AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

DATED AS OF NOVEMBER 5, 2006

AMONG

SSPF/CET OPERATING COMPANY LLC,

SSPF/CET OP HOLDING COMPANY LLC,

SSPF/CET OP HOLDING COMPANY SUBSIDIARY L.P.,

COLUMBIA EQUITY, L.P.

AND

COLUMBIA EQUITY TRUST, INC.

TABLE OF CONTENTS

EXHIBITS

           AGREEMENT AND PLAN OF MERGER , dated as of November 5, 2006 (this “ Agreement ”), among SSPF/CET Operating Company LLC, a Delaware limited liability company (“ Acquiror ”), SSPF/CET OP Holding Company LLC, a Delaware limited liability company and a wholly owned subsidiary of Acquiror (“ Merger Subsidiary ”), SSPF/CET OP Holding Company Subsidiary L.P., a Virginia limited partnership (“ Partnership Merger Subsidiary ”), Columbia Equity, L.P., a Virginia limited partnership (the “ Partnership ”), and Columbia Equity Trust, Inc., a Maryland corporation (the “ Company ”).

RECITALS

           WHEREAS , the parties wish to effect a business combination through a merger of the Company with and into Merger Subsidiary (the “ Company Merger ”) on the terms and subject to the conditions set forth in this Agreement with Merger Subsidiary continuing as the Surviving Company and a wholly owned subsidiary of Acquiror;

           WHEREAS , the parties also wish to effect a merger of Partnership Merger Subsidiary with and into the Partnership (the “ Partnership Merger ” and together with the Company Merger, the “ Mergers ”), on the terms and subject to the conditions set forth in this Agreement with the Partnership continuing as the Surviving Partnership and an indirect subsidiary of Acquiror;

           WHEREAS , each of the Board of Directors of the Company and the Company Special Committee (as defined below) unanimously has approved this Agreement and the Company Merger and declared that the Company Merger is advisable and in the best interests of the Company and its stockholders, on the terms and subject to the conditions set forth herein;

           WHEREAS , the Company, as the sole general partner of the Partnership, has approved this Agreement and the Partnership Merger and deemed it advisable for the Partnership to enter into this Agreement;

           WHEREAS, Acquiror, as the sole member of Merger Subsidiary, has approved this Agreement and the Company Merger and declared that this Agreement and the Company Merger are advisable on the terms and subject to the conditions set forth herein; and

           WHEREAS , Merger Subsidiary, as general partner of the Partnership Merger Subsidiary, has approved this Agreement and the Partnership Merger and deemed it advisable for the Partnership Merger Subsidiary to enter into this Agreement;

           WHEREAS, simultaneously with the execution and delivery of this Agreement, Acquiror and certain limited partners of the Partnership (the “ Principal Company Limited Partners ”) have entered into voting agreements in the form of Exhibit A attached hereto (the “ Voting Agreements ”) pursuant to which Acquiror and the Principal Company Limited Partners have agreed to take specified actions in furtherance of the Partnership Merger;

           WHEREAS , to induce Acquiror, Company Merger Subsidiary and Partnership Merger Subsidiary to enter into this Agreement, concurrently herewith, certain officers of the Company are entering into Employment Agreements with Acquiror dated as of the date hereof and effective as of the Company Merger Effective Time (as defined below) (each, an “ Employment Agreement ”); and

           WHEREAS , the parties hereto desire to make certain representations, warranties, covenants and agreements in connection with the Mergers, and also to prescribe various conditions to such transactions.

           NOW , THEREFORE , in consideration of the premises and of the mutual covenants, representations, warranties and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE 1.
CERTAIN DEFINITIONS

     1.01 Certain Definitions . The following terms are used in this Agreement with the meanings set forth below:

          “ Acquiror ” has the meaning set forth in the preamble to this Agreement.

          “ Acquiror Benefit Plans ” has the meaning set forth in Section 6.08 .

          “ Acquisition Proposal ” has the meaning set forth in Section 6.04(b) .

          “ Action ” means any claim, action, suit, proceeding, arbitration, mediation or other investigation as to which written notice has been provided to the applicable party, or as to which such party has actual knowledge.

          “ Affiliate ” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is under common control with such Person. For purposes of the immediately preceding sentence, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, JPMorgan Chase Bank N.A. and any of its subsidiaries or any entity controlled, managed and/or advised by JPMorgan Chase Bank, N.A. or any of its subsidiaries are not Affiliates of Acquiror for purposes of this Agreement.

          “ Agreement ” means this Agreement, as amended or modified from time to time in accordance with Section 10.04 .

          “ Alternative Acquisition Agreement ” has the meaning set forth in Section 6.04(c) .

          “ Applicable Permits ” has the meaning set forth in Section 5.02(e) .

          “ Articles of Merger ” has the meaning set forth in Section 2.02(b) .

          “ Benefit Plans ” has the meaning set forth in Section 5.02(i) .

          “ Blue Sky Laws ” has the meaning set forth in Section 5.02(d) .

          “ Business Day ” means Monday through Friday of each week, except a legal holiday recognized as such by the U.S. Government or any day on which banking institutions in the State of New York are authorized or obligated to close.

          “ Buy-Out Payment ” has the meaning set forth in Section 9.03(b) .

          “ CERCLA ” has the meaning set forth in Section 5.02(o) .

          “ Certificate ” means any certificate which immediately prior to the Company Merger Effective Time represented shares of Company Common Stock.

          “ Change in Recommendation ” has the meaning set forth in Section 6.04(c) .

          “ Claim ” has the meaning set forth in Section 6.07(a) .

          “ Closing ” and “ Closing Date ” have the meanings set forth in Section 2.02(a) .

          “ Code ” means the Internal Revenue Code of 1986, as amended.

          “ Company ” has the meaning set forth in the preamble to this Agreement.

          “ Company Board ” means the Board of Directors of the Company.

          “ Company Bylaws ” means the Amended and Restated Bylaws of the Company as in effect on the date hereof.

          “ Company Charter ” means the Articles of Amendment and Restatement of the Company as in effect on the date hereof.

          “ Company Common Stock ” means the common stock, $0.001 par value per share, of the Company.

          “ Company Indemnified Parties ” has the meaning set forth in Section 6.07(a) .

          “ Company Lease ” means any tenant lease at a Company Property.

          “ Company Material Adverse Effect ” means any event, circumstance, change or effect that individually or in the aggregate (i) is materially adverse to the business, properties, liabilities, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) prevents the ability of the Company to consummate the Company Merger; provided , however , that none of the following shall be deemed to constitute or shall be taken into account in determining whether there has been a “Company Material Adverse Effect”: (A) any event, circumstance, change or effect arising out of or attributable to (a) any decrease in the market price of Company Common Stock (but not any event, circumstance, change or effect underlying such decrease to the extent that such event, circumstance, change or effect would otherwise constitute a Company Material Adverse Effect), (b) any changes in the United States or global economy or capital, financial or securities markets generally, including changes in interest or exchange rates, (c) the commencement or escalation of a war or armed hostilities, (d)

the occurrence of acts of terrorism or sabotage (except to the extent disproportionately adversely affecting the Company as compared to other similarly situated companies (by size or otherwise) which own commercial office properties in the greater Washington, D.C. metropolitan market), (e) any changes in general economic, legal, regulatory or political conditions in the geographic regions in which the Company and its Subsidiaries operate, (f) any events, circumstances, changes or effects arising from the consummation or anticipation of the Mergers or the announcement of the execution of this Agreement, (g) any events, circumstances, changes or effects arising from the compliance with the terms of, or the taking of any action required by, this Agreement, (h) earthquakes, hurricanes or other natural disasters (except to the extent disproportionately adversely affecting the Company as compared to other similarly situated companies (by size or otherwise) which own commercial office properties in the greater Washington, D.C. metropolitan market), (i) changes in Law or GAAP, or (j) failure by the Company to complete the acquisition of any properties or assets currently under contract or letter of intent, (k) a failure by the Company to report earnings or revenue results in any quarter ending on or after the date hereof consistent with the Company’s historic earnings or revenue results in any previous fiscal quarter or published guidance with respect thereto (but not any event, circumstance, change or effect underlying such failure to the extent that such event, circumstance, change and or effect would otherwise constitute a Company Material Adverse Effect), or (B) any event, circumstance, change or effect disclosed herein or in the Disclosure Letter.

          “ Company Merger ” has the meaning set forth in the recitals of this Agreement.

          “ Company Merger Certificates ” has the meaning set forth in Section 2.02(b) .

          “ Company Merger Consideration ” has the meaning set forth in Section 3.01(b) .

          “ Company Merger Effective Date ” means the day of the Company Merger Effective Time.

          “ Company Merger Effective Time ” has the meaning set forth in Section 2.02(b) .

          “ Company Property ” or “ Company Properties ” has the meaning set forth in Section 5.02(l) .

          “ Company Special Committee ” means the committee of the Company Board comprised of the five non-employee members of the Company Board.

          “ Company Stock Plan ” means the Company’s 2005 Equity Compensation Plan.

          “ Company Stockholders Meeting ” means a special meeting of the Company’s stockholders to consider and vote upon the approval of the Company Merger, this Agreement and any other matter required to be approved by the Company’s stockholders for consummation of the Transaction (including any adjournment or postponement).

          “ Company Title Insurance Policy ” has the meaning set forth in Section 5.02(l) .

          “ Confidentiality Agreement ” has the meaning set forth in Section 6.03(b) .

          “ Continuing Employee ” has the meaning set forth in Section 6.08(a) .

          “ Disclosure Letter ” has the meaning set forth in Section 5.01 .

          “ DLLCA ” has the meaning set forth in Section 2.01(a) .

          “ Election Date ” has the meaning set forth in Section 3.02(b) .

          “ Employee ” has the meaning set forth in Section 6.08(a) .

          “ Employment Agreement ” has the meaning set forth in the recitals.

          “ Environmental Laws ” means any United States federal, state or local Laws in existence on the date hereof relating to pollution or protection of the environment.

          “ Environmental Permits ” has the meaning set forth in Section 5.02(o) .

          “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

          “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

          “ Exchange Agent ” has the meaning set forth in Section 3.03(a) .

          “ Exchange Fund ” has the meaning set forth in Section 3.03(a) .

          “ Expenses ” has the meaning set forth in Section 6.07(a) .

          “ Former Equityholder ” has the meaning set forth in Section 3.03(b) .

          “ GAAP ” means accounting principles generally accepted in the United States of America.

          “ Governmental Authority ” means any federal, state or local court, administrative agency or commission or other governmental authority or instrumentality or agency.

          “ Ground Lease ” has the meaning set forth in Section 5.02(l) .

          “ Hazardous Substance ” means (i) those substances defined in or regulated under the following federal statutes and their state counterparts, as each may be amended from time to time, and all regulations thereunder: the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act and the Clean Air Act; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) polychlorinated biphenyls, friable asbestos and radon; and (iv) any substance, material, or waste regulated by any Governmental Authority pursuant to any Environmental Law.

          “ Intellectual Property ” means all intellectual property owned or used by the Company and its Subsidiaries, including patents (including any continuations, divisionals, continuations-in- part, renewals and reissues), trademarks, trade names, service marks, domain names and other indicators of source or origin, database rights, copyrights, mask works, technology, know-how, trade secrets, inventory, ideas, algorithms, processes, computer software programs or applications (in both source code and object code form), tangible or intangible proprietary information or material and all other intellectual property or proprietary rights, together with all goodwill symbolized by any of the foregoing, registrations and applications for the foregoing, and rights to sue for past infringement thereof.

          “ IRS ” has the meaning set forth in Section 5.02(i) .

          “ JPM JVs ” means the joint venture entities listed on Exhibit C hereto.

          “ JPM JV Properties ” means the properties owned by JPM JVs as listed on Exhibit C hereto.

          “ JV Entities ” has the meaning set forth in Section 5.02(a) .

          “ knowledge of the Company ” or “to the Company’s knowledge” means the actual knowledge after due inquiry of the Chairman of the Company Board and Chief Executive Officer of the Company and the Executive Vice President and Chief Financial Officer of the Company.

          “ Law ” has the meaning set forth in Section 5.02(d) .

          “ Liens ” means any charge, mortgage, pledge, security interest, restriction, Claim, lien or encumbrance.

          “ LTIP Unit ” has the meaning set forth in Section 3.02(a) .

          “ Material Contracts ” has the meaning set forth in Section 5.02(p) .

          “ Merger Consideration ” has the meaning set forth in Section 3.02(a) .

          “ Merger Expenses ” has the meaning set forth in Section 9.03(a) .

          “ Merger Subsidiary ” has the meaning set forth in the preamble to this Agreement.

          “ Mergers ” has the meaning set forth in the recitals of this Agreement.

          “ MGCL ” means the Maryland General Corporation Law.

          “ Non-JPM JVs ” means the entities listed on Exhibit D hereto.

          “ Non-JPM JV Properties ” means the properties owned by non-JPM JVs as listed on Exhibit D hereto.

          “ NYSE ” has the meaning set forth in Section 5.02(d) .

          “ Organizational Documents ” has the meaning set forth in Section 5.02(a) .

          “ Other Filing ” has the meaning set forth in Section 5.02(k) .

          “ Outside Date ” has the meaning set forth in Section 9.01(b) .

          “ Partnership Agreement ” has the meaning set forth in Section 5.02(b) .

          “ Partnership Approval ” has the meaning set forth in Section 5.02(c) .

          “ Partnership Cash Merger Consideration ” has the meaning set forth in Section 3.02(a) .

          “ Partnership Form of Election ” means the form of election that the holders of Partnership LP Units will complete, execute and deliver to Acquiror to elect the form of Partnership Merger Consideration to be received in the Partnership Merger, in a form mutually satisfactory to each of the Company and Partnership Merger Subsidiary.

          “ Partnership LP Unit ” has the meaning set forth in Section 3.02(a) .

          “ Partnership Merger Certificate ” has the meaning set forth in Section 2.02(c) .

          “ Partnership Merger Consideration ” has the meaning set forth in Section 3.02(a) .

          “ Partnership Merger Effective Time ” has the meaning set forth in Section 2.02(c) .

          “ Partnership Merger ” has the meaning set forth in the preamble of this Agreement.

          “ Partnership Unit Election ” has the meaning set forth in Section 3.03(e) .

          “ Partnership Unit Common Merger Consideration ” has the meaning set forth in Section 3.02(a) .

          “ Partnership Unit Preferred Merger Consideration ” has the meaning set forth in Section 3.02(a) .

          “ Partner Solicitation Materials ” has the meaning set forth in Section 6.02(b) .

          “ Permitted Encumbrances ” has the meaning set forth in Section 5.02(l) .

          “ Permitted Liens ” has the meaning set forth in Section 5.02(l) .

          “ Person ” means any individual, bank, corporation, partnership, association, joint-stock company, business trust, limited liability company, Governmental Authority or unincorporated organization.

           “Principal Company Limited Partners” has the meaning set forth in the recitals.

          “ Property Restrictions ” has the meaning set forth in Section 5.02(l) .

          “ Proxy Statement ” has the meaning set forth in Section 5.02(d) .

          “ REIT ” means a real estate investment trust within the meaning of Sections 856-860 of the Code.

          “ Representative ” has the meaning set forth in Section 6.04(a) .

          “ Rights ” means, with respect to any Person, warrants, options, rights, convertible securities and other arrangements or commitments which obligate the Person to issue or dispose of any of its capital stock or other ownership interests.

          “ Sarbanes-Oxley Act ” has the meaning set forth in Section 5.02(f) .

          “ SDAT ” means the State Department of Assessments and Taxation of Maryland.

          “ SEC ” means the Securities and Exchange Commission.

          “ SEC Reports ” has the meaning set forth in Section 5.02(f) .

          “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

          “ Shares ” means shares of Company Common Stock.

          “ Stockholder Approval ” has the meaning set forth in Section 5.02(c) .

          “ Subsidiary ” and “ Significant Subsidiary ” have the meanings ascribed to those terms in Rule l-02 of Regulation S-X promulgated by the SEC, but shall not include the JV Entities.

          “ Superior Proposal ” has the meaning set forth in Section 6.04(b) .

          “ Surviving Company ” has the meaning set forth in Section 2.01(a) .

          “ Surviving Partnership ” has the meaning set forth in Section 2.01(b) .

          “ Tax ” or “ Taxes ” shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

          “ Taxable REIT Subsidiary ” has the meaning set forth in Section 4.01(m) .

          “ Tax Returns ” shall mean any return, filing, declaration, report, claim for refund, transfer pricing report or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

          “ Termination Date ” has the meaning set forth in Section 9.01 .

          “ Transaction ” means the Mergers and the other transactions contemplated by this Agreement.

          “ Transfer Taxes ” has the meaning set forth in Section 6.09 .

          “ Treasury Regulations ” shall mean the Treasury regulations promulgated under the Code.

           “Voting Agreements” has the meaning set forth in the recitals.

          “ VRULPA ” means the Virginia Revised Uniform Limited Partnership Act.

          “ VSCC ” means the State Corporation Commission of the Commonwealth of Virginia.

ARTICLE 2.
THE MERGERS

     2.01 The Mergers .

          (a) The Company Merger . Subject to the terms and conditions of this Agreement, and in accordance with the Delaware Limited Liability Company Act (the “ DLLCA ”) and the MGCL, at the Company Merger Effective Time, Merger Subsidiary and the Company shall consummate the Company Merger pursuant to which (i) the Company shall be merged with and into Merger Subsidiary and the separate existence of the Company shall thereupon cease and (ii) Merger Subsidiary shall be the surviving entity in the Merger (the “ Surviving Company ”) and shall continue to exist as a limited liability company and as a wholly owned subsidiary of Acquiror.

          (b) The Partnership Merger . Subject to the terms and conditions of this Agreement, and in accordance with Article 7.1 of the VRULPA, at the Partnership Merger Effective Time, Partnership Merger Subsidiary and the Partnership shall consummate the Partnership Merger pursuant to which (i) the Partnership Merger Subsidiary shall be merged with and into the Partnership and the separate existence of the Partnership Merger Subsidiary shall thereupon cease and (ii) the Partnership shall be the surviving entity in the Partnership Merger (the “ Surviving Partnership ”).

          (c) Governing Documents .

               (i) The limited liability company agreement of Merger Subsidiary, as in effect immediately prior to the Company Merger Effective Time, shall be the limited liability company agreement of the Surviving Company until thereafter amended in accordance with the provisions thereof and as provided by Law, subject to compliance with Section 6.07(c) hereof.

               (ii) The limited partnership agreement of the Partnership, as in effect immediately prior to the Partnership Merger Effective Time, shall be the limited partnership agreement of the Surviving Partnership until thereafter amended in accordance with the provisions thereof and as provided by Law.

               (iii) At the Company Merger Effective Time, the Operating Agreement of Acquiror shall be in the form of Exhibit B hereto.

          (d) Authorized Stock . The authorized membership interests of the Surviving Company upon consummation of the Company Merger shall be as set forth in the limited liability company agreement of Merger Subsidiary as in effect immediately prior to the Company Merger.

          (e) Partnership Matters . The Surviving Company shall be the general partner of the Surviving Partnership following the Partnership Merger Effective Time.

          (f) Effect of the Mergers .

               (i) At the Company Merger Effective Time, the effect of the Company Merger shall be as provided in the MGCL and the DLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Company Merger Effective Time, all the property, rights, privileges, powers and franchises of the Company shall vest in the Surviving Company, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Company.

               (ii) At the Partnership Merger Effective Time, the effect of the Partnership Merger shall be as provided in the VRULPA. Without limiting the generality of the foregoing, and subject thereto, at the Partnership Merger Effective Time, all the property, rights, privileges, powers and franchises of the Partnership Merger Subsidiary shall vest in the Surviving Partnership, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Partnership Merger Subsidiary shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Partnership.

          (g) Additional Actions . If, at any time after the Company Merger Effective Time or the Partnership Merger Effective Time, as applicable, the Surviving Company shall consider that any further assignments or assurances in law or any other acts are necessary or desirable to (i) vest, perfect or confirm, of record or otherwise, in the Surviving Company its right, title or interest in, to or under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Company as a result of, or in connection with, the Company Merger, (ii) vest, perfect or confirm, of record or otherwise, in the Surviving Partnership its right, title or interest in, to or under any of the rights, properties or assets of the Partnership Merger Subsidiary acquired or to be acquired by the Surviving Partnership as a result of, or in connection with, the Partnership Merger, or (iii) otherwise carry out the purposes of this Agreement, the Company, and its proper officers and directors, for itself and on behalf of the Partnership as its general partner, shall be deemed to have granted to the Surviving Company an irrevocable power of attorney to execute and deliver all such proper deeds, assignments and assurances in law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Company or Surviving Partnership, as applicable, and otherwise to carry out the purposes of this Agreement, and the proper officers, members and managers of the Surviving Company are fully authorized in the name of the Surviving Company for itself and on behalf of the Surviving Partnership as its general partner or otherwise to take any and all such action.

          (h) It is the intention of the parties hereto that, for federal income tax purposes, (i) the Company Merger shall be treated as a sale by the Company of its assets (including but not limited to its interest in the Partnership) to Acquiror for the sum of (x) the Company Merger Consideration and (y) the Company’s liabilities, including its allocable share of any liabilities of the Partnership or any of the Partnership’s Subsidiaries (excluding the Barlow Corporation and any taxable REIT subsidiaries of the Company), followed by a liquidation of the Company, (ii) the holders of Shares shall be treated as having received the Company Merger Consideration in a liquidating distribution, and (iii) each holder of Partnership LP Units receiving Partnership Cash Merger Consideration shall, with respect to any Partnership LP Unit for which it receives such consideration, be treated as if such holder sold its Partnership LP Units to Acquiror for an amount equal to the sum of (x) the Partnership Cash Merger Consideration and (y) the holder’s allocable share of any liabilities of the Partnership or any of its Subsidiaries. A party hereto shall not take any action that is inconsistent with this intent and shall take any action reasonably requested by another party hereto to the extent necessary to effect this intent.

     2.02 Effective Times; Closing .

          (a) The closing of the Mergers (the “ Closing ”) shall take place as promptly as practicable (but in no event later than the second Business Day) after the satisfaction or waiver of the conditions set forth in Article 8 (other than conditions which by their terms are required to be satisfied or waived at Closing) at 9:00 a.m., Eastern Time, at the offices of Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, NY 10038, or at such other place, at such other time, or on such other date as the parties may mutually agree upon (such date, the “ Closing Date ”). At the Closing, there shall be delivered to Acquiror and the Company the certificates and other documents required to be delivered under Article 8 hereof.

          (b) Subject to the satisfaction or waiver of the conditions set forth in Article 8 (other than those conditions that by their nature are to be satisfied at the consummation of the Company Merger, but subject to the fulfillment or waiver of those conditions), at the Closing, Merger Subsidiary and the Company shall duly execute and file articles of merger with the SDAT in accordance with the MGCL and the DLLCA (the “ Articles of Merger ”) and shall duly execute and file certificates of merger in accordance with the MGCL and the DLLCA (the “ Company Merger Certificates ”) and shall make all other filings or recordings required under the MGCL or the DLLCA to effect the Company Merger. The Company Merger shall become effective upon the later of (A) such time as the Maryland Articles of Merger have been accepted for record by the SDAT and (B) such time as the Company Merger Certificate shall have been filed with the Delaware Secretary of State, or such later time which the parties hereto shall have agreed upon and designated in the Company Merger Certificates in accordance with the DLLCA and the MGCL as the effective time of the Company Merger (the “ Company Merger Effective Time ”).

          (c) Subject to the satisfaction or waiver of the conditions set forth in Article 8 (other than those conditions that by their nature are to be satisfied at the consummation of the Partnership Merger, but subject to the fulfillment or waiver of those conditions), at the Closing, the Partnership and Partnership Merger Subsidiary shall duly execute and file a certificate of

merger in accordance with the VRULPA (the “ Partnership Merger Certificate ”) to effect the Partnership Merger. The Partnership Merger shall become effective upon such time as the Partnership Merger Certificate has been filed in accordance with the VRULPA, or such later time which the parties hereto shall have agreed upon and designated in the Partnership Merger Certificate as the effective time of the Partnership Merger (the “ Partnership Merger Effective Time ”).

ARTICLE 3.
CONSIDERATION; EXCHANGE PROCEDURES

     3.01 Conversion of Shares . At the Company Merger Effective Time, by virtue of the Company Merger and without any action on the part of a holder of Shares or holders of membership interests of Merger Subsidiary:

          (a) Each membership interest of Merger Subsidiary issued and outstanding immediately prior to the Effective Time shall remain as one issued and outstanding membership interest of the Surviving Company.

          (b) Except as set forth in Section 3.01(c) herein, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into, and shall be canceled in exchange for, the right to receive a cash amount equal to $19.00, without interest (the “ Company Merger Consideration ”).

          (c) Each share of Company Common Stock that is owned by the Company or any of its Subsidiaries, or by Acquiror, Merger Subsidiary or any other direct or indirect Subsidiary of Acquiror or Merger Subsidiary, shall be cancelled and retired and shall cease to exist and no cash, stock or any other consideration shall be delivered by Acquiror or Merger Subsidiary in exchange therefor.

     3.02 Conversion of Partnership LP Units and LTIP Units . At the Partnership Merger Effective Time, by virtue of the Partnership Merger and without any action on the part of a holder of any partnership interest of the Partnership or Partnership Merger Subsidiary (other than as described herein):

          (a) Each unit of partnership interest in the Partnership issued and outstanding immediately prior to the Partnership Merger Effective Time, including each unit of partnership interest that has been designated pursuant to the Partnership Agreement as an LTIP Unit (“ LTIP Unit ”) whether or not then vested (other than those held by the Company or any of its Subsidiaries or Acquiror or any of its Subsidiaries) (a “ Partnership LP Unit ”), subject to the terms and conditions set forth herein, shall be converted into the right to receive at the election of the holder thereof in accordance with Section 3.02(b) (i) cash in an amount equal to the Company Merger Consideration, without interest (the “ Partnership Cash Merger Consideration ”), (ii) one common membership interest in Acquiror as set forth in the form of limited liability company agreement of Acquiror attached as Exhibit B hereto (the “ Partnership Unit Common Merger Consideration ”), (iii) one preferred membership interest in Acquiror as set forth in the form of limited liability company agreement of Acquiror attached as Exhibit B hereto (the “ Partnership Unit Preferred Merger Consideration ”) and together with the

Partnership Cash Merger Consideration and the Partnership Unit Common Merger Consideration, the “ Partnership Merger Consideration ” and together with the Company Merger Consideration, the “ Merger Consideration ”) or (iv) a combination thereof. Each holder of Partnership LP Units, as a condition to making an election to receive Partnership Unit Common Merger Consideration or Partnership Unit Preferred Merger Consideration with respect to such holder’s Partnership LP Units, shall represent to Acquiror that such holder is an Accredited Investor (as such term is defined under Rule 501 promulgated under the Securities Act).

          (b) Each holder of Partnership LP Units shall be entitled to make an unconditional and irrevocable election (a “ Partnership Unit Election ”), on or prior to the Election Date, to receive in the Partnership Merger in exchange for such holder’s Partnership LP Units, (i) the Partnership Cash Merger Consideration, (ii) the Partnership Unit Common Merger Consideration, (iii) the Partnership Unit Preferred Merger Consideration or (iv) a combination thereof as follows:

               (i) As promptly as practicable following the date the Proxy Statement is mailed to the stockholders of the Company, the Partnership shall deliver to the holders of Partnership LP Units, the Partnership Form of Election. A Partnership Unit Election shall be deemed to have been properly made only if Acquiror shall have received at its principal executive office, not later than 5:00 p.m., New York City time on that date that is ten (10) Business Days before the scheduled date of the Company Stockholders’ Meeting (the “ Election Date ”), a Partnership Form of Election specifying the holder’s irrevocable election with respect to the form of Partnership Merger Consideration, and otherwise properly completed and signed. The Partnership Form of Election shall state therein the date that constitutes the Election Date. Failure of any holder to deliver the Partnership Form of Election by the Election Date will result in such holder receiving Partnership Cash Merger Consideration in exchange for such holder’s Partnership LP Units. Acquiror shall prepare, subject to review by the Company, any disclosure statement or other disclosure information to accompany the Form of Election, including information applicable to an offering of securities exempt from registration under the Securities Act.

               (ii) Each holder of Partnership LP Units, as a condition to making a Partnership Unit Election with respect to such holder’s Partnership LP Units, shall agree to execute the limited liability company operating agreement of Acquiror in the form attached as Exhibit B hereto.

               (iii) Holders of Partnership LP Units that elect, or are deemed to elect, to receive the Partnership Cash Merger Consideration shall be treated for federal income tax purposes as selling their Partnership LP Units to Acquiror pursuant to Treasury Regulations Section 1.708-1(c)(4), if such provision is applicable, and each such holder of Partnership LP Units shall consent to such treatment on the Partnership Form of Election or shall be deemed to have consented to such treatment if it fails to deliver the Partnership Form of Election by the Election Date.

     3.03 Exchange Procedures .

          (a) Exchange and Paying Agent . Prior to the Partnership Merger Effective Time, Acquiror shall appoint an institution reasonably acceptable to the Company to act as Exchange and Paying Agent (the “ Exchange Agent ”) in accordance with an agreement reasonably satisfactory to the Company for the payment or exchange, as applicable, in accordance with this Article 3 , of the Merger Consideration (collectively, such cash and securities being referred to as the “ Exchange Fund ”). On or before the Partnership Merger Effective Time, Acquiror shall deposit with the Exchange Agent the Merger Consideration, for the benefit of the holders of Shares and Partnership LP Units (including Partnership LTIP Units), as applicable. Acquiror, pursuant to irrevocable instructions, shall cause the Exchange Agent to make, and the Exchange Agent shall make, payments of the Merger Consideration out of the Exchange Fund in accordance with this Agreement. The Exchange Fund shall not be used for any other purpose. All expenses of the Exchange Agent shall be paid by Acquiror or the Surviving Company.

          (b) Exchange Procedures for Company Common Stock and Uncertificated Partnership LP Units . Promptly after the Company Merger Effective Time (but in any event within five (5) Business Days), Acquiror shall cause the Exchange Agent to mail to each person who immediately prior to the Company Merger Effective Time held Shares that were exchanged for the right to receive the Company Merger Consideration (each, a “ Former Equityholder ”), pursuant to Section 3.01 : (i) a letter of transmittal (which shall specify that, if applicable, delivery of Certificates shall be effected, and risk of loss and title to the Certificates shall pass to the Exchange Agent, only upon delivery of the Certificates to the Exchange Agent, and which letter shall be in such form and have such other provisions as Acquiror may reasonably specify) and (ii) if applicable, instructions for use in effecting the surrender of the Former Equityholder’s Certificates in exchange for the Company Merger Consideration to which the holder thereof is entitled. Upon (i) surrender by a Former Equityholder of a Certificate for cancellation to the Exchange Agent or to such other agent or agents reasonably satisfactory to the Company as may be appointed by Acquiror, and (ii) delivery by such Former Equityholder of such letter of transmittal (together with such Certificate, if applicable), duly executed and completed in accordance with the instructions thereto, and such other documents as may reasonably be required by the Exchange Agent, such Former Equityholder shall receive in exchange therefor the Company Merger Consideration payable in respect of the Shares, pursuant to the provisions of this Article 3 , and the Certificate so surrendered shall forthwith be canceled. The right of any Former Equityholder to receive the Company Merger Consideration shall be subject to and reduced by any applicable withholding obligation as set forth in Section 3.06 . In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, payment may be made to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the person requesting such payment shall pay any transfer or other Taxes required by reason of the payment to a person other than the registered holder of such Certificate or establish to the satisfaction of Acquiror that such Tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.03 , each Certificate shall be deemed at any time after the Company Merger Effective Time to represent only the right to receive, upon such surrender, the Company Merger Consideration as contemplated by this Section 3.03 . The Exchange Agent shall deliver the Partnership Merger Cash Consideration to the holders of Partnership LP Units as set forth in the records of the Partnership in accordance with their respective Partnership Unit Elections. The Surviving Partnership shall arrange for the issuance of the Partnership Merger Common Unit Consideration and Partnership Unit Preferred Merger Consideration in accordance with the Partnership Unit Elections.

          (c) No Further Ownership Rights . At the Company Merger Effective Time or Partnership Merger Effective Time, as applicable, holders of Shares or Partnership LP Units that are converted into the right to receive the Company Merger Consideration pursuant to Section 3.01(b) or the Partnership Merger Cash Consideration pursuant to Section 3.02(b) shall cease to be, and shall have no rights as, stockholders of the Company or limited partners of the Partnership other than the right to receive the applicable Merger Consideration provided under this Article 3 . The applicable Merger Consideration paid in accordance with the terms of this Article 3 shall be deemed to have been paid in full satisfaction of all rights and privileges pertaining to the Shares and Partnership LP Units exchanged therefor and, if applicable, represented by Certificates exchanged therefor.

          (d) Lost Certificates . In the event that any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Acquiror or Surviving Company, the posting by such Person of a bond in such reasonable amount as the Acquiror or Surviving Company may require as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue, in exchange for such lost, stolen or destroyed Certificate, the Company Merger Consideration payable in respect thereof pursuant to this Agreement.

          (e) Termination of Exchange Fund . Any portion of the Exchange Fund that remains unclaimed by the former holders of Shares or Partnership LP Units one year after the Company Merger Effective Time shall be delivered to Acquiror upon demand. Any such holders who have not complied with this Article 3 prior to that time shall thereafter look only to Acquiror, and Acquiror shall thereafter be liable, for payment of the Company Merger Consideration or Partnership Cash Merger Consideration, as applicable (subject to abandoned property, escheat and similar Laws). Any such portion of the Exchange Fund remaining unclaimed by holders of Shares or Partnership LP Units immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Authority shall, to the extent permitted by applicable Law, become the property of Acquiror free and clear of all claims or interest of any Persons previously entitled thereto.

          (f) No Liability . None of Acquiror, Merger Subsidiary, Partnership Merger Subsidiary, the Partnership, the Company or the Exchange Agent, or any employee, officer, director, agent or Affiliate thereof, shall be liable to any Person in respect of any cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

     3.04 Corporate Action . Prior to the Company Merger Effective Time and subject to and conditional upon the occurrence of the Closing, the Company and the Company Board shall take such actions as they deem necessary or desirable to terminate the Company Stock Plan, effective as of the Company Merger Effective Time.

     3.05 Adjustments . Notwithstanding anything in this Agreement to the contrary, if, between the date of this Agreement and the Company Merger Effective Time or Partnership Merger Effective Time, as applicable, any Shares, Partnership LP Units or Partnership LTIP Units then outstanding shall be changed into a different number, class or series of shares by reason of any stock dividend, partnership distribution, subdivision, reclassification, recapitalization, stock or unit split, combination or exchange of shares or units, then the applicable Merger Consideration payable with respect thereto and any other amounts payable pursuant to this Agreement shall be appropriately adjusted.

     3.06 Withholding Taxes . The Surviving Company, Acquiror, the Company or the Exchange Agent, as applicable shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Shares or Partnership LP Units such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, the Treasury Regulations, or any provision of state, local or foreign Tax Law and shall, to the extent so withheld, promptly pay or cause to be paid any such amounts to the appropriate Governmental Authority as required by applicable law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Shares or Partnership LP Units in respect of which such deduction and withholding was made.

     3.07 Stock Transfer Books .

          (a) At the close of business, New York time, on the day the Company Merger Effective Time occurs, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers of shares of Company Common Stock thereafter on the records of the Company. From and after the Company Merger Effective Time, the holders of Certificates shall cease to have any rights with respect to such shares of Company Common Stock, formerly represented thereby, except as otherwise provided herein or by Law. On or after the Company Merger Effective Time, any Certificates presented to the Exchange Agent, the Surviving Company or Acquiror for any reason shall be exchanged for the Company Merger Consideration with respect to the shares of Company Common Stock formerly represented thereby.

          (b) At the close of business, New York time, on the day the Partnership Merger Effective Time occurs, the transfer books of the Partnership shall be closed and there shall be no further registration of transfers of Partnership LP Units thereafter on the records of the Partnership. From and after the Partnership Merger Effective Time, the holders of Partnership LP Units shall cease to have any rights with respect to such Partnership LP Units, except as otherwise provided herein or by Law. On or after the Partnership Merger Effective Time, any Partnership LP Units presented to the Surviving Partnership for any reason shall be converted into the Partnership Cash Merger Consideration.

ARTICLE 4.
CONDUCT OF THE PARTIES PENDING CLOSING

     4.01 Conduct of Business by the Company and the Partnership . From the date hereof until the earlier of the Company Merger Effective Time and the termination of this Agreement pursuant to and in accordance with Article 9 , except as (i) expressly contemplated or permitted by this Agreement, (ii) as disclosed in the Disclosure Letter or (iii) as may be required pursuant to contracts entered into by the Company or its Subsidiaries prior to the date of this Agreement, without the prior written consent of Acquiror, not to be unreasonably conditioned, withheld or delayed, the Company will not, and will cause each of its Subsidiaries not to:

          (a) Ordinary Course . Conduct its business other than in the ordinary course consistent with past practice or fail to use commercially reasonable efforts to (i) preserve its business organization, (ii) conduct its operations in compliance with applicable Law, (iii) maintain its status as a REIT for federal income tax purposes, (iv) keep available the present services of its employees and (v) maintain its relationships with customers, suppliers, tenants, joint venture partners and others having business dealings with it.

          (b) Stock . (i) Authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any shares of common stock or partnership interests (or similar interests) of any class or any other securities or equity equivalents (including, without limitation, share appreciation rights, “phantom” stock plans or stock equivalents), other than the issuance of Company Common Stock upon redemption of Partnership LP Units and LTIP Units outstanding on the date hereof pursuant to the Partnership Agreement and issuance of Partnership LP Units upon conversion of LTIP Units, (ii) repurchase, redeem or otherwise acquire any securities or equity equivalents except in connection with the redemption of Partnership LP Units and LTIP Units pursuant to the Partnership Agreement and issuance of Partnership LP Units upon conversion of LTIP Units; (iii) take any action the result of which is that the Company acquires, forms or creates a Subsidiary of the Company; or (iv) take any action the result of which is that the Company or a Subsidiary acquires or otherwise owns any equity interest in any other Person.

          (c) Dividends; Etc . Except as provided in Section 7.01 , (i) make, declare, pay or set aside for payment any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of the capital stock of or other equity interests of the Company or any Subsidiary, other than (A) regular quarterly cash dividends on Company Common Stock in an amount equal to the greater of (x) $0.15 per share of Common Stock per quarter (and corresponding distributions with respect to Partnership LP Units and LTIP Units) or, (y) the Company’s estimated “REIT taxable income” (as such term is used in Section 857(a) of the Code) for the quarter (to the extent not previously distributed by way of dividend or otherwise to holders of Company Common Stock) as are necessary to avoid the imposition of taxes on the Company, as reasonably determined by the Company; (B) distributions required by any partnership, limited liability company or other joint venture agreement between the Company or any Subsidiary and one or more third parties; and (C) dividends paid by any of the Subsidiaries of the Company so long as such dividends are only paid to the Company or any of its other wholly-owned Subsidiaries; or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock.

          (d) Compensation; Employment Agreements; Etc . Except as may be required by contractual commitments in existence on the date of this Agreement or by applicable Law, each as set forth in Section 4.01(d) of the Disclosure Letter: (i) increase the compensation or benefits payable or to become payable to its directors, employees or executive officers, other than cost of living increases consistent with past practice; (ii) grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, executive officer or employee of the Company or any Subsidiary of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, or employee; or (iii) except as contemplated by this Agreement, take any affirmative action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Benefit Plan.

          (e) Acquisitions . Except as set forth in Section 4.01(e) of the Disclosure Letter: (i) acquire (by merger, consolidation, acquisition of equity interests or assets, or any other business combination) any corporation, partnership, limited liability company, joint venture or other business organization (or division thereof) or any real property or interest in any real property, or (ii) acquire, or enter into any option, commitment or agreement to acquire, any real property or interest in any real property or commence any development activity on any Company Property.

          (f) Indebtedness . (i) Incur or assume any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Subsidiary) for borrowed money, except (A) indebtedness for borrowed money incurred in the ordinary course of business pursuant to the existing credit facilities of the Company or its Subsidiaries, (B) unsecured indebtedness for borrowed money incurred in connection with the amendment, extension, modification, refunding, renewal, refinancing or replacement of existing indebtedness after the date of this Agreement, but only if the aggregate principal amount thereof is not increased thereby, the term thereof is not extended thereby (or, in the case of replacement indebtedness, the term of such indebtedness is not for a longer period of time than the period of time applicable to the indebtedness so replaced), and the other material terms and conditions thereof are not modified in any manner materially adverse to, or require consent in connection with, the consummation of the transactions contemplated hereby, (C) unsecured indebtedness for borrowed money incurred in order for the Company to pay dividends as set forth in Section 4.01(c) (and corresponding distributions with respect to Partnership LP Units) and to pay the dividend described in Section 7.01 , or (D) inter-company indebtedness among the Company and the Subsidiaries in the ordinary course of business consistent with past practice, or (ii) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 4.01(f) .

          (g) Debt Payment and Capital Expenditures . (i) Except as disclosed in Section 4.01(g) of the Disclosure Letter, (A) pre-pay any long-term debt, except in the ordinary course of business (including, without limitation, pre-payments or repayments of revolving credit facilities or other similar lines of credit and/or payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto) in an amount not to exceed $2,000,000 in the aggregate for the Company and its Subsidiaries taken as

a whole, or (B) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms or (ii) make any capital expenditures or commitments for capital expenditures not provided for in the Company’s budget in excess of $75,000 per property, or $1,000,000 in the aggregate, except for (W) expenditures required to be made pursuant to Company Leases currently in effect or that the Company is permitted to enter into pursuant to Section 4.01 , and agreements with respect to the JV Entities, (X) expenditures disclosed in Section 4.01(g) of the Disclosure Letter, (Y) expenditures in the ordinary course of business in order to own, operate and maintain the Company Properties in working order, or (Z) emergency expenditures which the Company reasonably deems necessary for the protection of the Company Properties.

          (h) Governing Documents . Amend or otherwise change any provision of the Organizational Documents, except as may be required by this Agreement.

          (i) Accounting Methods . Change in any material respect any of the accounting principles or practices used by it (except as required by GAAP or change in Law, or as recommended by the Company’s independent auditors, or pursuant to written instructions, comments or orders from the SEC).

          (j) Contracts . Except as otherwise permitted under this Section 4.01 , enter into or terminate any Material Contract or amend or modify in any material respect any of its existing Material Contracts.

          (k) Leases . (i) except in connection with a right being exercised by a tenant under an existing Company Lease, enter into any new lease (excluding renewals) for in excess of 25,000 square feet of net rentable area at a Company Property, (ii) except in connection with a right being exercised by a tenant under an existing Company Lease, terminate or materially modify or amend any Company Lease that relates to in excess of 25,000 square feet of net rentable area, or (iii) enter into, terminate or materially modify or amend any Ground Lease.

          (l) Claims . Except as disclosed in Section 4.01(l) of the Disclosure Letter, settle or compromise any claim or litigation pending or threatened (whether or not commenced prior to the date of this Agreement), other than any settlement or compromise involving only the payment of monetary damages not in excess of $100,000 in the aggregate or commence any lawsuit, arbitration or other proceeding against any Person, excluding claims in the ordinary course of business to enforce lease rights.

          (m) Tax Methods . Make any material tax election or settle or compromise any material liability for Taxes; provided , that nothing in this Agreement shall preclude the Company from designating dividends paid by it as “capital gain dividends” within the meaning of Section 857 of the Code or electing to treat any entity as a “taxable REIT subsidiary” (within the meaning of Section 856(l) of the Code (a “ Taxable REIT Subsidiary ”)). Notwithstanding anything in this Agreement to the contrary, the Company and its Subsidiaries may take any action which they reasonably deem necessary to maintain the REIT tax status of the Barlow Corporation and to otherwise avoid the recognition of “built-in gains.” During the period from the date of this Agreement to the Company Merger Effective Time, the Company shall, and shall

cause each Company Subsidiary to, (i) furnish all federal income Tax Returns required to be filed by the Company or any Company Subsidiary after the date hereof (“ Post-Signing Returns ”) to Acquiror for review at least three (3) Business Days before the due date for such Tax Returns; (ii) timely pay all Taxes due and payable by the Company or any of its Subsidiaries in respect of such Post-Signing Returns that are so filed, other than those being contested in good faith for which appropriate reserves have been made; (iii) accrue a reserve in the books and records and financial statements of the Company in accordance with past practice for all projected Taxes payable by the Company for which no Post-Signing Return is due prior to the Company Merger Effective Time; and (iv) promptly notify Acquiror of any suit, claim, action, investigation, proceeding or audit pending against or with respect to the Company or a Subsidiary in respect of any Tax.

          (n) Sale of Properties . Except as set forth in Section 4.01(n) of the Disclosure Letter, sell or otherwise dispose of any Company Property.

          (o) Liquidation, Etc. Adopt a plan of complete or partial liquidation or dissolution or adopt resolutions providing for or authorizing such liquidation or dissolution.

          (p) Insurance . Fail to maintain in full force and effect the existing insurance policies or to replace such insurance policies with reasonably comparable insurance policies covering the Company, Company Properties, Subsidiaries and their respective properties, assets and businesses.

          (q) Interference or Delay . Except as permitted by Section 6.04 , take, or cause to be taken, any action that would interfere with the consummation of the Mergers and other transactions contemplated by this Agreement, or delay the consummation of such transactions.

          (r) Adverse Actions . Except as permitted by Section 6.04 , take any action that is intended or is reasonably likely to result in (x) any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Company Merger Effective Time or (y) any of the conditions to the Mergers set forth in Article 8 not being satisfied.

          (s) Other Actions . Authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.

          Notwithstanding anything to the contrary set forth in this Agreement, nothing in this Agreement shall (a) prohibit the Company from taking any action at any time or from time to time that in the reasonable judgment of the Company is required by Law or is reasonably necessary for the Company to maintain its qualification as a REIT under the Code for any period or portion thereof ending on or prior to the Company Merger Effective Time, including without limitation, making dividend payments or distributions to holders of the Company Common Stock in accordance with this Agreement and (b) require the Company or any Subsidiary to take or refrain from taking any action that is prohibited by, or not specifically authorized by, the terms of agreements relating to the JV Entities or the properties owned by the JV Entities. In connection with the continued operation of the Company and the Subsidiaries, the Company, if requested by Acquiror, will confer in good faith with one or more representatives of the Acquiror designated to the Company regarding operational matters and the general status of ongoing operations and will notify the Acquiror promptly of any event or occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect.

     4.02 Conduct of Acquiror . From the date hereof until the Company Merger Effective Time, except as expressly contemplated or permitted by this Agreement, without the prior written consent of the Company, Acquiror will not, and will cause each of its Subsidiaries not to:

          (a) Interference or Delay . Take, or cause to be taken, any action that would interfere with the consummation of the Mergers and other transactions contemplated by this Agreement, or delay the consummation of such transactions.

          (b) Adverse Actions . Take any action that is intended or is reasonably likely to result in (x) any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect at any time at or prior to the Company Merger Effective Time or (y) any of the conditions to the Mergers set forth in Article 8 not being satisfied.

          (c) Other Actions . Authorize or enter into any agreement or otherwise make any commitment to do any of the foregoing.

     4.03 Commercially Reasonable Efforts . As used herein, the requirement for a party to use “commercially reasonable efforts” shall not require such party to make any concession or pay or commit to pay any amount or incur any liability or obligation not otherwise contractually required of such party.

ARTICLE 5.
REPRESENTATIONS AND WARRANTIES

     5.01 Disclosure Letter . Concurrently with the execution and delivery of this Agreement, the Company is delivering to Acquiror a Disclosure Letter with numbered sections corresponding to the relevant sections in this Agreement (the “ Disclosure Letter ”) (it being agreed that disclosure of any item in one section of the Disclosure Letter may be cross-referenced to any other relevant section or subsection). Nothing in the Disclosure Letter is intended to broaden the scope of any representation or warranty contained in Section 5.02 herein. None of the representations and warranties herein with respect to JV Entities shall relate to the JPM JVs or the JPM JV Properties. Any representation or warranty herein with respect to any Non-JPM JV or Non-JPM JV Property is to the knowledge of the Company. Acquiror acknowledges that the Company holds less than a majority interest in the Non-JPM JVs and the Company’s knowledge with respect to the Non-JPM JVs and their respective properties and operations is limited.

     5.02 Representations and Warranties of the Company . Subject to the exceptions and qualifications set forth in the Disclosure Letter, or except as set forth in SEC Reports, the Company and the Partnership jointly and severally hereby represent and warrant to Acquiror, Merger Subsidiary and Partnership Merger Subsidiary that:

          (a) Existence; Good Standing; Authority; Compliance with Law .

               (i) The Company is a corporation duly incorporated, validly existing under the laws of the State of Maryland and in good standing with the SDAT. The Company Organizational Documents are in full force and effect. The Company is duly qualified or licensed to do business as a foreign entity and is in good standing under the laws of any other jurisdiction in which the character of the properties owned, leased or operated by it therein or in which the transaction of its business makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed would not have a Company Material Adverse Effect. The Company has all requisite corporate power and authority to own its properties and carry on its business as now conducted in all material respects.

               (ii)  Section 5.02(a)(ii) of the Disclosure Letter sets forth: (i) each Subsidiary; (ii) the legal form of each Subsidiary, including the state of formation; and (iii) the identity and ownership interest of record of each of the Subsidiaries that is held by the Company or the Subsidiaries or by any other Person.

               (iii)  Section 5.02(a)(iii) of the Disclosure Letter sets forth a complete list of Persons, other than those set forth in Section 5.02(a)(ii) of the Disclosure Letter, in which the Company or any Subsidiary has a direct or indirect interest (the “ JV Entities ”), together with the jurisdiction of organization of each JV Entity, and, to the knowledge of the Company, the names of the other members and partners in each JV Entity and the respective economic and voting interests of each such member or partner in each JV Entity. Except for the JV Entities and Subsidiaries, the Company does not directly or indirectly own any equity or similar interest in any other Person, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in any Person.

               (iv) Each of the Subsidiaries and, to the knowledge of the Company, each Non-JPM JV, is a corporation, partnership or limited liability company duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, except where the failure to be so incorporated, organized, validly existing or in good standing would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Each of the Subsidiaries and, to the knowledge of the Company, each Non-JPM JV, has the requisite corporate, limited partnership, limited liability company or similar power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to have such power and authority would not, individually or in the aggregate, be reasonably expected to have a Company Material Adverse Effect. Each of the Subsidiaries and, to the knowledge of the Company, each Non-JPM JV, is duly qualified or licensed to do business and in good standing under the laws of each jurisdiction in which the character of the properties owned, leased or operated by it therein or in which the transaction of its business makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed would not have a Company Material Adverse Effect. The Organizational Documents of each Subsidiary and, to the knowledge of the Company, each Non-JPM JV, are in full force and effect.

               (v) Except as set forth in Section 5.02(a)(v) of the Disclosure Letter or in the Organizational Documents, all of the outstanding equity or voting securities or other interests of each of the Subsidiaries and, to the knowledge of the Company, each Non-JPM JV, have been validly issued and the equity interests of the Subsidiaries owned by the Company are (i) fully paid and nonassessable, (ii) not subject to any rights of first offer, rights of first response, tag-along rights or any other preemptive rights and (iii) owned by the Company or by one of its Subsidiaries free and clear of all Liens.

               (vi) The Company has previously made available to Acquiror complete copies of the Company Charter, Company Bylaws, Partnership Agreement, certificate of limited partnership of the Partnership and organizational or similar documents of each Subsidiary and of each of the JV Entities, each as amended through, and as in effect on, the date hereof (the “ Organizational Documents ”). No dissolution, revocation or forfeiture proceedings regarding the Company or any Subsidiary or, to the knowledge of the Company, any Non-JPM JV have been commenced and the Company, each Subsidiary, and to the knowledge of the Company, each Non-JPM JV is in compliance in all material respects with the Organizational Documents.

          (b) Capitalization .

               (i) The authorized shares of stock of the Company consist of 500,000,000 shares of Company Common Stock, of which, as of November 5, 2006, 13,863,334 were issued and outstanding, and 100,000,000 shares of preferred stock, par value $0.001 per share, of the Company, none of which, as of November 5, 2006, were issued and outstanding. As of November 5, 2006, (a) 1,331,880 shares of Company Common Stock have been reserved for issuance pursuant to the Company Stock Plan, subject to adjustment of the terms set forth in such plans and/or agreements, however, except for an aggregate of 290,000 LTIP Units, none of such shares have been, or will be, issued under the Company Stock Plan and, (b) 1,069,973 shares of Company Common Stock have been reserved for issuance upon the redemption of Partnership LP Units under the Partnership Agreement (excluding 290,000 LTIP Units).

               (ii) There is no outstanding indebtedness for borrowed money of the Company and the Subsidiaries, other than the secured and unsecured debt instruments listed in Section 5.02(b)(ii) of the Disclosure Letter and excluding inter-company indebtedness among the Company and the Subsidiaries. Section 5.02(b)(ii) of the Disclosure Letter sets forth a list as of September 30, 2006, of all such instruments, their outstanding principal amounts, interest rates and maturity dates. None of the Company or any Subsidiary nor, to the knowledge of the Company, any Non-JPM JV has any outstanding bonds, debentures, notes or other similar obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company or partners of the Partnership on any matter.

               (iii) Except for the LTIP Units and Partnership LP Units set forth in Section 5.02(b)(i) above, there are no existing options, warrants, calls, subscription rights, convertible securities or other rights, agreements or commitments (contingent or otherwise) that obligate the Company or any of its Subsidiaries to issue, transfer or sell any Company Common Stock or any equity interest in the Partnership or any investment that is convertible into or exercisable or exchangeable for Company Common Stock or any equity interest in the Partnership. The Company has not issued any share appreciation rights, dividend equivalent rights, performance awards, restricted stock unit awards or “phantom” shares.

               (iv) Except as set forth in Section 5.02(b)(iv) of the Disclosure Letter, (x) there are no agreements or understandings to which the Company is a party with respect to the voting of any shares of Company Common Stock and (y) there are no outstanding options, warrants or other rights to acquire ownership interests from or with respect to any Subsidiary.

               (v) Except as set forth in Section 5.02(b)(v) of the Disclosure Letter or the Organizational Documents, the Company is under no obligation, contingent or otherwise, by reason of any agreement to register the offer and sale or resale of any of its securities or the securities of any of its Subsidiaries under the Securities Act.

               (vi) The Company is the sole general partner of the Partnership. The Company holds 92.83% of the outstanding partnership interests in the Partnership as of November 5, 2006. Section 5.02(b)(vi) of the Disclosure Letter sets forth a list of all holders of record of Partnership LP Units and LTIP Units, including the name of the Person holding each such unit and the number of units held of record. As of November 5, 2006, the issued and outstanding partnership interests of the Partnership consist of 1,069,973 Partnership LP Units (excluding LTIP Units) and 290,000 LTIP Units. Except as set forth in the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of July 5, 2005 (the “ Partnership Agreement ”), or Section 5.02(b)(vi) of the Disclosure Letter, there are no options, warrants, calls, subscriptions, convertible securities, or other rights, agreements or commitments that obligate the Partnership, the Company or any Subsidiary to issue, repurchase, redeem, transfer or sell any partnership interests of the Partnership. Except as set forth in Section 5.02(b)(vi) of the Disclosure Letter, the partnership interests in the Partnership that are owned by the Company and its Subsidiaries are owned free and clear of any Liens and are subject only to the restrictions on transfer set forth in the Partnership Agreement and those imposed by applicable securities laws. Each Partnership LP Unit is subject to redemption rights as set forth in the Partnership Agreement.

               (vii) Except as set forth in the Organizational Documents or in Section 5.02(b)(vii) of the Disclosure Letter, (i) the Company and its Subsidiaries are not a party to any agreements relating to the sale or transfer (including agreements imposing transfer restrictions) of any Company Common Stock or any ownership interests in any Subsidiary, (ii) the Company and its Subsidiaries are not a party to any stockholder voting agreements, voting trusts or other agreements relating to the voting of any shares of stock of the Company or any Subsidiary, and (iii) there are no restrictions on the Company’s ability to vote the equity interests of any of the Subsidiaries.

               (viii) Except as set forth in Section 5.02(b)(viii) of the Disclosure Letter, there are not any Subsidiaries (other than the Partnership) and, to the knowledge of the Company, any Non-JPM JV in which any officer or director of the Company or any Subsidiary owns any stock or other securities. There are no agreements or understandings between the Company or any Subsidiary and any Person that could cause such Person to be treated as holding any stock or security in the Company or any Subsidiary as an agent for, or nominee of, the Company or any Subsidiary. The Company does not have a poison pill or similar stockholder rights plan.

          (c) Authority Relative to this Agreement .

               (i) The Company has all necessary corporate power and authority to execute and deliver this Agreement and to consummate the Company Merger and the other transactions contemplated hereby. No other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the Company Merger and the other transactions contemplated hereby (other than (A) the Stockholder Approval and (B) the filing and recordation of appropriate merger documents as required by the MGCL and the DLLCA). This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by each of Acquiror, Merger Subsidiary and Partnership Merger Subsidiary, constitutes a valid, legal and binding agreement of the Company, enforceable against the Company in accordance with and subject to its terms and conditions, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles.

               (ii) The Partnership has all necessary limited partnership power to execute and deliver this Agreement and to consummate the Partnership Merger and the other transactions contemplated hereby. No other partnership proceedings on the part of the Partnership, including actions of the Company as general partner of the Partnership, are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than the receipt of the affirmative vote or consent of limited partners holding a majority in interest of the Partnership LP Units (the “ Partnership Approval ”) and (B) the filing and recordation of appropriate Partnership Merger documents as required by the VRULPA). This Agreement has been duly and validly executed and delivered by the Partnership and, assuming due authorization, execution and delivery hereof by each of Acquiror, Merger Subsidiary and Partnership Merger Subsidiary, constitutes a valid, legal and binding agreement of the Partnership, enforceable against the Partnership in accordance with and subject to its terms and conditions, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles.

                (iii) The Company Special Committee at a meeting duly called and held unanimously has duly and validly authorized the execution and delivery of this Agreement, declared the Company Merger advisable and approved, subject to the Stockholder Approval, the Company Merger and the other transactions contemplated hereby, and no other actions are required to be taken by the Company Board for the consummation of the Company Merger and the other transactions contemplated hereby. The Company Board at a meeting duly called and held unanimously has directed that this Agreement be submitted to the stockholders of the Company for their approval to the extent required by Law and the Company Charter and Company Bylaws and has recommended the approval of the Company Merger by the holders of the Company Common Stock. The Company Merger requires the affirmative vote of a majority of all votes entitled to be cast by the holders of all outstanding Company Common Stock as of the record date for the Stockholder Meeting (the “ Stockholder Approval ”). The Stockholder Approval is the only vote of the holders of any class or series of stock of Company necessary to approve the Company Merger.

               (iv) Except as set forth in Section 5.02(c)(iv) of the Disclosure Letter, the transactions contemplated by this Agreement do not violate any provision regarding direct or indirect transfers of interests in any Subsidiary or, to the knowledge of the Company, any JV Entities, that are set forth in any agreement relating to the operation of, or the ownership interests in, any Subsidiary or, to the knowledge of the Company, any Non-JPM JV, even if such transactions result in a technical termination under Section 708 of the Code of any Subsidiary. All dividends or distributions on securities of the Company or any Subsidiary and, to the knowledge of the Company, any Non-JPM JV, that have been declared or authorized prior to the date of this Agreement have been paid in full (except to the extent such dividends have been publicly announced and are not yet due and payable).

               (v) The Board of Directors of the Company has no