I was able to obtain the manifest file from CRM. What I found out that one of the AppDomain element contain NULL String.
See 4th AppDomain element. This caused CRM to fail uploading the APP to Exchange as LongString does not allow null string as per OfficeApp Schema definition.
Is this a bug? Hopefully MS can look into this and provide a fix for On-premise
<AppDomains>
<AppDomain>login.windows-ppe.net</AppDomain>
<AppDomain>login.microsoftonline.com</AppDomain>
<AppDomain>login.windows.net</AppDomain>
<AppDomain />
<AppDomain>port.crm.crmlivetie.com</AppDomain>
<AppDomain>port.crm2.crmlivetie.com</AppDomain>
<AppDomain>port.crm.dynamics-int.com</AppDomain>
<AppDomain>port.crm.dynamics.com</AppDomain>
<AppDomain>port.crm2.dynamics.com</AppDomain>
<AppDomain>port.crm3.dynamics.com</AppDomain>
<AppDomain>port.crm4.dynamics.com</AppDomain>
<AppDomain>port.crm5.dynamics.com</AppDomain>
<AppDomain>port.crm6.dynamics.com</AppDomain>
<AppDomain>port.crm7.dynamics.com</AppDomain>
<AppDomain>port.crm8.dynamics.com</AppDomain>
<AppDomain>port.crm9.dynamics.com</AppDomain>
<AppDomain>port.crm10.dynamics.com</AppDomain>
<AppDomain>port.crm.MicrosoftDynamics.de</AppDomain>
</AppDomains>