Document:

exhibit106.htm - Generated by SEC Publisher for SEC Filing

Exhibit 10.6

 

AGREEMENT OF SALE AND PURCHASE

THIS AGREEMENT OF SALE AND PURCHASE ("Agreement")
made this ____ day of April, 2014 by and between M-C CAPITOL ASSOCIATES L.L.C.,
a limited liability company organized under the laws of the State of Delaware, having
an address c/o Mack-Cali Realty Corporation, 343 Thornall Street, Edison, New
Jersey 08837 ("Seller") and ETRE Property A-1, LLC, a limited
liability company organized under the laws of the State of Delaware, having an
address at c/o ETRE Financial, LLC, 44 Wall Street, New York, NY 10005 ("Purchaser"). 

In consideration of the mutual promises, covenants, and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:

ARTICLE I 

DEFINITIONS

Section 1.1           
Definitions.  For purposes of this Agreement, the
following capitalized terms have the meanings set forth in this
Section 1.1:

"Approved Title Conditions"  has
the meaning ascribed to such term in Section 2.2.

"Assignment"  has the meaning
ascribed to such term in Section 10.3(d) and shall be in the form attached
hereto as Exhibit A. 

"Assignment of Leases"  has the
meaning ascribed to such term in Section 10.3(c) and shall be in the form
attached hereto as Exhibit B. 

"Authority" or "Authorities" 
means the various federal, state, district and local governmental and
quasi-governmental bodies or agencies having jurisdiction over the Real
Property and Improvements, or any portion thereof. 

"Bill of Sale"  has the meaning
ascribed to such term in Section 10.3(b) and shall be in the form attached
hereto as Exhibit C. 

"Business Day"  means any day other
than a Saturday, Sunday or a day on which national banking associations are
authorized or required to close.

"Certificate as to Foreign Status" 
has the meaning ascribed to such term in Section 10.3(g) and shall be in
the form attached as Exhibit H. 

"Certifying Person"  has the
meaning ascribed to such term in Section 4.1(a).

"Closing"  means the consummation
of the purchase and sale of the Property contemplated by this Agreement, as
provided for in Article X.

"Closing Date"  means the date on
which the Closing of the transaction contemplated hereby actually occurs. 

 

 

 

"Closing Statement" 
has the meaning ascribed to such term in Section 10.4(b).

"Closing Surviving Obligations"  means
the rights, liabilities and obligations set forth in Sections 3.2, 4.1, 5.1(e),
5.2, 8.1(a), 8.1(b), 8.1(c) 8.1(d), 8.1(f), 8.1(h), 8.1(i), 8.1(n), 8.2, 8.3,
10.4, 10.5, 10.6, Article XI, the last sentence of Section 13.1, Article XII, Article
XIV, Article XVI, Article XVII, and any other provisions which
pursuant to their terms survive the Closing hereunder.

"Code"  has the meaning ascribed to
such term in Section 4.1.

"Deed"  has the meaning ascribed to
such term in Section 10.3(a).

"Delinquent Rental"  has the
meaning ascribed to such term in Section 10.4(c). 

"Documents"  has the meaning ascribed
to such term in Section 5.1(a).

"Due Diligence"  has the meaning
ascribed to such term in Section 5.1(a).

"Effective Date"  means the latest
date on which this Agreement has been executed and delivered by Seller or
Purchaser.

"Encumbrance" means any security
interest, lien, charge, claim, pledge, equitable interest,  option, mortgage,
right of way, easement, encroachment, servitude, lease,  right of first option,
right of first refusal or similar restriction, including any restriction on
use, transfer, receipt of income or exercise of any other attribute of
ownership, or any other encumbrance on title to the Property of any kind.

"Environmental Laws"  means each
and every federal, state, district, county and municipal statute, ordinance,
rule, regulation, code, order, requirement, directive, binding written
interpretation and binding written policy pertaining to Hazardous Substances
issued by any Authorities and in effect as of the date of this Agreement with
respect to or which otherwise pertains to or affects the Real Property or the
Improvements, or any portion thereof, the use, ownership, occupancy or
operation of the Real Property or the Improvements, or any portion thereof, or
Purchaser, and as same have been amended, modified or supplemented from time to
time prior to the Effective Date, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. § 9601 et seq.), the Hazardous Substances Transportation Act (49
U.S.C. § 1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §
6901 et seq.), as amended by the Hazardous and Solid Wastes Amendments of 1984,
the Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking
Water Act (42 U.S.C. § 300f et seq.), the Clean Water Act (33 U.S.C. § 1321 et
seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal
Act (42 U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. §
2601 et seq.), the Emergency Planning and Community Right-to-Know Act of 1986
(42 U.S.C. § 11001 et seq.), the Radon Gas and Indoor Air Quality Research Act
of 1986 (42 U.S.C. § 7401 et seq.), the National Environmental Policy Act (42
U.S.C. § 4321 et seq.), the Superfund Amendment Reauthorization Act of 1986 (42
U.S.C. § 9601 et seq.), the Occupational Safety and Health Act (29 U.S.C. § 651
et seq.) (collectively, the “Environmental Statutes”), and any
and all rules and regulations which have become
effective prior to the date of this Agreement under any and all of the
Environmental Statutes. 

 

 

 

“Escrow Agent” means Old Republic National
Title Insurance Company, having an office at 331 Madison Avenue, 9th
Floor, New York, NY 10017.

"ETRE REIT" means ETRE REIT, LLC,
a Delaware series limited liability company.

"Existing Survey"  means Seller's
existing survey of the Real Property dated March 2, 1992 and
revised through June 28, 1999, prepared by Bernard F. Locraft, Civil Engineers.

"Executive Order"  has the meaning
ascribed to such term in Section 8.1(p).

"Governmental Regulations"  means
all statutes, ordinances, rules and regulations of the Authorities applicable
to Seller or the use or operation of the Real Property or the Improvements or
any portion thereof.

"Hazardous Substances"  means
(a) asbestos, radon gas and urea formaldehyde foam insulation,
(b) any solid, liquid, gaseous or thermal contaminant, including smoke
vapor, soot, fumes, acids, alkalis, chemicals, petroleum products or
byproducts, polychlorinated biphenyls, phosphates, lead or other heavy metals
and chlorine, (c) any solid or liquid waste (including, without
limitation, hazardous waste), hazardous air pollutant, hazardous substance,
hazardous chemical substance and mixture, toxic substance, pollutant,
pollution, regulated substance and contaminant or any other term or expression
intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including, without limitation,
harmful properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity," or
"EP toxicity" or words of similar import under any applicable
Environmental Laws), (d) any radioactive materials; and (e) any other
chemical, material or substance, the use or presence of which, or exposure to
the use or presence of which, is prohibited, limited or regulated by any
Environmental Laws. 

"Improvements"  means all
buildings, structures, fixtures, parking areas and other improvements located
on the Real Property.

"Initial Objection Date"  has the
meaning ascribed to such term in Section 6.1(d).

"Initial Title Objection"  has the
meaning ascribed to such term in Section 6.1(d).

"IPO  " has the meaning ascribed to
such term in Section 9.1(a).

"IRS"  means the United States
Internal Revenue Service.

"Laws"  has the meaning ascribed to
such term in Section 8.1(j).

"Lease Schedule"  has the meaning
ascribed to such term in Section 5.1(a) and is attached as Exhibit F-1. 

“Leases” means all of the leases and other
agreements with Tenants with respect to the use and occupancy of the Property,
together with all renewals and modifications thereof, if any, all guaranties thereof, if any, and any new leases and
lease guaranties entered into after the Effective Date to the extent permitted
by Section 7.1(b).

 

 

 

"Licenses and Permits"  means,
collectively, any and all licenses, permits, certificates of occupancy,
approvals, authorizations, dedications, subdivision maps and entitlements now
or hereafter issued, approved or granted by the Authorities in connection with
the Property, together with all renewals and modifications thereof.

"Major Tenant" means any Tenant
leasing 8,000 rentable square feet or more of space at the Property, in the
aggregate. 

"Mortgage Loan"  has the meaning
ascribed to such term in Section 9.1(a).

"Mortgagee Title Policy"  has the
meaning ascribed to such term in Section 10.5(b).

“New Leasing Costs” has the meaning ascribed
to such term in Section 10.4(f).

"OFAC"  has the meaning ascribed to
such term in Section 8.1(p).

"Operating Expenses" has the
meaning ascribed to such term in Section 10.4(d).

"Personal Property"  means all tenant
correspondence files relating to the Property and all of Seller's right, title
and interest in and to all equipment, appliances, tools, supplies, machinery,
artwork, furnishings and other tangible personal property attached to,
appurtenant to, located in and used exclusively in connection with the
ownership or operation of the Improvements including, but not limited to, the personalty
described on Exhibit J annexed hereto and made a part hereof, but
specifically excluding all personal property leased by Seller or owned by
tenants or others.

"Prohibited Person"  has the
meaning ascribed to such term in Section 8.1(p).

"Property"  has the meaning
ascribed to such term in Section 2.1.

"Proration Items"  has the meaning
ascribed to such term in Section 10.4(a).

"Proration Time"  has the meaning
ascribed to such term in Section 10.4(a).

"Purchase Price"  has the meaning
ascribed to such term in Section 3.1.

"Purchaser's Affiliates"  means any past, present or future: (i) shareholder,
partner, member, manager or owner of Purchaser; (ii) entity in which
Purchaser has an interest; (iii) entity that, directly or indirectly,
controls, is controlled by or is under common control with Purchaser and
(iv) successors and assigns of any or all of the foregoing.

"Purchaser's Costs"  has the meaning
ascribed to such term in Section 3.3.

"Purchaser's Documents"  has the
meaning ascribed to such term in Section 8.2(b).

"Purchaser's Information"  has the
meaning ascribed to such term in Section 5.3(c).

 

 

 

"Real Property" 
means that certain parcel or parcels of real property located at 1201
Connecticut Avenue N.W., in the District of Columbia, as more particularly
described on the legal description attached hereto and made a part hereof as Exhibit
D, together with all of Seller's right, title and interest, if any, in
and to the appurtenances pertaining thereto, including but not limited to
Seller's right, title and interest in and to any adjacent streets, alleys and
right-of-ways, and any declarations, easement rights, air rights, subsurface
rights, development rights and water rights.

"Rental"  has the meaning ascribed
to such term in Section 10.4(c), and same are "Delinquent" in
accordance with the meaning ascribed to such term in Section 10.4(c).

"Scheduled Closing Date"  means April
30, 2014 or such later or earlier date to which Purchaser and Seller may
hereafter agree in writing.

"SEC"  has the meaning ascribed to
such term in Section 12.1.

"Section 1031 Exchange"  has the
meaning ascribed to such term in Section 10.7.

"Security Deposits"  means all
security deposits held by Seller, as landlord (together with any interest which
has accrued thereon, but only to the extent such interest has accrued for the
account of the Tenant).

"Service Contracts"  means all
service agreements, maintenance contracts, equipment leasing agreements, construction
contracts, and other contracts for the provision of labor, services, materials
or supplies relating solely to the Real Property, Improvements or Personal
Property and under which Seller is currently paying for services rendered solely
in connection with the Property, as listed and described on Exhibit E
attached hereto and made as part hereof, together with all renewals,
supplements, amendments and modifications thereof, and any new such agreements
entered into after the Effective Date, to the extent permitted by
Section 7.1.

"Seller's Affiliates"  means any:
(i) shareholder, partner, member, manager or owner of Seller;
(ii) entity in which Seller or any shareholder, partner, member, manager
or owner of Seller has or had an interest; (iii) entity that, directly or
indirectly, controls, is controlled by or is under common control with Seller
and (iv)  heirs, executors, administrators, personal or legal
representatives, successors and assigns of any or all of the foregoing.

"Seller's Documents " has the
meaning ascribed to such term in Section 8.1(b).

"Subsequent Objection Date"  has
the meaning ascribed to such term in Section 6.1(d).

"Subsequent Title Objection"  has
the meaning ascribed to such term in Section 6.1(d).

"Survey Update"  has the meaning
ascribed to such term in Section 8.1(v).

"Tax" and "Taxes" 
means all federal, state, county, local, foreign, and other taxes, and all
deficiencies, or other additions to tax, such as interest, fines and penalties
relating thereto.

"Tax Returns " has the meaning
ascribed to such term in Section 8.1(v).

 

 

 

"Tenants" 
means the tenants or occupants of the Real Property and Improvements who are
parties to the Leases.

"Tenant Notice Letters"  has the
meaning ascribed to such term in Section 10.2(e), and are to be delivered
by Purchaser to Tenants pursuant to Section 10.6.

"Termination Surviving Obligations" 
means the rights, liabilities and obligations set forth in Sections 5.1(b),
5.1(d), 5.1(e), 5.2, Articles XII, XIII,  XIV, XVI and XVII and any other
provisions which pursuant to their terms survive any termination of this
Agreement.

"Title Commitment" has the meaning
ascribed to such term in Section 6.1(a).

"Title Company"  means (i) Old
Republic National Title Insurance Company, having an office at 331 Madison
Avenue, 9th Floor, New York, NY 10017, and (ii) Title Associates, a
division of Stewart Title Insurance Company, having an office at 825 Third
Avenue, 30th Floor, New York, NY 10022.

"Title Defect"  has the meaning
ascribed to such term in Section 6.2.

"Title Objection"  has the meaning
ascribed to such term in Section 6.1(d).

"Title Policy"  has the meaning
ascribed to such term in Section 6.1(c).

"To Seller's
Knowledge",  “To the Knowledge of Seller” or 
“Seller has no Knowledge” refers to the present actual (as opposed to
constructive or imputed) knowledge solely of Laurence Fedorka, Director of Property Management of, and Michael Hueston, Property
Manager for Mack-Cali Realty Corporation, the general partner of
Mack-Cali Realty, L.P., the sole owner of common shares of stock in Mack-Cali
Property Trust, the sole member of Seller, without any inquiry or investigation
of any kind, except where expressly provided herein to the contrary.  Seller
hereby acknowledges that (i) Laurence Fedorka and Michael Hueston are the
primary Seller representatives having direct knowledge of the operation and
condition of the Property and the facts and circumstances with respect to which
the representations and warranties are made in this Agreement, and (ii) Laurence
Fedorka has been assigned to this Property since August, 2005 and Michael
Hueston has been assigned to this Property since August, 1999, when Seller
acquired the Property.

"Warranties"  has the meaning
ascribed to such term in 2.1(h).

Section 1.2           
References: Exhibits and Schedules.   Except as
otherwise specifically indicated, all references in this Agreement to Articles
or Sections refer to Articles or Sections of this Agreement, and all references
to Exhibits or Schedules refer to Exhibits or Schedules attached hereto, all of
which Exhibits and Schedules are incorporated into, and made a part of, this
Agreement by reference. The words "herein," "hereof,"
"hereinafter" and words and phrases of similar import refer to this
Agreement as a whole and not to any particular Section or Article.

ARTICLE II 

AGREEMENT OF PURCHASE AND SALE

 

 

 

 

Section 2.1           
Agreement.   Seller hereby agrees to sell, convey and
assign to Purchaser, and Purchaser hereby agrees to purchase and accept from
Seller, on the Closing Date and subject to the terms and conditions of this
Agreement, all of the following (collectively, the "Property"): 

(a)               
the Real Property;

(b)              
the Improvements;

(c)               
the Personal Property;

(d)             
all of Seller’s right, title and interest, if any, in and to any land
lying in the bed of any street, road or avenue opened or proposed, in front of
or adjoining the Real Property, to the center line thereof and all strips and
gores adjoining the Real Property or any part thereof;

(e)              
all of Seller’s right, title and interest, if any, to use and occupancy
of vaults, if any, under the sidewalks or streets abutting the Real Property;

(f)               
all of Seller's right, title and interest as lessor in and to the Leases
and, subject to the terms of the respective applicable Leases, the Security
Deposits;

(g)              
to the extent assignable, all of Seller's right, title and interest in
and to the Service Contracts and the Licenses and Permits;

(h)              
all of Seller’s right, title and interest in any transferable warranties
and guarantees of contractors, materialmen and mechanics who may have furnished
labor and/or materials to the Property (the "Warranties"); 

(i)                
all of Seller’s right, title and interest, if any, in and to the
building plans and specifications and site plans for the Property in Seller’s
possession or subject to Seller's control;

(j)                
all of Seller’s right, title and interest, if any, to any equipment,
telephone systems, technology equipment, security systems and signage attached
or appurtenant to the Real Property or the Improvements and, including without
limitation, (a) that are used in connection with the operation or maintenance
of the Property, and (b) any rights to the telephone exchanges currently in use
at the Improvements, but excluding all equipment, telephone systems, technology
equipment, security systems, telephone exchanges and signage that are owned by
a Tenant;

(k)              
all of Seller's right, title and interest, to the extent assignable or
transferable, in and to all other intangible rights, titles, interests,
privileges, appurtenances and tradenames or other identifying names or marks, owned
by Seller and related to or used exclusively in connection with the ownership,
use or operation of the Real Property or the Improvements but excluding any and
all rights to the name “Mack-Cali” or the logo of Mack-Cali Realty Corporation;
and

(l)                
all other rights and benefits running with the Real  Property.

Section 2.2           
Approved Title Conditions.   Seller shall convey and
Purchaser shall accept fee simple title to the Property, subject only to the
following (collectively, "Approved Title Conditions"
and individually, each an “Approved Title Condition”): 

 

 

 

 

(i)                
zoning regulations and zoning ordinances of the District of Columbia;

(ii)              
consents of record by Seller or any former owner of the Property for the
erection of any structure or structures on, under or above any street or
streets on which the Property may abut, provided that none of such consents
impose any monetary obligations on the owner of the Property or prohibit or
interfere with the use of the Property, the existence of the Improvements, or
any portion thereof;

(iii)            
rights whether or not of record of utility companies to lay, maintain,
install and repair pipes, lines, poles, conduits, cable boxes and related
equipment on, over and under the Property, provided that none of such rights
impose any monetary obligations on the owner of the Property or prohibit or
interfere with the use of the Property, the existence of the Improvements, or any
portion thereof;

(iv)            
projections and encroachments over any street or highway of stoops,
areas, cellar steps, trim cornices, lintels, window sills, awnings, canopies,
ledges, fences, hedges, doors, water tables, stand pipes, coal chutes, trim,
sidewalk elevators, fire escapes, coping and retaining walls projecting from
the Property and encroachments of similar elements projecting from adjoining
property over the Property, provided that same do not prohibit or interfere
with the use of the Property, the existence of the Improvements, or any portion
thereof, and Purchaser's title company insures against loss resulting from the
required removal of any such encroachments that project from the Property;

(v)              
covenants, easements, restrictions, agreements and consents of record,
provided that the same do not prohibit or interfere with the use of the
Property, the existence of the Improvements or any portion thereof, or render
title uninsurable in accordance with Section 6.2;

(vi)            
assessments, real estate taxes, vault charges and water and sewer
charges which are assessed, but not due and payable as of the Closing Date or which
are adjusted as provided elsewhere in this Agreement; 

(vii)          
the Leases set forth on the Lease Schedule or as otherwise permitted by
the terms and conditions of this Agreement; and

(viii)        
the state of facts shown on the Existing Survey;

(ix)            
Updated Survey which do not constitute Title Defects or which are waived
by Purchaser pursuant to Section  6.2.     

(x)              
all exceptions to title to the Real Property raised by the Title Company
in the Title Commitment which do not constitute Title Defects or which are waived
by Purchaser pursuant to Section  6.2.    

 

 

 

 

Section 2.3           
Indivisible Economic Package.   Purchaser has no right
to purchase, and Seller has no obligation to sell, less than all of the
Property, it being the express agreement and understanding of Purchaser and
Seller that, as a material inducement to Seller and Purchaser to enter into
this Agreement, Purchaser has agreed to purchase, and Seller has agreed to
sell, all of the Property, subject to and in accordance with the terms and
conditions hereof.

 

 

 

ARTICLE III 

CONSIDERATION

Section 3.1           
Purchase Price.   The purchase price for the Property
(the "Purchase Price") shall be Eighty-Five Million One
Hundred Twenty Five Thousand Dollars ($85,125,000.00) in lawful currency of the
United States of America, payable as provided in Section 3.3.

Section 3.2           
Allocation of Purchase Price.   Purchaser and
Seller agree that no portion of the Purchase Price shall be allocated to the
Personal Property. 

Section 3.3 Method of Payment of Purchase
Price.   No later than 1:00 p.m. Eastern time on the Scheduled Closing
Date, Purchaser shall pay the Purchase Price, together with all other costs and
amounts to be paid by Purchaser at the Closing pursuant to the terms of this
Agreement ("Purchaser's Costs"), by Federal Reserve
wire transfer of immediately available funds to the account of Escrow Agent. 
Escrow Agent, following authorization by the parties prior to 3:00 p.m. Eastern
Time on the Scheduled Closing Date, shall (i) pay to Seller by Federal
Reserve wire transfer of immediately available funds to an account designated
by Seller, the Purchase Price, less any costs or other amounts to be paid by
Seller at Closing pursuant to the terms of this Agreement, (ii) pay to the
appropriate payees out of the proceeds of Closing payable to Seller all costs
and amounts to be paid by Seller at Closing pursuant to the terms of this
Agreement, and (iii) pay Purchaser's Costs to the appropriate payees at
Closing pursuant to the terms of this Agreement. Escrow Agent shall be entitled
to rely on any instrument or signature reasonably believed by it to be genuine
and it may assume that any person purporting to give any writing, notice or
instruction in connection with this Agreement is duly authorized to do so.
Escrow Agent shall not be liable in connection with the performance of any
duties imposed upon the Escrow Agent by the provisions of this Agreement,
except by reason of the Escrow Agent's gross negligence or willful default.
Escrow agent shall not be liable for any default or insolvency on the part of
said bank in which said funds are deposited in accordance with written
instructions of Seller and Buyer.        Seller and Purchaser jointly and
severally agree to defend (by attorneys selected by Escrow Agent), indemnify
and hold Escrow Agent harmless from and against all costs, claims and expenses
(including reasonable attorney’s fees) incurred in connection with the
performance of Escrow Agent’s duties hereunder, except with respect to actions
or omission taken or suffered by Escrow Agent in bad faith or in willful
disregard of this contract or involving gross negligence on the part of Escrow
Agent.

 

 

 

 

ARTICLE IV 

designation of certifying person

Section 4.1           
Designation of Certifying Person.  In order to assure
compliance with the requirements of Section 6045 of the Internal Revenue
Code of 1986, as amended (the “Code”), and any related reporting
requirements of the Code, the parties hereto agree as follows:

(a)                  
In the event that the Closing occurs, Escrow Agent agrees to assume all
responsibilities for information reporting required under Section 6045(e)
of the Code, and Seller and Purchaser hereby designate the Escrow Agent as the
person to be responsible for all information reporting under
Section 6045(e) of the Code (the “Certifying Person”). 
 

(b)              
Seller and Purchaser each hereby agree:

(i)                
to provide to the Certifying Person all information and certifications
regarding such party, as reasonably requested by the Certifying Person or
otherwise required to be provided by a party to the transaction described
herein under Section 6045 of the Code; and

(ii)              
to provide to the Certifying Person such party's taxpayer identification
number and a statement (on IRS Form W-9 or an acceptable substitute form, or on
any other form the applicable current or future Code sections and regulations
might require and/or any form requested by the Certifying Person), signed under
penalties of perjury, stating that the taxpayer identification number supplied
by such party to the Certifying Person is correct.

ARTICLE V 

INSPECTION OF PROPERTY

Section 5.1           
Evaluation Period.  (a)  Prior to the Effective Date,
Purchaser has had an opportunity to conduct whatever due diligence inspections,
investigations, searches, reviews, tests and sampling that it desired in
connection with its purchase of the Property (collectively, “Due
Diligence”).  As part of its Due Diligence, Purchaser and its agents
and consultants had the right to review and inspect, at Purchaser’s sole cost
and expense, all documents, materials, files, books and records that it
requested from Seller, including but not limited to the following items, which,
to Seller’s Knowledge, were in Seller’s possession or control (collectively,
the “Documents”): (i) all existing environmental reports and
studies of the Real Property (which Purchaser had the right to have updated at
Purchaser’s sole cost and expense), real estate tax bills, together with assessments
(special or otherwise), ad valorem and personal property tax bills, covering
the period of Seller’s ownership of the Property; (ii) Seller’s then current
lease schedule in the form attached hereto as Exhibit F-1 (the “Lease
Schedule”); (iii) then current operating statements; and (iv) the
Leases, Tenant correspondence files, Service Contracts, and Licenses and
Permits. For purposes of this Agreement, any answers that were e-mailed by
Seller’s representative to questions raised by Purchaser’s representatives
shall be deemed to constitute a part of the Documents. 

(b)              
Purchaser acknowledges that any and all of the Documents may be
proprietary and confidential in nature and have been provided to Purchaser
solely to assist 

 

 

 

Purchaser in determining the desirability
of purchasing the Property.  Subject only to the provisions of
Article XII, Purchaser agrees not to disclose the contents of the
Documents or any of the provisions, terms or conditions contained therein to
any party outside of Purchaser’s organization other than its agents,
consultants, attorneys, partners, accountants, investment bankers or lenders
(collectively, for purposes of this Section 5.2(b), the “Permitted
Outside Parties”).  Purchaser further agrees that within its
organization, or as to the Permitted Outside Parties, the Documents will be
disclosed and exhibited only to those persons within Purchaser’s organization
or to those Permitted Outside Parties who are responsible for completing
Purchaser’s acquisition of the Property.  Purchaser further acknowledges that
the Documents and other information relating to the leasing arrangements
between Seller and Tenants are proprietary and confidential in nature.  Until
after the Closing, Purchaser agrees not to divulge the contents of such and
other information except in strict accordance with the confidentiality
standards set forth in this Section 5.2 and Article XII.  In
permitting Purchaser and the Permitted Outside Parties to review the Documents
and other information to assist Purchaser, Seller has not waived any privilege
or claim of confidentiality with respect thereto, and no third party benefits
or relationships of any kind, either express or implied, have been offered,
intended or created by Seller, and any such claims are expressly rejected by
Seller and waived by Purchaser and the Permitted Outside Parties, for whom, by
its execution of this Agreement, Purchaser is acting as an agent with regard to
such waiver.  Notwithstanding anything to the contrary contained in this
Agreement, Seller acknowledges and agrees that ETRE REIT and its affiliates
shall be permitted to disclose the transaction contemplated by this Agreement,
the terms, conditions, and negotiations concerning the same and information
relating to the Property in connection with the IPO and in filings with the Securities
and Exchange Commission (the "SEC") in connection
therewith. Seller agrees to use commercially reasonable efforts to assist Purchaser
and ETRE REIT in connection with the information regarding the Property to be
included in such SEC filings and to use commercially reasonable efforts to provide
access to Sellers’ information reasonably required in connection thereto. In
that regard, Seller acknowledges that Series A-1 of ETRE REIT will be required
after the Closing Date to comply with certain periodic reporting requirements
of the SEC in respect of the Series A-1 of ETRE REIT, the Property and the
transaction contemplated by this Agreement; accordingly, Seller agrees to use
commercially reasonable efforts to comply with the provisions set forth in Exhibit I 
attached hereto and made a part hereof in order to facilitate such compliance,
provided that, notwithstanding anything contained in this Agreement or in Exhibit I 
to the contrary, it is understood and agreed that Sellers will not be exposed
to any liability on account thereof. 

(c)               
Purchaser acknowledges that some of the Documents may have been prepared
by third parties and may have been prepared prior to Seller’s ownership of the
Property. PURCHASER HEREBY ACKNOWLEDGES THAT SELLER HAS NOT MADE AND DOES
NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING THE TRUTH, ACCURACY OR
COMPLETENESS OF THE DOCUMENTS OR THE SOURCES THEREOF.  EXCEPT AS OTHERWISE SET
FORTH IN SECTION 8.1, SELLER HAS NOT UNDERTAKEN ANY INDEPENDENT INVESTIGATION
AS TO THE TRUTH, ACCURACY OR COMPLETENESS OF THE DOCUMENTS AND IS PROVIDING THE
DOCUMENTS SOLELY AS AN ACCOMMODATION TO PURCHASER.

 

 

 

 

(d)              
In the event this Agreement is terminated for any reason, Purchaser
shall, at its option, promptly destroy or return to Seller all copies Purchaser
has made of the Documents and, upon written request from Seller, shall promptly
deliver to Seller a copy of any studies, reports, sampling or test results
regarding the Property or any part thereof obtained by Purchaser, before, on or
after the Effective Date, in connection with Purchaser’s Due Diligence
(collectively, “Purchaser’s Information”). 

(e)                  
Access.    Between the Effective Date and the Closing Date,
Purchaser and its representatives, agents and consultants shall be afforded
access to the Property pursuant to the terms and conditions of that certain
Right of Access Agreement dated March 5, 2014 by and between Seller and ETRE
REIT, LLC, as Entrant (the “Access Agreement”).  Purchaser 
hereby agrees to comply with, and be bound by, all of the terms and conditions
of the Access Agreement as fully as though Purchaser had been an original
signatory to the Access Agreement as Entrant thereunder, and all of the terms
and conditions of the Access Agreement are incorporated herein by reference;
provided, however, that Seller and Purchaser agree that (i) Section 11 of the
Access Agreement is hereby replaced with Article XIV of this Agreement, and
(ii) Section 12 of the Access Agreement is hereby deleted, and the term of the
Access Agreement shall be coterminous with this Agreement.   All obligations
imposed upon Entrant pursuant to the Access Agreement (except for those
obligations set forth in Section 5 thereof) shall survive the earlier of the termination
of this Agreement or the Closing hereunder. 

Section 5.2           
Sale "As Is".   THE TRANSACTION CONTEMPLATED
BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND PURCHASER. THIS
AGREEMENT REFLECTS THE MUTUAL AGREEMENT OF SELLER AND PURCHASER, AND THAT
PURCHASER HAS HAD THE RIGHT TO CONDUCT ITS OWN INDEPENDENT EXAMINATION OF THE
PROPERTY. OTHER THAN THE MATTERS REPRESENTED IN SECTION 8.1 HEREOF, BY
WHICH ALL OF THE FOLLOWING PROVISIONS OF THIS SECTION 5.2 ARE LIMITED,
PURCHASER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR
INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ANY OF SELLER'S AGENTS
OR REPRESENTATIVES, AND PURCHASER HEREBY ACKNOWLEDGES THAT NO SUCH
REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE.

OTHER THAN THE MATTERS REPRESENTED IN SECTION 8.1
HEREOF, BY WHICH ALL OF THE FOLLOWING PROVISIONS OF THIS SECTION 5.2 ARE
LIMITED, SELLER SPECIFICALLY DISCLAIMS, AND NEITHER SELLER NOR ANY OF SELLER’S
AFFILIATES NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION, WARRANTY OR ASSURANCE
WHATSOEVER TO PURCHASER, AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER, EITHER EXPRESS OR IMPLIED, ARE MADE BY SELLER OR RELIED UPON BY
PURCHASER WITH RESPECT TO THE STATUS OF TITLE TO OR THE MAINTENANCE, REPAIR,
CONDITION, DESIGN OR MARKETABILITY OF THE PROPERTY, OR ANY PORTION THEREOF,
INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF PURCHASER
UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (e) ANY
CLAIM BY PURCHASER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN,
WITH RESPECT TO THE IMPROVEMENTS OR THE PERSONAL PROPERTY, (f) THE
FINANCIAL CONDITION OR PROSPECTS OF THE PROPERTY AND (g) THE COMPLIANCE OR
LACK THEREOF OF THE REAL PROPERTY OR THE IMPROVEMENTS WITH GOVERNMENTAL
REGULATIONS, INCLUDING WITHOUT LIMITATION ENVIRONMENTAL LAWS, NOW EXISTING OR HEREAFTER
ENACTED OR PROMULGATED, IT BEING THE EXPRESS INTENTION OF SELLER AND PURCHASER
THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PROPERTY WILL BE
CONVEYED AND TRANSFERRED TO PURCHASER IN ITS PRESENT CONDITION AND STATE OF
REPAIR, “AS IS” AND “WHERE IS,” WITH ALL FAULTS.  PURCHASER REPRESENTS THAT IT
IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF REAL ESTATE, AND
THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF PURCHASER'S
CONSULTANTS IN PURCHASING THE PROPERTY.  PURCHASER HAS BEEN GIVEN A SUFFICIENT
OPPORTUNITY TO CONDUCT AND HAS CONDUCTED SUCH INSPECTIONS, INVESTIGATIONS AND
OTHER INDEPENDENT EXAMINATIONS OF THE PROPERTY AND RELATED MATTERS AS PURCHASER
DEEMS NECESSARY, INCLUDING BUT NOT LIMITED TO THE PHYSICAL AND ENVIRONMENTAL  CONDITIONS
THEREOF, AND WILL RELY UPON SAME AND NOT UPON ANY STATEMENTS OF SELLER
(EXCLUDING THE LIMITED MATTERS REPRESENTED BY SELLER IN SECTION 8.1
HEREOF) NOR OF ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF SELLER.
PURCHASER ACKNOWLEDGES THAT ALL INFORMATION OBTAINED BY PURCHASER WAS OBTAINED
FROM A VARIETY OF SOURCES, AND SELLER WILL NOT BE DEEMED TO HAVE REPRESENTED OR
WARRANTED THE COMPLETENESS, TRUTH OR ACCURACY OF ANY OF THE DOCUMENTS OR OTHER
SUCH INFORMATION HERETOFORE OR HEREAFTER FURNISHED TO PURCHASER.  UPON CLOSING,
PURCHASER WILL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED
TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED
BY PURCHASER'S INSPECTIONS AND INVESTIGATIONS. PURCHASER ACKNOWLEDGES AND
AGREES THAT, UPON CLOSING, SELLER WILL SELL AND CONVEY TO PURCHASER, AND
PURCHASER WILL ACCEPT THE PROPERTY, “AS IS, WHERE IS,” WITH ALL FAULTS.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL AGREEMENTS,
WARRANTIES OR REPRESENTATIONS COLLATERAL TO OR AFFECTING THE PROPERTY BY
SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. SELLER IS NOT LIABLE OR BOUND
IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION
PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE
OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO
HEREIN. PURCHASER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE “AS IS,
WHERE IS” NATURE OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER
ADVERSE MATTERS THAT MAY BE ASSOCIATED WITH THE PROPERTY.  PURCHASER, WITH 

 

 

 

PURCHASER’S COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS
AND WAIVERS SET FORTH IN THIS AGREEMENT AND UNDERSTANDS THEIR SIGNIFICANCE AND
AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH HEREIN ARE AN
INTEGRAL PART OF THIS AGREEMENT, AND THAT SELLER WOULD NOT HAVE AGREED TO SELL
THE PROPERTY TO PURCHASER FOR THE PURCHASE PRICE WITHOUT THE DISCLAIMERS AND
OTHER AGREEMENTS SET FORTH IN THIS AGREEMENT.

 

 

UNLESS BASED ON THE BREACH OF A REPRESENTATION IN
SECTION 8.1, PURCHASER AND PURCHASER’S AFFILIATES FURTHER COVENANT AND
AGREE NOT TO SUE SELLER AND SELLER’S AFFILIATES ON, AND RELEASE SELLER AND
SELLER’S AFFILIATES OF AND FROM, AND WAIVE, ANY CLAIM OR CAUSE OF ACTION,
INCLUDING WITHOUT LIMITATION ANY STRICT LIABILITY CLAIM OR CAUSE OF ACTION,
THAT PURCHASER OR PURCHASER’S AFFILIATES MAY HAVE AGAINST SELLER OR SELLER’S
AFFILIATES UNDER ANY ENVIRONMENTAL LAW, NOW EXISTING OR HEREAFTER ENACTED OR
PROMULGATED, RELATING TO ENVIRONMENTAL MATTERS OR ENVIRONMENTAL CONDITIONS IN,
ON, UNDER, ABOUT OR MIGRATING FROM OR ONTO THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND
LIABILITY ACT, OR BY VIRTUE OF ANY COMMON LAW RIGHT, NOW EXISTING OR HEREAFTER
CREATED, RELATED TO ENVIRONMENTAL CONDITIONS OR ENVIRONMENTAL MATTERS IN, ON,
UNDER, ABOUT OR MIGRATING FROM OR ONTO THE PROPERTY. THE TERMS AND CONDITIONS
OF THIS SECTION 5.2 WILL EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT
OR THE CLOSING, AS THE CASE MAY BE, AND WILL NOT MERGE WITH THE PROVISIONS OF
ANY CLOSING DOCUMENTS AND ARE HEREBY DEEMED INCORPORATED INTO THE DEED AS FULLY
AS IF SET FORTH AT LENGTH THEREIN.

ARTICLE VI 

TITLE AND SURVEY MATTERS

Section 6.1           
Survey; Title Commitment.  

(a)                  
Purchaser acknowledges that it has received a copy of the Existing
Survey and agrees that title to the Property shall be conveyed at Closing
subject to all matters shown on the Existing Survey.  Purchaser also
acknowledges that it has ordered for the Real Property:

(i)                                                                
from the Title Company (A) a title report (together with any amendment
thereto, the “Title Commitment”), and (B) complete and legible
copies of all recorded documents identified as exceptions in Schedule B of the
Title Commitment ("Title Exception Documents") ; and

(ii)                                                              
  an updated survey with respect to the Real Property (together with any
amendment thereto, the "Survey Update") 

 

 

 

 

(b)              
Promptly upon receipt by Purchaser, true and correct copies of the Title
Commitment and Survey Update shall be furnished to Seller.

(c)              
The Title Commitment will include the Title Company's requirements for
issuing an ALTA 1992 form owner’s and lender’s title policy (the “Title
Policy”).   

(d)             
On or before April 5, 2014 (the “Initial Objection Date”),
Purchaser shall provide Seller with written notice specifying any objection to any
exception set forth in the Title Commitment and/or the Survey Update (any such
exception, an “Initial Title Objection” and all such exceptions
collectively, the “Initial Title Objections”).  Thereafter, on or
before the date (the “Subsequent Objection Date”) which is the
earlier of (i) four (4) Business Days after Purchaser’s counsel receives
written notice of any new exception to the Title Commitment and/or receives a revision
to the Survey Update, and (ii) the Closing Date, Purchaser shall provide Seller
with written notice of any objection to such new exception or matter shown on
such revision (any such new exception or revision, a “Subsequent Title
Objection” and all such new exceptions or revisions collectively, the “Subsequent
Title Objections”  and together with any and all Initial Title Objections,
collectively, the "Title Objections"). TIME SHALL BE OF
THE ESSENSE WITH RESPECT TO THE INITIAL OBJECTION DATE AND THE SUBSEQUENT
OBJECTION DATE, AS APPLICABLE.  In the event Purchaser does not provide written
notice of an Initial Title Objection by the Initial Objection Date or a
Subsequent Title Objection by the Subsequent Objection Date, as applicable,
Purchaser shall be deemed to have accepted such exception to title or matter
shown on the Survey Update, as revised, as an Approved Title Condition.   

(e)              
Any Taxes, water rates or charges, and/or sewer rents and assessments as
to which Purchaser has provided timely written notice of objection pursuant to Section
6.1(d) above will be credited against the Purchase Price (subject to the
provision for apportionment of Taxes, water rates and sewer rents herein
contained).  If a new security interest is filed against the Real Property and
it would otherwise constitutes a valid Title Objection pursuant to Section 6.1(d)
above, such item shall not be a Title Objection if such personal property is exclusively
the property of a Tenant, and Seller executes and delivers an affidavit to such
effect. 

(f)               
If the Real Property shall be affected by any Title Objection as to
which Purchaser has provided timely written notice of objection pursuant to Section
6.1(d) above, and pursuant to the provisions of Section 6.2 below, Seller is
required to discharge or satisfy such Title Objection, Seller shall not be
required to discharge or satisfy the same of record provided the money
necessary to satisfy the lien is retained by the Title Company at Closing, and
the Title Company either omits the lien as an exception from the Title Insurance
Commitment or insures against collection thereof from out of the Real Property,
and a credit against the Purchase Price is given to Purchaser for the recording
charges for a satisfaction or discharge of such lien. 

(g)              
Any franchise, transfer, inheritance, income, corporate or other Tax
open, levied or imposed against Seller or any former owner of the Property as
to which Purchaser has provided timely written notice of objection pursuant to Section
6.1(d) above, shall be deemed to be cured if the Title Company either omits
such exception or insures against collection thereof from or out of the Real
Property, and provided further that Seller deposits with the Title Company a
sum reasonably sufficient to secure a release of the Property from the lien
thereof or provides an indemnity agreement reasonably satisfactory to the Title
Company.  After the 

 

 

 

Effective Date, if a rundown
search of title discloses judgments, bankruptcies, or other returns against
other persons having names the same as or similar to that of Seller, Seller
will deliver to Purchaser an affidavit stating that such judgments,
bankruptcies or other returns do not apply to Seller, and such search results
shall not be deemed a Title Objection.

Section 6.2           
Title Defect. 

In the event Purchaser provides
written notice of any Title Objection on or prior to the Initial Objection Date
or the Subsequent Objection Date, as applicable (collectively and individually,
a “Title Defect”), and such exception is (i) a monetary lien that
was voluntarily created by Seller in a liquidated amount, (ii) a judgment lien
against Seller, or (iii) a mechanics’ lien that is based on work for which
Seller, or an affiliate thereof, contracted, then, subject to Sections 6.1(e),
6.1(f) and 6.1(g), Seller shall remove or cause to be removed on or prior to
the Closing Date such lien at its sole cost and expense (which, if such lien is
a mechanic’s lien, may be cured by bonding in accordance with the laws of the
District of Columbia; the exceptions described in clauses (i), (ii) and (ii)
above, collectively, “Seller’s Monetary Defects”  and each such
exception, individually a “Seller’s Monetary Defect”).  In the event
that the Title Defect is a monetary lien in a liquidated amount but is not a
Seller’s Monetary Defect (each such lien, individually, a “No-Fault
Monetary Defect”  and all such liens, collectively, “No-Fault
Monetary Defects”), and the cost to Seller to remove or cause to be
removed such No-Fault Monetary Defect, in the aggregate with all other No-Fault
Monetary Defects, does not exceed $250,000.00 (such amount, the “No-Fault
Threshold”), then Seller shall remove such No-Fault Monetary Defect or
cause it to be removed at its expense, which removal may be accomplished at
Closing.  In the event that the Title Defect is any other title matter, which,
in Purchaser's reasonable determination, affects good and marketable title to
the Property but such lien or title matter cannot be removed for a readily ascertainable
sum of money (each, individually, a “Non-Monetary Title Defect” 
and collectively, “Non-Monetary Title Defects”), then Purchaser
shall exercise commercially reasonable efforts to attempt to remove or cause the
removal of such Non-Monetary Title Defect; provided, however, that Seller shall
not be required to spend in excess of $250,000.00 to attempt to remove or cause
the removal of each Non-Monetary Title Defect, individually.  Seller shall have
the option (but not the obligation) to attempt to remove or cause the removal
of No-Fault Monetary Defects that, in the aggregate,  exceed the No-Fault
Threshold and/or a Non-Monetary Title Defect that, individually, exceeds $250,000.00
(each such Title Defect, individually,  an “Optional Title Defect” and
collectively, “Optional Title Defects”).  If Seller fails to
notify Purchaser within five (5) Business Days after Seller receives
Purchaser’s timely notice of a Title Objection which Seller is not obligated to
remove or attempt to remove hereunder, that Seller is electing to attempt to remove
or cause the removal of such Title Defect, then Seller shall be deemed to have
elected to not attempt such removal.   If reasonably necessary in connection
with Seller's efforts to remove or cause the removal of any Title Defect,
Seller shall have the right, upon written notice delivered to Purchaser not
less than five (5) days prior to the Scheduled Closing Date, or such lesser
period should Seller become aware of its failure or inability within the five (5)
days prior to the Scheduled Closing Date, to reasonable adjournments of the Scheduled
Closing Date one or more times, for a period not to exceed forty-five (45) days
in the aggregate, to enable Seller to attempt such removal.  If Seller does not
elect to attempt to remove or cause the removal of an Optional Title Defect, or
is unable to effect such removal, then Purchaser shall have the right, by
written notice given to Seller prior to the Scheduled Closing Date, at its
option, to (x) waive the Optional Title Defect and close title on 

 

 

 

the Scheduled Closing Date (as extended pursuant to this
Section 6.2, if applicable) in accordance with the provisions of this Agreement
with no offset against, or reduction in, the Purchase Price unless such defect
can be cured for a readily ascertainable sum of money, in which case Purchaser
shall be entitled to an adjustment in the Purchase Price in the amount of such
readily ascertainable sum of money up to a maximum of Seven Hundred and Fifty
Thousand Dollars ($750,000.00), or (y) terminate this Agreement, in which case,
except with respect to the Termination Surviving Obligations, this Agreement
shall be null and void and the parties shall have no further obligations to
each other under this Agreement.  If Purchaser fails to elect to terminate this
Agreement by notice given to Seller prior to the Scheduled Closing Date, then Purchaser
shall be deemed to have waived such Title Defect, and Purchaser shall close
title on the Scheduled Closing Date in accordance with the provisions of this Agreement. 
   

ARTICLE VII 

INTERIM OPERATING COVENANTS AND
ESTOPPELS 

Section 7.1           
Interim Operating Covenants.  Seller covenants to
Purchaser that Seller shall:

(a)                  
Operations. From the Effective Date until Closing, (i)
continue to operate, manage, repair and maintain the Improvements in the
ordinary course of Seller’s business and substantially in accordance with
Seller’s present practice, subject to ordinary wear and tear, (ii) not, without Purchaser's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, enter into (x)
any new Lease with a Major Tenant (or any amendments to any existing Lease with
a Major Tenant (including, in each case, a Person that would constitute a Major
Tenant taking into account such Lease or amendment thereto), or (y) any new Lease or any amendments to any existing Lease, which
would result in either (A) a 5% decrease in the aggregate annual cash revenue
derived therefrom or (B) the aggregate capital expenditures (including tenant
improvements and leasing commissions) required thereunder exceeding $100,000,
(iii) provide written notice to Purchaser prior to entering into any new Lease
or any amendments to any existing Lease, which does not require Purchaser's
consent under (ii) above and (iv) provide prompt written notice to Purchaser if
Seller initiates or settles any tax appeal for the tax year in which the Closing is scheduled
to occur, provided that such appeal will not in any way adversely affect the
taxes to be paid by the Purchaser for the tax year in which the Closing occurs
or any subsequent tax year.  If Purchaser fails to respond within five (5)
Business Days to any written request for consent under this Section 7.1(a),
then Purchaser shall be deemed to have granted its consent.  From the Effective
Date until and continuing through and after the Closing, Seller expressly
reserves the right to prosecute and settle, in its sole and unfettered
discretion, any tax appeals that pertain to tax years prior to the tax year in
which the Closing occurs, provided that such appeal will not in any way
adversely affect the taxes to be paid by the Purchaser for the tax year in
which the Closing occurs or any subsequent tax year.  After the Closing, Seller
and Purchaser shall jointly determine whether to accept any settlement in a tax
appeal for the tax year in which the Closing occurs.

 (b)   Compliance with
Governmental Regulations. From the Effective Date until Closing, not
take any action that Seller knows would result in a failure to comply in all
material respects with all Governmental Regulations applicable to the Property,
it being understood and agreed that prior to Closing, Seller will have the
right to contest any such Governmental Regulations.

 

 

 

 

(c)        Contracts.
 Not enter into any Service Contract that would be binding on the Property or Purchaser
following the Closing, unless (i) such Service Contract is with a bona fide
third party that is not affiliated with Seller, or is otherwise on market terms
and conditions, and such contract is terminable on thirty (30) days notice
without premium or penalty or (ii) Purchaser consents thereto in writing, which
approval will not be unreasonably withheld, delayed or conditioned, provided
that any Service Contract with any affiliate of Seller or which has an aggregate
value in excess of $15,000 shall be subject to Purchaser's consent in its sole
and absolute discretion. 

(d)       Personal Property.    Not
remove from the Real Property any Personal Property unless such item is
replaced with a similar item of comparable utility or value; provided, however,
that supplies, parts and materials may be used by Seller in the ordinary course
of operating, maintaining and repairing the Property in accordance with its
past practice. 

(e)        [Intentionally
Omitted.]

(f)    Notices.   Promptly
inform Purchaser in writing of any event materially and adversely affecting the
ownership, use, occupancy, operation or maintenance of the Property, whether or
not insured against including, without limitation, any default or default notice
relating to the Lease, and promptly deliver to Purchaser copies of written
default notices and notices of violations affecting the Property received by
Seller between the Effective Date and Closing.

Section 7.2           
Estoppels.   Seller shall use commercially reasonable
efforts to obtain an executed estoppel certificate from each Tenant in the form
requested by Purchaser’s mortgage lender, which is annexed hereto as Exhibit G.
 It shall be a condition precedent to Closing that (i) Seller obtain from
each Major Tenant an executed estoppel certificate in the form, or limited to
the substance, prescribed by each Major Tenant’s Lease and (ii) that  estoppel
certificates are received from Tenants (including the Major Tenants) representing
at least 80% of the rentable square feet of the Property (including the space
leased by the Major Tenants). If the conditions precedent specified in the
immediately preceding sentence are not satisfied at or prior to the Closing,
such failure shall constitute the failure of a condition precedent to Closing,
provided however, Seller shall not be deemed to be in default of its
obligations hereunder.

In the event Seller is unable to obtain an executed
estoppel certificate from any Major Tenant, Seller may, but is not obligated
to, elect to provide its own estoppel certificate in the form prescribed by the
Lease for such Major Tenant, which Purchaser agrees to accept as a valid and
binding estoppel certificate.

ARTICLE VIII 

REPRESENTATIONS AND WARRANTIES

Section 8.1           
Seller’s Representations and Warranties. The following
constitute the sole representations and warranties of Seller, which
representations and warranties shall be true as of the Effective Date.  Subject
to the limitations set forth in Section 8.3 of this Agreement, Seller
represents and warrants to Purchaser the following:

 

 

 

 

(a)                  
Status. Seller is a limited liability company, duly
organized and validly existing under the laws of the State of Delaware, is
qualified to do business in the District of Columbia, and has the power to
acquire, own, and operate the Property.

(b)              
Authority. Seller has the power to enter into the
transactions contemplated by this Agreement and to execute, deliver and perform
its obligations under this Agreement, including without limitation, the
conveyance of the Property as provided herein, the Deed, the Bill of Sale, the
Assignment of Leases, the Assignment and other documents contemplated hereby to
be executed and performed by Seller and any other documents to be delivered
pursuant to Section 10.3 (collectively, the “Seller’s Documents”).  The execution and delivery of this Agreement and the other Seller’s
Documents and the performance of Seller’s obligations hereunder and thereunder have
been or will be duly authorized by all necessary action on the part of Seller,
and this Agreement constitutes, and the other Seller’s Documents, when executed
and delivered by Seller, will constitute the legal, valid and binding
obligation of Seller enforceable against Seller in accordance with their
respective terms and provisions, subject to applicable bankruptcy and other
like laws affecting the rights of contractual parties and creditors generally,
and the exercise of judicial or administrative discretion in accordance with
general equitable principles (whether such enforceability is considered in a
proceeding in equity or at law).

(c)               
Non-Contravention.  The execution and delivery of this
Agreement and the other Seller’s Documents by Seller and the consummation by
Seller of the transactions contemplated hereby and thereby does not and will
not (i) violate any judgment, order, injunction, decree, regulation or ruling
of any court or Authority or conflict with, result in a breach of, or
constitute a default under the organizational documents of Seller, (ii) result
in a breach of, or constitute a default under or result in the creation of any Encumbrance
upon any of the properties or assets of Seller pursuant to any agreement,
indenture, mortgage, lien, lease, consent, license, franchise or other
instrument to which Seller is bound or under which Seller’s properties are
affected, (iii) result in a breach of, or constitute a default under any lease
or other material agreement or instrument to which Seller is a party or by
which it is bound or (iv) violate any Law, judgment, decree, writ or injunction
applicable to Seller.

(d)              
Non-Foreign Entity.  Neither Seller nor its direct or
indirect owner or owners, as the case may be (other than shareholders in
Mack-Cali Realty Corporation or limited partners in Mack-Cali Realty, L.P., as
to whom no representation is made) is a “foreign person” or “foreign
corporation” as those terms are defined in the Code, and the Treasury
regulations promulgated thereunder. 

(e)               
Tenants.  The only tenants of the Property are tenants
pursuant to the Leases set forth on the Lease Schedule annexed hereto and made
apart hereof as Exhibit F-1.  To Seller’s Knowledge, the
Documents made available to Purchaser for review as part of its Due Diligence
included true and correct copies of all of the Leases, and Seller has not
knowingly deleted or omitted any portion of such Leases.  Except for the
Leases, there are no other written agreements, and, to Seller’s Knowledge, no
oral agreements, for the use and occupancy of the Property or any part thereof,
to which the Seller or its affiliates is a party or are bound as landlord.  Exhibit
F-2 sets forth a complete list of the Security Deposits under the Leases. 
Seller has not delivered or received a written notice of default from any
Tenant, except those that were made available to Purchaser for review as part
of the Documents.  Except as set forth on the arrearage schedule annexed hereto
and made a part hereof as Exhibit F-3 (the “Arrearage  

 

 

Schedule”), (i) to Seller's Knowledge, no Tenant is
in material default (which includes any event that with the giving of notice or
passage of time, or both, will or could constitute a material default) under its
Lease, and (ii) to Seller's Knowledge, with due inquiry, no Tenant is in
monetary default under its Lease. 

(f)               
Service Contracts.  To Seller’s Knowledge, the Documents listed
on Exhibit E constitute  all Service Contracts with respect
to the Property.  None of such Service Contracts that extend beyond the Closing
Date are with affiliates of Seller.  To Seller’s Knowledge, Seller made
available to Purchaser to review as part of its Due Diligence true and correct copies
of such Service Contracts, and Seller has not knowingly deleted or omitted any
portion of such Service Contracts.

(g)              
[Intentionally Omitted.]

(h)              
Consents.  No consent, waiver, approval, authorization or
other action of, or filing or registration with, any governmental or
quasi-governmental agency, commission, officer or entity (collectively, a “Governmental
Action”) is required in connection with the execution, delivery,
observance or performance by Seller of this Agreement and/or the other Seller’s
Documents, except a Governmental Action that would be applicable to any sale of
real property in the District of Columbia.  

(i)                
Solvency.  Seller is not insolvent and will not be
insolvent as a result of the transaction contemplated herein. There has not
been filed, nor is there pending or contemplated, by or against Seller, or any
corporation, partnership, limited liability company, or other entity which is a
member of Seller or with respect to which Seller is a principal shareholder,
controlling person, general partner or managing member, as the case may be, a
petition in bankruptcy or insolvency proceedings or for reorganization, or for
the appointment of a receiver or trustee, nor has any such entity made or
contemplated making an assignment for the benefit of creditors or filed a
petition for an arrangement or entered into or contemplated entering into an
arrangement with creditors or admitted in writing the inability to pay its
debts as they become due.

(j)                
Violations.  Seller has included in the Documents made
available to Purchaser for review, a copy of all written notices from any Authority
of any violations of present laws, rules, regulations, ordinances, governmental
resolutions, requirements and orders, including, without limitation, any such
law relating to or regulating health, safety, or labor matters or the Environmental
Laws (collectively, “Laws”) of a material nature applicable
to the Property which have not been cured in all material respects.  

(k)              
Litigation.  To Seller’s Knowledge, with due inquiry, there
are no suits, arbitrations, mediations, investigations, litigations, actions or
proceedings (including landlord/tenant matters under the Leases), pending, or,
to the Knowledge of Seller, threatened against Seller or the Property before or
by any court or administrative agency or officer, which if adversely
determined, could individually or in the aggregate have an adverse effect on
the title, use, value, occupancy, ownership or valuation of the Property or
which could in any way adversely interfere with the consummation by Seller of
the transaction contemplated by this Agreement or the other Seller's Documents.
 Seller has received no written notice of any condemnation proceedings relating
to the Property, and to Seller's Knowledge, no condemnation or eminent domain
is threatened.

 

 

 

 

(l)                
             Employee Contracts.  None of the employees
presently employed by Seller or its Affiliates at the Improvements is subject
to a union contract or any employment agreement to which Seller or its Affiliates
is a party or is bound.

(m)            
Unrecorded Rights.  Except as may be set forth in the
Leases and other Documents disclosed to Purchaser for its review and/or as is
set forth in the land records for the District of Columbia, (i) Seller has not
sold, conveyed, transferred, given, ground leased, pledged, mortgaged or
otherwise disposed of or encumbered in any manner all or any portion of the
Property, and (ii) Seller has not granted to any Tenant or any other person or
entity (other than Purchaser) a right of first refusal, option or other right
to purchase the Property or any interest therein, and, to Seller's Knowledge, no
such rights exist.

(n)              
Anti-Terrorism.  Neither Seller nor any of its officers,
directors, shareholders, partners, investors or members is a Prohibited Person,
as such term is hereinafter defined. “Prohibited Person” means
any of the following. (a) a person or entity that is listed in the Annex to, or
otherwise subject to the provisions of,  Executive Order No. 13224 on Terrorist
Financing (effective September 24, 2001) (the “Executive Order”);
(b) a person or entity owned or controlled by, or acting for or on behalf of
any person or entity that is listed in the Annex to, or is otherwise subject to
the provisions of, the Executive Order; (c) a person or entity that is named as
a “specially designated national” or “blocked person” or persons or entities
with whom a citizen of the United States is restricted from doing business
with  by any trade embargo, economic sanction, or other prohibition of United
States law, regulation, or Executive Order of the President of the United
States including those listed on the most current list published by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”);
or (d) a person or entity that is affiliated with any person or entity
identified in clause (a), (b) and/or (c) above.  Seller is not engaging in this
transaction on the behalf of, either directly or indirectly, any Prohibited
Person.

(o)              
Leasing Commission Agreements.  To Seller’s Knowledge, (i)
there are no executory brokerage, leasing or listing agreements affecting the Property
in effect on the date hereof that will be binding on Purchaser after the
Closing, and (ii) true, correct and complete copies of all non-executory
brokerage, leasing or listing agreements affecting the Property pursuant to
which commissions or fees may be due and owing in connection with the Leases (the
“Leasing Commission Agreements”) have been made available to
Purchaser for review as part of the Documents and are listed on Exhibit K
annexed hereto and made a part hereof.

(p)              
Environmental Matters.  To Seller’s  Knowledge: (i) Seller
has made available to Purchaser for review as part of the Documents, all
environmental reports and studies with respect to the Property in Seller’s possession
or control, (ii) except as may be set forth in such environmental reports and
studies, Seller has not received or provided any written notice from or to any Authority
concerning the discharge or seepage of any Hazardous Substances at the Property,
and (iii) except as may be set forth in such environmental reports and studies,
no Hazardous Substances have been released, discharged, or disposed of on or
under the Property in violation of any Environmental Laws. 

(q)              
             Special Assessments.  Seller has no Knowledge of
any pending or threatened real estate tax special assessments affecting the Property
or of any contemplated improvements affecting the Property that may result in real
estate tax special assessments affecting the 

 

 

 

Property.
 To Seller’s Knowledge, Seller has not received written notice from any
Authorities of (i) any municipal and/or public improvement liens encumbering
the Property that are not set forth in the public records of the District of
Columbia, or (ii) any work that has been undertaken or is planned that could
result in such a lien except for any such notice that is set forth in the
public records of the District of Columbia.

(r)                
[Intentionally Omitted.]

(s)               
[Intentionally Omitted.]

(t)                
Tax Appeals.  There is no pending proceeding for the
reduction of the assessed valuation of the Property for real estate tax
purposes that relates to a Tax period, any part of which occurs on or after the
Scheduled Closing Date.

Section 8.2           
Purchaser’s Representations and Warranties.  The
following constitute the sole representations and warranties of Purchaser,
which representations and warranties shall be true as of the Effective Date.  Purchaser
represents and warrants to Seller the following:

(a)                  
Status. Purchaser is a duly organized and validly existing
limited liability company under the laws of the State of Delaware.

(b)              
Authority.  Purchaser has the power to enter into the
transactions contemplated by this Agreement and to execute, deliver and perform
this Agreement, including without limitation, the purchase of the Property as
provided herein, in the Assignment of Leases, and the Assignment and other
documents contemplated hereby to be executed and performed by Purchaser and to
be delivered pursuant to Section 10.2 (collectively, the “Purchaser’s
Documents”).  The execution and delivery of this Agreement and
the other Purchaser’s Documents and the performance of Purchaser’s obligations
hereunder and thereunder have been or will be duly authorized by all necessary
action on the part of Purchaser, and this Agreement constitutes, and the other Purchaser’s
Documents, when executed and delivered by Purchaser  will constitute the legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with their respective terms and provisions, subject to applicable
bankruptcy and other like laws affecting the rights of contractual parties and
creditors generally, and the exercise of judicial or administrative discretion
in accordance with general equitable principles (whether such enforceability is
considered in a proceeding in equity or at law).

(c)               
Non-Contravention.  The execution and delivery of this
Agreement and the other Purchaser’s Documents by Purchaser and the consummation
by Purchaser of the transactions contemplated hereby and thereby does not and
will not (i) violate any judgment, order, injunction, decree, regulation or
ruling of any court or Authority or conflict with, result in a breach of, or
constitute a default under the organizational documents of Purchaser, (ii)
result in a breach of, or constitute a default under or result in the creation
of any Encumbrance upon any of the properties or assets of Purchaser pursuant
to any agreement, indenture, mortgage, lien, lease, consent, license, franchise
or other instrument to which Purchaser is bound or under which Purchaser’s
properties are affected, (iii) result in a breach of, or constitute a default
under any lease or other material agreement or instrument to which Purchaser is
a party or by which it is bound or (iv) violate any Law, judgment, decree, writ
or injunction applicable to Purchaser.

 

 

 

 

(d)              
Consents. No consent, waiver, approval, authorization or
other action of, or filing or registration with, any governmental agency,
commission or officer or, any other person or entity is required in connection
with the execution, delivery, observance or performance by Purchaser of this
Agreement, the other Purchaser’s Documents or any of the transactions provided
for herein or therein.

(e)               
Anti-Terrorism.  Purchaser represents that neither Purchaser
nor any officer, director, or to Purchaser’s actual knowledge,  any shareholder,
partner, investor or member of Purchaser is a Prohibited Person. Purchaser is
not engaging in this transaction on the behalf of, either directly or
indirectly, any Prohibited Person.

 

Section 8.3           
Survival of Representations, Warranties and Covenants.  
Except for the representations and warranties comprising the Closing Surviving
Obligations, the representations and warranties of Seller set forth in
Section 8.1 and the certifications contained in any Seller estoppels
delivered under the second paragraph of Section 7.2 will survive the
Closing for a period of six (6) months, after which time they will merge into
the Deed and automatically terminate and expire, unless, prior
to the expiration of such six (6) month period,
Purchaser shall have provided Seller with a written notice alleging that Seller
is in breach of such representation or warranty and specifying in reasonable
detail the nature of such breach in which case such representation or warranty
shall survive until such claim is resolved. Purchaser will not have any
right to bring any action against Seller as a result of any untruth or inaccuracy
of such representations, warranties or certifications, unless and until the
aggregate amount of all liability and losses arising out of any such untruths
or inaccuracies, exceed Two Hundred Seventy Thousand Dollars ($270,000) (the “Minimum
Threshold”); provided, however, if the Minimum Threshold is reached,
then Seller’s liability shall revert back and cover the first dollar of such
liabilities and losses and shall not be limited to only the excess of such
liabilities and losses above the Minimum Threshold.  In addition, in no event
will Seller's liability for all such untruths or inaccuracies exceed, in the
aggregate, the sum of Two Million Three Hundred Fifty Thousand Dollars ($2,350,000).   Seller shall have no liability with
respect to any of Seller's representations or warranties herein if, prior to
the Closing, Purchaser obtains knowledge (from whatever source, including,
without limitation, as a result of Purchaser's due diligence tests, investigations
and inspections of the Property, the Tenant’s estoppel certificate, or written
disclosure by Seller or Seller's agents and employees) that any of Seller's
representations or warranties herein are inaccurate, and Purchaser nevertheless
consummates the transaction contemplated by this Agreement.  Purchaser shall conclusively be deemed to have
knowledge that a  representation or warranty was inaccurate if (i) Purchaser or
any of its directors, officers, employees, agents, consultants or representatives
had actual knowledge that the representation or warranty was inaccurate,
incomplete or misleading, or had actual knowledge of any information or fact
which would render the representation or warranty inaccurate, incomplete or
misleading, or (ii) this Agreement, any Exhibit hereto, any document furnished
to Purchaser by Seller or by any third party, or any studies, tests, analysis,
investigations or reports prepared by or for Purchaser, its employees, agents,
attorneys, accountants, investors or other representatives contains information
which is inconsistent with a representation or warranty.   Notwithstanding
anything to the contrary contained herein, for the purposes of calculating
liability, if such claim relates to a breach of a representation or warranty
and such representation or warranty is qualified in any respect by materiality,
for the purposes of calculating liability such materiality qualification will
be ignored. 

 

 

 

The Closing Surviving Obligations and the
Termination Surviving Obligations will survive Closing without limitation
unless a specified period is otherwise expressly provided in this Agreement. 
All other representations, warranties, covenants and agreements made or
undertaken by Seller or Purchaser, as applicable, under this Agreement, unless
otherwise specifically provided herein, shall not survive the Closing but shall
be merged into the Deed and other Closing documents delivered at the Closing.

ARTICLE IX 

CONDITIONS PRECEDENT TO CLOSING

Section 9.1           
Conditions Precedent to Obligation of Purchaser.  The
obligation of Purchaser to consummate the transaction hereunder shall be
subject to the fulfillment on or before the Closing Date of all of the
following conditions, any or all of which may be waived by Purchaser in its
sole discretion:

(a)                  
Purchaser shall have readily available funds in the aggregate sum of at least 
$85,125,000 resulting from: (i) obtaining a mortgage loan to finance the
acquisition of the Property in the amount of at least $37,825,000
on market terms and conditions (the “Mortgage Loan”) and (ii) an
initial public offering (the “IPO”) of Series A-1 common shares
of the Series A-1 of ETRE REIT,  which will directly or indirectly own the
Property, where the net proceeds of such IPO shall be in the amount of at least
$47,300,000.  Purchaser shall use commercially reasonable efforts to close the
Mortgage Loan and complete the IPO.  Notwithstanding anything to the contrary
contained herein, if Purchaser, despite its best efforts, is unable to satisfy
the lender’s requirements for closing the Mortgage Loan, then Seller shall have
the right, in its sole and absolute discretion, to elect to make the Mortgage
Loan substantially on the same terms and conditions as set forth in the
lender’s mortgage loan commitment, and, if circulated by the lender, the
lender’s proposed loan documents to evidence and secure such loan, but with the
waiver or modification of the unsatisfied requirements.

(b)              
Seller shall have delivered to Purchaser (directly or by delivery into
escrow with Escrow Agent) all of the items required to be delivered to
Purchaser pursuant to the terms of this Agreement, including but not limited
to, those provided for in Section 10.3.

(c)              
All of the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects when made and as
of the Closing, except to reflect such new Leases and/or Service Contracts or
terminations of or amendments to Leases and/or Service Contracts that are either
permitted or otherwise consented to by Purchaser pursuant to Article VII.

(d)             
Seller shall have performed and observed, in all material respects, all
covenants and agreements set forth under this Agreement to be performed and
observed by Seller as of the Closing Date.

(e)              
Seller shall have obtained all consents necessary to consummate the
transactions contemplated in this Agreement and the other Seller's Documents.

(f)               
There shall not be in effect any Law or any injunction that prohibits the
transactions contemplated in this Agreement and the other Seller's Documents.

 

 

 

 

(g)                 
The Title Company shall be irrevocably committed to issue, or shall have
issued, the Title Policy to Purchaser and the Mortgagee Title Policy to
Purchaser's lender, with such endorsements as Purchaser and/or Purchaser's
lender shall reasonably require.

(h)                 
Possession of the Property shall be delivered to Purchaser at Closing,
subject only to (i) the Leases (and rights arising under or pursuant to the
Leases) and (ii) the Approved Title Conditions.

(i)                
Purchaser shall have received all of the certificates required pursuant to
Section 7.2.

Section 9.2           
Conditions Precedent to Obligation to Seller.  The
obligation of Seller to consummate the transaction hereunder shall be subject
to the fulfillment on or before the Closing Date (or as otherwise provided) of
all of the following conditions, any or all of which may be waived by Seller in
it sole discretion:

(a)                  
Seller shall have received the Purchase Price as adjusted pursuant to,
and payable in the manner provided for, in this Agreement.

(b)              
Purchaser shall have delivered to Seller (directly or by delivery into
escrow with the Title Company) all of the items required to be delivered to
Seller pursuant to the terms of this Agreement, including but not limited to,
those provided for in Section 10.2.

(c)               
All of the representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects when made and as
of the Closing Date.

(d)              
Purchaser shall have performed and observed, in all material respects,
all covenants and agreements of this Agreement to be performed and observed by
Purchaser as of the Closing Date.

Section 9.3      Effect of Failure to Satisfy Certain
Conditions Precedent.  In the event that Purchaser is unable to satisfy
the conditions precedent to Closing set forth in Subsection 9.1(a) above on or
before April 17, 2014, WITH TIME BEING OF THE ESSENSE, then this Agreement
shall be null and void and of no further force and effect, and neither party
shall have any obligations to the other hereunder except (i) for the
Termination Surviving Obligations, and (ii) that within ten (10) Business Days
after receipt of copies of invoices from Seller, Purchaser shall reimburse
Seller for one-half of any reasonable out-of-pocket third-party expenses
incurred by Seller in connection with this transaction.  In the event that
Seller is unable to satisfy the other conditions precedent to Closing pursuant
to Section 9.1 above, Purchaser shall have the right to terminate this
Agreement and neither party shall have any obligations to the other hereunder except
for the Termination Surviving Obligations.

ARTICLE X 

CLOSING

Section 10.1       
Closing. The consummation of the transaction
contemplated by this Agreement by delivery of documents and payments of money
shall commence no later than 1:00 

 

 

 

p.m. and be
completed no later than 3:00 p.m. Eastern Time on the Scheduled Closing Date at
the offices of the Escrow Agent.  At Closing, the events set forth in this
Article X will occur, it being understood that the performance or tender
of performance of all matters set forth in this Article X are mutually
concurrent conditions which may be waived by the party for whose benefit they
are intended.  

Section 10.2       
Purchaser’s Closing Obligations. On the Closing Date,
Purchaser, at its sole cost and expense, will deliver the following items to
Seller at Closing as provided herein:

(a)                  
The Purchase Price, after all adjustments are made as herein provided,
by Federal Reserve wire transfer of immediately available funds, in accordance
with the timing and other requirements of Section 3.2;

(b)              
A counterpart original of the Assignment of Leases, duly executed by
Purchaser;

(c)               
A counterpart original of the Assignment, duly executed by Purchaser;

(d)              
Copies of the relevant organization documents of Purchaser (including its
managing member) evidencing Purchaser’s authority to enter into this Agreement,
the Purchaser's Documents and to consummate the transactions contemplated
hereby and thereby and incumbency, and specimen signatures of each person
executing this Agreement and the Purchaser's Documents  on behalf of Purchaser
certified by an officer or authorized person of Purchaser;

(e)               
Written notices executed by Purchaser and to be addressed and delivered
to each Tenant by Purchaser in accordance with Section 10.6 herein and the
notice provisions of each Tenant's Lease, (i) acknowledging the sale of
the Property to Purchaser, (ii) acknowledging that Purchaser has received
and that Purchaser is responsible for the Security Deposit (specifying the
exact amount of the Security Deposit) and (iii) indicating that rent should
thereafter be paid to Purchaser and giving instructions therefor (the “Tenant
Notice Letters”);  

(f)               
A counterpart of the Closing Statement, duly executed by Purchaser; 

(g)              
A certificate, dated as of the date of Closing, stating that the
representations and warranties of Purchaser contained in Section 8.2 are
true and correct in all material respects as of the Closing Date; and

(h)              
Such other documents as may be reasonably necessary or appropriate to
effect the consummation of the transaction which is the subject of this Agreement.

Section 10.3       
Seller's Closing Obligations.  At the Closing, Seller
will deliver to Purchaser the following documents:

(a)                  
A special warranty deed in the form attached as Exhibit L (the
“Deed”), duly executed and acknowledged by Seller, in proper form
for recording with the office of the Washington D.C. Recorder of Deeds, conveying
to Purchaser fee simple title to the Real Property and the Improvements free
from all Encumbrances other than the Approved Title Conditions;

 

 

 

 

(b)              
An original blanket assignment and bill of sale in the form attached
hereto as Exhibit C (the “Bill of Sale”), duly
executed by Seller, assigning and conveying to Purchaser title to the Personal
Property (subject to such changes to the Personal Property as are permitted
under Section 7.1(d) above);

(c)               
A counterpart original of an assignment and assumption of Seller’s
interest, as lessor, in the Leases and Security Deposits in the form attached
hereto as Exhibit B (the “Assignment of Leases”),
duly executed by Seller, conveying and assigning to Purchaser all of Seller's
right, title and interest, as lessor, in and to the Leases and Security
Deposits;

(d)              
A counterpart original of an assignment and assumption of all of Seller’s
right, title and interest in and to the Service Contracts, but only to the
extent that same are assignable, and, to the extent assignable, the Licenses
and Permits in the form attached hereto as Exhibit A (the "Assignment"),
duly executed by Seller, conveying and assigning to Purchaser all of Seller’s
right, title, and interest, if any, in and to the assignable Service Contracts
and Licenses and Permits;

(e)               
The Tenant Notice Letters, duly executed by Seller;

(f)               
Copies of the relevant organization documents of Seller (including its managing
member and beneficial owners, if applicable) evidencing Seller’s authority to
enter into this Agreement, the Seller's Documents and to consummate the
transactions contemplated hereby and thereby and incumbency, and specimen
signatures of each person executing this Agreement and the Seller's Documents
on behalf of Seller, certified by an officer or authorized person of Seller;

(g)              
A certificate in the form attached hereto as Exhibit H (“Certificate
as to Foreign Status") certifying that Seller’s Owner is not a
"foreign person" as defined in Section 1445 of the Code;

(h)              
To the extent in Seller’s possession or under its control, all original
Leases and  Service Contracts; 

(i)                
A certificate, dated as of the date of Closing, stating that the
representations and warranties of Seller contained in Section 8.1 are true
and correct as of the Closing Date, with modifications to reflect (i) new
Leases and/or Service Contracts or terminations of or amendments to Leases
and/or Service Contracts that are either permitted or otherwise consented to by
Purchaser pursuant to Article VII, (ii) non-material changes to the
representations and warranties in Sections 8.1(e), 8.1(j), 8.1(k), 8.1(o) (but
only with respect to any new Leasing Commission Agreements entered into in
connection with new Leases or amendments to Leases, in each case, that are
either permitted or otherwise consented to by Purchaser pursuant to Article
VII), and 8.1(p) (but only if such non-material changes to 8.1(p) would not
impose any liability on Purchaser), and 8.1(q), and/or (iii) material changes that
Purchaser is waiving as conditions precedent to Closing;

(j)                
The Lease Schedule updated to show any changes, to Seller’s Knowledge,
dated as of no more than five (5) Business Days prior to the Closing Date, and
certified by an officer or authorized person of Seller to be true, accurate and
correct in all material respects;

 

 

 

 

(k)              
Such affidavits or other instruments duly executed and acknowledged by
Seller as the Title Company shall reasonably require in order to omit from the
Title Policy all exceptions for judgments, penalties, bankruptcies or other
returns against persons or entities whose names are the same as or similar to
Seller’s name;

(l)                
             Such evidence as the Title Company may reasonably require as
to the authority of the person or persons executing documents on behalf of Seller;

(m)            
All real property transfer tax returns required under applicable Law in
connection with the sale of the Real Property duly signed and sworn to, if
necessary, by Seller;

(n)              
All Tenant correspondence files and all books and records necessary to
reconcile Tenant Operating Expenses, unless previously delivered by Seller to
Purchaser;

(o)              
A complete set of keys for the Improvements including leased spaces to
the extent in Seller’s possession or control;

(p)              
All equipment operating manuals and all Warranties in any way relating
to the Property, if any, in Seller’s possession or subject to its control;

(q)              
All Licenses and Permits, entitlements and plans and specifications, if
any, related to the Property to the extent that same are transferrable and in
the possession of Seller or subject to its control;

(r)                
Copies of current real estate tax assessment notices and bills relating
to the Real Property;

(s)               
Copies of all environmental and physical condition reports (including
all Phase I, Phase II, Americans with Disabilities Act (ADA) and soil reports
for the Property, as available) in Seller’s possession or control unless
previously delivered by Seller to Purchaser;

(t)                
Copies of any plans and specifications for the Property in Seller’s possession
or under its control; 

(u)              
A Counterpart of the Closing Statement, duly executed by Seller; and

(v)              
Such other instruments and documents, in form and substance reasonably
satisfactory to Seller, Purchaser and/or the Title Company, as may be
reasonably necessary to effect the Closing and the transaction contemplated by this
Agreement.

Section 10.4       
Prorations. 

(a)                  
Seller and Purchaser agree to adjust, as of 11:59 p.m. on the day preceding
the Closing Date (the “Proration Time”), the following
(collectively, the “Proration Items”): 

(i)                
Rents, in accordance with Section 10.4(c) below.

(ii)              
Cash Security Deposits and any prepaid rents, together with interest
required to be paid thereon.  

 

 

 

 

(iii)            
Utility charges payable by Seller, including, without limitation,
electricity, water charges and sewer charges.  If there are meters on the Property,
Seller will cause readings of all said meters to be performed not more than
five (5) days prior to the Closing Date, and a per diem adjustment shall be
made for the days between the meter reading date and the Closing Date based on
the most recent meter reading.  Final readings and final billings for utilities
will be made if possible as of the Closing Date, in which event no proration
will be made at the Closing with respect to utility bills.  Seller will be
entitled to all deposits presently in effect with the utility providers, and
Purchaser will be obligated to make its own arrangements for any deposits with
the utility providers.

(iv)            
Amounts payable under the Service Contracts.

(v)              
Real estate taxes due and payable for the calendar year for the
Real Property and Improvements.  If the Closing Date shall occur before the Tax
rate is fixed, the apportionment of real estate Taxes shall be upon the basis
of the Tax rate for the preceding year applied to the latest assessed
valuation.  If, subsequent to the Closing Date, real estate Taxes (by reason of
change in either assessment or rate or for any other reason other than as a result of the final determination or
settlement of any Tax appeal) for the Real Property and/or Improvements should
be determined to be higher or lower than those that are apportioned, a new
computation shall be made, and Seller agrees to pay Purchaser any increase
shown by such recomputation and vice versa; provided,
however, to the extent that any increase in the assessed value of the Real
Property and/or Improvements results from
improvements made to the Property by Purchaser, then Purchaser shall be solely
responsible for any increase in Taxes attributable thereto.  With respect to Tax appeals, any Tax refunds or
credits attributable to Tax years prior to the Tax year in which the Closing
occurs shall belong solely to Seller, regardless of whether such refunds are
paid or credits are given before or after Closing.  Any Tax refunds or credits
attributable to the Tax year in which the Closing occurs shall be apportioned
between Seller and Purchaser based on their respective periods of ownership in
such Tax year.  The expenses of any Tax appeals shall be apportioned between
the parties in the same manner as the refunds and/or credits.  The provisions
of this Section 10.4(a)(v) shall survive the Closing.   

(vi)            
The value of fuel stored at the Property, at Seller’s most recent cost,
including Taxes thereon, on the basis of a reading made within ten (10) days
prior to the Closing by Seller’s supplier.

(b)              
Seller will be charged and credited for the amounts of all of the Proration
Items relating to the period up to and including the Proration Time, and
Purchaser will be charged and credited for all of the Proration Items relating
to the period after the Proration Time.  The estimated Closing prorations shall
be set forth on a preliminary closing statement to be prepared by Seller and
submitted to Purchaser prior to the Closing Date (the "Closing
Statement").  The Closing Statement, once agreed upon, shall be
signed by Purchaser and Seller and may be delivered electronically.  The
prorations shall be paid at Closing by Purchaser to Seller (if the prorations
result in a net credit to Seller) or by Seller to Purchaser (if the prorations
result in a net 

 

 

 

credit to Purchaser) by increasing or
reducing the cash to be delivered by Purchaser in payment of the Purchase Price
at the Closing.  If the actual amounts of the Proration Items are not known as
of the Closing Date, the prorations will be made at Closing on the basis of the
best evidence then available; thereafter, when actual figures are received,
re-prorations will be made on the basis of the actual figures, and a final cash
settlement will be made between Seller and Purchaser.  No prorations will be
made in relation to insurance premiums, and Seller's insurance policies will
not be assigned to Purchaser.  

(c)               
Purchaser will receive a credit on the Closing Statement for the
prorated amount (as of the Proration Time) of all Rental previously paid to or
collected by Seller and attributable to any period following the Proration
Time.  After the Closing, Seller will cause to be paid or turned over to
Purchaser all Rental, if any, received by Seller after Closing and attributable
to any period following the Proration Time.  “Rental”  as used
herein includes fixed monthly rentals, additional rentals, percentage rentals,
escalation rentals (which include each Tenant's proration share of building
operation and maintenance costs and expenses as provided for under the Lease,
to the extent the same exceeds any expense stop specified in such Lease),
retroactive rentals, all administrative charges, utility charges, tenant or
real property association dues, storage rentals, special event proceeds,
temporary rents, vending machine receipts and other sums and charges payable by
Tenants under the Leases or from other occupants or users of the Property.  “Delinquent
Rental”, as used herein, means any Rental which was due prior to the
Closing Date, for which payment thereof has not been made on or before the
Proration Time.  Delinquent Rental will not be prorated.  Purchaser agrees to
use good faith collection procedures with respect to the collection of any
Delinquent Rental, but Purchaser will have no liability for the failure to
collect any such amounts and will not be required to pursue legal action to
enforce collection of any such amounts owed to Seller by any Tenant.  All sums
collected by Purchaser from and after Closing from each Tenant (excluding
tenant specific billings for tenant work orders and other specific services as
described in and governed by Section 10.4(e) below) will be applied first
to the month of Closing, then to current amounts owed by such Tenant to
Purchaser and then delinquencies owed by such Tenant to Seller.  Any sums due
Seller will be promptly remitted to Seller by Purchaser.  

(d)              
At the Closing, Seller shall deliver to Purchaser a list of additional
rent, however characterized, under each Lease, including without limitation,
real estate taxes, electrical charges, utility costs and operating expenses
(collectively, “Operating Expenses”) billed to Tenants for the
calendar year in which the Closing occurs (both on a monthly basis and in the
aggregate), the basis on which the monthly amounts are being billed and the
amounts incurred by Seller on account of the components of Operating Expenses
for such calendar year.  Upon the reconciliation by Purchaser of the Operating
Expenses billed to Tenants, and the amounts actually incurred for such calendar
year, Seller and Purchaser shall be liable for overpayments of Operating
Expenses, and shall be entitled to payments from Tenants, as the case may be,
on a pro-rata  basis based upon each party's period of ownership
during such calendar year.

(e)               
With respect to specific billings to Tenants for tenant work orders,
special items performed or provided at the request of a Tenant or other
specific services, which are collected by Purchaser after the Closing Date but
relate to the foregoing specific services rendered by Seller prior to the
Proration Time, then notwithstanding anything to the contrary contained herein,
Purchaser shall cause the first amounts collected from such Tenant to be paid
to Seller on account thereof.

 

 

 

 

(f)                  
At Closing, Purchaser shall receive a credit against the Purchase Price
in the amount of any then unpaid tenant improvement allowances under (i) Article
3.4 of that certain Fourth Amendment to Lease with Brooks Brothers Group, Inc.,
as tenant, dated October 7, 2013, and (ii) Article 3.5 of that certain Second
Amendment to Lease with Police Foundation, as tenant, dated March 31, 2010.  Notwithstanding
any provision of this Section 10.4 to the contrary, Purchaser will be
solely responsible for any leasing commissions, tenant improvement costs or
other expenditures (for purposes of this Section 10.4(f), "New
Leasing Costs") that are or will be incurred in connection with
any (i) Lease amendments, renewals and/or expansions entered into on or after
the Effective Date in accordance with Section 7.1(a) above, or, if pursuant to
an option, exercised on or after the Effective Date, and/or (ii) new leases
entered into on or after the Effective Date in accordance with Section 7.1(a)
above. Purchaser
will pay to Seller at Closing, in addition to the Purchase Price, an amount
equal to any New Leasing Costs paid by Seller.

(g)              
The provisions of this Section 10.4 shall survive the Closing for
twelve (12) months.

Section 10.5       
Costs of Title Company and Closing Costs.  Costs of
the Title Company and other Closing costs incurred in connection with the
Closing will be allocated as follows:

(a)                  
Seller shall pay (i) Seller’s attorney’s fees; and (ii) the
cost of discharging any Title Defects that Seller is obligated to discharge
pursuant to the terms and conditions of this Agreement.

(b)              
Purchaser shall pay (i) Purchaser’s attorney's fees; (ii) the costs
of Purchaser’s Due Diligence with respect to the Property, including but not
limited to the cost of the Updated Survey; (iii) the costs of recording the
Deed and all other documents, except for discharges of any Title Defects that
Seller is obligated to discharge pursuant to the terms and conditions of this
Agreement; (iv) all premiums and other costs in connection with obtaining
the Title Policy, any mortgagee title insurance policy that Purchaser desires
to obtain (the “Mortgagee Title Policy”) and any additional
coverage or endorsements or deletions (including, without limitation, the
deletion of the survey exception) to the Title Policy and/or Mortgagee Title
Policy that are desired by Purchaser; (v) any escrow fees; (vi) all costs
and expenses incurred in connection with the IPO; (vii) all costs and expenses
incurred in connection with the Mortgage Loan; and (viii) all costs and
expenses in connection with transferring any Warranties to Purchaser.  

(c)                  
All transfer, registration, stamp, documentary, sales, use and similar taxes
and (including all applicable real estate transfer or gains taxes) incurred in
connection with the consummation of the transaction contemplated by this
Agreement shall be paid fifty percent (50%) by Seller and fifty percent (50%)
by Purchaser.  Seller and Purchaser shall cooperate in the timely making of all
filings, returns, reports and forms as may be required in connection therewith.

(d)              
Any other costs and expenses of Closing not provided for in this
Section 10.5 shall be allocated between Purchaser and Seller in accordance
with the custom in the area in which the Property is located. 

 

 

 

 

Section 10.6       
Post-Closing Delivery of Tenant Notice Letters.  Promptly
following Closing, Purchaser will deliver to each Tenant a Tenant Notice
Letter, as described in Section 10.2(e). 

Section 10.7       
Like-Kind Exchange.  Purchaser hereby acknowledges
that Seller may now or hereafter desire to enter into a partially or completely
nontaxable exchange (a “Section 1031 Exchange”) involving the
Property (and/or any one or more of the properties comprising the Property)
under Section 1031 of the  Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.  In connection therewith, and
notwithstanding anything herein to the contrary, Purchaser shall
cooperate with Seller and shall take, and consent to Seller taking, any action
in furtherance of effectuating a Section 1031 Exchange (including, without
limitation, any action undertaken pursuant to Revenue Procedure 2000-37,
2000-40 IRB, as may hereafter be amended or revised (the “Revenue
Procedure”)), including, without limitation, (a) permitting Seller
or an “exchange accommodation titleholder” (within the meaning of the Revenue
Procedure) (“EAT”) to assign, or cause the assignment of all of
Seller’s rights hereunder with respect to any or all of the Property to a
“qualified intermediary” (as defined in Treasury Regulations Section
1.1031(k)-1(g)(4)(iii)) (a “QI”); (b) permitting Seller to
assign all of Seller’s rights hereunder with respect to any or all of
the Property and/or to convey, transfer or sell any or all of the Property, to
(i) an EAT; (ii) any one or more limited liability companies (“LLCs”)
that are wholly-owned by an EAT; or (iii) any one or more LLCs that are
wholly-owned by Seller and/or any affiliate of Seller and to thereafter permit
Seller to assign its interest in such one or more LLCs to an EAT; and
(c) pursuant to the terms of this Agreement, having any or all of the
Property conveyed by an EAT or any one or more of the LLCs referred to in
(b)(ii) or (b)(iii) above, and allowing for the consideration therefor to be
paid by an EAT, any such LLC or a QI; provided, however, that
Purchaser shall not be required to delay the Closing; and provided  further 
that in connection therewith, and notwithstanding anything herein to the
contrary, Purchaser agrees to provide reasonable cooperation requested by the
Seller in implementing any such assignment and Section 1031 Exchange, including
the execution of any necessary documentation in connection therewith and/or,
where applicable, the payment of the Purchase Price to a facilitator identified
by the Exchange Party; provided, however, that  (x) such
cooperation shall not entail any additional costs, expenses or liabilities to
the Purchaser beyond its existing obligations under this Agreement, and Seller
shall reimburse Purchaser upon demand, for any costs, expenses and/or
liabilities incurred by Purchaser relating to the Section 1031 Exchange, (y) that
no Section 1031 Exchange shall delay the Closing, and Purchaser shall not be
obligated to expend any monies or incur any costs, and (z) Seller shall provide
whatever safeguards are reasonably requested by Purchaser, and not inconsistent
with Seller’s desire to effectuate a Section 1031 Exchange involving any of the
Property, to ensure that all of Seller’s obligations under this
Agreement shall be satisfied in accordance with the terms thereof.

ARTICLE XI 

CONDEMNATION AND CASUALTY

Section 11.1       
Casualty.  If, prior to the Closing Date, the Real
Property and Improvements or any portion thereof is destroyed or damaged by
fire or other casualty, Seller will promptly notify Purchaser of such casualty.
 In such event, if the reasonably estimated cost to repair or replace the
damaged or destroyed portions of the Property exceeds five percent (5%) of the
Purchase Price (a “Significant Casualty”), then Purchaser shall
have the right to terminate this Agreement by written notice to Seller within
ten (10) days of receipt of  notice of 

 

 

 

the casualty
along with repair or restoration estimates,  and, if so terminated, neither
party shall have any obligations to the other hereunder except for the
Termination Surviving Obligations.  In the event that Purchaser does not
terminate this Agreement pursuant to the preceding sentence or the portion that
is destroyed or damaged is less than a Significant Casualty, then (a) at
Closing, Seller shall assign and turn over to Purchaser Seller’s insurance
proceeds net of reasonable collection costs (or if such have not been awarded,
all of its right, title and interest therein) payable with respect to such fire
or other casualty up to the amount of the Purchase Price, (b) Seller will not
be obligated to repair such damage or destruction, and (c) the parties
will proceed to Closing pursuant to the terms hereof without abatement of the
Purchase Price, except that Purchaser will receive a credit against the
Purchase Price for any insurance deductible amount. In the event Seller elects
to perform any repairs as a result of a casualty, Seller will be entitled to
deduct its costs and expenses from any amount to which Purchaser is entitled
under this Section 11.1, which right shall survive the Closing.

Section 11.2       
Condemnation of Property.  In the event of any
condemnation or sale in lieu of condemnation of all or any portion of the
Property prior to the Closing, Purchaser shall have the right to terminate this
Agreement and, if so terminated by Purchaser, neither party shall have any
obligations to the other hereunder except for the Termination Surviving
Obligations. In the event that  Purchaser does not terminate this
Agreement pursuant to the preceding sentence, then, at Closing, Seller will
assign to Purchaser any and all claims for the proceeds of such condemnation or
sale to the extent the same are applicable to the Property, and Purchaser will
take title to the Property together with the assignment of such proceeds and
subject to such condemnation and without reduction of the Purchase Price. 
Should Purchaser elect to terminate Purchaser’s obligations under this
Agreement under the provisions of this Section 11.2, then neither Seller
nor Purchaser shall have any further obligation under this Agreement, except
for the Termination Surviving Obligations.  Notwithstanding anything to the
contrary herein, if any eminent domain or condemnation proceeding is instituted
(or notice of same is given) solely for the taking of any subsurface rights for
utility easements or for any right-of-way easement, and the surface may, after
such taking, be used in substantially the same manner as though such rights
have not been taken, Purchaser shall not be entitled to terminate this
Agreement as to any part of the Property, but Seller shall assign any award
resulting therefrom to Purchaser at Closing and such award shall be the
exclusive property of Purchaser upon Closing.

ARTICLE XII 

CONFIDENTIALITY AND EXCLUSIVITY

Section 12.1     Confidentiality.
Seller and Purchaser each expressly acknowledge and agree that the transactions
contemplated by this Agreement and the terms, conditions, and negotiations
concerning the same shall be held in the strictest confidence by each of them
and will not be disclosed by either of them except to their respective legal
counsel, accountants, consultants, officers, partners, directors, and
shareholders, and except and only to the extent that such disclosure may be
necessary for their respective performances hereunder.  Purchaser further
acknowledges and agrees that, unless and until the Closing occurs, no
information obtained by Purchaser in connection with the Property will be
disclosed by Purchaser to any third persons without the prior written consent
of Seller.  Nothing contained in this Article XII shall preclude or limit
either party to this Agreement from disclosing or accessing any information
otherwise deemed confidential under this Article XII in response to lawful
process or subpoena or other valid or enforceable order of a court of competent
jurisdiction or any filings with governmental 

 

 

 

authorities
required by reason of the transactions provided for herein pursuant to advice
of counsel.  In addition, prior to or after the Closing, any release to the
public of information, unless otherwise permitted under this Section 12.1, with
respect to the sale contemplated herein or any matters set forth in this Agreement
shall be made only in a form approved by Purchaser and Seller and their
respective counsel, which approval shall not be unreasonably withheld,
conditioned or delayed.  Notwithstanding anything to the contrary contained in
this Agreement, Seller acknowledges and agrees that ETRE REIT and its affiliates
shall be permitted to disclose the transaction contemplated by this Agreement,
the terms, conditions, and negotiations concerning the same and information
relating to the Property in connection with the IPO and in filings with the Securities
and Exchange Commission (the "SEC") in connection
therewith. Seller agrees to use commercially reasonable efforts to assist Purchaser
and ETRE REIT in connection with the information regarding the Property to be
included in such SEC filings and to use commercially reasonable efforts to provide
access to Sellers’ information reasonably required in connection thereto. In
that regard, Seller acknowledges that Series A-1 of ETRE REIT will be required
after the Closing Date to comply with certain periodic reporting requirements
of the SEC in respect of the Series A-1 of ETRE REIT, the Property and the
transaction contemplated by this Agreement; accordingly, Seller agrees to use
commercially reasonable efforts to comply with the provisions set forth in Exhibit I 
attached hereto and made a part hereof in order to facilitate such compliance,
provided that, notwithstanding anything contained in this Agreement or in Exhibit I 
to the contrary, it is understood and agreed that Sellers will not be exposed
to any liability on account thereof. 

Section 12.2       
Exclusivity.  From the Effective Date through April
17, 2014, neither Seller nor any of its direct or indirect subsidiaries,
affiliates, members, shareholders, managers, directors, officers, employees,
representatives or agents will directly or indirectly solicit, encourage,
discuss or negotiate with any other person a possible investment in,
acquisition of or master lease transaction relating to the Property, regardless
of whether such transaction takes the form of a sale of membership or other
equity interests, or a joint venture, merger, dissolution, liquidation,
reorganization, recapitalization, consolidation, asset sale or otherwise.

Section 12.3       
Survival.  The provisions of this Article XII
will survive the Closing or any termination of this Agreement.  

ARTICLE XIII 

REMEDIES

Section 13.1       
Default by Seller.  In the event the Closing of the
transaction contemplated hereby does not occur on the Scheduled Closing Date as
herein provided by reason of any default of Seller, and Seller fails to cure
such default within ten (10) days after receipt of written notice of such
default from Purchaser, then Purchaser may, as Purchaser’s sole and exclusive
remedy, elect by written notice to Seller, either of the following:
(a) terminate this Agreement, in which event Seller shall promptly reimburse
Purchaser for all of its reasonable out of pocket costs and expenses incurred
in connection with this transaction, including but not limited to reasonable
attorneys’ fees and expenses, and Seller and Purchaser will have no further
rights or obligations under this Agreement, except with respect to the
Termination Surviving Obligations; or (b) seek to enforce specific
performance of Seller’s obligation to execute the documents required to convey
the Property to Purchaser, it being understood and agreed that the remedy of
specific performance shall not be available to enforce any other obligation of
Seller 

 

 

 

hereunder.  Purchaser expressly waives its
rights to seek damages in the event of Seller’s default hereunder.  Purchaser
shall be deemed to have elected to terminate this Agreement if Purchaser fails
to file suit for specific performance against Seller in a court having
jurisdiction in the district in which the Property is located on or before forty-five
(45) days following the Scheduled Closing Date. Notwithstanding the foregoing,
nothing contained in this Section 13.1 will limit Purchaser's remedies at
law, in equity or as herein provided in pursuing remedies for a breach by
Seller of any of the Closing Surviving Obligations or the Termination Surviving
Obligations. 

Section 13.2       
Default by Purchaser.  In the event the Closing and
the consummation of the transactions contemplated herein do not occur on the
Scheduled Closing Date as provided herein by reason of any default of
Purchaser, and Purchaser fails to cure such default within ten (10) days after
receipt of written notice of such default from Seller, then Seller may
terminate this Agreement by written notice to Purchaser, in which event,
Purchaser shall promptly reimburse Seller for all of its out of pocket costs
and expenses incurred in connection with this transaction, including but not
limited to reasonable attorneys’ fees and expenses, Seller shall have all other
rights and remedies available to Seller at law or in equity as a result of such
breach, including the right to bring suit for damages (other than consequential
or punitive damages), and Purchaser will continue to be liable under this
Agreement for  the Termination Surviving Obligations.  

ARTICLE XIV 

NOTICES

Section 14.1       
Notices.  

(a)                  
All notices or other communications required or permitted hereunder
shall be in writing, and shall be given by any nationally recognized overnight
delivery service with proof of delivery, or by facsimile transmission (provided
that such facsimile is confirmed by the sender by expedited delivery service in
the manner previously described), sent to the intended addressee at the address
set forth below, or to such other addresses or to the attention of such other
persons as the addressee will have designated by written notice sent in accordance
herewith. Unless changed in accordance with the preceding sentence, the
addresses for notices given pursuant to this Agreement will be as follows:

If to Purchaser:           c/o
ETRE Financial LLC                                                                                                                                44
Wall Street

                                    New York, NY 10005

                                    Attn.: Jesse Stein                                            

                        (212)
388-6850 ext.2 (tele.)

                                    (646) 349-1980 (fax)

with a copy to:            Jay L. Bernstein, Esq. 

Clifford Chance US LLP 

31 West 52nd Street 

New York, NY 10019 

212 878-8527 (tele.) 

(212) 878-8375 (fax)

 

 

 

If to Seller:                  c/o
Mack-Cali Realty Corporation

343 Thornall Street

Edison, New Jersey 08837-2206

                                    with separate notices
to the attention of:

                                    Mr. Mitchell E. Hersh

(732) 590-1040 (tele.)

(732) 205-9040 (fax)

                        and

                        Gary
T. Wagner, Esq.

                                    (732) 590-1516 (tele.)

                                    (732) 205-9015 (fax)

with a copy to:                        Daniel
J. Wagner, Esq.

                                    at the same address

                        (732)
590-1053 (tele.)

                                    (732) 205-9015 (fax)                                                               

If to Escrow Agent:    Old Republic National Title
Insurance Company 

                                    331 Madison Avenue, 9th
Floor

                                    New York, NY 10017

                                    Attn: Al Stork

(212) 559-1300 (tele.)

(212) 983-2791 (fax)

(b)              
Notices given by (i) overnight delivery service as aforesaid shall
be deemed received and effective on the first Business Day following such
dispatch and (ii) facsimile transmission as aforesaid shall be deemed
given at the time and on the date of machine transmittal provided same is sent
and confirmation of receipt is received by the sender prior to 4:00 p.m. (EST)
on a Business Day (if sent later, then notice shall be deemed given on the next
Business Day).  Notices may be given by counsel for the parties described
above, and such notices shall be deemed given by said party for all purposes
hereunder.

ARTICLE XV 

ASSIGNMENT 

Section 15.1       
Assignment: Binding Effect.  Purchaser shall not have
the right to assign this Agreement except to a newly formed Delaware limited
liability company controlled, directly or indirectly, by Purchaser.

ARTICLE XVI 

BROKERAGE

Section 16.1       
Brokers.  Jones Lang LaSalle (“JLL”) has
been retained by Seller as its broker in this transaction.  Except for Seller’s
retention of JLL, neither Seller nor Purchaser has retained any broker or agent
in connection with this transaction.   Seller hereby acknowledges 

 

 

 

that Purchaser is not responsible for, and agrees to
indemnify, defend and hold Purchaser harmless from and against, any and all
loss, cost, damage, liability or expense, including reasonable attorneys’ fees,
which Purchaser may sustain, incur or be exposed to by reason of any claim for a
commission made by JLL in connection with this transaction.  Purchaser and
Seller represent that they have not dealt with any brokers, finders or salesmen
in connection with this transaction other than JLL, and agree to indemnify,
defend and hold each other harmless from and against any and all loss, cost,
damage, liability or expense, including reasonable attorneys’ fees, which
either party may sustain, incur or be exposed to by reason of any claim for
fees or commissions made through the other party.  Purchaser has retained JLL as
its due diligence consultant in connection with this transaction.  Purchaser hereby
acknowledges that Seller is not responsible for, and agrees to indemnify,
defend and hold Seller harmless from and against, any and all loss, cost,
damage, liability or expense, including reasonable attorneys’ fees, which
Seller may sustain, incur or be exposed to by reason of any claim for fees made
by JLL in connection with its due diligence consulting services in this
transaction. The provisions of this Article XVI will survive any Closing
or termination of this Agreement.

ARTICLE XVII 

MISCELLANEOUS

Section 17.1       
Waivers.  No waiver of any breach of any covenant or
provisions contained herein will be deemed a waiver of any preceding or
succeeding breach thereof, or of any other covenant or provision contained
herein.  No extension of time for performance of any obligation or act will be
deemed an extension of the time for performance of any other obligation or act.

Section 17.2       
Recovery of Certain Fees.  In the event a party hereto
files any action or suit against another party hereto by reason of any breach
of any of the covenants, agreements or provisions contained in this Agreement,
then in that event the prevailing party will be entitled to have and recover
certain fees from the other party including all reasonable attorneys’ fees
and costs resulting therefrom. For purposes of this Agreement, the term
"attorneys’ fees" or "attorneys’ fees and costs" shall mean
the fees and expenses of counsel to the parties hereto, which may include
printing, photocopying, duplicating and other expenses, air freight charges,
and fees billed for law clerks, paralegals and other persons not admitted to
the bar but performing services under the supervision of an attorney, and the
costs and fees incurred in connection with the enforcement or collection of any
judgment obtained in any such proceeding.  The provisions of this
Section 17.2 shall survive the entry of any judgment, and shall not merge,
or be deemed to have merged, into any judgment.

Section 17.3       
Construction.  Headings at the beginning of each
Article and Section are solely for the convenience of the parties and
are not a part of this Agreement.  Whenever required by the context of this
Agreement, the singular will include the plural and the masculine will include
the feminine and vice versa.  This Agreement will not be construed as if it had
been prepared by one of the parties, but rather as if both parties had prepared
the same.  All exhibits and schedules referred to in this Agreement are
attached and incorporated by this reference, and any capitalized term used in
any exhibit or schedule which is not defined in such exhibit or schedule will
have the meaning attributable to such term in the body of this Agreement.  In
the event the date on which Purchaser or Seller is required to take any action
under the terms of this Agreement is not a Business Day, the action will be
taken on the next succeeding Business Day.

 

 

 

 

Section 17.4       
Counterparts.  This Agreement may be executed in
multiple counterparts, each of which, when assembled to include a signature for
each party contemplated to sign this Agreement, will constitute a complete and
fully executed Agreement.  All such fully executed counterparts will
collectively constitute a single agreement.  The delivery of an executed
counterpart of this Agreement via electronic means, such as e-mail or
facsimile, shall be as legally binding on the party so delivering same as the
delivery of a counterpart bearing an original signature.

Section 17.5       
Severability.  If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
law or public policy, all of the other conditions and provisions of this
Agreement will nevertheless remain in full force and effect, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any adverse manner to either party.  Upon such determination that
any term or other provision is invalid, illegal, or incapable of being
enforced, the parties hereto will negotiate in good faith to modify this
Agreement so as to reflect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.

Section 17.6       
Entire Agreement.  This Agreement is the final
expression of, and contains the entire agreement between, the parties with
respect to the subject matter hereof, and supersedes all prior understandings
with respect thereto.  This Agreement may not be modified, changed,
supplemented or terminated, nor may any obligations hereunder be waived, except
by written instrument, signed by the party to be charged or by its agent duly
authorized in writing, or as otherwise expressly permitted herein.

Section 17.7       
Governing Law.  THIS AGREEMENT WILL BE CONSTRUED,
PERFORMED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE DISTRICT IN WHICH THE
PROPERTY IS LOCATED.  SELLER AND PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY DISTRICT OR FEDERAL COURT SITTING IN THE DISTRICT OF
COLUMBIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN A DISTRICT OR FEDERAL
COURT SITTING IN THE DISTRICT OF COLUMBIA. 

Section 17.8       
No Recording.  The parties hereto agree that neither
this Agreement nor any affidavit or memorandum concerning it will be recorded,
and any recording of this Agreement or any such affidavit or memorandum by
Purchaser will be deemed a material default by Purchaser hereunder.

Section 17.9       
Further Actions. The parties agree to execute such
instructions to the Title Company and such other instruments and to do such
further acts as may be reasonably necessary to carry out the provisions of this
Agreement.

Section 17.10   
Exhibits and Schedules.  The following sets forth a
list of Exhibits and Schedules to the Agreement:

            Exhibit
A -      Assignment 

 

 

 

            Exhibit B -      Assignment of Leases

            Exhibit
C -      Bill of Sale

            Exhibit
D -      Legal Description of Real Property

            Exhibit
E -       Service Contracts

            Exhibit
F-1 -    Lease Schedule

            Exhibit
F-2 -    Security Deposits 

            Exhibit
F-3 -    Arrearage Schedule 

            Exhibit
G -      Tenant Estoppel

            Exhibit
H -      Certificate as to Non-Foreign Status

            Exhibit
I -        Audit Inquiry and SEC Compliance

            Exhibit
J -        Personal Property

            Exhibit
K-       Leasing Commission Agreements

            Exhibit
L -       Deed

             

 

Section 17.11   
No Partnership.  Notwithstanding anything to the
contrary contained herein, this Agreement shall not be deemed or construed to
make the parties hereto partners or joint venturers, it being the intention of
the parties to merely create the relationship of Seller and Purchaser with
respect to the Property to be conveyed as contemplated hereby.

Section 17.12   
[Intentionally Omitted.]

Section 17.13   
Discharge of Obligations.    The acceptance of
the Deed by Purchaser shall be deemed to be a full performance and discharge of
every representation and warranty made by Seller herein and every agreement and
obligation on the part of Seller to be performed pursuant to the provisions of
this Agreement, except those which are herein specifically stated to survive
the Closing.

Section 17.14 Asbestos.  Purchaser acknowledges
that it has received copies of Seller’s Asbestos-Containing Material Operations
and Maintenance Plan, dated July 2007, prepared by URS Corporation, and Asbestos-Containing
Material Operations and Maintenance Plan Addendum, dated August 2008, prepared
by URS Corporation. 

 

 

 

IN WITNESS WHEREOF, Seller
and Purchaser have respectively executed this Agreement as of the Effective
Date.

                                                             

                                                                        PURCHASER: 

 

                                                                        ETRE Property A-1, LLC, a Delaware
limited                                                                           liability
company 

 

By:                                                       

Name:                                                   

Title:                                                     

 

 

SELLER: 

 

                                                                        M-C
CAPITOL ASSOCIATES L.L.C.

 

By: Mack-Cali
Property Trust, sole member

 

By:
________________________

       Mitchell E. Hersh

                                                                   President
and Chief Executive Officer

 

 

As to Section 3.3 and Article IV only:

 

ESCROW AGENT:

 

Old
Republic National Title Insurance Company

 

By:_____________________________

Name:___________________________

Title:____________________________exhibit107.htm - Generated by SEC Publisher for SEC Filing

Exhibit 10.7

 

                                                                                                  

FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE 

 

            THIS FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE (this "First Amendment"), is made and entered into as of the 24th day of April 2014, by and between M-C CAPITOL ASSOCIATES L.L.C., a Delaware limited liability company ("Seller") and ETRE Property A-1, LLC, a Delaware limited liability company ("Purchaser"). 

 

        

WITNESSETH:

 

WHEREAS, Purchaser and Seller are the parties to that certain Agreement of Sale and Purchase dated April 2, 2014 with respect to the sale and purchase of real property commonly known as 1201 Connecticut Avenue NW, Washington, DC (the "Agreement"); and 

 

            WHEREAS, Purchaser and Seller desire to amend the Agreement in the manner and pursuant to the terms, conditions and provisions hereof.

 

            NOW, THEREFORE, for and in consideration of the sum of Ten Dollars and other good and valuable consideration in hand paid by each party to the other, the receipt and sufficiency whereof is hereby acknowledged, the parties hereto, intending to be legally bound hereby, do hereby covenant and agree as follows:

 

1.             The foregoing recitals are true and correct.

 

2.             The definition of “Scheduled Closing Date”  in Section 1.1 of the Agreement is hereby deleted and replaced with the following: "“Scheduled Closing Date”  means May 15, 2014 or such later or earlier date to which Purchaser and Seller may hereafter agree in writing."

 

3.             Section 9.3 of the Agreement is hereby amended by deleting "April 17, 2014" on the third line thereof and substituting “May 15, 2014” therefor.

 

4.             Section 12.2 of the Agreement is hereby amended by deleting "April 17, 2014" on the first line thereof and substituting “May 15, 2014” therefor.

 

5.                  Section 16.1 of the Agreement is hereby deleted in its entirety and replaced with the following:

 

Section 16.1    Brokers.  Neither Seller nor Purchaser has retained any broker or agent in connection with this transaction, and Purchaser and Seller agree to indemnify, defend and hold each other harmless from and against any and all loss, cost, damage, liability or expense, including reasonable attorneys’ fees, which either party may sustain, incur or be exposed to by reason of any claim for fees or commissions made through the other party.  Purchaser has retained Jones Lang LaSalle (“JLL”) as its due diligence consultant in connection with this transaction.  Purchaser hereby acknowledges that Seller is not responsible for, and agrees to 

1

 

 

 

indemnify, defend and hold Seller harmless from and
against, any and all loss, cost, damage, liability or expense, including
reasonable attorneys’ fees, which Seller may sustain, incur or be exposed to by
reason of any claim for fees made by JLL in connection with its due diligence
consulting services in this transaction. The provisions of this
Article XVI will survive any Closing or termination of this Agreement.

 

6.                 
At the end of Section 10.5(b) of the Agreement, the following sentence
is hereby inserted: “In addition to the foregoing, at Closing, Purchaser shall
pay Seller $100,000.00 to reimburse Seller for its internal overhead expenses
incurred in connection with this transaction.  The parties agree that $100,000.00
represents a reasonable estimate of such expenses, and Seller shall not be
required to deliver proof of such expenses.” 

 

7.                 
The provisions of this First Amendment are made a part of the subject
Agreement and shall supersede, govern and control all provisions in the Agreement
in conflict herewith.  Seller and Buyer ratify and reaffirm the Agreement as
modified by this First Amendment, and warrant and represent to one another that
the Agreement, as modified by this First Amendment, is in full force and effect
and has not been further amended or modified and acknowledge and agree that,
except as modified by this First Amendment, the rights and obligations of the
parties under the Agreement shall not be affected by the execution and delivery
hereof.  All references in the Agreement to the "Agreement" shall
mean the Agreement as amended by this First Amendment.

 

8.                 
The terms and provisions of this First Amendment shall be governed and
construed in accordance with the law of the District of Columbia.

 

9.                 
Each party to this First Amendment shall execute all instruments and
documents and take such further action as may be reasonably required to
effectuate the purposes of this First Amendment.  Only a writing executed by
the parties hereto may modify this First Amendment.

  

10.             
This First Amendment may be executed in multiple counterparts, each of
which, when assembled to include a signature for each party contemplated to
sign this First Amendment, will constitute a complete and fully executed
agreement.  All such fully executed counterparts will collectively constitute a
single agreement.  The delivery of an executed counterpart of this First
Amendment via electronic means, such as e-mail or facsimile, shall be as
legally binding on the party so delivering same as the delivery of a counterpart
bearing an original signature.

11.             
This First Amendment shall be binding upon the parties hereto, as well
as their successors and permitted assigns.  

                         

[REMAINDER OF
PAGE  INTENTIONALLY LEFT BLANK; 

SIGNATURES ON NEXT
PAGE]

 

 2

 

 

 

 

IN WITNESS WHEREOF, the parties have hereunto set their hands to this First Amendment as of the date and year first above written.   

 

 

Seller: 

 

ETRE PROPERTY A-1, LLC, 

a Delaware limited liability company

 

 

                                                                                    By:__/s/ Paul Frischer_____________

Name:  Paul Frischer

Title:    Authorized Person

 

                                   

 

Purchaser: 

 

M-C CAPITOL ASSOCIATES L.L.C.,  

a Delaware limited liability company

 

By: Mack-Cali Property Trust, sole member

 

By:__/s/ Mitchell E. Hersh_____

Name: Mitchell E. Hersh

Title:    President and Chief      Executive Officer

	

    
	

   [Signature Page to First Amendment to Agreement of Sale and Purchase]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}]]