Document:

EXHIBIT
10.1

Commercial
Multi-Property Agreement of Purchase and Sale,

Together with Related Amendments

IMPORTANT NOTE:

Certain information
contained in the originally executed copy of the Commercial Multi-Property
Agreement of Purchase and Sale, as well as in the related amendments thereto,
has been omitted from the following Exhibit 10.1 pursuant to a request for
confidential treatment delivered by the Registrant to the Office of the
Secretary of the Securities and Exchange Commission simultaneously with the
filing of this Form 10-Q. The omitted information has been replaced
with the symbol “***” to notify readers that such information has been omitted.
The omission of this information appears on many of the pages of the
Commercial Multi-Property Agreement of Purchase and Sale, as well as the
related amendments thereto.

The Registrant has
separately filed in paper format with the Securities and Exchange Commission,
together with the aforementioned request for confidential treatment, a complete
version of the Commercial Multi-Property Agreement of Purchase and Sale,
including the related amendments thereto, which does not omit any information
for which confidential treatment is being sought.

 

 

 COMMERCIAL MULTI-PROPERTY

AGREEMENT

OF PURCHASE AND SALE

 

TABLE OF CONTENTS

	
  ARTICLE I.

  	
   

  	
  SUBJECT OF SALE

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 1.1.

  	
   

  	
  Sale of the Properties

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 1.2.

  	
   

  	
  Seller Relationships

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
   

  	
  PURCHASE PRICE

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 2.1.

  	
   

  	
  Purchase Price

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 2.2.

  	
   

  	
  Investment

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 2.3.

  	
   

  	
  Return of Deposit

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 2.4.

  	
   

  	
  Additional Escrow Terms

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
   

  	
  TITLE EXCEPTIONS; DUE DILIGENCE

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.1.

  	
   

  	
  State of Title to be Conveyed.

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.2.

  	
   

  	
  Title Reports.

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.3.

  	
   

  	
  Title Objections.

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.4.

  	
   

  	
  Removal of Title Objections.

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.5.

  	
   

  	
  Deliveries by Sellers

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.6.

  	
   

  	
  No Representations Regarding Due Diligence Materials

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.7.

  	
   

  	
  Access to the Property

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.8.

  	
   

  	
  Return of Information Upon Termination

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 3.9.

  	
   

  	
  Study Period

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
   

  	
  ASSESSMENTS

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 4.1.

  	
   

  	
  Assessments

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
   

  	
  EXPENSES

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 5.1.

  	
   

  	
  Expenses

  	
   

  	
  16

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 5.2.

  	
   

  	
  Survival

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
   

  	
  APPORTIONMENTS

  	
   

  	
  17

  	
   

  

 

 i
 

 

 

	
   

  	
   

  	
  Section 6.1.

  	
   

  	
  Apportionments

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.2.

  	
   

  	
  Goods and Services

  	
   

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.3.

  	
   

  	
  Leasing Costs

  	
   

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.4.

  	
   

  	
  Reapportionment

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.5.

  	
   

  	
  Monthly Statements.

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.6.

  	
   

  	
  Security Deposits

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.7.

  	
   

  	
  Capital Expenses

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.8.

  	
   

  	
  Timing

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 6.9.

  	
   

  	
  Survival

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
   

  	
  CONDITIONS TO CLOSING AND THE CLOSING

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 7.1.

  	
   

  	
  Conditions to Sellers’ Obligation to Sell

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 7.2.

  	
   

  	
  Conditions to Buyer’s Obligation to Purchase

  	
   

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 7.3.

  	
   

  	
  Adjournment of Closing Date

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 7.3.

  	
   

  	
  No Financing Contingency

  	
   

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 7.4.

  	
   

  	
  Closing

  	
   

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
   

  	
  SELLERS’ REPRESENTATIONS

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 8.1.

  	
   

  	
  Sellers’ Representations

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 8.2.

  	
   

  	
  Representation Survival

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 8.4.

  	
   

  	
  Limitations on Sellers’ Representations

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 8.5.

  	
   

  	
  Buyer’s Knowledge

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 8.6.

  	
   

  	
  Sellers’ Knowledge

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 8.7.

  	
   

  	
  Sellers’ Representations and Warranties

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
   

  	
  BUYER’S REPRESENTATIONS

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 9.1.

  	
   

  	
  Buyer’s Representations

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 9.2.

  	
   

  	
  Survival

  	
   

  	
  34

  	
   

  

 

 ii
 

 

 

	
  ARTICLE X.

  	
   

  	
  LIKE KIND EXCHANGE

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.18.

  	
   

  	
  Like-Kind Exchange

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI.

  	
   

  	
  TAX REASSESSMENT OR REDUCTION PROCEEDINGS

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 11.1.

  	
   

  	
  Tax Reassessment or Reduction Proceedings

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII.

  	
   

  	
  CONDITION OF PROPERTIES; RELEASE OF CLAIMS

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 12.1.

  	
   

  	
  Condition of Properties

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 12.2.

  	
   

  	
  Release of Claims

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII.

  	
   

  	
  DELIVERIES AT CLOSING

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 13.1.

  	
   

  	
  Deliveries at Closing

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV.

  	
   

  	
  DEFAULT; DAMAGES

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.1.

  	
   

  	
  Buyer Defaults

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.2.

  	
   

  	
  Seller Defaults

  	
   

  	
  42

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.3.

  	
   

  	
  Right to Cure

  	
   

  	
  43

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.4.

  	
   

  	
  Defaults Discovered Post Closing

  	
   

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.5.

  	
   

  	
  Limitation on Seller’s Default

  	
   

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.6.

  	
   

  	
  Termination of Related Purchase Agreements

  	
   

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 14.6.

  	
   

  	
  Survival

  	
   

  	
  45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV.

  	
   

  	
  OPERATION OF PROPERTIES UNTIL CLOSING

  	
   

  	
  45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 15.1.

  	
   

  	
  Operation of the Properties

  	
   

  	
  45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 15.2.

  	
   

  	
  Books and Records

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 15.3.

  	
   

  	
  Change in Condition of Property Prior to Closing

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 15.4.

  	
   

  	
  Deemed Consent

  	
   

  	
  48

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 15.5.

  	
   

  	
  No Termination

  	
   

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 15.6.

  	
   

  	
  Continued Operation by Sellers

  	
   

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI.

  	
   

  	
  CASUALTY AND CONDEMNATION

  	
   

  	
  49

  	
   

  

 

 iii
 

 

 

	
   

  	
   

  	
  Section 16.1.

  	
   

  	
  Condemnation

  	
   

  	
  49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 16.2.

  	
   

  	
  Casualty

  	
   

  	
  50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 16.3.

  	
   

  	
  Termination

  	
   

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVII.

  	
   

  	
  NOTICES

  	
   

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 17.1.

  	
   

  	
  Notices

  	
   

  	
  51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVIII.

  	
   

  	
  INVESTMENT BANKER AND BROKER

  	
   

  	
  53

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 18.1.

  	
   

  	
  Investment Banker and Broker

  	
   

  	
  53

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIX.

  	
   

  	
  ASSIGNMENT

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 19.1.

  	
   

  	
  Assignment

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XX.

  	
   

  	
  FURTHER ASSURANCES

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 20.1.

  	
   

  	
  Further Assurances

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXI.

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 21.1.

  	
   

  	
  Confidentiality

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXII.

  	
   

  	
  PUBLIC DISCLOSURE - PRESS RELEASES

  	
   

  	
  55

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 22.1.

  	
   

  	
  Public Disclosure

  	
   

  	
  55

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXIII.

  	
   

  	
  DISBURSEMENTS BY ESCROW HOLDER

  	
   

  	
  55

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 23.1.

  	
   

  	
  Actions by Escrow Holder

  	
   

  	
  55

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXIV.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.1.

  	
   

  	
  Entire Agreement

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.2.

  	
   

  	
  Modification

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.3.

  	
   

  	
  Captions

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.4.

  	
   

  	
  Governing Law

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.5.

  	
   

  	
  References

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.6.

  	
   

  	
  Certain Definitions

  	
   

  	
  56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.7.

  	
   

  	
  Exhibits

  	
   

  	
  57

  	
   

  

 

 iv
 

 

 

	
   

  	
   

  	
  Section 24.8.

  	
   

  	
  Successors and Assigns

  	
   

  	
  57

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.9.

  	
   

  	
  Survival

  	
   

  	
  57

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.10.

  	
   

  	
  Attorneys’ Fees

  	
   

  	
  58

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.11.

  	
   

  	
  Severability

  	
   

  	
  58

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.12.

  	
   

  	
  Counterparts

  	
   

  	
  58

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.14.

  	
   

  	
  Recordation

  	
   

  	
  58

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.15.

  	
   

  	
  Time of Essence

  	
   

  	
  58

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Section 24.17.

  	
   

  	
  Escrow Holder

  	
   

  	
  58

  	
   

  

 

 v
 

 

EXHIBITS AND SCHEDULES

	
  Exhibit A

  	
   

  	
  Description of Land

  	
   

  	
  Recital

  	
   

  
	
  Exhibit B

  	
   

  	
  Tenant List

  	
   

  	
  1.1(a),
  1.1(b), 8.1(c)

  	
   

  
	
  Exhibit C

  	
   

  	
  Service Contracts

  	
   

  	
  1.1(e),
  8.1(d)

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Assignment
  and Assumption Agreement

  	
   

  	
  1.1(e),
  13.1(a)

  	
   

  
	
  Exhibit E

  	
   

  	
  Construction Contracts

  	
   

  	
  1.1(f)

  	
   

  
	
  Exhibit F

  	
   

  	
  Equipment Leases

  	
   

  	
  1.1(i)

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of Special
  Warranty Deed

  	
   

  	
  3.1,
  13.1(a)

  	
   

  
	
  Exhibit H

  	
   

  	
  Property Evaluation
  Reports

  	
   

  	
  3.5

  	
   

  
	
  Exhibit I

  	
   

  	
  Assessments

  	
   

  	
  4.1

  	
   

  
	
  Exhibit J

  	
   

  	
  Outstanding Lease
  Obligations

  	
   

  	
  6.3(a)

  	
   

  
	
  Exhibit K

  	
   

  	
  Schedule of Rent Step
  Up

  	
   

  	
  6.3(b),
  6.3(e)

  	
   

  
	
  Exhibit L

  	
   

  	
  Schedule of “Out for
  Signature” Leases

  	
   

  	
  6.3
  (c), 6.3(e)

  	
   

  
	
  Exhibit M

  	
   

  	
  Schedule of Vacancy
  Leasing Costs

  	
   

  	
  6.3(d),
  6.3(e)

  	
   

  
	
  Exhibit N

  	
   

  	
  Capital Expense
  Projects

  	
   

  	
  6.7

  	
   

  
	
  Exhibit O

  	
   

  	
  Form of Tenant
  Estoppel Certificate

  	
   

  	
  7.2(b)

  	
   

  
	
  Exhibit P

  	
   

  	
  Form of Seller’s
  Estoppel

  	
   

  	
  7.2(b)

  	
   

  
	
  Exhibit Q

  	
   

  	
  Buyer’s Additional
  Credits

  	
   

  	
  6.3(e)

  	
   

  
	
  Exhibit R

  	
   

  	
  Pending Claims

  	
   

  	
  8.1(e)

  	
   

  
	
  Exhibit S

  	
   

  	
  Security Deposits

  	
   

  	
  8.1(g)

  	
   

  
	
  Exhibit T

  	
   

  	
  Schedule of Tax
  Reduction Proceedings

  	
   

  	
  8.1(h)

  	
   

  
	
  Exhibit U

  	
   

  	
  Form of Bill of
  Sale

  	
   

  	
  13.1(a)

  	
   

  
	
  Exhibit V

  	
   

  	
  Form of Seller’s
  Title Affidavit

  	
   

  	
  13.1(h)

  	
   

  
	
  Exhibit W

  	
   

  	
  Form of FIRPTA
  Certification

  	
   

  	
  13.1(k)

  	
   

  
	
  Exhibit X

  	
   

  	
  Pre-Development Costs

  	
   

  	
  6.1(8)

  	
   

  
	
  Exhibit Y

  	
   

  	
  Leasing Guidelines

  	
   

  	
  15.1(b)

  	
   

  
	
  Exhibit Z

  	
   

  	
  Insurance Coverage

  	
   

  	
  15.1(e),
  16.2

  	
   

  
	
  Exhibit AA

  	
   

  	
  Provisions Pertaining
  to Loan Assumptions

  	
   

  	
  2.1(c)

  	
   

  
	
  Exhibit BB

  	
   

  	
  Provisions Pertaining
  to Buildings Under Construction

  	
   

  	
  7.5

  	
   

  
	
  Exhibit CC

  	
   

  	
  Description of
  Portfolios

  	
   

  	
  7.3

  	
   

  
	
  Exhibit DD

  	
   

  	
  29G Construction Costs
  Incurred as of the Effective Date

  	
   

  	
  15.1(h)

  	
   

  
	
  Exhibit EE

  	
   

  	
  Form of Master
  Lease for Parcel 29G

  	
   

  	
  15.1(h)

  	
   

  
	
  Exhibit FF

  	
   

  	
  Required Tenants

  	
   

  	
  7.2(b)

  	
   

  
	
  Exhibit GG

  	
   

  	
  Title Questions

  	
   

  	
  3.2, 3.9(b)

  	
   

  

 vi
 

 

 

	
  Schedule

  	
   

  	
   

  	
   

  	
  Section

  	
   

  
	
  Schedule
  1- A

  	
   

  	
  List of Sellers

  	
   

  	
  Recital

  	
   

  
	
  Schedule
  1.1(i)

  	
   

  	
  Bonds, Deposits and
  Similar Assurances

  	
   

  	
  1.1(i)

  	
   

  
	
  Schedule
  2.1

  	
   

  	
  Purchase Price
  Allocation

  	
   

  	
  2.1

  	
   

  
	
  Schedule
  2.1(a)

  	
   

  	
  Allocation of Security
  Deposit

  	
   

  	
  2.1(a)

  	
   

  
	
  Schedule
  3.1(a)

  	
   

  	
  Preliminary Title
  Reports

  	
   

  	
  3.1(a),
  3.3

  	
   

  
	
  Schedule
  3.1(f)

  	
   

  	
  Surveys

  	
   

  	
  3.1(f)

  	
   

  
	
  Schedule 3.9(b)

  	
   

  	
  Tenants to be Interviewed

  	
   

  	
  3.9(b)

  	
   

  

 

 vii

 

AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”)
is made as of this January ___, 2006 (the “Effective Date”) by and
among the entities listed on Schedule 1-A hereto (each, a “Seller”
and, collectively, the “Sellers”), having an address at c/o The Mark
Winkler Company, 4900 Seminary Road, Suite 900, Alexandria, Virginia
22311, and DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership (“Buyer”),
having an address at 600 East 96th Street, Suite 100, Indianapolis, Indiana
46240.

W I T N E S S E T H:

WHEREAS, each Seller is the owner of the tracts of
land set forth next to such Seller’s name set forth on Schedule 1-A
hereto, which tracts of land are more particularly described on Exhibits A
attached hereto (such land, together with all appurtenances and rights,
privileges, development rights, air rights, rights of way, and easements
appurtenant thereto, are collectively referred herein to as the “Land”); and

WHEREAS, each Seller desires to sell to Buyer and
Buyer desires to purchase from each Seller, each Property (as defined below),
subject to the terms and conditions of this Agreement. Certain of the
Properties are grouped as portfolios as shown on Exhibit CC
attached hereto (each, a “Portfolio”).

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by each party
hereto, and intending to be legally bound hereby, Sellers and Buyer agree as
follows:

ARTICLE I.

SUBJECT OF SALE

Section 1.1.  Sale of the Properties. Upon and
subject to the terms and conditions herein contained, Sellers agree to sell,
transfer, assign and convey to Buyer, and Buyer agrees to purchase from Sellers each Seller’s
interest in: (a) the Land, (b) the buildings and other improvements,
if any, located on the Land (the “Buildings”), and (c) except to
the extent otherwise set forth herein, all of the other tangible and intangible
property owned by Sellers in, on, attached to, appurtenant to, and used in the
operation or maintenance of, the Land or the Buildings, including, without
limitation, development rights and air rights, if any (collectively with the
Land and the Buildings, the “Properties” and, each a “Property”
or an “Individual Property”). The sale of the Properties shall include,
without limitation, the following:

(a)   Sellers’ interests as landlord under all leases, licenses and
other occupancy agreements for space in the Buildings reflected in the tenant
list attached as Exhibit B hereto (as the same may be amended,
modified, renewed or extended in accordance with the terms of this Agreement,
the “Leases”), together with all leases and other occupancy agreements
relating to the Buildings entered into by Sellers after the Effective Date in
accordance with the terms of this Agreement, to the extent the Leases do 

 1
 

 

not expire or are not terminated prior to the
Closing Date (as hereinafter defined) in accordance with the terms of this
Agreement;

(b)   Sellers’ interests, if any, in all refundable security deposits,
whether in the form of cash, letters of credit or other security, and, except
as provided herein, advance rental payments held by Sellers in connection with
the Leases, received from the tenants listed in Exhibit B attached
hereto together with all other tenants pursuant to leases and other occupancy
agreements relating to the Buildings entered into by Sellers after the
Effective Date in accordance with the terms of this Agreement (the “Tenants”),
including all accrued interest thereon which Tenants are entitled to receive;

(c)   Sellers’ interests, if any, in all licenses, permits,
certificates, approvals, authorizations, variances and consents (collectively,
the “Permits”) issued or granted by governmental and quasi-governmental
bodies, officers and authorities exclusively in respect of the ownership,
occupancy, use and operation of the Land or the Buildings to the extent
assignable;

(d)   Sellers’ interest in all maintenance, parking management, supply,
and other service contracts (collectively, the “Service Contracts”), but
specifically excluding property management agreements, which property
management agreements shall be terminated, at or prior to Closing, by the
Seller whose Property is affected by such property management agreements at
such Seller’s sole cost and expense. All Service Contracts that, to Seller’s
knowledge, are not terminable at Closing, are indicated on Exhibit C.
Except as provided below and subject to the terms and conditions of this
Agreement, Buyer shall purchase the Properties subject to the Service Contracts
and shall assume the obligations of Seller thereunder pursuant to the terms of
an Assignment and Assumption Agreement, the form of which is set forth as Exhibit D.
Service Contracts that affect one or more properties in addition to the
Properties to be purchased by Buyer pursuant to this Agreement shall be
terminated by Seller effective as of the Closing Date. During the Study Period,
Buyer shall review the Service Contracts to determine which may be terminated
by Seller prior to the Closing and which may not. Seller agrees to provide
notices of termination on or prior to the Closing for each of the Service
Contracts that are terminable and that Buyer designates in writing during the
Study Period for termination; provided that in no event shall Seller be obligated
to terminate Service Contracts relating to maintaining warranties in connection
with the Buildings and other improvements or that were obtained in connection
with the initial construction or installation. All termination fees, if any,
arising out of a termination, shall be paid by Buyer at Closing;

(e)   All contract rights related to any construction activities on the
Properties, including improvements required by any Leases, but only to the
extent (i) assignable or transferable without penalty or payment by any of
the Sellers (unless Buyer agrees to assume responsibility for such penalty or
payment in a manner reasonably acceptable to Sellers) and/or (ii) such
contract rights are not being retained on a non-exclusive basis by or on behalf
of any of the Sellers for continuing development of Liberty Center III,
including, without limitation, the following: 
construction contracts, architectural contracts, engineering contracts,
and other agreements related to construction

 2
 

 

activities on the Properties that will remain
in existence after the Closing (collectively, the “Construction Contracts”).
Seller will assign to Buyer, and Buyer will assume from Seller, the
Construction Contracts listed on Exhibit E pursuant to the terms of
an Assignment and Assumption Agreement, the form of which is set forth as Exhibit D.

(f)    all right, title and interest of Sellers in and to any unpaid award for any taking of all or
part of the Land or the Buildings;

(g)   all right, title and interest of Sellers in and to all assignable
warranties and guaranties, if any with respect to the Land or the Buildings;
and

(h)   all right, title and interest of Sellers in and to machinery,
tools, equipment, fixtures and other tangible property in, on, attached to,
appurtenant to and used by Sellers solely in the operation or maintenance of,
the Land or the Buildings which are owned by Sellers including, without
limitation, all inventory, supplies, building materials, tools, machinery and
equipment in the condition, and of the volume, as existing on the Closing Date,
it being understood that such items may be in need of repair, and Seller shall
have no obligation to repair the same (the “Personal Property”), and all
right, title and interest of Sellers under all equipment leases relating to the
operation or maintenance of the Land or Buildings, which equipment leases are
listed on Exhibit F attached hereto (the “Equipment Leases”).

(i)    Subject to the apportionment provisions of Article VI,
the sale of the Properties shall exclude (i) all cash of any Seller
(whether on hand or in bank accounts) other than the aforementioned unapplied
security deposits, (ii) delinquent Tenant arrearages and accounts
receivable as of the Closing Date, (iii) Sellers’ policies of title
insurance, (iv) computer programs which are not related solely to the
operation of the Properties  or are not
owned by Seller, (v) Sellers’ rights under this Agreement, (vi) all
proprietary or licensed computer programs, (vii) all insurance proceeds
with respect to events existing or occurring prior to, and other claims
existing on, the Closing Date, other than the proceeds assigned to Buyer
pursuant to Article XVI hereof, (viii) all bonds, letters of
credit, deposits or similar assurances posted with governmental or
quasi-governmental agencies or utility companies to secure performance of
public improvements or payment obligations to utility companies, (ix) any
items of personal property owned or leased (from anyone other than a Seller) by
each Seller’s property manager and located in the property manager’s on-site or
off-site property management office, (x) any items of personal property
owned or leased (from anyone other than a Seller) by any Tenant at or on each
Seller’s Property, and (xi) any Protected Information (as defined herein). Buyer
shall be responsible at its sole cost and expense to post (and to pay the cost
of) all bonds, deposits or similar assurances to be posted with governmental or
quasi-governmental agencies or utility companies in connection with the
development, ownership, operation and maintenance of the Property, as the same
are listed on Schedule 1.1(i) attached hereto.

(j)    Each Seller quitclaims to Buyer any rights it may have to use the
names “Mark Center”, “TransDulles Centre”, 
and “Liberty Center”, and the related logos, and Buyer shall have the
non-exclusive right, together with other property owners, to use

 3
 

 

such names. Buyer hereby acknowledges that
Seller makes no representations or warranties concerning any patents,
trademarks, copyrights or other intellectual property rights.

Section 1.2.  Seller Relationships. Notwithstanding
anything contained in this Agreement to the contrary, the representations,
covenants and obligations of each individual Seller under this Agreement shall
be limited to the representations, covenants and obligations of such Seller set
forth in this Agreement, as applicable to such Seller and to such Seller’s
Property only. The obligations of the Sellers under this Agreement are not
joint and several. No Seller shall be responsible for the obligations of any
other Seller under this Agreement. No Seller shall be subject to claims,
damages or remedies attributable to any breach of this Agreement by another
Seller.

ARTICLE II.

PURCHASE
PRICE.

Section 2.1.  Purchase Price. The aggregate purchase
price for the Properties (the “Purchase Price”) is EIGHT HUNDRED
THIRTY-SEVEN MILLION THREE HUNDRED SIXTY-SIX THOUSAND NINETY ONE AND 00/100
DOLLARS ($837,366,091), which represents the sum of the purchase price
allocated to each Property as shown on Schedule 2.1, payable by Buyer as
follows. Parcel 20 Seller may also be entitled to the increase in the Purchase
Price allocable to its Property pursuant to the terms of Section 15.1(i) below:

(a)   Buyer shall, within one (1) Business Day (as defined below)
after full execution of this Agreement, deliver to First American Title
Insurance Company (in such capacity, the “Escrow Holder”) the amount of
**** of the ******** ***** in the form of a letter of credit (as provided
below) or by wire transfer of immediately available good funds to an account
designated by Escrow Holder (together with any interest earned thereon, the “Initial
Deposit”). Provided this Agreement is not terminated by the end of the
***** ******** **** (as defined below), Buyer shall, within one (1) Business
Day after the ***** ******** ****, deposit with Escrow Holder an additional
amount (together with any interest earned thereon, the “Additional Deposit”)
such that the sum of the Initial Deposit and the Additional Deposit shall equal
**** ******* **** of the ******** *****. The Additional Deposit shall be in the
form of a letter of credit (as provided below) or by wire transfer of
immediately available good funds to an account designated by Escrow Holder. As
used herein, the term “Deposit” shall mean the Initial Deposit together with
the Additional Deposit, from and after the date that the Additional Deposit is
required to be made. The Deposit shall be allocated to the Properties as set
forth on Schedule 2.1(a). The Deposit shall be non-refundable; provided,
however, that the Deposit (or the appropriate allocable portion thereof)
shall be refundable to Buyer if  Buyer
terminates this Agreement in accordance with the provisions of this Agreement
which expressly provide for the return of any portion of the Deposit to Buyer
upon such termination. At the election of
Buyer, the Deposit (or any portion thereof) may be in the form of one or more
irrevocable letters of credit issued by a U.S. federally insured commercial
bank approved by Sellers for the benefit of Escrow Holder, each of which

 4
 

 

shall have an initial term of at
least one year, the form and substance of which shall be acceptable to Sellers
and Escrow Holder. If Buyer and Seller cannot agree upon the issuer of a letter
of credit or the form or substance of such letter of credit, the Deposit shall
be in cash. If at any time during the term of the Agreement, any letter of
credit will expire within thirty (30) days, Buyer shall deliver to Escrow
Holder either a replacement letter of credit, or an endorsement to the letter
of credit, extending the expiration date of the Letter of Credit for at least
one (1) year, or to a date that is thirty (30) days following the
scheduled Closing Date, whichever is earlier. If a replacement letter of credit
or endorsement is not provided to Escrow Holder as required by the preceding
sentence within seven (7) Business Days of the expiration date, Escrow
Holder shall draw upon the letter of credit and the proceeds thereof shall be
held by Escrow Holder as the Deposit under this Agreement. Escrow Holder shall
draw upon and deliver the proceeds of a letter of credit (or applicable portion
thereof) to a Seller whenever the terms of this Agreement require the Deposit
or a portion thereof to be delivered to such Seller, including following an
event of default by Buyer that has not been cured during any requisite cure
period, and shall deliver such letter of credit to Buyer whenever the terms of
this Agreement require the Deposit to be delivered to Buyer. Each letter of
credit shall provide that it may be drawn upon by Escrow Holder upon
presentation, to issuer, of the original letter of credit together with a site
draft and a written statement duly executed and acknowledged by an authorized
representative of Escrow Holder, certifying that the amount drawn thereunder is
being drawn upon by Escrow Holder pursuant to the terms and conditions of this
Agreement; and

(b)   Buyer shall, on or before 11:00 a.m. (Eastern Time) on the
Closing Date, deliver to Escrow Holder, by bank wire transfer of immediately
available funds to an account designated by Escrow Holder no less than three (3) Business
Days prior to Closing, the Purchase Price less the amount of any cash Deposit
which is being paid to Seller at Closing. At the Closing, Escrow Holder shall
deliver to Sellers the Purchase Price as adjusted to reflect prorations and
other adjustments made pursuant to Article VI. Except as otherwise
provided in this Agreement, Escrow Holder shall hold all amounts deposited by
Buyer under this Section 2.1(b) for the benefit of Buyer until
delivered to Sellers at the Closing and Buyer shall be entitled to a credit
against the Purchase Price for all interest paid to Sellers that is earned on
such amounts from the date of the deposit until the Closing.

(c)   The Purchase Price is subject to adjustment pursuant to the terms
of the loan assumption provisions set forth on Exhibit AA attached
hereto and made a part hereof.

Section 2.2.  Investment. The cash portion of the
Deposit shall be deposited by Escrow Holder into an interest bearing account
approved by Buyer and Seller and paid by Escrow Holder in accordance with the
terms and provisions of this Agreement.

Section 2.3.  Return of Deposit. Promptly after the
receipt by Escrow Holder of (a) notice of any demand by either party
claiming that it is entitled to the Deposit (or any portion thereof) or (b) any
other claim or the commencement of any action, suit or proceeding by either
party, Escrow Holder shall send a copy of such notice to the other

 5
 

 

party and inform the other party of such
claim; but the failure by Escrow Holder to give such notice shall impose no
liability on the Escrow Holder so long as Escrow Holder does not release the
Deposit. If Escrow Holder shall receive written notice from either party within
five (5) Business Days after delivery of such notice to the other party
instructing Escrow Holder not to deliver the Deposit to the requesting party or
to otherwise hold the Deposit, or if for any reason there is any dispute or
uncertainty concerning any action to be taken hereunder, Escrow Holder shall
take no action and shall continue to hold the Deposit until it has received
instructions in writing concurred to by Sellers and Buyer or until directed by
final order or judgment of a court of competent jurisdiction, whereupon Escrow
Holder shall take such action in accordance with such instructions or such
order. If no written notice is received by Escrow Holder within such five (5) Business
Day period, Escrow Holder shall deliver a second notice to the other party, and
if no response is received within five (5) Business Days thereafter,
Escrow Holder may deliver the Deposit to the party which made such demand.

Section 2.4.  Additional Escrow Terms. (a) Sellers
and Buyer hereby appoint Escrow Holder to act as the escrow agent under the
terms of this Agreement, and Escrow Holder has agreed to accept such
appointment under the terms of this Agreement. The duties and responsibilities
of Escrow Holder shall be limited to those expressly set forth in this Agreement.
No implied duties of Escrow Holder shall be read into this Agreement.

(b)   Upon receipt of the Deposit, Escrow Holder shall provide written
notice to Sellers and Buyer acknowledging such receipt. Concurrently with the
delivery of this Agreement, Buyer shall deliver to Escrow Holder an executed W-9
Form from Buyer stating Buyer’s federal tax identification number.

(c)   Escrow
Holder shall be entitled to rely upon the authenticity of any signature and the
genuineness and/or validity of any writing received by Escrow Holder pursuant
to or otherwise relating to this Agreement. Escrow Holder shall not be
responsible or liable in any respect on account of the identity, authority or
rights of any person executing, depositing or delivering or purporting to execute, this Agreement, or on account of
or by reason of forgeries, false representations, or the exercise of Escrow
Holder’s discretion in any particular manner, nor shall Escrow Holder be liable
for any mistake of fact or of law or any error of judgment; provided,
however, that nothing in this Agreement shall limit
Escrow Holder’s liability for any claim arising out of Escrow Holder’s
negligence, willful misconduct or breach of this Agreement. Under no
circumstances shall Escrow Holder be liable for any general or consequential
damages or damages caused, in whole or in part, by the action or inaction of
Sellers or Buyer (collectively, the “Interested Parties”) or any of
their respective agents or employees. Escrow Holder shall not be liable for any
damage, loss, liability, or delay caused by accident, strike, fire, flood, war,
riot, equipment breakdown, electrical or mechanical failure, act of God or any
cause which is beyond its reasonable control.

(d)   Escrow Holder shall not be responsible in any manner whatsoever
for:  (i) any failure or inability
of any Interested Party, or of any one else, to perform or comply with any of
the provisions of this Agreement or any other instrument or agreement referred
to herein; (ii) the failure to return all or any part of the Deposit by
any financial

 6
 

 

institution in which the Deposit is
deposited; or (iii) any investment decision with respect to the Deposit. Furthermore,
Escrow Holder shall not be responsible for the collection of any checks
deposited with it.

(e)   Escrow Holder shall not be bound or in any way affected by any
notice of any modification or cancellation of this Agreement, of any fact or
circumstance affecting or alleged to affect the parties’ respective rights or
liabilities hereunder other than as is expressly provided in this Agreement,
unless notice of the same is delivered to Escrow Holder in writing, signed by
the proper parties.

(f)    Sellers and Buyer jointly and severally agree to indemnify and
hold harmless Escrow Holder from and against any and all reasonable costs,
claims, damages or expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) howsoever occasioned that may be incurred by
Escrow Holder acting under this Agreement or to which Escrow Holder may be put
in connection with Escrow Holder acting under this Agreement, except for costs,
claims or damages arising out of Escrow Holder’s willful misconduct, negligence
or breach of this Agreement.

(g)   In the event of a dispute or conflicting demands or instructions
with respect to any portion of the Deposit, Escrow Holder shall have the right
to interplead such portion of the Deposit with a court of competent
jurisdiction at the cost of Sellers and Buyer.

(h)   Sellers and Buyer reserve the right, at any time and from time to
time, to substitute a new escrow agent in place of Escrow Holder pursuant to a
writing executed by Sellers and Buyer which shall contain instructions to
Escrow Holder regarding disbursement of the Deposit to the new escrow agent.

ARTICLE III.

TITLE
EXCEPTIONS; DUE DILIGENCE.

Section 3.1.  State of Title to be Conveyed. Each
Seller’s interest in its Property shall be conveyed to Buyer at the Closing for
such Property in fee simple by Special Warranty Deed in the form of Exhibit G
attached hereto, free and clear of any and all liens, mortgages, deeds of
trust, security interests, encumbrances and other title matters, except for the
following “Permitted Encumbrances”:

(a)   the standard pre-printed exclusions from coverage contained in the
ALTA form of owner’s title policies issued by a title company selected by Buyer
and reasonably acceptable to Sellers (in such capacity, the “Title Company”)
and those specific items identified on the marked form of Schedule B-II of the
preliminary title reports listed on Schedule 3.1(a) hereto (as same
may have been updated, amended or modified prior to the Effective Date, the “Preliminary
Title Reports”) prepared by the Title Company for each Property, as listed
on Schedule 3.1(a) hereto, subject to the following:  (1) exception B-2(1) is
subject to the provisions of Section 3.3 of this Agreement; (2) exception
B-2(a) shall be a permitted exception only as to tenants or

 7
 

 

licensees, as tenants or licensees only,
under unrecorded leases or licenses; (3) exception B-2(b) is a
Permitted Exception only as to easements shown on the Surveys received during
the Study Period; (4) exception B-2(c) is subject to the
provisions of Section 3.3 hereof; and (5) exception B-2(d) shall
be deleted and replaced with any specific survey exceptions taken by the Title
Company in the owner’s policy;

(b)   the Leases that exist as of the Closing for each Property
(including the Leases that exist as of the Effective Date and such Leases that
are entered into, modified or renewed after the date of this Agreement not in
violation of this Agreement, but excluding those Leases that have expired or
have been duly terminated);

(c)   all liens of general real estate taxes and assessments,
assessments in connection with any proposed Dulles Rail extension (if
applicable), personal property taxes and all water, sewer, utility, trash and
other similar charges and assessments that are not yet due and payable, it
being agreed that all such amounts due and payable as of Closing shall be paid
in full by Seller, subject to proration for the month and year of Closing, as
set forth in this Agreement;

(d)   Intentionally deleted;

(e)   all liens, encumbrances and other defects or exceptions to title
insurance coverage caused by (i) Buyer; (ii) any of Buyer’s
representatives; or (iii) any of the Sellers or any of their respective
representatives at Buyer’s or any Buyer’s representative’s written request;

(f)    matters shown on those certain ALTA/ACSM Land Title Surveys
listed on Schedule 3.1(f) (as same may have been updated, amended
or modified prior to the Effective Date, the “Surveys”), provided that
this item (f) shall not be listed as a permitted exception in the Special
Warranty Deed;

(g)   all liens, encumbrances and governmental obligations that either
affect solely the property of a Tenant under a Lease or are the obligation of a
Tenant to discharge, cure or comply with pursuant to the terms of its Lease,
provided that this item (g) shall not be listed as a permitted exception
in the Special Warranty Deed;

(h)    Intentionally Omitted;

(i)    all Title Objections (as defined below) approved or deemed
approved by Buyer pursuant to Section 3.3 below; and

(j)    as to the Properties in the Mark Center Portfolio, any current
and future burdens and requirements, financial or otherwise, arising from or in
relation to any Transportation Management Plan applicable with respect to the
Property, as such Transportation Management Plan may be from time to time
amended (the “TMP”), provided that this item (j) shall not be listed as a
permitted exception in the Special Warranty Deed, except to the extent
appearing on the Preliminary Title Reports.

 8

 

Section 3.2.  Title Reports. Buyer acknowledges that
it has received copies of, and, subject to Section 7.2, approves
all documents relating to Permitted Encumbrances referred to in the Preliminary
Title Reports and all other documents evidencing or relating to matters
reflected in the Preliminary Title Reports. Buyer will purchase from the Title
Company an owner’s title insurance policy for each Individual Property insuring
Buyer in the amount of the Purchase Price allocable to such Property (“Title
Policies”). In addition, Buyer may elect to purchase customary endorsements
to the Title Policies, provided, however, the availability of any endorsements
shall not be a condition to the Closing or a basis for a delay or extension of
the Closing. Buyer acknowledges and agrees that, except for the warranty in the
Special Warranty Deeds and other Seller’s Documents delivered to Buyer at
Closing, and any express warranty in this Agreement, Sellers make no
representation or warranty regarding the condition of title to the Properties. Notwithstanding
anything to the contrary set forth herein, attached hereto as Exhibit GG
is a list of title questions raised by Buyer (the “Title Questions”). Buyer
and Sellers acknowledge and agree that such Title Questions are neither deemed
to be, nor precluded from qualifying as, Title Objections pursuant to Section 3.3
below.

Section 3.3.  Title Objections.  If any revision or update of any Preliminary
Title Report or Survey discloses exceptions to title other than Permitted
Encumbrances shown in the Preliminary Title Report, or Survey received during
the Study Period, that would cause title to an Individual Property to be
uninsurable or would render title unmarketable or constitute a monetary lien or
judgment on a Property, or encumbers a Property materially and adversely (the
foregoing, collectively, the “Title Objections”), Buyer shall so notify
the Seller of the particular Property to which such Title Objection relates (“Buyer’s
Objection Notice”): (a) on or before the fifth (5th) Business Day after receipt
of any revision or update if received by Buyer on or before the fifth (5th) Business Day before the
Closing Date, (b) on or before one (1) Business Day prior to the
Closing Date if received by Buyer less than five (5) Business Days before
the Closing Date (but prior to the Closing Date) or (c) on the Closing
Date if Buyer becomes aware of same on the Closing Date (each such date, the “Objection
Cut Off Date”), time being of the essence. Such Seller shall have until the
Closing Date (and may adjourn the Closing for such reasonable periods) to have
each such Title Objection (i) insured over, (ii) removed, or (iii) corrected
(each as selected by a Seller, a “Remedy”) (in the case of (i) or (iii),
to the reasonable satisfaction of Buyer, but subject to Section 3.4
below); provided, however, nothing herein shall require a Seller
to (I) bring any action or proceeding to remove any Title Objection or (II) take
any steps, or incur any expense, in excess of *** ******* ******** *******
********** in the aggregate to remove any Title Objections (except that each
Seller shall be obligated to remove the following “Mandatory Cure Items”:
(A) the mortgages or deeds of trust identified on the Preliminary Title
Report that are not assumed by Buyer pursuant to Exhibit AA
attached hereto, (B) any and all liens voluntarily placed by a Seller
against its Property after the date of the applicable Preliminary Title Report
in violation of this Agreement, (C) any and all liens arising by, through
or under a Seller and (D) any other Title Objection that would cost not
more than the foregoing *** ******* ******** ******* **********, in the
aggregate, to remove). Each Seller agrees to notify Buyer within five (5) Business
Days of such Seller’s receipt of Buyer’s Objection Notice whether such Seller
elects to endeavor to Remedy all or any of the Title Objections raised in Buyer’s
Objection Notice. Other than the exceptions to 

 9
 

 

title which each Seller is required pursuant to this Section 3.3
to Remedy, any exception to title which Buyer does not raise pursuant to the
terms hereof on or before the Objection Cut Off Date shall be deemed a
Permitted Encumbrance and not a Title Objection. If a Seller at or prior to the
Closing Date (as the same may be extended) either (x) does not elect to
Remedy a Title Objection, or (y) having elected to Remedy a Title
Objection for any reason whatsoever does not do so, at or prior to the Closing
Date (as the same may be adjourned), Buyer may at its sole and exclusive option
within five (5) Business Days after a Seller fails to elect to Remedy a
Title Objection or, with respect to any Title Objection that a Seller fails to
Remedy after having elected to do so, on the Closing Date (as the same may be
adjourned) either (1) terminate this Agreement with respect to such
Individual Property to which such Title Objection relates and receive a return
of the portion of the Deposit relating to such Individual Property as shown on
Schedule 2.1(a) (and the applicable Seller and Buyer shall jointly instruct
Escrow Holder to promptly return such portion of the Deposit to Buyer) and such
Seller shall not have any further liability or obligation to Buyer hereunder
nor shall Buyer have any further liability or obligation to such Seller
hereunder with respect to that Individual Property, except for such obligations
as are specifically stated in this Agreement to survive the termination of this
Agreement, or (2) elect to accept title to the Individual Property as it
then is without any reduction in, abatement of, or credit against the Purchase
Price and such exceptions shall be deemed a Permitted Encumbrance; if Buyer
fails to timely make either such election, Buyer shall be deemed to have
elected option (1).

Section 3.4.  Removal of Title Objections. Notwithstanding
anything herein to the contrary, Sellers shall be deemed to have removed or
corrected each exception that is not a Permitted Encumbrance if, in Sellers’
discretion and at Sellers’ sole cost and expense, Sellers either (a) take
such actions as are necessary to eliminate (of record or otherwise, as
appropriate) such Title Objection, (b) cause the Title Company to insure
over or remove such exception that is not a Permitted Encumbrance as an
exception to title in the Title Policy or affirmatively insure against the same
(and confirmation that the Title Company will issue subsequent title policies
on the Property with the same affirmative insurance), in each case without any additional cost to Buyer,
whether such insurance is made available in consideration of payment, bonding,
indemnity given by Sellers or otherwise , or (c) deliver (i) their
own funds (or direct that a portion of the Purchase Price be delivered) in an
amount needed to fully discharge any such exception to the Title Company with
instructions for the Title Company to apply such funds to fully discharge any such exception, and (ii) if
required by the Title Company, such instruments, in recordable form, as are
necessary to enable the Title Company to discharge such exception of record. Buyer
shall have no right to direct the Title Company to apply any portion of the
Purchase Price to cure a Title Objection without Sellers’ prior written
approval.

Section 3.5.  Deliveries by Sellers. Prior to the
Effective Date, Buyer received an offering package with respect to the
Properties (the “Offering Package”) distributed by a representative of
Sellers. Sellers through their agents, have also made available to Buyer an
electronic war room (“War Room”) on its website where certain information
relating to the Property has been posted. Data in this War Room includes
the Leases, and current environmental reports, Property Evaluation Reports
listed on Exhibit H, Argus 

 10
 

 

modeled building-by-building cash flow projections, Pro Forma
Development Budgets, updated title reports, and updated surveys. The due
diligence materials delivered (or made available) by Seller or its agent,
including, without limitation, those due diligence materials found in the War Room or
Offering Package (together with any other information provided to Buyer by the
Sellers in accordance with this Agreement, the “Due Diligence Materials”) do
not (and are not intended to) include any Protected Information (as defined
below). Prior to Closing, each Seller will cooperate with Buyer and shall use
commercially reasonable efforts to make available other specific information
relating to such Seller’s Property (other than Protected Information) that
Buyer may reasonably request to the extent in such Seller’s or its agent’s
possession or control and to the extent readily available. Notwithstanding the
foregoing, it shall not  in and of itself
be deemed a default by Sellers under this Agreement if Sellers do not deliver
or make available any due diligence material to Buyer, nor will the same constitute
a failure of a condition to Closing unless and to the extent expressly provided
to the contrary in this Agreement. As used herein, the term “Protected
Information” means any one or more of the following: any internal valuation
records, personnel records, all internal communications, including projections
and internal memoranda or materials, budgets, reports, strategic plans,
internal analyses, computer software, submissions relating to obtaining
internal approvals, information that is considered privileged, confidential or
proprietary by Seller and information protected by the attorney-client
privilege or work product doctrine.

Section 3.6.  No Representations Regarding Due Diligence
Materials. Except as expressly set forth in Article VIII, by
making available to Buyer, or furnishing Buyer with the Due Diligence
Materials, Sellers do not make any warranty or representation with respect to
the accuracy, completeness, conclusions or statements expressed in the Due
Diligence Materials. Sellers shall make available to Buyer, or furnish Buyer
with, any material updates of the Due Diligence Materials upon receipt by
Sellers, but failure to deliver or make available the same shall not in and of
itself constitute a default hereunder, or otherwise constitute a failure of a
condition to Closing unless and to the extent expressly provided to the
contrary in this Agreement. Buyer hereby waives any and all claims against
Sellers or any party that prepared or furnished the Due Diligence Materials
arising out of any inaccuracy, incompleteness, conclusions or statements
expressed in the Due Diligence Materials furnished or made available by Sellers
or any other party (provided the foregoing shall not limit claims Buyer may
have against Sellers for misrepresentations or breaches of warranties expressly
set forth in Article VIII of this Agreement).

Section 3.7.  Access to the Property.

(a)   Provided
Buyer has delivered evidence of Buyer’s Liability Insurance (as hereinafter
defined) to Sellers and Sellers have approved the same (which approval shall
not be unreasonably withheld, conditioned or delayed), Sellers will allow Buyer
and its employees, agents, prospective lenders, attorneys, contractors and
representatives (collectively, “Buyer Representatives”), prior to the Closing Date
at reasonable times during normal business hours upon two (2) Business
Days’ prior notice (but subject to the rights of Tenants under their Leases),
to enter upon the Properties (i) for the purpose of performing surveys,
physical inspections, engineering studies and environmental 

 11
 

 

assessments which Buyer may reasonably desire (“Investigations”).
Buyer shall be solely responsible for all of the costs and expenses of any
Investigations and shall conduct such Investigations in good faith and with due
diligence. Notwithstanding the foregoing, without Seller’s prior approval,
which shall not be unreasonably withheld, conditioned or delayed, Buyer shall
not be permitted to conduct any Investigations which involve invasive or
destructive testing of the Properties (or any portion thereof and including,
without limitation, any boring of the Properties in connection with an
environmental audit or otherwise) or any alteration of the Properties (or any
portion thereof). In the event Sellers do provide their consent to any such
invasive testing or alteration, Buyer shall promptly restore the applicable
Property to its condition immediately prior to such test or alteration. Buyer
shall provide Sellers with evidence that applicable contractors have named
Sellers and The Mark Winkler Company (the “Manager”) as additional
insureds in their respective insurance policies, which insurance policies must
be approved by Sellers in their reasonable discretion and maintained through
the Closing Date. Buyer shall (x) fully comply with all laws, rules and
regulations applicable to Properties and/or the Investigations and all other
activities undertaken in connection therewith, (y) not interfere with the
use, occupancy, management, maintenance or operation of the Properties (or any
portion thereof) by Sellers,  Manager,
the Tenants under the Leases or other occupants of the Properties (or any of
their respective agents, representatives, guests, invitees, contractors, or
employees), and (z) permit Sellers to have a representative present during
all Investigations undertaken hereunder. With at least two (2) Business
Days prior written notice from Buyer, Sellers shall arrange for Buyer to
conduct tenant interviews, provided such Tenants are agreeable to such
interview, and Sellers shall have the right to have a representative accompany
Buyer on such interviews. Buyer may not, however, request any governmental
investigations or inspections of the Properties; provided, however, nothing
contained herein shall prevent Buyer from meeting with governmental agencies to
discuss and confirm the zoning of the Properties. Buyer hereby agrees to
indemnify, defend and hold harmless Sellers, Manager and each other Released
Party (as hereafter defined) from and against any and all loss, cost, expense,
damage, claim and liability (including, without limitation, reasonable
attorneys’ fees and disbursements), suffered or incurred by Sellers, Manager or
any other Released Party and arising out of or in connection with (I) Buyer
and/or Buyer’s representatives entry upon the Properties, (II) any
Investigations and other activities conducted on the Properties by Buyer or
Buyer’s representatives (but nothing contained herein shall impose any
liability on Buyer solely as a result of Buyer’s mere discovery of a condition
of the Property, including, but not limited to, environmental conditions), and (III) any
liens or encumbrances filed or recorded against any Property as a consequence
of any and all Investigations and other activities undertaken by Buyer or Buyer’s
representatives. Buyer shall procure, prior to entry upon the Properties, and
maintain for at least one (1) year after the Effective Date commercial
general liability insurance covering Buyer, Sellers,  Manager and the Properties for actions taken
by Buyer or Buyer’s representatives, contractors, agents or invitees on an
occurrence, as opposed to claims made, basis and providing for a combined
single limit for bodily injury and property damage of not less than ****
******* *** ****** ******* *************** per occurrence issued by
companies and in form and substance reasonably satisfactory to Sellers (“Buyer’s
Liability Insurance”), which insurance requirements may be satisfied with a
combination of  a primary policy and an
excess policy, provided the same meet the requirements set forth in this Section 3.7(a).

 12
 

 

All of Buyer’s General Liability Insurance shall be primary and not
contributing with any insurance maintained by Sellers or Manager to the extent
of Buyer’s indemnity contained in this Section 3.7. Sellers and
Manager shall be named as additional insureds under all of Buyer’s General
Liability Insurance and Sellers and Manager shall be given written notice at
least thirty (30) days prior to cancellation, material amendment or reduction
of any such coverage. The provisions of this Section 3.7 shall not
in any way be deemed to amend the provisions of Article XII. The
indemnity set forth in this Section 3.7 shall survive the Closing
and/or the termination of this Agreement until the Survival Date set forth in Section 24.9(a) hereof.

(b)   Except
as otherwise expressly permitted by Section 3.7(a) hereof, Buyer
and/or Buyer’s representatives shall not communicate or otherwise interfere
with the Tenants or with the normal conduct by Sellers or the Manager of their
business at the Properties.

Section 3.8.  Return of Information Upon Termination.
If this Agreement is terminated by either party as to one or more Individual
Properties pursuant to the terms of this Agreement, then upon Sellers’ request,
Buyer shall return to Sellers all Due Diligence Materials relating to the
Individual Property or Properties as to which this Agreement has been
terminated that were delivered to Buyer and/or Buyer’s general partners, and
their principals, officers, employees, attorneys  or other persons acting for or on behalf of
Buyer actively involved with the transactions contemplated by this Agreement
(collectively, the “Receiving Party Representatives”) but expressly
excluding any and all reports studies, data, analysis and surveys that Buyer
and/or the Receiving Party Representatives discover, commission or generate in
connection with or resulting from their due diligence activities on (or
relating to) the Properties. All of the Due Diligence Materials shall be
maintained by Buyer in confidence, and Buyer acknowledges and agrees that the
Due Diligence Materials are subject to the confidentiality provisions of Article XXI.
Buyer shall indemnify the Released Parties (as hereinafter defined) from and
against any and all Claims resulting from, arising out of or in connection with
Buyer’s and/or the Receiving Party Representatives’ breach of its obligations
under this Section 3.8. The obligations of Buyer set forth in this Section 3.8
shall survive the Closing or the termination of this Agreement until the
Survival Date set forth in Section 24.9 below.

Section 3.9.  Study Period.

(a)   During
the period (the “Study Period”) that commenced on ******* **, **** (the “*****
****** ************ ****”), and ends on ******* **, ****, at **** **** *******
**** (the “***** ******** ****”), the Buyer will be afforded the
opportunity to confirm or examine whatever facts (“Facts”), as distinct
from judgments (“Judgments”), in the Offering Package and the Due
Diligence Materials and this Agreement it chooses to investigate. In no event
shall “Facts” include (i) any pro forma information, projections,
forecasts, or opinions regarding present or future market conditions, (ii) any
change, or potential change, in the market conditions which influence the
Properties including, without limitation, the market rents for buildings in the
northern Virginia and Washington D.C. metropolitan office market, the supply
and demand forces affecting the northern Virginia and Washington D.C.
metropolitan office market, (iii) the 

 13
 

 

Properties’ competitive position relative to their existing and new
development competitors, occupancy/vacancy rates, collection loss allowances,
if any, and projected growth rates, if any, in rents and expenses and levels of
tenant packages (including tenants work and market driven leasing fees), (iv) the
impact of the consummation of this transaction on the assessed value of the
Properties, (v) the availability or limited availability or cost of
obtaining terrorism and  other insurance,
(vi) other income sources and amounts including, without limitation,
overtime HVAC charges from the Properties, (vii) parking revenues and
expense estimates, (viii) the applicability and amount of any Commonwealth
of Virginia franchise tax, or (ix) whether any Building can be re-measured
to include more net rentable area.

(b)   Subject
to Section 3.9(c) below, Buyer may elect to terminate this
Agreement with respect to an Individual Property by written notice received by
Seller on or before the ***** ******** **** (the “Termination Notice”)
if and only if Buyer determines during the Study Period that (i) it has
been unable to resolve any Title Questions listed on Exhibit GG to
Buyer’s reasonable satisfaction (regardless of whether such Title Questions
constitute a Material Difference), (ii) Buyer has not been able to conduct
tenant interviews with at least eight (8) of the eleven (11) Tenants
listed on Schedule 3.9(b) attached hereto (regardless of whether the
failure of Buyer to conduct any such interviews constitutes a Material
Difference), or (iii) there are material adverse inconsistencies with
respect to an Individual Property between (A) the Facts set forth in the
Offering Package, the Due Diligence Materials and this Agreement, and those
Facts known by Buyer on the Effective Date, and (B) Facts discovered by
Buyer during the Study Period which inconsistencies, if known by Buyer on the
Effective Date, would have caused Buyer to materially reduce the aggregate
Purchase Price agreed to by Buyer under this Agreement for the Portfolio in
which the Individual Property is located (each such material inconsistency
being referred to herein as a “Material Difference”). Buyer’s
Termination Notice shall set forth a detailed, full and complete description of
such inconsistencies (“Buyer’s Objections”).

(c)   Not
later than five (5) Business Days following the date of Seller’s timely
receipt of Buyer’s written Termination Notice, Seller shall elect one of the
following by written notice to Buyer:

(i) to accept Buyer’s
termination of the Agreement with respect to the applicable Individual Property
that is the subject of Buyer’s Objections or to terminate this Agreement in its
entirety with respect to the Portfolio in which the Individual Property is
located;

(ii) to notify Buyer
that it disputes Buyer’s termination; or

(iii) to elect to
reasonably cure the Material Difference constituting Buyer’s Objections either
by crediting against the Purchase Price an amount equal to the diminution in
value of the Individual Property resulting from the Material Difference to
Buyer’s reasonable satisfaction, or curing to Buyer’s reasonable satisfaction
the Buyer’s Objections.

 14
 

 

(d)  In the event Seller disputes Buyer’s
assertion that there is a Material Difference, or if Buyer disputes whether
Seller has effected a reasonable cure of Buyer’s Objections (either by
crediting the Purchase Price or otherwise) (each, a “Dispute”), then
such party shall provide written notice to the other party that it is
commencing the resolution mechanism described in this Section 3.9(d), and
the operation of this Section 3.9(d) shall be the sole remedy
of such party with respect to such Dispute. Notwithstanding the foregoing,
Buyer’s posting of the Additional Deposit shall be a condition precedent to
Buyer’s right to commence the dispute resolution mechanism set forth in this Section 3.9(d).

(i)  Within five (5) Business Days after Buyer
has delivered notice of a Dispute to Seller or received notice from Seller of a
Dispute, Buyer shall deliver to Seller a reasonably detailed analysis (together
with supporting documentation) of such Material Difference or Seller’s failure
to reasonably cure (as applicable, the “Disputed Information”), and
within five (5) Business Days thereafter Buyer and Seller shall together
present such Disputed Information to Bruce Lane, or, if he is unable or
unwilling to serve, Gerard Leval,  (each
of such individuals, an “Arbitrator”). At that time, each party may also
submit to the Arbitrator (with copies to the other party) any additional
information that such party desires the Arbitrator to consider in rendering an
opinion. Within ten (10) Business Days after the presentation to the
Arbitrator (for purposes of this Section 3.9(d), the “Evaluation Period”),
the Arbitrator either shall request that the parties appear before the
Arbitrator to present their positions and, if requested, present additional
information, or the Arbitrator shall issue a written statement either (A) that
there is or is not a Material Difference in Facts (as applicable), or (B) that
Seller has or has not reasonably cured any Buyer Objection (as applicable).

(ii) In the event that the Arbitrator determines
that there is a Material Difference in Facts, or that Seller has not reasonably
cured a Buyer Objection, the Arbitrator shall determine whether a credit
against the Purchase Price, or another cure proposed by Seller, is a reasonable
and satisfactory cure as contemplated in the second sentence of Section 3.9(c)(iii) above,
provided that the Arbitrator shall take into consideration Buyer’s legal status
as a real estate investment trust (“REIT”) and the regulations governing REITs
in determining whether a cure is reasonable and satisfactory. Any such proposed
credit or cure shall be binding on the parties unless the amount of such credit,
or the amount of such cure exceeds one-half of one percent (0.5%) of the
Purchase Price allocated to the Individual Property to which such credit or
cure relates, in which event Seller may notify Buyer within ten (10) Business
Days following receipt of the Arbitrator’s determination of its election to
terminate this Agreement with respect to the applicable Individual Property
only. If the Arbitrator determines that no credit against the Purchase Price or
other cure proposed by Seller would constitute a reasonable and satisfactory
cure, then the applicable portion of the Deposit shall be returned to Buyer and
all rights, obligations and liabilities of the parties hereunder shall be
released and discharged with respect to the applicable Individual Property only,
except that Buyer’s obligation to comply with Buyer’s indemnity and repair
obligations in Section 3.7(a) and the confidentiality
requirements of Section 3.8 and any other obligations of Buyer
hereunder that expressly survive Closing shall survive termination
(collectively, the “Buyer’s Surviving Obligations”).

 15

 

 

(iii)          Fees and expenses of the Arbitrator
shall be divided evenly between the parties.

(iv)          Determinations made by the Arbitrator
pursuant to this Section 3.9(d) shall be binding between the parties.
In the event that either party refuses to abide by the decision of the
Arbitrator, or fails to cooperate or timely respond to the dispute resolution
mechanism set forth in this Section 3.9(d) such refusal shall
be a default under Article XIV of the Agreement. The Arbitrator shall not
be liable to either party in connection with or as a result of this resolution
mechanism hereunder. No party shall sue, join, subpoena, or in any manner
otherwise involve the Arbitrator in any action or proceeding. The Closing Date
for any Portfolio with Property that is subject to this Arbitration provision
shall be extended to allow for all time periods to run fully.

Article IV.

ASSESSMENTS

Section 4.1.  Assessments.
If, on the Closing Date, the Properties, or any part thereof, shall be or shall
have been affected by an assessment or assessments which are or may be payable
in installments, then assessments that were due and payable during the period
prior to the Closing Date shall be paid by Sellers and all assessments relating
to the period on or after the Closing Date shall be paid by Buyer. Any such
assessment (less the amount thereof which any Tenant is obligated to pay
directly to the assessing authority and for which Seller is not collecting
monthly installments from such Tenant under the express terms of such Tenant’s
Lease) shall be prorated as of 11:59 p.m. on the day preceding the Closing
Date (the “Proration Time”) and the net amount thereof shall be added to
(if such net amount is in Sellers’ favor) or deducted from (if such net amount
is in Buyer’s favor) the payment required pursuant to clause (b) of Section 2.1
above.

Section 4.2.  Assessments
Survival Date. The provisions of this Article IV shall survive the
Closing until the Survival Date set forth in Section 24.9(a).

Article V.

EXPENSES.

Section 5.1.  Expenses.
Each party shall pay its own costs and expenses in connection with the
transactions contemplated hereby, including the fees and expenses of its
attorneys, accountants, consultants and engineers. In addition, Buyer shall pay
(a) all of the escrow fees, if any, (b) all expenses of or related to
the issuance of owner’s title insurance policies and any endorsements to Buyer’s
policies of title insurance, (c) all expenses of obtaining, if applicable,
any lender’s title insurance policy and any endorsements to such policy, (d) all
city and state charges required to be paid to record documents in the official
records of the Commonwealth of Virginia (the “Official Records”), (e) the
cost of any updates to the Surveys initiated by Buyer, (f) one hundred
percent (100%) of all state and local taxes and recordation fees that may be
due in connection with the sale of the Properties (including with respect to
Properties in Virginia

 16
 

 

 

the grantor’s tax imposed pursuant to Section 58.1-802 of
the Virginia Code), (g) all due diligence expenses and charges for any
engineering reports or appraisals commissioned by Buyer, and (h) all costs
relating to any mortgage financing arranged by Buyer and any applicable
assumption or other similar fees in the event that any mortgage is to be assumed;
it being acknowledged and agreed by Buyer that Buyer’s obligations under this
Agreement are not subject to, or contingent upon, the availability and/or
consummation of financing. All other closing costs that are customarily paid in
a commercial real estate purchase and sale transaction in the Commonwealth of
Virginia or in connection with Buyer’s financing (but exclusive of costs
incurred in connection with the pay-off or release of Sellers’ financing, which
shall be paid by Seller) shall be borne by Buyer.

Section 5.2.  Survival.
The provisions of this Article V shall survive the Closing or
termination of this Agreement until the Survival Date set forth in Section 24.9(a).

Article VI.

APPORTIONMENTS.

Section 6.1.  Apportionments.
The parties shall apportion, as of the Proration Time, the following in respect
of each Property and the net amount thereof shall be added to (if such net
amount is in the applicable Seller’s favor) or deducted from (if such net
amount is in Buyer’s favor) the payment required pursuant to Section 2.1(b):

(a)   Rents,
fees and other sums and charges (collectively, “Rents”) paid or payable
by Tenants, including any advance payment of Rent, shall be adjusted and
prorated as of the Proration Time but shall be paid on an as and when collected
basis. Any amount collected by Buyer or any Seller after the Closing Date, from
Tenants who owe Rents for periods prior to the Closing Date, shall be applied (i) first,
** ******* ** ***** *** *** ***** ** ***** *** ******* **** ****** (the “*******
*****”) (********* ***** **** ** ******* ** ************ *******), (ii) second,
** ******* ** ***** ** ******* ** ** *** ******* **** ** *** ****** **** *****
** ******* *** *** **** **** ** **** **** *** **** ******* ** ********** **
**** ***** ** ******* (********* ** *** ****** ** *************) *** *********
** * ****** ** ***** ** * ********** ********** ****, (iii) third, **
******* ** ***** **** *** *** *** ****** ********* *** ******* *****, and  (iv) fourth, ** ******* ** ***** **
******* *** ********* ******* ******** ** ****** **** *****. If any Tenant
specifies that any payment shall be applied to any delinquent rent, then the
payment will be applied as directed by such Tenant. Each such amount, less any
costs of collection (including reasonable attorneys’ fees) reasonably allocable
thereto, shall be adjusted and prorated as provided above, and the party who
receives such amount shall promptly pay over to the other party the portion
thereof to which it is so entitled. With respect to delinquent amounts that
have not been paid to the applicable Seller prior to the Closing Date, for a
period of at least six (6) months following the Closing Date Buyer shall
use commercially reasonable efforts (but shall not be required to undertake
litigation or dispossessory actions), including, without limitation, sending
written notices to Tenants of any arrearages, to collect such amounts from
Tenants who owe Rents for periods prior to the Closing Date. Sellers represent
that as of the Effective Date no percentage rents are

 17
 

 

 

due pursuant to the Leases. To the extent any such percentage rents
become due and payable prior to the Closing Date, the parties shall apportion
such percentage rents in a manner reasonably acceptable to the parties.

(b)   Payments
by the Tenants under the Leases for utility costs, operating expenses,
insurance costs and other escalation charges (excluding real estate tax
payments and deposits) (collectively, “Expense Contributions”) shall be
prorated as of the Proration Time by allocating each such payment ratably based
on the number of days in the period to which the same applies, and shall be
paid upon receipt. Buyer and Sellers hereby acknowledge and agree that Expense
Contributions are billed to, and paid by, Tenants on the basis of estimates of
the expenses with respect to which Expense Contributions are payable. Seller
shall have the responsibility and authority to handle all 2005 expense
reconciliations and all payments received therefor shall belong to Seller. On
or before the date that is one hundred eighty (180) days after the Closing Date
(the “Reconciliation Date”), Sellers and Buyer shall agree to a final
reconciliation of utility costs, operating expenses, insurance costs and other
escalation charges (estimating in the parties’ reasonable judgment any amounts
that are unknown or uncertain as of such date ) for that portion of 2006 that
predates the Closing Date. In the event such final reconciliation reveals a
discrepancy from the Expense Contributions made by Tenants, as between Buyer
and the applicable Seller, such discrepancy shall be allocated ratably between
Purchaser and Seller on a per diem basis for the period to which it applies.

If either party shall
have collected or shall have caused to be collected more than its share of such
Expense Contributions attributable to 2006, as allocated pursuant to this Section 6.1(b),
such party shall pay over to the other the amount of such excess as promptly as
possible after such sums have been ascertained and paid. In the event a Seller has
collected less than its share of such Expense Contributions applicable to the
period in 2006 prior to the Closing Date, such Seller shall receive a credit at
Closing for the difference between the amount it actually collected and the
amount it was entitled to collect, and Buyer shall collect such remaining
amount from the Tenants. The principles of Section 6.1(a) shall
also apply to delinquencies in such Expense Contributions when collected; provided,
however, that notwithstanding anything to the contrary contained herein,
until the Reconciliation Date, Buyer shall be obligated to use commercially
reasonable efforts (but Buyer shall not be required to undertake litigation or
dispossess any such Tenants), including, without limitation, sending written notices
to Tenants of any arrearages, to collect all amounts payable by Tenants
pursuant to this Section 6.1(b). Provided Buyer does not elect to
sue a Tenant for such delinquencies, each Seller shall have the right to sue
Tenants to collect such delinquencies, provided no action shall be taken to
dispossess any such Tenant, and the expenses incurred in connection with such
suit, and amounts collected, shall be apportioned as set forth in Section 6.1(a) above;
provided, however, Buyer shall not be required to pay any expenses of any
Seller in excess of Buyer’s share of rents collected. If any Tenant is entitled
to refunds of any such rents or charges, such refunds shall be allocated
between and paid by the applicable Seller and Buyer in accordance with the foregoing
principles.

 18
 

 

 

(c)   Each
of the following, to the extent the same is not required to be paid directly to
the billing entity or vendor by any Tenant under its Lease, shall be adjusted
as of the Proration Time, as follows:

(1)   All
payments and deposits made by Tenants on account of real estate taxes
including, without limitation, payments relating to the common areas, shall be
adjusted by the parties as of the Proration Time in accordance with the parties’
respective responsibilities for the payment of such taxes as set forth in Section 6.1(c)(2),
with the intention that the party that is liable for any portion of any tax
shall be allocated the payments made by Tenants on account of such tax
payments;

(2)   All
real property taxes shall be adjusted by the parties as of the Proration Time
on the basis of the fiscal period for which assessed. If the Closing shall
occur before the tax rate is fixed, the apportionment of taxes shall be based
on the tax rate for the preceding period applied to the latest assessed valuation
and, once the tax rate is fixed after the Closing, the parties shall adjust the
real property tax apportionment accordingly. Promptly after the date such tax
rate is fixed, the party that shall have paid less than its share of the real
property taxes shall promptly pay over to the other party the amount of such
deficit;

(3)   To
the extent possible, Sellers shall cause all utility meters which are not
payable by Tenants to be read as of the Closing Date, and Sellers shall pay all
charges for those utilities payable by Sellers with respect to the Properties
which have accrued to and including the Closing Date, and Buyer shall pay all
such expenses accruing after the Closing Date. To the extent that final
readings are not taken on the Closing Date, water, electricity, and sewer
charges and rents and vault taxes, fees and charges, if any (other than those
required to be paid directly to the utility companies by any Tenant under its
Lease), shall be adjusted as of the Proration Time on the basis of the fiscal
period for which assessed, but if any of such charges shall be payable on the
basis of meter readings, then such charges shall be apportioned on the basis of
meter readings made on a date (prior to the Closing Date) which is as close to
the Closing Date as is reasonably practicable. After Closing, upon the
determination of the final meter readings as of the Proration Time, the party
that shall have paid less than its share of the metered charges shall promptly
pay over to the other party the amount of such deficit;

(4)   Fuel
used in heating the Buildings (inclusive of fuel used for backup generators for
which Seller is responsible) shall be adjusted as of the Proration Time on the
basis of the written estimate by the applicable Seller’s fuel supplier of the
quantity on or about the day preceding the Closing Date and Seller’s cost
therefor (including sales tax, if any);

(5)   Charges,
revenue(s) and deposits, if any, under any Service Contracts not
terminated prior to Closing;

(6)   All
customary items of revenue or expense not otherwise specifically provided for
herein which are customarily prorated between a buyer and seller of real
property shall be prorated as of the Proration Time in accordance with the
custom

 19
 

 

 

governing such proration. All advance payments to occupy space or use
facilities within the Buildings shall be prorated as of the Proration Time by
allocating each such payment ratably based on the number of days in the period
to which the same apply; and

(7)   Expenses
with respect to the parking facilities at the Properties, and charges and
revenues(s) (i) with respect to monthly parking fees shall be
apportioned in accordance with Section 6.1(a) and (ii) with
respect to daily parking fees paid shall be apportioned on an interim basis
based on the assumption that the same shall be equal to the amount of the daily
average of charges and revenues paid for daily fees for the month immediately
preceding the Closing and shall be re-adjusted as promptly as possible after
the Closing to accurately reflect the daily charges and revenues paid for each
day of the month in which the Closing occurs.

(8)   In
addition to the Purchase Price, Buyer shall pay at Closing to Sellers or their
designees an amount equal to the *************** ***** ***** ** ******* *
attached hereto, and any ********** *************** ***** ******** ******* ***
******* **** not to exceed the ******* *** ***** ** ******* * ******** ******
(the “*************** *****”).

Section 6.2.  Goods and
Services. Except as to improvements required to be made by the landlord
under the Leases pursuant to Section 6.3 below and except with
respect to items otherwise covered by this Agreement, with respect to each
Property:

(a)   Each
Seller shall pay for all goods delivered and services rendered at or in connection
with its Property prior to the Closing Date and (ii) Buyer shall pay for
all goods delivered and services rendered at or in connection with the
Properties which are in the process of being delivered or rendered on or after
the Closing Date and ordered in the ordinary course of business; and

(b)   Unless
otherwise provided in Section 6.1 above, as promptly as possible
after the Closing Date, the parties shall adjust the cost of all goods
delivered to and services rendered at or in connection with each Property by
allocating to the applicable Seller that portion of the total cost of such
goods and services which reflect the portion of the goods and services which is
applicable to the period preceding the Closing Date and allocating the balance
to Buyer. If either party shall have paid less than its share of the cost of
such goods and services as so allocated, such party shall promptly pay over to
the other the amount of such deficit.

Section 6.3.  Leasing Costs.

(a)   As
of the Closing Date, all leasing commissions, if any, for the current or
initial lease terms for Leases entered into prior to the Effective Date hereof
and for renewals, extensions or expansions of Leases properly exercised by
Tenants as of the Effective Date and the cost of any improvements and tenant
allowances required to be made by the landlord in the space to which any such
Lease relates, shall have been paid by Sellers (or credited to Buyer if not due
and payable as of Closing), including those costs and allowances set forth on Exhibit J
attached hereto (the “Outstanding Lease Obligations”). Those amounts
listed on Exhibit J hereto in the column labeled “Seller

 20
 

 

 

Obligation”, together with any other leasing costs which are the
responsibility of Seller pursuant to the first sentence of this Section 6.3(a),
shall be collectively referred to herein as “Sellers Outstanding Lease
Obligations”. All leasing commissions and tenant improvement costs and
allowances for any renewals or extensions of the terms of Leases entered into
prior to the Effective Date but which have not yet been exercised by the
Effective Date (including, without limitation, any commissions payable in
connection with a Tenant’s waiver of or failure to exercise a cancellation
right) or any expansions of the premises covered thereby but which have not
been exercised by the Effective Date (including those set forth in the column
labeled “Buyers Obligations” on Exhibit J attached hereto), shall
be paid by Buyer, which obligations are being expressly assumed by Buyer
pursuant to the terms of this Agreement. Subject to Sections 6.3(c) and (d) herein,
Buyer shall pay its allocable share of leasing commissions payable in
connection with any Leases (or extensions) entered into after the Effective
Date in accordance with the terms of this Agreement, the value of any free rent
periods, and the cost of any improvements and tenant allowances required to be
made by the landlord in (i) the space to which any such Leases (or
extensions) entered into after the Effective Date relate or (ii) other space
in the Buildings pursuant to any requirements set forth in such Leases (or
extensions) entered into after the Effective Date. Seller’s allocable share of
such costs, fees and expenses shall be prorated on the Closing Date based on
the portion of the term of such Leases for which rent is being paid before and
after the Closing Date. At the Closing, Buyer shall receive a credit (the “Sellers
Outstanding Lease Obligation Credit”) against the Purchase Price in an
amount equal to the difference between (i) Sellers Outstanding Lease
Obligations, minus (ii) the amounts actually paid on account of Sellers
Outstanding Lease Obligations between the Effective Date and the Closing Date,
as documented by Sellers with paid invoices or other reasonably satisfactory
evidence of such payments. Notwithstanding anything set forth in this Agreement
to the contrary, following Closing there shall be no readjustment of the
Sellers Outstanding Lease Obligation Credit; provided, however, that in the
event that amounts have been paid prior to Closing by or on behalf of Sellers
with respect to Sellers Outstanding Lease Obligations for which Sellers would
not have provided a credit to Buyer at Closing but for a missing receipt or
other reasonable evidence of payment required hereunder, then if, subsequent to
the Closing, such receipt or other reasonable evidence of payment is provided,
Buyer shall promptly pay to Sellers the amount relating thereto. Notwithstanding
anything set forth in this Agreement to the contrary, (i) all obligations
with respect to Sellers Outstanding Lease Obligations shall be expressly
assumed by Buyer from and after the Closing Date, and (ii) except with
respect to Sellers Outstanding Lease Obligations Credit, Buyer shall not be
entitled to any credit hereunder for any Outstanding Lease Obligations.

(b)   Attached
hereto as Exhibit K is a description of certain Tenant rent
increases scheduled to occur in calendar year 2006 (each such increase, the “Rent
Step-Up”). If the Rent Step-Up has not occurred for a Tenant listed on Exhibit K
on or prior to the Closing Date, Buyer shall receive a credit against the
Purchase Price in an amount equal to the difference between (x) the amount
of rent that would have been due from such Tenant from and after the Closing
Date through the date the Rent Step-Up is scheduled to occur (the “Rent
Step-Up Date”) had the Rent Step-Up occurred prior to the

 21
 

 

 

Closing Date minus (y) the amount of rent actually due from such
Tenant from and after the Closing Date through the Rent Step-Up Date.

(c)   Attached
hereto as Exhibit L is a description of the leases that Sellers
have identified as likely to be executed and under which the tenants are
expected to commence paying rent during calendar year 2006 (each such lease, “Out-for-Signature
Lease”), provided that Sellers shall not be deemed to have made any
representation or warranty as to the likelihood of execution of the
Out-for-Signature Leases by such tenants. In addition, Exhibit L
sets forth the amounts of leasing commissions and tenant improvement costs and
allowances with respect to the Out-for-Signature Leases (the “Out-for-Signature
Leasing Costs”) for which Sellers shall be responsible. At Closing, Buyer
shall receive a credit against the Purchase Price in an amount equal to (i) with
respect to Exhibit L, Section IV, the difference between (x) the
amount of rent that would have been due from such tenant from and after the
Closing Date through December 31, 2006 (assuming such Out-for-Signature
Leases were in effect during such period and tenant was paying rent thereunder)
minus (y) the amount of rent which would be due in calendar year 2006 from
such tenant from and after the “Projected OFS Lease Start Date” under such
Out-for-Signature Lease as set forth on Exhibit L hereto, plus
(ii) with respect to Exhibit L Section II, the difference
between (x) the amount of rent that would have been due from such tenant
from and after the Closing Date through December 31, 2006 (assuming such
Out-for-Signature Lease renewal was in effect during such period and tenant was
paying rent thereunder) minus (y) the amount of rent which would have been
due from such tenant from and after the Closing Date through December 31,
2006 (assuming the Out-for-Signature Lease renewal is effective on the “Projected
OFS Lease Start Date” under such Out-for-Signature Lease as set forth on Exhibit L
hereto and tenant was paying rent thereunder), plus (iii) the
unfunded Out-for-Signature Leasing Costs (as listed on Exhibit L,
Sections I and III), if any.

(d)   Attached
hereto as Exhibit M is a description of the vacant or assumed to be
vacant leaseable space at the Property and the amounts of leasing commissions
and tenant improvement costs and allowances (the “Vacancy Leasing  Costs”)
for which Sellers shall be responsible. On the Closing Date, Buyer shall be
entitled to receive a credit against the Purchase Price in an amount equal to
the unfunded Vacancy Leasing Costs, if any.

(e)   Attached
hereto as Exhibit Q is a description of the additional credits to
which Buyer shall be entitled at Closing (the “Buyer’s Additional Credits”)
to the extent Seller has not previously paid these items prior to Closing.

(f)    Notwithstanding
anything to the contrary contained herein, in no event shall Buyer be entitled
to receive an aggregate credit against the Purchase Price pursuant to Sections
6.3(a), (b), (c), (d) and (e) hereof in excess of ***********, and
the amount of credit to which Buyer is entitled pursuant to this Section 6.3
shall be reduced by any amounts applied by Sellers to the expenses set forth in
this Section 6.3. The calculation of the amount of the forgoing maximum
credit was determined using the formulas set forth in Sections 6.3(b), (c) and
(d) above and assumes a Closing Date as of January 1, 2006 (as
illustrated on Exhibits K, Exhibit L and Exhibit M
hereby). At the Closing, the

 22
 

 

 

calculation of the actual credit due pursuant Sections 6.3(b), (c) and
(d) hereof shall be made based on such formulas and using the actual
Closing Date hereunder. If the Closing Date shall fall on a date other than the
first of any month, the rent for such month shall be prorated for the purposes
of determining the actual credit. At Closing, Seller and Purchaser shall enter
into an amendment to this Agreement that reflects the actual Purchase Price, as
adjusted by the credits set forth in Sections 6.3(a), (b), (c), (d) and (e) above
(the “Purchase Price Amendment”).

Section 6.4.  Reapportionment.
Any errors in the calculation of apportionments shall be corrected or adjusted,
and paid, as soon as practicable (but not more often than monthly) after the
Closing Date. If it is impracticable to apportion certain items hereunder
(including, without limitation, water and sewer charges and rents) by the
Closing Date, such items shall be apportioned, and paid, as soon as practicable
after the Closing Date.

Section 6.5.  Monthly
Statements. So long as amounts payable by Tenants for periods prior to the
Closing Date remain outstanding, or any other amount that is to be apportioned
between Buyer and Sellers pursuant to this Article VI remains
subject to apportionment or adjustment, Buyer will provide Sellers with a
monthly report of payments received and amounts paid by Buyer with respect to
the applicable Tenants and categories of revenue and expense. Buyer shall not modify
or amend any Lease in a manner that will decrease the amount payable to Sellers
pursuant to this Article VI.

Section 6.6.  Security
Deposits. All refundable Security Deposits under Leases not theretofore
applied on or prior to the Closing Date by Sellers as landlord in accordance
with the terms of an applicable Lease, with interest thereon to the extent any
interest is required to be paid to such Tenants shall be delivered by Sellers
to Buyer or Sellers may elect to give Buyer a credit against the Purchase Price
in the amount of such Security Deposits. Sellers shall not apply Security
Deposits for any Tenants that are in default of their Leases from and after the
Effective Date until Closing, without the consent of Buyer, which consent shall
not be unreasonably withheld, conditioned or delayed. Sellers shall reasonably
cooperate, at no cost to Seller, with Buyer’s efforts to cause any Security
Deposits in the form of a letter of credit to be assigned to Buyer at Closing,
including executing any transfer requests. Prior to the transfer of any such
letters of credit to Buyer, Sellers shall cooperate with Buyer and take any
action required by Buyer related to the letters of credit (including executing
any draw requests), provided that Buyer shall indemnify Sellers against any
damages Sellers might suffer as a result of following Buyer’s instructions.

Section 6.7.  Capital
Expenses. Except for the capital expenses for the projects identified on Exhibit N
attached hereto, if any, all capital expenses incurred by Sellers approved by
Buyer in accordance with Article XV hereof with respect to the
Properties between the Effective Date and the Closing Date that are to be
depreciated under generally accepted accounting principles over a useful life
which extends beyond the Closing Date shall be apportioned between Buyer and
Sellers based upon the portion of the useful life of such assets as so
determined prior to and from and after the Closing Date. To the extent Sellers
recover any such capital expenditures from Tenants prior to

 23
 

 

 

the Closing Date, the same shall be apportioned in the same manner as
set forth above. At Closing, Sellers shall provide Buyer with all lien waivers
received prior to Closing with respect to work paid for prior to Closing for
the projects described on Exhibit N hereto.

Section 6.8.  Timing. The
parties further agree to meet three (3) Business Days prior to the Closing
Date to agree upon the apportionments in accordance with the terms hereof.

Section 6.9.  Survival.
The provisions of this Article VI shall survive the Closing until
the Survival Date set forth in Section 24.9(a) hereof.

Article VII.

CONDITIONS TO CLOSING AND
THE CLOSING.

Section 7.1.  Conditions to
Sellers’ Obligation to Sell. The obligations of Sellers to consummate the
transaction contemplated hereunder to occur on the Closing Date are each
conditioned on the fulfillment of each of the following on and as of the
Closing Date as the same may be extended pursuant to Section 7.3
below, provided that each Seller, in its sole discretion, may waive any such
condition as to its particular Property:

(a)   The
delivery to Sellers of the Purchase Price prorated as provided herein plus the
payment by Buyer to the appropriate parties of any closing costs to be paid by
Buyer hereunder; and

(b)   All
representations and warranties of Buyer contained in this Agreement shall, in
all material respects, be true at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date and
Buyer shall have performed and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by Buyer prior to or by the Closing Date (including, but not
limited to, the delivery by Buyer of the items described in Article XIII
below). Buyer shall exercise commercially reasonable, good faith efforts to
cause all conditions precedent within Buyer’s control to be satisfied.

(c)   A
simultaneous closing under the Company Agreement shall have occurred if all
closings occur concurrently under this Agreement. If closings are sequential
under the terms of any provision of this Agreement permitting sequential
closings, then sequential closings under the Company Agreement shall also have
occurred as provided in the Company Agreement. Notwithstanding the foregoing,
this condition shall not apply if the Company Agreement fails to close as the
result of a Seller default under the Company Agreement which has not been cured
within applicable notice and cure periods.

(d)   Closing
shall have occurred under that certain Assignment and Assumption Agreement (the
“4807 Agreement”) with respect to the Option Agreement dated December 17,
2004 (the “4807 Option”), by and between 4807 Stonecroft Associates
Limited Partnership (“4807 Assignor”) and 4803 Stonecroft Associates LLC.
Notwithstanding the foregoing, this condition shall not apply if the 4807
Agreement fails

 24
 

 

 

to close as the result of a Seller default under the 4807 Agreement
which has not been cured within applicable notice and cure periods.

Section 7.2.  Conditions to
Buyer’s Obligation to Purchase. The obligations of Buyer to consummate the
transaction contemplated hereunder on a Portfolio by Portfolio basis are
conditioned on the fulfillment of each of the following on and as of the
Closing Date with respect to such Portfolio, provided that Buyer, in its sole
discretion, may waive such condition:

(a)   All
representations and warranties of each Seller as to each such Seller’s Property
contained in this Agreement shall be true in all material respects at and as of
the Closing Date with respect to such Property as if such representations and
warranties were made at and as of the Closing Date (except for (i) changes
in facts permitted hereunder including, without limitation, as a result of
actions taken by any Seller in accordance with Article XV hereof or
occurring from events consented to by Buyer (not to be unreasonably withheld,
conditioned or delayed), and (ii) Sellers’ right to update all of the
Exhibits to account for changes first occurring from and after the Effective
Date; provided, however, that the foregoing right to update and
amend the Exhibits hereto shall not be deemed to permit a Seller to default
under any express covenant made by such Seller herein) nor shall it be deemed
to affect the other rights of Buyer hereunder, and Sellers shall have performed
and complied in all material respects with all representations, covenants,
agreements and conditions required by this Agreement to be performed or
complied with by Sellers prior to or by the Closing Date (including, but not
limited to, the delivery by Sellers of the items described in Article XIII).

(b)   The
delivery by Sellers to Buyer of a tenant estoppel certificate from Tenants
(other than the General Services Administration (the “GSA”)) who, in the
aggregate, comprise at least ********** ******* (***) of the ***** ********
**** ** *** ********* ** * ********* ***** *** ****** ** *** *** (which shall
include the Tenants listed on Exhibit FF attached hereto
(collectively, the “Required Tenants”)) in substantially the same form
attached hereto as Exhibit O (unless a Tenant’s Lease has a
prescribed estoppel form attached to said Lease, in which event the prescribed
form shall be acceptable for said Tenant) (a “Tenant  Estoppel”). If
a Tenant Estoppel is delivered by Sellers to Buyer, Buyer may nevertheless
disapprove such Tenant Estoppel if and only if it does not contain such items
as are required to be given in connection with an estoppel certificate pursuant
to the Tenant’s Lease, or contains allegations of an uncured material default
by a Seller or contains information that materially deviates from the facts and
financial information contained in the Offering Memorandum, the Due Diligence
Materials or in this Agreement. If Sellers are unable to obtain Tenant
Estoppels from a sufficient number of Tenants to satisfy the ********** *******
(***) *********** set forth in this Section 7.2(b) on or
before the Closing Date (or have not delivered Tenant Estoppels from the
Required Tenants), then the Closing Date for any applicable Portfolio shall be
adjourned for a period not to exceed thirty (30) days for Sellers to obtain the
sufficient number of Tenant Estoppels (or Estoppel Certificates from the
Required Tenants, as the case may be). In addition, if Sellers are unable to
obtain Tenant Estoppels from a sufficient number of Tenants to satisfy the
********** ******* (***) *********** set forth in this Section 7.2(b) on
or before the Closing Date (as may be

 25
 

 

 

extended hereunder), an individual Seller shall have the right to elect
to execute and deliver to Buyer a certificate substantially in the form of Exhibit P
attached hereto (each such certificate, a “Seller’s Estoppel”) with
respect to such additional lease(s) at such individual Seller’s Building
and selected by Seller as would satisfy the requirement; provided, however,
that an individual Seller shall not have the right to deliver a Seller’s
Estoppel in lieu of Tenant Estoppels from Required Tenants. In the event that
an individual Seller elects to deliver such a Seller’s Estoppel, each statement
therein made by such Seller shall constitute warranties and representations by
such Seller hereunder which shall survive for a period terminating on the
earlier of (i) December 28, 2006, or (ii) the date on which
Buyer has received an executed Tenant Estoppel signed by the applicable Tenant
under the Lease in question that is not inconsistent with Seller’s Estoppel. With
respect to the rentable area of the Buildings leased to the GSA, each
individual Seller shall, as applicable, use commercially reasonable efforts to
obtain a supplemental lease agreement, novation agreement, statement of lease
or similar instrument delivered by the GSA (a “GSA Estoppel”) for Leases
to the GSA in excess of 10,000 rentable square feet (a “Material GSA Lease”);
provided, however, the delivery of a GSA Estoppel shall not be a condition
precedent to Buyer’s obligation to consummate the transaction contemplated
hereunder; provided, further that Sellers shall execute and deliver to Buyer a
certificate substantially in the form of Exhibit P attached hereto
(each such certificate, a “Seller’s GSA Estoppel”) with respect to all
Material GSA Leases at such individual Seller’s Building. In the event that an
individual Seller elects to deliver such a Seller’s GSA Estoppel, each
statement therein made by such Seller shall constitute warranties and
representations by such Seller hereunder which shall survive for a period
terminating on the earlier of (i) December 28, 2006, or (ii) the
date on which Buyer has received an executed GSA Estoppel signed by the GSA
under the Material GSA Lease in question.

(c)   Promptly
after the ***** ******** ****, Sellers shall submit to Buyer, for Buyer’s
reasonable approval, copies of the Tenant Estoppels or GSA Estoppels, as
applicable, Sellers are submitting to Tenants or the GSA, as applicable, for
execution. Buyer shall begin providing any comments to such Tenant Estoppels
and GSA Estoppels within five (5) Business Days of Sellers’ delivery of
the same and diligently and continuously review said estoppels and provide any
comments to Sellers as reviews are completed by Buyer.

(d)   Buyer
shall receive estoppel certificates from declarants and/or owner’s associations
applicable to each Portfolio in a form reasonably acceptable to Buyer  or on the form required to be delivered
pursuant to the applicable declaration, confirming that each Individual
Property is in compliance with the restrictive covenants and no assessments are
outstanding. Alternatively, if Seller cannot obtain estoppel certificates,
Buyer shall receive either title insurance coverage or an indemnity from Seller
protecting against any such violations and monetary defaults.

(e)   In
the event this Agreement remains in effect for only a portion of a Portfolio,
the termination of this Agreement as to any Individual Property within such
Portfolio, thereby creating multiple owners of the Properties, shall not (i) cause
such Properties to fail to comply in all material respects with applicable
zoning, subdivision and parking laws and regulations, (ii) adversely affect
ingress, egress and utility

 26
 

 

 

easements necessary for the use and operation of such Properties, or (iii) violate
any lease, mortgage/deed of trust or other agreement affecting such Properties.

(f)    A
simultaneous closing under the Company Agreement shall have occurred with the
first closing hereunder, or, if closings are sequential under the terms of any
provision of this Agreement permitting sequential closings, then sequential closings
under the Company Agreement shall also have occurred. Notwithstanding the
foregoing, this condition shall not apply if the Company Agreement fails to
close as the result of a Buyer default under the Company Agreement which has
not been cured within applicable notice and cure periods.

(g)   Either
closing shall have occurred under the 4807 Agreement or Seller shall have
terminated the 4807 Option and removed it of record. Notwithstanding the
foregoing, this condition shall not apply if the 4807 Agreement fails to close
as the result of a Buyer default under the 4807 Agreement which has not been
cured within applicable notice and cure periods.

Section 7.3.  Adjournment
of Closing Date.

(a)   If
the conditions set forth in Section 7.1 or Section 7.2
above for any Portfolio are not satisfied or waived, or deemed to have been
waived, on or before the Closing Date by the party entitled to waive such
condition, any Sellers of a Portfolio as to which such condition is not
satisfied may, from time to time, in their sole discretion, extend the Closing
Date for said Portfolio to allow such conditions set forth in Section 7.1
and in Section 7.2 to be satisfied. If the conditions set forth in Section 7.2
above for any Portfolio are not satisfied or waived or deemed to have been
waived by Buyer as of the Closing Date, Buyer may, from time to time, in its
sole discretion, extend the Closing Date for said Portfolio to allow such
condition to be satisfied. In no event shall the Closing Date be extended
pursuant to this Section 7.3 by more than sixty (60) days in the
aggregate.

(b)   If
one or more conditions set forth in Section 7.1 is not satisfied by the
Closing Date (as the same may be extended by the foregoing sixty (60) day
period) (and after the satisfaction and expiration of all required notice and
cure periods in the event of a default expressly provided in this Agreement),
either (x) the Seller of an Individual Property to which such condition
relates may terminate this Agreement with respect to such Individual Property
(in which event such Seller shall be entitled to retain the portion of the
Deposit applicable to such Individual Property and/or to pursue any other
remedies available to such Seller pursuant to Section 14.1 below), or (y) the
Sellers of all of the Properties in the Portfolio in which such Individual
Property is located may terminate this Agreement with respect to the entire
Portfolio, and such Sellers shall be entitled to receive the portion of the
Deposit applicable to such Portfolio and/or to pursue their remedies set forth
in Section 14.1 hereof.

(c)   If
one or more conditions set forth in Section 7.2 is not satisfied by the
Closing Date (as the same may be extended by the foregoing sixty (60) day
period) (and after the satisfaction and expiration of all required notice and
cure periods in the event of

 27
 

 

 

a default expressly provided in this Agreement) with respect to one or
more Individual Properties, Buyer may elect by written notice to the applicable
Sellers, to terminate this Agreement either (x) solely with respect to
such Individual Property or Properties as to which such condition relates (in
which event Buyer may, as its sole and exclusive remedy, be entitled to a
return of the portion of the Deposit applicable to such Individual Property
provided that Buyer is not otherwise in default hereunder), or (y) as to
all Properties within the Portfolio in which such Individual Property is
located (in which event Buyer may, as its sole and exclusive remedy, be
entitled to receive a return of the portion of the Deposit applicable to all
Properties within such Portfolio provided that Buyer is not otherwise in
Default hereunder). If Buyer elects to terminate with respect to an Individual
Property only, upon receipt of such written notice,  the Sellers of the Properties within the
Portfolio of which such Individual Property is a part may terminate this
Agreement with respect to such entire Portfolio (in which event Buyer may, as
its sole and exclusive remedy, be entitled to a return of the portion of the
Deposit applicable to such Portfolio provided that Buyer is not otherwise in
default hereunder).

(d)   In
no event shall the provisions of this Section 7.3 be deemed to supersede
the rights of Seller pursuant to Section 14.1 below or of Buyer pursuant
to Section 14.2 below if the failure of any condition results from a
default by Buyer or a Seller hereunder.

Section 7.4.  No Financing
Contingency. It is expressly acknowledged by Buyer that the Closing of the
transactions contemplated by this Agreement is not subject to any financing
contingency and that no financing for this transaction shall be provided by
Sellers. Without limiting the foregoing, Buyer agrees that the ability or
inability of Buyer to obtain debt, equity investments or other financing in
order to pay all or any part of the Purchase Price shall not be a contingency
or condition to any of Buyer’s obligations under this Agreement.

Section 7.5.  Closing.
The closing of the transaction contemplated herein (the “Closing”) shall
occur at the offices of Pillsbury Winthrop Shaw Pittman LLP, 2300 N Street, NW,
Washington, DC, 20037 on a date that is mutually agreeable to the parties but
that is not later than February 28, 2006, except with respect to Liberty
Center III, for which the Closing Date shall be as set forth on Exhibit BB
attached hereto (as the same may be adjourned in accordance with this
Agreement, the “Closing Date”), time being of the essence, subject only
to adjournment rights expressly permitted in this Agreement.

Section 7.6.  Joint
Cooperation. Buyer and Seller shall, at no cost or expense or increased
liability to either party, reasonably cooperate with each other in obtaining
the items listed in Section 7.2 including, without limitation,
delivering such additional agreements, instruments and/or information as may
reasonably be required in order to obtain the items listed in Section 7.2.
Buyer and Seller shall use commercially reasonable, good faith efforts to cause
all conditions precedent within each party’s control to be satisfied.

 28

 

ARTICLE VIII.

SELLERS’ REPRESENTATIONS.

Section 8.1.  Sellers’
Representations. Each Seller represents and warrants to Buyer that, as of
the Effective Date, the following representations and warranties pertaining to
such Seller and such Seller’s Property are true in all material respects. Sellers
reserve the absolute right to update all of the Exhibits and Schedules hereto
in order to make such representations and warranties true as of the Closing
Date; provided, however, that the foregoing right to update and
amend the Exhibits and Schedules hereto shall not be deemed a waiver of any
Buyer’s claims of a Seller default (i.e. the foregoing right to update and
amend the Exhibits and Schedules hereto shall not be deemed to permit Sellers
to default under any express covenant made by Sellers).

(a)   Each
Seller represents that it is duly organized, validly existing and in good
standing under the laws of the state of its organization and duly qualified to
do business in the Commonwealth of Virginia, and it has full power and
authority to execute and deliver this Agreement, subject to the terms of this
Agreement, and as of the Closing Date will have authority to execute and
deliver all other documents now or hereafter to be executed and delivered by it
pursuant to this Agreement (the “Seller’s Documents”) and to perform all
obligations arising under this Agreement and its Seller’s Documents. This
Agreement constitutes, and as of the Closing Date such Seller’s Documents will
each constitute, the legal, valid and binding obligations of such Seller,
enforceable against such Seller in accordance with their respective terms,
subject to bankruptcy, reorganization and other similar laws affecting the
enforcement of creditors’ rights generally and except as may be limited by general
equitable principles. Within the five (5) years prior to the Effective
Date, no Seller has (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller’s creditors, as the case may be, (iii) suffered
the appointment of a receiver to take possession of all, or substantially all,
of Seller’s assets which remains pending, (iv) suffered the attachment or
other judicial seizure of all, or substantially all of Seller’s assets, which
remains pending, (v) admitted in writing its inability to pay its debts as
they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally.

(b)   This
Agreement does not and will not contravene any provision of the organizational
documents of such Seller, any judgment, order, decree, writ or injunction, or
any provision of any existing law or regulation to which such Seller is a party
or is bound. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby do not and will not require (except to
the extent, if any, set forth herein or in the documents listed in the Exhibits
attached hereto) any consent or waiver by any third party (including, without
limitation, the consent of any direct or indirect partner of such Seller) or
such consent or waiver has, as of the Effective Date, been obtained by such
Seller. Seller has granted no options or rights of first refusal to acquire any
interest in the Properties.

 29
 

 

(c)   Exhibit B
attached hereto is a true and complete tenant list for such Seller’s Property. True
and complete copies of all Leases have been made available to Buyer for
inspection in the War Room. Sellers have delivered to Buyer a current tenant
delinquency report that each Seller uses in its operation and management of
each Property which is the most current delinquency report as of the Effective
Date. Each Seller agrees to update the delinquency report pertaining to such
Seller’s Property upon Buyer’s written request.

(d)   To
each Seller’s knowledge, Exhibit C attached hereto is a true
and complete list of all Service Contracts affecting such Seller’s Property
(subject to amendments, modifications or supplements permitted pursuant to Article XV).
Attached hereto as Exhibit E is a true and complete list of all
Construction Contracts affecting such Seller’s Property (subject to amendments,
modifications or supplements permitted pursuant to Article XV).

(e)   To
each Seller’s knowledge, except as set forth on Exhibit R attached
hereto, there are no pending actions, suits,
arbitrations, claims or proceedings at law or in equity affecting such Seller
or its Property, including, but not limited to actions, suits, arbitrations,
claims or proceedings regarding Hazardous Materials (as hereinafter defined),
Americans with Disabilities Act of 1990 or any zoning, building, health,
traffic, flood control or other applicable rules, regulations, codes,
ordinances, or statutes of any local, state or federal authority or any other
governmental authority . To each Seller’s knowledge, Seller has not received
written notice of default, that remains uncured, under any easements or other
recorded restrictive covenant affecting the Properties.

(f)    As
of the Closing Date each Seller shall have paid all leasing commissions payable
by such Seller with respect to the current lease term of any Lease, subject to
the terms of Section 6.3 above.

(g)   Attached
as Exhibit S is a list of all refundable Security Deposits (and all
accrued interest required to be paid thereon) held by such Seller as of the
Effective Date.

(h)   Except
as set forth on Exhibit I hereto, each Seller represents
individually as to the Property owned by such Seller, as of the Effective Date,
to each such Seller’s knowledge as to its own Property, such Seller has not
received written notice of any assessments currently affecting its Property
that are not of public record or would not generally be recorded in the public
records except with respect to any assessments, if any, imposed from time to
time pursuant to recorded covenants.

(i)    To
each Seller’s knowledge, except as set forth on Exhibit T, there
are no tax reduction proceedings pending with respect to all or any portion of
the Properties.

(j)    To
each Seller’s knowledge, there is no proceeding or inquiry by any governmental
agency with respect to the release, production, disposal or storage at the
Properties of any Hazardous Materials (as hereafter defined).

 30
 

 

(k)   Such
Seller is not, and will not become, a person or entity with whom U.S. persons
or entities are restricted from doing business under regulations of the Office
of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including
those named on OFAC’s Specially Designated and Blocked Persons list) or under
any statute, executive order (including the September 24, 2001, Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is
not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.

Section 8.2.  Representation
Survival. The provisions of this Article VIII which are
specifically referred to in Section 24.9(a), and the
representations and warranties set forth in such provisions, shall survive the
Closing until the Survival Dates set forth in Section 24.9(a). Notwithstanding
anything herein to the contrary, no Seller shall have any liability to Buyer
for a breach of any representation or warranty hereunder, if the breach in
question is, on or prior to the ***** ******** ****: (a) based on a
condition, state of facts or other matter which was known by Buyer or any
Receiving Party Representative, (b) made available to Buyer or any
Receiving Party Representative or (c) disclosed in writing to Buyer or any
Receiving Party Representative on or prior to the ***** ******** ****. The
provisions of this Section 8.2 shall not be deemed to limit Buyer’s
rights, if any, under Section 14.2 below.

Section 8.3.   Representation
Accuracy. If prior to the Closing Date (i) Buyer or any Receiving
Party Representative has or obtains knowledge that any of Sellers’
representations or warranties set forth in this Article VIII are untrue in
any respect, or (ii) any information in the Leases, Service Contracts, any
Tenant Estoppel or GSA Estoppel,  the
Information, the Offering Package and Due Diligence Materials or other written
information provided or made available to Buyer or any Receiving Party
Representative (collectively, the “Specified Documents”) is inconsistent
with any of Sellers’ representations or warranties hereunder, and Buyer
nevertheless proceeds with the Closing, then (X) the breach by any Seller
of the representations and warranties as to which Buyer shall have such
knowledge or which are inconsistent with the Specified Documents, shall be
deemed waived by Buyer, (Y) such representations and warranties shall be
deemed modified to conform them to the information that Buyer shall have
knowledge of or the information in the Specified Documents, as applicable, and (Z) no
Seller shall have any liability to Buyer or its successors or assigns in
respect thereof. Buyer shall promptly notify Sellers in writing if Buyer has or
obtains knowledge that any of Sellers’ representations or warranties set forth
in this Article VIII are untrue in any respect.

Section 8.4.  Limitations
on Sellers’ Representations. Sellers do not represent or warrant that any
particular Lease, Out-for-Signature Lease, or Service Contract will be in force
or effect as of the Closing Date or that any Tenant under a Lease or any party
to an Equipment Lease or Service Contract (other than any Seller) will not be
in default under its, as applicable, Lease, Equipment Lease or Service Contract
unless such party’s default arises from a breach by any Seller of its
obligations under this Agreement. If any agreement is not in effect or a party
to any agreement is in material default (except for any Seller), such fact
shall not, in any way, relieve Buyer of its obligation to purchase the 

 31
 

 

Properties or entitle Buyer to a reduction in the Purchase Price unless
and to the extent expressly provided to the contrary in this Agreement. Subject
to the provisions of Article XV, the termination of any Lease, Equipment
Lease or Service Contract shall not affect the obligations of Buyer hereunder
unless and to the extent expressly provided to the contrary in this Agreement.

Section 8.5.  Buyer’s
Knowledge. To the extent the Specified Documents contain provisions
inconsistent with or different from the representations and warranties made in
Sections 8.l(a) through 8.1(k) or Buyer or the Receiving Party
Representatives has knowledge of such inconsistency or difference, then such
representations and warranties shall be deemed modified to conform them to the
provisions of the Specified Documents or to such different or inconsistent
facts known to Buyer or the Receiving Party Representatives, as applicable. For
purposes of this Agreement, the words “to Buyer’s knowledge”, “known to Buyer” and similar phrases, means
the present, actual knowledge of Nicholas Anthony and Chris Kollme
(collectively the “Buyer Knowledge Parties”). The Buyer
Knowledge Parties are not charged with the acts, omissions and/or knowledge of any of
the Receiving Party Representatives. Nothing herein shall be construed to imply
or mean that any of the Buyer Knowledge Parties have any personal liability for
a breach of a representation or warranty or otherwise.

Section 8.6.  Sellers’
Knowledge. For purposes of this Agreement, the words “to Sellers’ knowledge” means the
present, actual knowledge of (i) Kathy Knizner, Vice President of
Commercial Properties and Peter Scholz, Senior Vice President and Chief
Transactions Officer  with respect to all
Properties other than the ongoing construction matters at Liberty Center III,
and (ii) with respect to the ongoing construction matters at Liberty
Center III, EdWard Westrick (collectively, the “Seller Knowledge Parties”),
in all cases without any independent investigation or verification or any duty
to make any inquiry, review or investigation. The Seller Knowledge Parties are
the parties of Seller with the most knowledge about the leasing, management,
operations and development of the Properties. The Seller Knowledge Parties are
not charged with
knowledge of the acts, omissions and/or knowledge of the predecessors in title
to any of the Properties or with knowledge of the acts, omissions and/or
knowledge of any of the Seller’s agents, employees or other representatives. Nothing
herein shall be construed to imply or mean that any of the Seller Knowledge
Parties have any personal liability for a breach of a representation or
warranty or otherwise.

Section 8.7.  Sellers’
Representations and Warranties. Each of the Buyer and the Sellers
acknowledge and agree that, notwithstanding anything to the contrary contained
herein, (i) any representation or warranty made by Seller or Sellers
hereunder shall be deemed to have been made by each Seller individually as such
representation or warranty pertains to such Seller or its Property only, and (ii) any
liability imposed on any Seller hereunder, whether pursuant to this Agreement
or otherwise, shall be several (and not joint) as to each Seller, and, except
as may be expressly provided herein, the liability of each Seller shall be
limited to the interest of such Seller in its Property.

 32
 

 

ARTICLE IX.

BUYER’S REPRESENTATIONS.

Section 9.1.  Buyer’s
Representations. Buyer represents and warrants to Sellers that as of the
Effective Date the following representations and warranties are true in all
material respects and shall be true in all material respects on the Closing
Date:

(a)   Buyer
is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Indiana. At the Closing Date, Buyer or its
permitted assignees will be authorized to do business in the Commonwealth of
Virginia. Buyer has full power and authority to execute and deliver this
Agreement and all other documents now or hereafter to be executed and delivered
by it pursuant to this Agreement (the “Buyer’s Documents”) and to
perform all obligations arising under this Agreement and Buyer’s Documents. This
Agreement constitutes, and Buyer’s Documents will each constitute, the legal,
valid and binding obligations of Buyer enforceable against Buyer in accordance
with their respective terms, covenants and conditions, subject to bankruptcy,
reorganization and other similar laws affecting the enforcement of creditors,
rights generally, and except as may be limited by general equitable principles.
Each person or entity comprising Buyer has duly authorized and approved this
Agreement and the transaction contemplated hereby.

(b)   This
Agreement and Buyer’s Documents do not and will not contravene any provision of
the organizational documents of Buyer, any judgment, order, decree, writ,
injunction or any other agreement binding on Buyer, or any provision of any
existing law or regulation to which Buyer is a party or is bound. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby do not and will not require (except to the extent,
specifically set forth herein) any consent by any third party (including,
without limitation, the consent of any direct or indirect partner of Buyer).

(c)   To
Buyer’s knowledge, no litigation, or governmental or agency proceeding or
investigation is pending or threatened against Buyer which would materially
impair or adversely affect Buyer’s ability to perform its obligations under
this Agreement and consummate the transactions contemplated herein.

(d)   Buyer
has the financial wherewithal to timely perform its obligations hereunder.

(e)   Buyer
is not, and will not become, a person or entity with whom U.S. persons or
entities are restricted from doing business under regulations of the Office of
Foreign Asset Control (“OFAC”) of the Department of the Treasury (including
those named on OFAC’s Specially Designated and Blocked Persons list) or under
any statute, executive order (including the September 24, 2001, Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is
not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.

 33
 

 

Section 9.2.  Survival.
The provisions of this Article IX and the representations and
warranties set forth in such provisions (and all other representations and
warranties of Buyer contained herein), shall survive the Closing until the
Survival Date set forth in Section 24.9(a) hereof.

ARTICLE X.

LIKE KIND EXCHANGE

Section 10.1.  Like-Kind
Exchange. Any Seller or the Buyer may consummate the purchase or sale (as
applicable) of a Property or any portion thereof as part of a so-called like
kind exchange (an “Exchange”) pursuant to § 1031 of the Internal Revenue
Code of 1986, as amended (the “Code”), provided that:  (a) the Closing shall not be delayed or
affected by reason of the Exchange nor shall the consummation or accomplishment
of an Exchange be a condition precedent or condition subsequent to the
exchanging party’s obligations under this Agreement, (b) the exchanging
party shall effect its Exchange through an assignment of this Agreement, or its
rights under this Agreement, to a qualified intermediary, (c) neither
party shall be required to take an assignment of the purchase agreement for the
relinquished or replacement property or be required to acquire or hold title to
any real property for purposes of consummating an Exchange desired by the other
party, (d) the exchanging party shall pay any additional costs that would
not otherwise have been incurred by the non-exchanging party had the exchanging
party not consummated the transaction through an Exchange, and (e) the
exchanging party agrees to indemnify and hold harmless the other party from and
against all actual damages incurred by the other party arising from any tax
deferred exchange relating to such Property conducted by the exchanging party. Neither
party shall by this Agreement or acquiescence to an Exchange desired by the
other party have its rights under this Agreement affected or diminished in any
manner or be responsible for compliance with or be deemed to have warranted to
the exchanging party that its Exchange in fact complies with § 1031 of the
Code, provided that each party shall reasonably cooperate with the other party
in furtherance of an Exchange of the exchanging party.

ARTICLE XI.

TAX REASSESSMENT OR REDUCTION PROCEEDINGS.

Section 11.1.  Tax Reassessment or
Reduction Proceedings. If any tax reassessment, refund or reduction
proceedings in respect of the Land and/or the Buildings, relating to any taxes
payable in any fiscal years prior to the fiscal year in which the Closing Date
occurs, are pending on the Closing Date, Sellers reserve and shall have the
right to continue to prosecute the same. If any such proceedings, relating to
taxes payable for the fiscal year in which the Closing Date occurs, are pending
on the Closing Date, Sellers and Buyer shall cooperate in such proceedings and
neither Sellers nor Buyer shall settle or abandon the same without the consent
of the other (which consent shall not be unreasonably withheld, conditioned or
delayed); provided, however, that Sellers shall have the right to retain
its current counsel in connection with any pending certiorari proceedings with
respect to all prior fiscal tax years through and including the fiscal year 

 34
 

 

in which the Closing Date occurs. Any net refunds or
savings in the payment of taxes (after deducting all reasonable expenses,
including, but not limited to attorneys’ fees, and taking into account amounts
reimbursable to Tenants) resulting from any tax reassessment or reduction
proceedings for the tax year in which the Closing Date occurs shall belong to
and be the property of the party who is responsible for the payment of such
taxes under Section 6.1(c)(2) and shall so be apportioned, if
applicable; provided, however, that if the Closing has occurred
and any such refund creates an obligation to reimburse any Tenants for any
Rents paid, that portion of such refund equal to the amount of such required
reimbursement (after deduction of allocable expenses as may be provided in such
Tenants’ respective Leases) shall be paid to Buyer and Buyer shall disburse the
same to such Tenants.   Except for any
reassessment of the Properties caused by the sale of the Properties, or
improvements made to the Properties by Buyer, Buyer shall not take any action
that might (i) increase the assessment of the Properties or decrease any
settlement for real property taxes for the year in which the Closing Date
occurs or any prior year or (ii) decrease the amount of any refund or
reduction that would otherwise be paid to Sellers on account of a refund for
the year in which the Closing Date occurs or any prior year. The provisions of
this Article XI shall survive the Closing until the Survival Date
set forth in Section 24.9(a) hereof.

ARTICLE XII.

CONDITION OF PROPERTIES; RELEASE OF CLAIMS.

Section 12.1.  Condition
of Properties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, BUYER IS PURCHASING
THE PROPERTIES “AS-IS, WHERE IS AND WITH ALL FAULTS” IN THEIR PRESENT
CONDITION, SUBJECT TO REASONABLE USE, WEAR, TEAR AND NATURAL DETERIORATION OF
THE PROPERTIES BETWEEN THE EFFECTIVE DATE AND THE CLOSING DATE AND FURTHER
AGREES THAT (i) SELLERS SHALL NOT BE LIABLE FOR ANY LATENT OR PATENT
DEFECTS IN THE PROPERTIES AND (ii) EXCEPT AS EXPRESSLY SET FORTH HEREIN,
NEITHER MANAGER, SELLERS, NOR ANY OTHER RELEASED PARTY HAS MADE OR WILL MAKE OR
WILL BE ALLEGED TO HAVE MADE ANY VERBAL OR WRITTEN REPRESENTATIONS, WARRANTIES,
PROMISES OR GUARANTIES WHATSOEVER TO BUYER, WHETHER EXPRESS OR IMPLIED,
REGARDING THE PROPERTIES OR ANY PART THEREOF, OR ANYTHING RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT, AND (iii) BUYER, IN EXECUTING,
DELIVERING AND PERFORMING THIS AGREEMENT, HAS NOT AND DOES NOT RELY UPON ANY
STATEMENT, INFORMATION, OR REPRESENTATION TO WHOMSOEVER MADE OR GIVEN, WHETHER
TO BUYER OR OTHERS, AND WHETHER DIRECTLY OR INDIRECTLY, VERBALLY OR IN WRITING,
MADE BY ANY PERSON, FIRM OR CORPORATION, EXCEPT AS EXPRESSLY SET FORTH HEREIN. IN
ADDITION TO THE FOREGOING, AS OF THE EFFECTIVE DATE, BUYER SHALL BE DEEMED TO
HAVE REPRESENTED THAT (I) AS OF THE CLOSING
DATE BUYER SHALL HAVE EXAMINED THE PROPERTIES AND THE PROPERTY CONDITION
REPORTS AND IS FAMILIAR WITH THE PHYSICAL AND ENVIRONMENTAL CONDITION OF THE
PROPERTIES AND

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HAS CONDUCTED (OR ELECTED NOT TO CONDUCT) SUCH INVESTIGATION OF THE
AFFAIRS AND CONDITION OF THE PROPERTIES AS BUYER HAS CONSIDERED APPROPRIATE, (II) EXCEPT
AS EXPRESSLY SET FORTH HEREIN, NEITHER MANAGER, SELLERS, NOR ANY OTHER RELEASED
PARTY HAS MADE OR WILL MAKE OR WILL BE ALLEGED TO HAVE MADE ANY VERBAL OR
WRITTEN REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES WHATSOEVER TO
BUYER, WHETHER EXPRESS OR IMPLIED, AND, IN PARTICULAR, THAT NO SUCH
REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES HAVE BEEN MADE OR WILL BE
MADE OR WILL BE ALLEGED TO HAVE BEEN MADE WITH RESPECT TO THE PHYSICAL
CONDITION, ENVIRONMENTAL CONDITION OR OPERATION OF THE PROPERTIES; THE ACTUAL
OR PROJECTED REVENUE AND EXPENSES OF THE PROPERTIES, THE ZONING AND OTHER LAWS,
REGULATIONS, ORDINANCES, RULES, BUILDING CODES AND ZONING PROFFERS, ALL GOVERNMENTAL
APPROVALS APPLICABLE TO THE PROPERTIES, AND ALL COVENANTS, CONDITIONS AND
RESTRICTIONS OF RECORD  APPLICABLE TO THE
PROPERTIES OR THE COMPLIANCE OF THE PROPERTIES THEREWITH, THE QUANTITY, QUALITY
OR CONDITION OF THE ARTICLES OF PERSONAL PROPERTY AND FIXTURES INCLUDED IN THE
TRANSACTIONS CONTEMPLATED HEREBY; THE USE OR OCCUPANCY OF THE PROPERTIES OR ANY
PART THEREOF OR ANY OTHER MATTER OR THING AFFECTING OR RELATED TO THE
PROPERTIES OR THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT AS, AND SOLELY TO
THE EXTENT, HEREIN SPECIFICALLY SET FORTH, (III) EXCEPT AS EXPRESSLY SET
FORTH HEREIN NEITHER MANAGER, SELLER, NOR ANY OTHER RELEASED PARTY HAS MADE OR
WILL MAKE ANY VERBAL OR WRITTEN REPRESENTATIONS, WARRANTIES, PROMISES OR
GUARANTIES WHATSOEVER TO BUYER, WHETHER EXPRESS OR IMPLIED, AND, IN PARTICULAR,
THAT NO SUCH REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES HAVE BEEN OR
WILL BE MADE WITH RESPECT TO THE TRUTH, ACCURACY OR COMPLETENESS OF ANY
MATERIALS, DATA OR OTHER INFORMATION, INCLUDING, WITHOUT LIMITATION, THE
CONTENTS OF SELLERS’ BOOKS AND RECORDS, CONTRACTS, ENVIRONMENTAL REPORTS,
ENGINEERING REPORTS, PROPERTY CONDITION REPORTS, PHYSICAL CONDITION SURVEYS,
INFORMATIONAL BROCHURE WITH RESPECT TO THE PROPERTIES, TENANT LISTS OR INCOME
AND EXPENSE STATEMENTS, WHICH SELLERS OR THEIR REPRESENTATIVES MAY HAVE
DELIVERED, MADE AVAILABLE OR FURNISHED TO BUYER IN CONNECTION WITH THE
PROPERTIES AND BUYER REPRESENTS, WARRANTS AND AGREES THAT ANY SUCH MATERIALS,
DATA AND OTHER INFORMATION DELIVERED, MADE AVAILABLE OR FURNISHED TO BUYER
AND/OR THE RECEIVING PARTY REPRESENTATIVES ARE DELIVERED, MADE AVAILABLE OR
FURNISHED TO BUYER AND/OR THE RECEIVING PARTY REPRESENTATIVES AS A CONVENIENCE
AND ACCOMMODATION ONLY AND EXPRESSLY DISCLAIMS ANY INTENT TO RELY ON ANY SUCH 

 36
 

 

MATERIALS, DATA AND OTHER INFORMATION, (IV) EXCEPT AS EXPRESSLY
SET FORTH HEREIN, BUYER HAS NOT RELIED UPON ANY SUCH REPRESENTATIONS,
WARRANTIES, PROMISES OR GUARANTIES OR UPON ANY STATEMENTS MADE IN ANY
INFORMATIONAL BROCHURE WITH RESPECT TO THE PROPERTIES AND HAS ENTERED INTO THIS
AGREEMENT AFTER HAVING MADE AND RELIED SOLELY ON ITS OWN INDEPENDENT
INVESTIGATION, INSPECTION, ANALYSIS, APPRAISAL, EXAMINATION AND EVALUATION OF
THE FACTS AND CIRCUMSTANCES AND (V) BUYER ACKNOWLEDGES THAT THE PROPERTIES
MAY NOT BE IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT OF 1990,
AS AMENDED AND SELLERS MAKE NO REPRESENTATIONS WITH RESPECT TO THE SAME. WITHOUT
LIMITING THE FOREGOING, EXCEPT AS, AND SOLELY TO THE EXTENT, SPECIFICALLY SET
FORTH IN THIS AGREEMENT, SELLERS HAVE MADE NO REPRESENTATION OR WARRANTY
WHATSOEVER REGARDING HAZARDOUS MATERIALS (AS DEFINED BELOW) OR ENVIRONMENTAL
CONDITION OF ANY KIND OR NATURE ON, ABOUT OR WITHIN THE PROPERTIES OR THE
PHYSICAL CONDITION OF THE PROPERTIES OR THE COMPLIANCE OF ANY OF THE PROPERTIES
WITH ANY LEGAL REQUIREMENTS AND BUYER AGREES TO ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION OR MECHANICAL DEFECTS AND
ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS MAY NOT HAVE BEEN REVEALED
BY BUYER’S INVESTIGATIONS. SELLER HAS NO OBLIGATION TO REMEDY OR CAUSE
COMPLIANCE WITH ANY VIOLATION OF ANY FEDERAL, STATE, COUNTY, OR MUNICIPAL LAWS,
ORDINANCES, ORDERS, REGULATIONS, REQUIREMENTS, OR RECORDED COVENANTS OR
RESTRICTIONS AFFECTING ANY PROPERTY.

Section 12.2.  Release of
Claims. Without limiting any provision in this Agreement, Buyer, for itself
and any of its assigns pursuant to Article XIX below and their affiliates,
hereby irrevocably and absolutely waives its right to recover from, and forever
releases and discharges, and covenants not to file or otherwise pursue any
legal action (whether based on contract, statutory rights, common law or
otherwise) against, Sellers, Sellers’ affiliates or their affiliates or any
direct or indirect partner, member, trustee, beneficiary, director, shareholder,
controlling person, affiliate, officer, attorney, employee, agent, contractor,
representative (including, without limitation, Goldman, Sachs & Co.
and The Mark Winkler Company) or broker of any of the foregoing, and any of
their respective heirs, successors, personal representatives, devisees, donees
and assigns (each a “Released Party” and collectively, “Released
Parties”) with respect to any and all suits, actions, proceedings,
investigations, demands, claims, liabilities, obligations, fines, penalties,
liens, judgments, losses, injuries, damages, settlement expenses or costs of
whatever kind or nature, whether direct or indirect, known or unknown,
contingent or otherwise (including any action or proceeding brought or
threatened or ordered by any governmental authority), including, without
limitation, attorneys’ and experts’ fees and expenses, and investigation and
remediation costs that may arise on account of or in any way be connected with (a) the
Investigations by Buyer Representatives permitted pursuant 

 37
 

 

to Section 3.7 hereof, and (b) the Properties or any
portion thereof (collectively, “Claims”), including, without limitation,
the physical, environmental and structural condition of the Properties or any
law or regulation applicable thereto, or any other matter relating to the use,
presence, discharge or release of Hazardous Materials (as hereinafter defined)
on, under, in, above or about the Properties. In connection with this Section,
Buyer expressly waives the benefits of any provision or principle of federal or
state law or regulation that may limit the scope or effect of the foregoing
waiver and release to the extent applicable. For purposes of this Agreement,
the term “Hazardous Materials” means any substance, chemical, compound,
product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or other
material that is hazardous, toxic, ignitable, corrosive, carcinogenic or
otherwise presents a risk of danger to human, plant or animal life or the
environment or that is defined, determined or identified as such in any
federal, state or local law, rule or regulation (whether now existing or
hereafter enacted or promulgated) and any judicial or administrative order or
judgment, in each case relating to the protection of human health, safety
and/or the environment, including, but not limited to, airborne toxins or mold,
any materials, wastes or substances that are included within the definition of (A) “hazardous
waste” in the federal Resource Conservation and Recovery Act; (B) “hazardous
substances” in the federal Comprehensive Environmental Response, Compensation
and Liability Act; (C) “pollutants” in the federal Clean Water Act; (D) “toxic
substances” in the federal Toxic Substances Control Act; and (E) “oil or
hazardous materials” in the laws or regulations of any State. Notwithstanding
anything herein to the contrary (including the foregoing release), (a) Buyer
shall have the right to defend government and third-party claims by alleging
that Seller (or someone acting on Seller’s behalf), not Buyer, is liable for
such claims and Buyer has no obligation to indemnify Seller for governmental or
third party claims asserted before or after the Closing as a result of any act
or omission taken or failed to be taken by or on Seller’s behalf prior to the
Closing, (b) the release shall not apply to claims made by tenants of the
Property (1) who did not deliver an estoppel certificate to Buyer and (2) who
allege defaults by Seller, as landlord, related to the period of Seller’s
ownership of the Property and (c) the release shall not apply to
third-party tort claims relating to the Property that occurred during Seller’s
ownership of the Property.

Section 12.3.  Survival.
The provisions of this Article XII shall survive termination or the
Closing until the Survival Date set forth in Section 24.9(a) hereof.

ARTICLE XIII.

DELIVERIES AT CLOSING.

Section 13.1.  Deliveries
at Closing. The following shall be delivered to the Title Company, Buyer or
Sellers, as set forth below, on or before the Closing Date:

(a)   Each
Seller shall execute and deliver to the Title Company a Special Warranty Deed
in the form of Exhibit G attached hereto, an Assignment and
Assumption Agreement in the form of Exhibit D attached hereto, and
a Bill of Sale in the form of Exhibit U attached hereto, and a Post
Closing Escrow Holdback Agreement, each pertaining to the Property owned by
such Seller.

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(b)   Each
Seller and Buyer shall execute and deliver to the other duplicate originals of
notices to all Tenants stating that (i) the Properties have been sold and
conveyed to Buyer; and (ii) such other matters as are required by
applicable law or pursuant to the terms of the Leases or which either party may
reasonably request (the “Tenant Notification Letters”).

(c)   Each
Seller and Buyer shall execute and deliver to the other and the Title Company
such evidence as may be reasonably required by the other of the due
authorization, execution and delivery by such party of this Agreement and
Seller’s Documents or Buyer’s Documents, as the case may be.

(d)   Sellers
shall deliver to Buyer a list of all Tenants who are delinquent, as of the
Closing Date, in the payment of Rents, the amount of each such delinquency and
the period to which each such delinquency relates.

(e)   To
the extent not previously delivered to Buyer or the Receiving Party
Representatives, Sellers shall deliver to Buyer each of the following, to the extent
in Sellers’ possession:  copies of all
tenant files, unexpired warranties and guaranties affecting the Properties, the
Permits, real estate tax bills for the tax year in which the Closing Date
occurs (if then available), then current water, sewer and utility bills for the
Properties, the Service Contracts (to the extent assumed by Buyer), copies of
operating statements for the Properties for the one-year period prior to the
Closing Date, originals of the Leases, each to the extent in Sellers’ possession
or control or reasonably available to Sellers, excluding, however, such
instruments and documents as Sellers may reasonably require for their own use
following the Closing Date (and as to all such instruments and documents other
than the Leases, Sellers will deliver true and complete copies thereof to
Buyer). Such instruments and documents shall be deemed to have been delivered
to Buyer if the same are maintained in the property management office of any
Property.

(f)    Sellers
shall terminate or cause to be terminated, effective not later than the last
day of the first full calendar month following Closing,  (i) all existing property management and
parking management agreements affecting the Properties, (ii) all leasing
commission agreements (other than any leasing commission agreements with
respect to Out-for-Signature Leases or contained within any Lease or payable by
Buyer pursuant to the provisions of this Agreement), and (iii) those
Service Contracts, designated in writing by Buyer (no less than thirty-five
(35) days prior to the Closing Date) which may by their terms be terminated
with thirty (30) days’ prior notice; provided, however, Sellers
shall not be required to terminate any such Service Contracts, if, (A) any
payments are required to be made in connection with such termination unless
Buyer shall have agreed to pay the same or (B) any Seller shall incur any
liability with respect to such termination.

(g)   Each
Seller and Buyer shall execute and deliver to the other duplicate originals, to
the extent such agreements are not terminated prior to Closing, of notices to
the contractors under the Service Contracts and Tenants under the Leases
advising such parties of the sale of the Properties at the Closing (“Other
Notification Letters”).

 39
 

 

(h)   Each
Seller shall execute, acknowledge and deliver to the Title Company an affidavit
in the form attached hereto as Exhibit V for the benefit of the
Title Company together with such other documents as the Title Company may
reasonably require (provided the same do not result in any additional liability
to any Seller).

(i)    Sellers
shall deliver to Buyer an updated tenant list, the Leases, the Service
Contracts (to the extent assumed by Buyer).

(j)    Subject
to Section 7.2(b), Sellers shall deliver to Buyer the Tenant Estoppels
that Sellers have received from the Tenants.

(k)   Each
Seller shall deliver to Buyer a FIRPTA certification in the form of Exhibit W
attached hereto.

(l)    Buyer
shall deliver to the Title Company for disbursement to Sellers the balance of
the Purchase Price pursuant to Article II above.

(m)  Sellers
shall deliver to Buyer any Security Deposits in Seller’s possession or control
that have not been (i) applied to defaults as permitted by this Agreement
or (ii) credited to Buyer pursuant to Section 6.6 hereof.

(n)   Each
Seller and Buyer shall execute and deliver to each other a certificate updating
the representations and warranties made by each of them in Articles VIII and
IX, respectively. If any of the facts contained in the representations and
warranties made by Sellers in Article VIII change in any material
respect between the Effective Date and the Closing Date, then promptly upon
learning of such change in facts, Sellers shall disclose such changes in
writing to Buyer. The matters contained in the certificates delivered hereunder
shall survive the Closing until the respective Survival Dates set forth in Section 24.9(a) hereof
with respect to the representation to which each such matter relates.

(o)   Sellers
and Buyer shall each execute and deliver to each other and Title Company a
closing statement.

(p)   Sellers
and Buyer shall each execute and deliver to each other and the Title Company
the Purchase Price Amendment.

(q)   Originals
of any letters of credit (collectively, “Letters of Credit”) identified
on Exhibit S which are held by any Seller as security deposits, if
such Letters of Credit in their present form (including amendments thereto)
permit Buyer to exercise the rights of beneficiary thereunder without amendment
of such Letters of Credit; provided, however, that as for those
Letters of Credit that require amendment in order to enable Buyer to
exercise  the rights of beneficiary
thereunder, the same shall be delivered to Buyer at Closing and Sellers and
Buyer shall cooperate and expend commercially reasonable efforts to obtain such
amendments after the Closing, for the benefit of and delivery to Buyer or to
draw upon such Letter of Credit, if permitted under the terms of such Letter of
Credit (but in either case Sellers shall not be obligated to spend any money
unless Buyer has agreed to reimburse Sellers therefor). If Sellers shall be
unable to 

 40
 

 

amend such Letter of Credit, Sellers shall cooperate with Buyer to
obtain a replacement Letter of Credit with respect thereto in favor of Buyer
(but Sellers shall not be obligated to spend any money unless Buyer has agreed
to-reimburse Sellers therefor). Buyer agrees to indemnify, defend and hold
Sellers harmless from and against any and all costs, loss, damages and expenses
of any kind or nature whatsoever (including reasonable attorneys’ fees and
costs) arising out of or resulting from any Seller’s presenting any such Letter
of Credit for payment in accordance with Buyers request. The provisions of this
Section 13.1(p) shall survive the Closing until the Survival
Date set forth in Section 24.9(a) hereof.

(r)    Sellers
shall deliver to Buyer the declarant/owner’s association estoppels that Sellers
have received.

(s)   Each
Seller and Buyer shall execute and deliver to each other and the Title Company
such other instruments and documents and shall pay such sums of money which may
be required pursuant to any of the other provisions of this Agreement; provided,
however, the foregoing shall not expand or modify either party’s
obligations contained in this Agreement. Each instrument and document to be
delivered prior to the Closing Date, the form of which is not attached to this
Agreement as an Exhibit, shall be consistent with the applicable provisions of
this Agreement and shall be in the form or contain the information or
provisions provided for in this Agreement.

(t)    In
the event Buyer closes on the purchase of all Properties within the Mark Center
Portfolio, the Sellers of Property within the Mark Center Portfolio shall
assign to Buyer at Closing all of their interests as declarant, if any, under
any and all recorded declarations pertaining to Mark Center (the “Mark Center
Declaration”). The parties agree that the Mark Center Declaration shall be
amended, subject to obtaining any necessary lender consents (i) to delete provisions
thereof that provide the declarant thereunder rights of first refusal or
negotiation in connection with acquiring land or buildings in Mark Center, and (ii) 
to remove the Millbrook project from the application of the Declaration. In the
event Buyer closes on the purchase of all Properties within the TransDulles
Centre Portfolio, the Sellers of Property within the TransDulles Centre
Portfolio shall assign to Buyer at Closing all of their interests as declarant,
if any, under any and all Declarations pertaining to TransDulles Centre. In the
event Buyer closes on the purchase of all Properties within the Westfields
Portfolio, the Sellers of Property within the Westfields Portfolio shall assign
to Buyer at Closing all of their interests as declarant, if any, under any and
all Declarations pertaining to Liberty Center or the TASC campus.

ARTICLE XIV.

DEFAULT; DAMAGES.

Section 14.1.  Buyer Defaults. In the event that
Buyer shall default in any material respect under (a) this Agreement with
respect to its obligations to be performed on or before the Closing Date with
respect to one or more of the Properties, or (b) the 4807 Agreement, or
that certain purchase agreement for the sale of certain assets of the 

 41
 

 

Mark Winkler Company from affiliates of Sellers to Buyer or its
affiliate (the “Company Agreement,” and, together with the 4807
Agreement, the “Related Purchase Agreements”), Buyer and Sellers agree
that the actual damages that any Seller shall sustain as a result thereof shall
be substantial and shall be extremely difficult and impractical to determine. Buyer
and Sellers therefore agree that if Buyer fails to perform any or all of the
terms, covenants, conditions and agreements to be performed by Buyer hereunder
or under the Related Purchase Agreements, whether at or prior to the
Closing,  then, subject to the provisions
set forth in Section 14.3, Sellers’ sole and exclusive remedy shall
be (i) that (x) the Seller of the Property as to which Buyer has
breached its obligation may elect to terminate this Agreement with respect to
such Individual Property or (y) the Sellers of the Properties within the
Portfolio in which such Individual Property is located shall be entitled to
terminate this Agreement with respect to all Properties within the Portfolio,
and to receive from Escrow Holder, as full, complete and valid liquidated
damages (and not as a penalty) the portion of the Deposit relating to such
Individual Property or Portfolio as shown on Schedule 2.1(a), or (ii) all
of the Sellers may terminate this Agreement with respect to all of the
Properties and receive from Escrow Holder, as full, complete and valid
liquidated damages (and not a penalty) the entire Deposit (including the
Additional Deposit, if required to be deposited at such time, whether or not the
same actually has been posted by Buyer), 
together with any interest earned thereon from the Escrow Holder, and
thereafter neither Buyer nor any Seller shall have any further liability or
obligation to the other parties hereunder, except for such indemnities,
liabilities and obligations as are expressly stated to survive the termination
of this Agreement. In the event Buyer defaults in its obligations under this
Agreement after the Additional Deposit is required to be posted (but prior to
actually posting the Additional Deposit), Buyer shall be obligated to post such
Additional Deposit immediately upon receiving written notice of its default
from a Seller, and each such Seller shall be entitled to bring an action to
collect such Additional Deposit from Buyer to which such Seller is entitled.

Section 14.2.  Seller Pre-Closing Defaults.

(a)   In
the event that any Seller has defaulted in any material respect under this
Agreement with respect to its obligations hereunder (a “Defaulting Seller”),
and provided that Buyer was not in breach in any material respect of this
Agreement, then, subject to the provisions set forth in Section 14.3,
Buyer shall be entitled, as its sole and exclusive remedy, and Buyer hereby
waives its right to pursue any other remedy at law or in equity, to
either:  (i) treat this Agreement as
being in full force and effect and pursue only the remedy of specific
performance of the Defaulting Sellers’ obligations to deliver the documents
described in Section 13.1(a) hereof; or (ii) terminate this
Agreement either (1) solely with respect to the Defaulting Seller and the
Individual Property to which such default relates or (2) with the entire
specific Portfolio in which the Property is located, and receive a return of a
pro rata portion of the Deposit as shown on Schedule 2.1(a), together with any
interest earned thereon (and the parties shall jointly instruct Escrow Holder
to promptly return to Buyer such pro rata portion of the Deposit shown on Schedule
2.1(a), together with any interest earned thereon). In the event that
either (i) the Seller has defaulted in any material respect under the
Company Agreement, and provided that Buyer was not in breach in any material
respect of the Company Agreement, or (ii) if Seller shall have defaulted
in any material respect under the 4807 Agreement and has not terminated 

 42
 

 

the Option and removed the same of record, and Buyer is not in breach
in any material respect of the 4807 Agreement, Buyer may exercise its remedy
set forth in Section 14.2(a)(ii)(2) above. As a condition precedent
to Buyer’s exercising any right it may have to bring an action for specific
performance hereunder, Buyer must commence such action for specific performance
within thirty (30) days after the date scheduled for the applicable Closing. Buyer
agrees that its failure to timely commence such an action for specific
performance within such thirty (30) day period shall be deemed a waiver by it
of its right to commence an action for specific performance as well as a waiver
by it of any right it may have to file or record a notice of lis pendens or notice of pendency of
action or similar notice against any portion of the Property. In no case shall
Buyer seek punitive damages or consequential damages. It is understood that a
default with respect to one Seller or its Individual Property shall not extend
the Closing Date for any unrelated Portfolio or excuse Buyer’s performance
hereunder with respect to the Sellers and Properties of any unrelated
Portfolios.

(b)   If
prior to the Closing Date Buyer has or obtains knowledge that a Seller has
defaulted on its obligations hereunder in any respect, and Buyer nevertheless
proceeds with the Closing, then the default by such Seller as to which Buyer
shall have such knowledge shall be deemed waived by Buyer and Sellers shall
have no liability to Buyer or its successors and assigns in respect thereof. Buyer
shall promptly notify Sellers in writing if Buyer has or obtains knowledge that
a Seller has defaulted on its obligations hereunder in any respect.

Section 14.3.  Right to Cure. (a) Notwithstanding
anything contained herein to the contrary and without limiting the rights of
either party set forth in this Agreement, in the event that Buyer or a
Defaulting Seller (a “Defaulting Party”) has defaulted hereunder with
respect to one or more Individual Properties, before the non-defaulting party
can exercise any of its remedies hereunder, such non-defaulting party shall
provide written notice of default to the Defaulting Party and the Defaulting
Party shall exercise its commercially reasonable efforts  to cure such default promptly, for a period
of up to forty-five (45) days. The Closing Date with respect to such Individual
Property or, at the non-defaulting party’s election, for the entire Portfolio
in which such Individual Property is located, shall be extended for the period
of time reasonably necessary to effect such cure, but not in excess of 45 days,
provided that in no event shall the Closing Date be extended pursuant to Section 7.3
and this Section 14.3 for more than seventy (70) days in the aggregate
(the “Extension Period”). Notwithstanding the foregoing, in no event
shall Buyer be entitled to a cure period for Buyer’s failure to deliver any
portion of the Purchase Price at Closing. In the event the Defaulting Seller,
as without having any obligation to do so, fails to cure such default within
the Extension Period, and such default does not cause direct actual damages to
Buyer in excess of the ******* ****** applicable to each Individual Property
(as defined in this Section 14.3), then such default or condition
precedent will be deemed to have been waived by Buyer, without abatement to or
reduction of the Purchase Price subject to reduction of the Purchase Price in
the amount of such actual damages not in excess of the ******* ******. Seller’s
obligations pursuant to the following Sections and Articles shall not be
subject to the ******* ****** threshold for the purposes of this Section 14.3(a):  (i) the Mandatory Cure Items 

 43
 

 

set forth in Section 3.3, or (ii) Article IV, Article V,
Article VI, Article XI, Section 14.7, Article XVI, Article XVIII
or Section 24.10 of this Agreement.

(b)  In the event that a
Defaulting Seller has defaulted hereunder, and such default or failure of a
condition precedent causes direct actual damages in a liquidated amount to
Buyer in excess of the ******* ****** for the Individual Property owned by such
Seller, then, in such event, such Defaulting Seller shall be entitled, but
shall not have any obligation, either:  (a) to
cure such default; or (b) provide Buyer with a credit against the Purchase
Price applicable to such Defaulting Seller’s Individual Property in an amount
equal to Buyer’s actual direct damages and such default shall be deemed cured
in its entirety and Buyer
shall remain obligated to purchase such Individual Property (and all of
the other Properties) without any further reduction in the Purchase Price.

Section 14.4.  Defaults Discovered Post Closing. If
Buyer closes the transactions contemplated by this Agreement and, after the
Closing Date but before the applicable Survival Date, Buyer discovers a breach of any Seller’s representations,
warranties, covenants or indemnities hereunder or under any certificates and
other documents executed at, or in connection with, the Closing, Buyer shall
have the right, until the applicable Survival Date, to sue such Seller for
actual direct damages incurred by Buyer as a result of such breach or breaches.
However, in the event of a claim for a breach of representation or warranty, no
individual Seller shall have any liability to Buyer for all or any of such
matters in excess of *** ******* (**) of the ******* ***** allocated to such
******** ******** (the “************ ****** ***”) and no claim for
breach of a representation or warranty may be made unless the claims,
individually or in the aggregate, shall be in excess of **** ** *** ****
******* ****** *** *** **** ******** (the “******* ******”) after taking
into account all prior claims and then only to the extent such claims are in excess
of the ******* ******, and then only to the extent of the excess over the
******* ******. Buyer shall not enter any judgment or collect an amount in
excess of the ************ ****** *** for a breach of a representation or
warranty. Notwithstanding anything contained herein to the contrary, if Buyer
had knowledge of a default by a Seller on the Closing Date and Buyer elects to
close the transaction contemplated herein, Buyer shall be deemed to have
irrevocably waived such default and Sellers shall not have any liability with
respect to such default. Further, notwithstanding anything to the contrary
contained herein, the ************ ****** *** and the Minimum Amount shall not
apply to a breach of any Seller covenants to apportion or pay funds after Closing
pursuant to Articles VI, XI and XVI herein or Seller indemnities for investment
banker broker claims pursuant to Article XVIII below or pay for attorneys’
fees pursuant to Section 24.10 below.

Section 14.5.  Limitation on Seller’s Default. Notwithstanding
anything to the contrary, a Seller’s inability to satisfy a condition of this
Agreement shall not be considered a default by such Seller hereunder unless
such inability results from the breach of such Seller’s express obligations
hereunder.

Section 14.6.  Termination of the Related Purchase
Agreements. In the event either Buyer or an affiliate of Seller terminates
any Related Purchase Agreement pursuant to the terms thereof other than by
reason of a default by Sellers or Sellers’ affiliates 

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thereunder, Sellers shall have the right either to terminate this
Agreement with respect to one or more Portfolios, or to terminate this
Agreement in its entirety, and neither party shall have any further obligation
to the other, except (i) as provided in Section 14.1 hereof, (ii) and
those obligations that expressly survive termination.

Section 14.7.  Sellers’ Post Closing Obligations. At
Closing Buyer and each Seller shall enter into an escrow holdback agreement
(each a “Post Closing Escrow Holdback Agreement”) pursuant to which each
Seller shall deposit an amount equal to *** ******* (****) ** *** ********
***** allocable to such Seller’s Property with Escrow Holder, to be held in a
separate interest-bearing account until ******** **, ****. No account of any
Seller shall be available to satisfy claims against any other Seller hereunder.
  The funds of each Seller shall be
released to such Seller on ******** **, ****, unless Buyer has delivered
written notice to such Seller and Escrow Holder of a specific claim against
such Seller under this Agreement specified in reasonable detail, in which case
Escrow Holder shall retain *** ******* ****** **** ******* (****)  of the reasonably estimated cost to satisfy
such claim until the resolution of such claim.

Section 14.8.  Survival. The provisions of this Article XIV
shall survive the Closing and the termination of this Agreement until the
Survival Date set forth in Section 24.9(a) hereof.

ARTICLE XV.

OPERATION OF PROPERTIES
UNTIL CLOSING.

Section 15.1.  Operation of the Properties. Between
the Effective Date and the Closing Date:

(a)   Subject
to Sections 15.1(b), (c), (d), (e), (f), (g), (h) and (i), Sellers shall
continue to operate and maintain the Properties and to purchase supplies for
the Properties in the ordinary course of business in accordance with present
business practices. In no event shall Sellers be obligated to Buyer, however,
to expend any sums to correct any violations, or make any capital improvements
or repairs to capital improvements, or to otherwise cause the Properties to be
in compliance with any law, regulation or ordinance.

(b)   Except
as otherwise expressly provided in this Agreement, Sellers may not, without the
prior written consent of Buyer in each instance (which consent shall not be
unreasonably withheld, conditioned or delayed), (i) cancel or terminate
any Lease (other than for a default thereunder by a party other than any
Seller), (ii) renew or extend any Lease (other than in accordance with the
leasing guidelines for each Property annexed as Exhibit Y, or
pursuant to the terms of options or extensions set forth in any existing Lease)
or (iii) enter into any new lease other than in accordance with the
leasing guidelines for each Property annexed as Exhibit Y. Each
such Seller shall have the right to sue Tenants and to collect such
delinquencies, but no action shall be taken to dispossess any such Tenant
following Closing. Seller shall be entitled to any monetary awards resulting
such suits (less reasonable allocation of costs and expenses for attorneys’
fees) 

 45
 

 

for Rents pertaining to the three month period prior to the Closing
Date, and for operating expense delinquencies applicable to any period of time
prior to the Closing Date. Each Seller shall give Buyer written notice prior to
taking any of the actions referred to in this Section 15.1(b), which
notice shall include the material terms of the proposed action.

(c)   Except
as otherwise expressly provided in this Agreement, Sellers may not, without the
prior written consent of Buyer in each instance (which consent shall not be
unreasonably withheld, conditioned or delayed), cancel, terminate, renew,
extend or modify in any material respect any of the Service Contracts, or enter
into any new service contract or equipment lease for all or any portion of the
Properties unless, in the case of any such cancellation or termination, a new
service contract or equipment lease on substantially similar or more favorable
terms is entered into and the same is terminable upon thirty (30) days’ notice
or, in the case of any extension or renewal of a Service Contract or entering
into of any new service contract or equipment lease, the same may be terminated
on not more than thirty (30) days notice. Each Seller shall give Buyer written notice prior to
taking any of the actions referred to in this Section 15.1 (c),
which notice shall include the material terms of the proposed action as well as
a request for Buyer’s consent thereto if such consent is required by the terms
of the foregoing provisions of this Subsection (c). If Buyer does not respond
to such notice within five (5) Business Days after receipt thereof, time
being of the essence with respect thereto, Buyer shall be deemed to have
consented to such actions, as set forth in Section 15.4 below.

(d)   Sellers
shall not make any expenditures with respect to the Properties which are not in
the ordinary course of business in accordance with present business practices
without Buyer’s consent (which consent shall not be unreasonably withheld,
conditioned or delayed), except in the case of emergencies to protect any
property or person from damage or injury, Sellers Outstanding Lease
Obligations, the Out-for Signature Leasing Costs, the Vacancy Leasing Costs
(for which Buyer shall receive a credit at Closing), the capital expense
projects identified on Exhibit N hereto and further provided that
Buyer’s consent shall not be required for, and Sellers shall be permitted to
pay, any actual increase in property taxes, insurance premiums, or increased
costs caused by any increase in any utility rates. Each Seller shall complete
all work described on Exhibit N hereto pertaining to such Seller’s
Property, and if the same is not completed prior to Closing, such Seller shall
provide a credit to Buyer at Closing for the cost of completing such work.

(e)   Sellers
will keep in full force and effect with respect to the Properties policies of
insurance providing coverage at least as extensive as that described in Exhibit Z.

(f)    Unless
to be discharged in full on or prior to the Closing Date with releases or
discharges delivered contemporaneously with, or prior to, the Closing Date,
Sellers shall not further encumber the Properties with any mortgage, deed of
trust or similar security agreement. Furthermore, unless to be discharged in
full on or prior to the Closing Date, Sellers shall not, without Buyer’s prior
written approval not to be unreasonably withheld, conditioned or delayed (i) execute
any easement agreements except those required in connection with ongoing
development at a Property, and, (ii)

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unless otherwise permitted pursuant to the terms of this Agreement,
execute any other documents or agreements affecting title to the
Properties.

(g)   Notwithstanding
any limitation set forth herein, Sellers may, without Buyer’s consent and
without cost to Buyer (unless otherwise set forth herein or unless otherwise
approved by Buyer) (i) take such actions, if any, with respect to the
Properties, reasonably necessary to comply with the terms of the Leases and any
insurance requirements or to comply with laws, rules or regulations of any
governmental authority, (ii) take such actions as they deem reasonably
necessary to repair any insured or uninsured casualty or damage, and (iii) take
such actions with respect to the Properties reasonably necessary to prevent
loss of life, personal injury or property damage.

(h)   Each
of Buyer and the Seller of Parcel 29G (the “29G Seller”) acknowledges
and agrees that 29G Seller will enter into separate contracts (collectively,
the “29G Construction Contracts”) with the following entities for the
construction of improvements on Parcel 29G: (i) Trinity Group Construction, Inc.
(the general contractor), (ii) Metroplex Retaining Walls of Virginia, (iii) Anderson
Site Contracting, Inc., and (iv) contracts with other entities reasonably
required by 29G Seller for the construction of the improvements on Parcel 29G,
each of which shall be subject to Buyer’s reasonable consent. The final form of
the 29G Construction Contracts will be mutually agreeable to Buyer and 29G
Seller. 29G Seller shall perform all of the obligations of the property owner
under each of the 29G Construction Contracts from the Effective Date until the
Closing Date, and, at Closing 29G Seller shall assign, and Buyer shall assume,
all of 29G Seller’s obligations under the 29G Construction Contracts (which
shall include, without limitation, all outstanding amounts owed and other
liabilities thereunder). 29G Seller covenants to not modify any 29G
Construction Contract without the prior consent of Buyer, which consent shall
not be unreasonably withheld, conditioned or delayed. At Closing, (I) 29G
Seller shall receive reimbursement for (A) the costs incurred as of the
Effective Date by 29G Seller in connection with the development of the
improvements on Parcel 29G (which costs are set forth on Exhibit DD
attached hereto (the “29G Construction Costs”)), and (B) any
additional costs incurred by 29G Seller in connection with the construction of
the 29G Building between the Effective Date and the Closing Date, including those
costs incurred under the 29G Construction Contracts, are otherwise consistent
with the 29G budget posted in the War Room as of the Effective Date, or
are reasonably approved by Buyer (collectively, the “29G Construction Costs”),
and (II) The Winkler Family Trust (the “Trust”) and Buyer shall enter into
a master lease payment agreement for the building being constructed on Parcel
29G in the form of Exhibit EE attached hereto.

(i)    Each
of Buyer and the Seller of Parcel 20 located in TransDulles Centre (the “Parcel
20 Seller”) acknowledge and agree that Parcel 20 Seller has entered into a
letter of intent with, and is currently negotiating a build-to-suit lease with
Universal Technical Institute or its affiliate (collectively “UTI”) for
approximately 150,000 rentable square feet of space (the “Parcel 20 Minimum
Space”) within a building to be constructed on a portion of the Parcel 20
Land (the “Parcel 20 Building”). In the event UTI and Parcel 20 Seller
terminate negotiations, Parcel 20 Seller shall market the Parcel 20 Building
and seek to enter into one or more leases for no less than the Parcel 20
Minimum 

 47
 

 

Space with tenants having a comparable financial capacity of other
tenants of similar space within TransDulles Centre that are reasonably
acceptable to Buyer and identified by Parcel 20 Seller prior to the Closing
Date (“Parcel 20 Comparable Tenants”).  Parcel 20 Seller agrees to consult with Buyer
during the negotiation of such the UTI lease or other leases (including without
limitation, consulting with Buyer about the costs anticipated to be incurred in
negotiating such leases), and agrees that Buyer shall have the right to approve
any such leases, which approval shall not be unreasonably withheld, conditioned
or delayed. Buyer agrees to reimburse Parcel 20 Seller at Closing for all costs
incurred by Parcel 20 Seller in connection with such leases, including, without
limitation, hard costs, soft costs, all tenant inducement costs and the cost of
any leasing commissions, and from and after the Closing Date shall continue to
fund costs reasonably necessary to procure such UTI lease or other leases,
which costs shall be subject to Buyer’s reasonable approval. If Parcel 20
Seller procures a lease with UTI or one or more Parcel 20 Comparable Tenants,
signed by the tenant(s), for no less than the Parcel 20 Minimum Space on or
before the date that is two hundred seventy (270) days after the Closing Date,
Buyer shall pay to Parcel 20 Seller a Purchase Price increase in the sum of
********** within two (2) Business Days after submission of a lease or
leases signed by the tenants thereunder; provided, however, if any lease(s) contain
Tenant Contingencies (as defined below), such ********** payment shall be
delayed until the Tenant Contingencies are satisfied or waived, provided such
Tenant Contingencies are not required to be satisfied prior to the expiration
of such 270 day period. As used herein, the term “Tenant Contingencies”
shall mean any contingencies that would permit a tenant to terminate its lease
prior to the commencement of the lease term, such as due diligence inspection,
board approval, obtaining any special exception for zoning or other
governmental approval, obtaining any tax incentives, but expressly excluding
any contingencies in Buyer’s control (such as Buyer’s construction financing,
or Buyer’s obligation to complete the Building).

Section 15.2.  Books and Records. Upon Buyer’s
request, for a period of eighteen (18) months after the Closing Date, Sellers
shall make all of Sellers’ records with respect to the Properties which are in
the possession of Sellers and/or Manager available to Buyer for inspection by
Buyer’s designated accountants.

Section 15.3.  Change in Condition of Property Prior to
Closing . If and when Sellers obtain knowledge of the same, Sellers shall
promptly notify Buyer of any material change in any condition with respect to
the physical condition of the Properties or of any event or circumstance which
makes any representation or warranty by Sellers under this Agreement materially
untrue or misleading, or any covenant of Sellers under this Agreement incapable
or materially less likely to be capable of being performed.

Section 15.4.  Deemed Consent. Except as otherwise
set forth herein, if Buyer’s consent is required under this Article XV,
time being of the essence, and Buyer does not object in writing (stating its
specific objections) within five (5) Business Days after Buyer’s receipt
of written request for such consent, then Buyer will be deemed to have given
such consent and will confirm such, consent in writing upon demand.

 48

 

Section 15.5.  No Termination. Notwithstanding
anything to the contrary contained herein, Buyer shall not be entitled to
terminate this Agreement and Sellers shall not be liable to Buyer, and Buyer
shall not receive a reduction in, or a credit against, the Purchase Price, in
the event any Tenant vacates its premises, defaults under its Lease in any
respect, or if any Tenant terminates its Lease in accordance with rights
granted Tenant under the terms of its Lease, prior to the Closing Date, unless
as the result of a default by any Seller beyond applicable notice and cure
periods set forth in the Lease.

Section 15.6.  Continued Operation by Sellers. Sellers,
at their cost, subject to Section 15.1, will, so long as the other
party thereto is not in default thereunder, continue to perform and observe in
all material respects all of the covenants and conditions required to be
performed by Sellers in the same manner as presently performed and observed by
Sellers under (a) the Leases, (b) Service Contracts, (c) the
Permitted Encumbrances, (d) any note, indenture, mortgage or deed of trust
affecting the Properties, and (e) any Permits; provided, however,
that the foregoing agreement shall not limit Sellers’ rights to terminate any
of the foregoing agreements to the extent otherwise permitted hereunder.

ARTICLE XVI.

CASUALTY AND CONDEMNATION

Section 16.1.  Condemnation. If, prior to the Closing
Date, all or any portion of one or more Individual Properties other than a
Material Taking of a portion of an Individual Property is taken by eminent
domain (or is the subject of a pending taking which has not yet been
consummated), the Seller of such Individual Property shall notify Buyer of such
fact promptly after obtaining knowledge thereof. In such event, there shall be
no abatement of the Purchase Price and the Seller of such Individual Property
shall assign to Buyer (without recourse) on the Closing Date the rights of such
Seller to any portion of the award that has not been used by such Seller to
restore or rebuild the applicable Individual Property, if any, for the taking,
and Buyer shall be entitled to receive and keep all awards for the taking of
the applicable Individual Property or such portion thereof. Furthermore, Buyer
shall have the right to approve any settlement with the applicable governmental
authority, such approval not to be unreasonably withheld, conditioned or
delayed. In the event there is a Material Taking of a portion of an Individual
Property, Buyer shall have the right to terminate this Agreement as to the
Individual Property or the Portfolio in which such Individual Property is
located by delivering written notice to the applicable Sellers within ten (10) Business
Days after receiving written notice of such Material Taking (which notice shall
include all documentation related thereto in such Seller’s possession), in
which event Buyer shall be entitled to a return of the portion of the Deposit
allocable to such Individual Property or Portfolio, as applicable, provided
that Buyer is not then in default hereunder after all applicable notice and
cure periods, and a corresponding reduction in Purchase Price shall be made at
Closing. As used herein, the term “Material Taking” shall mean a taking that (1) permits
tenants that occupy more than fifteen percent (15%) in the aggregate of the
rentable square feet of space within a Building to terminate their Leases, and
such tenants do not waive such termination right in writing, or (2) requires
more than ********** to 

 49
 

 

repair, (3) materially and adversely affects a Building in a
manner that cannot be repaired, (4) permanently takes a material portion
of the parking spaces available to a Building, which would cost in excess of
********** to replace, (5) permanently materially and adversely impacts
vehicular access to a Building, (6) as to undeveloped land, materially and
adversely affects Buyer’s intended development of the land, or (7) that is
not a condemnation of a leasehold interest.

Section 16.2.  Casualty.

(a)   If,
prior to the Closing Date, a material part (as defined below) of any Individual
Property is destroyed or damaged by fire or other casualty, the Seller of such
Individual Property shall promptly notify Buyer of such fact (“Material
Damage Notice”).   Thereafter, such
Seller shall engage the Architect (as defined below) to certify to such Seller
and Buyer, with reasonably adequate supporting documentation, whether the
Available Restoration Funds (as defined below) are sufficient to restore such
Individual Property to substantially its same condition and to provide
sufficient revenue to replace rental revenue lost as a result of such casualty.
 After the Architect makes its
determination, Seller shall so notify Buyer in writing (the “Second Notice”),
which shall contain Architect’s determination, and all supporting documentation.
If the Architect determines that the Available Restoration Funds are not
sufficient to restore such Individual Property to substantially its same
condition and to provide sufficient revenue to replace rental revenue lost as a
result of such casualty, Buyer shall have the right to terminate this Agreement
with respect to such Individual Property or the Portfolio in which such
Individual Property is located, in which event Buyer shall be entitled to a
return of the portion of the Deposit allocable to such Individual Property or
Portfolio, as applicable, provided that Buyer is not then in default hereunder
after all applicable notice and cure periods, and a corresponding reduction in
the Purchase Price shall be made at Closing. Such right of termination must be
exercised by Buyer, if at all, within ten (10) Business Days after receipt
of such Second Notice. However, if (i) the Architect determines that the
Available Restoration Funds are sufficient to restore such Individual Property
to substantially its same condition and to provide sufficient revenue to
replace rental revenue lost as a result of such casualty, or (ii) the
damage or destruction constitutes less than a material part of an Individual
Property, then (A) Buyer shall not have the right to terminate this
Agreement, (B) the Purchase Price shall not be abated, (C) the Seller
of such Individual Property shall assign to Buyer (without any recourse) on the
Closing Date the rights of such Seller to the insurance proceeds (except to the
extent already applied by Seller in effecting the repair and restoration, or to
cover rent loss prior to closing), and (D) to the extent not already
applied by Seller to effect the repair and restoration, Buyer shall be entitled
to receive from such Seller the sum of the deductible, if any, and the Seller’s
Contribution Amount. As used herein, “Available Restoration Funds” means
the sum of (x) the insurance proceeds (including rent loss insurance), (y) the
amount of the deductible, if any, and (z) any additional amount Seller may
elect to contribute to such restoration (the “Seller’s Contribution Amount”).
For the purposes hereof, a “material part” of an Individual Property
shall mean damage to any portion of an Individual Property that  (1) permits tenant(s) who occupy in
the aggregate more than fifteen percent (15%) of the rentable square feet of
space within a Building to terminate their Leases, and such tenants do not
waive such termination rights in writing, (2) destroys 

 50
 

 

a material portion of the parking spaces available to a Building which
cannot be replaced, or (3) Seller’s insurance company refuses to confirm
in writing to Buyer that the damage shall be covered in full, subject only to
the deductible.  As used herein, the “Architect”
means an architect or other professional mutually and reasonably agreed upon by
Buyer and Sellers.

In furtherance hereof, in the event less than a material part of any
Individual Property is damaged after the Effective Date, Sellers shall, in
accordance with sound management practice, endeavor to repair such damage prior
to the Closing Date, provided that if such repair is not completed by the
Closing Date, the Closing shall not be postponed and the balance of the
insurance proceeds shall be assigned to Buyer and Buyer shall receive a credit
against the Purchase Price of the sum of the deductible, to the extent not
already applied by Seller to effect the repair and restoration. Notwithstanding
anything herein to the contrary, in the event the Architect determines that any
damage to a material part of an Individual Property cannot be repaired within
nine (9) months, Buyer shall have the right to terminate this Agreement
with respect to such Individual Property or Portfolio within ten (10) days
after receiving notice of such determination, in which event Buyer shall
receive a refund of the portion of the Deposit allocable to such Individual
Property or Portfolio.

(b)   Sellers
shall not enter into any settlement with the insurance carrier for any damage
that constitutes a material part of an Individual Property without the consent
of Buyer, which shall not be unreasonably withheld, conditioned or delayed. If
permitted by Sellers’ insurance carrier without any additional cost or expense,
Sellers shall request that Buyer be named as an additional insured, as its
interest may appear, under Sellers’ insurance policies described in Exhibit Z
and, if so permitted, Sellers shall provide evidence thereof to Buyer.

Section 16.3.  Termination. If this Agreement is
terminated pursuant to this Article XVI, the portion of the Deposit
allocable to the Individual Property that has been terminated shall be returned
to Buyer, at which time this Agreement shall be null and void with respect to
such Seller and such Individual Property, and neither party shall have any
rights or obligations under this Agreement with respect to such Seller and such
Individual Properties, except that the rights and obligations that, by their
terms, expressly survive Closing, shall survive termination.

ARTICLE XVII.

NOTICES.

Section 17.1.  Notices. Any notice, communication,
request, reply or advice (collectively, “Notice”) provided for or
permitted by this Agreement to be made or accepted by Buyer or any Seller must
be in writing. Notice may, unless otherwise provided herein, be given or served
(a) by depositing the same in the United States mail, postage paid,
certified, and addressed to the party to be notified, with return receipt
requested, (b) by delivering the same to such party, or an agent of such
party, in person or by commercial courier, (c) by facsimile transmission,
evidenced by confirmed receipt and 

 51
 

 

concurrently followed by a “hard” copy of same delivered to the party
by mail, personal delivery or overnight delivery pursuant to clauses (a), (b) or
(d) hereof, or (d) by depositing the same into custody of a
nationally recognized overnight delivery service such as Federal Express,
Overnight Express, UPS, Airborne Express, Emery or Purolator. Notice sent in
the manner hereinabove described (other than by facsimile) shall be effective
upon receipt or refusal of delivery. Notice given by facsimile shall be
effective only if sent to the party to be notified between the hours of 8:00 a.m.
and 7:00 p.m. of any Business Day with delivery made after such hours to
be deemed received the following Business Day. For the purposes of Notice, the
addresses of Sellers, Buyer and Escrow Holder shall, until changed as
hereinafter provided, be as set forth in this Article XVII. Buyer
and Sellers shall have the right from time to time to change their respective
addresses, and each shall have the right to specify as its address any other
address within the United States of America by at least five (5) days
written Notice to the other party. Notices shall be addressed as follows:

(a)   if to Sellers, to:

The Mark Winkler Company

4900 Seminary Road, Suite 900

Alexandria, Virginia 22311

Attention:  Randal B. Kell

Telephone:  (703) 578-7782

Facsimile:  (703) 578-7899

With a copy to:

The Mark Winkler Company

4900 Seminary Road, Suite 900

Alexandria, Virginia 22311

Attention:  William C. Nussbaum

Telephone: (703) 578 7798

Facsimile:  (703) 578 7899

And a copy to:

Pillsbury Winthrop Shaw Pittman LLP

2300 N Street, N.W.

Washington, D.C. 20037

Attention:  John Engel

Telephone: (202) 663-8863

Facsimile: (202) 663-8007

(b)   if
to Buyer, to:

Duke Realty Corporation

3950 Shackleford Road, Suite 300

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Duluth, Georgia 30096-8268

Attention:  Howard Feinsand

Telephone: (770) 717-3267

Facsimile: (770) 717-3314

With
a copy to:

James
G. Farris, Jr. 

Alston & Bird LLP 

1201 West Peachtree Street 

Atlanta, Georgia 30309-3424

Telephone: (404) 881-7896

Facsimile: (404) 253-8587

or to such other person and/or address as shall be
specified by either party in a notice given to the other pursuant to the
provisions of this Article XVII. This article shall survive Closing
or the earlier termination of this Agreement.

ARTICLE XVIII.

INVESTMENT BANKER AND
BROKER.

Section 18.1.  Investment Banker and Broker. Buyer
warrants and represents to Sellers that Buyer has not dealt or negotiated with
any investment banker, broker or other person that could claim a commission,
fee or other compensation by reason of having dealt with Buyer in connection
with this transaction, other than Goldman, Sachs & Co. and The Mark
Winkler Company, in connection with the transaction contemplated by this
Agreement. Buyer shall indemnify, defend and hold harmless Sellers from and
against any and all losses, costs, liens, claims, liabilities or damages
(including, but not limited to, reasonable attorneys’ fees and disbursements)
resulting from a breach of the foregoing representation or any claim that may
be made by any investment banker, broker or other person, other than Goldman,
Sachs & Co. and The Mark Winkler Company, claiming a commission, fee or
other compensation by reason of having dealt with Buyer in connection with this
transaction including, without limitation, any loss, liability, damages, costs
and expenses (including reasonable attorneys’ fees and disbursements) incurred
in enforcing this indemnity. Sellers warrant and represent to Buyer that, other
than Goldman, Sachs & Co. and The Mark Winkler Company (collectively,
the “Sellers’ Representatives”), Sellers have not dealt or negotiated
with any investment banker or broker in connection with this transaction. Sellers
hereby agree to pay Sellers’ Representatives any brokerage commissions, fees or
other compensation which may be due or payable. Sellers shall indemnify, defend
and hold harmless Buyer from and against any and all losses, costs, liens,
claims, liabilities or damages (including, but not limited to, reasonable
attorneys’ fees and disbursements) resulting from a breach of the foregoing
representation or any claim that may be made by any investment banker, broker
or other person claiming a commission, fee or other compensation by reason of
having dealt with Sellers in connection with this transaction including,
without limitation, any 

 53
 

 

loss, liability, damages, costs and expenses (including reasonable
attorneys’ fees and disbursements) incurred in enforcing this indemnity. This Article XVIII
shall survive the Closing or termination of this Agreement until the Survival
Date set forth in Section 24.9(a) hereof.

ARTICLE XIX.

ASSIGNMENT.

Section 19.1.  Assignment. Buyer shall not directly
or indirectly assign or transfer this Agreement or any of its rights hereunder
without Sellers’ prior written consent in each instance, which consent may be
granted or withheld in Sellers’ sole and absolute discretion; provided,
however, Seller hereby consents to Buyer assigning this Agreement to one or
more entities at Closing (a) that are either controlling or controlled by
Buyer or (b) in which Buyer, or any affiliate of Buyer, is an investor,
member or partner. No consent given by Sellers to any assignment shall be
construed as a consent to any other assignment, and any unpermitted assignment
made by Buyer shall be void. In the event the rights and obligations of Buyer
shall be assigned as aforesaid, the assignee will be substituted in place of
Buyer in the documents executed or delivered pursuant to this Agreement and
shall assume in writing all of Buyer’s duties and obligations hereunder; provided,
however, that such assignment and assumption shall not relieve Buyer of
its obligations hereunder, and that Buyer and such assignee shall remain
jointly and severally liable for all obligations of the Buyer hereunder.

ARTICLE XX.

FURTHER ASSURANCES.

Section 20.1.  Further Assurances. The parties agree
to do such other and further acts and things, and to execute and deliver such
instruments and documents, as either may reasonably request from time to time,
on or after the Closing Date, at the cost of the requesting party in
furtherance of the purposes of this Agreement and consistent with the terms
hereof. The provisions of this Article XX shall survive the Closing
until the Survival Date set forth in Section 24.9(a) hereof.

ARTICLE XXI.

CONFIDENTIALITY.

Section 21.1.  Confidentiality. Buyer acknowledges
and agrees that terms of this Article XXI shall supersede in its entirety
the confidentiality agreement executed by Buyer in favor of Sellers prior to
the Effective Date (the “Confidentiality Agreement”). Without in any way
limiting the foregoing, Buyer agrees that each of the following shall be kept
strictly confidential in accordance with the terms hereof:  (i) the existence of and subject matter
of this Agreement and all of the terms hereof (including the Purchase Price);
and (ii) any and all materials and information provided by Sellers or made
available to Buyer, including, without limitation, the Due Diligence Materials;
and (iii)

 54
 

 

the reason for any termination of this Agreement (if applicable). Without
in any way limiting the foregoing, prior to Closing, Buyer expressly agrees not
to have any discussions regarding, or share any information relating to, this
Agreement or the terms hereof, with any Tenant except as otherwise specifically
permitted under this Agreement. Notwithstanding the foregoing, the
confidentiality provisions of this Section 21.1 shall not apply to
disclosures to governmental agencies having jurisdiction over either Buyer or
Seller, or other communications with their direct and indirect investors,
lenders, professional advisors assisting with the transactions contemplated
herein and employees regarding this Agreement and/or the transactions
contemplated herein (each a “Confidence Party”), without the consent of
the other; provided that each Confidence Party shall agree to be bound by the
terms of this Article XXI, and if requested by the disclosing
party, shall be obligated to execute and deliver a confidentiality agreement
confirming that such Confidence Party is bound by the terms of this Article XXI.
The provisions of this Section 21.1 shall survive Closing or the
termination of this Agreement until the applicable Survival Date set forth in Section 24.9
(a) hereof.

ARTICLE XXII.

PUBLIC DISCLOSURE - PRESS
RELEASES.

Section 22.1.  Public Disclosure. Except to the
extent required by law, prior to Closing, Sellers and Buyer each agree that it will
not issue any press release or advertisement with respect to this Agreement or
the transactions contemplated hereby without the prior written consent of the
other party hereto, which consent shall not be unreasonably withheld or delayed.
If Sellers or Buyer
are required by law to issue such a press release or other public
communication, at least one (1) Business Day prior to the issuance of the
same such party shall deliver a copy of the proposed press release or other
public communication to the other party hereto for its review and approval. Notwithstanding
the foregoing, Sellers and Buyer may make an announcement to, and make any
other required filings with governmental agencies having jurisdiction over
either Buyer or Sellers, otherwise communicate with, its direct and indirect
investors, lenders and employees regarding this Agreement and/or the
transactions contemplated herein, without the consent of the other. The
provisions of this Section 22.1 shall survive Closing or the
earlier termination of this Agreement until the Survival Date set forth in Section 24.9(a).

ARTICLE XXIII.

DISBURSEMENTS BY ESCROW
HOLDER.

Section 23.1.  Actions by Escrow Holder. Upon the
Closing, Escrow Holder shall disburse all funds deposited with Escrow Holder on
account of the Purchase Price to Sellers as Sellers may direct or in accordance
with a closing statement prepared by Escrow Holder and approved by Sellers and
Buyer.

 55
 

 

ARTICLE XXIV.

MISCELLANEOUS.

Section 24.1.  Entire Agreement. This Agreement and
the Exhibits attached hereto, together with Seller’s Documents and Buyer’s
Documents, constitute the entire agreement between the parties with respect to
the subject matter hereof, and all understandings and agreements heretofore or
simultaneously had between the parties are merged in, superseded by and
contained in this Agreement.

Section 24.2.  Modification. This Agreement may not
be waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the parties hereto; and any consent, waiver, approval or
authorization (other than deemed consents or approvals) shall be effective only
if signed by the party granting such consent, waiver, approval or
authorization.

Section 24.3.  Captions. The table of contents,
captions, Section and Article titles and Exhibit and Schedule
names contained in this Agreement are for convenience and reference only and
shall not be used in construing this Agreement.

Section 24.4.  Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Virginia and not the conflicts of laws provisions thereof,
without the aid of any custom, canon or rule of law requiring construction
against the draftsman. Without limiting the foregoing, any questions relating
to the status of title and conveyance documents delivered on the Closing Date
shall be governed by the internal laws of the Commonwealth of Virginia and not
the conflicts of laws provisions thereof. In any such litigation the parties to
this Agreement waive personal service of any summons, complaint, or other
process, and agree that service thereof may be made as provided in Article XVII
above.

Section 24.5.  References. The terms “hereof,” “herein,”
and “hereunder” and words of similar import, shall be construed to refer to
this Agreement as a whole, and not to any particular article or provision,
unless expressly so stated. All words or terms used in this Agreement,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.

Section 24.6.  Certain Definitions. The following
terms used but not otherwise defined herein shall have the following meanings:

(a)           “Business
Day” shall mean any day other than a Saturday, Sunday or bank holiday in the
Commonwealth of Virginia or any holiday when the federal government in the
District of Columbia is closed.

(b)           “Person”
shall mean any natural person, a partnership, a corporation, limited liability
company, a business trust and any other form of business or legal entity.

(c)           “Commercially
reasonable efforts” as used herein shall not obligate Sellers to pursue
litigation or any other enforcement action or to incur more than ******** in
the 

 56
 

 

aggregate under this Agreement. Buyer’s assertion that
Sellers have not exercised commercially reasonable efforts shall not be the
basis for the declaration of a Seller default hereunder.

Section 24.7.  Exhibits. The Exhibits attached hereto
are hereby made part of this Agreement.

Section 24.8.  Successors and Assigns. Subject to the
provisions of Article XIX above, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. None of the provisions of this Agreement are
intended to be, nor shall they be construed to be, for the benefit of any third
party except for the Released Parties pursuant to the terms hereof.

Section 24.9.  Survival. (a) The acceptance by
Buyer from each Seller of the Deeds and related closing documents referred to
in Article XIII above shall be deemed to be an acknowledgment, for
all purposes, of the full performance and discharge of every representation,
agreement and obligation on the part of each Seller to be performed by it
pursuant to the provisions of this Agreement, except for the following
provisions which are to survive the Closing (or, as applicable, any termination
of this Agreement) until the Survival Date and any other provisions of this
Agreement which are specifically stated to survive the Closing (or, as
applicable, any termination of this Agreement). The “Survival Date”
shall mean the following with respect to the Articles or Sections set forth
below:

                                (i)            The following Articles or Sections
shall survive indefinitely subject to applicable statute of limitations: 

Section 3.6
(No Representation Regarding Due Diligence Materials),

Section 3.7
(Buyer Investigation Indemnity),

Section 3.8
(Return of Information Upon Termination),

Sections 8.1 (a)-(b), and
(k) (Seller’s Corporate and Entity Representations),

Sections 8.2, 8.3, 8.4,
8.5, 8.6 and 8.7 (Limitations on Seller’s Representations),

Article IX
(Buyer’s Representations),

Article XII
(Condition of Properties; Release of Claims),

Article XIV
(Default, Damages, Limitation of Liability),

Article XVII (Notices),

Article XVIII
(Investment Banker and Broker), and

Article XXIV
(Miscellaneous).

(ii)  The following
Articles and Sections shall survive until December 28, 2006:

Article IV
(Assessments),

Article V
(Expenses),

Article VI
(Prorations),

Sections
8.1(f)-(j) (Seller’s Representations),

Article XI
(Tax Reassessment or Reduction Proceedings),

Section 13.1(n) and
(p) (Deliveries at Closing),

Section 15.2
(Books and Records),

 57
 

 

Article XX
(Further Assurances),

Article XXI
(Confidentiality), and

Article XXII
(Disclosure).

(iii) 
Section 15.2 shall survive for a period of eighteen months after the
Closing Date.

                (b)           Notice of any claim made by Buyer or Sellers on the basis
of a breach of a provision of this Agreement which survives the Closing (or, as
applicable, any termination of this Agreement) shall be given on or before the
applicable Survival Date. In the event that either party shall fail to give
such written notice prior to the applicable Survival Date, such party shall be
deemed to have waived all claims in connection with any such provision. Any
litigation with respect to such claim shall be commenced within sixty (60) days
after the applicable Survival Date. Time shall be of the essence with respect
to giving notice hereunder and commencing any litigation.

(c)           The
provisions of this Section 24.9 shall survive the Closing or, as
applicable, any termination of this Agreement, indefinitely.

Section 24.10.  Attorneys’ Fees. If any party obtains
a judgment (including a judgment ordering specific performance) against any
other party by reason of breach of this Agreement, reasonable attorneys’ fees
and disbursements as fixed by the court shall be included in such judgment.

Section 24.11.  Severability. If any provision of this
Agreement, or the application of such provision to any person or circumstance,
shall be held invalid or unenforceable, the remainder of this Agreement or the
application of such provision to the person or circumstance other than those in
respect of which it is invalid or unenforceable, except those provisions which
are expressly made subject to or conditioned upon such invalid or unenforceable
provisions, shall not be affected thereby.

Section 24.12.  Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an original and all of
which, when taken together, shall be deemed one and the same instrument.

Section 24.13.  Recordation. Neither Sellers nor Buyer
may record this Agreement or any memorandum hereof.

Section 24.14.  Time of Essence. Time is of the
essence of this Agreement. In the computation of any period of time provided
for in this Agreement or by law, the day of the act or event from which the
period of time runs shall be excluded, and the last day of such period shall be
included, unless it is a Saturday, Sunday, or legal holiday, in which case the
period shall be deemed to run until the end of the next day which is not a
Saturday, Sunday, or legal holiday.

Section 24.15.  Escrow Holder. Buyer, Seller and
Escrow Holder each acknowledge and agree that Escrow Holder is executing this
Agreement solely for the purpose of acknowledging its obligations set forth in Article II
and Section 23.1 hereof. 

 58
 

 

This Agreement shall be deemed to be binding and effective upon
execution by Buyer and Seller and when the Deposit is posted (as required
hereunder). Amendments to this Agreement shall not require the consent of
Escrow Holder to be effective unless affecting the rights or obligations of
Escrow Holder under this Agreement.

Section 24.16.  Binding Agreement. The submission of
an unsigned copy of this Agreement to Buyer or Sellers shall not constitute an
offer or option to buy or sell the Property. This Agreement shall become
effective and binding only upon execution and delivery by both Sellers and Buyer.

Section 24.17.  No Third-Party Beneficiaries. This
Agreement shall not confer any rights or obligations upon any person other than
the parties to this Agreement and their respective successors and permitted
assigns.

Section 24.18.  WAIVER OF
TRIAL BY JURY. THE SELLERS AND THE PURCHASER HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR CONTRACT)
BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT. THE PROVISIONS OF THIS SECTION SHALL
SURVIVE THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THE TERMS OF THIS
AGREEMENT OR EARLIER TERMINATION OF THIS AGREEMENT.

[THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 59

 

IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement under seal as of the day and year first above written.

	
  

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  DUKE REALTY LIMITED

  PARTNERSHIP, an Indiana limited

  partnership

  
	
   

  	
   

  
	
   

  	
  By: DUKE REALTY CORPORATION, an

  Indiana corporation,

  its sole general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ HOWARD L. FEINSAND

  	
  [Seal]

  
	
   

  	
   

  	
  Name:

  	
  Howard L. Feinsand

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,

  General Counsel and Corporate

  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  [Seal]

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Sellers’
  Signatures Attached on Following

  Pages]

  
	
   

  	
   

  
	
   

  	
  ESCROW HOLDER:

  
	
   

  	
   

  
	
   

  	
  FIRST AMERICAN
  TITLE INSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Phillip J. Sholar

  	
  [Seal]

  
	
   

  	
  Name:

  	
  Phillip J.
  Sholar

  
	
   

  	
  Title:

  	
  VP & Counsel

  

 

 

FIRST
AMENDMENT TO COMMERCIAL MULTI-PROPERTY AGREEMENT OF PURCHASE AND SALE

THIS
FIRST AMENDMENT TO COMMERCIAL MULTI-PROPERTY AGREEMENT OF PURCHASE AND SALE (this
“First Amendment”) is made as of
February 28, 2006, by and among the entities listed on Schedule 1-A
attached hereto (each, a “Seller” and
collectively, the “Sellers”), and DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited
partnership (“Buyer”).

RECITALS:

	
  R-1.

  	
   

  	
  Buyer and Sellers entered into that certain Commercial
  Multi-Property Agreement of Purchase and Sale, dated January
  24, 2006, (the "Agreement"), wherein, inter  alia,
  Buyer agreed to purchase from Seller, and Seller agreed to sell to Buyer,
  certain improved and unimproved real property more particularly described in Exhibit
  A of the Agreement.

  
	
   

  	
   

  	
   

  
	
  R-2.

  	
   

  	
  Simultaneously with this First Amendment, Buyer is
  purchasing a portion of the Properties through various assignees controlled
  by Buyer.

  
	
   

  	
   

  	
   

  
	
  R-3.

  	
   

  	
  Buyer and Seller have agreed to amend the Agreement
  pursuant to the terms of this First Amendment.

  

 

AGREEMENTS:

NOW,
THEREFORE, in
consideration of Ten Dollars ($10.00) in hand paid from each party to the
other, the mutual covenants and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller hereby agree as follows:

1.             Definitions.  Unless
otherwise provided herein, all capitalized terms not expressly defined in this
First Amendment shall have the meanings ascribed to such terms in the
Agreement.

2.             Reduction in Purchase Price.  Pursuant to
Section 6.3 of the Agreement, and agreement
between the parties, the Purchase Price for the Properties being acquired on or
about this day is hereby amended and allocated to the Properties being acquired
as of this date as more particularly described on Exhibit A attached
hereto (the Properties listed on Exhibit A hereto are referred to as the “First Phase Properties”). The parties acknowledge that the
Purchase Price allocated to **** ** **********, *********, ******** includes a
credit to Buyer of ********, in addition to adjustments pursuant to Section 6.3
of the Agreement (which ******** reduction is included in the amended Purchase
Price for said Property in Exhibit A attached hereto).

3.             Closing Date.  Notwithstanding anything to the contrary
contained in the Agreement, Sellers and Buyer acknowledge that the properties
described on Exhibit B hereto 

 

(collectively,
the “Delayed Properties” and each a “Delayed Property”) will not close at the same time as the
First Phase Properties, due to delays in finalizing the assignment and
assumption of Outstanding Loans for the Delayed Properties.  Sellers and Buyer waive any and all rights
they may have to terminate the Agreement solely as a result of all of the
Properties not closing on the same date. 
Closing for each Delayed Property shall occur within five (5) Business
Days after the loan assumption for the Outstanding Loan related to each Delayed
Property is approved by the Existing Lender, and all documents and other
conditions required by the Existing Lender have been satisfied, and all other
conditions to Closing set forth in the Agreement are satisfied as it relates to
such Delayed Property; provided, however, all Closings shall occur, if at all,
by May 3, 2006. The parties acknowledge that Closings for each Delayed Property
are not contingent on Closings for any other Delayed Property; except that
Buyer shall not be required to acquire **** **, unless and until Buyer has
acquired **** *** and that Closing of **** ** may occur after the Closing of
**** ***.  For Delayed Properties, all
references in the Agreement to “Closing” shall mean the Closing for each such
Delayed Property.  Notwithstanding the
foregoing, nothing contained in this Section 3 shall affect the Closing on
******* ****** ***, which is governed by Exhibit BB to the Agreement.

4.             Estoppels for Delayed
Properties.  If Sellers
have satisfied the estoppel requirements for any Portfolio by delivering a
Seller’s Estoppel for any Delayed Property, Seller shall update said Seller’s
Estoppel stating the current status of facts at the Closing of such Delayed
Property.

 

5.             ****** ** – ***********.  Notwithstanding
anything herein to the contrary, each of **************** ****** *******
*********** (the "*** ******") and Buyer acknowledge and agree that,
pursuant to the request of Buyer, *** ****** is conveying title to a certain
portion of real property in *********** ****** commonly known as "******
**" to *********** ***** *** (an assignee of Buyer) rather than conveying
the same to *********** *********, *** (another assignee of Buyer) together
with other real property and buildings in TransDulles Center owned by ***
****** (the "*** ******** ********"). *********** *********, *** and
*********** **** *** are collectively referred to as the "*** ******"
Without waiving any other claims that Buyer (or *** ******, as assignee of
Buyer) may have against *** ****** under the Agreement, in the event Buyer’s
election to have ****** ** and the *** ******** ******** conveyed to two
separate buyers, rather than one single buyer hereunder, causes any
representations, warranties or covenants of *** ****** to be untrue, or
conditions to Buyer’s or *** ******* obligations to Close to be unsatisfied, or
causes any portion of ****** ** or any portion of the *** ******** ******** to
be in violation of any title, zoning (including subdivision) or other
requirements, any such failure of representation, warranty or covenant, or the
Property’s violation of any such title, zoning or other matter, shall not be
the basis of a *** ****** default hereunder and shall not excuse *** *******
performance of its obligations under this Agreement, and shall not be the basis
of any claim against *** ****** hereunder after Closing.  The terms of this paragraph shall survive
Closing indefinitely.

6.             Facsimile Signatures;
Counterparts.  This
First Amendment may be executed in multiple counterparts, each of which shall
be enforceable against the party signing

 2
 

same,
and all of which together shall constitute a single and enforceable
agreement.  Executed counterparts of this
First Amendment may be delivered by either party via facsimile or telecopy
transmission, and any such transmission shall be deemed effective and binding
on the party effecting such delivery. 
Any party effecting delivery of this First Amendment by facsimile or
telecopy transmission shall not use as a defense against the enforceability
hereof the fact that any signatures so transmitted are not original.

7.             Reaffirmation of Purchase
Agreement.  Except
as expressly set forth in this First Amendment, neither the Agreement nor any
provision thereof has been or is hereby amended.  In furtherance of, and without in any manner
limiting the foregoing, Buyer and Seller each hereby agree and acknowledge that
the Agreement, as amended hereby, remains in full force and effect and is
hereby affirmed, confirmed and reaffirmed.

 

 

[Signature Pages to Follow]

 

 

 3

 

 

IN
WITNESS WHEREOF, Buyer and
Sellers have executed and delivered this First Amendment under seal as of the
date first hereinabove written.

	
  

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
  [Sellers’ Signatures Attached on Following Page]

  
	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Duke Realty Corporation, an Indiana corporation, its
  sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Howard L. Feinsand

  	
   

  	
  [Seal]

  
	
   

  	
   

  	
  Name:

  	
  Howard L. Feinsand

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President, General Counsel and
  Secretary

  	
   

  	
   

  

 

 

 

 

 

 

[Signature Page of First Amendment to Commercial
Multi-Property P&S]

 

 

**** ****** *********

 

	
  With respect to **** *****

  	
  ** ASSOCIATES LIMITED PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  MCOP, Inc., a Virginia corporation, 

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name:Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:  President

  

 

 

	
  With respect to **** *****

  	
  ** ASSOCIATES LIMITED PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  MCOP, Inc., a Virginia corporation, 

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  ** ASSOCIATES LIMITED PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  MCOP, Inc., a Virginia corporation, 

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title    President

  

 

 

 

	
  With respect to **** *****

  	
  ** ASSOCIATES LIMITED PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  MCOP, Inc., a Virginia corporation, 

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  **** ***** **********  ASSOCIATES
  LIMITED 

  
	
  ********** ******:

  	
  PARTNERSHIP, a Virginia
  limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  MCOP, Inc., a Virginia corporation, 

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  **** ***** ********** ASSOCIATES LIMITED 

  
	
  ********** ******:

  	
  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  **** ***** ********** ******, Inc., a Virginia corporation,
  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  **** ****** ***** II LIMITED
  PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Plaza II, Inc., a Virginia corporation,

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:  President

  

 

 

 

	
  With respect to **** *****

  	
  **** ****** ***** II LIMITED
  PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Plaza II, Inc., a Virginia
  corporation,

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  **** ***** ********** ASSOCIATES LIMITED 

  
	
  ********** ******:

  	
  PARTNERSHIP, a Virginia
  limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  MCOP, Inc., a Virginia corporation, 

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  **** ***** ********** ******LIMITED

  
	
  ********** ******:

  	
  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  **** ***** ********** ******, Inc., a Virginia

  corporation, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

 

	
  With respect to **** *****

  	
  PLAZA I-A ASSOCIATES LIMITED
  PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Plaza I-A, Inc., a Virginia
  corporation,

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  ****** *** ASSOCIATES LIMITED
  PARTNERSHIP,

  
	
  ********** ******:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  ****** ***, Inc., a Virginia
  corporation,

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** *****

  	
  MARK CENTER PROPERTIES LIMITED

  
	
  ********** ******:

  	
  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Mark Center Properties, Inc.,
  a Virginia 

  corporation, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

**** ****** *********

 

	
  With respect to *********

  ******

  	
  WINKLER-SOUTHERN TOWERS LIMITED

  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Winkler-TDC LLC, a Virginia limited
  

  liability company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Family Trust Under the Last 

  and Testament of Mark Winkler, 

  Deceased, its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
    Name: Randal
  B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
    Title:   Trust
  Manager

  

 

 

	
  With respect to ****** **:

  	
  WINKLER-SOUTHERN TOWERS LIMITED

  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Winkler-TDC LLC, a Virginia limited
  

  liability company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Family Trust Under the Last
  Will

  and Testament of Mark Winkler, 

  Deceased, its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
    Name: Randal
  B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
    Title:   Trust Manager

  

 

 

 

	
  With respect to ****** **: 

  	
  ****** ** ASSOCIATES LIMITED
  PARTNERSHIP,

  a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  W Investment VII, LLC, a Virginia
  limited liability company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Family Trust Under the Last
  Will 

  and Testament of Mark Winkler, 

  Deceased, its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
    Name: Randal
  B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
    Title:   Trust
  Manager

  

 

 

	
  With respect to ****** **: 

  	
  ****** ** ASSOCIATES LIMITED
  PARTNERSHIP,

  a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  W Investment VI LLC, a Virginia
  limited liability company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Mark Center Properties Limited 

  Partnership, a Virginia limited 

  partnership, its sole member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Mark Center Properties, Inc.,
  a 

  Virginia corporation, its sole

  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
  By: /s/ Randal B. Kell                

  
	
   

  	
   

  	
   

  	
   

  	
           Name:
  Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
           Title:
  President

  

 

 

**********
*********

 

	
  With respect to *******

  	
  ****** ** ASSOCIATES LIMITED
  PARTNERSHIP,

  
	
  ****** *:

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  ****** **, Inc., a Virginia
  corporation,

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to *******

  	
  ****** ** ASSOCIATES LIMITED
  PARTNERSHIP,

  
	
  ****** **:

  	
  a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ****** ** LLC, a Virginia limited
  liability 

  company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company, a
  Virginia 

  corporation, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

	
  With respect to *******

  	
  ******* ****** *** ASSOCIATES
  LIMITED

  
	
  ****** ***:

  	
  PARTNERSHIP, a Delaware limited
  partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ** ***, LLC, a Delaware limited
  liability company,

  its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company, a
  Virginia

  corporation, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

 

	
  With respect to *******   

  	
  ****** **/*** * LLC,

  
	
  ****** **:

  	
  a Virginia limited liability company

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  The Mark Winkler Company, a Virginia 

  , its sole manager

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:  Chief Executive Officer

  

 

 

	
  With respect to **** * * **:

  	
  ****** *** ASSOCIATES LIMITED
  PARTNERSHIP, 

  
	
   

  	
  a Virginia limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  ****** *** Inc., a Virginia
  corporation,

  its sole manager

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

	
  With respect to **** ***:

  	
  **** ********** ASSOCIATES LIMITED

  
	
   

  	
  PARTNERSHIP, a Virginia limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  **** **********, Inc., a
  Virginia corporation,

  its sole manager

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title:   President

  

 

 

 

	
  With respect to **** **:   

  	
  **** ********** ASSOCIATES LIMITED 

  
	
   

  	
  PARTNERSHIP, a Delaware limited
  partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  **** **********, LLC, a Delaware
  limited liability 

  company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company, a
  Virginia

  corporation, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

	
  With respect to ****** ***:

  	
  ****** *** ASSOCIATES LIMITED
  PARTNERSHIP, 

  a Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ****** ***, LLC, a Delaware limited
  liability 

  company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company, a
  Virginia 

  corporation, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

 

	
  With respect to **** **:   

  	
  W INVESTMENT VIII, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  W Investment VIII, LLC, a Delaware
  limited 

  liability company, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company, a
  Virginia 

  corporation, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

	
  With respect to **** **:   

  	
  W INVESTMENT VIII, L.P.,

  
	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  W Investment VIII, LLC, a Delaware
  limited 

  company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company, a Virginia 

  corporation, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

SECOND
AMENDMENT TO COMMERCIAL MULTI-PROPERTY AGREEMENT OF PURCHASE AND SALE

THIS
SECOND AMENDMENT TO COMMERCIAL MULTI-PROPERTY AGREEMENT OF PURCHASE AND SALE (this
“Second Amendment”) is made as of March 10,
2006, by and among the entities listed on Schedule 1-A attached
hereto (each, a “Seller” and collectively, the “Sellers”), and DUKE REALTY LIMITED
PARTNERSHIP, an Indiana limited partnership (“Buyer”).

RECITALS:

	
  R-1.

  	
   

  	
  Buyer and Sellers entered into that certain
  Commercial Multi-Property Agreement of Purchase and Sale, dated
  January 24, 2006, as amended by that certain First Amendment to
  Commercial Multi-Property Agreement of Purchase and Sale, dated
  February 28, 2006 (collectively, the “Agreement”),
  wherein, inter  alia, Buyer agreed to purchase from Seller, and
  Seller agreed to sell to Buyer, certain improved and unimproved real property
  more particularly described in Exhibit A of the Agreement
  (individually a “Property” and
  together the “Properties”).

  
	
   

  	
   

  	
   

  
	
  R-2.

  	
   

  	
  Simultaneously with this Second Amendment, Buyer is
  purchasing a portion of the Properties through various assignees controlled
  by Buyer.

  
	
   

  	
   

  	
   

  
	
  R-3.

  	
   

  	
  Buyer and Sellers have agreed to amend the Agreement
  pursuant to the terms of this Second Amendment.

  

 

AGREEMENTS:

NOW,
THEREFORE, in
consideration of Ten Dollars ($10.00) in hand paid from each party to the
other, the mutual covenants and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller hereby agree as follows:

1.  Definitions.  Unless
otherwise provided herein, all capitalized terms not expressly defined in this
Second Amendment shall have the meanings ascribed to such terms in the
Agreement.

2.  Reduction
in Purchase Price.  Pursuant to Section 6.3
of the Agreement, and agreement between the
parties, the Purchase Price for the Properties being acquired on the date
hereof is hereby amended and allocated to such Properties as more particularly
described on Exhibit A attached hereto (the Properties listed on Exhibit A
hereto are referred to as the “Second Phase Properties”).

3.  Facsimile
Signatures; Counterparts.  This
Second Amendment may be executed in multiple counterparts, each of which shall
be enforceable against the party signing same, and all of which together shall
constitute a single and enforceable agreement. Executed counterparts of this
Second Amendment may be delivered by either party via facsimile or telecopy
transmission, and any such transmission shall be deemed effective and binding
on the party effecting such delivery. Any party effecting delivery of this
Second Amendment by facsimile or telecopy transmission shall not use as a
defense against the enforceability hereof the fact that any signatures so
transmitted are not original.

 

4.  Reaffirmation
of Purchase Agreement.  Except
as expressly set forth in this Second Amendment, neither the Agreement nor any
provision thereof has been or is hereby amended. In furtherance of, and without
in any manner limiting the foregoing, Buyer and Seller each hereby agree and
acknowledge that the Agreement, as amended hereby, remains in full force and
effect and is hereby affirmed, confirmed and reaffirmed.

[Signature Pages to Follow]

 2

 

IN WITNESS WHEREOF,
Buyer and Sellers have executed and delivered this Second Amendment under seal
as of the date first hereinabove written.

	
  

  	
   

  	
   

  	
   

  	
  SELLERS:

  
	
   

  	
   

  	
   

  	
   

  	
  [Sellers’ Signatures
  Attached on Following Page]

  
	
   

  	
   

  	
   

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  	
   

  	
  DUKE REALTY LIMITED
  PARTNERSHIP, an Indiana limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  Duke Realty Corporation, an Indiana

  
	
   

  	
   

  	
   

  	
   

  	
  corporation, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Howard L. Feinsand 

  	
    [Seal]

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Howard L. Feinsand

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Executive Vice President, General Counsel and
  Secretary

  

 

[Signature
Page of Second Amendment to Commerical Multi-Property P&S]

 

 

	
  With respect to **** ***:

  	
   

  	
  **** ******* ASSOCIATES LIMITED

  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  **** ***********, Inc., a Virginia corporation,

  its sole manager

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
  Title: President

  

 

 

 

	
  With respect to **** **:

  	
   

  	
  **** ********* ASSOCIATES LIMITED PARTNERSHIP, a
  Delaware limited partnership

  
	
   

  	
   

  	
  By:

  	
  **** ********, LLC, a
  Delaware limited

  liability company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  The Mark Winkler
  Company, a Virginia corporation, its sole manager

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
									

 

THIRD
AMENDMENT TO COMMERCIAL MULTI-PROPERTY AGREEMENT OF

PURCHASE AND SALE

THIS
THIRD AMENDMENT TO COMMERCIAL MULTI-PROPERTY AGREEMENT OF PURCHASE AND SALE (this
“Third Amendment”) is made as of April 21,
2006, by and between ****** ** ASSOCIATES LIMITED PARTNERSHIP
(“Seller”), and DUKE REALTY
LIMITED PARTNERSHIP, an Indiana limited partnership (“Buyer”).

RECITALS:

R-1.                                                                         Buyer
and Seller and affiliates of Seller entered into that certain Commercial
Multi-Property Agreement of Purchase and Sale, dated January 24, 2006, as
amended by that certain First Amendment to Commercial Multi-Property Agreement
of Purchase and Sale, dated February 28, 2006, as amended by that certain
Second Amendment to Commercial Multi-Property Agreement of Purchase and Sale,
dated March 10, 2006 (collectively, the “Agreement”),
wherein, inter  alia, Buyer agreed to purchase from Seller, and
Seller agreed to sell to Buyer, certain improved real property more
particularly described in Exhibit A of the Agreement (the “Property”).

R-2.                                                                         Simultaneously
with this Third Amendment, Buyer is purchasing the Property through an assignee
controlled by Buyer.

R-3.                                                                         Buyer
and Seller have agreed to amend the Agreement pursuant to the terms of this
Third Amendment.

AGREEMENTS:

NOW,
THEREFORE, in consideration
of Ten Dollars ($10.00) in hand paid from each party to the other, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Buyer and Seller hereby agree as follows:

1.             Definitions.           Unless otherwise provided herein, all
capitalized terms not expressly defined in this Third Amendment shall have the
meanings ascribed to such terms in the Agreement.

2.             Reduction in Purchase Price.
Pursuant to Section 6.3 of the
Agreement, and agreement between the parties, the
Purchase Price for the Property being acquired on the date hereof is hereby
amended and allocated to such Property as more particularly described on Exhibit A
attached hereto (the Property listed on Exhibit A hereto is
referred to as the “Third Phase Property”).

3.             Facsimile Signatures;
Counterparts.             This Third Amendment may be executed
in multiple counterparts, each of which shall be enforceable against the party
signing same, and all of which together shall constitute a single and
enforceable agreement. Executed

 

counterparts
of this Third Amendment may be delivered by either party via facsimile or
telecopy transmission, and any such transmission shall be deemed effective and
binding on the party effecting such delivery. Any party effecting delivery of
this Third Amendment by facsimile or telecopy transmission shall not use as a
defense against the enforceability hereof the fact that any signatures so
transmitted are not original.

4.             Reaffirmation of Purchase
Agreement.          Except as expressly set forth in this
Third Amendment, neither the Agreement nor any provision thereof has been or is
hereby amended. In furtherance of, and without in any manner limiting the
foregoing, Buyer and Seller each hereby agree and acknowledge that the
Agreement, as amended hereby, remains in full force and effect and is hereby
affirmed, confirmed and reaffirmed.

[Signature Pages to Follow]

 2

 

IN
WITNESS WHEREOF,
Buyer and Seller have executed and delivered this Third Amendment under seal as
of the date first hereinabove written.

 

	
  

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ****** ** ASSOCIATES LIMITED

  PARTNERSHIP, a Virginia limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ****** ** LLC, a Virginia limited liability

  company, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  The Mark Winkler Company,

  a Virginia corporation, its sole

  manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Name: Randal B. Kell

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  

 

 

 

	
  

  	
  BUYER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DUKE REALTY LIMITED PARTNERSHIP, an

  Indiana limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Duke Realty Corporation, an Indiana

  corporation, its sole general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Howard L. Feinsand

  	
  [Seal]

  
	
   

  	
   

  	
  Name: Howard L. Feinsand

  
	
   

  	
   

  	
  Title: Executive Vice President, General

  
	
   

  	
   

  	
  Counsel and SecretaryExhibit 10.1

 

Confidential Treatment
Requested.  Confidential portions of this
document have been redacted and have been separately filed with the Commission

 

AMENDMENT NO. 2 to

RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT, DATED
MAY 24, 2004, by and between VERTEX PHARMACEUTICALS INCORPORATED and CYSTIC
FIBROSIS FOUNDATION THERAPEUTICS INCORPORATED

 

This Amendment No. 2 (the “Second
Amendment”) is made as of January 1, 2006 (the “Effective Date”) by
and between Vertex Pharmaceuticals Incorporated, a Massachusetts corporation
with its principal offices at 130 Waverly Street, Cambridge, Massachusetts
02139-4242 (“Vertex”), and Cystic Fibrosis Foundation Therapeutics
Incorporated, a Delaware corporation with its principal offices at 6931
Arlington Road, Bethesda, Maryland 20814 (“CFFT”).

 

This Second Amendment amends
the Research, Development and Commercialization Agreement, dated May 24, 2004,
by and between Vertex and CFFT (the “Existing Agreement”), as amended by
Amendment No. 1 to the Existing Agreement, dated January 6, 2006, by and
between Vertex and CFFT (the “First Amendment”).  Any reference herein to the “Existing
Agreement, as amended”, refers to the Existing Agreement and the First
Amendment, unless the context otherwise requires.  Vertex and CFFT are referred to herein
individually as a “Party” and collectively as the “Parties.”

 

Background

 

In 1998, CFFT made an award
to Aurora Biosciences Corporation (“Aurora”) to conduct a feasibility
study using high throughput screening for cystic fibrosis targets.  On May 19, 2000, CFFT selected and provided
support for Aurora to conduct high throughput screening with respect to the
cystic fibrosis transmembrane conductance regulator (“CFTR”) target
identified by CFFT.  Since that time,
Aurora, and then after its merger into Vertex, Vertex, have been

 

Information redacted pursuant to a confidential treatment request.  An unredacted version of this exhibit has
been filed separately with the Commission.

 

 

conducting a research program
with CFFT’s support aimed at identification and design of “Potentiator” and
“Corrector” compounds, both of which are directed as a principal mode of
therapeutic action at modulation of the biological effect of CFTR in different
ways and with different anticipated results.

 

On May 24, 2004, the Parties
executed the Existing Agreement.  The
Existing Agreement contemplated that during the course of the research program,
Vertex, with CFFT’s agreement, would select either the Potentiator or the
Corrector approach as its Primary Program (as defined in the Existing
Agreement), to which a majority of resources under the research program would
be directed, and the other approach would be designated as an Alternative
Program (as defined in the Existing Agreement), to which the balance of
resources would be directed.

 

In 2005, with the
concurrence of CFFT, Vertex selected the Potentiator approach as the Primary
Program, and designated a certain Potentiator Compound (“VX-770”) as a
Development Candidate under the terms of the Existing Agreement.

 

The Parties believe that it
may be possible to create Corrector Compounds of significant potential value as
therapeutics.  To further that effort, on
January 6, 2006, the Parties executed the First Amendment.  Among other things, the First Amendment
provided for continued funding for research relating to Corrector Compounds.

 

In connection with the First
Amendment, the Parties executed a Term Sheet (the “Term Sheet”)
outlining the financial terms upon which CFFT might consider funding for the
accelerated development of Potentiator Compounds.

 

This Second Amendment is
intended to set forth the Parties’
agreement with respect to additional funding for the accelerated development of
Potentiator Compounds, and to amend the Existing Agreement and the First
Amendment accordingly.

 

2

 

Amendment

 

In consideration of the
mutual covenants set forth in this Second Amendment, and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Parties agree as follows:

 

Section
1.  Acceleration Funding Agreement

 

This Second Amendment is
intended to constitute the Potentiator Funding Agreement contemplated by the
First Amendment (referenced as the “Acceleration Funding Agreement” in
the Term Sheet).  Capitalized terms not
otherwise defined in this Second Amendment shall have the meaning ascribed to
them in the Existing Agreement, as amended. 
If specific provisions of this Second Amendment are inconsistent with
specific provisions of the Existing Agreement, as amended, the provisions of
this Second Amendment, with respect to the subject matter of this Second
Amendment, shall control.  Otherwise, the
Existing Agreement, as amended, shall continue to be applicable.

 

Section 2.  Development
and Development Funding.

 

2.1.         Potentiator
JDC Organization and Operation.

 

2.1.1       Potentiator
JDC Membership.  As soon as practicable after the
Effective Date, Vertex will establish a Potentiator Joint Development Committee
(the “Potentiator JDC”) consisting of [***],
as may be determined from time to time by the Potentiator JDC.  The Potentiator JDC shall continue to
function until FDA approval of a Potentiator Drug Product.  During the period ending December 31, 2008,
the Potentiator JDC shall include an [***].  Thereafter, CFFT shall be entitled to [***] on the Potentiator JDC.  In addition to members appointed by CFFT, the
Potentiator JDC is expected to have members from the various functional groups
(e.g., research, preclinical
safety, clinical, regulatory, marketing) that are or

 

3

 

will be expected to be involved
from time to time in development and launch of VX-770 or any other Potentiator
Backup Compound that is substituted for VX-770 (collectively VX-770 and such
Potentiator Backup Compounds are referred to hereinafter as “VX-770”).  [***].  In addition to Potentiator JDC members,
attendees of Potentiator JDC meetings may include such Vertex or CFFT
representatives as may be required for presentation to or discussion with the
Potentiator JDC from time to time.

 

2.1.2       Potentiator
JDC Operation.  The Potentiator JDC will be the principal
organization through which the development of VX-770 is planned and evaluated,
subject to appropriate review and approval at senior management levels as
required by Vertex from time to time. 
The Potentiator JDC will be responsible for preparation and
implementation of the development plan described in Section 2.1.3, below, with
respect to VX-770.  The Potentiator JDC
will typically meet [***],
depending on the level of current development activity.  [***].

 

2.1.3       Development
Plan.  The Potentiator JDC shall review the implementation of
an overall development plan for VX-770. 
The development plan shall describe the proposed clinical trial
activities, non-clinical development activities, and supply and manufacturing
activities for VX-770.  The initial
development plan considered by Vertex for VX-770 (the “VX-770 Benchmark
Potentiator Development Plan”) and the development plan currently being
implemented by Vertex (the “VX-770 Accelerated Potentiator Development Plan”),
are attached hereto as Exhibits 2.1.3A
and 2.1.3B, respectively.  The VX-770 Accelerated Potentiator
Development Plan [***].  The VX-770 Accelerated Potentiator Development
Plan will be reviewed and may be further refined from time to time by the
Potentiator JDC, based in part on data generated in early pre-clinical and
clinical trials.  [***] 
The actual design of those Phase I and any further clinical trails may
be influenced by FDA feedback, clinical and nonclinical trial

 

4

 

data and other scientific and
medical information.  Any change in the
clinical plans will be reviewed [***].

 

2.1.4       Meeting
Materials.  The Potentiator
JDC will consider all information that is material to an assessment of the
status, direction and progress of the development program for VX-770, including
clinical trial protocols, a summary of the IND package, enabling animal
toxicity data reports, clinical trial protocols, clinical trials final reports,
summary data and reports.  The
Potentiator JDC will review progress reports prepared by Vertex, which shall be
submitted to the Potentiator JDC prior to each meeting and which shall include
a summary in written text of progress made during the preceding [***] under the VX-770 Accelerated
Potentiator Development Plan.  [***] 
The Potentiator JDC Chair will ensure that minutes are prepared and
distributed to each member of the Potentiator JDC after each meeting.  [***] CFFT’s
representatives on the Potentiator JDC will receive all documents and
information distributed or communicated to members of the Potentiator JDC.  In any event, all information presented to
the JDC or otherwise disclosed to CFFT by or at the direction of Vertex shall
be deemed confidential to Vertex and subject to the confidentiality provisions
of the Existing Agreement.

 

2.2          Therapeutic
Development Network.  CFFT
will use its good faith efforts to foster discussions between the Therapeutic
Development Network (“TDN”) and Vertex so that the TDN may enter into
appropriate agreements with Vertex to provide to Vertex resources and expertise
of the TDN to support development efforts for VX-770.

 

2.3          Budget and
Funding.  Exhibit 2.3A contains a summary “Benchmark Potentiator
Budget” that sets forth the estimated costs of the VX-770 Benchmark
Potentiator Development Plan originally proposed by Vertex, and a further
summary budget, the 

 

5

 

“Accelerated Potentiator
Budget,” that sets forth the estimated costs of the VX-770 Accelerated
Potentiator Development Plan, in each case for the period commencing January 1,
2006 and ending December 31, 2007 (the “CFFT Accelerated Potentiator Funding
Term”).  A more detailed budget for
the VX-770 Accelerated Potentiator Development Plan for 2006, based on Vertex’s
most current activity and cost assumptions, is also attached as Exhibit 2.3B.  Vertex will provide comparable budgetary
information [***] as soon as it
becomes available in [***].  CFFT agrees to bear $13.3 million of the
actual Development Costs (as defined below) for VX-770 under the VX-770
Accelerated Potentiator Development Plan; provided that (i) CFFT’s aggregate funding obligation
(the “CFFT Accelerated Potentiator Funding”) shall not exceed [***] of that portion of Vertex’s
Development Costs incurred during the CFFT Accelerated Potentiator Funding Term
that are in excess of the aggregate Development Costs summarized in the
Benchmark Potentiator Budget for the CFFT Accelerated Potentiator Funding Term;
and (ii) CFFT’s funding obligation
[***].  The budget for the VX-770 Accelerated
Potentiator Development Plan may be revised by the Potentiator JDC from time to
time; except that the amount of CFFT Accelerated Potentiator Funding shall not
be increased without the written consent of CFFT.  For purposes of this Amendment 2, the dates
specified in Section 4.3 of the Existing Agreement for Vertex to provide CFFT
with an accounting of all internal FTE’s and outsource costs will be changed to
no later than [***], respectively;
and Vertex shall exercise its good faith efforts to furnish CFFT with such
accounting as early in January as is possible. 
Funding will be reviewed by Vertex and CFFT at the end of each calendar
year during the CFFT Accelerated Potentiator Funding Term, and any amounts paid
by CFFT during the calendar year that are in excess of the CFFT Accelerated
Potentiator Funding amounts required under this Second Amendment will be
credited against CFFT’s 2007 funding obligations hereunder (if paid

 

6

 

on account of activities during
2006), or promptly refunded by Vertex (if paid on account of activities during
2007).

 

For the purpose of this
Second Amendment, “Development Costs” shall mean all internal and
external costs associated with the VX-770 Accelerated Potentiator Development
Plan, including but not limited to all (i)
costs and expenses invoiced by third parties, whether for goods or services
associated with the development plan, and (ii)
FTE costs of Vertex development scientists and management personnel with
respect to time properly allocated to the VX-770 Accelerated Potentiator
Development Plan activities.  Such
internal costs may include, but not be limited to, (a) laboratory work; (b)
regulatory planning, oversight and review; (c)
quality assurance activities; (d)
pharmaceutical supply chain activities; (e)
negotiations with clinical trial sites, institutional review boards, and
suppliers; (f) development plan
research; (g) program management
activities; (h) intellectual
property creation and protection; (i)
holding scientific discussions; (j)
traveling to and attending appropriate seminars and symposia; and (k) carrying out Potentiator JDC
activities, provided, however, costs associated with (i) and (j) above shall
only be allocated to the VX-770 Accelerated Potentiator Development Plan
activities if they are attributable to personnel who spent more than half of
their working time on such activities. 
Activities included in calculating FTE’s shall not include negotiation
of this Second Amendment or modifications or extensions of this Second
Amendment or the Existing Agreement, as amended, or administrative activities
such as accounting, invoicing, personnel related activities or the like.  FTEs allocated to activities under the VX-770
Accelerated Potentiator Development Plan shall be accounted for at the rate of
$[***] per FTE per annum.  Payments for internal and external costs
shall be invoiced and paid pursuant to Section 4.3 of the Existing Agreement.

 

7

 

At its sole discretion, and
except as to amounts previously due to Vertex, CFFT shall have the right to
terminate the CFFT Accelerated Potentiator Funding Term and CFFT’s funding
obligation hereunder effective December 31, 2006 or June 30, 2007 upon not less
than [***] prior written notice to Vertex; provided,
however, that in the event of such a termination, the provisions of
this Second Amendment will cease to apply effective as of the date of such
termination (and, with respect to provisions of the Existing Agreement, as
amended, which were otherwise modified or amended by the provisions of this
Second Amendment, such provisions shall be read without regard to any amendment
or modification set forth in this Second Amendment).

 

Section 3.  Amendments
to Corrector Contributions and Royalty Rates.

 

3.1          Corrector
Contributions.  Effective as of January 6, 2006, Section 4.2
of the Existing Agreement, as amended, is further amended as follows: the text
in Section 4.2 up to and including the Initial Corrector Budget Chart is
deleted, and, in its place the following is inserted:

 

CFFT will fund [***] of the Initial Corrector Budget and Vertex will fund [***] of the Initial Corrector
Budget.  Based on the approved Initial
Corrector Budget of $[***] (which
includes the $[***]of Potentiator
research funding referenced in the Research Plan), CFFT will make the payments
to Vertex specified below during the specified periods.

 

	
   

  	
   

  	
  INITIAL CORRECTOR BUDGET (millions $)

  	
   

  
	
  Research Period

  	
   

  	
  Aggregate Budget Amount

  	
   

  	
  CFFT Financial

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January
  1, 2006 –

  December 31, 2006

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January
  1, 2007 –

  March 31, 2008

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  

 

The text in the balance of Section 4.2 of the
First Amendment (i.e., following
the Initial Corrector Budget Chart) remains unchanged.

 

8

 

3.2          Royalty
Rates.  Section 5.3.1 of the Existing Agreement is
amended, as of the Effective Date, as follows:

 

(i)            [***]

 

(ii)           The paragraph following
the royalty table in Section 5.3.1 of the Existing Agreement, as amended, is
deleted; and in its place, the following is inserted:

 

[***]

 

(iii)         Section
5.3.2 of the Existing Agreement, as amended, is redesignated as Section 5.3.3,
and the following new Section 5.3.2 is inserted:

[***]

 

	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  

 

[***]

 

(iv)          The following new Section 5.3.4 is
inserted:

 

Net Sales under this Section 5.3 shall not in any event
include any Net Sales of Drug Products that are the subject of the royalty
obligations set forth in the Section 5.3.3 or in Section 10.5.5.

 

Section
4.  Existing Agreement Ratified.

 

In all other respects, the
Existing Agreement, as amended, is hereby ratified and confirmed.

 

[Signature Page Follows]

 

9

 

In witness whereof, the Parties hereto have executed this
Agreement as of the day and year first above written.

 

 

	
  VERTEX
  PHARMACEUTICALS

  	
  CYSTIC
  FIBROSIS FOUNDATION

  
	
  INCORPORATED

  	
  THERAPEUTICS
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ KENNETH S. BOGER

  	
   

  	
  By: 

  	
  /s/ ROBERT J. BEALL

  	
   

  
	
   

  	
   

  
	
  Title: Senior Vice
  President and General Counsel

  	
  Title: President and Chief
  Executive Officer

  
	
   

  	
   

  
	
  Date: March 15, 2006

  	
  Date: March 9, 2006

  
						

 

10

 

Exhibit 2.1.3A

 

[***]

 

 

11

 

Exhibit 2.1.3B

 

[***]

 

12

 

Exhibit 2.3B

 

Funding of
VX-770 Development

 

Budget
Summary:  The budget for the VX-770 Benchmark
Potentiator Development Plan (“Benchmark Potentiator Budget”) attached
hereto as Exhibit 2.1.3A is as
follows:

 

	
   

  	
  [***]

  	
  [***]

  
	
  [***]

  	
   

  	
   

  
	
  [***]

  	
  [***]

  	
  [***]

  
	
  [***]

  	
  [***]

  	
  [***]

  
	
  [***]

  	
  [***]

  	
  [***]

  

 

The budget for the VX-770 Accelerated
Potentiator Development Plan (the “Accelerated Potentiator Budget”)
attached hereto as Exhibit 2.1.3B is
as follows:

 

	
   

  	
  [***]

  	
  [***]

  
	
  [***]

  	
   

  	
   

  
	
  [***]

  	
  [***]

  	
  [***]

  
	
  [***]

  	
  [***]

  	
  [***]

  
	
  [***]

  	
  [***]

  	
  [***]

  

 

13

 

Detailed Accelerated Potentiator Budget

 

[***]

 

14

 

Detailed Accelerated
Potentiator Budget

 

[***]

 

15

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