage
loan in the original principal amount of $130,000,000 (as assigned, the
“Existing Loan”), made by Fremont Investment & Loan, a California industrial
bank (“Fremont”), predecessor in interest to iStar FM Loans LLC (the “Existing
Lender”), as lender, to Triton Pavilion, LLC (the “Existing Loan Borrower”), as
borrower, and evidenced by the documents set forth on Exhibit V (the “Existing
Loan Documents”). Concurrently with the Closing, Seller acknowledges that
Existing Loan Purchaser intends to acquire Existing Lender’s right, title and
interest in, to and under the Existing Loan, pursuant to the Existing Loan
Purchase Agreement (such transaction, the “Existing Loan Acquisition
Transaction”), and concurrently therewith, Purchaser shall assume Seller’s and
the Existing Loan Borrower’s respective positions under the Existing Loan.

38.2. The obligations of Purchaser to close the transactions contemplated by
this Agreement shall be conditioned upon (i) the Existing Lender, prior to the
Outside Closing Date (x) agreeing to sell to Existing Loan Purchaser the
Existing Loan pursuant to the Existing Loan Purchase Agreement and
(y) consummating the transactions contemplated thereby simultaneously with the
Closing, and, in each case, in accordance with the terms of the Existing Loan
Purchase Agreement, and (ii) concurrently with the Existing Loan Purchaser’s
acquisition of the Existing Loan, Existing Loan Purchaser approving Purchaser’s
assumption of Seller’s and the Existing Loan Borrower’s respective positions as
IDOT guarantor and borrower, as applicable, under the Existing Loan,
simultaneously with the Closing, in each case, on terms acceptable to Purchaser
in its sole discretion and without condition or qualification or modification to
the Existing Loan Documents (except for such modifications to the Existing Loan
Documents as are approved by Purchaser and the Existing Loan Purchaser)
(collectively, the “Financing Conditions”). In the event that the Financing
Conditions, or any of them, have not been satisfied prior to the Outside Closing
Date, then Purchaser may elect to terminate this Agreement. In the event that
Purchaser elects to terminate this Agreement in accordance with the preceding
sentence, then the Downpayment shall be released to Purchaser and no party shall
have any further liability or obligation to the other, except for the Surviving
Obligations, which shall survive such termination. In connection with
Purchaser’s assumption of, and Existing Loan Purchaser’s acquisition of, the
Existing Loan, Purchaser and Seller each agree to use commercially reasonable
efforts to cooperate with each other and with Existing Lender in connection with
the satisfaction of the Financing Conditions and to furnish to the Existing
Lender such information as may be reasonably required by the Existing Lender in
order to approve such assumption and acquisition of the Existing Loan on the
terms set forth herein. It is acknowledged and agreed that the Financing
Conditions have been included for the sole benefit of Purchaser who shall have
the right to waive same, at its sole option, by written notice at any time up to
and including the Outside Closing Date.

38.3. If (a) the Existing Loan Acquisition Transaction is consummated
simultaneously with the consummation of the transactions contemplated by this
Agreement, and (b) there exists no default by any of Seller, CBF, or Pavilion
Indemnitor (as hereinafter defined) under this Agreement, then from and after
the Closing Date, Purchaser shall cause the Existing Loan Purchaser to waive all
claims relating to the Existing Loan which it may then have against Seller,
Existing Loan Borrower, or CBF, solely in their capacity as borrower (or
affiliates of borrower, as applicable) or as owner of the Property in respect of
the Existing Loan (it being understood that the foregoing forbearance shall
exclude, and be inapplicable to, any claims which Purchaser or its affiliates
may have against Seller, CBF, Existing Loan Borrower or their respective
affiliates which arise out of or otherwise relate to (x) the Property, this

 

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Agreement, the Closing, or matters related to any of the foregoing items or
(y) any claims made against Purchaser, Existing Loan Purchaser or their
respective affiliates by the Existing Lender or its affiliates, arising out of
the acts or omissions of Seller, Existing Loan Borrower or CBF). Seller
acknowledges that it has determined that the Existing Loan Purchase Agreement
fully satisfies Purchaser’s obligations under this Section 38.3.

39. Reserved.

40. Seller Indemnity.

40.1 (a) For a period commencing on the Effective Date and following the Closing
for a period of time ending on December 31, 2008, Seller and CBRE Realty
Finance, Inc., a Delaware corporation (“Pavilion Indemnitor”, and together with
Seller, the “Seller Indemnitors”) shall jointly and severally indemnify, defend
(with counsel acceptable to Purchaser) and hold Purchaser and its respective
direct and indirect members, managers, partners, officers, directors,
shareholders, employees, affiliates and their respective successors and assigns,
including, without limitation, the Existing Loan Purchaser (collectively, the
“Purchaser Indemnified Parties”), harmless from and against any and all
liquidated liabilities (including, without limitation, attorneys’ fees and
litigation costs) (collectively “Losses”) which any Purchaser Indemnified Party
incurs arising out of or resulting from: (i) any matter or thing pertaining to
the ownership or operation of the Property prior to the Closing Date; (ii) any
liabilities and any litigation, action or proceeding pertaining to the ownership
or operation of the Property or otherwise relating to the Existing Loan (to the
extent not covered by the release by Purchaser of Seller pursuant to the
Assumption and Release Agreement) or the mezzanine financing provided by
Seller’s affiliates in respect of the Property, in each case relating to actions
or events occurring prior to the Closing Date; (iii) Seller’s violation of
Section 10.1(p) hereof; (iv) Seller’s default under this Agreement beyond any
applicable notice and grace periods, due to matters solely within Seller’s
control; or (v) Seller’s failure to consummate the Closing and/or any Seller
Indemnitor’s hindrance of the Closing or the consummation of the Existing Loan
Acquisition Transaction, in each case, due to matters solely within Seller’s
control; provided, however, the foregoing indemnity shall not be applicable to
(x) Losses incurred as a result of the exercise by a party entitled to exercise
a right of first refusal to purchase the Property under Chapters 11 or 53A of
the County Code, (y) Losses resulting from the failure of the Closing to occur
because Purchaser is in default under this Agreement beyond any applicable
notice or grace periods; or (z) Losses related to the Outstanding Trade
Payables, to the extent that such Losses are less than the Maximum Trade
Payables Exposure.

(b) The Seller Indemnitors’ indemnity obligations under this Section 40, under
any other applicable provision of this Agreement, and under any other instrument
delivered by the Seller Indemnitors pursuant to this Agreement, are sometimes
collectively referred to herein as the “Indemnity”.

(c) Without limiting the foregoing, Purchaser shall have the right to require
Pavilion Indemnitor to pay, comply with and satisfy its obligations and
liabilities under this Agreement, and shall have the right to proceed
immediately against Pavilion Indemnitor with respect thereto, in each case,
without being required to attempt recovery first from Seller or any other party.

40.2 In connection with the foregoing Indemnity, for the avoidance of doubt, the
Seller Indemnitors’ liability shall include the amount of any deposit made by
the Existing Loan Purchaser under the Existing Loan Purchase Agreement, in the
event that the Existing Loan Purchaser defaults or elects to terminate the
transactions contemplated by the Existing Loan Purchase Agreement because of the
matters described in Section 40.1(a) (iii), (iv) or (v), and as a result,
forfeits such deposit to the Existing Lender and (b) Seller’s liability shall
include all other Losses incurred by Purchaser and the Existing Loan Purchaser
resulting from the matters described in Section 40.1.

 

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40.3. The Existing Loan Purchaser and the Title Company shall each be deemed a
third party beneficiary of this Section 40, and shall be entitled to separately
enforce same, on its own behalf; provided, that the Title Company shall only be
deemed a third party beneficiary of this Section 40 as it relates to Losses
incurred by the Title Company in connection with the Outstanding Unit Purchase
Contracts.

40.4. This Section 40 shall survive the Closing.

41. Montgomery County’s Rights.

(a) The parties acknowledge that the Property is subject to the terms of the
County Code. Accordingly, it shall be a condition precedent to Purchaser’s
obligation to close the transactions contemplated by this Agreement that on or
prior to the ROFR Out Date (as hereinafter defined) (i) Purchaser shall have
obtained a Certificate of Compliance (as hereinafter defined) and (ii) Seller
shall have (x) complied with the terms of clause (b) below and (y) delivered to
Purchaser evidence acceptable to Purchaser, and in recordable form, that each
governmental or tenant entity (each, a “ROFR Party”) having a right to purchase
the Property under the County Code shall have either (A) waived its right to
purchase the Property under the County Code or (B) been deemed to have waived
its right to purchase the Property under the County Code, by the passage of
time, or otherwise. Such evidence shall be satisfied by a “Certificate of
Compliance”, issued in Purchaser’s name (and, at Purchaser’s option, in the name
of Purchaser’s assignee, as permitted in accordance with the terms of
Section 31), in accordance with the County Code, and in form reasonably
acceptable to Purchaser and Purchaser’s title insurer and suitable for recording
in the Montgomery County land records (it being understood that such Certificate
of Compliance shall be deemed reasonably acceptable to Purchaser if same
(w) correctly reflects all applicable names and other facts related to the ROFR
Process, as applied to the Property, this Agreement and the parties hereto
(taking into account any permitted assignment of Purchaser’s interest in this
Agreement, prior to Closing), (x) is in suitable form for recording in the
Montgomery County land records, (y) is deemed acceptable by the Title Company to
delete any exception in the Title Commitment regarding the ROFR Process and
(z) otherwise complies with the County Code). The matters described in clauses
(i) and (ii) above are hereinafter referred to as the “ROFR Process”. The ROFR
Process shall be deemed to have been completed when and if the matters described
above have been completed.

(b) In connection with the ROFR Process, Seller shall promptly take all actions
necessary timely to comply with provisions of the County Code relating to the
right of first refusal granted to each of the ROFR Parties. Seller’s actions
shall include, without limitation, serving such notices, executing such
documents (including, without limitation, affidavits) and taking such actions as
shall be required under the County Code, or otherwise advisable to prove
compliance by Seller with the County Code (it being agreed that Seller shall
deliver to all required recipients thereto, on or prior January 16, 2008, all
applicable notices and offers, including, without limitation all (x) notices of
sale under Section 53A-3 of the County Code and (y) right of first refusal
offers under Section 53A-4 of the County Code, in each case, in the manner
required by the County Code and containing all documentation required to be
delivered in connection therewith). Seller shall provide to Purchaser copies of
any proposed notices to be delivered, or other submittals to made under, the
ROFR Process for Purchaser’s review and reasonable approval, prior to delivery
of such notices or other submittals (which approval shall not be withheld if
such notices or other submittals are (x) factually accurate, as applied to the
Property, this Agreement and the parties hereto (taking into account any
permitted assignment of Purchaser’s interest in this Agreement, prior to
Closing) and (y) otherwise in compliance with the County Code). Purchaser shall
cooperate with Seller, in all commercially reasonable respects, in connection
with Seller’s actions under this clause (b); provided, however, that, any
provision of this Agreement to the contrary notwithstanding, Seller shall not
enter into or agree to any rental covenants or other terms, conditions or
agreements of any type or nature

 

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whatsoever that would bind the Property or Purchaser after Closing in connection
with Seller’s obligation to obtain a Certificate of Compliance pursuant to the
ROFR Process without the prior written consent of Purchaser, which consent may
be withheld by Purchaser in its sole and absolute discretion, even if
Purchaser’s failure to consent should preclude the issuance of a Certificate of
Compliance. If, prior to the ROFR Out Date, one or more ROFR Parties lawfully
gives notice that it is or intends to exercise its right to purchase the
Property under the County Code, or if a tenants’ association shall be formed and
registered with respect to the Property, then, at Purchaser’s option, upon
notice to Seller (which notice shall be given by Purchaser to Seller within 10
Business Days after Purchaser receives notice of the formation and registration
of such tenants’ association), this Agreement shall terminate and be of no
further force or effect (other than those provisions expressly stated to
survive) and the Downpayment (together with any interest accrued thereon) shall
be refunded to Purchaser. If, prior to the ROFR Out Date, all rights to purchase
the Property held by all ROFR Parties shall have elapsed, then the parties shall
proceed to Closing in accordance with the terms of this Agreement, and Seller
shall obtain and deliver to Purchaser, at Closing, a Certificate of Compliance.
For purposes of this Section 41, “ROFR Out Date” shall mean the Outside Closing
Date.

42. Arbitration.

42.1. In the event that there is a disagreement between Purchaser and Seller as
to any matter arising out of this Agreement for which arbitration is expressly
stated to be the sole procedure or mechanism for the resolution of such
disagreement (the “Matter in Dispute”), then the Matter in Dispute shall be
submitted to arbitration pursuant to the rules of the JAMS within the District
of Columbia. The arbitrators will be entitled to award monetary damages,
declaratory relief and injunctive relief interpreting the provisions of this
Agreement, however the arbitrators will not be entitled to award punitive or
consequential damages or to act inconsistently with the terms of this Agreement.
The arbitrators will be entitled, but not required, to provide that the losing
party in any arbitration will pay all or a portion of the prevailing party’s
costs incurred in connection therewith, including, without limitation, the costs
and fees of the arbitrators, provided, however, if the arbitrators decline to
make such a provision, then the costs of the arbitration will be split equally
between the parties (except that each party will bear such party’s own
attorneys’ fees). The determination of the arbitrators in the foregoing
proceeding shall be binding upon the parties, subject only to the provision of
Section 42.3 below.

42.2. In the event that the arbitrators make a determination in favor of a party
(the “Prevailing Party”) and the Matter in Dispute is monetary in nature, then
the other party (the “Non-Prevailing Party”) shall pay to the Prevailing Party
the amount determined by the arbitrators to be necessary to make the Prevailing
Party whole (the “Arbitrated Amount”) within ten (10) days after the
determination is made in such arbitration proceeding, provided, however, in the
event this Agreement expressly provides that an escrow of funds (each, a “Funds
Escrow”) be established (and such Funds Escrow is established) by the
Non-Prevailing Party with respect to a monetary Matter in Dispute and the amount
in the Funds Escrow is greater than the Arbitrated Amount, then the
Non-Prevailing Party shall, within such ten (10) day period, instruct the escrow
agent for the Funds Escrow to disburse an amount equal to the Arbitrated Amount
from the Funds Escrow to the Prevailing Party and, unless otherwise provided in
this Agreement, the Non-Prevailing Party shall be entitled to a return of the
remaining funds in the Funds Escrow. In the event that the arbitrators make a
determination in favor of the Prevailing Party and the Matter in Dispute is
non-monetary in nature, then the Non-Prevailing Party shall take such action as
is required by the arbitrators in connection therewith within ten (10) days
after the determination is made in such arbitration proceeding.

42.3. The parties agree that the arbitration proceeding described in this
Section 42 is the sole and exclusive manner in which the parties may resolve
Matters in Dispute and the parties fully waive any right to commence any action
or proceeding in any court arising out of any Matter in Dispute,

 

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subject only to the right of a party hereto to bring an action in court to
enforce the determination made in an arbitration proceeding. For the avoidance
of doubt the parties hereto acknowledge and agree that any dispute arising out
of this Agreement that is not a Matter in Dispute shall not be required to be
submitted to arbitration as hereinabove provided.

43. Seller Estoppel Certificate. Concurrently with the execution and delivery of
this Agreement, and again at Closing, Seller and Existing Loan Borrower shall
deliver to Purchaser an estoppel certificate with respect to the Existing Loan
(the “Seller Estoppel Certificate”), in form attached hereto as Exhibit C, and
otherwise in form acceptable to Purchaser in Purchaser’s sole and absolute
discretion, stating, among other things, that Seller has no defenses to the
repayment, in full, of the Existing Loan, in accordance with the terms of the
Existing Loan Documents.

44. Consent to Relief from Automatic Stay. Seller hereby consents to relief from
the automatic stay in bankruptcy, in the event that a Bankruptcy Event occurs.
In connection with the foregoing consent, Seller hereby acknowledges that
(a) the debts secured by liens on the Property exceed the value of the Property;
(b) if a Bankruptcy Event occurs, then, absent Purchaser’s consent, there is no
reasonable possibility that Seller could achieve a successful reorganization
within a reasonable length of time; and (c) the Seller’s business and Property
constitute “single asset real estate” within the meaning of Section 101(51B) of
the United States Bankruptcy Code, because the Property is real property
consisting of a single property or project which generates substantially all of
the gross income of Seller, on which no substantial business is being operated,
other than operating such real property (and the Property is not residential
property with fewer than four units).

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the Effective Date.

 

Seller: PAVILION LLC, a Maryland limited liability company By:   Triton
Pavilion, LLC, a Delaware limited liability company, its managing member  

By:

  Montrose Investment Holdings, LLC, a Delaware limited liability company, its
managing member    

By:

  CBRE Realty Finance TRS, LLC, a Delaware limited liability company, its
managing member       By:  

/s/ Paul Martin

      Name:   Paul Martin       Title:   Managing Director Federal Employer
Identification No.: 20-3942281 Purchaser: ANGELO GORDON REAL ESTATE INC., a
Delaware corporation By:  

/s/ Joseph R. Wekselblatt

Name:   Joseph R. Wekselblatt Title:   Chief Financial Officer Federal Employer
Identification No.: 20-4522205

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The escrow provisions in the foregoing contract are agreed to by the
undersigned, who acknowledges receipt of the Deposit.

 

LAWYERS TITLE INSURANCE CORPORATION By:   Linowes and Blocher, LLP, its
authorized agent  

By:

 

/s/ William Hoffman

 

Name:

  William Hoffman   Title:  

 

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The indemnification provisions in Section 40 of the foregoing Agreement are each
agreed to by the undersigned.

 

Pavilion Indemnitor: CBRE REALTY FINANCE, INC., a Delaware corporation By:  

/s/ Paul Martin

Name:   Paul Martin Title:   Executive Vice President

 

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The provisions in Sections 1(e), 13.1, 15 and 19 of the foregoing Agreement are
each agreed to by the undersigned.

 

CBF: CBRE REALTY FINANCE TRS, LLC, a Delaware limited liability company By:  

/s/ Paul Martin

Name:   Paul Martin Title:   Executive Vice President

 

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AG Indemnitor is executing this Agreement, solely to evidence its agreement to
the terms of the indemnification provisions set forth in Section 15 above.

 

AG Indemnitor: AG CORE PLUS II CORP., a Delaware corporation By:  

/s/ Joseph R. Wekselblatt

Name:   Joseph R. Wekselblatt Title:   Chief Financial Officer AG CORE PLUS II
(AU) HOLDINGS CORP., a Delaware corporation By:  

/s/ Joseph R. Wekselblatt

Name:   Joseph R. Wekselblatt Title:   Chief Financial Officer