Document:

Exhibit 10.2 PSA for 1227 25th St NW

    1227
      25th
      Street, N.W.

    Washington,
      D.C.

    

    

    AGREEMENT
      OF PURCHASE AND SALE

    

    

     

    THIS
      AGREEMENT OF PURCHASE AND SALE
      (“Agreement”) is made as of February 13, 2006 (“Contract Date”), between (i) BNA
      Washington Inc., a Delaware corporation (“Seller”), and (ii) CESC 1227 LLC, a
      Delaware limited liability company (“Purchaser”).

     

    ARTICLE
      1. INTERPRETATION

     

    1.1  Definitions.
      For
      purposes of this Agreement, the following capitalized terms shall have the
      meanings indicated:

     

    1.1.1  Access
      Agreement:
      the
      Access Agreement executed by Purchaser in connection with the
      Property.

     

    1.1.2  Accounting
      Firm:
      as
      defined in Section 10.10.

     

    1.1.3  Action:
      any
      action, suit, arbitration, governmental investigation or other legal
      proceeding.

     

    1.1.4  Adjacent
      Agreement:
      the
      Agreement of Purchase and Sale dated as of the Contract Date between Seller
      and
      Adjacent Purchaser, relating to the purchase and sale of the Adjacent
      Property.

     

    1.1.5  Adjacent
      Property:
      Lot 883
      in Square 24 in the District of Columbia, together with all right, title and
      interest of Seller in and to any Appurtenances thereto.

     

    1.1.6  Adjacent
      Purchaser:
      CESC
      1229-1231 TRS Inc., a Delaware corporation, an affiliate of
      Purchaser.

     

    1.1.7  Apportionment
      Time: 12:01
      a.m. local time at the Property.

     

    1.1.8  Appurtenances:
      with
      respect to a parcel of land, (i) all rights, ways, easements, privileges
      and appurtenances to such parcel, (ii) all strips and gores appurtenant to
      such parcel, and (iii) any land lying in the bed of any streets, roads and
      alleys appurtenant to such parcel.

     

    1.1.9  BNA:
      The
      Bureau of National Affairs, Inc., a Delaware corporation.

     

    1.1.10  Closing:
      the
      consummation of the purchase and sale of the Property as contemplated by this
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.1.11  Closing
      Date:
      the date
      on which the Closing occurs.

     

    1.1.12  Code:
      the
      Internal Revenue Code of 1986, as amended.

     

    1.1.13  Confidentiality
      Agreement:
      the
      Confidentiality Agreement executed by Purchaser in connection with the
      Property.

     

    1.1.14  Contract:
      any
      contract for services, maintenance and supplies, equipment leases, and any
      other
      contract or agreement relating to the management, use, maintenance, operation,
      provisioning or equipping of the Property, and all amendments
      thereto.

     

    1.1.15  Contract
      Date:
      as
      defined in the Preamble.

     

    1.1.16  Crystal
      City Agreement:
      the
      Agreement of Purchase and Sale dated as of the Contract Date between Crystal
      City Seller and Crystal City Purchaser, relating to the purchase and sale of
      the
      Crystal City Property.

     

    1.1.17  Crystal
      City Property:
      a
      to-be-subdivided three-dimensional lot and improvements therein comprising
      a
      portion of the land and improvements described in Arlington County Site Plan
      No.
      56, commonly known as the “Crystal Mall” complex, which lot and improvements
      consist of the office building located at 1801 South Bell Street, Arlington,
      Virginia, as shown on Schedule 1.1.6 to the Crystal City Agreement (and as
      modified from time to time in accordance therewith).

     

    1.1.18  Crystal
      City Purchaser:
      Seller,
      as purchaser under the Crystal City Agreement.

     

    1.1.19  Crystal
      City Seller: collectively,
      CESC Mall Land L.L.C., a Delaware limited liability company and CESC Mall
      L.L.C., a Virginia limited liability company, affiliates of
      Purchaser.

     

    1.1.20  Damages:
      out of
      pocket damages, liabilities, losses, claims, costs and expenses (including
      reasonable attorneys’ fees and expenses).

     

    1.1.21  Deposit:
      as
      defined in Section 2.2.

     

    1.1.22  District:
      the
      Government of the District of Columbia.

     

    1.1.23  Encumbrance:
      any
      lien, mortgage, deed of trust, security interest, pledge, charge, option,
      encroachment, easement, covenant, lease, reservation or restriction of any
      kind
      (whether recorded, perfected, inchoate, actual or contingent) affecting
      title.

     

    1.1.24  Environmental
      Laws:
      all
      Legal Requirements in effect as of the Contract Date relating to the protection
      of the environment or to human health, or regulating the manufacture, use or
      disposal of Hazardous Substances.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.1.25  EBG:
      Epstein
      Becker & Green, P.C., and all occupants of the premises described in the EBG
      Lease.

     

    1.1.26  EBG
      Lease:
      Lease,
      dated May 12, 1989, between Seller and Epstein Becker & Green, P.C., as
      amended.

     

    1.1.27  Escrow
      Agent:
      Commercial Settlements, Inc., 1015 15th
      Street,
      N.W., Suite 300, Washington, D.C., Attn: David P. Nelson, as agent for the
      Title
      Company.

     

    1.1.28  Exchange
      Agreement:
      the
      Exchange Agreement dated as of the Contract Date among all of the parties to
      this Agreement, the Adjacent Agreement and the Crystal City Agreement, providing
      for the coordination of certain rights and remedies of the parties pursuant
      to
      such agreements. 

     

    1.1.29  Hazardous
      Substance:
      any
      pollutant, contaminant or any toxic, radioactive or otherwise hazardous
      substance, including petroleum, its derivatives, by-products and other
      hydrocarbons, asbestos, and toxic mold, in each case as regulated under
      Environmental Laws.

     

    1.1.30  Improvements:
      the
      buildings, structures, installations and other improvements, including such
      facilities, fixtures and appurtenances as shall constitute real property,
      located in or on the Land, commonly known as 1227 25th
      Street,
      N.W., Washington, D.C.

     

    1.1.31  Intangible
      Property:
      collectively, (i) all assignable guarantees and warranties, if any, that relate
      to the Improvements or Personal Property, (ii) all assignable permits,
      certificates of occupancy, and other public approvals that relate to the Land
      or
      the Improvements, (iii) all plans and specifications for the Improvements,
      (iv) all rights and work product under construction, service, consulting,
      engineering, architectural and similar contracts relating to the Property,
      (v)
      books and records relating solely to ownership or operation of the Property,
      and
      (vi) keys and lock and safe combinations relating to the Property.

     

    1.1.32  Land:
      Lot
      109
      in Square 24 in the District of Columbia, together with all right, title and
      interest of Seller in and to any Appurtenances thereto.

     

    1.1.33  Landlord:
      Seller
      or any successor landlord under the Leases.

     

    1.1.34  Land
      Records:
      the land
      records of the District of Columbia.

     

    1.1.35  Leases:
      collectively, the leases described on Schedule
      3.10
      and any
      leases, licenses or other agreements for the occupancy of any portion of the
      Land or Improvements that are entered into in accordance with Section
      5.4.

     

    1.1.36  Legal
      Requirement:
      any
      federal, state, local or municipal constitution, law, statute, ordinance, rule,
      order or regulation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.1.37  Letter
      of Credit: as
      defined in Section 2.2.2.1.

     

    1.1.38  Permitted
      Exceptions:
      collectively, (i) the matters approved or deemed approved by Purchaser in
      accordance with Section 5.2, (ii) the lien for real estate taxes and assessments
      not yet due and payable, and (iii) the rights of tenants under the
      Leases.

     

    1.1.39  Person:
      a
      natural person or any legal or governmental entity.

     

    1.1.40  Personal
      Property:
      all
      equipment, furniture, furnishings, appliances, tools, machinery, supplies and
      other tangible personal property owned by Seller and located at and used solely
      in connection with the operation of the Land and Improvements (as opposed to
      such items as may be used by Seller and/or BNA exclusively as an occupant of
      office space in the Improvements and in connection with Seller’s and/or BNA’s
      publishing and printing business therein, all of which items shall remain the
      property of Seller or BNA, as appropriate).

     

    1.1.41  Property:
      collectively, (i) the Land, (ii) all right, title and interest of Seller in
      and to the Improvements, (iii) all of Seller’s right, title and interest in and
      to the Personal Property, the Intangible Property, the Leases and the
      Contracts.

     

    1.1.42  Purchase
      Price:
      as
      defined in Section 2.2.

     

    1.1.43  Purchaser:
      as
      defined in the Preamble.

     

    1.1.44  Purchaser
      Indemnified Parties:
      as
      defined in Section 7.5.1.

     

    1.1.45  Purchaser’s
      Designee:
      as
      defined in Section 11.1.

     

    1.1.46  Seller:
      as
      defined in the Preamble.

     

    1.1.47  Seller
      Indemnified Parties:
      as
      defined in Section 7.5.2.

     

    1.1.48  Seller’s
      Knowledge:
      the
      actual current knowledge of Les Holmes and Elizabeth Brown (and for any time
      period after any such Person ceases to be in the employ of BNA, such Person’s
      replacement with respect to such Person’s responsibility with respect to the
      Property), without any obligation to review any files or make inquiry of any
      Person. No knowledge of any other Person shall be imputed to
      Seller.

     

    1.1.49  Settlement
      Statement:
      as
      defined in Section 10.1.

     

    1.1.50  Survey:
      as
      defined in Section 5.2.2.

     

    1.1.51  Survey
      Standards:
      as
      defined in Section 5.2.2.

     

    1.1.52  Tax
      Deferral Agreement:
      the
      Agreement among, Seller, BNA and the District dated September 4, 1996, pursuant
      to which the District agreed to defer payment of real estate taxes with respect
      to the Land and Improvements.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.1.53  Title
      Commitment:
      as
      defined in Section 5.2.1.

     

    1.1.54  Title
      Company:
      Commonwealth Land Title Insurance Company, acting through Escrow Agent as its
      agent.

     

    1.1.55  Transaction
      Documents: collectively,
      this Agreement and the documents executed at Closing by Seller and/or Purchaser
      (or Purchaser’s Designee).

     

    1.1.56  Vornado:
      Vornado
      Realty L.P., a Delaware limited partnership.

     

    1.2  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      District of Columbia (without
      reference to conflicts of laws principles).

     

    1.3  Captions,
      Numbering and Headings. Captions,
      numbering and headings of Articles, Sections, Schedules and Exhibits in this
      Agreement are for convenience of reference only and shall not be considered
      in the
      interpretation of this Agreement. References in this Agreement to Articles,
      Sections, Schedules and Exhibits shall be deemed to be references to such
      Articles, Sections, Schedules and Exhibits in this Agreement unless otherwise
      expressly specified.

     

    1.4  Number;
      Gender.
      Whenever
      required by the context, the singular shall include the plural, the neuter
      gender shall include the male gender and female
      gender,
      and vice versa.

     

    1.5  Business
      Day.
      In the
      event that the date for performance of any obligation under this Agreement
      falls
      on other than a business day, then such obligation shall be performed on the
      next succeeding business day.

     

    1.6  Severability.
      In
      the
      event that one or more of the provisions of this Agreement shall be held to
      be
      illegal, invalid or unenforceable, each such provision
      shall be
      deemed severable and the remaining provisions of this Agreement shall continue
      in full force and effect, unless this construction would operate as an undue
      hardship on Seller or Purchaser or would constitute a substantial deviation
      from
      the general intent of the parties as reflected in this Agreement.

     

    1.7  No
      Oral Modifications or Waivers.
      No
      modification of this Agreement
      shall be
      valid or effective unless the same is in writing and signed by Seller and
      Purchaser. No purported waiver of any of the provisions of this Agreement shall
      be valid or effective unless the same is in writing and signed by the party
      against whom it is sought to be enforced. Notwithstanding the foregoing, the
      parties agree that the time for performance of any matter to be performed
      pursuant to this Agreement may be modified by mutual exchange of electronic
      mail
      by the parties or their respective counsel.

     

    1.8  Exhibits.
      All
      Schedules and Exhibits referenced in this Agreement
      are
incorporated
      by this
      reference as if fully set forth in this Agreement, and all references to this
      Agreement shall be deemed to include all such Schedules and
      Exhibits.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.9  Integration.
      This
      Agreement, all Schedules and Exhibits
      appended
to
      this
      Agreement,
      the
      documents and agreements referenced in this Agreement, the Adjacent Agreement,
      the Exchange Agreement, the Access Agreement, and the Confidentiality Agreement
      contain the entire understanding between Seller and Purchaser with respect
      to
      the sale of the Property, and are intended to be a full integration of all
      prior
      or contemporaneous agreements, conditions, understandings or undertakings
      between Seller and Purchaser with respect thereto. There are no promises,
      agreements, conditions, undertakings, understandings, warranties or
      representations, whether oral, written, express or implied, between Seller
      and
      Purchaser with respect to the sale of the Property other than as are expressly
      set forth in this Agreement, the Schedules and Exhibits appended to this
      Agreement, the documents and agreements referenced in this Agreement, the
      Adjacent Agreement, the Exchange Agreement, the Access Agreement, and the
      Confidentiality Agreement. Without limiting the generality of the foregoing,
      the
      offer letter dated as of May 31, 2005 between Seller and Charles E. Smith
      Commercial Realty (an affiliate of Purchaser) is hereby superseded and shall
      be
      of no further force or effect.

     

    1.10  No
      Construction Against Drafter. This
      Agreement has been negotiated and prepared by Seller and Purchaser and their
      respective attorneys and, should
      any
      provision of this Agreement require judicial interpretation,
      the
      court interpreting or construing such provision shall not apply the rule of
      construction that a document is to be construed more strictly against one
      party.

     

    1.11  Including.
      The term
“including,” and variants thereof, shall mean “including without
      limitation.”

     

    ARTICLE
      2.  
      SALE OF PROPERTY

     

    2.1  Sale
      and Purchase.
      Subject
      to and in accordance with the terms of this Agreement, Seller shall sell to
      Purchaser, and Purchaser shall purchase from Seller, all of the
      Property.

     

    2.2  Purchase
      Price.

     

    2.2.1  The
      purchase price (“Purchase Price”) for the sale and purchase of the Property
      shall be Forty Million Dollars ($40,000,000.00), subject to the debits and
      credits described in Article 10.

     

    2.2.2  The
      Purchase Price shall be payable as follows:

     

    2.2.2.1  Within
      three (3) business days following the Contract Date, Purchaser shall deposit
      into escrow with Escrow Agent the sum of Seven Hundred Twenty Thousand Dollars
      ($720,000.00), which deposit may be in the form of either immediately available
      funds or an irrevocable sight draft letter of credit in the form attached as
      Exhibit
      E
      and
      otherwise in form and content reasonably acceptable to Seller (“Letter of
      Credit”).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2.2.2  The
      Letter of Credit deposited pursuant to Section 2.2.2.1, any proceeds of a
      draw on such Letter of Credit pursuant to this Agreement, any immediately
      available funds deposited by Purchaser pursuant to Section 2.2.2.1 and any
      interest accrued on such proceeds or funds, shall be referred to collectively
      as
      the “Deposit.” The Deposit shall be held in accordance with Section 8.1. At
      Closing, the cash portion of the Deposit shall, at Purchaser’s option, either be
      paid to or at the direction of Seller and credited against the Purchase Price
      or
      returned to Purchaser, and any Letter of Credit not previously drawn by Escrow
      Agent shall be returned to Purchaser, together with a letter from Seller
      authorizing the termination of such Letter of Credit.

     

    2.2.2.3  At
      Closing, Purchaser shall pay to or at the direction of Seller by wire transfer
      of immediately available funds, the balance of the Purchase Price (net of the
      cash portion of the Deposit), as adjusted for the debits and credits described
      in Article 10.

     

    2.2.2.4  Any
      Letter of Credit shall be issued by a financial institution acceptable to Seller
      and having a long-term unsecured debt rating from Standard & Poor’s
      Corporation of not less than “A” (or equivalent from another nationally
      recognized rating agency).

     

    2.3  Condition
      of Property. Purchaser
      acknowledges that (i) Purchaser has been given a reasonable opportunity to
      inspect and investigate the Property, all improvements thereon and all aspects
      relating thereto, including all of the physical, environmental and operational
      aspects of the Property, either independently or through agents and experts
      of
      Purchaser’s choosing, and (ii) Purchaser will acquire the Property based solely
      upon Purchaser’s own investigation and inspection of the Property and the
      representations, warranties and covenants of Seller expressly set forth in
      the
      Transaction Documents executed by Seller. Seller
      and Purchaser agree that, except as expressly provided for in this Agreement
      and
      the other Transaction Documents executed by Seller, (i) the Property shall
      be
      sold and Purchaser shall accept possession of the Property on the Closing Date
      “AS IS,” “WHERE IS,” and “WITH ALL FAULTS,” and (ii) such sale shall be without
      representation or warranty of any kind, whether express, implied, statutory
      or
      otherwise, including any warranty of income potential, operating expenses,
      uses,
      merchantability, floor area ratio, development potential, or fitness for a
      particular purpose, and Seller hereby disclaims and renounces any such
      representation or warranty. Purchaser further acknowledges and agrees that,
      except as expressly provided in the Transaction Documents executed by Seller,
      Seller shall be under no duty to make any affirmative disclosure regarding
      any
      matter which may be known to Seller, or its officers, directors, contractors,
      agents or employees, and that it is relying solely upon its own inspection
      of
      the Property and not upon any representations made to it by any Person
      whomsoever on Seller’s behalf.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      3.  
      SELLER’S REPRESENTATIONS AND WARRANTIES

     

    Seller
      hereby represents and warrants to Purchaser as follows:

     

    3.1  Good
      Standing. Seller
      is
      a corporation duly formed, validly existing and in good standing under the
      laws
      of the State of Delaware, and qualified to transact business and in good
      standing under the laws of the District of Columbia. Seller has full corporate
      power and authority to execute this Agreement and to consummate the transaction
      contemplated by this Agreement.

     

    3.2  Due
      Authorization.
      The
      execution, delivery and performance of this Agreement by Seller and the
      consummation by Seller of the transactions contemplated by this Agreement have
      been duly and validly authorized by all requisite actions of Seller. Assuming
      the due execution and delivery of this Agreement by Purchaser, this Agreement
      constitutes the valid and binding obligation of Seller, enforceable against
      Seller in accordance with its terms.

     

    3.3  No
      Violations. The
      execution, delivery and performance of this Agreement by Seller and the
      consummation by Seller of the transactions contemplated by this Agreement will
      not:  (i) violate any Legal Requirement or any order of any court
      or governmental authority that is binding on Seller or the Property; or
      (ii) result in a breach of or default under any contract or other agreement
      to which Seller is a party or by which the Property is bound or any provision
      of
      the organizational documents of Seller.

     

    3.4  Bankruptcy.
      Seller
      is not the subject debtor under any federal, state or local bankruptcy or
      insolvency proceeding, or any other proceeding for dissolution, liquidation
      or
      winding up of its assets.

     

    3.5  Litigation.
      Except
      as set forth on Schedule
      3.5,
      there
      are no Actions pending or, to Seller’s Knowledge, threatened against Seller or
      relating to the ownership, operation, development, use or occupancy of the
      Property, before any court or governmental authority, which if adversely
      determined would affect Seller’s ability to enter into or perform this Agreement
      or would materially adversely affect the ownership or operation of, or title
      to,
      the Property.

     

    3.6  Violations
      of Law.
      Seller
      has not received written notice from any governmental authority alleging a
      violation of any Legal Requirement affecting the Property that has not been
      corrected. Seller shall have the right to update the representation set forth
      in
      this Section 3.6 to reflect any such written notice that is received by Seller
      after the Contract Date.

     

    3.7  Condemnation.
      There
      are no pending condemnation actions with respect to the Property, and to
      Seller’s Knowledge there are no threatened or contemplated condemnation actions
      with respect to the Property. Seller shall have the right to update the
      representation set forth in this Section 3.7 to reflect (i) any condemnation
      that becomes pending after the Contract Date, or (ii) any threatened or
      contemplated condemnation that first becomes known to Seller after the Contract
      Date, in which event the provisions of Article 9 shall control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.8  Environmental
      Matters.
      To
      Seller’s Knowledge, other than (i) Hazardous Substances used in the ordinary
      course of maintaining and cleaning the Property in commercially reasonable
      amounts, and (ii) Hazardous Substances used as fuels, lubricants or otherwise
      in
      connection with vehicles, machinery and equipment located at the Property in
      commercially reasonable amounts, no Hazardous Substances are present on or
      in
      the Property. To Seller’s Knowledge, the Hazardous Substances described in the
      foregoing clauses (i) and (ii) are being used and disposed of in compliance
      with
      all applicable Environmental Laws.

     

    3.9  Contracts.
      There
      are
      no Contracts that will affect the Property as of the Closing Date, except (i)
      Permitted Exceptions, and (ii) as otherwise permitted under this
      Agreement.

     

    3.10  Leases.
      There
      are no leases, licenses or other agreements permitting the possession or
      occupancy of all or any portion of the Land or Improvements other than those
      identified on Schedule
      3.10.
      Seller
      has provided to Purchaser a correct and complete copy of each Lease. To Seller’s
      Knowledge, the Leases are in full force and effect. Except
      as
      set forth in Schedule
      3.10,
      there
      are no outstanding obligations on the part of the Landlord under the Leases
      to
      construct or pay for tenant improvements or to pay any leasing commissions,
      and
      the Leases provide for no free rent periods that have not expired. Seller
      shall have the right to update the representation set forth in this Section
      3.10
      to reflect Leases executed, terminated or modified after the Contract Date
      in
      accordance with this Agreement.

     

    3.11  Foreign
      Person.
      Seller
      is not a “foreign person” as defined in Section 1445 of the Code.

     

    ARTICLE
      4.  
      PURCHASER’S REPRESENTATIONS AND WARRANTIES

     

    Purchaser
      hereby represents and warrants to Seller as follows:

     

    4.1  Good
      Standing.
      Purchaser is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the State of Delaware, and has full power and
      authority to conduct the business in which it is now engaged. Purchaser is
      duly
      qualified to do business and in good standing under the laws of the District
      of
      Columbia, or will be so qualified and in good standing as of the Closing
      Date.

     

    4.2  Due
      Authorization.
      The
      execution, delivery and performance of this Agreement by Purchaser and the
      consummation by Purchaser of the transactions contemplated by this Agreement
      have been duly and validly authorized by all requisite actions of Purchaser.
      Assuming the due execution and delivery of this Agreement by Seller, this
      Agreement constitutes the valid and binding obligation of Purchaser, enforceable
      against Purchaser in accordance with its terms.

     

    4.3  No
      Violations. The
      execution, delivery and performance of this Agreement by Purchaser and the
      consummation by Purchaser of the transactions contemplated by this Agreement
      will not:  (i) violate any Legal Requirement or any order of any
      court or governmental authority that is binding on Purchaser; or
      (ii) result in a breach of or default under (A) any contract or other
      agreement to which Purchaser is a party or (B) any provision of the
      organizational documents of Purchaser.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.4  Bankruptcy.
      Purchaser is not the subject debtor under any federal, state or local bankruptcy
      or insolvency proceeding, or any other proceeding for dissolution, liquidation
      or winding up of its assets.

     

    4.5  Litigation.
      There
      are no Actions pending or, to Purchaser’s knowledge, threatened against
      Purchaser before any court or governmental authority, an adverse determination
      of which would materially adversely affect (i) the financial condition of
      Purchaser, or (ii) Purchaser’s ability to enter into or perform this
      Agreement.

     

    4.6  Terrorist
      Organizations Lists.
      Purchaser is not acting, directly or indirectly, for or on behalf of any Person
      named by the United States Treasury Department as a Specifically Designated
      National and Blocked Person, or for or on behalf of any Person designated in
      Executive Order 13224 as a Person who commits, threatens to commit, or
      supports terrorism. Purchaser is not engaged in the transaction contemplated
      by
      this Agreement directly or indirectly on behalf of, or facilitating such
      transaction directly or indirectly on behalf of, any such Person.

     

    ARTICLE
      5.  
      ACTIONS PENDING CLOSING

     

    5.1  Due
      Diligence.

     

    5.1.1  Purchaser
      acknowledges that Purchaser has completed such inspections and investigations
      of
      the Property as Purchaser deems desirable to evaluate the financial and physical
      condition of the Property and such other matters that Purchaser may deem
      relevant and hereby waives any further due diligence period.

     

    5.1.2  Prior
      to
      Closing, Purchaser and Purchaser’s agents and contractors shall have the right
      to enter upon the Property during regular business hours and upon reasonable
      prior notice to Seller. Purchaser and Purchaser’s agents and contractors may at
      Seller’s option be accompanied by a representative of Seller during any such
      entry upon the Property. Purchaser agrees that all inspections of the Property
      shall be subject to the rights or security requirements of tenants under Leases,
      and shall be conducted in a manner not unreasonably disruptive to tenants,
      guests or invitees at the Property or otherwise to the operation of the
      Property. Purchaser shall have the right to interview the tenant under any
      Lease, provided, however, that Purchaser shall first deliver written notice
      thereof to Seller, and at Seller’s option a representative of Seller shall
      participate in any such interviews. In the event Purchaser desires to conduct
      any physically invasive due diligence, Purchaser shall provide Seller with
      the
      scope of the work to be done and the name of the contractor to conduct such
      work, and shall request Seller’s prior consent thereto, which consent shall not
      be unreasonably withheld. Prior to entry onto the Property, Purchaser shall
      provide Seller with a certificate of insurance evidencing that Purchaser
      maintains a commercial general liability policy that names Seller as an
      additional insured, in such amounts and from such insurers as Seller shall
      approve, such approval not to be unreasonably withheld. Purchaser shall
      (i) restore the Property, at its own expense, to substantially the same
      condition which existed prior to any inspections or other activities of
      Purchaser thereon; and (ii) be responsible for and pay any and all liens by
      contractors, subcontractors, materialmen, or laborers performing the inspections
      or any other work for Purchaser, its agents or contractors on or related to
      the
      Property. Purchaser agrees to and hereby does indemnify, defend and hold
      harmless Seller and its affiliates, members, partners, shareholders, officers,
      directors, employees, agents, representatives, licensees, and the successors
      of
      any of the foregoing, harmless from and against any and all damages including
      mechanic’s and materialmen’s liens, caused by the entry by Purchaser and/or any
      of Purchaser’s agents or contractors onto the Property pursuant to this
      Section 5.1.2, provided that Purchaser shall not be so liable for the mere
      discovery by Purchaser or its agents or contractors of any existing condition
      at
      the Property. Purchaser’s obligations pursuant to this Section 5.1 shall
      survive the Closing (without limitation as to time) or earlier termination
      of
      this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.1.3  Seller
      has made available to Purchaser for inspection and copying or delivered to
      Purchaser such documents, materials and information concerning the Property
      as
      Seller may have in its possession or under its control, excluding only
      (i) materials that Seller shall have obtained or developed in connection
      with the potential sale of the Property, (ii) materials that are subject to
      attorney-client privilege, (iii) internal communications, and (iv) internal
      projections, forecasts, valuations, budgets and analyses.

     

    5.1.4  Purchaser
      shall,
      at no
      cost to Seller (but
      without representation or warranty of any kind), furnish to Seller copies of
      any
third-party
      reports
      received by Purchaser relating to any inspections of the Property conducted
      on
      Purchaser’s behalf. Upon any termination of this Agreement (other than a
      termination resulting from a default by Seller), Purchaser shall (i) assign
      all
      of its right, title and interest in any such third party reports to Seller
      (without representation or warranty of any kind) and (ii) return all documents,
      materials and information (and all copies thereof) concerning the Property
      that
      Seller has provided to Purchaser. Purchaser’s obligation in this Section 5.1.4
      shall survive the termination of this Agreement.

     

    5.2  Title
      and Survey.

     

    5.2.1  Purchaser
      acknowledges receipt from Title Company, prior to the Contract Date, of the
      commitment for an ALTA Owner’s Policy of Title Insurance attached as
Schedule
      5.2.1
      (“Title
      Commitment”) for the Land and Improvements, accompanied by a copy of all
      documents referred to in the Title Commitment.

     

    5.2.2  Purchaser
      has obtained, prior to the Contract Date, a survey of the Property by VIKA
      dated
      August 4, 2005, and revised November 1, 2005 (“Survey”)
      prepared
      in accordance with the Minimum Standard Detail Requirements and Classifications
      for ALTA/ACSM Land Title Surveys published in 1999 (“Survey
      Standards”).

     

    5.2.3  All
      Encumbrances as of the effective date of the Title Commitment (excluding
      Encumbrances shown on Schedule B, Section 1 of the Title Commitment),
      and all items shown on the Survey, shall be deemed to have been approved by
      Purchaser and shall be Permitted Exceptions for all purposes under this
      Agreement.

     

    5.2.4  Seller
      shall cure at or before the Closing all Encumbrances other than the Permitted
      Exceptions. Seller may use a portion of the Purchase Price to effect such cure
      at Closing. Seller shall have the right to mortgage the Property prior to
      Closing, provided that that lien of such mortgage shall be released at or prior
      to Closing at Seller’s sole cost and expense.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.3  Operation
      of Property. Prior
      to
      Closing, except as otherwise expressly provided in this Agreement:

     

    5.3.1  Seller
      shall continue to operate the Property in the ordinary course of business
      consistent with the practices and procedures in effect as of the Contract
      Date.

     

    5.3.2  Seller
      shall maintain and repair the Improvements substantially in their present
      condition, except for reasonable wear and tear and damage by casualty or
      condemnation, and except for such other matters as may be agreed upon by the
      parties in writing following a written request by Seller that Purchaser waive
      Seller’s obligation hereunder with respect to specific repairs or replacements,
      which request shall be considered by Purchaser in good faith in light of
      Purchaser’s then-current plans to redevelop (or not) the
      Improvements.

     

    5.3.3  Seller
      shall not remove any Personal Property, except as may be required for repair
      or
      replacement in the ordinary course of business, and replacement shall be of
      approximately equal quality and quantity as the removed item of Personal
      Property.

     

    5.3.4  Seller
      shall maintain, at its cost, standard premises operations liability coverage,
      and shall add Purchaser as an additional insured promptly after the Contract
      Date.

     

    5.4  Leases.

     

    5.4.1  Prior
      to
      Closing, except as otherwise set forth in this Agreement, Seller shall not
      (i)
      enter into any new lease, license or other agreement for the occupancy of the
      Improvements, or (ii) modify any Lease in a manner that would be binding on
      Purchaser from and after Closing, without the prior written approval of
      Purchaser in each instance, such approval to be granted or withheld in
      Purchaser’s sole discretion. Prior to Closing, Seller shall, at its sole cost
      and expense (except as otherwise provided in the EBG Lease), complete all of
      the
      work to be performed by the Landlord pursuant to the EBG Lease. Purchaser’s
      approval shall not be required with respect to any modification of any Lease
      that is required under the terms of such Lease but Seller shall deliver to
      Purchaser written notice of such modification or renewal within five (5) days
      of
      Seller’s receipt of the same. Prior to Closing, Seller shall perform its
      obligations under each Lease, and shall endeavor to promptly collect all rents
      due under the Leases in accordance with Seller’s usual practices.

     

    5.4.2  Prior
      to
      the Contract Date, Seller has obtained and delivered to Purchaser an estoppel
      certificate from the tenant under each Lease. Seller shall
      use
      commercially reasonable efforts to obtain from each such tenant and deliver
      to
      Purchaser, prior to Closing, an updated estoppel certificate in substantially
      the form of Exhibit
      D
      or in
      the form required by such tenant’s Lease, dated no earlier than the date that is
      thirty (30) days prior to the scheduled date for Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.5  Contracts.
      Prior
      to
      Closing, Seller shall terminate all Contracts affecting or relating to the
      Property, other than Contracts that constitute Permitted
      Exceptions.

     

    5.6  Title.
      Except
      as expressly permitted or required under this Agreement, prior to Closing,
      Seller shall not cause or voluntarily permit any change in title to the Property
      or any Encumbrance against title to the Property.

     

    5.7  Updates
      to Representations.
      Prior to
      Closing, Seller and Purchaser shall each promptly notify the other in writing
      if
      it becomes aware of any fact or condition that is inconsistent with any of
      Seller’s representations or warranties under this Agreement. Such
      representations and warranties shall automatically be deemed modified to reflect
      all information actually known to Purchaser prior to the Contract Date,
      including information contained in all third-party due diligence reports
      prepared at the direction of Purchaser.

     

    5.8  Satisfaction
      of Conditions.
      Prior to
      Closing, Seller and Purchaser shall each use good faith, commercially reasonable
      efforts to satisfy the conditions to Closing set forth in Article
      6.

     

    5.9  Tax
      Deferral.
      At or
      prior to Closing, Seller shall pay (or shall cause BNA to pay) all real estate
      taxes deferred by the District pursuant to the Tax Deferral Agreement, together
      with any interest, penalties and other amounts payable in connection
      therewith.

     

    5.10  Crystal
      City Agreement: Seller
      shall perform the obligations of Crystal City Purchaser under the Crystal City
      Agreement. Purchaser shall cause Crystal City Seller to perform the obligations
      of Crystal City Seller under the Crystal City Agreement.

     

    5.11  Adjacent
      Agreement: Seller
      shall perform its obligations under the Adjacent Agreement. Purchaser shall
      cause Adjacent Purchaser to perform its obligations under the Adjacent
      Agreement.

     

    5.12  Access
      for Marketing:
      Prior to
      Closing, Purchaser shall have the right, upon reasonable prior notice to Seller
      and during normal business hours, to show the Improvements to prospective
      tenants, investors and other interested parties.

     

    5.13  Pre-Development
      Activities.
      Prior to
      Closing, Purchaser shall have the right to apply for and pursue the following:
      (i) a planned unit development designation, variances or other zoning relief
      affecting all or any portion of the Property and/or the Adjoining Property,
      (ii)
      the subdivision of the Property and/or the Adjoining Property into one or more
      record lots or assessment and taxation lots, and (iii) such other land use,
      development and construction permits and approvals as may be required in
      connection with Purchaser’s planned redevelopment of the Property and/or the
      Adjoining Property. All costs in connection with any such proceedings shall
      be
      borne by Purchaser. Seller shall, at Purchaser’s expense, cooperate with
      Purchaser in such manner as Purchaser may reasonably request in connection
      with
      such proceedings. To the extent required by applicable Legal Requirements,
      Seller, as the owner of the Property, shall execute or join in any documents
      required in connection with the foregoing (including applications for planned
      unit development designation, variances or other zoning relief), provided that
      (a) Seller shall not be exposed to any liability as a result thereof (or shall
      be indemnified by Purchaser for any such liability) and (b) the proposed action
      shall not impose any obligations of any kind on Seller nor adversely affect
      the
      Property prior to Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      6.  
      CONDITIONS TO CLOSING

     

    6.1  Purchaser’s
      Conditions to Closing.
      The
      obligation of Purchaser to consummate the Closing shall be subject to the
      satisfaction of each of the following conditions, any or all of which may be
      waived in whole or in part by Purchaser:

     

    6.1.1  Each
      of
      Seller’s representations and warranties set forth in this Agreement (as modified
      by all modifications and updates expressly permitted by Article 3 or the
      second sentence of Section 5.7) shall be correct in all material respects as
      of
      the Closing Date.

     

    6.1.2  Seller
      shall have performed all of its material obligations under this Agreement
      required at or prior to Closing.

     

    6.1.3  The
      Title
      Company shall be prepared to issue to Purchaser, immediately upon consummation
      of Closing, an Owner’s Policy of Title Insurance consistent with the Title
      Commitment, at standard rates and in an amount equal to the Purchase Price
      paid
      by Purchaser at Closing.

     

    6.1.4  Unless
      the Crystal City Agreement has been terminated as a result of a default by
      Crystal City Seller thereunder, Closing shall have occurred, or shall
      concurrently be occurring, under the Crystal City Agreement.

     

    6.1.5  Closing
      shall have occurred, or shall concurrently be occurring, under the Adjacent
      Agreement.

     

    6.2  Failure
      of Purchaser’s Condition.
      In the
      event of the failure of any condition set forth in Section 6.1.1 through
      6.1.5, Purchaser, at its sole election, may (i) terminate this Agreement
      and (subject to the last sentence of this Section 6.2) receive a return of
      the
      Deposit, (ii) waive the condition and proceed to Closing, or (iii) extend the
      date for Closing for such additional period of time (not to exceed one hundred
      twenty (120) days in the aggregate for all such extensions) as may be reasonably
      required to allow such condition to be satisfied. Nothing set forth in this
      Section 6.2 shall affect Purchaser’s rights or remedies under Section 8.3 with
      respect to any breach of this Agreement by Seller.

     

    6.3  Seller’s
      Conditions to Closing.
      The
      obligation of Seller to consummate the Closing shall be subject to the
      satisfaction of each of the following conditions, any or all of which may be
      waived in whole or in part by Seller:

     

    6.3.1  Each
      of
      Purchaser’s representations and warranties set forth in this Agreement shall be
      correct in all material respects as of the Closing Date.

     

    6.3.2  Each
      of
      Purchaser’s representations and warranties set forth in this Agreement shall be
      correct in all material respects as if made by Purchaser’s Designee as of the
      Closing Date.

     

    6.3.3  Purchaser
      shall have performed all of its material obligations under this Agreement
      required at or prior to Closing.

     

    6.3.4  Unless
      the Crystal City Agreement has been terminated as a result of a default by
      Crystal City Purchaser thereunder, Closing shall have occurred, or shall
      concurrently be occurring, under the Crystal City Agreement.

     

    6.3.5  Closing
      shall have occurred, or shall concurrently be occurring, under the Adjacent
      Agreement.

     

    6.4  Failure
      of Seller’s Condition. In
      the
      event of the failure of any condition precedent set forth in Section 6.3.1
      to
      6.3.5, Seller, at its sole election, may (i) terminate this Agreement, in which
      event the Deposit (subject to the last sentence of this Section 6.4) shall
      be
      returned to Purchaser, (ii) waive the condition and proceed to Closing, or
      (iii) extend the date for Closing for such additional period of time (not
      to exceed one hundred twenty (120) days in the aggregate for all such
      extensions) as may be reasonably required to allow Purchaser to satisfy such
      condition. Nothing set forth in this Section 6.4 shall affect Seller’s rights or
      remedies under Section 8.2 with respect to any breach of this Agreement by
      Purchaser.

     

    ARTICLE
      7.  
      CLOSING

     

    7.1  Closing.
      Closing
      shall be held on the date that closing is required to occur under the Crystal
      City Agreement (including any extensions of closing thereunder), but not earlier
      than December 1, 2006.

     

    7.1.1  Closing
      shall be conducted through an escrow with Escrow Agent. Seller and Purchaser
      shall execute (or cause their counsel to execute) such additional instructions
      to Escrow Agent as may be required in connection therewith.

     

    7.1.2  Pre-closing
      (“Pre-Closing”) shall be held at the Washington, D.C., offices of DLA Piper
      Rudnick Gray Cary US LLP on the business day immediately preceding the scheduled
      date for Closing. At Pre-Closing, Seller and Purchaser shall execute and deliver
      to Escrow Agent all documents and deliveries required under Sections 7.2 and
      7.3, other than the Settlement Statement and payment of the amounts required
      to
      be paid at Closing. Seller and Purchaser shall complete and execute the
      Settlement Statement, and Seller and Purchaser shall pay the amounts required
      to
      be paid at Closing to Escrow Agent at Closing by wire transfer of immediately
      available funds, such that the amounts due to or on behalf of Seller pursuant
      to
      the Settlement Statement shall be wire transferred into a bank account or
      accounts designated by Seller no later than 3:00 p.m. local time at the Property
      on the Closing Date.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.1.3  Unless
      Closing under the Crystal City Agreement shall have been extended pursuant
      to
      Section 7.1.2.2 of the Crystal City Agreement, Seller shall have the right,
      in
      Seller’s sole but reasonable discretion, to continue for a limited period as
      described below to occupy the portions of the Land and Improvements occupied
      by
      Seller immediately prior to Closing (“Seller Premises”) in order to accommodate
      Seller’s move to the Crystal City Property. If Seller shall exercise such right,
      then at Closing, Purchaser, as landlord, and Seller, as tenant, shall execute
      a
      lease (“Seller Lease”) of the Seller Premises. The Seller Lease shall (i)
      provide for rental per square foot equal to the rental per square foot
      (including real estate taxes and operating expense passthroughs), taking into
      account a monthly rent set-off in the amount of $27,830.40, then payable under
      the terms of the EBG Lease, (ii)  provide that Seller accepts the Seller
      Premises in an “as is” condition on the Closing Date, (iii) provide for a term
      commencing on the Closing Date and expiring on a date designated by Seller
      that
      is not later than the earlier of (x) ninety (90) days after the Closing Date
      or
      (y) such date (which shall not be less than thirty (30) days after the Closing
      Date) as may be required by Purchaser in order to accommodate a new third party
      tenant or to commence redevelopment activities, and (iv) otherwise be in
      substantially the same form as the Charles E. Smith Commercial Realty standard
      form of office lease, with such changes thereto as Seller and Purchaser, each
      acting reasonably and in good faith, shall mutually agree upon.

     

    7.1.4  Except
      as
      otherwise provided in Section 7.1.2.1 of the Crystal City Agreement, Seller
      shall surrender the Land and Improvements at Closing (or, if applicable, the
      expiration of the Seller Lease) and shall, at its sole cost and expense, remove
      from the Land and Improvements all equipment, furniture, furnishings,
      appliances, tools, machinery, supplies and other tangible personal property
      owned or leased by Seller other than the Personal Property.

     

    7.2  Seller’s
      Closing Deliveries.
      At or
      prior to Closing, Seller shall deliver to Escrow Agent the
      following:

     

    7.2.1  The
      Deed
      (“Deed”) in the form of Exhibit
      A,
      conveying fee title to the Land and Improvements to Purchaser, duly executed
      and
      acknowledged by Seller, and dated as of the Closing Date.

     

    7.2.2  The
      Bill
      of Sale (“Bill of Sale”) in the form of Exhibit
      B,
      conveying all of Seller’s right, title and interest in the Personal Property to
      Purchaser, duly executed by Seller, and dated as of the Closing
      Date.

     

    7.2.3  The
      Assignment (“Assignment”) in the form of Exhibit
      C,
      assigning all of Seller’s right, title and interest in the Leases, Contracts and
      Intangible Property to Purchaser, duly executed by Seller, and dated as of
      the
      Closing Date.

     

    7.2.4  If
      Seller
      has exercised its right to continue to occupy the Seller Premises following
      Closing, the Seller Lease, duly executed by Seller, and dated as of the Closing
      Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.2.5  A
      certificate, duly executed by Seller, confirming that its representations and
      warranties set forth in this Agreement are correct in all material respects
      as
      if made on the Closing Date (or noting any exceptions).

     

    7.2.6  A
      title
      affidavit, in customary form reasonably satisfactory to the Title Company and
      Seller, duly executed by Seller.

     

    7.2.7  An
      affidavit, in the form required by the Code and the regulations issued pursuant
      thereto, to the effect that Seller is not a foreign person within the meaning
      of
      the Code.

     

    7.2.8  Such
      evidence of the power and authority of Seller to consummate the transactions
      described in this Agreement as may be reasonably required by Purchaser or Title
      Company.

     

    7.2.9  A
      written
      direction to Escrow Agent to disburse the Deposit to Seller in accordance with
      Section 8.1.2.1.

     

    7.2.10  To
      the
      extent within the possession or under the control of the Seller, originals
      of
      the Leases, Contracts and Intangible Property.

     

    7.2.11  A
      Settlement Statement in accordance with Section 10.1, duly executed by
      Seller.

     

    7.2.12  Notices
      to the tenants under all Leases, and to vendors under all Contracts, informing
      them of the change in ownership of the Property.

     

    7.2.13  Such
      other documents and instruments as are customary and as may be reasonably
      requested by Purchaser, Escrow Agent or Title Company, to effectuate the
      transactions contemplated by this Agreement.

     

    7.3  Purchaser’s
      Closing Deliveries.
      At or
      prior to Closing, Purchaser shall deliver to Escrow Agent the
      following:

     

    7.3.1  The
      Assignment, duly executed by Purchaser or Purchaser’s Designee, and dated as of
      the Closing Date.

     

    7.3.2  If
      Seller
      has exercised its right to continue to occupy the Seller Premises following
      Closing, the Seller Lease, duly executed by Purchaser or Purchaser’s Designee,
      and dated as of the Closing Date.

     

    7.3.3  A
      certificate, duly executed by Purchaser, confirming that its representations
      and
      warranties set forth in this Agreement are correct in all material respects
      as
      if made on the Closing Date (or noting any exceptions).

     

    7.3.4  A
      certificate from Purchaser’s Designee, duly executed by Purchaser’s Designee,
      confirming that Purchaser’s representations and warranties set forth in the
      Agreement are correct in all material respects as if made by such Purchaser’s
      Designee on the Closing Date (or noting any exceptions).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.3.5  Such
      evidence of the power and authority of Purchaser and Purchaser’s Designee to
      consummate the transactions described in this Agreement as may be reasonably
      required by Seller or Title Company.

     

    7.3.6  A
      written
      direction to Escrow Agent to disburse the Deposit to Seller in accordance with
      Section 8.1.2.1.

     

    7.3.7  The
      balance of the Purchase Price, as adjusted pursuant to
      Article 10.

     

    7.3.8  A
      Settlement Statement in accordance with Section 10.1, duly executed by Purchaser
      or Purchaser’s Designee.

     

    7.3.9  Such
      other documents and instruments as are customary and as may be reasonably
      requested by Seller, Escrow Agent or Title Company to effectuate the
      transactions contemplated by this Agreement.

     

    7.4  Closing
      Costs.
      All
      transfer and recordation taxes imposed upon the recordation of the Deed and
      all
      escrow or settlement fees of Escrow Agent shall be borne equally by Seller
      and
      Purchaser. Seller and Purchaser shall each bear its own counsel’s fees and
      expenses in connection with the transactions described in this Agreement.
      Purchaser shall pay all costs of Purchaser’s due diligence investigations of the
      Property, title insurance premiums and costs, and costs of the Survey. Any
      other
      closing costs shall be borne by the parties in accordance with custom for
      transactions similar to the transactions described herein in the District of
      Columbia.

     

    7.5  Indemnification.

     

    7.5.1  Subject
      to any express provisions of this Agreement to the contrary, from and after
      Closing, Seller hereby agrees to indemnify Purchaser, Purchaser’s Designee, and
      their respective trustees, directors, officers, employees, partners, members
      and
      affiliates (collectively, “Purchaser Indemnified Parties”), and to hold
      Purchaser Indemnified Parties harmless from and against, any and all Damages
      paid or incurred by Purchaser Indemnified Parties due to (i) any breach of
      any
      representation or warranty made by Seller in this Agreement, (ii) any breach
      of
      any covenant made by Seller in this Agreement, (iii) liabilities to any third
      party, including liabilities under the Leases, that are based upon any matter
      relating to the use, maintenance, operation or construction of the Property
      occurring prior to the Closing Date (except to the extent that Purchaser
      receives a credit therefor at Closing), and (iv) any liability of Seller, BNA
      or
      the Property under the Tax Deferral Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.5.2  Subject
      to any express provisions of this Agreement to the contrary, from and after
      Closing, Purchaser hereby agrees to indemnify Seller and its trustees,
      directors, officers and employees, partners, members and affiliates
      (collectively, “Seller Indemnified Parties”), and to hold Seller Indemnified
      Parties harmless from and against, any and all Damages paid or incurred by
      Seller Indemnified Parties due to (i) any breach of any representation or
      warranty made by Purchaser or Purchaser’s Designee in this Agreement, (ii) any
      breach of any covenant made by Purchaser or Purchaser’s Designee in this
      Agreement, (iii) any obligations with respect to which Purchaser receives a
      credit at Closing, to the extent of such credit, and (iv) liabilities to any
      third party, including liabilities under the Leases, that are incurred by any
      Seller Indemnified Party based upon any matter relating to the use, maintenance,
      operation or construction of the Property occurring on or after the Closing
      Date.

     

    7.5.3  The
      obligations of Seller under Section 7.5.1 shall not extend to (i) any
      Damages arising out of the alleged presence at, or release or disposal from
      the
      Property of any Hazardous Substance, or the alleged violation of any
      Environmental Laws, (ii) any Damages arising out of a violation of any
      Legal Requirement with respect to the physical condition, maintenance or
      improvement of the Property (including zoning and building codes and the
      Americans with Disabilities Act) which exists on or before the Closing Date,
      or
      (iii) any Damages arising out of the state of the physical condition,
      maintenance or improvement of the Property on or before the Closing Date, except
      (in the case of this clause (iii) only) Damages for the death of or injury
      to
      third parties, or damage to property other than the Property. The obligations
      of
      Seller under Section 7.5.1 (except with respect to the Tax Deferral
      Agreement) and of Purchaser under Section 7.5.2 shall not extend to (a) any
      consequential or punitive damages, (b) any loss or diminution of value in
      the Property (except in the case of a breach of a representation or warranty
      by
      Seller), or (c) any Damages that are not payable to third parties (except
      in the case of a breach of a representation or warranty by Seller).

     

    7.5.4  Notwithstanding
      anything to the contrary in this Agreement, Seller’s liability under
      Section 7.5.1 shall not exceed, in the aggregate together with Seller’s
      liability under Section 7.5.1 of the Adjacent Agreement, an amount equal to
      Five
      Million Dollars ($5,000,000.00), except for liability based upon actual fraud
      on
      the part of Seller. The foregoing limitations shall not be applicable to
      Seller’s indemnity obligations with respect to the Tax Deferral
      Agreement.

     

    7.5.5  Whenever
      either party shall learn through the filing of a claim or the commencement
      of a
      proceeding or otherwise of the existence of any liability for which the other
      party is or may be responsible under this Section 7.5, the party learning of
      such liability shall notify the other party promptly and furnish such copies
      of
      documents (and make originals thereof available) and such other information
      as
      such party may have that may be used or useful in the defense of such claims.
      The indemnified party shall afford the indemnifying party full opportunity
      to
      defend such claims, using counsel reasonably acceptable to the indemnified
      party, in the name of the indemnified party and generally shall cooperate with
      the indemnifying party in the defense of such claim, provided that no such
      matter shall be settled without the prior written consent of the indemnified
      party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.5.6  This
      Section 7.5 shall survive Closing indefinitely, except that Seller’s
      indemnification of Purchaser pursuant to Section 7.5.1 shall terminate on the
      date that is one (1) year after the Closing Date. From and after Closing, the
      indemnification provisions in this Section 7.5 shall be the exclusive remedies
      of Seller and Purchaser in connection with any of the matters described in
      this
      Section 7.5 and the transaction described in this Agreement, and each party
      hereby waives and releases and other rights or remedies it may have under
      applicable law or at equity in connection therewith. The foregoing limitations
      shall not be applicable to Seller’s indemnity obligations with respect to the
      Tax Deferral Agreement, which shall survive Closing without limitation as to
      time.

     

    7.6  Survival.

     

    7.6.1  Except
      where this Agreement expressly provides for a longer period, the
      representations, warranties, covenants and indemnities of Seller and Purchaser
      set forth in this Agreement shall survive Closing until the date that is one
      (1)
      year after the Closing Date, and any action on any such representation,
      warranty, covenant or indemnity must be instituted on or before such
      date.

     

    7.6.2  Notwithstanding
      any other provision of this Agreement, if at or prior to Closing Purchaser
      obtains actual knowledge that any representation or warranty of Seller under
      this Agreement (as the same is modified pursuant to Section 5.7) is inaccurate
      in any respect, but nonetheless proceeds to Closing, Purchaser shall be deemed
      to have waived any right to make a claim arising out of such
      inaccuracy.

     

    ARTICLE
      8.  
      ESCROW, DEFAULT, REMEDIES

     

    8.1  Escrow
      Terms.

     

    8.1.1  Escrow
      Agent shall promptly give notice to Purchaser and Seller upon its receipt of
      any
      portion of the Deposit from Purchaser in accordance with this Agreement. Escrow
      Agent shall invest the Deposit (if in cash) in overnight repurchase obligations
      secured by United States obligations through such bank as Escrow Agent may
      elect
      and shall be approved by Purchaser and Seller. Escrow Agent shall not be liable
      for any loss of such investment (unless due to Escrow Agent’s gross negligence
      or willful misconduct). All interest on the Deposit shall be treated by Escrow
      Agent for income tax purposes as earned by Purchaser, and Purchaser shall
      provide its tax identification number to Escrow Agent for this
      purpose.

     

    8.1.2  Escrow
      Agent shall deliver the Deposit to Seller or to Purchaser, as the case may
      be,
      under the following conditions:

     

    8.1.2.1  At
      Closing, the Deposit shall be delivered to Seller (if in cash) or Purchaser
      (if
      a Letter of Credit) upon receipt by Escrow Agent of a statement executed by
      Seller and Purchaser that the Deposit may be so released; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.1.2.2  The
      Deposit shall be delivered to Seller following receipt by Escrow Agent of
      written demand therefor from Seller, stating that Purchaser has defaulted in
      the
      performance of its obligations under this Agreement and specifying the Section
      of this Agreement which entitles Seller to receive the Deposit, but only if
      Purchaser shall not have given written notice of objection in accordance with
      Section 8.1.3; or

     

    8.1.2.3  The
      Deposit shall be delivered to Purchaser following receipt by Escrow Agent of
      written demand therefor from Purchaser stating that Seller has defaulted in
      the
      performance of its obligations under this Agreement or that this Agreement
      was
      terminated under circumstances entitling Purchaser to the return of the Deposit,
      and specifying the Section of this Agreement which entitles Purchaser to the
      return of the Deposit, but only if Seller shall not have given written notice
      of
      objection in accordance with Section 8.1.3; or

     

    8.1.2.4  The
      Deposit shall be delivered as directed by joint written instructions of Seller
      and Purchaser.

     

    8.1.3  Upon
      the
      filing of a written demand for the Deposit by Seller or Purchaser pursuant
      to
      Section 8.1.2.2 or 8.1.2.3, Escrow Agent shall promptly give notice thereof
      (including a copy of such demand) to the other party. The other party shall
      have
      the right to object to the delivery of the Deposit, by giving notice of such
      objection to Escrow Agent at any time within five (5) business days after such
      party’s receipt of notice from Escrow Agent, but not thereafter. Failure to
      deliver such objection notice within such period shall be deemed to be a waiver
      of such party’s right to object to Escrow Agent’s compliance with such demand.
      Such objection notice shall set forth the basis for objecting to the delivery
      of
      the Deposit. Upon receipt of such notice of objection, Escrow Agent shall
      promptly give a copy of such notice to the party who filed the written demand.
      The foregoing five (5) business day period does not constitute a cure period
      in
      which either Seller or Purchaser, as the case may be, shall be required to
      accept tender of cure of any default under this Agreement. If the Deposit is
      in
      the form of the Letter of Credit, then Escrow Agent shall draw upon the same
      prior to the release of the Deposit to Seller, and Seller and Purchaser hereby
      irrevocably direct Escrow Agent to effectuate such draw.

     

    8.1.4  If
      Escrow
      Agent shall have received the notice of objection provided for in Section 8.1.3
      within the time therein prescribed, Escrow Agent shall continue to hold the
      Deposit until (i) Escrow Agent receives written notice from Seller and
      Purchaser directing the disbursement of the Deposit, in which case Escrow Agent
      shall then disburse the Deposit in accordance with said direction, or
      (ii) litigation is commenced between Seller and Purchaser, in which case
      Escrow Agent shall deposit the Deposit with the clerk of the court in which
      said
      litigation is pending, or (iii) Escrow Agent takes such affirmative steps
      as Escrow Agent may elect, at Escrow Agent’s option, in order to terminate
      Escrow Agent’s duties hereunder (but in no event disbursing the Deposit to
      either Seller or Purchaser), including depositing the Deposit in court and
      commencing an action for interpleader, the costs thereof to be borne by
      whichever of Seller or Purchaser is the losing party. If
      the
      Deposit is in the form of the Letter of Credit, then Escrow Agent shall draw
      upon the same prior to the delivery of the Deposit to the clerk of court, and
      Seller and Purchaser hereby irrevocably direct Escrow Agent to effectuate such
      draw. Seller and Purchaser shall execute such documents as may be necessary
      to
      cause Escrow Agent to effectuate such draw.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.1.5  Escrow
      Agent may rely and act upon any instrument or other writing reasonably believed
      by Escrow Agent to be genuine and purporting to be signed and presented by
      any
      person or persons purporting to have authority to act on behalf of Seller or
      Purchaser, as the case may be, and shall not be liable in connection with the
      performance of any duties imposed upon Escrow Agent by the provisions of this
      Agreement, except for Escrow Agent’s own gross negligence, willful misconduct or
      default. Escrow Agent shall have no duties or responsibilities except those
      set
      forth herein. Escrow Agent shall not be bound by any modification or termination
      of this Agreement unless the same is in writing and signed by Purchaser and
      Seller, and, if Escrow Agent’s duties hereunder are affected, unless Escrow
      Agent shall have given prior written consent thereto. Escrow Agent shall be
      reimbursed by Seller and Purchaser for any expenses (including reasonable legal
      fees and disbursements of outside counsel, including all of Escrow Agent’s fees
      and expenses with respect to any interpleader action pursuant to Section 8.1.4)
      incurred in connection with this Agreement, and such liability shall be joint
      and several; provided that, as between Purchaser and Seller, the prevailing
      party in any dispute over the Deposit shall be entitled to reimbursement of
      any
      such expenses paid to Escrow Agent. In the event that Escrow Agent shall be
      uncertain as to Escrow Agent’s duties or rights hereunder, or shall receive
      instructions from Purchaser or Seller that, in Escrow Agent’s opinion, are in
      conflict with any of the provisions hereof, Escrow Agent shall be entitled
      to
      continue to hold the Deposit pursuant to Section 8.1.4, and may decline to
      take any other action.

     

    8.1.6  Escrow
      Agent shall have the right at any time to resign upon ten (10) business
      days prior notice to Seller and Purchaser. Seller and Purchaser shall jointly
      select a successor Escrow Agent and shall notify Escrow Agent of the name and
      address of such successor Escrow Agent within ten (10) business days after
      receipt of notice from Escrow Agent of its intent to resign. If Escrow Agent
      has
      not received notice of the name and address of such successor Escrow Agent
      within such period, Escrow Agent shall have the right to select on behalf of
      Seller and Purchaser a bank or trust company to act as its successor hereunder.
      At any time after the ten (10) business day period, Escrow Agent shall have
      the
      right to deliver the Deposit to any successor selected hereunder, provided
      such
      successor shall execute and deliver to Seller and Purchaser an assumption
      agreement whereby it assumes all of Escrow Agent’s obligations hereunder. Upon
      the delivery of all such amounts and such assumption agreement, the successor
      shall become the Escrow Agent for all purposes under this Section 8.1 and shall
      have all of the rights and obligations of the Escrow Agent under this Section
      8.1, and the resigning Escrow Agent shall have no further responsibilities
      or
      obligations hereunder.

     

    8.1.7  If
      the
      Deposit is in the form of the Letter of Credit, then not later than the date
      that is thirty (30) days prior to the expiration of such Letter of Credit,
      Purchaser shall cause such Letter of Credit to be extended or replaced with
      another Letter of Credit that satisfies the requirements of this Agreement.
      If
      Purchaser fails to so extend or replace such Letter of Credit by such date,
      then
      Escrow Agent shall draw upon the same and hold the proceeds of such draw as
      the
      Deposit hereunder, and Seller and Purchaser hereby irrevocably direct Escrow
      Agent to effectuate such draw. Seller and Purchaser shall execute such documents
      as may be necessary to cause Escrow Agent to effectuate such draw. If
      either
      party disputes the release of the Deposit to the other pursuant to Section
      8.1.3, then if the Deposit is in the form of the Letter of Credit, Escrow Agent
      is hereby irrevocably directed to draw upon the Letter of Credit and hold the
      proceeds of such draw as the Deposit.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.2  Purchaser’s
      Default.
      If
      Purchaser defaults in its obligation to proceed to Closing in accordance with
      this Agreement, or if any condition set forth in Sections 6.3.1 through
      6.3.4 is not satisfied and Seller elects not to proceed to Closing, and if
      such
      default is not cured and/or such condition is not satisfied within fifteen
      (15)
      days after Seller has given Purchaser written notice of the same, then Seller
      shall have the right to terminate this Agreement by written notice to Purchaser,
      and upon such termination Escrow Agent shall, subject to Sections 8.1.3 and
      8.1.4, pay the Deposit to Seller. In addition, if Seller, on or before the
      date
      that is three (3) years after the date on which this Agreement terminates
      pursuant to this Section 8.2 (“Outside Date”), sells the Property to a third
      party purchaser (“Successor Purchaser”) for a gross purchase price that is less
      than the Purchase Price, then not later than thirty (30) days following receipt
      by Purchaser of the documentation provided by Seller in accordance with this
      Section 8.2, Purchaser shall pay to Seller an amount (“Sales Price Damages”)
      equal to the difference between the Purchase Price and the gross purchase price
      paid by the Successor Purchaser. Seller shall provide Purchaser with correct
      and
      complete copies of all documentation reasonably requested by Purchaser in
      connection with the determination of the Sales Price Damages. If Seller also
      sells the Adjacent Property on or before the Outside Date then the “Sales Price
      Damages” collectively payable by Purchaser and Adjacent Purchaser under this
      Agreement and the Adjacent Agreement shall be calculated on an aggregate basis.
      In no event shall the Sale Price Damages under this Agreement and the Adjacent
      Agreement exceed in the aggregate $11,000,000. The amount of the Deposit plus
      the amount, if any, of the Sales Price Damages, shall be full and complete
      liquidated damages, and the exclusive and sole right and remedy of Seller,
      and
      neither party shall have any further obligations or liabilities to the other
      party under this Agreement, except for obligations that expressly survive
      termination of this Agreement. Purchaser acknowledges that Seller’s actual
      damages caused by Purchaser’s default in its obligation to proceed to Closing
      would be difficult to determine precisely and that the amount of the Deposit,
      together with the amount, if any, of the Sales Price Damages, as liquidated
      damages, is a fair and reasonable approximation. Seller hereby waives any right
      to recover damages (whether actual, consequential, punitive or other) as a
      result of Purchaser’s default in its obligation to proceed to Closing in
      accordance with this Agreement or as a result of any conditions set forth in
      Sections 6.3.1 through 6.3.4 not being satisfied, except for the damages
      described in this Section 8.2. This Section 8.2 shall survive any
      termination of this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.3  Seller’s
      Default.
      If
      Seller defaults in its obligation to proceed to Closing in accordance with
      this
      Agreement, or if any condition set forth in Section 6.1.1, 6.1.2 or 6.1.4 is
      not
      satisfied and Purchaser elects not to proceed to Closing, and if such default
      is
      not cured and/or such condition is not satisfied within fifteen (15) days after
      Purchaser has given Seller written notice of the same, then Purchaser shall
      be
      entitled, as its sole remedy, to either (i) specific performance of this
      Agreement, provided that any action for specific performance must be initiated
      no later than sixty (60) days after the date that Closing is otherwise required
      to occur under this Agreement, or (ii) terminate this Agreement by written
      notice to Seller, and upon such termination Escrow Agent shall, subject to
      Sections 8.1.3 and 8.1.4, return the Deposit to Purchaser and neither party
      shall have any further obligations or liabilities to the other party under
      this
      Agreement, except for obligations that expressly survive termination of this
      Agreement, provided that if specific performance is not available to Purchaser
      due to an intentional act of Seller, then in addition to terminating this
      Agreement, Purchaser shall be entitled to reimbursement by Seller of Purchaser’s
      out-of-pocket costs actually expended in connection with the transaction
      contemplated by this Agreement in an aggregate amount not to exceed the amount
      of the Deposit. Purchaser hereby waives any right to recover damages (whether
      actual, consequential, punitive or other) as a result of Seller’s default in its
      obligation to proceed to Closing in accordance with this Agreement or as a
      result of any conditions set forth in Sections 6.1.1, 6.1.2 or 6.1.4 not being
      satisfied, except as expressly set forth in this Section 8.3. This Section
      8.3 shall survive any termination of this Agreement.

     

    8.4  District
      Agreement. 

     

    8.4.1  On
      the
      Contract Date, Crystal City Seller and Crystal City Purchaser are executing
      the
      Crystal City Agreement for the sale by the Crystal City Seller to Crystal City
      Purchaser of the Crystal City Property. This Agreement and the Crystal City
      Agreement shall be subject to the provisions of the Exchange
      Agreement.

     

    8.4.2  Any
      default by Crystal City Purchaser under the Crystal City Agreement shall
      constitute a default by Seller under this Agreement. Any default by the Crystal
      City Seller under the Crystal City Agreement shall constitute a default by
      Purchaser under this Agreement.

     

    8.5  Adjacent
      Agreement.
      Closing
      on the sale of the Property pursuant to this Agreement and closing on the sale
      of the Adjacent Property pursuant to the Adjacent Agreement shall occur
      concurrently. In no event shall Seller be obligated to sell the Property nor
      shall Purchaser be required to purchase the Property without the concurrent
      Closing of the sale or purchase, respectively, of the Adjacent Property. Any
      default by Adjacent Purchaser under the Adjacent Agreement shall constitute
      a
      default by Purchaser under this Agreement. Any default by Seller under the
      Adjacent Agreement shall constitute a default by Seller under this Agreement.
      If
      the Adjacent Agreement is terminated for any reason prior to Closing, this
      Agreement shall terminate automatically, the Deposit shall be delivered to
      the
      party entitled to receive the Deposit (as defined under the Adjacent Agreement)
      under the Adjacent Agreement, and neither party shall have any further
      obligations or liabilities to the other party under this Agreement, except
      for
      obligations that expressly survive termination of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      9.  
      CASUALTY AND CONDEMNATION

     

    9.1  Notice
      to Purchaser.
      Seller
      shall give Purchaser prompt written notice of (i) any pending or threatened
      condemnation affecting the Property prior to Closing, upon becoming aware of
      the
      same, and (ii) any fire or other casualty occurring prior to Closing that
      affects the Property and that is reasonably estimated by Seller, acting
      reasonably and in good faith, to cost more than $10,000.00 to
      repair.

     

    9.2  Minor
      Condemnation. If,
      prior
      to Closing, a proceeding for condemnation is commenced against all or any
      portion of Property, and such proceeding does not materially adversely affect
      the use, occupancy or redevelopment of the Property, as reasonably determined
      by
      Seller and Purchaser, each acting reasonably and in good faith, then this
      Agreement shall continue in full force and effect and the Purchase Price shall
      not be reduced, but Purchaser shall be entitled to an assignment of all
      condemnation awards payable to Seller (other than any portion of such awards
      in
      respect of income lost prior to Closing or expended by or on behalf of Seller
      prior to Closing to restore the Property), and Seller shall have no obligation
      to repair or restore the Property.

     

    9.3  Major
      Condemnation.
      If,
      prior to Closing, a proceeding for condemnation is commenced against all or
      any
      portion of Property, and such proceeding is not covered by Section 9.2, then
      Purchaser shall have the right, upon notice in writing to Seller delivered
      within ten (10) days after Seller gives Purchaser notice of such condemnation,
      to terminate this Agreement, whereupon this Agreement shall terminate, Escrow
      Agent shall return the Deposit to Purchaser and neither party to this Agreement
      shall thereafter have any further rights or liabilities under this Agreement
      other than those that expressly survive termination of this Agreement. If
      Purchaser does not timely elect to terminate this Agreement, then this Agreement
      shall continue in full force and effect and the Purchase Price shall not be
      reduced, but Purchaser shall be entitled to an assignment of all condemnation
      awards payable to Seller (other than any portion of such awards in respect
      of
      income lost prior to Closing or expended by or on behalf of Seller prior to
      Closing to restore the Property), and Seller shall have no obligation to repair
      or restore the Property.

     

    9.4  Casualty.
      If,
      prior
      to Closing, the Property is damaged by fire or other casualty, then this
      Agreement shall continue in full force and effect and the Purchase Price shall
      not be reduced, but Purchaser shall be entitled to an assignment of all fire
      or
      other casualty insurance proceeds payable to Seller (other than any portion
      of
      such proceeds in respect of income lost prior to Closing or expended by or
      on
      behalf of Seller prior to Closing to restore the Property), plus the amount
      of
      any deductible, and Seller shall have no obligation to repair or restore the
      Property. Notwithstanding the foregoing, Seller shall be obligated to undertake
      such repair and restoration as may be required (i) under the terms of the
      Leases, and (ii) in any event, to safeguard the Property.

     

    9.5  Insurance.
      Prior to
      Closing, Seller shall maintain, at its cost, “broad form/special perils”
insurance with respect to the Improvements in an amount equal to 100% of the
      replacement cost thereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      10.  PRORATIONS

     

    10.1  Prorations
      Generally.
      Seller
      and Purchaser shall receive debits and credits against the Purchase Price
      pursuant to this Article 10. In the case of any adjustment to be made at
      Closing, such adjustment shall be set forth on a settlement statement
      (“Settlement Statement”) executed by Seller and Purchaser, and the portion of
      the Purchase Price payable pursuant to Section 2.2.2.3 shall be increased or
      decreased to reflect such adjustment. In the case of any adjustment to be made
      after Closing, Purchaser and Seller shall make such adjustment by payment of
      immediately available funds to the other party within five (5) days of the
      date
      such adjustment is determined.

     

    10.2  Governmental
      Charges. Real
      estate taxes, personal property taxes, and any other governmental assessments
      for the tax year(s) in which Closing occurs shall be apportioned between Seller
      and Purchaser as of the Apportionment Time.

     

    10.3  Rents
      under Leases.
      All
      rents and other charges (including base rent, percentage rent, expense
      reimbursement rent and any additional rent) under Leases (collectively, “Rents”)
      shall be apportioned in accordance with the following provisions:

     

    10.3.1  All
      Rents
      which were earned and attributable to the period prior to the Closing Date
      shall
      be retained by Seller to the extent that such Rents have been collected prior
      to
      the Closing Date. Rents earned and attributable to the period beginning on
      the
      Closing Date and thereafter will be paid to Purchaser directly by the tenants
      or
      licensees, or if received by Seller prior to Closing shall be credited to
      Purchaser at Closing.

     

    10.3.2  All
      Rents
      received on or after the Closing Date by Purchaser in respect of any Lease
      shall
      be applied first to sums due under such Lease attributable to the period
      beginning on the Closing Date through the last day of the month in which such
      sums were received. Thereafter, any remaining sums shall be promptly paid to
      Seller to the extent of any Rent owing to Seller under the applicable Lease
      for
      periods prior to the Closing Date. All Rents received by Seller after Closing,
      whether attributable to the period prior to or after the Closing Date, shall
      be
      deemed to be held in trust by Seller for Purchaser and shall be promptly
      delivered to Purchaser by Seller for application as provided in this
      Section.

     

    10.3.3  Any
      customary and actual, direct out of pocket costs incurred by Purchaser in
      collection of delinquent Rents shall be deducted by Purchaser prior to the
      payment to Seller on account of delinquent Rents. Purchaser shall not modify
      any
      Lease in such a way to affect the amounts of Rents that may be due to Seller.
      Seller shall have the right to contact tenants to request payment of delinquent
      rentals after the Closing Date and to institute legal proceedings, at Seller’s
      sole expense, to collect and retain such delinquent Rents, but not to evict
      such
      tenants.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.3.4  Reconciliations
      of taxes, insurance charges and other expenses owed by tenants and licensees
      under Leases for the calendar year (or fiscal year if different from the
      calendar year) in which Closing occurs shall be prepared by Purchaser with
      the
      cooperation of Seller within one hundred twenty (120) days following the end
      of
      such year in accordance with the requirements set forth in the Leases and as
      provided in this Section 10.3.4. For those Leases in which tenant pays a
      proportionate share of taxes, insurance charges or other expenses over a base
      year amount or expense stop, the proration of the amount received from such
      tenant over such base year amount or expense stop shall be calculated based
      on
      the total amount of such expenses for the Property incurred by each of Seller
      and Purchaser reduced by the base year amount allocated evenly for the portion
      of the year each owns the Property. The base year amount will be prorated
      between the parties based on the number of days each party owned the Property
      during such year. For Leases which do not have a base year amount or expense
      stop, the proration between the parties of income received from tenants from
      reconciliations of expenses under the Leases shall be calculated based on the
      expenses actually incurred by each party for such year and each party’s period
      of ownership of the Property.

     

    10.3.5  Purchaser
      shall receive a credit for any cash security deposit actually posted by the
      tenant under any Lease, except to the extent that such security deposit has
      been
      applied by Seller prior to the Closing Date in accordance with the terms of
      the
      applicable Lease. Seller and Purchaser shall cooperate to transfer to Purchaser
      any security deposit posted by the tenant under any Lease that is in a form
      other than cash.

     

    10.3.6  Purchaser
      shall receive the following credits with respect to the Landlord’s obligations
      under the Ninth Amendment to Office Lease dated as of June 30, 2004
      (“9th
      Amendment”), between Seller and EBG: (i) to the extent that such amounts have
      not previously been paid to or applied against rent payable by EBG, a credit
      in
      the total amount of all rent credits provided under Section 5(b) of the
      9th
      Amendment, plus (ii) to the extent that Seller has not previously paid EBG
      for
      all amounts reimbursable by the Landlord under Section 7(b) of the 9th
      Amendment, a credit in the amount of Seller’s and Purchaser’s good faith
      estimate of all remaining reimbursable amounts thereunder, plus (iii) to the
      extent that Seller has not previously paid EBG for all amounts payable by the
      Landlord under Section 7(c) of the 9th
      Amendment, a credit in the amount of all remaining amounts payable thereunder.
      To the extent permitted under the EBG Lease, at Purchaser’s option, which may be
      exercised at any time prior to Closing, all or any portion of such amounts
      shall
      be paid to EBG out of Seller’s proceeds at Closing.

     

    10.4  Contracts.
      All
      amounts payable under the Contracts shall be apportioned between Seller and
      Purchaser as of the Apportionment Time.

     

    10.5  Utilities.
      Water,
      sewer, fuel, electricity, gas and other utilities shall be apportioned between
      Seller and Purchaser as of the Apportionment Time.

     

    10.6  Deposits.
      Seller
      shall receive a credit for all deposits made by or on behalf of Seller as of
      the
      Apportionment Time as security under any Contract, utility, public service
      or
      other arrangement to the extent the same remains on deposit for the benefit
      of
      Purchaser.

     

    10.7  Permits.
      Seller
      shall receive a credit for prepaid fees for any permits that are assigned to
      Purchaser.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    10.8  Tax
      Appeals.

     

    10.8.1  If
      any
      appeal of any taxes or assessments is pending as of the Closing Date with
      respect to any tax period that has closed prior to the Closing Date, Seller
      shall be entitled to receive any rebate or credit resulting from such appeal,
      and shall pay all expenses of prosecuting such appeal.

     

    10.8.2  If
      any
      appeal of any taxes or assessments is pending as of the Closing Date with
      respect to the period in which the Closing Date occurs (“Current Year Tax
      Appeal”), such taxes or assessments shall be re-prorated between Seller and
      Purchaser as of the Apportionment Time in accordance with the results of such
      Current Year Tax Appeal. Seller shall consider in good faith any request by
      Purchaser to initiate a Current Year Tax Appeal. Seller and Purchaser shall
      cooperate in the prosecution of each Current Year Tax Appeal. All third party
      costs and fees incurred in connection with any Current Year Tax Appeal,
      including legal fees and expenses, shall be paid by Seller to the extent due
      and
      payable prior to the Closing Date, and shall be paid by Purchaser to the extent
      due and payable on or after the Closing Date, but upon completion of the Current
      Year Tax Appeal, all such costs and fees shall be prorated between Purchaser
      and
      Seller in the same proportion as they bear re-prorated taxes and
      assessments.

     

    10.9  Transaction
      Taxes.
      Seller
      shall be responsible for its federal and state income, franchise and similar
      taxes applicable to the transactions contemplated by this Agreement. Purchaser
      shall be responsible for any bulk sales taxes, personal property sales taxes,
      and similar taxes applicable to the transactions contemplated by this
      Agreement.

     

    10.10  Disputes
      with Respect to Adjustments.
      If
      Seller and Purchaser, each acting reasonably and in good faith, cannot resolve
      any issue with respect to the adjustments described in this Article 10, they
      shall submit such issue for binding resolution by a nationally recognized
      accounting firm mutually acceptable to both parties (“Accounting Firm”). The
      parties shall bear equally all fees and expenses of the Accounting Firm in
      connection with the resolution of such issue, and each party shall bear its
      own
      legal, accounting and other fees and expenses incurred in connection with the
      resolution of the issue by the Accounting Firm. Such resolution shall be final
      and binding on the parties and judgment may be entered upon such resolution
      in
      any court having jurisdiction thereof. Seller and Purchaser agree that the
      proceeding described in this Section 10.10 shall be conducted in the District
      of
      Columbia.

     

    10.11  Interest
      on Amounts Owed.
      Any
      amount that is payable by Seller or Purchaser to the other pursuant to this
      Article 10 and not paid when due shall bear interest from the date due until
      paid at the rate of ten percent (10%) per annum.

     

    10.12  Survival.
      This
      Article 10 shall survive Closing.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      11.  MISCELLANEOUS

     

    11.1  Assignment.
      Neither
      Seller nor Purchaser shall assign this Agreement without the consent of the
      other. Notwithstanding the foregoing, without Seller’s consent, Purchaser shall
      have the right to assign the right to receive the Property at Closing to another
      Person (“Purchaser’s Designee”), subject to the following
      conditions:  (i) such Purchaser’s Designee is a direct or indirect
      wholly-owned subsidiary of Vornado; (ii) Purchaser shall give notice to
      Seller no later than ten (10) business days prior to the date set for
      Closing of the identity of Purchaser’s Designee; and (iii) such assignment
      shall not adversely affect any Exchange or delay or otherwise adversely affect
      Closing. Upon any such assignment, Purchaser’s Designee shall be deemed to have
      assumed for the benefit of Seller all obligations of Purchaser under this
      Agreement, the Access Agreement and the Confidentiality Agreement, but such
      assignment shall not relieve Purchaser of its obligations under this Agreement,
      the Access Agreement and the Confidentiality Agreement.

     

    11.2  Notices.
      Notices
      and other communications required or permitted under this Agreement shall be
      in
      writing and delivered by hand against receipt or sent by recognized overnight
      delivery service, by certified or registered mail, postage prepaid, with return
      receipt requested or by facsimile. All notices shall be addressed as
      follows:

     

    If
      to
      Purchaser:

     

    Vornado
      Realty L.P.

    888
      Seventh Avenue

    New
      York,
      New York 10019

    Attn:
      Joseph Macnow

    Phone:
      (212) 894-7066

    Fax:
      (212) 843-2198

     

    with
      a
      copy to:

     

    Gregory
      R. Redding, Esquire

    Vice
      President and Division Counsel

    Charles
      E. Smith Real Estate Services L.P.

    2345
      Crystal Drive, Suite 1000

    Arlington,
      Virginia 22202

    Phone:
      (703) 769-1840

    Fax:
      (703) 769-1301 

     

    and
      with
      a copy to: 

     

    Michael
      D. Goodwin, Esq.

    Arnold
      & Porter LLP

    555
      12th
      Street,
      N.W.

    Washington,
      D.C. 20004

    Phone:
      (202) 942-5558

    Fax:
      (202) 942-5999

     

    If
      to
      Seller:

     

    BNA
      Washington Inc.

     

    1231
      25th
      Street, NW

     

    Washington,
      DC 20037

    Attention:
      Eunice Bumgardner

    Phone:
      (202) 736-3916

    Fax:
      (202) 973-3707

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    with
      a
      copy to:

     

    Robb
      Johnson

    Senior
      Vice President

    Staubach

    8484
      Westpark Drive, Suite 150

    McLean,
      Virginia 22102

    Phone:
      (703) 448-3555

    Fax:
      (703) 448-6685

     

    and

     

    Jay
      Epstien, Esquire

    DLA
      Piper
      Rudnick Gray Cary US LLP

    1200
      19th
      Street,
      N.W.

    Washington,
      D.C. 20036

    Phone:
      (202) 861-3850

    Fax:
      (202) 689-7450

     

    If
      to
      Escrow Agent:

     

    Commercial
      Settlements, Inc.

    1015
      15th
      Street,
      N.W., Suite 300

    Washington,
      D.C. 20005

    Attn:
      David P. Nelson

    Phone:
      (202) 737-4747

    Fax:
      (202) 737-4108

     

    or
      to
      such other addresses as may be designated by a proper notice. Notices shall
      be
      deemed to be effective upon receipt (or refusal thereof) if personally
      delivered, sent by recognized overnight delivery service, or sent by certified
      or registered mail, postage prepaid, with return receipt requested, or upon
      electronically verified transmission, if such delivery is by
      facsimile.

     

    11.3  Waiver
      of Jury Trial; Jurisdiction.
      Seller
      and Purchaser each hereby waives any right to jury trial in the event any party
      files an action relating to this Agreement or to the transactions or obligations
      contemplated by this Agreement. Any action, suit or proceeding arising out
      of
      this Agreement or the transactions contemplated by this Agreement shall be
      brought exclusively in the United States District Court for the District of
      Columbia, and Seller and Purchaser agree that such courts are the most
      convenient forum for resolution of any such action and further agree to submit
      to the jurisdiction of such courts and waive any right to object to venue in
      such courts.

     

    11.4  Counterparts
      and Effectiveness.
      This
      Agreement may be executed in any number of counterparts which, when taken
      together, shall constitute a single binding instrument. Execution and delivery
      of this Agreement by facsimile shall be sufficient for all purposes and shall
      be
      binding on any Person who so executes.

     

    11.5  Brokerage.
      Seller
      represents to Purchaser that other than The Staubach Company - Northeast, Inc.
      (“Seller’s Broker”), no broker, finder or similar consultant has acted on its
      behalf in connection with this Agreement or the transaction contemplated by
      this
      Agreement. Purchaser represents to Seller that no broker, finder or similar
      consultant has acted on its behalf in connection with this Agreement or the
      transaction contemplated by this Agreement. At Closing, Seller shall pay to
      Seller’s Broker a commission pursuant to a separate agreement. Purchaser and
      Seller each shall indemnify and hold the other harmless from claims made by
      any
      broker, finder or similar consultant claiming through it for a commission,
      fee
      or compensation in connection with this Agreement or the transaction
      contemplated by this Agreement, and such indemnity shall survive Closing without
      limitation as to time. The indemnification obligations set forth in this
      Section 11.5 shall survive Closing or any termination of this
      Agreement.

     

    11.6  Confidentiality.
      Purchaser and Seller shall each maintain as confidential any and all information
      and material obtained about the other which is furnished to it by the other
      in
      connection with this Agreement, and such obligation shall survive any
      termination of this Agreement and shall survive Closing for a period of one
      (1)
      year. Purchaser and Seller shall each maintain as confidential the terms of
      this
      Agreement and such obligation shall survive any termination of this Agreement,
      but shall terminate at Closing. Purchaser shall maintain as confidential any
      and
      all information and material about the Property which is furnished to it by
      or
      on behalf of Seller, and such obligation shall survive any termination of this
      Agreement but shall terminate at Closing. Confidential information shall not
      include information and material which (i) becomes generally available to the
      public other than as a result of a disclosure prohibited by this
      Section 11.6, (ii) is known to Purchaser or Seller, as the case may
      be, on a non-confidential basis, prior to its receipt of such information and
      material from the other party, or (iii) becomes available to Purchaser or
      Seller, as the case may be, on a non-confidential basis from a source other
      than
      the other party which is not prohibited from disclosing the same.
      Notwithstanding the foregoing, (i) each of Purchaser and Seller may
      disclose confidential information to its employees, agents or advisors, and
      to
      potential investors or lenders, in each case on a need-to-know basis after
      the
      recipients of the information have been informed of the confidential nature
      of
      such information and directed not to disclose such information except in
      accordance with this Section 11.6, (ii) each of Purchaser and Seller
      may disclose confidential information to the extent required by applicable
      law
      or the rules of any applicable securities exchange, and (iii) Purchaser and
      Seller, following prior notice to and consultation with the other, may disclose
      the transaction contemplated by this Agreement to the extent necessary to obtain
      consents or approvals contemplated by this Agreement.

     

    11.7  Bulk
      Sales Compliance. Seller
      and Purchaser acknowledge that they do not intend to comply with and have agreed
      to waive the provisions of any statutory bulk sale or similar requirements
      applicable to the transactions contemplated by this Agreement, and Seller and
      Purchaser agree to rely upon the adjustment provisions of this Agreement to
      address any matters that would otherwise be subject to such bulk sale
      requirements.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.8  Public
      Announcements. Prior
      to
      Closing, each party shall notify the other and provide the other with an
      opportunity to comment on any proposed form of press release or other written
      disclosure with respect to this Agreement or the transactions contemplated
      by
      this Agreement not less than twenty-four (24) hours prior to such proposed
      disclosure.

     

    11.9  Recordation.
      Neither
      Seller nor Purchaser shall record this Agreement or any notice of this Agreement
      in the land records of any jurisdiction.

     

    11.10  Time
      of Essence.
      Time is
      of the essence with respect to the performance of all obligations, and the
      exercise of all rights, of Seller and Purchaser under this
      Agreement.

     

    11.11  Rule
      Against Perpetuities.
      Notwithstanding any other provision in this Agreement, Closing shall occur,
      if
      at all, prior to the date that is twenty-one (21) years following the death
      of
      the survivor of George W. Bush and Laura Bush and the now living children of
      said persons.

     

    11.12  Like-Kind
      Exchanges.

     

    11.12.1  Notwithstanding
      anything contained herein to the contrary, Purchaser acknowledges
      that
      Seller may designate the Property as relinquished property to consummate a
      like-kind exchange or reverse like-kind exchange under Section 1031 of the
      Code
      (an “Exchange”) with respect to property that Seller will acquire either prior
      to or within one hundred eighty (180)
      days
      after Closing (the “Replacement Property”). In the event that Seller designates
      the Property as relinquished property to consummate an Exchange with respect
      to
      the Replacement Property through the use of a qualified intermediary
      (“Intermediary”) and/or an Exchange Accommodation Titleholder (“EAT”), Purchaser
      shall cooperate in structuring the transaction as an Exchange for the benefit
      of
      Seller and Purchaser agrees to render all required performance under this
      Agreement to either the Intermediary or the EAT (either the Intermediary or
      the
      EAT referred to herein as the “1031 Assignee”) to the extent reasonably directed
      by Seller and to accept performance of all of Seller’s obligations by the 1031
      Assignee. Purchaser agrees that performance by the 1031 Assignee will be treated
      as performance by Seller, and Seller agrees that Purchaser’s performance to the
      1031 Assignee will be treated as performance to Seller. No assignment of rights
      under this Agreement to a 1031 Assignee shall effect a release of Seller from
      obligations under this Agreement.

     

    11.12.2  Notwithstanding
      anything contained herein to the contrary, Seller acknowledges
      that
      Purchaser may designate the Property as replacement property to consummate
      an
      Exchange with respect to property that Seller will relinquish either prior
      to or
      within one hundred eighty (180) days after Closing (the “Relinquished
      Property”). In the event that Purchaser designates the Property as replacement
      property to consummate an Exchange with respect to the Relinquished Property
      through the use of a 1031 Assignee, Seller shall cooperate in structuring the
      transaction as an Exchange for the benefit of Purchaser and Seller agrees to
      render all required performance under this Agreement to such 1031 Assignee
      to
      the extent reasonably directed by Purchaser and to accept performance of all
      of
      Purchaser’s obligations by the 1031 Assignee. Seller agrees that performance by
      the 1031 Assignee will be treated as performance by Purchaser, and Purchaser
      agrees that Seller’s
      performance to the 1031 Assignee will be treated as performance to Purchaser.
      No
      assignment of rights under this Agreement to a 1031 Assignee shall effect a
      release of Purchaser from obligations under this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.13  District
      of Columbia Provisions.

     

    11.13.1  The
      characteristic of the soil of the Land, as described by the Soil Conservation
      Service of the U.S. Department of Agriculture in the Soil Survey Book of the
      District of Columbia (area 11)
      published in July 1976, and as shown on the Soil Maps of the District of
      Columbia at
      the back
      of that publication, is Urban Land. For further information, Purchaser may
      contact a soil testing laboratory, the District of Columbia Department of
      Environmental Services or the Soil Conservation Service of the U.S. Department
      of Agriculture. The foregoing is set forth pursuant to requirements of the
      District of Columbia Code and is not intended, and shall not be construed as,
      limiting the conditions set forth herein with respect to Purchaser’s right to
      make investigations, tests and studies satisfactory to it.

     

    11.13.2  In
      accordance with the requirements of Section 3(g) 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
      (the “Act”), Seller has informed Purchaser, and hereby re-informs Purchaser,
      that Seller has no knowledge of the existence or removal, during Seller’s
      ownership of the Property, of any underground storage tanks at or from the
      Property. This disclosure notice was provided to Purchaser prior to entering
      into this Agreement.

     

    

     

    [Signatures
      on following page]

    
      
        -
          -

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      Seller
      and Purchaser have caused this Agreement to be executed as of the Contract
      Date.

     

    SELLER:

     

    BNA
      Washington Inc., a Delaware corporation

     

    

    By:  /s/Elizabeth
      Brown

    Name:
      Elizabeth Brown   

    Its:
      President, BNA Washington Inc.   

    

    

    By: /s/George
      J. Korphage  

    Name:
      George J. Korphage

    Its:
      Chairman of the Board, BNA Washington Inc.  

    

     

    PURCHASER:

     

    CESC
      1227
      LLC, a Delaware limited liability company

     

    By: Vornado
      Realty L.P., a Delaware  limited
      partnership, sole member

     

    By: Vornado
      Realty Trust, a Maryland  real
      estate investment trust, its  general
      partner

     

    

     

    By:
      /s/Mitchell N. Schear   

    Name:
      Mitchell N. Schear  

    Its:
      President, CSCR  

    

    

    

    

    
      
        -
          -

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    JOINDER
      OF ESCROW AGENT

     

    The
      undersigned is joining this Agreement to evidence its agreement to receive,
      hold
      and disburse the Deposit in accordance with the terms of the
      Agreement.

     

    Commonwealth
      Land Title Insurance Company

     

    

    By:   

    Name:   

    Its:   

    

    
      
        -
          -

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    JOINDER
      OF CRYSTAL CITY SELLER

     

    The
      undersigned, jointly and severally, hereby guaranty the prompt and full payment
      to Seller of all amounts due and payable by Purchaser pursuant to
      Section 8.2 of the foregoing Agreement of Purchase and Sale. Such guaranty
      is absolute and unconditional, is a guaranty of payment and performance and
      not
      of collection, shall survive any termination of this Agreement. If at any time
      prior to the satisfaction or expiration of Purchaser’s obligations under Section
      8.2, the undersigned do not collectively own at least two of the buildings
      located at Crystal Mall (as defined in the Crystal City Agreement), the
      undersigned shall cause an affiliate of Vornado Realty, L.P., a Delaware limited
      partnership, with a net worth of at least $20,000,000 to guaranty the
      obligations guarantied by the undersigned hereunder.

     

    CESC
      Mall
      Land L.L.C., a Delaware limited liability company

     

    

     

    By:   

    Name:   

    Its:   

    

     

    CESC
      Mall
      L.L.C., a Virginia limited liability company

     

    

     

    By:   

    Name:   

    Its:   

     

    

     

    

    
      
        
          1541473_1.DOC

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    Schedules
      and Exhibits

     

    

    Schedules

    

    3.5 Pending
      Actions

    3.10 Leases

    5.2.1 Title
      Commitment

    

    Exhibits

    

    A Form
      of
      Deed

    B Form
      of
      Bill of Sale

    C Form
      of
      Assignment

    D Form
      of
      Estoppel

    E Form
      of
      Letter of CreditExhibit 10.3 PSA for 1801 S. Bell St

    

      1801
        S. Bell

      Arlington,
        Virginia

      

      

      AGREEMENT
        OF PURCHASE AND SALE

       

      THIS
        AGREEMENT OF PURCHASE AND SALE
        (“Agreement”) is made as of February 13, 2006 (“Contract Date”), between (i) BNA
        Washington Inc., a Delaware corporation (“Purchaser”), and (ii) CESC Mall Land
        L.L.C., a Delaware limited liability company (“Fee Owner”) and CESC Mall L.L.C.,
        a Virginia limited liability company (“Leasehold Owner,” and collectively with
        Fee Owner, “Seller”).

       

      ARTICLE
        1. INTERPRETATION 

       

      1.1 Definitions.
        For
        purposes of this Agreement, the following capitalized terms shall have the
        meanings indicated:

       

      1.1.1 Access
        Agreement:
        the
        Access Agreement dated as of June 16, 2005, executed by Purchaser in connection
        with the Property.

       

      1.1.2 Accounting
        Firm:
        as
        defined in Section 10.12.

       

      1.1.3 Action:
        any
        action, suit, arbitration, governmental investigation or other legal
        proceeding.

       

      1.1.4 Apportionment
        Time: 12:01
        a.m. local time at the Property.

       

      1.1.5 BNA:
        The
        Bureau of National Affairs, Inc., a Delaware corporation.

       

      1.1.6 BNA
        Lot:
        a
        portion of the Office Parcel comprising a three-dimensional subdivided lot
        substantially as depicted in the subdivision plat attached as Schedule
        1.1.6,
        as
        subdivided pursuant to Section 5.3.

       

      1.1.7 Closing:
        the
        consummation of the purchase and sale of the Property as contemplated by
        this
        Agreement.

       

      1.1.8 Closing
        Date:
        the date
        on which the Closing occurs.

       

      1.1.9 Code:
        the
        Internal Revenue Code of 1986, as amended.

       

      1.1.10 Confidentiality
        Agreement:
        the
        Confidentiality Agreement dated as of June 16, 2005, executed by Purchaser
        in
        connection with the Property.

       

      1.1.11 Contract:
        any
        contract for services, maintenance and supplies, equipment leases, and any
        other
        contract or agreement relating to the management, use, maintenance, operation,
        provisioning or equipping of the Property, and all amendments thereto, excluding
        the Work Agreement and the Renovation Contracts, and also excluding the Excluded
        Property.

       

      
        
          
             

             

             

          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.1.12 Contract
        Date:
        as
        defined in the Preamble.

       

      1.1.13 Crystal
        Mall:
        collectively, the Office Parcel and the Hotel Parcel, together with all
        improvements located thereon as described in Arlington County Site Plan No.
        56,
        commonly known as the “Crystal Mall” complex and including the Crystal City
        Marriott Hotel and the office buildings currently having the following
        addresses: 1800, 1801, 1851 and 1901 South Bell Street, Arlington, Virginia,
        and
        any replacements of such buildings and improvements.

       

      1.1.14 Damages:
        out of
        pocket damages, liabilities, losses, claims, costs and expenses (including
        reasonable attorneys’ fees and expenses).

       

      1.1.15 Deposit:
        as
        defined in Section 2.2.

       

      1.1.16 District
        Agreement:
        collectively, the Agreements of Purchase and Sale dated as of the Contract
        Date
        between District Seller and District Purchaser, relating to the purchase
        and
        sale of the District Property.

       

      1.1.17 District
        Property:
        collectively, Lots 109 and 883 in Square 24 in the District of Columbia,
        together with all improvements thereon.

       

      1.1.18 District
        Purchaser:
        collectively, (i) as to Lot 109 in Square 24 in the District of Columbia
        and the
        improvements thereon, CESC 1227 LLC, a Delaware limited liability company,
        an
        affiliate of Seller, and (ii) as to Lot 883 in Square 24 in the District
        of
        Columbia and the improvements thereon, CESC 1229-1231 TRS Inc., a Delaware
        corporation, an affiliate of Seller.

       

      1.1.19 District
        Seller: Purchaser,
        as seller under the District Agreement.

       

      1.1.20 Encumbrance:
        any
        lien, mortgage, deed of trust, security interest, pledge, charge, option,
        encroachment, easement, covenant, lease, reservation or restriction of any
        kind
        (whether recorded, perfected, inchoate, actual or contingent) affecting
        title.

       

      1.1.21 Environmental
        Laws:
        all
        Legal Requirements in effect as of the Contract Date relating to the protection
        of the environment or to human health, or regulating the manufacture, use
        or
        disposal of Hazardous Substances.

       

      1.1.22 EPA
        Lease:
        Lease
        No. GS-11B-90179, dated June 30, 1989, between Leasehold Owner and the United
        States of America, as amended.

       

      1.1.23 EPA
        Premises:
        the
        portion of the space that is leased pursuant to the EPA Lease that is located
        within the Improvements.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.1.24 EPA
        Tenant:
        the
        United States of America, and all occupants of the EPA Premises holding through
        or under the United States of America.

       

      1.1.25 EPA
        Vacation Date:
        the date
        on which the EPA Tenant shall completely vacate the entire EPA Premises and
        release possession and control thereof to Leasehold Owner.

       

      1.1.26 Escrow
        Agent:
        Commercial Settlements, Inc., 1015 15th
        Street,
        N.W., Suite 300, Washington, D.C., Attn: David P. Nelson, as agent for the
        Title
        Company.

       

      1.1.27 Exchange
        Agreement:
        the
        Exchange Agreement dated as of the Contract Date among all of the parties
        to
        this Agreement and the District Agreement, providing for the coordination
        of
        certain rights and remedies of the parties pursuant to such agreements.

       

      1.1.28 Excluded
        Property:
        all
        right, title and interest of Seller in, to and under the Joint Venture Agreement
        by and among various joint venture parties trading under the name and style
        of
        Charles E. Smith Management Environmental Control Associates, dated October
        1,
        1979 and amended July 1, 1994.

       

      1.1.29 Existing
        Ground Lease:
        the
        Lease dated June 30, 2000, between Fee Owner, as landlord, and Leasehold
        Owner,
        as tenant, with respect to the Office Parcel.

       

      1.1.30 Existing
        Lender:
        The
        Prudential Insurance Company of America, and any successor holder of the
        Existing Mortgage.

       

      1.1.31 Existing
        Mortgage:
        collectively, (i) the Amended and Restated Deed of Trust and Security Agreement
        B (Office - Fee) dated June 30, 2000 between Fee Owner and Existing Lender,
        recorded in the Land Records at Book 2500, Page 925, and (ii) the Amended
        and
        Restated Deed of Trust and Security Agreement B (Office - Leasehold) dated
        June
        30, 2000 between Leasehold Owner, Fee Owner and Existing Lender, recorded
        in the
        Land Records at Book 2500, Page 881.

       

      1.1.32 Existing
        REA:
        the
        Declaration and Grant of Easements and Covenants dated as of October 27,
        1997,
        by Clarke Associates Limited Partnership, a Virginia limited partnership,
        as
        grantor and grantee, and consented to by Existing Lender and Marriott Hotel
        Services, Inc., recorded in the Land Records at Book 2857, Page 0173, as
        amended.

       

      1.1.33 Fee
        Owner:
        as
        defined in the Preamble.

       

      1.1.34 Force
        Majeure Delay:
        as
        defined in the Work Agreement.

       

      1.1.35 G-1
        Lease:
        as
        defined in Section 5.7.4.

       

      1.1.36 G-1
        Option: as
        defined in Section 5.7.4.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.1.37 G-1
        Premises:
        as
        defined in Section 5.7.4.

       

      1.1.38 Garage:
        Levels
        G-2 and G-3 of the parking garage for Crystal Mall.

       

      1.1.39 GSA:
        the
        United States of America, acting through the General Services Administration.
        

       

      1.1.40 GSA
        Lease:
        Lease
        No. GS-11B-00206, dated February 6, 2001, between Leasehold Owner and the
        United
        States of America, as amended.

       

      1.1.41 GSA
        Premises: the
        space
        that is leased pursuant to the GSA Lease, located within both the Improvements
        and other improvements on the Remaining Office Parcel.

       

      1.1.42 Hazardous
        Substance:
        any
        pollutant, contaminant or any toxic, radioactive or otherwise hazardous
        substance, including petroleum, its derivatives, by-products and other
        hydrocarbons, asbestos, and toxic mold, in each case as regulated under
        Environmental Laws.

       

      1.1.43 Hotel
        Parcel: the
        parcel of land described on Schedule
        1.1.43.

       

      1.1.44 Improvement
        Expenditure:
        as
        defined in the Work Agreement.

       

      1.1.45 Improvements:
        the
        buildings, structures, installations and other improvements, including such
        facilities, fixtures and appurtenances as shall constitute real property,
        located in or on the BNA Lot, commonly known as 1801 South Bell
        Street.

       

      1.1.46 Ineligible
        Costs:
        as
        defined in the Work Agreement.

       

      1.1.47 Intangible
        Property:
        collectively, (i) all assignable guarantees and warranties that relate to
        the
        Improvements or Personal Property, (ii) all assignable permits, certificates
        of
        occupancy, and other public approvals that relate to the BNA Lot or the
        Improvements, (iii) all plans and specifications for the Improvements,
        (iv) all rights and work product under construction, service, consulting,
        engineering, architectural and similar contracts relating to the Property,
        (v)
        books and records relating solely to ownership or operation of the Property,
        and
        (vi) keys and lock and safe combinations relating to the Property, excluding
        the
        Excluded Property.

       

      1.1.48 Land
        Records:
        the land
        records of the Office of the Circuit Court of Arlington County,
        Virginia.

       

      1.1.49 Leasehold
        Owner: as
        defined in the Preamble.

       

      1.1.50 Leases:
        collectively,
        the leases described on Schedule
        3.10
        and any
        leases, licenses or other agreements for the occupancy of any portion of
        the BNA
        Lot or Improvements that are entered into in accordance with
        Section 5.7.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.1.51 Legal
        Requirement:
        any
        federal, state, local or municipal constitution, law, statute, ordinance,
        rule,
        order or regulation.

       

      1.1.52 Letter
        of Credit: as
        defined in Section 2.2.2.1.

       

      1.1.53 Management
        Agreement:
        the
        agreement between Purchaser and Manager for the provision of property management
        and related services for the Property from and after Closing, in the form
        attached as Exhibit E.

       

      1.1.54 Manager:
        Charles
        E. Smith Real Estate Services L.P., an affiliate of Seller.

       

      1.1.55 Office
        Parcel: the
        parcel of land described on Schedule
        1.1.55.

       

      1.1.56 Permitted
        Exceptions:
        collectively, (i) the matters approved or deemed approved by Purchaser in
        accordance with Section 5.2, (ii) the lien for real estate taxes and
        assessments (including business improvement district assessments) not yet
        due
        and payable, and (iii) the rights of tenants under the Leases.

       

      1.1.57 Person:
        a
        natural person or any legal or governmental entity.

       

      1.1.58 Personal
        Property:
        all
        equipment, furniture, furnishings, appliances, tools, machinery, supplies
        and
        other tangible personal property owned by Fee Owner and Leasehold Owner and
        located at and used solely in connection with the operation of the BNA Lot
        and
        Improvements.

       

      1.1.59 Project
        Costs:
        as
        defined in the Work Agreement.

       

      1.1.60 Property:
        collectively, (i) a fee simple interest in the BNA Lot and the Improvements,
        (ii) all rights, ways, easements, privileges and appurtenances to the BNA
        Lot
        and Improvements under the Supplemental REA, and (iii) all of Seller’s right,
        title and interest in and to the Personal Property, the Intangible Property,
        the
        Leases and the Contracts.

       

      1.1.61 Purchase
        Price:
        as
        defined in Section 2.2.

       

      1.1.62 Purchaser:
        as
        defined in the Preamble.

       

      1.1.63 Purchaser
        Indemnified Parties:
        as
        defined in Section 7.5.1.

       

      1.1.64 Purchaser’s
        Designee:
        as
        defined in Section 11.1.

       

      1.1.65 Remaining
        Office Parcel:
        the
        Office Parcel, less and except the BNA Lot.

       

      1.1.66 Renovation
        Contract:
        any
        contract or agreement entered into by Seller or its affiliates in accordance
        with the Work Agreement.

       

      1.1.67 Renovations:
        as
        defined in the Work Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.1.68 Seller:
        as
        defined in the Preamble.

       

      1.1.69 Seller
        Delay:
        as
        defined in the Work Agreement.

       

      1.1.70 Seller
        Indemnified Parties:
        as
        defined in Section 7.5.2.

       

      1.1.71 Seller’s
        Knowledge:
        the
        actual current knowledge of J. David Sittler and Deidre A. Schexnayder (and
        for
        any time period after any such Person ceases to be in the employ of Vornado,
        such Person’s replacement with respect to such Person’s responsibility with
        respect to the Property), without any obligation to review any files or make
        inquiry of any Person. No knowledge of any other Person shall be imputed
        to
        Seller.

       

      1.1.72 Settlement
        Statement:
        as
        defined in Section 10.1.

       

      1.1.73 Substantial
        Completion:
        as
        defined in the Work Agreement.

       

      1.1.74 Supplemental
        REA:
        as
        defined in Section 5.4.1.

       

      1.1.75 Survey:
        as
        defined in Section 5.2.2.

       

      1.1.76 Survey
        Standards: as
        defined in Section 5.2.2.

       

      1.1.77 Target
        Completion Date:
        July 15,
        2007. Notwithstanding the foregoing, if the EPA Vacation Date shall occur
        after
        August 31, 2006, then the Target Completion Date shall be extended by one
        day
        for each day after August 31, 2006 until the EPA Vacation Date occurs.

       

      1.1.78 Title
        Commitment:
        as
        defined in Section 5.2.1.

       

      1.1.79 Title
        Company:
        Commonwealth Land Title Insurance Company, acting through Escrow Agent as
        its
        agent.

       

      1.1.80 Transaction
        Documents: collectively,
        this Agreement, the Work Agreement, the Supplemental REA and the documents
        executed at Closing by Seller and/or Purchaser (or Purchaser’s
        Designee).

       

      1.1.81 Vornado:
        Vornado
        Realty L.P., a Delaware limited partnership.

       

      1.1.82 Work
        Agreement:
        the Work
        Agreement attached as Exhibit A
        providing for Seller’s coordination of the Renovations.

       

      1.2 Governing
        Law. This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        Commonwealth of Virginia (without reference to conflicts of laws
        principles).

       

      1.3 Captions,
        Numbering and Headings. Captions,
        numbering and headings of Articles, Sections, Schedules and Exhibits in this
        Agreement are for convenience of reference only and shall not be considered
        in
        the interpretation of this Agreement. References in this Agreement to Articles,
        Sections, Schedules and Exhibits shall be deemed to be references to such
        Articles, Sections, Schedules and Exhibits in this Agreement unless otherwise
        expressly specified.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.4 Number;
        Gender.
        Whenever
        required by the context, the singular shall include the plural, the neuter
        gender shall include the male gender and female gender, and vice
        versa.

       

      1.5 Business
        Day.
        In the
        event that the date for performance of any obligation under this Agreement
        falls
        on other than a business day, then such obligation shall be performed on
        the
        next succeeding business day.

       

      1.6 Severability.
        In
        the
        event that one or more of the provisions of this Agreement shall be held
        to be
        illegal, invalid or unenforceable, each such provision shall be deemed severable
        and the remaining provisions of this Agreement shall continue in full force
        and
        effect, unless this construction would operate as an undue hardship on Seller
        or
        Purchaser or would constitute a substantial deviation from the general intent
        of
        the parties as reflected in this Agreement.

       

      1.7 No
        Oral Modifications or Waivers.
        No
        modification of this Agreement shall be valid or effective unless the same
        is in
        writing and signed by Seller and Purchaser. No purported waiver of any of
        the
        provisions of this Agreement shall be valid or effective unless the same
        is in
        writing and signed by the party against whom it is sought to be enforced.
        Notwithstanding
        the foregoing, the parties agree that the time for performance of any matter
        to
        be performed pursuant to this Agreement may be modified by mutual exchange
        of
        electronic mail by the parties or their respective counsel.

       

      1.8 Exhibits.
        All
        Schedules and Exhibits referenced in this Agreement are incorporated by this
        reference as if fully set forth in this Agreement, and all references to
        this
        Agreement shall be deemed to include all such Schedules and
        Exhibits.

       

      1.9 Integration.
        This
        Agreement, all Schedules and Exhibits appended to this Agreement, the documents
        and agreements referenced in this Agreement, the Exchange Agreement, the
        Access
        Agreement, the Confidentiality Agreement and the Work Agreement contain the
        entire understanding between Seller and Purchaser with respect to the sale
        of
        the Property, and are intended to be a full integration of all prior or
        contemporaneous agreements, conditions, understandings or undertakings between
        Seller and Purchaser with respect thereto. There are no promises, agreements,
        conditions, undertakings, understandings, warranties or representations,
        whether
        oral, written, express or implied, between Seller and Purchaser with respect
        to
        the sale of the Property other than as are expressly set forth in this
        Agreement, the Schedules and Exhibits appended to this Agreement, the documents
        and agreements referenced in this Agreement, the Exchange Agreement, the
        Access
        Agreement, the Confidentiality Agreement and the Work Agreement. Without
        limiting the generality of the foregoing, any Memorandum of Understanding
        between Leasehold Owner and BNA is hereby superseded and shall be of no further
        force or effect.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.10 No
        Construction Against Drafter. This
        Agreement has been negotiated and prepared by Seller and Purchaser and their
        respective attorneys and, should any provision of this Agreement require
        judicial interpretation, the court interpreting or construing such provision
        shall not apply the rule of construction that a document is to be construed
        more
        strictly against one party.

       

      1.11 Including.
        The term
“including,” and variants thereof, shall mean “including without
        limitation.”

       

      ARTICLE
        2. SALE OF PROPERTY

       

      2.1 Sale
        and Purchase.
        Subject
        to and in accordance with the terms of this Agreement, Seller shall sell
        to
        Purchaser, and Purchaser shall purchase from Seller, all of the
        Property.

       

      2.2 Purchase
        Price.

       

      2.2.1 The
        purchase price (“Purchase Price”) for the sale and purchase of the Property
        shall be the sum of the following: (i) Seventy Four Million and 00/100ths
        Dollars ($74,000,000), plus (ii) the amount of the Improvement Expenditure
        that
        Seller has paid, incurred or committed prior to Closing, subject to the
        adjustments described in Section 7.1.3 and to the debits and credits described
        in Article 10.

       

      2.2.2 The
        Purchase Price shall be payable as follows:

       

      2.2.2.1. Within
        three (3) business days following the Contract Date, Purchaser shall deposit
        into escrow with Escrow Agent the sum of Two Million Dollars ($2,000,000.00)
        which deposit may be in the form of either immediately available funds or
        an
        irrevocable sight draft letter of credit in the form attached as Exhibit H
        and
        otherwise in form and content reasonably acceptable to Seller (“Letter of
        Credit”).

       

      2.2.2.2. The
        Letter of Credit deposited pursuant to Section 2.2.2.1, any proceeds of a
        draw on such Letter of Credit pursuant to this Agreement, any immediately
        available funds deposited by Purchaser pursuant to Section 2.2.2.1 and any
        interest accrued on such proceeds or funds, shall be referred to collectively
        as
        the “Deposit.” The Deposit shall be held in accordance with Section 8.1. At
        Closing, the cash portion of the Deposit shall, at Purchaser’s option, either be
        paid to or at the direction of Seller and credited against the Purchase Price
        or
        returned to Purchaser, and any Letter of Credit not previously drawn by Escrow
        Agent shall be returned to Purchaser, together with a letter from Seller
        authorizing the termination of such Letter of Credit.

       

      2.2.2.3. At
        Closing, Purchaser shall pay to or at the direction of Seller by wire transfer
        of immediately available funds, the balance of the Purchase Price (net of
        the
        cash portion of the Deposit), as adjusted for the debits and credits described
        in Article 10.

       

      2.2.2.4. Any
        Letter of Credit shall be issued by a financial institution acceptable to
        Seller
        and having a long-term unsecured debt rating from Standard & Poor’s
        Corporation of not less than “A” (or equivalent from another nationally
        recognized rating agency).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      2.3 Condition
        of Property. Purchaser
        acknowledges that (i) Purchaser has been given a reasonable opportunity to
        inspect and investigate the Property, all improvements thereon and all aspects
        relating thereto, including all of the physical, environmental and operational
        aspects of the Property, either independently or through agents and experts
        of
        Purchaser’s choosing, and (ii) Purchaser will acquire the Property based solely
        upon Purchaser’s own investigation and inspection of the Property and the
        representations, warranties and covenants of Seller expressly set forth in
        the
        Transaction Documents executed by Seller. Seller
        and Purchaser agree that, except as expressly provided for in this Agreement
        and
        the other Transaction Documents executed by Seller, including the Work
        Agreement, (i) the Property shall be sold and Purchaser shall accept possession
        of the Property on the Closing Date “AS IS,” “WHERE IS,” and “WITH ALL FAULTS,”
and (ii) such sale shall be without representation or warranty of any kind,
        whether express, implied, statutory or otherwise, including any warranty
        of
        income potential, operating expenses, uses, merchantability or fitness for
        a
        particular purpose, and Seller hereby disclaims and renounces any such
        representation or warranty. Purchaser further acknowledges and agrees that,
        except as expressly provided in the Transaction Documents executed by Seller,
        Seller shall be under no duty to make any affirmative disclosure regarding
        any
        matter which may be known to Seller, or its officers, directors, contractors,
        agents or employees, and that it is relying solely upon its own inspection
        of
        the Property and not upon any representations made to it by any Person
        whomsoever on Seller’s behalf.

       

      ARTICLE
        3. SELLER’S REPRESENTATIONS AND WARRANTIES

       

      Seller
        hereby represents and warrants to Purchaser as follows:

       

      3.1 Good
        Standing. Each
        of
        Fee Owner and Leasehold Owner is a limited liability company duly formed,
        validly existing and in good standing under the laws of the state of its
        organization, and qualified to transact business and in good standing under
        the
        laws of the Commonwealth of Virginia. Each of Fee Owner and Leasehold Owner
        has
        full limited liability company power and authority to execute this Agreement
        and
        to consummate the transaction contemplated by this Agreement.

       

      3.2 Due
        Authorization.
        The
        execution, delivery and performance of this Agreement by Seller and the
        consummation by Seller of the transactions contemplated by this Agreement
        have
        been duly and validly authorized by all requisite actions of Seller. Assuming
        the due execution and delivery of this Agreement by Purchaser, this Agreement
        constitutes the valid and binding obligation of Seller, enforceable against
        Seller in accordance with its terms.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3.3 No
        Violations. The
        execution, delivery and performance of this Agreement by Seller and the
        consummation by Seller of the transactions contemplated by this Agreement
        will
        not:  (i) violate any Legal Requirement or any order of any court
        or governmental authority that is binding on Seller or the Property; or
        (ii) subject to obtaining the approvals of Existing Lender as described in
        this Agreement, result in a breach of or default under any contract or other
        agreement to which Fee Owner and/or Leasehold Owner is a party or by which
        the
        Property is bound or any provision of the organizational documents of Fee
        Owner
        or Leasehold Owner.

       

      3.4 Bankruptcy.
        Neither
        Fee Owner nor Leasehold Owner is the subject debtor under any federal, state
        or
        local bankruptcy or insolvency proceeding, or any other proceeding for
        dissolution, liquidation or winding up of its assets.

       

      3.5 Litigation.
        Except
        as set forth on Schedule
        3.5,
        there
        are no Actions pending or, to Seller’s Knowledge, threatened against Fee Owner
        or Leasehold Owner or relating to the ownership, operation, development,
        use or
        occupancy of the Property, before any court or governmental authority, which
        if
        adversely determined would affect Seller’s ability to enter into or perform this
        Agreement or would materially adversely affect the ownership or operation
        of, or
        title to, the Property.

       

      3.6 Violations
        of Law.
        Neither
        Fee Owner nor Leasehold Owner has received written notice from any governmental
        authority alleging a violation of any Legal Requirement affecting the Property
        that has not been corrected. Seller shall have the right to update the
        representation set forth in this Section 3.6 to reflect any such written
        notice that is received by Fee Owner or Leasehold Owner after the Contract
        Date.

       

      3.7 Condemnation.
        There
        are no pending condemnation actions with respect to the Property, and to
        Seller’s Knowledge there are no threatened or contemplated condemnation actions
        with respect to the Property. Seller shall have the right to update the
        representation set forth in this Section 3.7 to reflect (i) any
        condemnation that becomes pending after the Contract Date, or (ii) any
        threatened or contemplated condemnation that first becomes known to Seller
        after
        the Contract Date, in which event the provisions of Article 9 shall
        control.

       

      3.8 Environmental
        Matters.
        Except
        as provided in the reports listed on Schedule
        3.8,
        to
        Seller’s Knowledge, other than (i) Hazardous Substances used in the ordinary
        course of maintaining and cleaning the Property in commercially reasonable
        amounts, and (ii) Hazardous Substances used as fuels, lubricants or otherwise
        in
        connection with vehicles, machinery and equipment located at the Property
        in
        commercially reasonable amounts, no Hazardous Substances are present on or
        in
        the Property. Except as provided in the reports listed on Schedule
        3.8,
        to
        Seller’s Knowledge, the Hazardous Substances described in the foregoing clauses
        (i) and (ii) are being used and disposed of in compliance with all applicable
        Environmental Laws.

       

      3.9 Contracts.
        There
        are
        no Contracts that will affect the Property as of the Closing Date, except
        (i)
        Permitted Exceptions, and (ii) as otherwise permitted under this Agreement
        including Section 5.8.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3.10 Leases.
        There
        are no leases, licenses or other agreements permitting the possession or
        occupancy of all or any portion of the BNA Lot or Improvements other than
        those
        identified on Schedule
        3.10.
        Seller
        has provided to Purchaser a correct and complete copy of each Lease. To Seller’s
        Knowledge, the Leases are in full force and effect. Seller shall have the
        right
        to update the representation set forth in this Section 3.10 to reflect
        Leases executed, terminated or modified after the Contract Date in accordance
        with this Agreement.

       

      3.11 Foreign
        Person.
        Neither
        Fee Owner nor Leasehold Owner is a “foreign person” as defined in
        Section 1445 of the Code.

       

      ARTICLE
        4. PURCHASER’S REPRESENTATIONS AND WARRANTIES

       

      Purchaser
        hereby represents and warrants to Seller as follows:

       

      4.1 Good
        Standing.
        Purchaser is a corporation duly organized, validly existing and in good standing
        under the laws of the State of Delaware, and has full power and authority
        to
        conduct the business in which it is now engaged. Purchaser is duly qualified
        to
        do business and in good standing under the laws of the Commonwealth of Virginia,
        or will be so qualified and in good standing as of the Closing
        Date.

       

      4.2 Due
        Authorization.
        The
        execution, delivery and performance of this Agreement by Purchaser and the
        consummation by Purchaser of the transactions contemplated by this Agreement
        have been duly and validly authorized by all requisite actions of Purchaser.
        Assuming the due execution and delivery of this Agreement by Seller, this
        Agreement constitutes the valid and binding obligation of Purchaser, enforceable
        against Purchaser in accordance with its terms.

       

      4.3 No
        Violations. The
        execution, delivery and performance of this Agreement by Purchaser and the
        consummation by Purchaser of the transactions contemplated by this Agreement
        will not:  (i) violate any Legal Requirement or any order of any
        court or governmental authority that is binding on Purchaser; or
        (ii) result in a breach of or default under (A) any contract or other
        agreement to which Purchaser is a party or (B) any provision of the
        organizational documents of Purchaser.

       

      4.4 Bankruptcy.
        Purchaser is not the subject debtor under any federal, state or local bankruptcy
        or insolvency proceeding, or any other proceeding for dissolution, liquidation
        or winding up of its assets.

       

      4.5 Litigation.
        There
        are no Actions pending or, to Purchaser’s knowledge, threatened against
        Purchaser before any court or governmental authority, an adverse determination
        of which would materially adversely affect (i) the financial condition of
        Purchaser, or (ii) Purchaser’s ability to enter into or perform this
        Agreement.

       

      4.6 Terrorist
        Organizations Lists. Purchaser
        is not acting, directly or indirectly, for or on behalf of any Person named
        by
        the United States Treasury Department as a Specifically Designated National
        and
        Blocked Person, or for or on behalf of any Person designated in Executive
        Order 13224 as a Person who commits, threatens to commit, or supports
        terrorism. Purchaser is not engaged in the transaction contemplated by this
        Agreement directly or indirectly on behalf of, or facilitating such transaction
        directly or indirectly on behalf of, any such Person.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        5. ACTIONS PENDING CLOSING

       

      5.1 Due
        Diligence.

       

      5.1.1 Purchaser
        acknowledges that Purchaser has completed such inspections and investigations
        of
        the Property as Purchaser deems desirable to evaluate the financial and physical
        condition of the Property and such other matters that Purchaser may deem
        relevant and hereby waives any further due diligence period. 

       

      5.1.2 Prior
        to
        Closing, Purchaser and Purchaser’s agents and contractors shall have the right
        to enter upon the Property during regular business hours and upon reasonable
        prior notice to Seller. Purchaser and Purchaser’s agents and contractors may at
        Seller’s option be accompanied by a representative of Seller during any such
        entry upon the Property. Purchaser agrees that all inspections of the Property
        shall be subject to the rights or security requirements of tenants under
        Leases,
        and shall be conducted in a manner not unreasonably disruptive to tenants,
        guests or invitees at the Property or otherwise to the operation or renovation
        of the Property. Purchaser shall have the right to interview the tenant under
        any Lease, provided, however, that Purchaser shall first obtain the prior
        written consent of Seller, and at Seller’s option a representative of Seller
        shall participate in any such interviews. Prior to entry onto the Property,
        Purchaser shall provide Seller with a certificate of insurance evidencing
        that
        Purchaser maintains a commercial general liability policy that names Fee
        Owner,
        Leasehold Owner and Manager as additional insureds, in such amounts and from
        such insurers as Seller shall approve, such approval not to be unreasonably
        withheld. Purchaser shall (i) restore the Property, at its own expense, to
        substantially the same condition which existed prior to any inspections or
        other
        activities of Purchaser thereon; and (ii) be responsible for and pay any
        and all liens by contractors, subcontractors, materialmen, or laborers
        performing the inspections or any other work for Purchaser, its agents or
        contractors on or related to the Property. Purchaser agrees to and hereby
        does
        indemnify, defend and hold harmless Fee Owner, Leasehold Owner, Manager and
        their respective affiliates, members, partners, shareholders, officers,
        directors, employees, agents, representatives, licensees, and the successors
        of
        any of the foregoing, harmless from and against any and all damages including
        mechanic’s and materialmen’s liens, caused by the entry by Purchaser and/or any
        of Purchaser’s agents or contractors onto the Property pursuant to this
        Section 5.1.2, provided that Purchaser shall not be so liable for the mere
        discovery by Purchaser or its agents or contractors of any existing condition
        at
        the Property. Purchaser’s obligations pursuant to this Section 5.1 shall
        survive the Closing (without limitation as to time) or earlier termination
        of
        this Agreement.

       

      5.1.3 Seller
        has made available to Purchaser for inspection and copying or delivered to
        Purchaser such documents, materials and information concerning the Property
        as
        Seller may have in its possession or under its control, excluding only
        (i) materials that Seller shall have obtained or developed in connection
        with the potential sale of the Property, (ii) materials that are subject to
        attorney-client privilege, (iii) internal communications, and (iv) internal
        projections, forecasts, valuations, budgets and analyses.

       

      
        
          
          

        

        
          
          

          
            

          

        

         

         

                    5.1.4 
Purchaser
          shall, at no cost to Seller (but without representation or warranty of
          any
          kind), furnish to Seller copies of any third-party reports received by
          Purchaser
          relating to any inspections of the Property conducted on Purchaser's behalf
          (excluding, however, any such reports by Purchaser's Broker).  Upon any
          termination of this Agreement (other than a termination resulting from
          a default
          by Seller), Purchaser shall (i) assign all of its right, title and interest
          in
          any such third party reports to Seller (without representation or warranty
          of
          any kind) and (ii) return all documents, materials and information ( and
          all
          copies thereof) concerning the Property that Seller has provided to
          Purchaser.  Purchaser's obligation in this Section 5.1.4 shall survive the
          terminiation of this Agreement.

         

      

      5.2 Title
        and Survey.

       

      5.2.1 Purchaser
        acknowledges receipt from Title Company, prior to the Contract Date, of the
        commitment for an ALTA Owner’s Policy of Title Insurance attached as
Schedule
        5.2.1
        (“Title
        Commitment”) for the BNA Lot, accompanied by a copy of all documents referred to
        in the Title Commitment.

       

      5.2.2 Purchaser
        acknowledges receipt from Seller, prior to the Contract Date, of a survey
        of
        Crystal Mall, including the Property, by DeLashmutt Associates Ltd., dated
        June
        23, 2005 and revised October 27, 2005 (“Survey”) prepared in accordance
        with the Minimum Standard Detail Requirements and Classifications for ALTA/ACSM
        Land Title Surveys published in 1999 (“Survey Standards”).

       

      5.2.3 All
        Encumbrances as of the effective date of the Title Commitment (excluding
        Encumbrances shown on Schedule B, Section 1, of the Title Commitment),
        all items shown on the Survey, all items shown on the subdivision plat attached
        hereto as Schedule
        1.1.6
        (as such
        plat may be amended or revised as permitted under this Agreement), and the
        Supplemental REA shall be deemed to have been approved by Purchaser and shall
        be
        Permitted Exceptions for all purposes under this Agreement.

       

      5.2.4 Seller
        shall cure at or before the Closing all Encumbrances other than the Permitted
        Exceptions (subject, in the case of any mechanics’ lien or materialmen’s
        lien arising from the Renovations, to Purchaser’s compliance with the Work
        Agreement). Seller may use a portion of the Purchase Price to effect such
        cure
        at Closing and title insurance that affirmatively insures over any such matter
        shall constitute cure of such matter.

       

      5.3 Subdivision
        of Office Parcel. Promptly
        following the Contract Date, Seller, at its sole cost and expense, shall
        apply
        for, and shall thereafter diligently pursue, the subdivision (“Subdivision”) of
        the Office Parcel to establish the BNA Lot as a separate legal lot under
        the
        subdivision ordinances of Arlington County, Virginia. The subdivision plat
        shall
        be in the form attached as Schedule
        1.1.6.
        Any
        material deviations from Schedule
        1.1.6
        shall be
        subject to Purchaser’s prior written approval not to be unreasonably withheld.
        Seller shall pay all costs of the Subdivision, including the cost of any
        impact
        fees, proffers and development conditions imposed by Governmental Authorities
        as
        a condition to the approval of the Subdivision. Seller shall keep Purchaser
        regularly informed of the status of the Subdivision, and shall promptly respond
        to Purchaser’s inquiries regarding the status of the same. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.4 Supplemental
        REA.

       

      5.4.1 Prior
        to
        March 28, 2006, Purchaser and Seller, each acting reasonably and in good
        faith,
        shall negotiate the form of a declaration of reciprocal covenants, easements
        and
        restrictions (“Supplemental REA”) to govern the BNA Lot and Improvements, on the
        one hand, and the Remaining Office Parcel and the improvements thereon, on
        the
        other hand. The Supplemental REA shall include (i) the matters described
        on
Exhibit G,
        (ii)
        such other matters as may be normal and customary for reciprocal covenants,
        easements and restrictions, and (iii) such other matters as either Purchaser
        or
        Seller may reasonably request to ensure that the BNA Lot and Improvements,
        on
        the one hand, and the Remaining Office Parcel and the improvements thereon,
        on
        the other hand, may be separately owned, operated, leased, financed and
        sold.

       

      5.4.2 Seller
        shall use commercially reasonable efforts to cause Existing Lender to approve
        the Supplemental REA and to subordinate the Existing Mortgage to the
        Supplemental REA concurrently with the recordation thereof. If by the later
        of
        (a) the date that is sixty (60) days after approval by Seller and Purchaser
        of
        the final form of the Supplemental REA, and (b) the date that is thirty (30)
        days after approval of the Subdivision by Arlington County (such later date,
        the
“REA Approval Date”), Existing Lender shall not have (i) approved the
        Supplemental REA and (ii) agreed to subordinate the Existing Mortgage to
        the
        Supplemental REA upon the recording thereof, then Purchaser shall thereafter
        have the right to terminate this Agreement by written notice to Seller given
        any
        time before Existing Lender has approved the Supplemental REA and agreed
        to
        subordinate the Existing Mortgage to the Supplemental REA upon the recording
        thereof. If by the date that is sixty (60) days after the REA Approval Date,
        Existing Lender shall not have provided such approval and agreement, then
        Seller
        shall thereafter have the right to terminate this Agreement by written notice
        to
        Purchaser given at any time before Existing Lender has approved the Supplemental
        REA and agreed to subordinate the Existing Mortgage to the Supplemental REA
        upon
        the recordation thereof. Upon any such termination, Escrow Agent shall return
        the Deposit to Purchaser and neither party to this Agreement shall thereafter
        have any further rights or liabilities under this Agreement other than those
        that expressly survive termination of this Agreement. Seller shall keep
        Purchaser regularly informed of the status of Existing Lender’s approval of the
        Supplemental REA, and shall promptly respond to Purchaser’s inquiries regarding
        the status of the same.

       

      5.4.3 The
        Supplemental REA shall be recorded in the Land Records immediately following
        the
        recordation of the Subdivision. The cost of such recordation shall be shared
        equally by Seller and Purchaser. At Closing, Purchaser shall succeed to the
        rights and obligations of the owner of the BNA Lot and Improvements as set
        forth
        in the Supplemental REA.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.5 Renovation
        of Improvements; Vacation of EPA Premises. Seller
        and Purchaser shall perform their respective obligations under the Work
        Agreement. Seller shall use commercially reasonable efforts to cause the
        EPA
        Tenant to completely vacate the entire EPA Premises and release possession
        and
        control to Leasehold Owner in accordance with the EPA Lease, and in all events
        by August 31, 2006, including taking such actions as filing an official claim
        with the appropriate contracting officer. If the EPA Tenant shall not have
        completely vacated the entire EPA Premises and released possession and control
        to Leasehold Owner by February 28, 2007, then Purchaser shall thereafter
        have
        the right to terminate this Agreement by written notice to Seller given any
        time
        before the EPA Tenant shall have relinquished possession of the EPA Premises
        to
        Leasehold Owner. If the EPA Tenant shall not have completely vacated the
        entire
        EPA Premises and released possession and control to Leasehold Owner by June
        30,
        2007, then Seller shall thereafter have the right to terminate this Agreement
        by
        written notice to Purchaser given any time before the EPA Tenant shall have
        relinquished possession of the EPA Premises to Leasehold Owner. Upon any
        such
        termination, Escrow Agent shall return the Deposit to Purchaser and neither
        party to this Agreement shall thereafter have any further rights or liabilities
        under this Agreement other than those that expressly survive termination
        of this
        Agreement. Seller shall keep Purchaser regularly informed of the status of
        Seller’s efforts to cause the EPA Tenant to relinquish possession of the EPA
        Premises, and shall promptly respond to Purchaser’s inquiries regarding the
        status of the same.

       

      5.6 Operation
        of Property. Prior
        to
        Closing, except as otherwise expressly provided in this Agreement and the
        Work
        Agreement:

       

      5.6.1 Seller
        shall continue to operate the Property in the ordinary course of business
        consistent with the practices and procedures in effect as of the Contract
        Date.

       

      5.6.2 Seller
        shall maintain and repair the Improvements substantially in their present
        condition, except for reasonable wear and tear and damage by casualty or
        condemnation.

       

      5.6.3 Seller
        shall not remove any Personal Property, except as may be required for repair
        or
        replacement in the ordinary course of business, and replacement shall be
        of
        approximately equal quality and quantity as the removed item of Personal
        Property.

       

      5.6.4 Seller
        shall maintain, at its cost, standard premises operations liability coverage,
        and shall add Purchaser as an additional insured promptly after the Contract
        Date. Notwithstanding the foregoing, the incremental increase in premiums
        paid
        by Seller attributable only to the Builder’s Risk portion of such coverage, if
        any, as a direct result of the Renovations shall constitute a Project Cost
        for
        purposes of the Work Agreement and shall be paid in the same manner as other
        Project Costs described therein.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.7 Leases.

       

      5.7.1 Prior
        to
        Closing, except as otherwise set forth in this Agreement, Seller shall not
        (i)
        enter into any new lease, license or other agreement for the occupancy of
        the
        Improvements, or (ii) modify any Lease in a manner that would be binding
        on
        Purchaser from and after Closing, without the prior written approval of
        Purchaser in each instance, such approval to be granted or withheld in
        Purchaser’s sole discretion. Purchaser’s approval shall not be required with
        respect to (a) any modification of any Lease that is required under the terms
        of
        such Lease, or (b) the renewal of the GSA Lease pursuant to the terms thereof,
        or (c) the amendment described in Section 5.7.2, but Seller shall deliver
        to Purchaser written notice thereof within five (5) days of Seller’s receipt of
        the same. Prior to Closing, Seller shall perform its obligations under each
        Lease, and shall endeavor to promptly collect all rents due under the Leases
        in
        accordance with Seller’s usual practices.

       

      5.7.2 Seller
        and Purchaser acknowledge that only a portion of the GSA Premises is located
        in
        the Improvements, and that the balance of the GSA Premises is located in
        the
        improvements on the Remaining Office Parcel. Seller shall use commercially
        reasonable efforts to cause GSA to amend the GSA Lease, as soon as practicable,
        to delete from the description therein of the GSA Premises such portions
        thereof
        as are located on the first floor and Level G-1. If GSA does not agree to
        such
        amendment of the GSA Lease prior to Closing, then Purchaser and Seller, each
        acting reasonably and in good faith, shall mutually determine a strategy
        to
        separate the benefits and burdens of the GSA Lease between the portions of
        the
        GSA Premises that are and are not part of the Improvements.

       

      5.7.3 Prior
        to
        the Contract Date, Seller has obtained from the GSA and delivered to Purchaser:
        (i) a Statement of Lease in a form consistent with the minimum requirements
        of
        the Federal Acquisition Regulations (“FAR”), and (ii) a Novation Acceptance
        Letter in a form reasonably requested by Purchaser, confirming that Purchaser
        will be acceptable to GSA as landlord under the GSA Lease on the terms and
        conditions set forth in this Agreement. Prior to Closing, Seller shall use
        commercially reasonable efforts to obtain from GSA an updated Statement of
        Lease
        (“Updated Statement of Lease”) in a form reasonably requested by Purchaser or in
        a form consistent with the minimum requirements of the FAR, dated no earlier
        than the date that is thirty (30) days prior to the scheduled date for Closing.
        At Closing, Seller and Purchaser shall cause to be delivered to GSA original
        counterparts of a novation agreement in substantially the form attached to
        the
        Novation Acceptance Letter (“Novation Agreement”), duly executed by Seller and
        Purchaser, together with all supporting documentation known by the parties
        to be
        required by GSA in connection with its execution of the Novation Agreement.
        After Closing, Seller and Purchaser shall use commercially reasonable efforts
        to
        obtain from GSA the fully executed Novation Agreement and deliver all additional
        supporting documentation (if any) required by GSA for execution of the Novation
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.7.4 Purchaser
        shall have the option (“G-1 Option”) to lease from Leasehold Owner that portion
        of the Level G-1 improvements located on the Remaining Office Parcel as is
        shown
        on Schedule
        5.7.4
        (“G-1
        Premises”). Purchaser shall exercise the G-1 Option by written notice to
        Leasehold Owner given on or before February 28, 2006. If Purchaser shall
        exercise the G-1 Option by such date, then at Closing, Leasehold Owner, as
        landlord, and Purchaser, as tenant, shall execute a lease (“G-1 Lease”) of the
        G-1 Premises. The G-1 Lease shall (i) provide for an initial “full service”
rental of $23/square foot, with a 2.5% annual escalation and a base year
        for
        operating expenses and taxes of the first lease year, (ii) provide for a
        $25/square foot tenant allowance over the “as is” condition of the G-1 Premises
        on the Contract Date, (iii) provide for a term commencing on the Closing
        Date
        and expiring on the fifth (5th)
        anniversary of the Closing Date, (iv) provide that upon expiration of the
        term
        thereof, the costs of separating the portions of the G-1 Premises located
        in the
        Improvements and the Remaining Office Parcel, respectively, shall be borne
        by
        Seller and Purchaser as set forth in Section 5(e) of the Work Agreement,
        and (v) otherwise be in substantially the same form as Manager’s standard form
        of office lease, with such changes thereto as Leasehold Owner and Purchaser,
        each acting reasonably and in good faith, shall mutually agree
        upon.

       

      5.7.5 From
        time
        to time prior to Closing, Seller may be required or requested to provide
        additional services under the GSA Lease, and Seller may need to enter into
        Contracts with third parties for the procurement of such services. Any such
        Contracts shall be subject to Purchaser’s approval, such approval not to be
        unreasonably withheld or delayed. It is understood and agreed that Purchaser
        may
        refuse to approve such proposed Contracts unless GSA pays the cost thereof
        or
        otherwise compensates the landlord under the GSA Lease therefor.

       

      5.8 Contracts.
        Prior
        to
        Closing, Seller shall terminate all Contracts affecting or relating to the
        Property, other than (i) Contracts that constitute Permitted Exceptions,
        (ii)
        Contracts that are entered into by Manager in accordance with the Management
        Agreement, (iii) Contracts that are entered into in accordance with the
        Supplemental REA, and (iv) such Contracts as may be required by the occupant
        of
        the GSA Premises in connection with its use and occupancy thereof.

       

      5.9 Termination
        of Ground Lease.
        At or
        prior to Closing, Fee Owner and Leasehold Owner shall terminate the Existing
        Ground Lease to the extent that it affects the BNA Lot, such that the transfer
        of the BNA Lot and Improvements to Purchaser pursuant to this Agreement is
        free
        and clear of any leasehold interest of Leasehold Owner.

       

      5.10 Title.
        Except
        as expressly permitted or required under this Agreement, prior to Closing,
        Seller shall not cause or voluntarily permit any change in title to the Property
        or any Encumbrance against title to the Property.

       

      5.11 Existing
        Mortgage. Seller
        shall use commercially reasonable efforts to cause Existing Lender to release
        the BNA Lot from the lien of the Existing Mortgage at or prior to Closing,
        at
        Seller’s sole cost and expense, including the payment of all fees and costs
        imposed by Existing Lender in connection with such release. If by the date
        that
        is ninety (90) days after the Contract Date, Existing Lender shall not have
        agreed in writing to release the BNA Lot from the lien of the Existing Mortgage,
        then Purchaser shall thereafter have the right to terminate this Agreement
        by
        written notice to Seller given any time before Existing Lender has agreed
        to
        release the BNA Lot from such lien. If by the date that is 120 days after
        the
        Contract Date, Existing Lender shall not have agreed in writing to release
        the
        BNA Lot from the lien of the Existing Mortgage, then Seller shall thereafter
        have the right to terminate this Agreement by written notice to Purchaser
        given
        any time before Existing Lender has agreed to release the BNA Lot from such
        lien. Upon any such termination, Escrow Agent shall return the Deposit to
        Purchaser and neither party to this Agreement shall thereafter have any further
        rights or liabilities under this Agreement other than those that expressly
        survive termination of this Agreement. Seller shall keep Purchaser regularly
        informed of the status of Existing Lender’s agreement to release the BNA Lot
        from the lien of the Existing Mortgage, and shall promptly respond to
        Purchaser’s inquiries regarding the status of the same.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.12 Updates
        to Representations.
        Prior to
        Closing, Seller and Purchaser shall each promptly notify the other in writing
        if
        it becomes aware of any fact or condition that is inconsistent with any of
        Seller’s representations or warranties under this Agreement. Such
        representations and warranties shall automatically be deemed modified to
        reflect
        all information actually known to Purchaser prior to the Contract Date,
        including information contained in all third-party due diligence reports
        prepared at the direction of Purchaser or Purchaser’s Broker.

       

      5.13 Satisfaction
        of Conditions.
        Prior to
        Closing, Seller and Purchaser shall each use good faith, commercially reasonable
        efforts to satisfy the conditions to Closing set forth in Article
        6.

       

      5.14 District
        Agreement: Seller
        shall cause District Purchaser to perform the obligations of District Purchaser
        under the District Agreement. Purchaser shall perform the obligations of
        District Seller under the District Agreement.

       

      5.15 Incentives. 

       

      5.15.1 The
        parties acknowledge that Arlington County has agreed to provide certain
        incentives to Purchaser in connection with Purchaser’s relocation to Arlington
        County including a to-be-agreed-upon reduction in the assessed value of the
        BNA
        Lot and Improvements (the “Assessment Reduction”) for a period of ten (10) years
        (“Assessment Reduction Period”). In connection with certain determinations that
        must be made for the Assessment Reduction, Seller shall, promptly upon request
        of Purchaser, cooperate with Purchaser in such manner as Purchaser may
        reasonably request, including:

       

      5.15.1.1. Executing
        a written request, prepared by Purchaser, with Arlington County (pursuant
        to
        standard tax assessment appeal procedures and timelines established in Arlington
        County) seeking a formal administrative review of the 2006 tax assessment
        attributable to the BNA Lot and Improvements (and if necessary, a Board of
        Equalization Appeal) and providing documentation of the anticipated vacation
        of
        the EPA Premises by EPA Tenant during 2006 and the anticipated demolition
        of
        portions of the existing improvements.

       

      5.15.1.2. Prior
        to
        the commencement of the Renovations, executing a written application, prepared
        by Purchaser, with Arlington County pursuant to Section 20-23 of the
        Arlington County Code for exemption under Article 20 of the revised and amended
        Arlington County Code, and coordinating a site inspection with the Arlington
        County Department of Real Estate Assessments.

       

      5.15.1.3. At
        the
        completion of the Renovations, notifying the Arlington County Department
        of Real
        Estate Assessments and coordinating a site inspection for the establishment
        of
        the ceiling of the Assessment Reduction.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.15.2 Purchaser
        shall prepare all requests, applications and materials described in Sections
        5.15.1.1 through 5.15.1.3. Seller and Purchaser shall keep each other regularly
        informed of the status of discussions with Arlington County relating to the
        2006
        assessment for the BNA Lot and Improvements and all their activities relating
        to
        the Assessment Reduction. Seller and Purchaser shall work together in good
        faith
        to ensure that the consequences of the vacation of the EPA Premises are
        reflected in the 2006 assessment for the BNA Lot and Improvements only (through
        subdivision or proportionate allocation, as appropriate). Purchaser shall
        pay
        any incremental third-party costs incurred by Seller in connection with any
        activities relating to the Assessment Reduction other than costs that would
        otherwise have been incurred by Seller in connection with normal and customary
        actions to seek review and reduction of the proposed 2006 tax assessment
        applicable to the BNA Lot and Improvements.

       

      ARTICLE
        6. CONDITIONS TO CLOSING

       

      6.1 Purchaser’s
        Conditions to Closing.
        The
        obligation of Purchaser to consummate the Closing shall be subject to the
        satisfaction of each of the following conditions, any or all of which may
        be
        waived in whole or in part by Purchaser:

       

      6.1.1 Each
        of
        Seller’s representations and warranties set forth in this Agreement (as modified
        by all modifications and updates expressly permitted by Article 3 or the
        second sentence of Section 5.12) shall be correct in all material respects
        as of the Closing Date.

       

      6.1.2 Seller
        shall have performed all of its material obligations under this Agreement
        required at or prior to Closing.

       

      6.1.3 The
        Title
        Company shall be prepared to issue to Purchaser, immediately upon consummation
        of Closing, an Owner’s Policy of Title Insurance consistent with the Title
        Commitment, at standard rates and in an amount equal to the sum of (i) the
        Purchase Price and (ii) the adjustments to the Purchase Price pursuant to
        Section 10.10.

       

      6.1.4 Unless
        the District Agreement has been terminated as a result of a default by District
        Seller thereunder, Closing shall have occurred, or shall concurrently be
        occurring, under the District Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.2 Failure
        of Purchaser’s Condition.
        In the
        event of the failure of any condition set forth in Section 6.1.1 through
        6.1.4, Purchaser, at its sole election, may (i) terminate this Agreement
        and (subject to the last sentence of this Section 6.2) receive a return of
        the Deposit, (ii) waive the condition and proceed to Closing, or (iii) extend
        the date for Closing for such additional period of time (not to exceed one
        hundred twenty (120) days in the aggregate for all such extensions) as may
        be
        reasonably required to allow such condition to be satisfied. Nothing set
        forth
        in this Section 6.2 shall affect Purchaser’s rights or remedies under
        Section 8.3 with respect to any breach of this Agreement or the Work
        Agreement by Seller.

       

      6.3 Seller’s
        Conditions to Closing.
        The
        obligation of Seller to consummate the Closing shall be subject to the
        satisfaction of each of the following conditions, any or all of which may
        be
        waived in whole or in part by Seller:

       

      6.3.1 Each
        of
        Purchaser’s representations and warranties set forth in this Agreement shall be
        correct in all material respects as of the Closing Date.

       

      6.3.2 Each
        of
        Purchaser’s representations and warranties set forth in this Agreement shall be
        correct in all material respects as if made by Purchaser’s Designee (if any) as
        of the Closing Date. 

       

      6.3.3 Purchaser
        shall have performed all of its material obligations under this Agreement
        required at or prior to Closing.

       

      6.3.4 Unless
        the District Agreement has been terminated as a result of a default by District
        Purchaser thereunder, Closing shall have occurred, or shall concurrently
        be
        occurring, under the District Agreement.

       

      6.4 Failure
        of Seller’s Condition. In
        the
        event of the failure of any condition precedent set forth in Section 6.3.1
        to 6.3.4, Seller, at its sole election, may (i) terminate this Agreement,
        in
        which event the Deposit (subject to the last sentence of this Section 6.4)
        shall be returned to Purchaser, (ii) waive the condition and proceed to Closing,
        or (iii) extend the date for Closing for such additional period of time
        (not to exceed one hundred twenty (120) days in the aggregate for all such
        extensions) as may be reasonably required to allow Purchaser to satisfy such
        condition. Nothing set forth in this Section 6.4 shall affect Seller’s
        rights or remedies under Section 8.2 with respect to any breach of this
        Agreement or the Work Agreement by Purchaser.

       

      ARTICLE
        7. CLOSING

       

      7.1 Closing.

       

      7.1.1 Closing
        shall be held on the date that is ten (10) days following Substantial
        Completion, but not earlier than December 1, 2006, and subject in all events
        to
        such extensions as may be expressly provided in this Agreement.

       

      7.1.2 Notwithstanding
        Section 7.1.1, Seller shall have the following rights to accelerate or
        extend the date for Closing:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.1.2.1. Seller
        shall have the right to accelerate the date for Closing to a date that is
        not
        more than sixty (60) days earlier than the date on which Substantial Completion
        is likely to occur. Seller shall exercise its right to accelerate the date
        for
        Closing pursuant to this Section 7.1.2.1 by written notice to Purchaser
        given not less than one hundred twenty (120) days prior to the date on which
        Substantial Completion is likely to occur. If Seller exercises such right,
        then
        Closing shall occur on such date as Seller may designate by not less than
        ten
        (10) days prior written notice to Purchaser, and the additional terms set
        forth
        on Schedule
        7.1.2.1
        shall
        apply.

       

      7.1.2.2. Seller
        shall have the right to extend the date for Closing to a date that is not
        more
        than ninety (90) days after Substantial Completion. Seller shall exercise
        its
        right to extend the date for Closing pursuant to this Section 7.1.2.2 by
        written notice to Purchaser given not less than thirty (30) days prior to
        the
        date on which Substantial Completion is likely to occur. If Seller exercises
        such right, then Closing shall occur on such date as Seller may designate
        by not
        less than ten (10) days prior written notice to Purchaser, and the additional
        terms set forth on Schedule
        7.1.2.2
        shall
        apply.

       

      7.1.2.3. For
        purposes of Sections 7.1.2.1 and 7.1.2.2, the determination of the date on
        which Substantial Completion is likely to occur shall be made jointly by
        Seller
        and Purchaser, each acting reasonably and in good faith. If Seller and Purchaser
        are unable to agree on such date, then such date shall be determined by the
        Architect (as defined in the Work Agreement).

       

      7.1.3 If
        Substantial Completion shall not have been achieved by the Target Completion
        Date, and as a result thereof the date for Closing pursuant to
        Section 7.1.1 shall not have occurred, then the Purchase Price shall be
        adjusted as follows:

       

      7.1.3.1. If
        Substantial Completion would have occurred on the Target Completion Date
        but for
        the occurrence of a Seller Delay, then the Purchase Price shall be reduced
        by
        the product obtained by multiplying (i) the number of days after the Target
        Closing Date that Substantial Completion has not occurred as a result of
        Seller
        Delay by (ii) $10,000 per day.

       

      7.1.3.2. If
        Substantial Completion is delayed beyond the Target Completion Date for any
        reason other than as described in Section 7.1.3.1, then the Purchase Price
        shall be increased by the product obtained by multiplying (i) the number
        of days
        of such delay minus the number of days (not to exceed thirty (30)) of such
        delay
        attributable to Force Majeure Delay, by (ii) $10,000 per day (except as
        otherwise provided in this Section 7.1.3.2). Notwithstanding the foregoing,
        (a)
        if Seller shall receive from the Contractor delay damages as a result of
        the
        Contractor’s failure to achieve timely Substantial Completion in accordance with
        the Contractor Agreement (as defined in the Work Agreement), then the amount
        of
        such delay damages so received shall be credited, dollar-for-dollar, against
        the
        increase to the Purchase Price described in this Section 7.1.3.2, and (b)
if
        Substantial Completion is delayed beyond the Target Completion Date as a
        result
        of Force Majeure Delay in excess of the thirty (30) days referred to in clause
        (i) above, then the Purchase Price shall be increased by the product obtained
        by
        multiplying (x) the number of days of Force Majeure Delay in excess of such
        thirty (30) days, by (y) $5,000 per day, provided that the Purchase Price
        shall
        not be increased by more than $450,000 pursuant to this clause (b).
        In
        addition, Seller shall continue to investigate the availability of insurance
        (“Delay Damage Coverage”) to cover the obligations of Purchaser under clause (b)
        above, and if such Delay Damage Coverage is available at a cost that is mutually
        acceptable to Seller and Purchaser then the parties shall purchase such Delay
        Damage Coverage and share the costs equally. If such Delay Damage Coverage
        is
        purchased by the parties, it is understood and agreed that the Purchase Price
        shall not be increased pursuant to this Section 7.1.3.2 as a result of the
        occurrence of an event otherwise covered by the Delay Damage Coverage except
        to
        the extent of applicable deductibles.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.1.4 Closing
        shall be conducted through an escrow with Escrow Agent. Seller and Purchaser
        shall execute (or cause their counsel to execute) such additional instructions
        to Escrow Agent as may be required in connection therewith.

       

      7.1.5 Pre-closing
        (“Pre-Closing”) shall be held at the Washington, D.C., offices of DLA Piper
        Rudnick Gray Cary US LLP on the business day immediately preceding the scheduled
        date for Closing. At Pre-Closing, Seller and Purchaser shall execute and
        deliver
        to Escrow Agent all documents and deliveries required under Sections 7.2
        and
        7.3, other than the Settlement Statement and payment of the amounts required
        to
        be paid at Closing. Seller and Purchaser shall complete and execute the
        Settlement Statement, and Seller and Purchaser shall pay the amounts required
        to
        be paid at Closing to Escrow Agent at Closing by wire transfer of immediately
        available funds, such that the amounts due to or on behalf of Seller pursuant
        to
        the Settlement Statement shall be wire transferred into a bank account or
        accounts designated by Seller no later than 3:00 p.m. local time at the Property
        on the Closing Date.

       

      7.2 Seller’s
        Closing Deliveries.
        At or
        prior to Closing, Seller shall deliver to Escrow Agent the
        following:

       

      7.2.1 The
        Deed
        (“Deed”) in the form of Exhibit B,
        conveying fee title to the BNA Lot and Improvements to Purchaser, duly executed
        and acknowledged by Fee Owner, and dated as of the Closing Date.

       

      7.2.2 The
        Bill
        of Sale (“Bill of Sale”) in the form of Exhibit C,
        conveying all of Seller’s right, title and interest in the Personal Property to
        Purchaser, duly executed by Seller, and dated as of the Closing
        Date.

       

      7.2.3 The
        Assignment (“Assignment”) in the form of Exhibit D,
        assigning all of Seller’s right, title and interest in the Leases, Contracts and
        Intangible Property to Purchaser, duly executed by Seller, and dated as of
        the
        Closing Date.

       

      7.2.4 The
        Management Agreement, duly executed by Manager and dated as of the Closing
        Date.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.2.5 The
        Novation Agreement, duly executed by Leasehold Owner, and dated as of the
        Closing Date.

       

      7.2.6 If
        Purchaser has exercised the G-1 Option, the G-1 Lease, duly executed by
        Leasehold Owner, and dated as of the Closing Date.

       

      7.2.7 The
        Agreement (“Reserved Rights Agreement”) in the form of Exhibit F,
        duly
        executed and acknowledged by Vornado, and dated as of the Closing Date.

       

      7.2.8 A
        memorandum of the Reserved Rights Agreement in the form attached to Exhibit F,
        duly
        executed and acknowledged by Vornado, and dated as of the Closing Date. Such
        memorandum shall be recorded in the Land Records at Closing immediately
        following recordation of the Deed and prior to any Encumbrances securing
        financing placed by Purchaser, and Seller and Purchaser shall share equally
        in
        the costs of such recordation.

       

      7.2.9 A
        certificate, duly executed by Seller, confirming that its representations
        and
        warranties set forth in this Agreement are correct in all material respects
        as
        if made on the Closing Date (or noting any exceptions).

       

      7.2.10 A
        title
        affidavit, in customary form reasonably satisfactory to the Title Company
        and
        Seller, duly executed by Seller.

       

      7.2.11 An
        affidavit, in the form required by the Code and the regulations issued pursuant
        thereto, to the effect that neither Fee Owner nor Leasehold Owner is a foreign
        person within the meaning of the Code.

       

      7.2.12 Such
        evidence of the power and authority of Seller to consummate the transactions
        described in this Agreement as may be reasonably required by Purchaser or
        Title
        Company.

       

      7.2.13 A
        written
        direction to Escrow Agent to disburse the Deposit in accordance with
        Section 8.1.2.1.

       

      7.2.14 To
        the
        extent within the possession or under the control of the Seller, originals
        of
        the Leases, Contracts and Intangible Property.

       

      7.2.15 A
        Settlement Statement in accordance with Section 10.1, duly executed by
        Seller.

       

      7.2.16 Notices
        to the tenants under all Leases, and to vendors under all Contracts, informing
        them of the change in ownership of the Property.

       

      7.2.17 Such
        other documents and instruments as are customary and as may be reasonably
        requested by Purchaser, Escrow Agent or Title Company, to effectuate the
        transactions contemplated by this Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.3 Purchaser’s
        Closing Deliveries.
        At or
        prior to Closing, Purchaser shall deliver to Escrow Agent the
        following:

       

      7.3.1 The
        Assignment, duly executed by Purchaser or Purchaser’s Designee, and dated as of
        the Closing Date.

       

      7.3.2 The
        Management Agreement, duly executed by Purchaser or Purchaser’s Designee and
        dated as of the Closing Date.

       

      7.3.3 The
        Novation Agreement, duly executed by Purchaser or Purchaser’s Designee, and
        dated as of the Closing Date.

       

      7.3.4 If
        Purchaser has exercised the G-1 Option, the G-1 Lease, duly executed by
        Purchaser or Purchaser’s Designee, and dated as of the Closing
        Date.

       

      7.3.5 The
        Reserved Rights Agreement, duly executed and acknowledged by Purchaser or
        Purchaser’s Designee, and dated as of the Closing Date.

       

      7.3.6 The
        memorandum of the Reserved Rights Agreement, duly executed and acknowledged
        by
        Purchaser or Purchaser’s Designee, and dated as of the Closing Date.

       

      7.3.7 A
        certificate, duly executed by Purchaser, confirming that its representations
        and
        warranties set forth in this Agreement are correct in all material respects
        as
        if made on the Closing Date (or noting any exceptions).

       

      7.3.8 A
        certificate from Purchaser’s Designee, duly executed by Purchaser’s Designee,
        confirming that Purchaser’s representations and warranties set forth in the
        Agreement are correct in all material respects as if made by such Purchaser’s
        Designee on the Closing Date (or noting any exceptions).

       

      7.3.9 Such
        evidence of the power and authority of Purchaser and Purchaser’s Designee to
        consummate the transactions described in this Agreement as may be reasonably
        required by Seller or Title Company.

       

      7.3.10 A
        written
        direction to Escrow Agent to disburse the Deposit in accordance with
        Section 8.1.2.1.

       

      7.3.11 The
        balance of the Purchase Price, as adjusted pursuant to Section 7.1 and
        Article 10.

       

      7.3.12 A
        Settlement Statement in accordance with Section 10.1, duly executed by
        Purchaser or Purchaser’s Designee.

       

      7.3.13 Such
        other documents and instruments as are customary and as may be reasonably
        requested by Seller, Escrow Agent or Title Company to effectuate the
        transactions contemplated by this Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.4 Closing
        Costs.
        Seller
        shall pay the Virginia Grantor’s Tax, and Purchaser shall pay the state and
        county Recordation Tax, imposed upon the recordation of the Deed. All escrow
        or
        settlement fees of Escrow Agent shall be borne equally by Seller and Purchaser.
        Seller and Purchaser shall each bear its own counsel’s fees and expenses in
        connection with the transactions described in this Agreement. Purchaser shall
        pay all costs of Purchaser’s due diligence investigations of the Property, title
        insurance premiums and costs, and costs of the Survey. Seller shall pay all
        costs of the Subdivision, all costs of terminating the Existing Ground Lease,
        and all costs of recording any instrument relating to the Existing Financing.
        Any other closing costs shall be borne by the parties in accordance with
        custom
        for transactions similar to the transactions described herein in Arlington
        County, Virginia.

       

      7.5 Indemnification.

       

      7.5.1 Subject
        to any express provisions of this Agreement and the Work Agreement to the
        contrary, from and after Closing, Seller hereby agrees to indemnify Purchaser,
        Purchaser’s Designee, and their respective trustees, directors, officers,
        employees, partners, members and affiliates (collectively, “Purchaser
        Indemnified Parties”), and to hold Purchaser Indemnified Parties harmless from
        and against, any and all Damages paid or incurred by Purchaser Indemnified
        Parties due to (i) any breach of any representation or warranty made by Seller
        in this Agreement or the Work Agreement, (ii) any breach of any covenant
        made by
        Seller in this Agreement or the Work Agreement, and (iii) liabilities to
        any
        third party, including liabilities under the GSA Lease and EPA Lease, that
        are
        based upon any matter relating to the use, maintenance, operation or
        construction of the Property occurring prior to the Closing Date (except
        to the
        extent that Purchaser receives a credit therefor at Closing). The foregoing
        shall not apply to Damages relating to the Renovations, responsibility for
        which
        shall be allocated in accordance with the Work Agreement.

       

      7.5.2 Subject
        to any express provisions of this Agreement and the Work Agreement to the
        contrary, from and after Closing, Purchaser hereby agrees to indemnify Seller
        and its trustees, directors, officers and employees, partners, members and
        affiliates (collectively, “Seller Indemnified Parties”), and to hold Seller
        Indemnified Parties harmless from and against, any and all Damages paid or
        incurred by Seller Indemnified Parties due to (i) any breach of any
        representation or warranty made by Purchaser or Purchaser’s Designee in this
        Agreement or the Work Agreement, (ii) any breach of any covenant made by
        Purchaser or Purchaser’s Designee in this Agreement or the Work Agreement, (iii)
        any obligations with respect to which Purchaser receives a credit at Closing,
        to
        the extent of such credit, and (iv) liabilities to any third party, including
        liabilities under the GSA Lease, that are incurred by any Seller Indemnified
        Party in its capacity as former owner of the Property, based upon any matter
        relating to the use, maintenance, operation or construction of the Property
        occurring on or after the Closing Date. The foregoing shall not apply to
        Damages
        relating to the Renovations, responsibility for which shall be allocated
        in
        accordance with the Work Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.5.3 Subject
        to any express provisions of the Work Agreement to the contrary, the obligations
        of Seller under Section 7.5.1 shall not extend to (i) any Damages
        arising out of the alleged presence at, or release or disposal from the Property
        of any Hazardous Substance, or the alleged violation of any Environmental
        Laws,
        (ii) any Damages arising out of a violation of any Legal Requirement with
        respect to the physical condition, maintenance or improvement of the Property
        (including zoning and building codes and the Americans with Disabilities
        Act)
        which exists on or before the Closing Date, or (iii) any Damages arising
        out of the state of the physical condition, maintenance or improvement of
        the
        Property on or before the Closing Date, except (in the case of this clause
        (iii)
        only) Damages for the death of or injury to third parties, or damage to property
        other than the Property. The obligations of Seller under Section 7.5.1 and
        of Purchaser under Section 7.5.2 shall not extend to (a) any consequential
        or punitive damages, (b) any loss or diminution of value in the Property
        (except in the case of a breach of a representation or warranty by Seller),
        or
        (c) any Damages that are not payable to third parties (except in the case
        of a breach of a representation or warranty by Seller).

       

      7.5.4 Notwithstanding
        anything to the contrary in this Agreement, Seller’s liability under
        Section 7.5.1 shall not exceed an amount equal to Five Million Dollars
        ($5,000,000.00) except for liability based upon actual fraud on the part
        of
        Seller.

       

      7.5.5 Whenever
        either party shall learn through the filing of a claim or the commencement
        of a
        proceeding or otherwise of the existence of any liability for which the other
        party is or may be responsible under this Section 7.5, the party learning
        of such liability shall notify the other party promptly and furnish such
        copies
        of documents (and make originals thereof available) and such other information
        as such party may have that may be used or useful in the defense of such
        claims.
        The indemnified party shall afford the indemnifying party full opportunity
        to
        defend such claims, using counsel reasonably acceptable to the indemnified
        party, in the name of the indemnified party and generally shall cooperate
        with
        the indemnifying party in the defense of such claim, provided that no such
        matter shall be settled without the prior written consent of the indemnified
        party.

       

      7.5.6 This
        Section 7.5 shall survive Closing indefinitely, except that Seller’s
        indemnification of Purchaser pursuant to Section 7.5.1 (other than to the
        extent of liabilities under the GSA Lease and EPA Lease prior to Closing)
        shall
        terminate on the date that is one (1) year after the Closing Date. From and
        after Closing, the indemnification provisions in this Section 7.5 shall be
        the exclusive remedies of Seller and Purchaser in connection with any of
        the
        matters described in this Section 7.5 and the transaction described in this
        Agreement, and each party hereby waives and releases and other rights or
        remedies it may have under applicable law or at equity in connection
        therewith.

       

      7.6 Survival.

       

      7.6.1 Except
        where this Agreement expressly provides for a longer period, the
        representations, warranties, covenants and indemnities of Seller and Purchaser
        set forth in this Agreement shall survive Closing until the date that is
        one (1)
        year after the Closing Date, and any action on any such representation,
        warranty, covenant or indemnity must be instituted on or before such
        date.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7.6.2 Notwithstanding
        any other provision of this Agreement, if at or prior to Closing Purchaser
        obtains actual knowledge that any representation or warranty of Seller under
        this Agreement (as the same is modified pursuant to Section 5.12) is
        inaccurate in any respect, but nonetheless proceeds to Closing, Purchaser
        shall
        be deemed to have waived any right to make a claim arising out of such
        inaccuracy.

       

      ARTICLE
        8. ESCROW, DEFAULT, REMEDIES

       

      8.1 Escrow
        Terms.

       

      8.1.1 Escrow
        Agent shall promptly give notice to Purchaser and Seller upon its receipt
        of any
        portion of the Deposit from Purchaser in accordance with this Agreement.
        Escrow
        Agent shall invest the Deposit (if in cash) in overnight repurchase obligations
        secured by United States obligations through such bank as Escrow Agent may
        elect
        and shall be approved by Purchaser and Seller. Escrow Agent shall not be
        liable
        for any loss of such investment (unless due to Escrow Agent’s gross negligence
        or willful misconduct). All interest on the Deposit shall be treated by Escrow
        Agent for income tax purposes as earned by Purchaser, and Purchaser shall
        provide its tax identification number to Escrow Agent for this
        purpose.

       

      8.1.2 Escrow
        Agent shall deliver the Deposit to Seller or to Purchaser, as the case may
        be,
        under the following conditions:

       

      8.1.2.1. At
        Closing, the Deposit shall be delivered to Seller (if in cash) or to Purchaser
        (if a Letter of Credit) upon receipt by Escrow Agent of a statement executed
        by
        Seller and Purchaser that the Deposit may be so released; or

       

      8.1.2.2. The
        Deposit shall be delivered to Seller following receipt by Escrow Agent of
        written demand therefor from Seller, stating that Purchaser has defaulted
        in the
        performance of its obligations under this Agreement and specifying the
        Section of this Agreement which entitles Seller to receive the Deposit, but
        only if Purchaser shall not have given written notice of objection in accordance
        with Section 8.1.3; or

       

      8.1.2.3. The
        Deposit shall be delivered to Purchaser following receipt by Escrow Agent
        of
        written demand therefor from Purchaser stating that Seller has defaulted
        in the
        performance of its obligations under this Agreement or that this Agreement
        was
        terminated under circumstances entitling Purchaser to the return of the Deposit,
        and specifying the Section of this Agreement which entitles Purchaser to
        the return of the Deposit, but only if Seller shall not have given written
        notice of objection in accordance with Section 8.1.3; or

       

      8.1.2.4. The
        Deposit shall be delivered as directed by joint written instructions of Seller
        and Purchaser.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      8.1.3 Upon
        the
        filing of a written demand for the Deposit by Seller or Purchaser pursuant
        to
        Section 8.1.2.2 or 8.1.2.3, Escrow Agent shall promptly give notice thereof
        (including a copy of such demand) to the other party. The other party shall
        have
        the right to object to the delivery of the Deposit, by giving notice of such
        objection to Escrow Agent at any time within five (5) business days after
        such
        party’s receipt of notice from Escrow Agent, but not thereafter. Failure to
        deliver such objection notice within such period shall be deemed to be a
        waiver
        of such party’s right to object to Escrow Agent’s compliance with such demand.
        Such objection notice shall set forth the basis for objecting to the delivery
        of
        the Deposit. Upon receipt of such notice of objection, Escrow Agent shall
        promptly give a copy of such notice to the party who filed the written demand.
        The foregoing five (5) business day period does not constitute a cure period
        in
        which either Seller or Purchaser, as the case may be, shall be required to
        accept tender of cure of any default under this Agreement. If the Deposit
        is in
        the form of the Letter of Credit, then Escrow Agent shall draw upon the same
        prior to the release of the Deposit to Seller, and Seller and Purchaser hereby
        irrevocably direct Escrow Agent to effectuate such draw.

       

      8.1.4 If
        Escrow
        Agent shall have received the notice of objection provided for in
        Section 8.1.3 within the time therein prescribed, Escrow Agent shall
        continue to hold the Deposit until (i) Escrow Agent receives written notice
        from Seller and Purchaser directing the disbursement of the Deposit, in which
        case Escrow Agent shall then disburse the Deposit in accordance with said
        direction, or (ii) litigation is commenced between Seller and Purchaser, in
        which case Escrow Agent shall deposit the Deposit with the clerk of the court
        in
        which said litigation is pending, or (iii) Escrow Agent takes such
        affirmative steps as Escrow Agent may elect, at Escrow Agent’s option, in order
        to terminate Escrow Agent’s duties hereunder (but in no event disbursing the
        Deposit to either Seller or Purchaser), including depositing the Deposit
        in
        court and commencing an action for interpleader, the costs thereof to be
        borne
        by whichever of Seller or Purchaser is the losing party. If
        the
        Deposit is in the form of the Letter of Credit, then Escrow Agent shall draw
        upon the same prior to the delivery of the Deposit to the clerk of court,
        and
        Seller and Purchaser hereby irrevocably direct Escrow Agent to effectuate
        such
        draw. Seller and Purchaser shall execute such documents as may be necessary
        to
        cause Escrow Agent to effectuate such draw.

       

      8.1.5 Escrow
        Agent may rely and act upon any instrument or other writing reasonably believed
        by Escrow Agent to be genuine and purporting to be signed and presented by
        any
        person or persons purporting to have authority to act on behalf of Seller
        or
        Purchaser, as the case may be, and shall not be liable in connection with
        the
        performance of any duties imposed upon Escrow Agent by the provisions of
        this
        Agreement, except for Escrow Agent’s own gross negligence, willful misconduct or
        default. Escrow Agent shall have no duties or responsibilities except those
        set
        forth herein. Escrow Agent shall not be bound by any modification or termination
        of this Agreement unless the same is in writing and signed by Purchaser and
        Seller, and, if Escrow Agent’s duties hereunder are affected, unless Escrow
        Agent shall have given prior written consent thereto. Escrow Agent shall
        be
        reimbursed by Seller and Purchaser for any expenses (including reasonable
        legal
        fees and disbursements of outside counsel, including all of Escrow Agent’s fees
        and expenses with respect to any interpleader action pursuant to
        Section 8.1.4) incurred in connection with this Agreement, and such
        liability shall be joint and several; provided that, as between Purchaser
        and
        Seller, the prevailing party in any dispute over the Deposit shall be entitled
        to reimbursement of any such expenses paid to Escrow Agent. In the event
        that
        Escrow Agent shall be uncertain as to Escrow Agent’s duties or rights hereunder,
        or shall receive instructions from Purchaser or Seller that, in Escrow Agent’s
        opinion, are in conflict with any of the provisions hereof, Escrow Agent
        shall
        be entitled to continue to hold the Deposit pursuant to Section 8.1.4, and
        may decline to take any other action.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      8.1.6 Escrow
        Agent shall have the right at any time to resign upon ten (10) business
        days prior notice to Seller and Purchaser. Seller and Purchaser shall jointly
        select a successor Escrow Agent and shall notify Escrow Agent of the name
        and
        address of such successor Escrow Agent within ten (10) business days after
        receipt of notice from Escrow Agent of its intent to resign. If Escrow Agent
        has
        not received notice of the name and address of such successor Escrow Agent
        within such period, Escrow Agent shall have the right to select on behalf
        of
        Seller and Purchaser a bank or trust company to act as its successor hereunder.
        At any time after the ten (10) business day period, Escrow Agent shall have
        the
        right to deliver the Deposit to any successor selected hereunder, provided
        such
        successor shall execute and deliver to Seller and Purchaser an assumption
        agreement whereby it assumes all of Escrow Agent’s obligations hereunder. Upon
        the delivery of all such amounts and such assumption agreement, the successor
        shall become the Escrow Agent for all purposes under this Section 8.1 and
        shall have all of the rights and obligations of the Escrow Agent under this
        Section 8.1, and the resigning Escrow Agent shall have no further
        responsibilities or obligations hereunder.

       

      8.1.7 If
        the
        Deposit is in the form of the Letter of Credit, then not later than the date
        that is thirty (30) days prior to the expiration of such Letter of Credit,
        Purchaser shall cause such Letter of Credit to be extended or replaced with
        another Letter of Credit that satisfies the requirements of this Agreement.
        If
        Purchaser fails to so extend or replace such Letter of Credit by such date,
        then
        Escrow Agent shall draw upon the same and hold the proceeds of such draw
        as the
        Deposit hereunder, and Seller and Purchaser hereby irrevocably direct Escrow
        Agent to effectuate such draw. Seller and Purchaser shall execute such documents
        as may be necessary to cause Escrow Agent to effectuate such draw. If either
        party disputes the release of the Deposit to the other pursuant to
        Section 8.1.3, then if the Deposit is in the form of the Letter of Credit,
        Escrow Agent is hereby irrevocably directed to draw upon the Letter of Credit
        and hold the proceeds of such draw as the Deposit.

       

      8.2 Purchaser’s
        Default.

       

      8.2.1 If
        Purchaser defaults in its obligation to proceed to Closing in accordance
        with
        this Agreement, or if any condition set forth in Sections 6.3.1 through
        6.3.4 is not satisfied and Seller elects not to proceed to Closing, and if
        such
        default is not cured and/or such condition is not satisfied within fifteen
        (15)
        days after Seller has given Purchaser written notice of the same, then Seller
        shall have the right to terminate this Agreement by written notice to Purchaser,
        and upon such termination (i) Escrow Agent shall, subject to
        Sections 8.1.3 and 8.1.4, pay the Deposit to Seller, and (ii) Purchaser
        shall pay to Seller an amount equal to the sum of (a) One Hundred Percent
        (100%)
        of any portion of the Improvement Expenditure that has been paid, incurred
        or
        irrevocably committed in accordance with the terms of the Work Agreement
        prior
        to the date of such default or the failure of such condition, plus (b) any
        amount that Seller has paid, incurred or irrevocably committed prior to the
        date
        of such default or the failure of such condition that exceeds the Improvement
        Expenditure and for which Purchaser is responsible under the Work Agreement,
        plus (c) interest that has accrued under Sections 5(b) and (c) of the Work
        Agreement as of the date of such default or the failure of such condition,
        plus
        (d) interest on the amounts described in the foregoing clauses (a), (b) and
        (c)
        at the lesser of the rate of 10% per annum or the highest rate permitted
        by law
        from the date of such default or failure of such condition to the date such
        amounts have been paid in full. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      8.2.2 Notwithstanding
        anything to the contrary set forth in Section 8.2.1 above, if (i) any
        expenditures from the Improvement Expenditure have been paid, incurred or
        irrevocably committed by Seller for the purpose of improving those components
        of
        the building of the Property that are identified on Schedule
        8.2.2
        to this
        Agreement (collectively, “Base Building Renovations”), and the design,
        engineering and permitting of the Base Building Renovations, (ii) Seller,
        on or
        before the date that is three (3) years after the date on which this Agreement
        terminates pursuant to Section 8.2.1 (“Outside Date”), enters into one or
        more legally binding transactions (each, a “Successor Transaction”) with one or
        more tenants or users for the occupancy of all or any portion of the Property
        (each, a “Successor User”), and (iii) either (a) the terms of the Successor
        Transaction require that a particular component of the Base Building Renovations
        shall be retained, in whole or in part, for the use by or benefit of the
        Successor User, or (b) on or before the Outside Date, the Successor User
        irrevocably elects that a particular component of the Base Building Renovations
        will be retained, in whole in part, for the use by or benefit of the Successor
        User (each such retained component described in clause (a) or (b), “Retained
        Component”), then Seller, within sixty (60) days after the Outside Date (or
        after such earlier date on which the Retained Components may be identified
        pursuant to the foregoing clause (a) or (b)), shall return to Purchaser a
        portion of the amount paid by Purchaser to Seller pursuant to
        Section 8.2.1(a) equal to the actual cost of such Retained Components as
        incurred by Seller pursuant to the Work Agreement. Concurrently with Seller’s
        payment of such amount, Seller shall provide Purchaser with a written statement
        setting forth in reasonable detail the cost of the Retained Components. If
        Purchaser does not object in writing to such statement within ten (10) business
        days of receipt thereof, specifying in reasonable detail any item(s) it believes
        have been omitted from such statement, then the statement shall be deemed
        final
        and binding. If Purchaser timely objects to such statement, then the parties
        shall negotiate in good faith regarding any areas of disagreement, it being
        understood and agreed that the final decision regarding the inclusion or
        exclusion of any item of Retained Components shall be made by the general
        contractor who is performing a majority (by cost) of the work for the Successor
        Transaction (or if there is no such general contractor, by the architect
        who is
        providing design services for the Successor Transaction). Notwithstanding
        the
        foregoing, (a) if Seller determines in its sole and absolute discretion to
        demolish the Property, it is understood and agreed that there shall be no
        value
        attributed to any items of Base Building Renovations for purposes of this
        Section 8.2.2, and (b) in no event shall the aggregate amounts required to
        be paid by Seller to Purchaser pursuant to this Section 8.2.2 exceed
        $11,000,000.00.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      8.2.3 The
        amounts described in this Section 8.2 shall be full and complete liquidated
        damages, and the exclusive and sole right and remedy of Seller, and neither
        party shall have any further obligations or liabilities to the other party
        under
        this Agreement, except for obligations that expressly survive termination
        of
        this Agreement. Purchaser acknowledges that Seller’s actual damages caused by
        Purchaser’s default in its obligation to proceed to Closing would be difficult
        to determine precisely and that the amounts described herein, as liquidated
        damages, is a fair and reasonable approximation. Seller hereby waives any
        right
        to recover damages (whether actual, consequential, punitive or other) as
        a
        result of Purchaser’s default in its obligation to proceed to Closing in
        accordance with this Agreement or as a result of any conditions set forth
        in
        Section 6.3 not being satisfied, except for the liquidated damages as
        described in this Section 8.2. This Section 8.2 shall survive any
        termination of this Agreement.

       

      8.3 Seller’s
        Default.
        If
        Seller defaults in its obligation to proceed to Closing in accordance with
        this
        Agreement, or if any condition set forth in Section 6.1.1, 6.1.2 or 6.1.4
        is not satisfied and Purchaser elects not to proceed to Closing, and if such
        default is not cured and/or such condition is not satisfied within fifteen
        (15)
        days after Purchaser has given Seller written notice of the same, then Purchaser
        shall be entitled, as its sole remedy, to either (i) specific performance
        of
        this Agreement, provided that any action for specific performance must be
        initiated no later than sixty (60) days after the date that Closing is otherwise
        required to occur under this Agreement, or (ii) terminate this Agreement by
        written notice to Seller, and upon such termination Escrow Agent shall, subject
        to Sections 8.1.3 and 8.1.4, return the Deposit to Purchaser and neither
        party shall have any further obligations or liabilities to the other party
        under
        this Agreement, except for obligations that expressly survive termination
        of
        this Agreement, provided that if specific performance is not available to
        Purchaser due to an intentional act of Seller, then in addition to terminating
        this Agreement, Purchaser shall be entitled to reimbursement by Seller of
        Purchaser’s out-of-pocket costs actually expended in connection with the
        transaction contemplated by this Agreement in an aggregate amount not to
        exceed
        the amount of the Deposit. Purchaser hereby waives any right to recover damages
        (whether actual, consequential, punitive or other) as a result of Seller’s
        default in its obligation to proceed to Closing in accordance with this
        Agreement or as a result of any conditions set forth in Sections 6.1.1, 6.1.2
        or
        6.1.4 not being satisfied, except as expressly set forth in this
        Section 8.3. This Section 8.3 shall survive any termination of this
        Agreement.

       

      8.4 District
        Agreement.

       

      8.4.1 On
        the
        Contract Date, District Seller and District Purchaser are executing the District
        Agreement for the sale by District Seller to District Purchaser of the District
        Property. This Agreement and the District Agreement shall be subject to the
        provisions of the Exchange Agreement.

       

      8.4.2 Any
        default by District Purchaser under the District Agreement shall constitute
        a
        default by Seller under this Agreement. Any default by District Seller under
        the
        District Agreement shall constitute a default by Purchaser under this
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        9. CASUALTY AND CONDEMNATION

       

      9.1 Notice
        to Purchaser.
        Seller
        shall give Purchaser prompt written notice of (i) any pending or threatened
        condemnation affecting the Property or the Garage prior to Closing, upon
        becoming aware of the same, and (ii) any fire or other casualty occurring
        prior
        to Closing that affects the Property or the Garage and that is reasonably
        estimated by Seller, acting reasonably and in good faith, to cost more than
        $10,000.00 to repair.

       

      9.2 Minor
        Condemnation. If,
        prior
        to Closing, a proceeding for condemnation (other than temporary condemnation
        resulting from a holdover by EPA Tenant under the EPA Lease) is commenced
        against all or any portion of Property or the Garage which (i) reduces the
        square footage of the Improvements by less than five percent (5%), (ii) reduces
        the number of parking spaces in the Garage allocated to Purchaser by less
        than
        five percent (5%), and (iii) does not materially and adversely affect the
        use
        and occupancy of the Improvements (as the same may be reduced) as contemplated
        by the Work Agreement, then this Agreement shall continue in full force and
        effect and the Purchase Price shall not be reduced, but Purchaser shall be
        entitled to an assignment of all condemnation awards payable to Seller (other
        than any portion of such awards in respect of income lost prior to Closing
        or
        expended by or on behalf of Seller prior to Closing to restore the Property),
        and Seller shall have no obligation to repair or restore the Property except
        as
        set forth in the Work Agreement.

       

      9.3 Major
        Condemnation.
        If,
        prior to Closing, a proceeding for condemnation (other than temporary
        condemnation resulting from a holdover by EPA Tenant under the EPA Lease)
        is
        commenced against all or any portion of Property, and such proceeding is
        not
        covered by Section 9.2, then Purchaser shall have the right, upon notice in
        writing to Seller delivered within thirty (30) days after Seller gives Purchaser
        notice of such condemnation, to terminate this Agreement, whereupon this
        Agreement shall terminate, Escrow Agent shall return the Deposit to Purchaser
        and neither party to this Agreement shall thereafter have any further rights
        or
        liabilities under this Agreement other than those that expressly survive
        termination of this Agreement. If Purchaser does not timely elect to terminate
        this Agreement, then this Agreement shall continue in full force and effect
        and
        the Purchase Price shall not be reduced, but Purchaser shall be entitled
        to an
        assignment of all condemnation awards payable to Seller (other than any portion
        of such awards in respect of income lost prior to Closing or expended by
        or on
        behalf of Seller prior to Closing to restore the Property), and Seller shall
        have no obligation to repair or restore the Property.

       

      9.4 EPA
        Holdover. Any
        temporary condemnation resulting from a holdover by EPA Tenant under the
        EPA
        Lease (whether or not formal condemnation proceedings shall be filed) shall
        not
        be treated as a condemnation under this Article 9, but shall be treated as
        a
        failure of the EPA Tenant to relinquish possession of the EPA Premises to
        Leasehold Owner for purposes of determining whether the EPA Vacation Date
        has
        occurred and the terms of Section 5.5 shall apply.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      9.5 Casualty. If,
        prior
        to Closing, the Improvements, or any other improvements (including the Garage)
        within the Remaining Office Parcel that are necessary for the use and occupancy
        of the Improvements (such other improvements, “Related Improvements”), are
        damaged or destroyed by fire or other casualty, then the following shall
        apply:
        (i) this Agreement shall continue in full force and effect and the Purchase
        Price shall not be reduced, (ii) Seller shall promptly undertake and diligently
        pursue the restoration of the Improvements and the Related Improvements to
        substantially the same condition as existed prior to the casualty, (iii)
        Seller
        shall pay all costs of restoring the Improvements and the Related Improvements,
        other than the cost of restoring any Renovations, (iv) Seller shall make
        available for the restoration of the Renovations all casualty insurance proceeds
        that are payable as a result of the damage to or destruction of the Renovations,
        and any shortfall shall be paid as a Project Cost in accordance with the
        Work
        Agreement, and (v) the restoration of the Renovations shall be included within
        the scope of work required under the Work Agreement and shall be performed
        pursuant to the Work Agreement.

       

      9.6 Insurance.
        Prior
        to Closing, Seller shall maintain, at its cost, “broad form/special perils”
insurance with respect to the Improvements and the Related Improvements,
        including “builder’s risk” coverage for the Renovations, in an amount equal to
        100% of the replacement cost thereof. Notwithstanding the foregoing, the
        incremental increase in premiums paid by Seller attributable only to the
        Builder’s Risk portion of such coverage, if any, as a direct result of the
        Renovations shall constitute a Project Cost for purposes of the Work Agreement
        and shall be paid in the same manner as other Project Costs described therein.
        Purchaser shall have the right to participate in the adjustment of any claim
        with respect to such insurance following the Contract Date with respect to
        the
        Renovations, and the proceeds thereof shall be applied against the costs
        of the
        restoration of the Renovations pursuant to the Work Agreement. Purchaser
        shall
        have the right to participate in any condemnation proceedings relating to
        the
        Property and to approve in its reasonable discretion any settlement in
        connection therewith.

       

      ARTICLE
        10. PRORATIONS

       

      10.1 Prorations
        Generally.
        Seller
        and Purchaser shall receive debits and credits against the Purchase Price
        pursuant to this Article 10. In the case of any adjustment to be made at
        Closing, such adjustment shall be set forth on a settlement statement
        (“Settlement Statement”) executed by Seller and Purchaser, and the portion of
        the Purchase Price payable pursuant to Section 2.2.2.3 shall be increased
        or decreased to reflect such adjustment. In the case of any adjustment to
        be
        made after Closing, Purchaser and Seller shall make such adjustment by payment
        of immediately available funds to the other party within five (5) days of
        the
        date such adjustment is determined.

       

      10.2 Governmental
        Charges.

       

      10.2.1 Real
        estate taxes, personal property taxes, and any other governmental assessments
        for the tax year(s) in which Closing occurs shall be apportioned between
        Seller
        and Purchaser as of the Apportionment Time.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.2.2 If
        as of
        Closing, Arlington County has not established an assessment for the BNA Lot
        and
        Improvements that is separate from the assessment for the Remaining Office
        Parcel and the improvements thereon generally, then at Closing, real estate
        taxes for purposes of Section 10.2.1 shall be estimated by allocating to
        the BNA Lot a proportionate share of the total assessment of the Office Parcel
        and improvements thereon based on the “floor area ratio” of the Improvements as
        a percentage of the total “floor area ratio” of the improvements located on the
        Office Parcel. At such time after Closing as Arlington County has established
        an
        assessment for the BNA Lot and Improvements that is separate from the assessment
        for the Remaining Office Parcel and the improvements thereon generally, Seller
        and Purchaser shall promptly thereupon reapportion the real estate taxes
        as of
        the Apportionment Time based on the actual separate assessment.

       

      10.2.3 Notwithstanding
        anything to the contrary contained herein, Purchaser shall cooperate with
        Seller
        in such manner as Seller may reasonably request to cause the Assessment
        Reduction Period to commence on or after the Closing Date; provided, however,
        that if the Assessment Reduction Period commences prior to the Closing Date
        and
        the real estate taxes payable by Seller for the BNA Lot and Improvements
        for the
        period prior to Closing are reduced below the amount of real estate taxes
        that
        would otherwise have been payable for the BNA Lot and Improvements for such
        period, Purchaser shall be entitled to a credit at Closing equal to the amount
        of such reduction (except for any portion of such reduction as may be payable
        to
        the tenant under any Lease). Notwithstanding the foregoing, Purchaser shall
        not
        be entitled to a credit at Closing as a result of any reduction in real estate
        taxes prior to Closing as a result of generally applicable law, policies
        and
        procedures in effect in Arlington County, Virginia.

       

      10.3 Rents
        under Leases.
        All
        rents and other charges (including base rent, percentage rent, expense
        reimbursement rent and any additional rent) under Leases (collectively, “Rents”)
        shall be apportioned in accordance with the following provisions:

       

      10.3.1 All
        Rents
        which were earned and attributable to the period prior to the Closing Date
        shall
        be retained by Seller to the extent that such Rents have been collected prior
        to
        the Closing Date.

       

      10.3.2 All
        Rents
        received on or after the Closing Date by Seller or Purchaser in respect of
        any
        Lease shall be applied (i) first to sums due under the applicable Lease
        attributable to the lease month prior to the lease month in which the Closing
        Date occurs, (ii) second to sums due under the applicable Lease attributable
        to
        the lease month during which the Closing Date occurs, (iii) third to any
        other
        sums due under the applicable Lease attributable to after the Closing Date,
        and
        (iv) fourth to any other sums due under the applicable Lease attributable
        to
        prior to the Closing Date. Rents received by either Seller or Purchaser after
        Closing shall be deemed to be held in trust for application in accordance
        with
        this Section 10.3.2.

       

      10.3.3 Any
        customary and actual, direct out of pocket costs incurred by Purchaser in
        collection of delinquent Rents shall be deducted by Purchaser prior to the
        payment to Seller on account of delinquent Rents. Purchaser shall not modify
        any
        Lease in such a way to affect the amounts of Rents that may be due to Seller.
        Seller shall have the right to contact tenants to request payment of delinquent
        rentals after the Closing Date and to institute legal proceedings, at Seller’s
        sole expense, to collect and retain such delinquent Rents, but not to evict
        such
        tenants.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.3.4 Reconciliations
        of taxes, insurance charges and other expenses owed by tenants and licensees
        under Leases for the calendar year (or fiscal year if different from the
        calendar year) in which Closing occurs shall be prepared by Manager with
        the
        cooperation of Purchaser and Seller within one hundred twenty (120) days
        following the end of such year in accordance with the requirements set forth
        in
        the Leases and as provided in this Section 10.3.4. For those Leases in
        which tenant pays a proportionate share of taxes, insurance charges or other
        expenses over a base year amount or expense stop, the proration of the amount
        received from such tenant over such base year amount or expense stop shall
        be
        calculated based on the total amount of such expenses for the Property incurred
        by each of Seller and Purchaser reduced by the base year amount allocated
        evenly
        for the portion of the year each owns the Property. The base year amount
        will be
        prorated between the parties based on the number of days each party owned
        the
        Property during such year. For Leases which do not have a base year amount
        or
        expense stop, the proration between the parties of income received from tenants
        from reconciliations of expenses under the Leases shall be calculated based
        on
        the expenses actually incurred by each party for such year and each party’s
        period of ownership of the Property.

       

      10.3.5 Purchaser
        shall receive a credit for any cash security deposit actually posted by the
        tenant under any Lease, except to the extent that such security deposit has
        been
        applied by Seller prior to the Closing Date in accordance with the terms
        of the
        applicable Lease. Seller and Purchaser shall cooperate to transfer to Purchaser
        any security deposit posted by the tenant under any Lease that is in a form
        other than cash.

       

      10.4 Contracts.
        All
        amounts payable under the Contracts shall be apportioned between Seller and
        Purchaser as of the Apportionment Time.

       

      10.5 Utilities.
        Water,
        sewer, fuel, electricity, gas and other utilities shall be apportioned between
        Seller and Purchaser as of the Apportionment Time.

       

      10.6 Renovation
        Contracts.
        Amounts
        payable under the Renovation Contracts shall not be apportioned between Seller
        and Purchaser as of the Apportionment Time. Seller shall pay such amounts
        to the
        extent of the Improvement Expenditure and other amounts paid, incurred or
        committed to by Seller under the Work Agreement and credited to Seller at
        Closing, and Purchaser shall pay the remainder of such amounts.

       

      10.7 Deposits.
        Seller
        shall receive a credit for all deposits made by or on behalf of Seller or
        Manager as of the Apportionment Time as security under any Contract, utility,
        public service or other arrangement to the extent the same remains on deposit
        for the benefit of Purchaser.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.8 Permits.
        Seller
        shall receive a credit for prepaid fees for permits that are assigned to
        Purchaser (other than fees that are paid from the Improvement
        Expenditure).

       

      10.9 Tax
        Appeals.

       

      10.9.1 If
        any
        appeal of any taxes or assessments is pending as of the Closing Date with
        respect to any tax period that has closed prior to the Closing Date, Seller
        shall be entitled to receive any rebate or credit resulting from such appeal,
        and shall pay all expenses of prosecuting such appeal.

       

      10.9.2 If
        any
        appeal of any taxes or assessments is pending as of the Closing Date with
        respect to the period in which the Closing Date occurs (“Current Year Tax
        Appeal”), such taxes or assessments shall be re-prorated between Seller and
        Purchaser as of the Apportionment Time in accordance with the results of
        such
        Current Year Tax Appeal. Seller shall consider in good faith any request
        by
        Purchaser to initiate a Current Year Tax Appeal. Seller and Purchaser shall
        cooperate in the prosecution of each Current Year Tax Appeal. All third party
        costs and fees incurred in connection with any Current Year Tax Appeal,
        including legal fees and expenses, shall be paid by Seller to the extent
        due and
        payable prior to the Closing Date, and shall be paid by Purchaser to the
        extent
        due and payable on or after the Closing Date, but upon completion of the
        Current
        Year Tax Appeal, all such costs and fees shall be prorated between Purchaser
        and
        Seller in the same proportion as they bear re-prorated taxes and
        assessments.

       

      10.10 Renovation
        Matters.
        At
        Closing, the Purchase Price shall be increased to reflect the following
        adjustments:

       

      10.10.1 Any
        Additional Deposit (as defined in the Work Agreement) that Seller has paid,
        incurred or committed prior to Closing, together with the interest thereon
        provided for in Section 5(d) of the Work Agreement.

       

      10.10.2 The
        amount of any Excess Improvement Expenditure Adjustment that is due and payable
        as of Closing pursuant to Section 5(b) of the Work Agreement.

       

      10.10.3 An
        amount
        equal to the sum of the following tranches of Project Costs (other than
        Ineligible Costs), in each case paid, incurred or committed in accordance
        with
        the Work Agreement: (i) 3% of the first $10,679,612, plus (ii) 2% of the
        next
        $14,705,882, plus (iii) 1% of any additional Project Costs.

       

      10.11 Transaction
        Taxes.
        Seller
        shall be responsible for its federal and state income, franchise and similar
        taxes applicable to the transactions contemplated by this Agreement. Purchaser
        shall be responsible for any bulk sales taxes, personal property sales taxes,
        and similar taxes applicable to the transactions contemplated by this
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.12 Disputes
        with Respect to Adjustments. If
        Seller
        and Purchaser, each acting reasonably and in good faith, cannot resolve any
        issue with respect to the adjustments described in this Article 10, they
        shall
        submit such issue for binding resolution by a nationally recognized accounting
        firm mutually acceptable to both parties (“Accounting Firm”). The parties shall
        bear equally all fees and expenses of the Accounting Firm in connection with
        the
        resolution of such issue, and each party shall bear its own legal, accounting
        and other fees and expenses incurred in connection with the resolution of
        the
        issue by the Accounting Firm. Such resolution shall be final and binding
        on the
        parties and judgment may be entered upon such resolution in any court having
        jurisdiction thereof. Seller and Purchaser agree that the proceeding described
        in this Section 10.12 shall be conducted in Arlington,
        Virginia.

       

      10.13 Interest
        on Amounts Owed.
        Any
        amount that is payable by Seller or Purchaser to the other pursuant to this
        Article 10 and not paid when due shall bear interest from the date due until
        paid at the rate of ten percent (10%) per annum.

       

      10.14 Survival.
        This
        Article 10 shall survive Closing.

       

      ARTICLE
        11. MISCELLANEOUS

       

      11.1 Assignment.
        Neither
        Seller nor Purchaser shall assign this Agreement without the consent of the
        other. Notwithstanding the foregoing, without Seller’s consent, Purchaser shall
        have the right to assign the right to receive the Property at Closing to
        another
        Person (“Purchaser’s Designee”), subject to the following
        conditions:  (i) such Purchaser’s Designee is a direct or indirect
        wholly-owned subsidiary of BNA; (ii) Purchaser shall give notice to Seller
        no later than ten (10) business days prior to the date set for Closing of
        the identity of Purchaser’s Designee; and (iii) such assignment shall not
        adversely affect any Exchange or delay or otherwise adversely affect Closing.
        Upon any such assignment, Purchaser’s Designee shall be deemed to have assumed
        for the benefit of Seller all obligations of Purchaser under this Agreement,
        the
        Work Agreement, the Access Agreement and the Confidentiality Agreement, but
        such
        assignment shall not relieve Purchaser of its obligations under this Agreement,
        the Work Agreement, the Access Agreement and the Confidentiality
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      11.2 Notices.
        Notices
        and other communications required or permitted under this Agreement shall
        be in
        writing and delivered by hand against receipt or sent by recognized overnight
        delivery service, by certified or registered mail, postage prepaid, with
        return
        receipt requested or by facsimile. All notices shall be addressed as
        follows:

       

       

      If
        to
        Seller:

       

      Vornado
        Realty L.P.

      888
        Seventh Avenue

      New
        York,
        New York 10019

      Attn:
        Joseph Macnow

      Phone:
        (212) 894-7066

      Fax:
        (212) 843-2198

       

      with
        a
        copy to:

       

      Gregory
        R. Redding, Esquire

      Vice
        President and Division Counsel

      Charles
        E. Smith Real Estate Services L.P.

      2345
        Crystal Drive, Suite 1000

      Arlington,
        Virginia 22202

      Phone:
        (703) 769-1840

      Fax:
        (703) 769-1301 

       

      and
        with
        a copy to:

       

      Michael
        D. Goodwin, Esq.

      Arnold
        & Porter LLP

      555
        12th
        Street,
        N.W.

      Washington,
        D.C. 20004

      Phone:
        (202) 942-5558

      Fax:
        (202) 942-5999

       

      If
        to
        Purchaser:

       

      BNA
        Washington, Inc.

       

      1231
        25th
        Street, NW

       

      Washington,
        DC 20037

      Attention:
        Eunice Bumgardner

      Phone:
        (202) 736-3916

      Fax:
        (202) 973-3707

       

      with
        a
        copy to:

       

      Robb
        Johnson

      Senior
        Vice President

      Staubach

      8484
        Westpark Drive, Suite 150

      McLean,
        Virginia 22102

      Phone:
        (703) 448-3555

      Fax:
        (703) 448-6685

       

      and

       

      Jay
        Epstien, Esquire

      DLA
        Piper
        Rudnick Gray Cary US LLP

      1200
        19th
        Street,
        N.W.

      Washington,
        D.C. 20036

      Phone:
        (202) 861-3850

      Fax:
        (202) 689-7450

       

      If
        to
        Escrow Agent:

       

      Commercial
        Settlements, Inc.

      1015
        15th
        Street,
        N.W., Suite 300

      Washington,
        D.C. 20005

      Attn:
        David P. Nelson

      Phone:
        (202) 737-4747

      Fax:
        (202) 737-4108

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      or
        to
        such other addresses as may be designated by a proper notice. Notices shall
        be
        deemed to be effective upon receipt (or refusal thereof) if personally
        delivered, sent by recognized overnight delivery service, or sent by certified
        or registered mail, postage prepaid, with return receipt requested, or upon
        electronically verified transmission, if such delivery is by
        facsimile.

       

      11.3 Waiver
        of Jury Trial; Jurisdiction.
        Seller
        and Purchaser each hereby waives any right to jury trial in the event any
        party
        files an action relating to this Agreement or to the transactions or obligations
        contemplated by this Agreement. Any action, suit or proceeding arising out
        of
        this Agreement or the transactions contemplated by this Agreement shall be
        brought exclusively in the United States District Court for the Eastern District
        of Virginia or the Circuit Court for Arlington County, Virginia, and Seller
        and
        Purchaser agree that such courts are the most convenient forum for resolution
        of
        any such action and further agree to submit to the jurisdiction of such courts
        and waive any right to object to venue in such courts.

       

      11.4 Counterparts
        and Effectiveness.
        This
        Agreement may be executed in any number of counterparts which, when taken
        together, shall constitute a single binding instrument. Execution and delivery
        of this Agreement by facsimile shall be sufficient for all purposes and shall
        be
        binding on any Person who so executes.

       

      11.5 Brokerage.
        Purchaser represents to Seller that other than The Staubach Company - Northeast,
        Inc. (“Purchaser’s Broker”), no broker, finder or similar consultant has acted
        on its behalf in connection with this Agreement or the transaction contemplated
        by this Agreement. Seller represents to Purchaser that no broker, finder
        or
        similar consultant has acted on its behalf in connection with this Agreement
        or
        the transaction contemplated by this Agreement. At Closing, Seller shall
        pay to
        Purchaser’s Broker a commission pursuant to a separate agreement. Purchaser and
        Seller each shall indemnify and hold the other harmless from claims made
        by any
        broker, finder or similar consultant claiming through it for a commission,
        fee
        or compensation in connection with this Agreement or the transaction
        contemplated by this Agreement, and such indemnity shall survive Closing
        without
        limitation as to time. The indemnification obligations set forth in this
        Section 11.5 shall survive Closing or any termination of this
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      11.6 Confidentiality.
        Purchaser and Seller shall each maintain as confidential any and all information
        and material obtained about the other which is furnished to it by the other
        in
        connection with this Agreement, and such obligation shall survive any
        termination of this Agreement and shall survive Closing for a period of one
        (1)
        year. Purchaser and Seller shall each maintain as confidential the terms
        of this
        Agreement and such obligation shall survive any termination of this Agreement,
        but shall terminate at Closing. Purchaser shall maintain as confidential
        any and
        all information and material about the Property which is furnished to it
        by or
        on behalf of Seller, and such obligation shall survive any termination of
        this
        Agreement but shall terminate at Closing. Confidential information shall
        not
        include information and material which (i) becomes generally available to
        the
        public other than as a result of a disclosure prohibited by this
        Section 11.6, (ii) is known to Purchaser or Seller, as the case may
        be, on a non-confidential basis, prior to its receipt of such information
        and
        material from the other party, or (iii) becomes available to Purchaser or
        Seller, as the case may be, on a non-confidential basis from a source other
        than
        the other party which is not prohibited from disclosing the same.
        Notwithstanding the foregoing, (i) each of Purchaser and Seller may
        disclose confidential information to its employees, agents or advisors, and
        to
        potential investors or lenders, in each case on a need-to-know basis after
        the
        recipients of the information have been informed of the confidential nature
        of
        such information and directed not to disclose such information except in
        accordance with this Section 11.6, (ii) each of Purchaser and Seller
        may disclose confidential information to the extent required by applicable
        law
        or the rules of any applicable securities exchange, and (iii) Purchaser and
        Seller, following prior notice to and consultation with the other, may disclose
        the transaction contemplated by this Agreement to the extent necessary to
        obtain
        consents or approvals contemplated by this Agreement.

       

      11.7 Bulk
        Sales Compliance. Seller
        and Purchaser acknowledge that they do not intend to comply with and have
        agreed
        to waive the provisions of any statutory bulk sale or similar requirements
        applicable to the transactions contemplated by this Agreement, and Seller
        and
        Purchaser agree to rely upon the adjustment provisions of this Agreement
        to
        address any matters that would otherwise be subject to such bulk sale
        requirements.

       

      11.8 Public
        Announcements.
        Prior to
        Closing, each party shall notify the other and provide the other with an
        opportunity to comment on any proposed form of press release or other written
        disclosure with respect to this Agreement or the transactions contemplated
        by
        this Agreement not less than twenty-four (24) hours prior to such proposed
        disclosure.

       

      11.9 Recordation.
        Neither
        Seller nor Purchaser shall record this Agreement or any notice of this Agreement
        in the land records of any jurisdiction.

       

      11.10 Time
        of Essence.
        Time is
        of the essence with respect to the performance of all obligations, and the
        exercise of all rights, of Seller and Purchaser under this
        Agreement.

       

      11.11 Rule
        Against Perpetuities.
        Notwithstanding any other provision in this Agreement, Closing shall occur,
        if
        at all, prior to the date that is twenty-one (21) years following the death
        of
        the survivor of George W. Bush and Laura Bush and the now living children
        of
        said persons.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      11.12 Like-Kind
        Exchanges. 

       

      11.12.1 Notwithstanding
        anything contained herein to the contrary, Purchaser acknowledges that Seller
        may designate the Property as relinquished property to consummate a like-kind
        exchange or reverse like-kind exchange under Section 1031 of the Code (an
“Exchange”) with respect to property that Seller will acquire either prior to or
        within one hundred eighty (180) days after Closing (the “Replacement Property”).
        In the event that Seller designates the Property as relinquished property
        to
        consummate an Exchange with respect to the Replacement Property through the
        use
        of a qualified intermediary (“Intermediary”) and/or an Exchange Accommodation
        Titleholder (“EAT”), Purchaser shall cooperate in structuring the transaction as
        an Exchange for the benefit of Seller and Purchaser agrees to render all
        required performance under this Agreement to either the Intermediary or the
        EAT
        (either the Intermediary or the EAT referred to herein as the “1031 Assignee”)
        to the extent reasonably directed by Seller and to accept performance of
        all of
        Seller’s obligations by the 1031 Assignee. Purchaser agrees that performance by
        the 1031 Assignee will be treated as performance by Seller, and Seller agrees
        that Purchaser’s performance to the 1031 Assignee will be treated as performance
        to Seller. No assignment of rights under this Agreement to a 1031 Assignee
        shall
        effect a release of Seller from obligations under this Agreement.

       

      11.12.2 Notwithstanding
        anything contained herein to the contrary, Seller acknowledges that Purchaser
        may designate the Property as replacement property to consummate an Exchange
        with respect to property that Seller will relinquish either prior to or within
        one hundred eighty (180) days after Closing (the “Relinquished Property”). In
        the event that Purchaser designates the Property as replacement property
        to
        consummate an Exchange with respect to the Relinquished Property through
        the use
        of a 1031 Assignee, Seller shall cooperate in structuring the transaction
        as an
        Exchange for the benefit of Purchaser and Seller agrees to render all required
        performance under this Agreement to such 1031 Assignee to the extent reasonably
        directed by Purchaser and to accept performance of all of Purchaser’s
        obligations by the 1031 Assignee. Seller agrees that performance by the 1031
        Assignee will be treated as performance by Purchaser, and Purchaser agrees
        that
        Seller’s performance to the 1031 Assignee will be treated as performance to
        Purchaser. No assignment of rights under this Agreement to a 1031 Assignee
        shall
        effect a release of Purchaser from obligations under this
        Agreement.

       

      11.13 Liability
        of Parties.

       

      11.13.1 Fee
        Owner
        and Leasehold
        Owner
        shall be jointly and severally liable for all obligations of Seller under
        this
        Agreement.

       

      11.13.2 BNA
        is
        guarantying certain obligations of Purchaser under this Agreement, as and
        to the
        extent set forth in the Joinder of BNA attached to this Agreement.

       

       

      [Signatures
        on following page]

      
        
          -
            -

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF,
        Seller
        and Purchaser have caused this Agreement to be executed as of the Contract
        Date.

       

      SELLER:

       

      CESC
        Mall
        Land L.L.C., a Delaware limited liability company

       

      

       

      By:
        /s/Mitchell N. Schear

      Name:
        Mithchell N. Schear   

      Its:
        President, CSCR   

      

       

      CESC
        Mall
        L.L.C., a Virginia limited liability company

       

      

       

      By:   

      Name:   

      Its:   

      

       

      PURCHASER:

       

      BNA
        Washington Inc., a Delaware corporation

      

      By:
        /s/ Elizabeth Brown  

      Name:
        Elizabeth Brown

      Its:
        President,  BNA Washington Inc.   

      

      

      By:
        /s/George J. Korphage   

      Name:
        George J. Korphage   

      Its:
        Chairman of the Board, BNA Washington Inc.   

      
        
          -
            -

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      JOINDER
        OF ESCROW AGENT

       

      The
        undersigned is joining this Agreement to evidence its agreement to receive,
        hold
        and disburse the Deposit in accordance with the terms of the
        Agreement.

       

      Commonwealth
        Land Title Insurance Company

       

      

      By:   

      Name:   

      Its:   

      
        
          -
            -

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      JOINDER
        OF BNA

       

      The
        undersigned hereby guaranties the prompt and full payment to Seller of all
        amounts due and payable by Purchaser pursuant to Section 8.2 of the
        foregoing Agreement of Purchase and Sale. Such guaranty is absolute and
        unconditional, is a guaranty of payment and performance and not of collection,
        and shall survive any termination of this Agreement.

       

      The
        Bureau of National Affairs, Inc., a Delaware corporation

       

      By:   

      Name:   

      Its:   

      

      

      By:   

      Name:   

      Its:   

       

      

       

      

      
        
          
            1395009_22.DOC

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            

          

        

      

       

      Schedules
        and Exhibits

       

      

      
        	
                Schedules

              	 
	
                1.1.6

              	
                Description
                  of BNA Lot

              
	
                1.1.43

              	
                Description
                  of Hotel Parcel

              
	
                1.1.55

              	
                Description
                  of Office Parcel

              
	
                3.5

              	
                Pending
                  Actions

              
	
                3.8

              	
                Environmental
                  Reports

              
	
                3.10

              	
                Leases

              
	
                5.2.1

              	
                Title
                  Commitment

              
	
                5.7.4

              	
                Depiction
                  of G-1 Premises

              
	
                7.1.2.1

              	
                Accelerated
                  Closing - Additional Terms

              
	
                7.1.2.2

              	
                Extended
                  Closing - Additional Terms

              
	
                8.2.2

              	
                Base
                  Building Renovations

              
	 	 
	
                Exhibits

              	 
	
                A

              	
                Work
                  Agreement

              
	
                B

              	
                Form
                  of Deed

              
	
                C

              	
                Form
                  of Bill of Sale

              
	
                D

              	
                Form
                  of Assignment

              
	
                E

              	
                Form
                  of Management Agreement

              
	
                F

              	
                Form
                  of Reserved Rights Agreement

              
	
                G

              	
                Terms
                  of Supplemental REA

              
	
                H

              	
                Form
                  of Letter of Credit

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