Exhibit 10.3
PURCHASE AND SALE AGREEMENT
 
This PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into by AVENUE
ASSOCIATES LIMITED PARTNERSHIP, a District of Columbia limited partnership
(“Seller”), and Wells Real Estate Investment Trust II, Inc., a Maryland
corporation (“Purchaser”), as of February 22, 2011 (the “Effective Date”).
RECITALS:
A.Seller owns a fee simple interest in and to certain real property known as
Market Square East and West located at 701 and 801 Pennsylvania Avenue, NW,
Washington, District of Columbia, as more particularly described in Exhibit A
attached hereto and made a part hereof (the “Premises”).
 
B.The parties to this Agreement have agreed to the sale and purchase of the
Property (as hereinafter defined), of which the Premises are a part, on terms
and conditions more particularly set forth in this Agreement.
 
ARTICLE 1
PURCHASE AND SALE OF PROPERTY.
 
On the terms and conditions stated in this Agreement, Seller hereby agrees to
sell to Purchaser, and Purchaser hereby agrees to purchase from Seller, all of
Seller's right, title and interest in and to the following described property
(collectively, the “Property”):
1.0    Land. The Premises, together with all rights and appurtenances pertaining
to the Premises, including, without limitation, all of Seller's right, title and
interest in and to (i) all minerals, oil, gas, and other hydrocarbon substances
thereon or thereunder, (ii) all adjacent strips, streets, roads, alleys and
rights-of-way, public or private, open or proposed, (iii) all covenants,
easements, privileges, and hereditaments pertaining thereto, whether or not of
record, and (iv) all access, air, water, riparian, development, utility, and
solar rights (collectively, the “Land”).
 
1.1    Improvements. The office building (the “Building”) constructed on the
Premises, together with all parking lots and parking structures and all other
improvements and structures constructed on the Premises (collectively, the
“Improvements”).
 
1.2    Personal Property. All of Seller's right, title and interest in and to
(specifically excluding any fixtures or personal property owned by tenants under
leases or licensees under licenses) the following: (i) mechanical systems,
fixtures, machinery and equipment comprising a part of or attached to or located
upon or within the Improvements; (ii) maintenance equipment and tools, if any,
owned by Seller and used exclusively in connection with, and located in or at,
the Improvements; (iii) site plans, surveys, plans and specifications, manuals
and instruction materials, and floor plans in Seller's possession which relate
to the Land or Improvements; (iv) pylons and other signs situated on or at the
Land or Improvements; and (v)

 

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other tangible personal property owned by Seller and used exclusively in
connection with, and located in or on, the Land or Improvements as of the date
of Closing (as defined in Section 8.1 below) (collectively, the “Personal
Property”).
 
1.3    Leases and Licenses. Seller's right, title and interest in (i) all leases
with tenants leasing all or any portion of the Improvements (the “Leases”), and
(ii) to the extent assignable, Seller's right, title and interest in all license
agreements, occupancy agreements, and other similar agreements with licensees
using any portion of the Improvements in effect as of the date of Closing
(collectively, the “Licenses”), in each case to the extent the same are in
effect as of the Closing Date, a current list of which is attached hereto as
Schedule 1.4.
 
1.4    Security Deposits. Seller's right, title and interest in all security
deposits held by Seller in connection with the Leases and Licenses and not
applied pursuant to the terms thereof, a current list of which is attached
hereto as Schedule 1.5.
 
1.5    Contracts. Subject to Section 6.1.3 hereof and to the extent assignable,
Seller's right, title and interest in all contracts and other agreements related
to the Land, Improvements, Personal Property, Leases or Licenses that will
remain in existence after Closing, including, without limitation, contracts or
agreements relating to construction, architectural services, parking,
maintenance or other supplies or services, management, leasing or brokerage
services, utility services, or any equipment leases, but expressly excluding the
existing Property Management Agreement and Exclusive Leasing Agreement (as such
terms are defined in Section 6.1.3), which will be terminated effective as of
the time of Closing (collectively, the “Contracts”), a current list of which is
attached hereto as Schedule 1.6.
 
1.6    Permits. Seller's right, title and interest in all permits, licenses,
certificates of occupancy, entitlements and governmental approvals which relate
exclusively to the Land or Improvements, to the extent assignable (collectively,
the “Permits”).
 
1.7    Intangibles. Seller's right, title and interest, if any, in all names,
trade names, street numbers, marks, other symbols and general intangibles, which
relate exclusively to the Land or the Improvements, to the extent assignable,
other than any of the same that reference “Beacon,” “Beacon Capital” or similar
(collectively, the “Intangibles”).
 
ARTICLE 2
PURCHASE PRICE AND DEPOSIT.
 
2.1    Purchase Price.
 
2.1.1    The aggregate purchase price for the Property (“Purchase Price”) shall
be SIX HUNDRED FIFTEEN MILLION AND NO/100 DOLLARS ($615,000,000.00). The cash
due at Closing from Purchaser on account of the Purchase Price shall be subject
to adjustment as set forth in this Agreement. The Purchase Price shall be
payable as follows:
 
2.1.2    Deposit. Within one (1) Business Day following the Effective Date and
as a condition precedent to this Agreement being effective, Purchaser shall
deliver to Commonwealth Land Title Insurance Company (the “Escrow Agent”), by
federal funds wire transfer, a cash deposit in immediately available funds in
the amount SEVENTY-FIVE MILLION AND NO/100 DOLLARS ($75,000,000.00) (together
with any interest accrued thereon, the “Deposit”). If Purchaser shall fail to
deposit the Deposit with Escrow Agent within the time period provided for above,
Seller may at any time

 

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prior to Escrow Agent's receipt of the Deposit, terminate this Agreement by
written notice to Purchaser and Escrow Agent as its sole and exclusive remedy,
in which case this Agreement shall be null and void ab initio, and thereafter
neither party shall have any further rights or obligations to the other
hereunder, except for those which expressly survive the termination of this
Agreement. Prior to Purchaser's making the Deposit, Seller, Purchaser and Escrow
Agent shall enter into an escrow agreement in the form of Exhibit B attached
hereto (the “Escrow Agreement”). Escrow Agent shall hold the Deposit in
accordance with this Agreement and the Escrow Agreement and shall disburse the
Deposit to Seller at Closing.
 
2.1.3    The balance of the Purchase Price due from Purchaser at Closing (after
crediting the Deposit and after application of prorations and adjustments
provided for in this Agreement) shall be paid by Purchaser to Escrow Agent by
federal funds wire transfer in immediately available funds no later than 11:00
a.m. (Washington, D.C. time) on the Closing Date and disbursed to Seller at
Closing in accordance with Section 8.3.2 hereof and the Escrow Agreement.
 
ARTICLE 3
TITLE AND SURVEY.
 
3.1    State of Title to be Conveyed. Title to the Property shall be conveyed to
Purchaser free from all liens, encumbrances, encroachments and other exceptions
to title except (i) those shown on Schedule B - Section II of the Commitment or
the Survey (as such terms are defined in Section 3.2 below) and not required to
be cured by Seller in accordance with this Article 3, (ii) the Leases and
Licenses, (iii) matters caused by Purchaser or the activities of Purchaser or
its agents, employees, consultants, contractors and representatives on the
Property, (iv) real estate taxes, sewer rents and taxes, water rates and
charges, vault charges and taxes, business improvement district taxes and
assessments and any other governmental taxes, charges or assessments levied or
assessed against the Property, including any so-called payments in lieu of
taxes, in each case which are a lien but not yet due and payable, subject to
proration in accordance with Section 8.5.4 below, and (v) applicable zoning and
building ordinances and land use regulations and any and all other present and
future laws, rules, regulations, statutes, ordinances, orders or other legal
requirements affecting the Property (collectively, the “Permitted Exceptions”).
 
3.2    Title Commitment and Survey. Seller has provided to Purchaser a title
insurance commitment with an effective date of January 5, 2011, revised February
3, 2011 (the “Commitment”) for an Owner's Policy of Title Insurance from
Commonwealth Land Title Insurance Company (the “Title Company”), covering the
Land, together with copies of all instruments reflected as exceptions set forth
therein, as well as a copy of Seller's existing ALTA survey of the Land prepared
by VIKA Incorporated and dated March 28, 2007, last revised January 11, 2011
(the “Survey”). With respect to any title or survey matters first arising after
the Effective Date and on or prior to the Closing which materially and adversely
affect the operation of the Property (a “Title Objection”), other than any of
the Permitted Exceptions (to which Purchaser shall have no right to object),
Purchaser shall have until the earlier of (i) five (5) Business Days after
Purchaser's discovery of such Title Objection or (ii) the Closing Date to notify
Seller in writing of Purchaser's objection thereto. In the event Purchaser shall
timely notify Seller of any Title Objections, Seller shall have the right, but
not the obligation, except for Monetary Liens (as hereinafter described), to
cure such Title Objection(s) in its sole and absolute discretion. Within three
(3) Business Days after receipt of Purchaser's notice of Title Objection(s),
with the Closing automatically extended, if necessary, to allow for such
response period, but in no event beyond the Designated Closing Date without
Seller's approval, Seller shall notify Purchaser in writing whether Seller
elects to attempt to cure such Title Objection(s). Failure of Seller to give
such notice within said three (3) Business Day period shall be deemed an
election by Seller not to cure such Title Objection(s). If Seller elects or is

 

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deemed to have elected not to cure any Title Objection(s) specified in
Purchaser's notice, Purchaser shall have the following options, to be given by
written notice to the Seller within two (2) Business Days after Purchaser's
receipt of Seller's notice electing not to cure such objection(s) (or, if Seller
fails to deliver such notice, within two (2) Business Days after the day on
which Seller was required to deliver such notice): (i) to accept a conveyance of
the Property subject to the Permitted Exceptions, specifically including any
matters objected to by Purchaser which Seller has elected, or is deemed to have
elected, not to cure (which such matter(s) shall thereafter be deemed to be a
Permitted Exception), without reduction of the Purchase Price, or (ii) to
terminate this Agreement by sending written notice thereof to Seller and Escrow
Agent, and upon delivery of such notice of termination, this Agreement shall
terminate and the Deposit shall be returned to Purchaser, and thereafter neither
party hereto shall have any further rights, obligations or liabilities hereunder
except for those matters which expressly survive termination of this Agreement.
In addition, if Seller fails prior to Closing to cure or satisfy any Title
Objections(s) that Seller has elected, or is required hereunder, to cure or
satisfy, then Purchaser may: (a) accept a conveyance of the Property subject to
the Permitted Exceptions, specifically including such Title Objection(s) which
Seller has failed to cure or satisfy (which such Title Objection(s) shall
thereafter be deemed to be a Permitted Exception), without reduction of the
Purchase Price, or (b) terminate this Agreement by sending written notice
thereof to Seller and Escrow Agent, and upon delivery of such notice of
termination, this Agreement shall terminate, the Deposit shall be returned to
Purchaser, and thereafter neither party hereto shall have any further rights,
obligations or liabilities hereunder except for those matters which expressly
survive termination of this Agreement. Notwithstanding the foregoing, any
delinquent real property taxes, deeds of trust, mortgages and, to the extent
arising out of the acts of Seller, mechanic's liens (specifically excluding
liens created by, through or under tenants) (collectively, “Monetary Liens”),
first discovered or disclosed after the Effective Date shall be automatically
deemed unpermitted exceptions, and Seller shall cause all such Monetary Liens to
be removed from record on or before the Closing Date. In addition, Seller, at
Seller's sole cost and expense, shall be obligated to release and discharge of
record, on or before the Closing Date, any Title Objection voluntarily created
by Seller from and after the Effective Date in breach of this Agreement.
 
ARTICLE 4
PURCHASER'S DUE DILIGENCE AND ACKNOWLEDGEMENT.
 
4.1    Purchaser's Due Diligence. Seller has made available (at reasonable times
and places or by providing Purchaser access to an online database) for
Purchaser's review Seller's books and records relating to the Property,
including, without limitation, maintenance records, environmental reports,
records of income, taxes and expenses, Leases, Licenses, tenant files,
Contracts, records of repairs and capital improvements, in all cases as
available, but expressly excluding all documents and materials of a proprietary
nature, such as internal valuation analysis, projections, software, marketing
materials, and materials constituting the work product of Seller or its agents
and attorneys (collectively, the “Property Information”).
 
4.1.1    Access. After the date hereof, Seller shall, upon reasonable notice and
at reasonable times, make the Property available to Purchaser and its agents,
employees, consultants and representatives for such inspections and tests as
Purchaser deems appropriate, at Purchaser's sole cost and expense. Purchaser
shall provide notice to Seller at least one (1) Business Day prior to any entry
onto the Property by Purchaser or Purchaser's agents, employees, consultants or
representatives. Seller shall have the right to have a representative present
during all or any of Purchaser's inspections and tests. Purchaser will use
reasonable efforts to minimize interference with Seller's operations at the
Property and the rights of tenants of the Property. Purchaser shall not alter or
disturb the Property in any manner and Purchaser shall not permit any mechanics'
liens to be filed against all or any part of the Property. In the event

 

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Purchaser discovers any matter during the course of its investigations and tests
which may be reportable under applicable law, Purchaser acknowledges and agrees
that it shall not undertake any such reporting (unless required by law), but
shall notify Seller immediately of any such discovery. Seller's prior written
consent shall be required prior to any interviews of any tenants of the Property
by Purchaser or its agents, employees, consultants and representatives, and
Seller shall have a right to have a representative present during all tenant
interviews.
 
4.1.2    Indemnity. Purchaser hereby agrees to indemnify, defend, and hold
harmless Seller, its partners, members, affiliates, property manager, and their
respective officers, directors, agents, employees, and representatives
(collectively, the “Indemnified Parties”) from and against any and all liens,
claims, or damages of any kind or nature, including any demands, actions or
causes of action, assessments, losses, costs, expenses, liabilities, interest
and penalties, and reasonable attorneys' fees suffered, incurred, or sustained
by any of the Indemnified Parties caused by the entry on the Property by
Purchaser or its agents, employees, consultants or representatives or by
Purchaser's investigations of the Property (“Claims”) unless such Claims arise
or are caused by Seller's gross negligence or willful misconduct. Purchaser will
promptly repair all damage to the Property arising from Purchaser's inspections
or tests, including any damage that may have been caused by Purchaser or its
agents, employees, consultants or representatives in the conduct of the review,
and shall promptly restore the Property substantially to its condition before
such inspections and tests. Notwithstanding anything set forth herein to the
contrary, the indemnification and restoration obligations of Purchaser in this
Section 4.1.2 shall survive Closing or the earlier termination, for any reason,
of this Agreement. Purchaser shall provide to Seller prior to its or its
agents', employees', consultants' or representatives' entry on the Property
certificates of liability insurance insuring Purchaser and Seller in an amount
not less than Two Million Dollars ($2,000,000.00).
 
4.1.3    Purchaser Acknowledgement. Purchaser acknowledges that it has had the
opportunity to perform a feasibility study of the Property, including, but not
limited to, review and approval of the physical and environmental
characteristics and condition of the Property and performance of marketing and
feasibility studies, structural and engineering investigations, auditing of
books and records of the Property, and financial analyses. Upon delivery of the
Deposit required hereunder, Purchaser acknowledges that the Deposit shall be
non-refundable to Purchaser except as expressly set forth herein.
 
4.2    As Is, Where Is.
 
4.2.1    Express Representations. Except as provided in the express
representations and warranties of Seller set forth in Sections 5.1 and 11.1 of
this Agreement and except as may be expressly set forth in the documents
executed and delivered by Seller at Closing, and subject to the limitations of
time and money set forth in Sections 5.4 and 10.2 herein (collectively, the
“Express Representations”), Seller does not, by the execution and delivery of
this Agreement, and Seller shall not, by the execution and delivery of any
document or instrument executed and delivered in connection with Closing, make
any representation or warranty, express or implied, of any kind or nature
whatsoever, with respect to the Property, and all such representations and
warranties are hereby disclaimed.
 
4.2.2    Disclaimed Matters. Without limiting the generality of the foregoing,
other than the Express Representations, Seller makes, and shall make, no express
or implied warranty as to matters of zoning, acreage, building square footage,
tax consequences, physical or environmental condition (including, without
limitation, laws, rules, regulations, orders and requirements pertaining to the
use, handling, generation, treatment, storage or disposal of any toxic or
hazardous waste or toxic, hazardous or

 

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regulated substance), valuation, governmental approvals, governmental
regulations or any other matter or thing relating to or affecting the Property
(collectively, the “Disclaimed Matters”).
 
4.2.3    No person acting on behalf of Seller is authorized to make, and by
execution hereof, Purchaser acknowledges that no person has made, any
representation, agreement, statement, warranty, guarantee or promise regarding
the Property or the transaction contemplated herein or the zoning, construction,
physical condition or other status of the Property except for the Express
Representations. No representation, warranty, agreement, statement, guarantee or
promise, if any, made by any person acting on behalf of Seller other than the
Express Representations will be valid or binding on Seller.
 
PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE EXPRESS REPRESENTATIONS,
SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (I) VALUE;
(II) THE INCOME TO BE DERIVED FROM THE PROPERTY; (III) THE SUITABILITY OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH MAY BE CONDUCTED THEREON,
INCLUDING, WITHOUT LIMITATION, THE POSSIBILITIES, IF ANY, FOR FUTURE DEVELOPMENT
OF THE PROPERTY; (IV) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; (V) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (VI) THE
NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
INDOOR AND OUTDOOR ENVIRONMENT AIR QUALITY, WATER, SOIL AND GEOLOGY; (VII) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY;
(VIII) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY; (IX) COMPLIANCE WITH ANY FEDERAL, STATE, AND
LOCAL ENVIRONMENTAL PROTECTION, POLLUTION, HEALTH AND SAFETY OR LAND USE LAWS,
RULES, REGULATIONS, ORDINANCES, ORDERS, REQUIREMENTS OR COMMON LAW, INCLUDING,
WITHOUT LIMITATION, TITLE III OF THE AMERICANS WITH DISABILITIES ACT OF 1990, AS
AMENDED, THE FEDERAL WATER POLLUTION CONTROL ACT, AS AMENDED, THE RESOURCE
CONSERVATION AND RECOVERY ACT, AS AMENDED, THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE SAFE DRINKING
WATER ACT, AS AMENDED, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, AS AMENDED,
THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970, AS AMENDED, THE TOXIC SUBSTANCE
CONTROL ACT, AS AMENDED, AND REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING
AND ANALOGOUS STATE STATUTES AND REGULATIONS; (X) THE PRESENCE OR ABSENCE OF
HAZARDOUS OR TOXIC MATERIALS, SUBSTANCES OR WASTE AT, ON, UNDER, OR ADJACENT TO
THE PROPERTY (SUBSECTIONS IX AND X HEREIN COLLECTIVELY REFERRED TO AS,
“ENVIRONMENTAL MATTERS”); (XI) THE CONTENT, COMPLETENESS OR ACCURACY OF THE
PROPERTY INFORMATION, THE SURVEY OR THE COMMITMENT; (XII) THE CONFORMITY OF THE
IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY INCLUDING ANY PLANS
AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO PURCHASER; (XIII)
THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR
BUILDING REQUIREMENTS; (XIV) DEFICIENCY OF ANY UNDERSHORING, (XV) DEFICIENCY OF
ANY

 

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DRAINAGE; (XVI) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED ON
OR NEAR AN EARTHQUAKE FAULT LINE; (XVII) THE EXISTENCE OF VESTED LAND USE,
ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; OR (XVIII) ANY OTHER
MATTER. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT, HAVING BEEN GIVEN THE
OPPORTUNITY TO INSPECT THE PROPERTY AND REVIEW INFORMATION AND DOCUMENTATION
AFFECTING THE PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF
THE PROPERTY AND REVIEW OF SUCH INFORMATION AND DOCUMENTATION, AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER, EXCEPT AS EXPRESSLY SET FORTH
IN THE EXPRESS REPRESENTATIONS. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
ANY INFORMATION MADE AVAILABLE TO PURCHASER OR PROVIDED OR TO BE PROVIDED BY OR
ON BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF
SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION, EXCEPT AS EXPRESSLY SET FORTH IN THE
EXPRESS REPRESENTATIONS. PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT PURCHASER
SHALL NOT BE ENTITLED TO RELY ON ANY REPORTS OR OTHER PROPERTY INFORMATION
SUPPLIED BY SELLER TO PURCHASER, EXCEPT AS SET FORTH IN THE EXPRESS
REPRESENTATIONS PURCHASER AGREES TO FULLY AND IRREVOCABLY RELEASE SELLER FROM
ANY AND ALL CLAIMS THAT PURCHASER MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST
SELLER FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE
OF ACTION ARISING FROM SUCH INFORMATION OR DOCUMENTATION, EXCEPT TO THE EXTENT
ARISING OUT OF A BREACH BY SELLER OF A REPRESENTATION OR WARRANTY (SUBJECT TO
THE LIMITATIONS OF TIME AND MONEY SET FORTH IN SECTIONS 5.4 AND 10.2 HEREIN)
MADE IN THE EXPRESS REPRESENTATIONS. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER
BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER,
AGENT, EMPLOYEE, SERVANT OR OTHER PERSON TO THE EXTENT NOT EXPRESSLY SET FORTH
IN THE EXPRESS REPRESENTATIONS. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR
HEREIN IS MADE ON AN “AS IS” CONDITION AND BASIS WITH ALL FAULTS AND DEFECTS,
AND THAT SELLER HAS NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS
EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED HEREIN. PURCHASER REPRESENTS,
WARRANTS, AND COVENANTS TO SELLER, WHICH REPRESENTATION, WARRANTY, AND COVENANT
TO SELLER SHALL SURVIVE THE CLOSING AND NOT BE MERGED WITH THE DEED, THAT,
EXCEPT FOR SELLER'S EXPRESS REPRESENTATIONS, PURCHASER IS RELYING SOLELY UPON
PURCHASER'S OWN INVESTIGATION OF THE PROPERTY.
BY INITIALING BELOW, PURCHASER ACKNOWLEDGES THAT (i) THIS SECTION 4.2 HAS BEEN
READ AND FULLY UNDERSTOOD, (ii) PURCHASER HAS HAD THE OPPORTUNITY TO ASK
QUESTIONS OF ITS COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (iii) PURCHASER
HAS ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS SECTION 4.2.
/s/ ENM
PURCHASER'S INITIALS

 

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4.2.4    Waiver. Without in any way limiting any provision of this Section 4.2,
Purchaser specifically acknowledges and agrees that, except with respect to the
Express Representations and the obligations of Seller set forth in Section 6.1
of this Agreement, Purchaser hereby waives, releases and discharges any claim it
has, might have had, or may have against Seller with respect to (a) the
Disclaimed Matters, (b) subject to Article 9 of this Agreement, the condition of
the Property as of the Closing Date, (c) the past, present or future condition
or compliance of the Property with regard to any federal, state or local law,
statute, ordinance, rule, regulation, order or determination of any governmental
authority or agency affecting the Property, including without limitation those
pertaining to Environmental Matters, or (d) any other state of facts that exists
with respect to the Property or any of the Property Information.
 
 
ARTICLE 5
REPRESENTATIONS AND WARRANTIES.
 
5.1    Seller's Representations and Warranties. As a material inducement for
Purchaser to enter into this Agreement, Seller represents to Purchaser, as of
the Effective Date, as follows:
 
5.1.1    Organization. Seller is duly formed and validly existing under the laws
of the jurisdiction of its organization and is qualified to transact business in
the jurisdiction where the Property is located.
 
5.1.2    Authority/Consent. Seller possesses all requisite power and authority,
and has taken all actions required by its organizational documents and
applicable law, to execute and deliver this Agreement and will, by Closing, have
taken all actions required by its organizational documents and applicable law to
consummate the transactions contemplated by this Agreement.
 
5.1.3    Litigation. Except as may be disclosed on Schedule 5.1.3 attached
hereto, and except for any claims (such as slip and fall and similar claims)
that are covered by Seller's insurance, to Seller's knowledge, no action, suit
or other proceeding (including, but not limited to, any condemnation action) is
pending or has been threatened in writing that concerns or involves the Property
which would, if determined adversely to Seller, materially and adversely affect
the use or value of the Property or affect Seller's ability to fulfill its
obligations under this Agreement.
 
5.1.4    Bankruptcy. No bankruptcy, insolvency, reorganization or similar action
or proceeding, whether voluntary or involuntary, is pending, or, to Seller's
knowledge, has been threatened in writing, against Seller.
 
5.1.5    Contracts. Except for the Contracts referenced on Schedule 1.6 and
subject to Section 6.1.3 below, there are no contracts or agreements to which
Seller is a party or by which it is bound relating to construction,
architectural services, parking, maintenance or other supplies or services,
management, leasing or brokerage services, or any equipment leases that are
currently in effect and will be in effect after Closing.
 
5.1.6    Employees. Seller has no employees.
 
5.1.7    Leases.
(i)    Except for the Leases and Licenses referenced on Schedule 1.4 and leases,
licenses, or other occupancy agreements which may be entered into by Seller
pursuant to Section 6.1.1 hereof, there are no leases, rental agreements,
license agreements or other

 

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occupancy agreements currently in effect which will affect the Property after
Closing.
(ii)    The Leases and Licenses have not been amended except as set forth on
Schedule 1.4.
(iii)     Each Lease and each License is in full force and effect.
(iv)    Seller has provided or will provide Purchaser with complete copies of
all Leases, Licenses, including all amendments thereto in Seller's possession.
(v)    Except as may be described in Schedule 8.5.8 (i) attached hereto, all
tenant improvement allowances currently due and payable by Seller as landlord or
licensee under or in connection with the current terms of the Leases and
Licenses have been paid in full.
(vi)    Attached hereto as Schedule 1.5 is a true and complete list of security
deposits currently held by Seller, as landlord or licensor, under the Leases and
Licenses.
(vii)    Except as may be described in Schedule 5.1.7(vii) attached hereto,
there exists no monetary default by any tenant or licensee under any of the
Leases or the Licenses after giving effect to any applicable grace or cure
periods.
5.1.8    Violations of Law. Except as set forth on Schedule 5.1.9 or as may be
included in the Property Information, Seller has not received written notice
from any governmental authority of any material violation of any federal, state,
county or municipal laws, ordinances, orders, regulations and requirements
affecting the Property or any portion thereof (including the conduct of business
operations thereon) which violation remains unresolved and which violation would
materially and adversely affect the Property or the operation thereof.
 
5.1.9    Environmental Reports. To Seller's knowledge, complete copies of all
environmental/hazardous waste studies and reports relating to the Property which
are in Seller's possession (collectively, the “Environmental Reports”) have been
furnished to Purchaser other than non-material documents with respect to matters
which have been remediated or otherwise closed out.
 
5.1.10    Foreign Person. Seller is not a “foreign person,” “foreign trust” or
“foreign corporation” (as those terms are defined in the Internal Revenue Code
of 1986, as amended, and related Income Tax Regulations).
 
5.1.11    No Conflicts. The execution and delivery of this Agreement by Seller
and the consummation by Seller of the transactions contemplated hereby will not:
(i) violate any judgment, order, injunction, or decree to which Seller or the
Property is subject, or (ii) subject to the satisfaction of the condition set
forth in Section 7.2.4 below, conflict with, result in a breach of, or
constitute a default under the organizational documents of Seller or any lease,
mortgage, loan agreement, covenant, or other agreement or instrument to which
Seller is a party or by which Seller or the Property is bound.
 
5.1.12    OFAC. Neither Seller nor, to Seller's knowledge, any of its equity
owners nor any of their respective employees, officers or directors, is a person
or entity with whom U.S. persons or entities are restricted from doing business
under regulations of the Office of Foreign Asset Control of the Department of
the Treasury (“OFAC”), (including those named on OFAC's Specially Designated and
Blocked Persons List) or under any similar statute, executive order (including
the September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to

 

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Commit, or Support Terrorism) or other similar governmental action.
 
5.1.13    Knowledge. Jeffrey L. Kovach is the owner representative for the asset
management of the Property and is the individual most likely to have actual
knowledge relevant to Seller's representations herein.
 
5.1.14    Joinder. BCSP V U.S, Investments, L.P., a Delaware limited partnership
and an affiliate of Seller, has joined in the execution of this Agreement for
the purpose of evidencing its agreement to be bound by the provisions of this
Section 5.1, subject to the limitations set forth in Sections 5.4 and 10.2 of
this Agreement, and Sections 6.7 and 6.8 of this Agreement, all as otherwise set
forth in the “Joinder”.
 
5.2    Purchaser's Representations and Warranties. As a material inducement for
Seller to enter into this Agreement, Purchaser represents to Seller, as of the
Effective Date, as follows:
 
5.2.1    Organization. Purchaser is duly formed, validly existing and in good
standing under the laws of the jurisdiction of its organization and, as of the
Closing Date, will be qualified to transact business in the jurisdiction where
the Property is located.
 
5.2.2    Authority/Consent. Purchaser possesses all requisite power and
authority, has taken all actions required by its organizational documents and
applicable law, and has obtained all necessary consents, to execute and deliver
this Agreement and will, by Closing, have taken all actions required by its
organizational documents and applicable law to consummate the transactions
contemplated in this Agreement.
 
5.2.3    OFAC. Neither Purchaser nor any of its equity owners, nor to
Purchaser's knowledge any of their respective employees, officers or directors,
is a person or entity with whom U.S. persons or entities are restricted from
doing business under regulations of OFAC (including those named on OFAC's
Specially Designated and Blocked Persons List) or under any similar statute,
executive order (including the September 24, 2001, Executive Order Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism) or other similar governmental action.
 
5.2.4    No Conflicts. The execution and delivery of this Agreement by Purchaser
and the consummation by Purchaser of the transactions contemplated hereby will
not: (i) violate any judgment, order, injunction, or decree to which Purchaser
is subject, or (ii) conflict with, result in a breach of, or constitute a
default under the organizational documents of Purchaser or any lease, mortgage,
loan agreement, covenant, or other agreement or instrument to which Purchaser is
a party or by which Purchaser is bound.
 
5.2.5    Bankruptcy. No bankruptcy, insolvency, reorganization or similar action
or proceeding, whether voluntary or involuntary, is pending, or, to Purchaser's
knowledge, has been threatened in writing, against Purchaser.
 
5.3    Knowledge. For purposes of this Agreement, the phrase “to Seller's
knowledge” means the present, actual knowledge, without independent
investigation or inquiry, of Jeffrey L. Kovach. There shall be no personal
liability on the part of Jeffrey L. Kovach arising out of any representations or
warranties made herein or otherwise. To the extent a Tenant Estoppel (defined in
Section 6.5 below) is provided to Purchaser which sets forth information with
respect to any item as to which Seller has made a representation or warranty,
then Seller's representations and warranties with respect to such information

 

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will thereafter be null and void and of no further force and effect and
Purchaser shall rely on the information in such Tenant Estoppel.
 
5.4    Survival. All of the representations and warranties set forth in this
Article 5 shall survive the Closing for a period of six (6) months (“Survival
Period”), subject to the provisions of Article 10 of this Agreement. Purchaser
shall provide Seller with written notice (a “Notice of Breach”) of any alleged
breach or failure of any representation or warranty made by Seller and
specifying the nature thereof within five (5) Business Days after Purchaser's
discovery of such alleged breach or failure. Purchaser shall commence any
action, suit, or proceeding with respect to any breach or failure that is the
subject of the Notice of Breach, if at all, on or before the date that is thirty
(30) days after the expiration of the Survival Period (the “Suit Deadline”).
Seller acknowledges and agrees that the resolution of such action, suit, or
proceeding may not occur until after the expiration of the Survival Period and
the Survival Period shall be deemed to be tolled with respect to (and only with
respect to) any alleged breach or failure of a representation or warranty of
which Seller receives a Notice of Breach before the expiration of the Survival
Period, provided Purchaser files an action, suit or proceeding with respect
thereto prior to the Suit Deadline. Notwithstanding the foregoing to the
contrary, Seller shall have no liability in connection with this Agreement by
reason of any inaccuracy of a representation or warranty if, and to the extent
that, such inaccuracy is disclosed to Purchaser or otherwise included in the
Property Information at the time of the Closing, and Purchaser elects,
nevertheless, to consummate the transaction contemplated hereby.
 
ARTICLE 6
COVENANTS OF SELLER PRIOR TO CLOSING.
 
6.1    Operation of Property. From the Effective Date until the Closing, Seller
shall operate the Property in accordance with the terms of this Section 6.1.
 
6.1.1    From the Effective Date until the Closing, Seller shall continue to
operate, maintain and repair the Property in the ordinary course of business and
to the standard that Seller has operated the Property to date, but shall not
take any of the following actions without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, delayed or
conditioned and which consent shall be deemed granted in the event that
Purchaser fails to respond to a written request for its consent within three (3)
Business Days: (a) make or permit to be made any material alterations to or upon
the Property (provided, however, Purchaser's consent shall not be required for
repairs or other work of an emergency nature, as required by law, or under any
Lease, provided that Seller shall notify Purchaser of such work as soon as
practicable), (b) enter into any contracts for the provision of services and/or
supplies to the Property which are not terminable without premium or penalty by
Purchaser upon no more than thirty (30) days' prior written notice, or amend or
modify any of the Contracts in any material respect, unless such Contract, as
amended, may be terminated without premium or penalty by Purchaser upon no more
than thirty (30) days' prior written notice, (c) enter into any leases,
licenses, or other occupancy agreements with respect to the Property or any part
thereof, or extend (except pursuant to a provision of the existing Lease or
License, in which event Seller shall notify Purchaser within three (3) Business
Days of such event), terminate or cancel (except in the event of a tenant
default, in which event Seller shall notify Purchaser within three (3) Business
Days of such event), or otherwise amend (except pursuant to a provision of the
existing Lease or License, in which event Seller shall notify Purchaser within
three (3) Business Days of such event) any of the Leases or Licenses, (d) remove
or permit the removal from the Property of any fixtures, mechanical equipment,
or any other item included in the Property except when replaced with items of
equal or greater quality and value by Seller prior to Closing, and except for
the use and consumption at the Property of inventory, office and other supplies
and spare parts, and the replacement of worn out, obsolete and defective tools,
equipment and appliances, in each case in the

 

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ordinary course of business, (e) settle, compromise, withdraw or terminate any
real estate tax appeal or proceeding affecting the Property other than any
relating solely to periods prior to tax year 2011 (except that Purchaser may
withhold its consent in the event such action would have a material adverse
effect on the 2011 or any subsequent tax year), or (f) grant any easements or
title encumbrances that will affect the Property after the Closing Date.
 
6.1.2    Notwithstanding the foregoing, Seller shall have no obligation to
Purchaser to make or perform any capital repairs or replacements unless required
to do so to meet its obligations as landlord under the Leases or by applicable
law.
 
6.1.3    Not later than ten (10) Business Days prior to the Designated Closing
Date, Purchaser may deliver a written notice to Seller setting forth which, if
any, of the Contracts Purchaser has elected to have Seller terminate. Seller
will deliver notices of termination at Closing terminating those Contracts that
Seller is timely notified hereunder to terminate by Purchaser, provided that (i)
such Contracts are terminable in accordance with their terms and (ii) Purchaser
shall be responsible for, and shall indemnify Seller for, any termination
penalties or fees. At Closing, Seller shall assign to Purchaser, to the extent
assignable, and Purchaser shall assume, the Contracts pursuant to the Assignment
and Assumption Agreement (as defined in Section 8.2.1.4). Notwithstanding
anything contained herein to the contrary, Purchaser agrees that the Master
Electric Energy Sales Agreement dated March 26, 2009, together with the Sales
Confirmation between Seller and GDF Suez Energy Resources NA, Inc. (“Suez”)
dated March 26, 2009 (collectively, the “Electric Supply Agreement”), shall be
assigned by Seller to Purchaser subject to the approval of Suez, which approval
Purchaser agrees to use reasonable good faith efforts to obtain; provided,
however, if Purchaser does not satisfy Suez's assignment requirements, Seller
shall terminate the Electric Supply Agreement and Purchaser shall pay for any
termination fees or charges assessed to Seller in connection with such
termination. If a termination fee is payable by Suez in connection with such
termination, Seller shall be entitled to retain such fee. With respect to the
Contracts with Macro Lease and IKON listed on Schedule 1.6, Seller and Purchaser
shall cooperate to obtain the consents required for the assignment of each such
Contract and, subject to receipt of such consents, Seller shall assign and
Purchaser shall assume such Contracts. Seller agrees to cause the existing
property management agreement between Seller and BCSP V DC Portfolio Property
Management LLC (the “Property Management Agreement”) and the existing Exclusive
Leasing Agreement (Office) between Seller and Cassidy Turley (the “Exclusive
Leasing Agreement”) to be terminated effective as of the Closing Date, and,
subject to Section 8.5.8 below, Purchaser shall not be responsible for any
termination penalties or fees in connection therewith.
 
6.2    Notices. Promptly after receipt, Seller shall provide Purchaser with true
and complete copies of any written notices that Seller receives from any
governmental authority with respect to (i) any special assessments or proposed
increases in the valuation of the Property; (ii) any condemnation or eminent
domain proceedings affecting the Property or any portion thereof; or (iii) any
material violation of any environmental law or any zoning, health, fire, safety
or other law, regulation or code applicable to the Property. In addition, Seller
shall deliver or cause to be delivered to Purchaser, promptly upon the giving or
receipt thereof by Seller, true and complete copies of any written notices of
default given or received by Seller under any of the Leases or Licenses.
 
6.3    Litigation. Seller will advise Purchaser promptly of any litigation,
arbitration proceeding or administrative hearing which is instituted after the
Effective Date and which concerns or affects Seller or the Property, other than
any such matters (such as slip and fall and similar claims) that are covered by
Seller's insurance.
 

 

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6.4    Insurance. Prior to Closing, Seller will maintain Seller's existing
insurance coverage with respect to the Property.
 
6.5    Tenant Estoppels. Seller shall request from each of the tenants under a
Lease an estoppel certificate in substantially the form of Exhibit C attached
hereto, provided, however, if such tenant's Lease attaches or prescribes a form
of, or content of, an estoppel certificate, such tenant may deliver an estoppel
certificate conforming to such tenant's Lease (collectively, the “Tenant
Estoppels”).
 
6.6    Tax Reduction Proceedings. Seller may file and/or prosecute an
application for the reduction of the assessed valuation of the Property or any
portion thereof for real estate taxes or a refund of real estate taxes
previously paid (a “Tax Certiorari Proceeding”) to the District of Columbia for
any fiscal year, provided that with respect to the fiscal year in which the
Closing occurs, Purchaser shall have consented with respect thereto, which
consent shall not be unreasonably withheld or delayed and which consent shall be
deemed granted in the event that Purchaser fails to respond to a written request
for its consent within three (3) Business Days. Seller shall have the right to
withdraw, settle or otherwise compromise Tax Certiorari Proceedings affecting
real estate taxes assessed against the Property (i) for any fiscal period prior
to the fiscal year in which the Closing shall occur without the prior consent of
Purchaser (unless such action would have a material adverse effect on the 2011
or any subsequent tax year), and (ii) for the fiscal year in which the Closing
shall occur, provided Purchaser shall have consented with respect thereto, which
consent shall not be unreasonably withheld or delayed (except that Purchaser may
withhold its consent in the event such action would have a material adverse
effect on the 2011 or any subsequent tax year) and which consent shall be deemed
granted in the event that Purchaser fails to respond to a written request for
its consent within three (3) Business Days. The amount of any tax refunds (net
of attorneys' fees and other costs of obtaining such tax refunds) with respect
to any portion of the Property for the tax year in which the Apportionment Time
(as defined in Section 8.5.3 below) occurs shall be apportioned between Seller
and Purchaser as of the Apportionment Time with a prior allocation of the
portion thereof which must be returned to tenants pursuant to the terms of the
Leases; Seller hereby agreeing to be responsible for the return of such refund
to such tenants for the period up to and including the Apportionment Time and
Purchaser having such obligation for the return of such refunds attributable to
the period from and after the Closing Date. If, in lieu of a tax refund, a tax
credit is received with respect to any portion of the Property for the tax year
in which the Apportionment Time occurs, then (x) within thirty (30) days after
receipt by Seller or Purchaser, as the case may be, of evidence of the actual
amount of such tax credit (net of attorneys' fees and other costs of obtaining
such tax credit), the tax credit apportionment shall be readjusted between
Seller and Purchaser, and (y) upon realization by Purchaser of a tax savings on
account of such credit, Purchaser shall pay to Seller an amount equal to the
savings realized (as apportioned). All refunds, credits or other benefits
applicable to any fiscal period prior to the fiscal year in which the Closing
shall occur shall belong solely to Seller (and Purchaser shall have no interest
therein) and, if the same shall be paid to Purchaser or anyone acting on behalf
of Purchaser, same shall be paid to Seller within five (5) days following
receipt thereof. The provisions of this Section 6.6 shall survive the Closing.
 
6.7    Jacobson Lawsuit. Seller and Purchaser each acknowledge that Schedule
5.1.3 attached hereto discloses a lawsuit brought by Lorna Jacobson against
Seller and certain of Seller's affiliates (the “Jacobson Lawsuit”) From and
after Closing, as between Seller and Purchaser, Seller shall be solely
responsible for the Jacobson Lawsuit and shall indemnify Purchaser with respect
to any loss, cost or expense incurred by Purchaser in connection with the
Jacobson Lawsuit. Seller shall be entitled to prosecute the Jacobson Lawsuit as
deemed appropriate by Seller in Seller's sole judgement and shall be entitled to
settle the Jacobson Lawsuit at any time as deemed appropriate by Seller in
Seller's sole judgement. Notwithstanding anything to the contrary set forth in
this Agreement, the indemnity set forth

 

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in this Section 6.7 shall survive Closing hereunder and shall not be subject to
the limitations set forth in Sections 5.4 and 10.2 of this Agreement.
 
6.8    Fulbright Audits. Seller and Purchaser each acknowledge that the tenant
estoppel delivered by Fulbright & Jawaorski L.L.P. dated January 26, 2011,
referenced audits being conducted by such tenant with respect to the years 2006,
2007, 2008 and 2009, and also referenced a refund amount of $101,419.42 with
respect to August 2006 (collectively, the “Fulbright Audits”). From and after
Closing, as between Seller and Purchaser, Seller shall be solely responsible for
the Fulbright Audits and shall indemnify Purchaser with respect to any loss,
cost or expense incurred by Purchaser in connection with the Fulbright Audits.
Seller shall be entitled to deal with the Fulbright Audits as deemed appropriate
by Seller in Seller's sole judgement and shall be entitled to settle the
Fulbright Audits, in whole or in part, at any time as deemed appropriate by
Seller in Seller's sole judgement. Notwithstanding anything to the contrary set
forth in this Agreement, the indemnity set forth in this Section 6.8 shall
survive Closing hereunder and shall not be subject to the limitations set forth
in Sections 5.4 and 10.2 of this Agreement.
 
ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING.
 
7.1    Conditions Precedent to Purchaser's Obligation to Close. Purchaser's
obligation to purchase the Property is subject to satisfaction on or before the
Closing Date of the following conditions, any of which may be waived in writing
by Purchaser in Purchaser's sole and absolute subjective discretion:
 
7.1.1    Title. A final examination of the title to the Land by the Title
Company shall disclose no title exceptions except for the Permitted Exceptions
and other matters approved or deemed approved by Purchaser in accordance with
this Agreement, and Title Company shall be irrevocably committed to issue to
Purchaser a standard ALTA title insurance policy insuring title to the Property
in the amount of the Purchase Price, subject only to the Permitted Exceptions
and such other matters so approved or deemed approved by Purchaser.
 
7.1.2    Delivery of Closing Documents. Seller shall have delivered each of the
Closing Documents required to be delivered under Section 8.2.1 of this Agreement
 
7.1.3    Covenants, Representations and Warranties. Seller shall not be in
material breach of any of covenants, representations and warranties it has made
in this Agreement. In addition, there shall not exist any facts or circumstances
that would make any of the Seller's Express Representations untrue in any
material respect as of the Closing Date. Notwithstanding the foregoing, if a
change in circumstances occurs after the Effective Date which is not otherwise a
breach or default by Seller under the terms of this Agreement and such change of
circumstances requires a representation and warranty made by the Seller to be
modified in order for such representation and warranty to be accurate as of
Closing, then the representation and warranty shall be deemed remade as so
modified, and Seller shall not be in breach of or in default under this
Agreement by virtue of such change in circumstances or modification.
Notwithstanding the foregoing, Purchaser acknowledges that certain tenants are
currently conducting audits as permitted under the terms and conditions of each
of their respective Leases (the “Tenant Audits”), and Purchaser acknowledges and
agrees that Purchaser shall not be permitted to terminate this Agreement
pursuant to any litigation claims that may arise as a result of the Tenant
Audits, provided, however, that Seller, and not Purchaser, shall be responsible
for any and all costs and payments that may be due as a result of such Tenant
Audits (or litigation claims that arise as a result of the Tenant Audits)
relating to any period prior to Closing.

 

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7.2    Conditions Precedent to Seller's Obligation to Close. Seller's obligation
to sell the Property is subject to satisfaction, on or before the Closing Date
of the following conditions, any of which may be waived in writing by Seller, in
Seller's sole and absolute subjective discretion:
 
7.2.1    Covenants. Purchaser shall have performed and observed, in all material
respects, all covenants of Purchaser under this Agreement.
 
7.2.2    Representations and Warranties. All representations and warranties of
Purchaser set forth in this Agreement shall be true and correct in all material
respects as if made on the Closing Date
 
7.2.3    Delivery of Closing Documents and Payment of Purchase Price. Purchaser
shall have delivered each of the Closing Documents required to be delivered
under Section 8.3.1 of this Agreement and shall have paid into escrow the
balance due of the Purchase Price.
 
7.3    Failure of a Condition.
 
7.3.1    General. If any condition precedent to Purchaser's obligation to close
the transactions contemplated by this Agreement, as set forth in Section 7.1 of
this Agreement, has not been satisfied on or before the Closing Date, then
Purchaser shall give notice to Seller of the condition or conditions that
Purchaser asserts are not satisfied. If the conditions specified in such notice
are not satisfied within ten (10) Business Days after receipt of such notice
(with the Closing Date automatically being extended to accommodate such ten (10)
Business Day period, but in no event beyond the Designated Closing Date without
Seller's approval), then Purchaser may terminate this Agreement by written
notice to Seller and Escrow Agent, whereupon neither party shall have any
further rights or obligations hereunder (other than any obligations of either
party that expressly survive termination) and the Deposit shall be returned to
Purchaser. Notwithstanding anything contained herein to the contrary, if any of
the conditions precedent to Purchaser's obligation to close, as set forth in
Section 7.1 of this Agreement, are not satisfied within the ten (10) Business
Day period specified above and the same are reasonably susceptible of being
cured, Seller shall have the right to extend such period in which to satisfy the
unsatisfied condition for a period of up to thirty (30) additional days, by
giving written notice thereof to the Purchaser and Escrow Agent within the
initial ten (10) Business Day period referenced above. Purchaser shall have the
right to waive the unsatisfied condition or conditions by written notice to
Seller and Escrow Agent given within five (5) Business Days after expiration of
the applicable satisfaction period without satisfaction having occurred, in
which event the Closing Date shall be the date that is five (5) Business Days
after Seller's receipt of Purchaser's waiver notice. If the Closing Date is
extended pursuant to this paragraph, then the Closing Date shall be the date
that is the earlier to occur of five (5) Business Days after (a) the date that
the unsatisfied condition has been satisfied, or (b) Seller's receipt of
Purchaser's waiver notice. It is understood and agreed that the failure of any
condition set forth in Section 7.1 hereof that is not reasonably susceptible of
being cured within the time allotted shall not constitute a default, breach of a
covenant, or other failure to perform by Seller hereunder unless such failed
condition was caused by Seller's willful and intentional actions in violation of
its covenants set forth in Section 6.1.1 hereof.
 
If any condition precedent to Seller's obligation to close the transactions
contemplated by this Agreement, as set forth in Section 7.2 of this Agreement,
has not been satisfied on or before the Closing Date, then Seller shall give
notice to Purchaser of the condition or conditions that Seller asserts are not
satisfied. If the conditions specified in such notice are not satisfied within
ten (10) Business Days after receipt of such notice (with the Closing Date
automatically being extended to accommodate such ten (10)

 

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Business Day period, but in no event beyond the Designated Closing Date without
Seller's approval), then Seller may terminate this Agreement by written notice
to Purchaser and Escrow Agent, whereupon neither party shall have any further
rights or obligations hereunder (other than any obligations of either party that
expressly survive termination) and the Deposit shall be returned to Purchaser
(unless the applicable conditions are not satisfied due to a default by
Purchaser under this Agreement, in which case the Deposit shall be paid to
Seller). Notwithstanding anything contained herein to the contrary, if any of
the conditions precedent to Seller's obligation to close, as set forth in
Section 7.2 of this Agreement, are not satisfied within the ten (10) Business
Day period specified above and the same, in Seller's reasonable judgment, are
reasonably susceptible of being cured, Seller shall have the right to extend
such period in which to satisfy the unsatisfied condition for a period of up to
thirty (30) additional days, by giving written notice thereof to Purchaser and
Escrow Agent with in the initial ten (10) Business Day period referenced above.
Seller shall have the right to waive the unsatisfied condition or conditions by
written notice to Purchaser and Escrow Agent given within five (5) Business Days
after expiration of the applicable satisfaction period without satisfaction
having occurred, in which event the Closing Date shall be the date that is five
(5) Business Days after Purchaser's receipt of Seller's waiver notice.
Notwithstanding the foregoing or anything set forth herein to the contrary, in
no event shall the Closing Date be extended with respect to Purchaser's failure
to fund into escrow the balance of the Purchase Price due at Closing as required
under this Agreement, unless expressly agreed by Seller in writing in Seller's
sole and absolute discretion.
7.3.2    Waiver. If the transaction contemplated by this Agreement closes, the
parties shall be deemed to have waived any and all unmet or unsatisfied
conditions subject to the provisions of Sections 5.4 and 10.2 hereof.
 
ARTICLE 8
CLOSING.
 
8.1    Closing Date. The consummation of the transactions contemplated hereby
(the “Closing”) shall be conducted by disbursement of documents from and
delivery of funds in escrow to Escrow Agent on the date which is fifteen (15)
days following the Effective Date (the “Designated Closing Date); TIME BEING
STRICTLY OF THE ESSENCE as to the date which is sixteen (16) days following the
Effective Date. The date that the Closing occurs hereunder, as such date may be
extended in accordance with this Agreement, is referred to herein as the
“Closing Date”. Purchaser and Seller agree to finalize and execute all documents
necessary for the consummation of the transaction contemplated herein,
including, but not limited to, the Settlement Statement (as defined in Section
8.2.1.7), and to deliver all such documents to the Escrow Agent in escrow not
later than 5:00 p.m. (Washington, D.C. time) on the Business Day immediately
preceding the Closing Date (time being strictly of the essence as to Seller's
and Purchaser's obligations to deliver all such documents) to ensure the orderly
and timely close of escrow and disbursement of all funds necessary for Closing
by not later than 1:00 P.M. (Washington, D.C. time) on the Closing Date.
Notwithstanding the foregoing or anything herein to the contrary, in no event
may the Closing Date be extended beyond the Designated Closing Date for any
reason, unless pursuant to the exercise of a right of Seller hereunder or
otherwise with the express written agreement of Seller, in Seller's sole and
absolute discretion, TIME BEING STRICTLY OF THE ESSENCE.
 
8.2    Seller's Obligations at the Closing. At the Closing, Seller will do, or
cause to be done, the following:
 
8.2.1    Closing Documents. Seller shall execute, acknowledge (if necessary) and
deliver originals of the following documents:

 

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8.2.1.1    Deed substantially in the form of Exhibit D hereto (the “Deed”);
 
8.2.1.2    Bill of Sale, substantially in the form of Exhibit E hereto;
 
8.2.1.3    Assignment and Assumption Agreement with respect to the Leases and
Licenses, substantially in the form of Exhibit F-1 hereto;
 
8.2.1.4    Assignment and Assumption Agreement with respect to the Contracts,
substantially in the form of Exhibit F-2 hereto (the “Assignment and Assumption
Agreement”);
 
8.2.1.5    Certificate of Non-Foreign Status, substantially in the form of
Exhibit G hereto;
 
8.2.1.6    Letters to each tenant under the Leases and each licensee under the
Licenses, substantially in the form of Exhibit H hereto, notifying tenants and
licensees of the conveyance of the Property to Purchaser and advising them that,
following the Closing Date, all future payments of rent are to be made to
Purchaser or at Purchaser's direction;
 
8.2.1.7    Settlement statement prepared by Escrow Agent showing all of the
payments, adjustments and prorations provided for in Section 8.5 of this
Agreement or otherwise agreed upon by Seller and Purchaser (the “Settlement
Statement”);
 
8.2.1.8    Such transfer tax forms as may be required as a condition to the
recordation of the Deed or as may be required in connection with the transfer of
the Property;
 
8.2.1.9    Subject to Section 7.1.4 of this Agreement, a certificate signed by
Seller stating that each of Seller's representations and warranties contained in
Section 5.1 of this Agreement is true and correct in all material respects,
provided, however, that if any of the representations and warranties have
changed since the Effective Date, then Seller shall revise the representations
and warranties to conform to the changed circumstances and shall set forth such
changed representations and warranties in such certificate;
 
8.2.1.10    An Owner's Affidavit in the form of Exhibit I attached hereto (the
“Owner's Affidavit”). Seller shall also deliver to the Title Company and
Purchaser such evidence as may be reasonably required by the Title Company with
respect to the authority of the person(s) executing the Deed and the other
documents required to be executed by Seller on behalf of Seller;
 
8.2.1.11    Evidence of the termination of the Property Management Agreement and
Exclusive Leasing Agreement effective as of the Closing Date and copies of
notices of termination of such other Contracts as are to be terminated in
accordance with Section 6.1.3; and
 
8.2.1.12    Such transfer documentation as may be necessary to transfer all
tenant security deposits held by Seller under the Leases or Licenses in the form
of a letter of credit (“Letters of Credit”) or any other non-cash form.
 
8.2.2    Original Property Information Documents. Seller will deliver to
Purchaser, or make available to Purchaser at the Property, originals within
Seller's possession of all Leases, Licenses, Contracts and Permits.

 

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8.2.3    Keys. Seller will deliver to Purchaser all keys to the Improvements in
the possession or subject to the control of Seller, including, without
limitation, master keys as well as combinations, card keys and cards for the
security systems, if any.
 
8.2.4    Costs. Seller will pay all costs allocated to Seller pursuant to
Section 8.5.1 of this Agreement.
 
8.3    Purchaser's Obligations at the Closing. At the Closing, Purchaser will
do, or cause to be done, the following:
    
8.3.1    Closing Documents. At Closing, Purchaser shall execute, acknowledge (if
necessary) and deliver originals of the following documents:
 
8.3.1.1    Bill of Sale in the form of Exhibit E hereto;
 
8.3.1.2    Assignment and Assumption Agreement with respect to the Leases and
Licenses in the form of Exhibit F-1 hereto;
 
8.3.1.3    Assignment and Assumption Agreement;
 
8.3.1.4    Settlement Statement;
 
8.3.1.5    Such transfer tax forms as may be required as a condition to the
recordation of the Deed or as may be required in connection with the transfer of
the Property;
 
8.3.1.6    Such evidence as may be reasonably required by the Title Company with
respect to the authority of the person(s) executing the documents required to be
executed by Purchaser on behalf of Purchaser; and
 
8.3.1.7    A certificate signed by Purchaser stating that each of Purchaser's
representations and warranties contained in Section 5.2 of this Agreement is
true and correct in all material respects, provided, however, that if any of the
representations and warranties have changed since the Effective Date, then
Purchaser shall revise the representations and warranties to conform to the
changed circumstances and shall set forth such changed representations and
warranties in such certificate.
 
8.3.2    Payment of Consideration. Purchaser shall pay to Escrow Agent a sum
equal to the remaining portion of the Purchase Price owed by Purchaser in
accordance with Section 2.1.3 of this Agreement. As part of the Closing under
this Agreement, in accordance with this Agreement and the Escrow Agreement,
Escrow Agent shall disburse, via federal funds wire transfer of immediately
available funds, to an account designated by Seller in a written notice to
Escrow Agent delivered prior to the Closing Date, with such notice to contain
all information necessary for Escrow Agent to effectuate such transfer, the
amount due to Seller as shown on the Settlement Statement.
 
8.3.3    Costs. Purchaser will pay all costs allocated to Purchaser pursuant to
Section 8.5.1 of this Agreement.
 
8.4    Escrow. The delivery of the documents and the payment of the sums to be
delivered and

 

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paid at the Closing shall be accomplished through an escrow with Escrow Agent
and in accordance with this Agreement and the Escrow Agreement.
 
8.5    Costs and Adjustments at Closing. Seller shall prepare and submit to
Purchaser for Purchaser's review, at least five (5) Business Days prior to the
Closing Date, a draft proration statement setting forth the prorations and
adjustments contemplated by this Agreement. Once Seller and Purchaser have
agreed on such proration statement, and at least three (3) Business Days prior
to the Closing Date, Seller and Purchaser shall submit the same to the Escrow
Agent and the Escrow Agent shall prepare the Settlement Statement and submit the
same to Seller and Purchaser for their approval at least two (2) Business Days
prior to the Closing Date.
 
8.5.1    Transaction Expenses. Any closing or escrow fees of Escrow Agent shall
be paid fifty percent (50%) by Seller and fifty percent (50%) by Purchaser.
Transfer taxes, recording taxes and the like shall be paid fifty percent (50%)
by Seller and fifty percent (50%) by Purchaser. Seller shall pay (i) all costs
and fees for Seller's representatives and consultants (except as set forth in
this Section 8.5.1 below), and (ii) all fees and costs associated with
delivering title to the Property in the condition required by Article 3 of this
Agreement. Purchaser shall pay (or reimburse Seller for) (i) all costs and fees
for title examination, title insurance and related title company charges
(including all such costs and fees associated with the issuance of the
Commitment and Lender's title insurance policy and any updates or endorsements
thereto required by Lender), (ii) all costs associated with the Survey or any
updates thereto ordered by either Seller or Purchaser or required by Lender,
(iii) all costs associated with Purchaser's due diligence studies and
investigations of the Property, (iv) all costs associated with Purchaser's
financing of its purchase of the Property, including, without limitation, all
recording fees and taxes and all Loan Fees and all Prepayment Costs (if
applicable), and (v) all costs associated with any state and local recordation
tax, documentary and other taxes and stamps, and any recording fees or mortgage
taxes associated with any new mortgage or deed of trust related to Purchaser's
financing of its purchase of the Property. Subject to Section 14.13 below,
Seller and Purchaser shall each pay its respective attorneys' fees.
 
8.5.2    Security Deposits. Seller shall pay to Purchaser, as a credit against
the Purchase Price, the amount of any cash security deposits actually received
by Seller pursuant to the Leases and Licenses and not yet refunded to tenants or
applied pursuant to the Leases and Licenses. With respect to any security
deposits that are held in the form of Letters of Credit or any form other than
cash, Seller shall deliver to Purchaser at the Closing the original Letters of
Credit or other applicable documents together with such original transfer and
assignment documentation as may be necessary to effect the transfer of each
Letter of Credit or other non-cash security deposit, provided any transfer fees
or other costs shall be borne by the Purchaser.
 
8.5.3    Rents. All rents, percentage rents, common area charges, operating
expenses, real estate taxes, parking charges and other costs or charges paid by
tenants under the Leases and licensees under the Licenses (collectively,
“Rents”) shall be prorated as of the Apportionment Time (as defined below), to
the extent actually collected by Seller prior to the Closing Date. All Rents
received from tenants or licensees after Closing by Seller or Purchaser will
first be applied to such charges as are then due for the month in which Closing
occurs and prorated appropriately between the parties based on the Apportionment
Time, and then to rents that became due and payable after Closing, and then, to
those which were due and payable prior to Closing, in reverse order of maturity.
From and after Closing, Purchaser shall use good faith and commercially
reasonable efforts to collect from the tenants and licensees all Rents that are
delinquent for the period prior to Closing. Purchaser shall remit to Seller any
Rents received by Purchaser subsequent to Closing which are attributable to
periods prior to Closing within ten (10) Business Days from Purchaser's receipt
of such Rents, together with appropriate

 

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supporting documentation. Seller shall remit to Purchaser any Rents received by
Seller subsequent to Closing which are attributable to periods from and after
Closing within ten (10) Business Days from Seller's receipt of such Rents,
together with appropriate supporting documentation. With respect to any Rents
that are delinquent for the period prior to Closing, Seller shall have the right
to pursue all rights and remedies against the applicable tenants or licensees to
recover such delinquencies; provided, however, that Seller shall not be entitled
to dispossess such tenants or licensees, disturb their possession of their
leased premises or seek any involuntary bankruptcy of any tenant or licensee. As
used herein, the term “Apportionment Time” shall mean 11:59 p.m. Washington,
D.C. time on the date immediately prior to the Closing Date.
 
8.5.4    Real Estate and Personal Property Taxes. Real estate, personal property
and ad valorem taxes for the year in which the Closing occurs, and any vault
charges will be prorated between Seller and Purchaser as of the Apportionment
Time on the basis of actual bills therefor, if available, with such proration to
be based on the applicable tax year rather than on the calendar year. If such
bills are not available, then such taxes and other charges shall be prorated on
the basis of the most currently available tax bills and, thereafter, promptly
re-prorated upon the availability of actual bills for the applicable period. Any
and all rebates or reductions in taxes received subsequent to Closing for the
tax year in which Closing occurs, net of costs of obtaining the same (including
without limitation reasonable attorneys' fees) and net of any amounts due to
tenants, shall be prorated as of the Apportionment Time, when received. The
current installment of all special assessments, if any, which are a lien against
the Property at the time of Closing and which are being or may be paid in
installments shall be prorated as of the Apportionment Time.
 
8.5.5    Utilities. Water, sewer, electric, fuel (if any) and other utility
charges, other than those for which tenants under Leases or licensees under
Licenses are responsible directly to the provider, shall be prorated as of the
Apportionment Time. If consumption of any of the foregoing is measured by meter,
Seller shall, prior to the Closing Date, endeavor to obtain a reading of each
such meter and a final bill as of the Closing Date. If there is no such meter or
if the bill for any of the foregoing will not have been issued as of the Closing
Date, the charges therefor shall be adjusted as of the Apportionment Time on the
basis of the charges of the prior period for which such bills were issued and
shall be further adjusted between the parties when the bills for the correct
period are issued. Seller and Purchaser shall cooperate to cause the transfer of
utility accounts from Seller to Purchaser. Seller shall be entitled to retain
any utility security deposits to be refunded by the applicable providers. At
Closing, Purchaser shall post substitute utility security deposits to replace
those previously paid by Seller or, if the utility provider will not refund such
deposits to Seller, Seller shall be reimbursed therefor by Purchaser at Closing.
 
8.5.6    Insurance Policies. Premiums on insurance policies will not be
adjusted. As of the Closing Date, Seller will terminate its insurance coverage
with respect to the Property and Purchaser will effect its own insurance
coverage.
 
8.5.7    Other Operating Income and Expenses. All other income and ordinary
operating expenses for or pertaining to the Property, including, but not limited
to, maintenance, service charges, and license fees, will be prorated as of the
Apportionment Time.
 
8.5.8    Tenant Improvement Allowances, Leasing Commissions and Free Rent.
Purchaser shall receive credits against the Purchase Price at Closing equal to
(i) the amount of outstanding tenant improvement allowances currently due and
payable by Seller to tenants or licensees and shown as “Seller's Obligation” on
Schedule 8.5.8(i) attached hereto, as such Schedule may be updated by Seller at
Closing in accordance with Section 8.2.1.9 of this Agreement (but Purchaser
shall not receive a credit

 

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with respect to any items shown on such schedule as “Purchaser's Obligation” or
for any tenant improvement allowances due with respect to any Leases or Licenses
entered into between the Effective Date and Closing); (ii) the amount of
outstanding brokerage and leasing commissions currently due and payable by
Seller to third parties and shown as “Seller's Obligation” on Schedule 8.5.8(ii)
attached hereto, as such Schedule may be updated by Seller at Closing in
accordance with Section 8.2.1.9 of this Agreement (but Purchaser shall not
receive a credit with respect to any items shown on such schedule as
“Purchaser's Obligation” or for any brokerage or leasing commissions due with
respect to any Leases or Licenses entered into between the Effective Date and
Closing); and (iii) a portion of the amount of “free rent” available to tenants
under Leases and licensees under Licenses and shown on Schedule 8.5.8(iii)
attached hereto which is attributable to the period from and after the Closing
Date. If, prior to Closing, Seller pays any tenant improvement allowances or
leasing commissions that are designated as “Purchaser's Obligation” on either
Schedule 8.5.8(i) or Schedule 8.5.8(ii) referenced in clauses (i) and (ii)
above, then Seller shall receive a credit at Closing equal to such amounts paid
by Seller on Purchaser's behalf. Notwithstanding anything set forth herein to
the contrary, the credit with respect to free rent referenced in clause (iii)
above shall be subject to adjustment only based on Seller's and Purchaser's
respective periods of ownership of the Property, and not with respect to amount
or any other factor. From and after Closing, Purchaser shall be solely
responsible for all tenant improvement allowances, all leasing commissions
(including without limitation any brokerage or leasing commissions payable
pursuant to the Exclusive Leasing Agreement), and all free rent associated with
the Property, the Leases and/or the Licenses, as well as any leases or licenses
entered into after Closing, and all costs and expenses associated therewith.
 
8.5.9    True-Up of Operating Expenses and Taxes. On or before December 15,
2011, Seller shall provide to Purchaser its general ledger of operating expenses
and real estate taxes for the Property for the period January 1, 2011 to the
Closing Date. On or before March 1, 2012, Purchaser shall provide to Seller the
annual tenant reconciliation schedule with respect to operating expenses and
real estate taxes for the Property for calendar year 2011, together with
appropriate supporting documentation and also with the proration of such amounts
between Seller and Purchaser based on the prorated amounts of operating expenses
and real estate taxes paid by Seller and Purchaser for the 2011 calendar year.
Such schedule and supporting documentation shall be subject to Seller's
reasonable approval. Purchaser shall invoice the tenants under the Leases and
the licensees under the Licenses for amounts owed in respect of such
reconciliation promptly after Seller's approval of such schedule, but not before
then. Seller shall remit to Purchaser any amount owed by Seller on account of
such reconciliation within ten (10) Business Days of Seller's approval of such
schedule. Purchaser shall use good faith and commercially reasonable efforts to
collect from the tenants and licensees all amounts owed by such tenants and
licensees on account of such reconciliation, and shall remit to Seller any such
amounts received by Purchaser which are attributable to periods prior to Closing
within ten (10) Business Days from Purchaser's receipt thereof.
 
8.5.10    Paul Bakery Egress Corridor. Seller is presently in the process of
constructing an egress corridor for the premises demised to Paul Penn. The
construction of such egress corridor is estimated to cost Fifty Thousand and
00/100 Dollars ($50,000.00) (the “Corridor Construction Cost”). To the extent
Seller has not completed the construction of such egress corridor by the Closing
Date, Seller shall assign to Purchaser and Purchaser shall assume from Seller at
Closing the contract(s) associated with the construction of such egress corridor
(the “Corridor Contracts”) and Purchaser shall receive a credit at Closing
against the Purchase Price in an amount equal to the Corridor Construction Cost
less any amounts expended by Seller prior to Closing under the Corridor
Contracts. From and after Closing, Purchaser shall be solely responsible for the
construction of such egress corridor and the cost thereof
 
8.5.11    Credits with Respect to Certain Items. Certain matters referenced in
tenant

 

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estoppel certificates shall be treated as follows: (i) the credit of $198,152.00
referenced on the tenant estoppel from Edison Electric Institute, Inc. dated
February 4, 2011, shall be treated on the Settlement Statement as March 2011
rent; (ii) the Annual Real Estate Tax Recovery credit of $11,732.34 referenced
on the tenant estoppel from Sanofi-Aventis U.S., Inc. dated February 8, 2011,
reduced to the extent any portion of such amount has been applied to outstanding
charges with respect to such tenant prior to Closing, shall be credited to
Purchaser at Closing; and (iii) the outstanding credits of $12,399.54 and
$2502.89 (aggregate amount of $14,902.43) with respect to overpayments of rent
referenced on the tenant estoppel from United HealthCare Services, Inc. dated
February 16, 2011, reduced to the extent any portion of such amount has been
applied to outstanding charges with respect to such tenant prior to Closing,
shall be credited to Purchaser at Closing.
 
8.5.12    Survival. The provisions of this Section 8.5 shall survive Closing for
a period of twelve (12) months from the Closing Date; provided, however, that
the provisions of Section 8.5.9 shall survive Closing for a period of eighteen
(18) months from the Closing Date.
 
ARTICLE 9
DAMAGE AND CONDEMNATION
 
9.1    Damage. If, prior to the Closing, all or any portion of the Property is
damaged by fire or any other cause whatsoever, Seller shall promptly give
Purchaser written notice of such damage. Risk of loss for damage to all or any
part of the Property by fire or other casualty from the Effective Date through
the Closing Date will be on Seller.
 
9.1.1    Minor Damage. If the cost for repairing such damage is equal to or less
than Ten Million Dollars ($10,000,000.00) (as determined by Seller's independent
insurer), then Purchaser shall have the right at Closing to receive a credit for
the amount of the deductible plus all insurance proceeds received by Seller as a
result of such loss, or an assignment of Seller's rights to such insurance
proceeds, and this Agreement shall continue in full force and effect with no
reduction in the Purchase Price, and Seller shall have no further liability or
obligation to repair such damage or to replace the Property.
 
9.1.2    Major Damage. If the cost for repairing such damage is greater than Ten
Million Dollars ($10,000,000.00) (as determined by Seller's independent
insurer), then Purchaser shall have the option, exercisable by written notice
delivered to Seller and Escrow Agent within five (5) Business Days after
Seller's notice of damage to Purchaser, either (i) to receive a credit for the
amount of the deductible plus all insurance proceeds received by Seller as a
result of such loss, or an assignment of Seller's rights to such insurance
proceeds, and this Agreement shall continue in full force and effect with no
reduction in the Purchase Price, and Seller shall have no further liability or
obligation to repair such damage or to replace the Property; or (ii) to
terminate this Agreement. If Purchaser elects to terminate this Agreement, the
Deposit shall be promptly returned to Purchaser, and thereafter neither party
will have any further rights or obligations hereunder, except for any
obligations that expressly survive termination. If Purchaser fails to notify
Seller within such five (5) Business Day period of Purchaser's intention to
terminate this Agreement, then Purchaser shall be deemed to have elected option
(i), and Purchaser and Seller shall proceed to Closing in accordance with the
terms and conditions of this Agreement.
 
9.2    Condemnation and Eminent Domain. If any condemnation proceedings are
instituted, or notice of intent to condemn is given, with respect to all or any
portion of the Property, Seller shall promptly upon obtaining knowledge thereof
notify Purchaser thereof (“Taking Notice”). If the condemnation will not result
in a material and adverse effect (as hereinafter defined) on the Property, the
parties shall proceed to Closing, in which event Seller shall assign or pay to
Purchaser at Closing all of

 

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Seller's right, title, and interest in any award payable on account of the
condemnation and/or pay to Purchaser all such awards previously paid. In the
event that such condemnation will result in a material and adverse effect on the
Property, Purchaser shall have the option, which shall be exercised by written
notice to Seller and Escrow Agent within five (5) Business Days after its
receipt of the Taking Notice, either (i) to terminate this Agreement and receive
the prompt return of the Deposit, in which case the parties shall have no
further rights or obligations under this Agreement (except for any obligations
that expressly survive termination), or (ii) to consummate the purchase of the
Property without a reduction of the Purchase Price, in which event Seller shall
assign or pay to Purchaser at Closing all of Seller's right, title, and interest
in any award payable on account of the condemnation proceeding and/or pay to
Purchaser all such awards previously paid. For the purposes of this Section 9.2,
“material and adverse effect” shall include, but not be limited to, any
reduction in the amount of any of the rentable square footage of the
Improvements, the reduction in the number of parking spaces at the Property, or
the permanent, material disruption of access to the Property. Failure to give
notice of Purchaser's election within such five (5) Business Day period shall be
deemed an election by Purchaser to proceed to Closing.
 
ARTICLE 10
REMEDIES AND ADDITIONAL COVENANT
 
10.1    Seller Default At or Before Closing. If Seller refuses or fails, in any
material respect, to perform any of its obligations or agreements hereunder when
performance is required on or prior to the Closing Date, or if any of the
Express Representations should be false in any material respect when made and
Purchaser shall become aware of same on or prior to the Closing Date and
Purchaser shall not have waived its claims with regard to same pursuant to this
Agreement, then Purchaser shall give Seller written notice of such breach or
default on or prior to the Closing Date and Seller shall have ten (10) Business
Days from the date of receipt of such notice to cure such breach or default and
the Closing Date shall be extended accordingly (but in no event beyond the
Designated Closing Date without Seller's approval). If Seller fails to cure such
breach or default within such ten (10) Business Day period, then Purchaser, as
its sole and exclusive remedy, (i) may terminate this Agreement by notifying
Seller and the Escrow Agent thereof, in which event neither party shall have any
rights, duties or obligations hereunder other than the obligations and rights
set forth herein that expressly survive the termination of this Agreement, and
the Escrow Agent shall return the Deposit to Purchaser, (ii) may sue for
specific performance of the obligations of Seller hereunder, or (iii) may waive
the alleged default and proceed to Closing under this Agreement without
adjustment of the Purchase Price.
 
10.2    Seller Breach After Closing. If any of the Express Representations
should be false in any material respect when made or Seller is in breach or
default of any covenant, representation or warranty under this Agreement or any
document executed and delivered by Seller at Closing, and Purchaser shall first
become aware of same after the Closing Date, then Purchaser shall give Seller
written notice of such false Express Representation or breach or default prior
to the expiration of the Survival Period and Seller shall have fifteen (15)
Business Days from the date of receipt of such notice to cure such breach. If
Seller fails to cure such breach within such fifteen (15) Business Day period,
and the actual losses or damages sustained as a result of Seller's false Express
Representations or breach or default exceeds $200,000.00, then Purchaser shall
have the right to bring an action against Seller for the actual damages suffered
by Purchaser due to such false Express Representation or breach or default,
provided that, in no event shall Seller be liable to Purchaser for damages under
this Section 10.2 in an aggregate amount in excess of Six Million Dollars
($6,000,000.00) (the “Cap”).
 
10.3    Purchaser Default. The parties acknowledge and agree that Seller should
be entitled to compensation for any detriment suffered if Purchaser fails to
consummate the purchase of the Property if

 

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and when required to do so under the terms of this Agreement, but agree that it
would be extremely difficult to ascertain the extent of the actual detriment
Seller would suffer as a result of such failure. Consequently, if Purchaser
fails to consummate the purchase of the Property on the Closing Date or fails to
perform any of its other covenants hereunder in any material respect, or
otherwise defaults in its obligations hereunder, then Seller shall be entitled
to terminate this Agreement by giving written notice thereof to Purchaser and
Escrow Agent prior to or on the Closing Date, in which event the Deposit shall
be paid to Seller as fixed, agreed and liquidated damages, and, after the
payment of the Deposit to Seller, neither Seller nor Purchaser will have any
further rights or obligations under this Agreement, except for any obligations
that expressly survive termination. Notwithstanding the foregoing, the
aforementioned liquidated damages shall not apply to the indemnity provisions
attributable to Purchaser under this Agreement.
 
10.4    Delivery of Materials. Notwithstanding anything contained in this
Agreement to the contrary, if this Agreement is terminated for any reason
whatsoever, then Purchaser shall promptly deliver to Seller all Property
Information provided to Purchaser by Seller, including copies thereof in any
form whatsoever (including electronic form) along with any and all test results
and studies of the Property performed by or on behalf of Purchaser pursuant to
Article 4 of this Agreement, excluding any confidential or proprietary
information or financial modeling or attorney work product. The obligations of
Purchaser under this Section 10.4 shall survive any termination of this
Agreement.
 
ARTICLE 11
BROKERAGE COMMISSION.
 
11.1    Brokers. Seller represents and warrants to Purchaser that Seller has not
contacted or entered into any agreement with any real estate broker, agent,
finder, or similar party in connection with this transaction, except for Eastdil
Secured (“Seller's Broker”) and that Seller has not taken any action which would
result in any real estate broker's or finder's fees or commissions being due and
payable to any party other than Seller's Broker with respect to the transactions
contemplated hereby. Seller will be solely responsible for the payment of
Seller's Broker's commission in accordance with the provisions of a separate
agreement between Seller and Seller's Broker. Purchaser hereby represents and
warrants to Seller that Purchaser has not contracted or entered into any
agreement with any real estate broker, agent, finder, or similar party in
connection with this transaction and that Purchaser has not taken any action
which would result in any real estate brokerage or finder's fees or commissions
being due or payable to any party with respect to the transaction contemplated
hereby.
 
11.2    Indemnity. Each party hereby indemnifies and agrees to hold the other
party harmless from any loss, liability, damage, cost, or expense (including,
without limitation, reasonable attorneys' fees) paid or incurred by the other
party by reason of a breach of the representation and warranty made by such
party under this Article 11. Notwithstanding anything to the contrary contained
in this Agreement, the indemnities set forth in this Section 11.2 shall survive
the Closing or earlier termination of this Agreement.
 
ARTICLE 12
NOTICES
 
12.1    Written Notice. All notices, demands and requests which may be given or
which are required to be given by either party to the other party under this
Agreement must be in writing.
 
12.2    Method of Transmittal. All notices, demands, requests or other
communications required

 

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or permitted to be given hereunder must be sent (i) by United States certified
mail, postage fully prepaid, return receipt requested, (ii) by hand delivery,
(iii) by Federal Express or a similar internationally recognized overnight
courier service, or (iv) by facsimile or electronic mail with a confirmation
copy delivered by another method set forth in this Section 12.2. All such
notices, demands, requests or other communications shall be deemed to have been
given for all purposes of this Agreement upon the date of receipt or refusal,
except that whenever under this Agreement a notice is either received on a day
which is not a Business Day or is required to be delivered on or before a
specific day which is not a Business Day, the day of receipt or required
delivery shall automatically be extended to the next Business Day.
 
12.3    Addresses. The addresses for proper notice under this Agreement are as
follows:
As to Seller:
Avenue Associates Limited Partnership
c/o Beacon Capital Partners, LLC
200 State Street, 5th Floor
Boston, Massachusetts 02109
Attention: Matthew T. Golden, Esq.
Facsimile: (617) 457-0448
Email: mgolden@beaconcapital.com
 
 
 
 
 
 
With a copy to:
Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
Attention: Jared L. Tardy, Esq.
Facsimile: (617) 574-4070
Email: jtardy@goulstonstorrs.com
 
 
As to Purchaser:
Wells Real Estate Funds
6200 The Corners Parkway
Norcross, GA 30092
Attention: Heather Griner
Facsimile: (770) 243-8510
Email: Heather.Griner@WellsREF.com
 
 
With a copy to:
Kelley Drye & Warren LLP
101 Park Avenue
New York, New York 10178
Attn: Robert D. Bickford, Jr., Esq.
Facsimile: (212) 808-7897
Email: rbickford@kelleydrye.com
 
 
As to Escrow Agent:
Commonwealth Land Title Insurance Company
1015 15th Street, NW, Suite 300
Washington, D.C. 20005
Attention: David P. Nelson
Facsimile: (202) 737 4108
Email: DavidNelson@cltic.com

 

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Either party may from time to time by written notice to the other party
designate a different address or addresses for notices. Notices sent to or from
an address outside of the continental United States shall be sent only by one of
the methods specified in clauses (ii), (iii) or (iv) of this Section 12.3.
Notices given on behalf of a party by its attorneys in the manner provided for
in this Article 12 shall be considered validly given.
 
ARTICLE 13
ASSIGNMENT
 
13.1    Assignment. Except for an assignment by Purchaser as permitted pursuant
to this Article, neither party shall have the right to assign this Agreement
without the prior written consent of the other, which consent may be granted or
withheld in the sole and absolute subjective discretion of the party whose
consent has been requested; provided, however, that, Purchaser shall have the
right to assign its interest in this Agreement and delegate its duties to an
affiliate, so long as such affiliate controls, is controlled by, or is under
common control with Purchaser, and provided that (a) such affiliate shall
assume, in writing (by execution of an assignment and assumption of this
Agreement in form and substance reasonably satisfactory to Seller), all of
Purchaser's obligations under this Agreement, and (b) Purchaser shall not be
released of any obligations under this Agreement. If Purchaser so assigns this
Agreement to an affiliate, Purchaser shall, at least five (5) Business Days
prior to the Designated Closing Date, give the Seller written notice of such
assignment, together with a copy of the assignment and assumption agreement
executed by Purchaser and the assignee.
 
ARTICLE 14
MISCELLANEOUS
 
14.1    Entire Agreement. This Agreement embodies the entire agreement between
the parties and cannot be varied except by the written agreement of the parties
and supersedes all prior agreements and undertakings.
 
14.2    Modifications. This Agreement may not be modified except by the written
agreement of the parties.
 
14.3    Gender and Number. Words of any gender used in this Agreement will be
construed to include any other gender and words in the singular number will be
construed to include the plural, and vice versa, unless the context requires
otherwise.
 
14.4    Captions. The captions used in connection with the Articles, Sections
and Subsections of this Agreement are for convenience only and will not be
deemed to expand or limit the meaning of the language of this Agreement.
 
14.5    Successors and Assigns. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
 
14.6    Controlling Law; Submission to Jurisdiction. This Agreement will be
construed under, governed by and enforced in accordance with the laws of the
District of Columbia (without reference to conflicts of laws principles). Any
claim, action, suit, or proceeding seeking to enforce any provision of, or based
on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought only in District of Columbia,
and each of the parties hereto hereby consents to the

 

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jurisdiction of such court (and of the appropriate appellate courts therefrom in
any such claim, action, suit, or proceeding) and irrevocably waives, to the
fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of venue of any such claim, action, suit, or
proceeding in any such court or that any such claim, action, suit, or proceeding
that is brought in any such court has been brought in an inconvenient forum.
Subject to applicable law, process in any such claim, action, suit, or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court, and such service shall be made by
personal service made on such party or by mail sent to such party at the address
set forth in this Agreement. Personal service may be made on such party's
resident agent.
 
14.7    Exhibits. All exhibits, attachments, schedules annexed instruments and
addenda referred to herein will be considered a part hereof for all purposes
with the same force and effect as if set forth verbatim herein.
 
14.8    No Rule of Construction. Seller and Purchaser have each been represented
by counsel in the negotiations and preparation of this Agreement; therefore,
this Agreement will be deemed to be drafted by both Seller and Purchaser, and no
rule of construction will be invoked respecting the authorship of this
Agreement.
 
14.9    Severability. In the event that any one or more of the provisions
contained in this Agreement (except the provisions relating to Seller's
obligations to convey the Property and Purchaser's obligation to pay the
Purchase Price, the invalidity of either of which shall cause this Agreement to
be null and void) are held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability will not affect any
other provisions hereof, and this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had not been contained herein;
provided, however, that the parties hereto shall endeavor in good faith to
rewrite the affected provision to make it (i) valid, and (ii) consistent with
the intent of the original provision.
 
14.10    Time of Essence. Time is important to both Seller and Purchaser in the
performance of this Agreement, and both parties have agreed that TIME IS OF THE
ESSENCE with respect to any date set out in this Agreement.
 
14.11    Business Days. “Business Day” means any day on which business is
generally transacted by banks in the District of Columbia and Boston,
Massachusetts. If the final date of any period which is set out in any paragraph
of this Agreement falls upon a day which is not a Business Day, then, and in
such event, the time of such period will be extended to the next Business Day.
 
14.12    No Memorandum. Purchaser and Seller agree not to record this Agreement
or any memorandum hereof.
 
14.13    Attorneys' Fees and Costs. In the event either party is required to
resort to litigation to enforce its rights under this Agreement, the prevailing
party in such litigation will be entitled to collect from the other party all
costs, expenses and reasonable attorneys' fees incurred in connection with such
action.
 
14.14    Counterparts and Acceptance of Offer. This Agreement may be executed in
multiple counterparts (which counterparts may be executed by facsimile or PDF)
which shall together constitute a single document. However, this Agreement shall
not be effective unless and until all counterpart signatures have been obtained.
An unsigned draft of this Agreement shall not be considered an offer by

 

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either party. Acceptance, for purposes hereof, shall mean that each party is in
physical possession of a fully-signed counterpart copy or original of this
Agreement.
 
14.15    Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY IN CONNECTION
WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE
RELATIONSHIP OF SELLER AND PURCHASER HEREUNDER, SELLER'S OR PURCHASER'S
OWNERSHIP OR USE OF THE PROPERTY, AND/OR ANY CLAIMS OF INJURY OR DAMAGE RELATED
TO THE PROPERTY.
 
14.16    Confidentiality.
 
14.16.1    Except as provided otherwise in this Section 14.16, Purchaser and
Seller, for the benefit of each other, hereby agree that neither of them will
release, or cause or permit to be released, to the public any press notices,
publicity (oral or written) or advertising promotion relating to, or otherwise
publicly announce or disclose, or cause or permit to be publicly announced or
disclosed, in any manner whatsoever, (i) the names of Seller and Purchaser
respectively, or any of their affiliates or subsidiaries, or (ii) the terms,
conditions or substance of this Agreement or the transactions contemplated
herein, without first obtaining the consent of the other party hereto. In
addition, prior to Closing, both Seller and Purchaser shall keep strictly
confidential this Agreement, the transactions contemplated hereby, and the terms
and conditions hereof, and all matters relating thereto, as well as all
information relating to the other party. Further, prior to Closing, Purchaser
shall keep strictly confidential all information (including the Property
Information) relating in any way to the Property or any portion thereof.
 
14.16.2    It is understood and agreed that the foregoing shall not preclude any
party from discussing the substance or any relevant details of the transactions
contemplated in this Agreement, or preclude Purchaser from sharing information
relating to the Property, on a confidential basis with such party's attorneys,
accountants, professional consultants, advisors, financial advisors, rating
agencies, investors, or potential lenders (“Representatives”), as the case may
be, or prevent any party hereto from complying with applicable laws, including,
without limitation, governmental regulatory, disclosure, tax and reporting
requirements (including to make any required SEC, New York Stock Exchange or
other securities market filings), or any order of a court of competent
jurisdiction or by a lawful, proper subpoena, in which event Purchaser shall
immediately notify Seller of the circumstances purporting to require such
disclosure and shall refrain from such disclosure for the maximum period of time
allowed by law so that Seller may take such actions as it may deem appropriate
to protect the confidential materials being sought. Nothing in this Section 14
shall prohibit or restrict Purchaser's ability to issue a press release
following the Closing, reporting the acquisition of the Property, so long as
such press release does not contain any reference to the Purchase Price or other
economic terms hereof and is otherwise in form and content reasonably approved,
in advance, by the Seller.
 
14.16.3    Purchaser shall indemnify and hold Seller and Seller's affiliates,
employees, officers and directors harmless, and Seller shall indemnify and hold
Purchaser and Purchaser's affiliates, employees, officers and directors
harmless, from and against any and all claims, demands, causes of action,
losses, damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) suffered or incurred by the other
party and proximately caused by a breach by Purchaser or Seller, as the case may
be, or their respective Representatives, of the provisions of Section 14.16; but
this Section 14.16.3 will not entitle either Purchaser or Seller or any other
person or entity, to recover consequential or incidental damages.
 

 

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14.16.4    In addition to any other remedies available to Seller and Purchaser,
Seller and Purchaser shall each have the right to seek equitable relief,
including, without limitation, injunctive relief or specific performance,
against the other party or its Representatives in order to enforce the
provisions of Section 14.16.
 
14.16.5    Seller acknowledges that Purchaser may be required by the Securities
and Exchange Commission to file audited financial statements for one year (i.e.,
the last complete fiscal year) with regard to the Property. At no cost or
liability to Seller, Seller shall (i) cooperate with Purchaser, its counsel,
accountants, agents, and representatives, provide them with access to Seller's
books and records (including, without limitation, the general ledger and
operating statements) with respect to the operation of the Property for the
applicable period, and permit them to copy the same, and (ii) furnish Purchaser
with such additional information concerning the same as Purchaser shall
reasonably request. In addition, Seller agrees to use good faith efforts to
provide to Purchaser's auditor, if requested by such auditor, historical
financial statements for the Property, including income and balance sheet data
for the Property, whether required before or after Closing. At no cost to
Seller, and at the specific request of Purchaser, Seller shall cooperate
reasonably with Purchaser to arrange for interviews of tenants and governmental
authorities in connection with the Property.
 
14.16.6    Notwithstanding any other provision of this Agreement, the provisions
of Section 14.16 shall survive the termination of this Agreement and the
provisions of Section 14.16.1 regarding press releases or public disclosures
shall survive Closing.
 
14.17     D.C. PROVISIONS: Soil Conditions. In accordance with the provisions of
Section 42-608(b) of the District of Columbia Code, according to the “Soil
Survey of District of Columbia” (prepared by the United States Department of
Agriculture, Soil Conservation Service, and issued July 1976) at page 50 and map
sheet 9 at the back of the publication, the condition of the soil of the Real
Property is that of Urban Land. Further information concerning the
characteristic of the soil and the Real Property may be obtained from a soil
testing laboratory, the District of Columbia Department of Environmental
Services or the Soil Conservation Service of the Department of Agriculture.
 
14.18    UST Notice. In accordance with the requirements of the District of
Columbia Underground Storage Tank Management Act of 1990, as amended by the
District of Columbia Underground Storage Tank Management Act of 1990 Amendment
Act of 1992 (D.C. Code Section 8-113.1 et seq.) and the D.C. Underground Storage
Tank Regulations, 20 DCMR Chapters 55-70, Seller has knowledge, and has informed
Purchaser, that during Seller's ownership of the Property, no underground
storage tanks were removed from the Property.
 
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IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement
as of the date first written above.
    
 
SELLER:
 
AVENUE ASSOCIATES LIMITED PARTNERSHIP,
a District of Columbia limited partnership
 
By: Market Square Associates, a District of Columbia general partnership, its
general partner
 
By: Cornerstone Market Square LLC,
a Delaware limited liability company,
a general partner
 
By: /s/ Matthew T. Golden
Name: Matthew T. Golden
Title: General Counsel and Managing Director
 
By: Cornerstone Market Square II LLC,
a Delaware limited liability company,
a general partner
 
By: /s/ Matthew T. Golden
Name: Matthew T. Golden
Title: General Counsel and Managing Director
 
 
 
PURCHASER:
 
Wells Real Estate Investment Trust II, Inc.,
a Maryland corporation
 
By: /s/ E. Nelson Mills
Name: E. Nelson Mills
Its: President
 
 

 

 

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JOINDER
BCSP V U.S. Investments, L.P., a Delaware limited partnership, hereby joins in
that certain Purchase and Sale Agreement dated as of February 22, 2011, by and
between Avenue Associates Limited Partnership, a District of Columbia limited
partnership (“Seller”), and Wells Real Estate Investment Trust II, Inc., a
Maryland corporation (the “Purchase Agreement”), for the sole purpose of
guaranteeing the obligations of Seller under Section 10.2 of the Purchase
Agreement, subject to the limitations set forth in Sections 5.4 and 10.2 of the
Purchase Agreement, and Sections 6.7 and 6.8 of this Agreement.
BCSP V U.S. Investments, L.P., a Delaware limited partnership
By:    BCSP REIT V, Inc., a Maryland corporation, its General Partner
 
By:    /s/ Matthew T. Golden
Matthew T. Golden
General Counsel and Managing Director
    
 
 
 
 
 
 

 

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Schedules and Exhibits
 
Schedules
 
Schedule 1.4     -    Leases and Licenses
Schedule 1.5     -    Security Deposits
Schedule 1.6     -    Contracts
Schedule 5.1.3     -     Litigation
Schedule 5.1.7(vii)     -     Monetary Defaults
Schedule 5.1.9     -     Violations of Law
Schedule 8.5.8(i)    -     Outstanding Tenant Improvements
Schedule 8.5.8(ii)    -     Leasing Commissions
Schedule 8.5.8(iii)    -     Free Rent
Exhibits
 
Exhibit A     -    Legal Description
Exhibit B     -     Escrow Agreement
Exhibit C     -     Form of Tenant Estoppel
Exhibit D     -     Form of Deed
Exhibit E     -     Form of Bill of Sale
Exhibit F-1    -     Form of Assignment and Assumption Agreement for Leases and
Licenses
Exhibit F-2    -     Form of Assignment and Assumption Agreement for Contracts
Exhibit G     -     Form of Certificate of Non-Foreign Status
Exhibit H     -     Form of Tenant Notification Letter
Exhibit I     -    Form of Owner's Affidavit
 
 
 
 
 
 
2
 
 
 
 
 
 
 

 

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EXHIBIT A
LEGAL DESCRIPTION
Parcel One (#701 Pennsylvania Avenue)
Part of Lot numbered Twenty (20) in Square numbered Four Hundred Eight (408) in
a combination of lots made by Pennsylvania Avenue Development Corporation
(“PADC”) and Avenue Associates Limited Partnership, as per plat recorded in
Subdivision Book 182 at page 128 in the Office of the Surveyor for the District
of Columbia, being former Lot numbered Twenty-one (21) in Square numbered Four
Hundred Thirty-two (432) in a combination of lots made by Pennsylvania Avenue
Development Corporation, as per plat recorded in Liber 177 at folio 105 in the
Office of the Surveyor for the District of Columbia.
LESS AND EXCEPT those parts contained within the above property described in
metes and bounds submitted to a horizontal property regime by Declaration of The
Residences at Market Square East condominium recorded December 11, 1991 as
Instrument No. 9100062334 among the Land Records of the District of Columbia and
shown in Condominium Plat Book 40 at Page 25 in the said Surveyor's office.
TOGETHER WITH easements and other rights reserved in Deed of Easements and
Covenants - Market Square Park, dated April 8, 1986 and recorded in the Office
of the Recorder of Deeds for the District of Columbia on April 21, 1986 as
Instrument No. 15939 as amended by Amendment to Deed of Easements - Market
Square Park, dated June 13, 1988 and recorded June 24, 1988 as Instrument No.
34233 and by Second Amendment to Deed of Easements - Market Square Park dated
January 29, 1990 and recorded August 8, 1990 as Instrument No. 9000043829 among
the said Land Records; and
TOGETHER WITH easements and other rights created by Deed of Easement (Subsurface
Improvements) dated April 8, 1986 and recorded April 21, 1986 as Instrument No.
15938 as amended by Amendment to Deed of Easement (Subsurface Improvements)
dated June 13, 1988 and recorded June 24, 1988 as Instrument No. 34234 among the
said Land Records.

 

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Parcel Two (#801 Pennsylvania Avenue)
Being a portion of Lot 20 in Square 408 in a combination of lots made by
Pennsylvania Avenue Development Corporation (“PADC”) and Avenue Associates
Limited Partnership, recorded in Subdivision Book 182 at Page 128 among the
Records of the Office of the Surveyor for the District of Columbia, being former
Original Lot Seven (7), Part of former Original Lots Six (6) and Eight (8), in
Square Four Hundred Eight, former Lot numbered Seventeen (17) in Square numbered
Four Hundred Eight (408) in a combination of Lots made by Pennsylvania Avenue
Development Corporation, as per plat recorded in Liber 177 at folio 104 in the
Office of the Surveyor for the District of Columbia, and Public Alley Closed as
shown on Plat of Alley Closing in Square 408 in Liber 181 at page 122 in the
Office of the Surveyor for the District of Columbia.
LESS AND EXCEPT those parts contained within the above property submitted to a
horizontal property regime by Declaration of The Residences at Market Square
West condominium recorded July 7, 1991 as Instrument No. 9100035563 among the
Land Records of the District of Columbia and shown in Condominium Plat Book 40
at Page 11 in the said Surveyor's office.)
TOGETHER WITH easements and other rights reserved in Deed of Easements and
Covenants - Market Square Park, dated April 8, 1986 and recorded in the Office
of the Recorder of Deeds for the District of Columbia on April 21, 1986 as
Instrument No. 15939 as amended by Amendment to Deed of Easements - Market
Square Park, dated June 13, 1988 and recorded June 24, 1988 as Instrument No.
34233 and by Second Amendment to Deed of Easements - Market Square Park dated
January 29, 1990 and recorded August 8, 1990 as Instrument No. 9000043829 among
the said Land Records; and
TOGETHER WITH easements and other rights created by Deed of Easement (Subsurface
Improvements) dated April 8, 1986 and recorded April 21, 1986 as Instrument No.
15938 as amended by Amendment to Deed of Easement (Subsurface Improvements)
dated June 13, 1988 and recorded June 24, 1988 as Instrument No. 34234 among the
said Land Records.
NOTE: At the date hereof the portions of Lots 20 described herein are known for
purposes of assessment and taxation as Lots 836 and 837 (assessed to Avenue
Associates Limited Partnership) and Lot 833 - exempt from taxation-(assessed to
the United States of America, - owner of part of 8th Street Closed by plat of
Public Streets Closed in Liber 177 at folio 103 in the Office of the Surveyor
for the District of Columbia).