[5 Property Portfolio]

                                                    
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
BY AND BETWEEN,
KADIMA MEDICAL PROPERTIES, LLC,
a Delaware limited liability company
(“Seller”)
and
GAHC3 INDEPENDENCE MOB PORTFOLIO, LLC
a Delaware limited liability company
(“Buyer”)
Dated effective as of October 15, 2014
                                                    

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ARTICLE I
 
PURCHASE AND SALE
5

 
Section 1.1
Agreement of Purchase and Sale
5

 
Section 1.2
Property Defined
6

 
Section 1.3
Purchase Price
7

 
Section 1.4
Intentionally Omitted
7

 
Section 1.5
Payment of Purchase Price
7

 
Section 1.6
Opening of Escrow; Deposit
7

 
Section 1.7
Deposit as Liquidated Damages
8

 
Section 1.8
Escrow Agent
9

 
 
 
 
ARTICLE II
 
TITLE AND SURVEY
9

 
Section 2.1
Title Contingency Period
9

 
Section 2.2
Title Examination
10

 
Section 2.3
Permitted Exceptions
13

 
Section 2.4
Conveyance of Title
14

 
 
 
 
ARTICLE III
 
REVIEW OF PROPERTY
15

 
Section 3.1
Right of Inspection
15

 
Section 3.2
Environmental Reports
17

 
Section 3.3
Request for Termination or Assumption of Operating Agreements
18

 
Section 3.4
No Financing Contingency
18

 
Section 3.5
Review of Estoppel Certificates
18

 
Section 3.6
Due Diligence; Right of Termination
20

 
Section 3.7
Rights Upon Termination
20

 
 
 
 
ARTICLE IV
 
CLOSING
21

 
Section 4.1
Time and Place
21

 
Section 4.2
Seller’s Obligations at Closing
22

 
Section 4.3
Buyer’s Obligations at Closing
25

 
Section 4.4
Escrow Agent's Obligations at Closing
26

 
Section 4.5
Credits and Prorations
26

 
Section 4.6
Transaction Taxes and Closing Costs
32

 
Section 4.7
Conditions Precedent to Obligation of Buyer
33

 
Section 4.8
Conditions Precedent to Obligation of Seller
33

 
Section 4.9
Conditions Relating to Specific Properties
34

 
 
 
 
ARTICLE V
 
REPRESENTATIONS, WARRANTIES AND COVENANTS
35

 
Section 5.1
Representations and Warranties of Seller
35

 
Section 5.2
Survival of Seller’s Representations and Warranties
38

 
Section 5.3
Covenants of Seller
39

 
Section 5.4
Representations and Warranties of Buyer
44

 
Section 5.5
Survival of Buyer’s Representations and Warranties
44

 
Section 5.6
Covenants of Buyer
44

 
 
 
 
ARTICLE VI
 
DEFAULT
45

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Section 6.1
Default by Buyer
45

 
Section 6.2
Default by Seller
45

 
 
 
 
ARTICLE VII
 
RISK OF LOSS
46

 
Section 7.1
Minor Damage
46

 
Section 7.2
Major Damage
46

 
Section 7.3
Definition of “Major” Loss or Damage
47

 
Section 7.4
Provisions Control Over Applicable Law
47

 
 
 
 
ARTICLE VIII
 
COMMISSIONS
47

 
Section 8.1
Brokerage Commissions
47

 
 
 
 
ARTICLE IX
 
DISCLAIMERS AND WAIVERS
48

 
Section 9.1
AS IS SALE; DISCLAIMERS
48

 
Section 9.2
Survival of Disclaimers
49

 
 
 
 
ARTICLE X
 
MISCELLANEOUS
49

 
Section 10.1
Confidentiality
49

 
Section 10.2
Public Disclosure
50

 
Section 10.3
Assignment
50

 
Section 10.4
Notices
51

 
Section 10.5
Modifications
52

 
Section 10.6
Entire Agreement
52

 
Section 10.7
Further Assurances
52

 
Section 10.8
Counterparts
52

 
Section 10.9
Facsimile Signatures
53

 
Section 10.10
Severability
53

 
Section 10.11
Applicable Law
53

 
Section 10.12
No Third-Party Beneficiary
53

 
Section 10.13
Captions
53

 
Section 10.14
Construction
53

 
Section 10.15
Recordation
54

 
Section 10.16
Attorneys’ Fees
54

 
Section 10.17
Time of the Essence
54

 
Section 10.18
Intentionally Deleted
54

 
Section 10.19
Changes to Property Entitlements
54

 
Section 10.20
Dates
54

 
Section 10.21
Exclusivity
54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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EXHIBITS
 
 
 
A-1 -
FEE PROPERTY ADDRESSES
A-2 -
GROUND LEASE PROPERTY ADDRESS
B-1 -
LEGAL DESCRIPTION OF LAND RELATING TO DAVIS SQUARE PROPERTY (including Parking
Lease Property related thereto)
B-2 -
LEGAL DESCRIPTION OF LAND RELATING TO MORRISTOWN PROPERTY
B-3 -
LEGAL DESCRIPTION OF LAND RELATING TO SOUTHGATE PROPERTY
B-4 -
LEGAL DESCRIPTION OF LAND RELATING TO VERONA PROPERTY
B-5 -
LEGAL DESCRIPTION OF LAND RELATING TO WESTCHESTER AVE PROPERTY
C
LIST OF EXCLUDED PERSONAL PROPERTY
D
[RESERVED]
E
LIST OF PROPERTY DOCUMENTS
F-1
FORM OF TENANT ESTOPPEL
F-2
FORM OF LESSOR ESTOPPEL
F-3
FORM OF SELLER ESTOPPEL
G
FORM OF DEED
H
FORM OF ASSIGNMENT OF GROUND LEASE
I
FORM OF BILL OF SALE
J
FORM OF ASSIGNMENT OF LEASES
K
FORM OF ASSIGNMENT OF CONTRACTS
L
FORM OF TENANT NOTICE
M
FORM OF FIRPTA CERTIFICATE
N
[RESERVED]
O
ASSIGNMENT OF PARKING LEASE
P
FORM OF ASSIGNMENT OF INTANGIBLES
 
 
 
 
 
 
 
 
 
 
 
 

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Q
FORM OF HOLDBACK ESCROW AGREEMENT
R-1
FORM OF REPRESENTATION LETTER
R-2
FORM OF AUDIT REQUEST LETTER
R-3
FORM OF AUDIT RESPONSE LETTER
 
 
 
 
SCHEDULES
 
 
 
1.1(b)
GROUND LEASES
1.1(c)
PERSONAL PROPERTY
1.1(g)
PARKING LEASE (DAVIS SQUARE PROPERTY)
1.3
ALLOCATED PURCHASE PRICES
1.6
ESCROW AGENT WIRE INSTRUCTIONS
2.3
PERMITTED EXCEPTIONS
3.5(c)
MAJOR TENANTS
4.5(b)(i)
SECURITY DEPOSITS NOT IN SELLER'S POSSESSION
5.1(e)
LIST OF LEASES
5.1(f)
LEASING COMMISSIONS
5.1(h)
LEGAL PROCEEDINGS
5.1(1)
OPERATING AGREEMENTS
5.1 (m)
UNCURED DEFAULTS UNDER PARKING LEASE
5.1(o)
UNCURED DEFULATS UNDER GROUND LEASE
5.3(b)
LEASING COMMISSIONS AND TENANT INDUCEMENT COSTS LIMITS
 
 
 
 
APPENDICES
 
 
 
A
ENVIRONMENTAL REPORTS

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PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this “Agreement”) is
made effective as of October 15, 2014 (the “Effective Date”), by and between
KADIMA MEDICAL PROPERTIES, LLC, a Delaware limited liability company (“Seller”),
and GAHC3 INDEPENDENCE MOB PORTFOLIO, LLC, a Delaware limited liability company
(“Buyer”).
ARTICLE I

PURCHASE AND SALE
Section 1.1    Agreement of Purchase and Sale. Subject to the terms and
conditions hereinafter set forth, Seller agrees to sell and convey or cause to
be sold and conveyed to Buyer, and Buyer agrees to purchase from Seller, the
following:
(a)    (i) the fee interest in and to (and any appurtenant ground lease in
connection therewith) those certain tracts or parcels of land situated in the
States of Kentucky, Massachusetts and New Jersey, located at the addresses set
forth in Exhibit A-1 attached hereto and made a part hereof and (ii) the
leasehold interest in and to that certain tract or parcel of land situated in
the State of New York located at the address set forth in Exhibit A-2 attached
hereto and made a part hereof (the “Ground Lease Property”), all as more
particularly described in Exhibits B-1 through B-5 attached hereto and made a
part hereof, together with all rights and appurtenances pertaining to such
property, including any right, title and interest of Seller in and to adjacent
streets, alleys or rights-of-way (the property described in clause (a) of this
Section 1.1 being herein referred to as the “Land”);
(b)    Subject to the rights of the ground lessor under any ground lease
(collectively, the “Ground Leases” and, each, a “Ground Lease”) relating to (i)
the Ground Lease Property or a portion of (ii) the Morristown Property (as
described on Schedule 1.1 (b)) and (iii) the Parking Lease on the Parking Lease
Property (as hereinafter defined) adjacent to the property located at 18-48
Holland Avenue, Somerville, Massachusetts (the “Davis Square Property”), the
commercial buildings located on the Land, and any and all other buildings,
structures, fixtures and other improvements affixed to or located on the Land,
excluding trade fixtures owned by tenants (the property described in clause (b)
of this Section 1.1 being herein referred to collectively as the
“Improvements”);
(c)    any and all of Seller’s, or its Affiliates’ (as defined below), right,
title and interest in and to all tangible personal property located upon the
Land or within the Improvements, including, without limitation, any appliances,
equipment, furniture, fixtures, carpeting, draperies and curtains, tools and
supplies, soils tests, environmental assessments, engineering reports and other
physical inspection reports, architectural drawings, plans and specifications
and other items of personal property owned by Seller, located on or used
primarily in connection with the operation of the Land and the Improvements (the
“Personal Property”),

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including without limitation the Personal Property listed on Schedule 1.1c
attached hereto; provided, however, that Personal Property shall specifically
exclude (i) any tangible personal property owned by tenants or other occupants
of the Properties identified in the Rent Roll and (ii) those specific items of
tangible personal property listed on Exhibit C as “Excluded Personal Property.”
For purposes of this Agreement, the term (A) “Affiliate” shall mean any person
or entity Controlling, under common Control with or Controlled by a specified
person or entity, whether directly or indirectly, and (B) “Control” shall mean
the direct or indirect ownership of 50% or more of any claims of ownership
interests in or possession, directly or indirectly (though one or more
intermediaries), of the power to direct or cause the direction of the management
and policies of an entity, through the ownership or control of voting
securities, partnership interests or other equity interests or otherwise;
(d)    to the extent they are in effect on the date of the Closing (as such term
is defined in Section 4.1 hereof), any and all of Seller’s, or its Affiliates’,
right, title and interest as landlord/lessor in and to the leases, licenses, and
occupancy agreements (including, without limitation, any right, title and
interest of Seller or its Affiliates in and to any subleases), including all
amendments or modifications thereto or supplements thereof, covering all or any
portion of the Real Properties (as such term is defined in Section 1.2 hereof)
(the property interest described in clause (d) of this Section 1.1 being
referred to collectively as the “Leases”), together with all rents and other
sums due thereunder (the “Rents”) and any and all unapplied security deposits,
letters of credit and other credit enhancement in Seller’s possession or control
or for which Seller is responsible in connection therewith (the “Security
Deposits”);
(e)    any and all of Seller’s, or its Affiliates’, right, title and interest in
and to all contracts and agreements (collectively, the “Operating Agreements”)
relating to the upkeep, repair, maintenance, management, leasing or operation of
the Land, Improvements or Personal Property and which are not terminated
pursuant to the terms of this Agreement;
(f)    any and all of Seller’s, or its Affiliates’, right, title and interest in
and to all (i) existing payment and performance bonds, warranties and guaranties
(express or implied) issued to Seller in connection with the Improvements or the
Personal Property, (ii) existing permits, certificates of occupancy, licenses,
approvals and authorizations issued by any governmental authority in connection
with the Properties, (iii) trademarks, trade names, service marks or logos used
at or relating to the Properties and (iv) all other intangible rights and
property owned by Seller or its Affiliates and used in connection with the Land
and Improvements (the property described in clause (f) of this Section 1.1 being
sometimes herein referred to collectively as the “Intangibles”), but excluding
Seller’s corporate logo or trade name;
(g)    any and all of Seller’s, or its Affiliates’, right, title and interest as
tenant/lessee in and to that certain leasehold interest and lease described on
Schedule 1.1(g) attached hereto and incorporated herein by this reference (the
“Parking Lease”), for certain property adjacent to the Davis Square Property
(the “Parking Lease Property”); and
Section 1.2    Property Defined. The Land and the Improvements are hereinafter
sometimes referred to, with respect to each tract or parcel more particularly
described in

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Exhibits B-1 through B-5 and the land subject to the Parking Lease and Ground
Lease(s), each, a “Real Property,” and collectively, with respect to all of the
tracts or parcels more particularly described on Exhibits B-1 through B-5 and
the land subject to the Parking Lease and Ground Lease(s), the “Real
Properties.” The Real Property, the Personal Property, the Leases, the Operating
Agreements, the Intangibles and, are hereinafter sometimes referred to, with
respect to each tract or parcel more particularly described on Exhibits B-1
through B-5, each, a “Property”, and collectively, with respect to all of the
tracts or parcels more particularly described in Exhibits B-1 through B-5, the
“Properties.”
Section 1.3    Purchase Price. Subject to the terms and conditions hereof,
Seller shall sell and Buyer shall purchase the Properties for the amount of ONE
HUNDRED THIRTY FIVE MILLION DOLLARS ($135,000,000) (as increased or decreased by
prorations and adjustments as herein provided) (the “Purchase Price”). The
Purchase Price shall be allocated among each Property, determined by Seller in
its sole discretion, as set forth on Schedule 1.3 attached hereto (the
“Allocated Purchase Prices”). The Allocated Purchase Prices are included for
solely the purpose of calculating any real property transfer tax which may be
due upon the transfer of any Property and shall not be deemed to be a
representation or warranty of the value thereof by Seller.
Section 1.4    Intentionally Omitted.
Section 1.5    Payment of Purchase Price. The Purchase Price, as increased or
decreased by prorations and adjustments as herein provided, shall be payable in
full at the Closing in cash by wire transfer of immediately available funds to a
bank account designated by Seller in writing to Buyer prior to the Closing.
Provided that all conditions precedent to Buyer’s obligations to close are
satisfied, on the Closing Date, Buyer shall deposit into Escrow (as defined in
Section 1.6 below), in cash or other immediately available funds, the full
amount of the Purchase Price, less the Deposit previously deposited by Buyer
into Escrow TIME BEING OF THE ESSENCE as to Buyer’s obligations under this
Section 1.5.
Section 1.6    Opening of Escrow; Deposit. Upon the execution and delivery of
this Agreement, the parties shall establish an escrow (the “Escrow”), with (a)
First American Title Insurance Company, (i) having its office at 633 Third
Avenue, New York, New York 10017, Attention: Stephen Farber, Telephone: (212)
551-9402, E-mail: sfarber@firstam.com (the “Escrow Agent”) and within three (3)
Business Days after the Effective Date, Buyer shall deposit, or cause to be
deposited on behalf of Buyer, with Escrow Agent a sum equal Five Million Dollars
($5,000,000) in good funds by federal wire transfer pursuant to wire
instructions of Escrow Agent attached hereto as Schedule 1.6 and made a part
hereof (together with any interest thereon as provided herein, the “Deposit”)
and (ii) having its office at 777 S. Figueroa, Suite 400, Los Angeles,
California 90017, Attn: Brian Serikaku, Telephone: (213) 271-1774, E-mail:
bmserikaku@firstam.com(the “Title Company”) and Buyer shall deposit with Title
Company, within three (3) Business Days after the Effective Date a fully
executed original or original counterpart(s) of this Agreement. Escrow Agent
shall hold the Deposit in an interest-bearing account of a federally insured
bank or savings and loan association reasonably acceptable to Seller, and shall
otherwise handle the Deposit in accordance with the terms, and conditions of
this Agreement. All interest accrued on the Deposit shall be added to and become

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part of the Deposit. The entire Deposit, exclusive of any and all interest
accrued thereon, shall be credited to the Purchase Price upon the close of
Escrow. Buyer shall be responsible for the payment of all costs and fees imposed
on the Deposit account other than Escrow Agent’s fees which shall be paid
equally by Buyer and Seller (except as otherwise expressly provided herein). The
failure of Buyer to timely deliver the Deposit hereunder shall be a material
default, and shall entitle Seller, at Seller’s sole option and as Seller’s sole
remedy, to terminate this Agreement immediately, whereupon this Agreement shall
terminate and be of no force and effect and neither party shall have any further
rights or obligations hereunder except those which specifically provide to
survive termination of this Agreement. Except as otherwise specifically provided
in Sections 2.2, 3.7, 5.3(a), 6.2, and 6.3 and Articles IV and VII hereof, the
Deposit (including the accrued interest thereon) shall be nonrefundable upon
expiration of the Contingency Period.
Section 1.7    Deposit as Liquidated Damages. AFTER THE EXPIRATION OF THE
CONTINGENCY PERIOD, IN THE EVENT THE SALE OF THE PROPERTIES AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED BY REASON OF BUYER’S DEFAULT UNDER THIS AGREEMENT,
THE DEPOSIT (INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE
RETAINED BY SELLER AS LIQUIDATED DAMAGES. SELLER’S ACTUAL DAMAGES IN THE EVENT
THE SALE IS NOT CONSUMMATED ARE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE AT THE EFFECTIVE DATE. THEREFORE, BY SEPARATELY EXECUTING THIS SECTION
1.7 BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN
AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S
DAMAGES AND NOT A PENALTY, AND SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY
AGAINST BUYER ARISING FROM A FAILURE OF THE SALE TO CLOSE DUE TO BUYER’S
DEFAULT. IN ADDITION, IN THE EVENT OF BUYER’S DEFAULT, BUYER SHALL PAY ALL
TITLE, SURVEY AND ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN
NO EVENT SHALL THIS SECTION 1.7 LIMIT THOSE DAMAGES SPECIFICALLY PROVIDED IN
THIS AGREEMENT TO BE RECOVERABLE BY EITHER PARTY AGAINST THE OTHER PARTY DUE TO
THE OTHER PARTY’S OBLIGATION TO INDEMNIFY SUCH PARTY IN ACCORDANCE WITH THIS
AGREEMENT OR BY REASON OF THE OTHER PARTY’S OBLIGATION TO PAY THE PREVAILING
PARTY’S ATTORNEYS’ FEES AND COSTS PURSUANT TO SECTION 10.16 HEREOF. BY THEIR
SEPARATELY EXECUTING THIS SECTION 1.7 BELOW, BUYER AND SELLER ACKNOWLEDGE THAT
THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES,
AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.

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KADIMA MEDICAL PROPERTIES, LLC,
GAHC3 INDEPENDENCE MOB PORTFOLIO,
a Delaware limited liability company
LLC, a Delaware limited liability company
 
 
By:     /s/ Joshua Dolgin                          
By: Griffin-American Healthcare REIT III
By:    /s/ Juda Chetrit                              
        Holdings, LP, a Delaware limited partnership
 
Its: Sole Member
 
 
 
        By: Griffin-American Healthcare REIT
 
                III, Inc., a Maryland corporation
 
         Its: General Partner
 
 
 
                 By:        /s/ Danny Prosky                     
 
                 Name:  Danny Prosky                           
 
                 Title:    President and Chief Operating
 
                               Officer

Section 1.8    Escrow Agent. By its execution and delivery of this Agreement,
Escrow Agent agrees to be bound by the terms and conditions of this Agreement to
the extent applicable to its duties, liabilities and obligations as “Escrow
Agent.” Escrow Agent shall hold and dispose of the Deposit in accordance with
the terms of this Agreement; provided that (i) prior to expiration of the
Contingency Period, the Deposit shall be refunded to Buyer at Buyer’s sole
discretion, notwithstanding any controversy, notice of direction or demand from
Seller, (ii) the Escrow Agent shall at Closing pay the Deposit to Seller,
inclusive of any interest earned thereon, without the necessity of further
notice, notwithstanding any controversy, notice or demand from Buyer, and (iii)
except as provided in clause (i) and (ii), not otherwise disburse the Deposit
except upon joint written order of Buyer and Seller or pursuant to a final
unappealable order from a court of competent jurisdiction over the parties.
Escrow Agent shall incur no liability in connection with the safekeeping or
disposition of the Deposit for any reason other than Escrow Agent’s breach of
contract, fraud, willful misconduct or negligence. If Escrow Agent is in doubt
as to its duties or obligations with regard to the Deposit, or if Escrow Agent
receives conflicting instructions from Buyer and Seller with respect to the
Deposit, Escrow Agent shall not be required to disburse the Deposit and may, at
its option, continue to hold the Deposit until both Buyer and Seller agree as to
its disposition, or until a final judgment is entered by a court of competent
jurisdiction directing its disposition, or Escrow Agent may interplead the
Deposit in accordance with the laws of the State of New York. Escrow Agent shall
not be responsible for any interest on the Deposit except as is actually earned,
or for the loss of any interest resulting from the withdrawal of the Deposit
prior to the date interest is posted thereon.
ARTICLE II

TITLE AND SURVEY
Section 2.1    Title Contingency Period. During the period beginning on the
Effective Date and ending at 5:00 p.m. New York, New York time on the last day
of the Contingency Period (hereinafter referred to as the “Title Contingency
Period”), Buyer shall have the right to review and investigate any and all
conditions and aspects of title to the Real

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Properties. Without limiting the foregoing, Buyer shall have the right to
review: (a) a current title commitment covering each of the Real Properties and
all underlying exceptions (collectively, the “Title Report”), issued by the
Title Company, which shall be obtained by Buyer, and (b) a copy of the most
current survey(s) of each of the Real Properties in Seller’s actual possession
and control, if any (the “Existing Survey(s)”) (the items referred to in clauses
(a) and (b) of this Section 2.1 are hereinafter referred to as the “Title
Contingency Items”); provided, however, in no event shall the Title Contingency
Period be extended or delayed if Seller does not possess or is unable to locate
an Existing Survey(s) of any of the Real Properties. To the extent not
previously delivered to Buyer, Seller shall deliver or cause to be delivered to
Buyer the Existing Surveys in Seller’s possession within three (3) Business Days
following the Effective Date. During the Title Contingency Period, Buyer shall
also have the right to obtain a new or updated survey(s) of each of the Real
Properties prepared by a licensed surveyor or engineer obtained by Buyer at
Buyer’s sole cost (the “New Survey(s)”).
Section 2.2    Title Examination.
(a)    Buyer agrees to cause title to the Real Properties to be examined by the
Title Company and shall direct the Title Company to deliver copies of the Title
Report to Seller's attorney simultaneously with the delivery of same to Buyer.
Buyer further agrees that not later than the date upon which the Contingency
Period expires, Buyer will furnish to Seller's attorneys a specification in
writing (the "Title Report Objection Notice") of any exceptions to title to the
Real Properties set forth in the Title Report or identified on any New Survey,
which Buyer believes are not covered by the exceptions to title set forth in
Section 2.3 hereof and "subject to" which Buyer believes it is not required to
accept title. Within five (5) Business Days of receipt of the Title Report
Objection Notice, Seller shall advise Buyer in writing whether Seller intends to
cure any objections raised in the Title Report Objection Notice, and, if so,
Seller shall thereupon promptly proceed to cure such objections. If Seller
declines to cure any such objections, then Buyer shall, within three (3)
business days of receipt of notice of Seller’s election not to cure, at its
option, (i) waive such objection(s) by proceeding to Closing as provided in this
Agreement, or (ii) terminate this Agreement in writing, in which event the
Deposit shall be returned to Buyer within one (1) Business Day after such
termination and each party shall thereupon be released from all further
obligations hereunder (except as otherwise provided herein). Except as otherwise
provided herein, Buyer's failure to deliver the Title Report Objection Notice to
Seller on or prior to the date upon which the Contingency Period expires shall
constitute Buyer's irrevocable acceptance of the Title Report and Buyer shall be
deemed to have unconditionally waived any right to object to any matters set
forth therein. If, after giving the Title Report Objection Notice to Seller,
Buyer learns, through continuation reports or other written evidence, of any
title defect(s) which Buyer claims are not covered by Section 2.3 hereof and
"subject to" which Buyer believes it is not required to accept title, Buyer
shall give written notice thereof to Seller promptly after the date Buyer learns
of same (a “Supplemental Objection Notice”) and Buyer shall be deemed to have
unconditionally waived any such matters as to which it fails to give such
written notice to Seller within five (5) days after the date Buyer learns of
same. Within five (5) Business Days of receipt of the Supplemental Objection
Notice, Seller shall advise Buyer in writing whether Seller intends to cure any
objections raised in the Supplemental Objection Notice, and, if so, Seller shall
thereupon promptly proceed to cure such objections; provided that in all events,
Seller shall be required to cure any items identified in the

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Supplemental Objection Notice that are intentionally and voluntarily caused,
created or consented to by Seller without Buyer’s prior written consent (not to
be unreasonably withheld, conditioned or delayed). If Seller declines to cure
any such objections, then Buyer shall, within three (3) business days of receipt
of notice of Seller’s election not to cure, at its option, (A) waive such
objection(s) by proceeding to Closing as provided in this Agreement, or (B)
terminate this Agreement in writing, in which event the Deposit shall be
returned to Buyer within two (2) Business Days after such termination and each
party shall thereupon be released from all further obligations hereunder (except
as otherwise specifically provided herein). Notwithstanding anything to the
contrary set forth herein, Seller shall be obligated to cure any Must Cure
Defects (as defined in Section 2.2(b) below) regardless of whether such Must
Cure Defects are raised in the Title Report Objection Notice or any Supplemental
Objection Notice. Buyer and Seller each acknowledges and agrees that TIME IS OF
THE ESSENCE with respect to all time periods set forth in this Section 2.2(a),
subject to any cure rights expressly provided to Seller under this Section 2.2.

(b)    If, on the Closing Date, Seller fails or is unable to convey to Buyer
title to the Real Properties subject to and in accordance with the provisions of
this Agreement, Seller shall be entitled, upon written notice delivered to Buyer
on or prior to the Closing Date, to reasonable adjournments of the Closing one
or more times for a period not to exceed sixty (60) days in the aggregate to
enable Seller to convey such title to the Real Properties. The procurement by
Buyer of a Title Policy (as defined below) or an endorsement thereto insuring
Buyer against any title exception which was disapproved pursuant to this Section
2.2 shall be deemed a cure by Seller of such disapproval; provided that the form
of such endorsement or coverage is satisfactory to Buyer in its reasonable
discretion. If the disapproved title exception is monetary in nature and such
endorsement or coverage insures Buyer against collection against the Real
Property for such title exception, the form of such endorsement or coverage
shall conclusively be deemed approved by Buyer. Any updates to any Existing
Survey(s) or New Survey(s) necessitated by Seller’s cure of any title objection
shall be Buyer’s sole responsibility, both as to performance and payment of
costs therefor. If Seller does not so elect to adjourn the Closing, or if at the
adjourned date Seller is unable to convey title subject to and in accordance
with the provisions of this Agreement, Buyer may terminate this Agreement by
written notice to Seller and Escrow Agent delivered on or promptly after the
date scheduled for the Closing, in which event Escrow Agent shall repay to Buyer
the Deposit, together with any interest earned thereon. This Agreement shall
thereupon be deemed canceled and become void and of no further effect, and
neither party hereto shall have any obligations of any nature to the other
hereunder or by reason hereof, except for any obligations expressly stated to
survive the Closing or earlier termination of this Agreement. If Seller is
unable to convey title in accordance with the provisions of this Agreement due
to a default by Seller, the provisions of Section 6.2 shall apply. If Seller
elects to adjourn the Closing as provided above, this Agreement shall remain in
effect for the period or periods of adjournment, in accordance with its terms.
Subject to matters Seller agrees to cure or is deemed to have agreed to cure in
accordance with this Section 2.2, Seller shall not be required to take or bring
any action or proceeding or any other steps to remove any defect in or objection
to title or to fulfill any condition precedent to Buyer’s obligations under this
Agreement or to expend any moneys therefor, nor shall Buyer have any right of
action against Seller therefor, at law or in equity, except that Seller shall,
on or prior to the Closing,

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pay, discharge or remove of record or cause to be paid, discharged or removed of
record at Seller’s sole cost and expense all of the following items (each a
“Must Cure Defect”): (i) Voluntary Liens (as hereinafter defined) and (ii) other
liens encumbering Seller’s interest or its predecessors’ interest in the Real
Properties (including judgments and federal, state and municipal tax liens)
which are in liquidated amounts and which may be satisfied solely by the payment
of money (including the preparation or filing of appropriate satisfaction
instruments in connection therewith) and do not exceed in the aggregate
$350,000. The term “Voluntary Liens” as used herein shall mean liens and other
encumbrances (other than Permitted Exceptions) which Seller has knowingly and
intentionally suffered or allowed to be placed on the Real Properties, including
without limitation, mortgages (other than the Existing Loan, which shall be
defeased), any mechanic’s liens, and liens for real property taxes and
assessments, but shall expressly exclude judgments and federal, state and
municipal tax liens.

(c)    Notwithstanding anything in this Section 2.2 to the contrary, Buyer may
at any time accept such title as Seller can convey, without reduction of the
Purchase Price or any credit or allowance on account thereof or any claim
against Seller; provided, however, that if, on the Closing Date (as hereinafter
defined), title to the Real Properties shall be encumbered by one or more Must
Cure Defects, which Must Cure Defects Seller shall have failed to remove as
required hereunder, Buyer shall be entitled (but not obligated) to accept title
to the Real Properties subject to such Must Cure Defects, in which case Buyer
shall be entitled to a credit against the Purchase Price in an amount equal to
(i) in case of any Voluntary Lien, the amount required to be paid to remove the
same, or (ii) in the case of any Must Cure Defects which are not Voluntary
Liens, the lesser of (y) the liquidated sum of money that would be required to
be paid to remove such Must Cure Defects and (z) $350,000, less any amounts
actually expended by Seller to remove such Must Cure Defects. The acceptance of
the Deeds and the Assignments of Ground Leases (as each of such capitalized
terms is hereinafter defined) by Buyer shall be deemed to be full performance
of, and discharge of, every agreement and obligation on Seller’s part to be
performed under this Agreement, except for such matters which are expressly
stated in this Agreement to survive the Closing, to the limit of such survival.

(d)    The amount of any unpaid taxes, assessments and water and sewer charges
which Seller is obligated to pay and discharge, with interest and penalties, may
at the option of Seller be paid by Buyer out of the balance of the Purchase
Price, if official bills therefor with interest and penalties thereon figured to
said date are furnished to or obtained by the Title Company at the Closing for
payment thereof and the Title Company omits from its title policy any exception
therefor.

(e)    If the Real Properties shall, at the time of the Closing, be subject to
any liens such as for judgments or transfer, inheritance, estate, franchise,
license or other similar taxes or any encumbrances or other title exceptions
which would be grounds for Buyer to reject title hereunder, the same shall not
be deemed an objection to title provided that, at the time of the Closing,
either (i) Seller delivers, immediately available federal funds by wire transfer
or official bank checks (or at the Closing by Buyer out of the balance of the
Purchase Price), in the amount required to satisfy the same and delivers to
Buyer and/or the Title Company at the Closing instruments in recordable form
(and otherwise in form reasonably satisfactory to the Title

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Company) in order to omit the same as an exception to its title policy
sufficient to satisfy and discharge of record such liens and encumbrances
together with the cost of recording or filing such instruments or (ii) the Title
Company will otherwise issue or bind itself to issue a policy which will insure
Buyer against collection thereof from or enforcement thereof against the Real
Properties and that no prohibition of or interference with the maintenance or
intended use or intended development of the Real Properties will result from the
existence of such liens or encumbrances.

Section 2.3    Permitted Exceptions. The Properties shall be conveyed subject to
the following matters, which are hereinafter referred to as the “Permitted
Exceptions”:
(a)    those matters approved or deemed approved by Buyer in accordance with
Sections 2.2 hereof;
(b)    All presently existing and future liens for unpaid real estate taxes and
water and sewer charges not due and payable as of the date of the Closing (as
hereinafter defined), subject to adjustment as herein below provided.
(c)    All present and future zoning, building, environmental and other laws,
ordinances, codes, restrictions and regulations of all governmental authorities
having jurisdiction with respect to the Property, including, without limitation,
landmark designations and all zoning variances and special exceptions, if any
(collectively, "Laws and Regulations").
(d)    All covenants, restrictions and rights and all easements and agreements
for the erection and/or maintenance of water, gas, steam, electric, telephone,
sewer or other utility pipelines, poles, wires, conduits or other like
facilities, and appurtenances thereto, over, across and under the Property, if
any, existing on the date hereof (collectively, "Rights").
(e)    Any state of facts which would be shown on or by an accurate Existing
Survey or New Survey (provided such state of facts as shown on a New Survey does
not render the Property uninsurable at regular rates) of the Property
(collectively, "Facts").
(f)    Rights of tenants and other occupants of the Property as tenants only
(collectively, "Space Lessees") under the Space Leases, other than the tenant
under the HVMA Lease.
(g)    Ground Leases.
(h)    Intentionally omitted
(i)    All violations of building, fire, sanitary, environmental, housing and
similar Laws and Regulations whether or not noted or issued at the date hereof
or at the date of the Closing (collectively, "Violations").
(j)    Consents by Seller or any former owner of the Property for the erection
of any structure or structures on, under or above any street or streets on which
the Property may abut.

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(k)    Possible encroachments and/or projections of stoop areas, roof cornices,
window trims, vent pipes, cellar doors, steps, columns and column bases, flue
pipes, signs, piers, lintels, window sills, fire escapes, satellite dishes,
protective netting, sidewalk sheds, ledges, fences, coping walls (including
retaining walls and yard walls), air conditioners and the like, if
any, on, under or above any street or highway, the Property or any adjoining
property, existing as of the date hereof.
(l)    Variations between tax lot lines and lines of record title.
(m)    Standard conditions and exceptions to title contained in the form of
title policy or "marked-up" title commitment employed by the Title Company.
(n)    Any financing statements, chattel mortgages, encumbrances or mechanics'
or other liens entered into by, or arising from, any financing statements filed
on a day more than five (5) years prior to the Closing and any financing
statements, chattel mortgages, encumbrances or mechanics' or other liens filed
against property no longer on the Property.
(o)    Any lien or encumbrance (including, without limitation, any mechanics'
and materialmen's lien or financing statement) removal of which is the
obligation of a Space Lessee pursuant to the related Space Lease.
(p)    Any other matter which the Title Company (as hereinafter defined) may
raise as an exception to title, provided the Title Company will insure against
collection or enforcement of same out of the Property and/or that no prohibition
of present use or maintenance of the Property will result therefrom, as may be
applicable.
(q)    Those matters described on Schedule 2.3 attached hereto and made a part
hereof.
Section 2.4    Conveyance of Title. At Closing, Seller shall convey and
transfer, or cause to be conveyed or transferred, to Buyer (a) with respect to
each Real Property other than the Ground Lease Property, fee simple title to
such Real Property by execution and delivery of the Deeds (as defined in Section
4.2(a) hereof) and (b) with respect to the Ground Lease Property, a portion of
the Morristown Property and the Parking Lease Property, the leasehold interest
in and to such Property by execution and delivery of the Assignment of Ground
Lease(s) (as defined in Section 4.2(b) hereof) and the Assignment of Parking
Lease (as defined in Section 4.2(m) hereof). Evidence of delivery of such fee
title and leasehold interest shall be the issuance by the Title Company of
current ALTA Standard Coverage Owner’s Policies of Title Insurance and ALTA
Leasehold Policies of Title Insurance, as applicable (collectively, the “Title
Policies”) covering each Real Property, in the aggregate amount of the Allocated
Purchase Prices for all of the Real Properties, showing fee title or leasehold
interest, as applicable, to such Real Property vested exclusively in Buyer or a
Buyer Entity, subject only to the Permitted Exceptions, and with such
endorsements as may be available to a buyer of real property in the applicable
jurisdiction as may have been reasonably requested by Buyer; provided, however,
the failure to obtain any requested endorsement shall not be deemed a failure of
a condition to Buyer’s obligations to Close or give rise to a termination of
this Agreement, unless the endorsement is

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being utilized by Seller to cure a title exception which was disapproved and
which Seller agreed to cure or to cure a Must Cure Defect, whereupon the
applicable provisions of Article II shall control. If prior to the Closing,
Buyer shall deliver to the Title Company a New Survey(s) meeting the minimum
standards as required by the Title Company for issuance of ALTA Extended Owner’s
Policies of Title Insurance or Leasehold Policies of Title Insurance (or if the
Title Company is willing to accept any Existing Survey), then Buyer shall be
entitled to obtain ALTA Extended Coverage Owner’s Policies or Leasehold Policies
of Title Insurance in lieu of ALTA Standard Coverage Owner’s Policies or
Leasehold Policies so long as the Closing is not thereby delayed. Buyer shall
pay the cost of any required New Survey(s).
ARTICLE III

REVIEW OF PROPERTY
Section 3.1    Right of Inspection.
(a)    During the period from the Effective Date and ending at 5:00 p.m. (New
York time) on November 5, 2014 (hereinafter referred to as the “Contingency
Period”), Buyer shall have the right (i) to review and investigate any and all
conditions and aspects of the Properties in its sole and absolute discretion
(except as expressly provided below and except for title and survey matters,
which shall be governed by Article II hereof), which, for clarification, shall
include the right to contact governmental authorities in connection with
obtaining zoning compliance letters and conducting usual and customary (a) title
searches, including, without limitation, searches for real estate taxes and
assessments, and (b) environmental assessments, and the right to speak with
tenants at the leased premises, subject to such tenant’s consent (in their sole
discretion) and the provisions of Section 3.1(c) and Section 3.8, below, (ii) to
receive and review copies of those items listed in Exhibit E attached hereto, to
the extent in Seller’s or Seller’s Affiliates’ possession and/or control (the
“Property Documents”), and (iii) at Buyer’s sole cost and expense, to make
physical inspections of the Real Properties, including, but not limited to, an
inspection of the environmental condition thereof pursuant to the terms and
conditions of this Agreement and to examine such other documents and files
(i.e., in addition to the Property Documents) concerning the leasing,
maintenance and operation of the Properties that are within Seller’s or Seller’s
Affiliates’ actual possession or control, which documents and files shall be
made available to Buyer through Seller’s Advisor (as defined in Section 8.1
below) or at Seller’s corporate headquarters in Brooklyn, New York. To the
extent not previously delivered or made available to Buyer, Seller shall deliver
or cause to be delivered to Buyer or make available for review by Buyer within
three (3) Business Days following the Effective Date the Property Documents by
either physical delivery thereof or by giving access to Buyer and/or its
representatives to Seller’s electronic filing system commonly known as a
“Dropbox.” Providing access to Buyer to the Property Documents through such
electronic filing system shall for all purposes of this Agreement constitute
delivery thereof.
(b)    Notwithstanding anything to the contrary contained in Section 3.1(a)
above, Buyer acknowledges that it shall have no right to examine any of the
following documents in connection with its review of the Properties, unless
Seller elects to make the same available for review in its sole discretion or
unless the same are required to be delivered or made

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available pursuant to Section 5.3(k) below: (i) partnership, limited liability
company or corporate records of Seller (other than documents evidencing Seller’s
authority to consummate the transactions contemplated by this Agreement, which
shall be disclosed to Buyer and Title Company), (ii) internal memoranda of
Seller, (iii) financial projections prepared by or for Seller, except to the
extent the foregoing are part of the Property Documents, (iv) appraisals
prepared by or for Seller, (iv) financials, accounting or tax records of Seller,
except to the extent the foregoing are part of the Property Documents, (vi)
similar proprietary, confidential or privileged information and (vii) any
internal memoranda relating to the foregoing, and (vii) Attorney-Client
Privileged materials (collectively, the “Confidential Documents”).
(c)    Any on-site inspections of the Properties shall occur only (i) at
reasonable times during normal business hours agreed upon by Seller and Buyer
after at least two (2) Business Days’ prior written notice to Seller and
otherwise schedule and coordinate all inspections and conversations with tenants
(i.e. any conversations with personnel of tenant at the leased premises); (ii)
in a manner that will not damage the Properties, unreasonably disturb or disrupt
the business activities of Seller or the tenants or unduly interfere with or
disturb the use and/or occupancy of the Properties by Seller or its tenants; and
(iii) after delivery of evidence satisfactory to Seller that commercial general
liability insurance in an amount not less than $2,000,000.00 per occurrence
respecting such work has been obtained by Buyer naming as additional insureds
Seller and any other person or entity designated by Seller as having an
insurable interest in the same. Such policy of insurance shall be kept and
maintained in force during the term of this Agreement and so long thereafter as
necessary to cover any claims of damages suffered by persons or property
resulting from any acts or omissions of Buyer, Buyer’s employees, agents,
contractors, suppliers, consultants or other related parties. In conducting the
foregoing inspections or otherwise accessing the Properties Buyer and any of
Buyer’s representatives or agents, shall at all times comply with and be subject
to the rights of tenants under the Leases. Seller may have a representative
present during any such inspections. Seller may from time to time establish
reasonable rules of conduct for Buyer and Buyer's representatives and agents in
furtherance of the foregoing. If Buyer desires to do any invasive testing at the
Properties, Buyer shall do so only after notifying Seller and obtaining Seller’s
prior written consent thereto, which consent may be given or withheld in the
reasonable discretion of Seller and may further be subject to any terms and
conditions imposed by Seller in its reasonable discretion, including, without
limitation, the prompt restoration of the Properties to their condition prior to
any such inspections or tests, at Buyer’s sole cost and expense; provided,
however, that if any nationally or regionally recognized environmental
consultant engaged by Buyer to review the environmental condition of the
Properties, after review of the Phase I Environmental Assessment, reasonably
recommends a Phase II Environmental Assessment to conduct environmental testing
or sampling in addition to the Phase I Environmental Assessment for a particular
Property, then notwithstanding the foregoing, Seller shall permit such
additional testing or sampling (including any reasonably recommended ground
water sampling) and shall not impose any unreasonable terms or conditions in
connection therewith; provided further, however, that in all events any
consultant performing any environmental tests or sampling beyond the scope of a
Phase I Environmental Assessments shall be reasonably approved by Seller and
provided that any results shall not form the basis of any right of Buyer to
terminate this Agreement beyond the express rights of Buyer to terminate this
Agreement under the applicable provisions of Sections 2.2, 3.6, 6.2, and 6.3,
and Articles IV and VII hereof, or to

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receive any offset or credit with respect thereto against the Purchase Price.
For purposes of this Section 3.1(c), Seller agrees that Partner Assessment
Corporation, Inc., or an Affiliate thereof, shall be deemed a nationally or
regionally recognized environmental consultant approved by Seller.
(d)    Buyer shall keep the Properties free and clear of any liens (including,
but not limited to, mechanics’ liens or materialmen’s liens) arising out of
Buyer’s entry onto or inspection of the Properties. At Seller’s option, Buyer
will furnish to Seller copies of any reports received by Buyer relating to any
inspection of the Properties, without representation or warranty of any kind
(express, implied or otherwise) as to the content and accuracy thereof, and at
no charge to Seller other than the costs of reproduction. BUYER SHALL HAVE NO
LIABILITY OR OBLIGATION WHATSOEVER FOR ANY INACCURACY IN OR OMISSION FROM ANY
SUCH REPORTS. SELLER SHALL HAVE NO CLAIMS AGAINST THE BUYER AND/OR THE PREPARER
OF ANY REPORT PROVIDED BY BUYER ARISING FROM OR RELATING TO SUCH REPORTS, EXCEPT
AS SET FORTH BELOW WITH RESPECT TO BUYER’S OR PREPARER’S DAMAGE TO THE PROPERTY.
Buyer agrees to protect, indemnify, defend (with counsel satisfactory to Seller)
and hold Seller and Seller’s employees, officers, directors, representatives,
invitees, tenants, agents, contractors, servants, attorneys, shareholders,
participants, Affiliates, partners, members, parents, subsidiaries, successors
and assignees, free and harmless from and against any claim for liabilities,
losses, costs, expenses (including reasonable attorneys’ fees) for any injury or
damage to person or property resulting from the inspection of the Properties by
Buyer or its agents or consultants, and notwithstanding anything to the contrary
in this Agreement, such obligation to indemnify and hold harmless Seller shall
survive Closing or any termination of this Agreement; provided however, this
indemnity by Buyer shall not extend to protect any party from (i) any
pre-existing liabilities for matters merely discovered by Buyer (i.e., latent
environmental contamination) so long as Buyer’s actions do not aggravate any
pre-existing liability of any party (it being understood that mere discovery of
unknown but existing environmental contamination or latent defect shall not be
considered an “aggravation”) or (ii) matters occurring to the extent they are
the result of the gross negligence or willful misconduct of Seller, any
Affiliate of Seller, or any other indemnified party.
Section 3.2    Environmental Reports. BUYER ACKNOWLEDGES THAT (1) BUYER WILL
RECEIVE COPIES (OR HAVE ACCESS TO THROUGH THE DROPBOX) OF THE ENVIRONMENTAL
REPORTS LISTED ON APPENDIX A (the “Environmental Reports”) AS PART OF THE
PROPERTY DOCUMENTS WITHOUT REPRESENTATION AND WARRANTY, AND (2) IF SELLER
DELIVERS ANY ADDITIONAL ENVIRONMENTAL REPORTS TO BUYER, BUYER WILL ACKNOWLEDGE
IN WRITING THAT IT HAS RECEIVED SUCH REPORTS PROMPTLY UPON RECEIPT THEREOF.
SELLER SHALL HAVE NO LIABILITY OR OBLIGATION WHATSOEVER FOR ANY INACCURACY IN OR
OMISSION FROM ANY ENVIRONMENTAL REPORT. BUYER SHALL HAVE NO CLAIMS AGAINST THE
SELLER AND/OR THE PREPARER OF ANY ENVIRONMENTAL REPORT PROVIDED BY SELLER
ARISING FROM OR RELATING TO SUCH ENVIRONMENTAL REPORTS. BUYER HAS CONDUCTED, OR
WILL CONDUCT PRIOR TO THE EXPIRATION OF THE CONTINGENCY PERIOD, ITS OWN
INVESTIGATION OF THE ENVIRONMENTAL CONDITION OF THE PROPERTIES

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TO THE EXTENT BUYER DEEMS SUCH AN INVESTIGATION TO BE NECESSARY OR APPROPRIATE.
Section 3.3    Request for Termination or Assumption of Operating Agreements. As
part of the Property Documents, Seller shall deliver to (or provide access
thereto through the Dropbox) Buyer a schedule listing all Operating Agreements
and true, correct and complete copies thereof. Buyer shall have the right, in
its sole and absolute discretion, to request that Seller provide notice of
termination of any Operating Agreement that is terminable by notice to the other
party thereto in accordance with its terms, without penalty, by delivering to
Seller written notice of such election (the “Contract Termination Notice”) on or
before the expiration of the Contingency Period. If Buyer timely delivers a
Contract Termination Notice with respect to any such Operating Agreement, Seller
shall, after receipt of such Contract Termination Notice and after the end of
the Contingency Period and provided that this Agreement has not otherwise been
terminated in accordance with its terms, duly and promptly provide such notice
of termination to the counter party to any Operating Agreement, specifying a
termination date for such Operating Agreement to be the later of (i) the Closing
Date or (ii) the earliest possible date for termination of the Operating
Agreement in accordance with the terms thereof. At the Closing, Buyer shall
assume all Operating Agreements then in effect which were not the subject of a
Contract Termination Notice (“Assumed Operating Agreements”). If Buyer fails to
deliver the Contract Termination Notice within such time period, Buyer shall be
deemed to have elected not to have Seller deliver a termination notice with
respect to any such Operating Agreement. Notwithstanding the foregoing or any
other provision in this Agreement to the contrary, the following shall apply:
(a)    Seller shall cause all other property management and leasing agreements
and any agreements between the Seller and Affiliates of the Seller relating to
the Property to be terminated as of the Closing; and
(b)    All Operating Agreements assumed by Buyer at the Closing will be assumed
only with respect to any obligations arising thereunder from and after the
Closing, as more particularly described in this Agreement and the Exhibits
hereto and subject to the prorations and adjustments provided herein.
Section 3.4    No Financing Contingency. It is expressly agreed that there shall
not be any conditions making Buyer’s obligations under this Agreement contingent
upon the obtaining of any financing by Buyer. Notwithstanding the foregoing,
Seller acknowledges that Buyer may terminate this Agreement pursuant to Section
3.6 for any reason.
Section 3.5    Review of Estoppel Certificates.
(a)    Within five (5) Business Days after the Contingency Period Expiration
Date and provided Buyer has not theretofore terminated this Agreement, Seller
shall prepare and deliver to each tenant under a Lease with Seller or its
Affiliate an estoppel certificate in substantially the form attached hereto as
Exhibit F-1 (the “Tenant Estoppels”), and shall request that the tenants
complete and sign the Tenant Estoppels and return them to Seller. No later than
three (3) Business Days prior to the date on which Seller intends to distribute
the

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Tenant Estoppels to the tenants for their completion and execution, Seller shall
deliver the draft estoppel certificates to Buyer for Buyer’s review and
approval, which approval shall not be unreasonably withheld, conditioned or
delayed and shall be deemed to be given within two (2) Business Days after
Buyer’s receipt thereof without reply. Seller shall use reasonable efforts to
obtain and deliver to Buyer an executed Tenant Estoppel from each tenant under a
Lease of the Properties, and Seller shall deliver the Tenant Estoppels to Buyer
promptly upon receipt of the same. In no event shall Seller be required to
declare an event of default under any Lease for failure to deliver a Tenant
Estoppel or otherwise be required to institute legal proceedings against any
tenant in connection therewith. The failure to deliver a Tenant Estoppel shall
be treated in accordance with Section 3.5(c) and 4.7(e) hereof.
(b)    Within five (5) Business Days after the end of the Contingency Period
Expiration Date; and provided Buyer has not theretofore terminated this
Agreement, Seller shall prepare and deliver to the lessor under the Ground
Lease(s) and the Parking Lease an estoppel certificate in substantially the form
attached hereto as Exhibit F-2 or the form required by such Ground Lease(s) or
Parking Lease, as the case may be, and subject to changes specific to such
Ground Lease(s) or Parking Lease (collectively, the “Lessor Estoppels”), and
shall request that such lessors complete and sign the Lessor Estoppels and
return them to Seller in accordance with the terms of such Ground Lease(s) or
Parking Lease, as the case may be. Notwithstanding the foregoing, with respect
to the Parking Lease, it shall not be deemed a failure of a condition if Seller
seeks to obtain a Lessor Estoppel for the Parking Lease (by, at a minimum,
sending a written request for the Lessor Estoppel to lessor under the Parking
Lease and following up with a telephone call), but is unable to deliver such
Lessor Estoppel at Closing, but delivers a Seller Estoppel for such Parking
Lease in accordance with Section 3.5(c). Seller shall deliver the Lessor
Estoppels to Buyer promptly upon receipt of the same. In no event shall Seller
be required to declare an event of default under the Ground Lease(s) or the
Parking Lease for failure to deliver a Lessor Estoppel or otherwise be required
to institute legal proceedings against such lessors in connection therewith.
(c)    Seller agrees, as a condition to Buyer’s obligation to close, to deliver
to Buyer, as applicable, all of the Lessor Estoppels (subject to the provisions
of Section 3.5(b) above with respect to the Parking Lease) and a Tenant Estoppel
from all of the tenants which occupy eighty percent (80%) of the total leased
area of each respective Property, to include all tenants leasing (i) 14,000
square feet or more at the Ground Lease Property; (ii) 5,000 square feet or more
at the Davis Square Property and Verona Property (as defined in Exhibit A-1);
(iii) 5,000 square feet or more at the Morristown Property (as defined in
Exhibit A-1),; and (iv) 4,000 square feet or more at the Southgate Property (as
defined in Exhibit A-1) (collectively, the “Required Tenant Estoppels”). The
tenants described in (i) through (iv) above are each hereinafter referred to as
a “Major Tenant.” Leases at the same Property with the same tenant or Affiliates
of such tenant identified on such other leases shall be aggregated for the
purposes of determining whether a tenant is a Major Tenant. If Seller is unable
to timely obtain the Required Tenant Estoppels prior to the Closing Date, Seller
agrees to deliver to Buyer, prior to the Closing Date, a Seller Estoppel in
substantially the form attached as Exhibit F-3 (a “Seller Estoppel”) for such
missing Tenant Estoppels; provided that Buyer shall not be required to accept a
Seller Estoppel in lieu of a Tenant Estoppel from a Major Tenant, nor shall
Buyer be required to accept Seller Estoppels for more than ten percent (10%) of
the eighty percent (80%) threshold described

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in the first sentence of this subsection (c) (collectively, the “Seller Estoppel
Limitations”). If Seller delivers a Seller Estoppel, and if thereafter a Tenant
Estoppel is received from the tenant under the Lease covered by such Seller
Estoppel, as the case may be, then such Lessor Estoppel or Tenant Estoppel, as
applicable, shall be substituted for such applicable Seller Estoppel (each a
“Substitute Estoppel”) and Seller shall have no further liability thereunder,
provided that the Tenant Estoppel contains no material adverse changes from the
Seller Estoppel, or notwithstanding such changes, is nevertheless acceptable to
Buyer. Seller’s liability pursuant to any Seller Estoppel shall survive the
Closing, but shall expire on the earlier to occur of (i) the date which is six
(6) months after the Closing Date and (ii) the date upon which an analogous
Substitute Estoppel is delivered to Buyer provided the Substitute Estoppel
raises no material adverse issues which relate to the period of time prior to
Closing. Seller’s liability under any Seller Estoppels shall not be subject to
the Basket limitation of Section 5.2, but shall be subject to the Cap limitation
of Section 5.2, and shall be secured by the Holdback Escrow Account. The
provisions of this Section 3.5 shall survive Closing.
Section 3.6    Due Diligence; Right of Termination. The Deposit shall be fully
refundable to Buyer for any reason or no reason within two (2) Business Days of
Seller's and Escrow Agent’s receipt of Buyer’s written notice thereof to Seller
and Escrow Agent (the "Termination Notice") at any time prior to the expiration
of the Contingency Period (the “Contingency Period Expiration Date”). This
Agreement shall be deemed canceled and become void and of no further effect, and
neither party shall have any obligations of any nature to the other hereunder or
by reason hereof, except that the provisions hereof expressly provided to
survive such termination upon Buyer’s receipt from Escrow Agent of the Deposit.
In the event that Buyer fails to give the Termination Notice to Seller and
Escrow Agent on or before the expiration date of the Contingency Period, this
Agreement shall remain in full force and effect in accordance with its express
terms, except that Buyer shall be deemed to have unconditionally and irrevocably
approved all of Buyer’s due diligence, including, without limitation, the
Property. TIME SHALL BE OF THE ESSENCE in respect of the giving of the
Termination Notice. Buyer shall have the right at any time prior to the
Contingency Period Expiration Date, exercisable in its sole discretion, to
provide a written notice to Seller approving all conditions and aspects of the
Property (an “Approval Notice”), in which event the date of such Approval Notice
shall become the Contingency Period Expiration Date.
Section 3.7    Rights Upon Termination. If this Agreement is terminated or
deemed terminated with respect to all Properties by Buyer in the manner and
within the applicable time period(s) provided pursuant to any of Sections 2.2,
3.1(c), 3.6, 4.1, 5.3(a), 6.2, 6.3 or Articles IV and VII, or because of a
failure of a condition precedent to Buyer’s obligations hereunder as set forth
in Section 4.7 and Section 4.9 below, then, (i) each party shall promptly
execute and deliver to Escrow Agent such documents as Escrow Agent may
reasonably require to evidence such termination; (ii) the Deposit plus all
accrued interest thereon shall be returned to Buyer, (iii) all instruments in
Escrow shall be returned to the party depositing the same, (iv) Buyer shall
return all items previously delivered by Seller to Buyer, and at the request of
Seller, copies of any reports, surveys or other studies or investigations
prepared or received by Buyer relating to the Properties, subject to the
provisions of Section 3.1(d) above, (v) Buyer and Seller shall each pay one-half
(1/2) of all Escrow and title cancellation charges, and (vi) neither party shall
have any further rights, obligations or liabilities whatsoever to the other
party concerning

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the Properties by reason of this Agreement, except for any indemnity obligations
of either party pursuant to the provisions of this Agreement which are expressly
stated in this Agreement to survive termination. The provisions of this Section
3.7 shall survive the termination of this Agreement
Section 3.8     No Modification. Notwithstanding the foregoing, Buyer agrees
that it shall have no right to obtain a reduction of the Purchase Price or any
other modification of this Agreement as a result of any fact or circumstance or
other matter discovered in the course of the inspections during the Contingency
Period (including without limitation, relating to the condition of the
Properties, the operation of the Properties, the tenant discussions or the
inability to conduct such discussions with any tenant) it being understood and
agreed that Buyer shall have no right to terminate this Agreement except as set
forth in Sections 2.2, 3.6, 3.7, 5.3(a), 6.2, and 6.3, and Articles IV and VII
hereof.
ARTICLE IV

CLOSING
Section 4.1    Time and Place. (a)    The Closing (as hereinafter defined) of
the transaction contemplated hereby shall be consummated on December 16, 2014
(the “Closing Date”) TIME BEING OF THE ESSENCE, subject to the express
adjournment rights granted in this Agreement; provided that if on or before
December 12, 2014, (1) HVMA (as defined in Section 4.9(b) below) has not
affirmatively elected (in writing) not to exercise the HVMA ROFR (as defined in
Section 4.9(b)) in accordance with Section 4.9(b), and (2) the condition
precedent set forth in Section 4.7(e) below has not been satisfied, the Closing
Date shall be extended until the date that is three (3) Business Days after the
later of (x) satisfaction of the Davis Square ROFR Condition in accordance with
Section 4.9(b); and (y) satisfaction of the condition precedent set forth in
Section 4.7(e) below. Notwithstanding anything contained herein to the contrary,
in the event that the Closing has not occurred on or before March 1, 2015, this
Agreement shall automatically terminate in all respects, in which case Buyer
shall be entitled to the return of the Deposit from Escrow Agent, in addition to
any reimbursement for out of pocket expenses that Buyer may be entitled to
pursuant to this Section 4.1. If any condition precedent to Buyer’s obligations
to close set forth in this Agreement is not satisfied within the time period
provided for herein for satisfaction, (i) Buyer may waive the conditions in
writing on or before the Closing Date, and the parties will proceed to Closing,
(ii) may adjourn the Closing Date for a period not to exceed thirty (30) days in
order to satisfy the condition and during such periods the parties shall
cooperate in good faith and with reasonable diligence to satisfy the applicable
condition, or (iii) may terminate this Agreement by written notice to Seller
delivered on the Closing Date, in which event the Deposit shall promptly be
returned to Buyer, and the parties shall have no further obligations hereunder
except those which expressly survive Closing. If Buyer elects to proceed
pursuant to clause (ii) above, and such condition remains unsatisfied after the
end of such extension period, then, at such time, either Buyer may elect to
proceed pursuant to either clause (i), (ii) or (iii) above. In the event of the
failure of any condition precedent to Buyer’s obligations to close, if such
failure were as a direct consequence of a breach or default of Seller’s
covenants, representations or warranties hereunder, Seller shall if determined
by a final non-appealable judgment of a court of competent jurisdiction, be
liable for

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such breach or default as otherwise set forth in this Agreement. Notwithstanding
anything set forth in this Agreement to the contrary, in the event that Buyer
terminates this Agreement due to a failure of the conditions precedent set forth
in Section 4.9 below, then Buyer shall additionally be entitled to receive from
Seller, Buyer’s actually incurred, out of pocket expenses in conjunction with
this Agreement, up to a maximum of Three Hundred Fifty Thousand Dollars
($350,000) and this reimbursement obligation shall expressly survive any
termination of this Agreement; provided that Buyer shall be entitled to such
reimbursement for a failure of a condition precedent described in Section 4.9(a)
only to the extent that such failure was due to the willful misconduct of
Seller. The term “Closing” is used in this Agreement to mean the time and date
the transactions hereby are closed and the Title Policy is issued, regardless of
whether the Deeds are actually recorded in the land records in which the
Properties are situated.
(b)    Notwithstanding the foregoing, Buyer shall have a one time right to
adjourn the Closing Date (the “Buyer’s Adjournment Option”) for fifteen (15)
days (the “Adjourned Date”) provided that at least five (5) Business Days prior
to the Closing Date, WITH TIME BEING OF THE ESSENCE AS TO SUCH DATE Buyer
delivers notice of its exercise of such adjournment and then TIME SHALL BE OF
THE ESSENCE for the performance by Buyer of its obligation hereunder on or
before the Adjourned Date. Upon reasonable prior notice to Seller, which notice
may be revoked by Buyer at any time without liability, Buyer may elect to close
prior to the Adjourned Date. If so adjourned pursuant to the Buyer’s Adjournment
Option, all references herein to the “Closing Date” shall be deemed to be to the
Adjourned Date.
(c)    The Closing shall be consummated through the Escrow administered by
Escrow Agent. At the Closing, Seller and Buyer shall perform the obligations set
forth in, respectively, Section 4.2 and Section 4.3 hereof, the performance of
which obligations shall be covenants to the parties to perform and shall be
concurrent conditions.
TIME SHALL BE OF THE ESSENCE WITH RESPECT TO BUYER’S AND SELLER’S OBLIGATION TO
CONSUMMATE THE CLOSING ON THE CLOSING DATE, OR IF APPLICABLE, THE ADJOURNED
CLOSING DATE, subject to any adjournment rights expressly provided to Seller or
Buyer under this Agreement.
Section 4.2    Seller’s Obligations at Closing. At least one (1) Business Day
prior to the scheduled Closing Date, Seller, or its Affiliates, as applicable,
shall:
(a)    with respect to each Real Property other than the Ground Lease Property,
deliver or cause to be delivered to Buyer through Escrow a duly executed and
acknowledged Special Warranty Deed or Limited Warranty Deed in substantially the
form attached hereto as Exhibit G, but with such changes thereto as are required
by any applicable laws in the jurisdiction where such Real Property is located
(the “Deeds”);
(b)    with respect to the Ground Lease Property and a portion of each of the
Morristown Property and Davis Square Property, assign or cause to be assigned to
Buyer, and Buyer shall assume, such ground lessee’s interest in and to such
Ground Lease Property and a portion of each of the Morristown Property and Davis
Square Property, by a duly executed

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assignment and assumption of ground lessee’s interest in ground lease and
special warranty deed or limited warranty deed in substantially the form
attached hereto as Exhibit H delivered through Escrow, but with such changes
thereto as are required by any applicable laws in the jurisdiction where such
Ground Lease Property is located (the “Assignments of Ground Lease”), together,
if expressly required pursuant to the terms of such Ground Lease, with written
consent of the applicable ground lessors to the Assignments of Ground Lease;
(c)    with respect to each applicable Property, deliver or cause to be
delivered to Buyer through Escrow a duly executed bill of sale in the form
attached hereto as Exhibit I (the “Bill of Sale”) conveying to Buyer without
warranty (except for the representations and warranties expressly set forth in
this Agreement) all right, title and interest of Seller in and to the Personal
Property;
(d)    with respect to each Property, assign or cause to be assigned to Buyer
and Buyer shall assume the landlord/lessor interest in and to the Leases, Rents,
and Security Deposits from and after the date of Closing, and any and all
Leasing Commissions and Tenant Inducement Costs, to the extent provided in
Section 4.5(b)(v) hereof, by a duly executed assignment and assumption agreement
(the “Assignment of Leases”) in the form attached hereto as Exhibit J delivered
through Escrow;
(e)    with respect to each Property, to the extent assignable, assign or cause
to be assigned to Buyer without warranty (except for the representations and
warranties expressly set forth in this Agreement), and Buyer shall assume,
Seller’s interest in the Assumed Operating Agreements, if any, by a duly
executed assignment and assumption agreement (the “Assignment of Contracts”) in
the form attached hereto as Exhibit K delivered through Escrow;
(f)    with respect to each Property, assign or cause to be assigned to Buyer,
without warranty (except for the representations and warranties expressly set
forth in this Agreement), Seller’s interest in the Intangibles by a duly
executed assignment agreement (the “Assignment of Intangibles”) in the form
attached hereto as Exhibit P delivered through Escrow;
(g)    with respect to each Property, join with Buyer to execute notices outside
of Escrow in the form attached hereto as Exhibit L (the “Tenant Notices”), which
Buyer shall send to each tenant under each of the Leases promptly after the
Closing, informing such tenant of the sale of such Property and of the
assignment to Buyer of Seller’s interest in, and obligations under, the Leases
(including, if applicable, any Security Deposits), and directing that all Rent
and other sums payable after the Closing under such Lease be paid as set forth
in the notice;
(h)    if any representation or warranty of Seller needs to be modified due to
changes since the Effective Date, deliver to Buyer through Escrow a certificate,
dated as of the date of Closing and executed on behalf of Seller by a duly
authorized officer thereof, identifying any representation or warranty which is
not, or no longer is, true and correct in all material respects and explaining
the state of facts giving rise to the change. Unless such certificate is
received at Closing, Seller’s representations and warranties made in this
Agreement shall be deemed to remade at and as of Closing. In no event shall
Seller be liable to Buyer for, or be deemed to be in default hereunder by

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reason of, any breach of representation or warranty which results from any
change that (i) occurs between the Effective Date and the date of Closing, and
(ii) is expressly permitted under the terms of this Agreement or is beyond the
reasonable control of Seller to prevent. The occurrence of a change in a
representation and warranty shall, if materially adverse to Buyer, constitute
the non-fulfillment of the condition set forth in Section 4.7(b) hereof. If,
despite changes or other matters described in such certificate, the Closing
occurs, Seller's representations and warranties set forth in this Agreement
shall be deemed to have been modified by all statements made in such
certificate;
(i)    deliver to the Title Company such usual and customary evidence as the
Title Company may reasonably require as to the authority of the person or
persons executing documents on behalf of Seller;
(j)    deliver to Buyer through Escrow a certificate in the form attached hereto
as Exhibit M duly executed by Seller;
(k)    deliver to Buyer outside of Escrow or at the Properties the Leases and
the Assumed Operating Agreements, together with such leasing, management and
other property files and records which are material in connection with the
continued operation, leasing and maintenance of the Properties, but excluding
any Confidential Documents. Prior to the Closing, Seller may, at its sole cost,
make a copy of all files, records and documents which Seller has delivered to
Buyer. In addition, for a period of the lesser of (i) the duration of Buyer’s
ownership of the Properties, or (ii) one (1) year after the Closing, Buyer shall
allow Seller and its representatives access without charge to all files, records
and documents delivered to Buyer at or in connection with the Closing, at the
place where Buyer keeps such files, records and documents, upon reasonable
advance notice and at reasonable times at Seller’s sole cost, to make copies of
any and all such files, records and documents, which right shall survive the
Closing;
(l)    deliver such affidavits as may be customarily and reasonably required by
the Title Company, including, without limitation, “gap” indemnities and owner’s
affidavits, in a form reasonably acceptable to Seller;
(m)    deliver to Buyer exclusive possession and occupancy of the Properties,
subject to the Leases and the Permitted Exceptions;
(n)    with respect to the Parking Lease Property, assign or cause to be
assigned to Buyer without warranty (except for the representations and
warranties expressly set forth in this Agreement), and Buyer shall assume the
tenant/lessee interest in and to the Parking Lease, by a duly executed
assignment and assumption agreement (the “Assignment of Parking Lease”) in the
form attached hereto as Exhibit O delivered through Escrow, but with such
changes as are required by any applicable laws in the jurisdiction where the
Real Property is located;
(o)    execute and deliver a closing statement confirming the prorations,
credits and adjustments hereunder through Escrow;
(p)    Intentionally omitted;

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(q)    execute an deliver such real estate transfer tax returns or other
equivalent forms or documents as each respective jurisdiction requires in
connection with the delivery a Deed (collectively the “Transfer Tax Documents”);
(r)    deliver a certified Rent Roll current as of three (3) Business Days prior
to Closing;
(s)    deliver evidence of termination of Operating Agreements not assumed by
Buyer hereunder and termination of existing management agreements;
(t)    deliver such additional documents as shall be reasonably required to
consummate the transaction contemplated by this Agreement, including, but not
limited to, any escrow agreements described in this Agreement; and
(u)    join with Buyer to execute outside of Escrow notices reasonably
acceptable to Buyer and Seller (the “Lessor Notices”), which Buyer shall send to
each lessor under the Ground Leases and Parking Lease promptly after the
Closing, informing such lessor/third party entity of the sale of the applicable
Property and of the assignment to Buyer of Seller’s interest in, and obligations
under, the Ground Leases and Parking Lease, as applicable, and directing that
all future notices under such documents be sent to the addressee specified by
Buyer in such notice.
Section 4.3    Buyer’s Obligations at Closing. At least one (1) Business Day
prior to the scheduled Closing Date, Buyer shall (or shall cause a Buyer Entity
or Buyer’s permitted assignee/nominee pursuant to Section 10.3 below to):
(a)    pay to Seller through Escrow the full amount of the Purchase Price (due
credit shall be given for the Deposit), as increased or decreased by prorations
and adjustments as herein provided in immediately available wire transferred
funds pursuant to Section 1.5 hereof;
(b)    join Seller in execution and delivery through Escrow of the Assignment of
Leases, Assignment of Contracts, Assignments of Ground Lease and Assignment of
Parking Lease;
(c)    join Seller in execution outside of Escrow of the Tenant Notices and the
Lessor Notices;
(d)    if any representation or warranty of Buyer needs to be modified due to
changes since the Effective Date, deliver to Seller through Escrow a
certificate, dated as of the date of Closing and executed on behalf of Buyer by
a duly authorized officer thereof, identifying any representation or warranty
which is not, or no longer is, true and correct and explaining the state of
facts giving rise to the change. Unless such certificate is received at Closing,
Buyer’s representations and warranties made in this Agreement, shall be deemed
to remade at and as of Closing. In no event shall Buyer be liable to Seller for,
or be deemed to be in default hereunder by reason of, any breach of
representation or warranty which results from any change that (i) occurs between
the Effective Date and the date of Closing, and (ii) is expressly permitted
under the terms of this Agreement or is beyond the reasonable control of Buyer
to prevent. The occurrence of a change in a representation or warranty shall, if
materially adverse to Seller, as determined by Seller in its

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sole discretion, constitute the non-fulfillment of the conditions set forth in
Section 4.8(c) hereof. If, despite changes or other matters described in such
certificate, the Closing occurs, Buyer’s representations and warranties set
forth in this Agreement shall be deemed to have been modified by all statements
made in such certificate;
(e)    deliver to Seller such evidence as the Title Company may reasonably
require as to the authority of the person or persons executing documents on
behalf of Buyer;
(f)    deliver such affidavits, as may be customarily and reasonably required by
the Title Company, in a form reasonably acceptable to Buyer;
(g)    execute and deliver a closing statement confirming the prorations,
credits and adjustments hereunder through Escrow;
(h)    join Seller in execution and delivery of the Transfer Tax documents;
(i)    Intentionally omitted;
(j)    perform and satisfy all agreements and covenants required hereby to be
performed by Buyer prior to or at the Closing; execute and deliver all documents
and instruments to be executed by Buyer, any Buyer Entity or any other permitted
assignee or nominee of Buyer, as applicable, to evidence the assumption by such
party of all of Seller’s, or its Affiliates’, as applicable, rights and
obligations under this Agreement;
(k)    Intentionally omitted; and
(l)    deliver such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transaction which is the subject
of this Agreement, including, but not limited to, any escrow agreements
described in this Agreement.
Section 4.4    Escrow Agent’s Obligations at Closing. Escrow Agent shall
undertake the following at or promptly after Closing:
(a)    If necessary, Escrow Agent is authorized and instructed to insert the
date Escrow closes as the effective date of any documents conveying interests
herein or which are to become operative as of the Closing Date;
(b)    Cause the Deeds and any other recordable instruments which the parties so
direct to be recorded in the Official Records of the Recorder of the County in
which the Properties are located. If permitted by applicable law, Escrow Agent
is hereby instructed not to affix the amount of the documentary transfer tax on
the face of the Deeds but to pay on the basis of a separate affidavit of Seller
not made a part of the public record;
(c)    Cause each non-recorded document to be delivered to the party acquiring
rights thereunder, or for whose benefit such document was obtained;
(d)    Deliver to Buyer the Title Policies; and

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(e)    Deliver to Seller the Purchase Price and such other funds, if any, as may
be due to Seller by reason of credits under this Agreement, less all items
chargeable to Seller under this Agreement.
Section 4.5    Credits and Prorations.
(a)    All income and expenses of the Properties shall be apportioned as of
12:01 a.m. on the day of Closing as if Buyer were vested with title to the
Properties during the entire day upon which Closing occurs. Such prorations, if
and to the extent known and agreed upon as of the Closing, shall be paid by
Buyer to Seller (if the prorations result in a net credit to the Seller) or by
Seller to Buyer (if the prorations result in a net credit to the Buyer) by
increasing or reducing the cash to be paid by Buyer at the Closing. Any such
prorations not determined as of the Closing shall be paid by Buyer to Seller, or
by Seller to Buyer, as the case may be, in cash as soon as practicable following
the Closing. Such prorated items include without limitation the following:
(i)    all Rents and any other income with respect to the Properties received by
the Closing, if any; taxes and assessments levied against the Properties;
(ii)    any improvement assessment liens or other similar assessments which
encumber the Properties, and, with respect to assessments attributable to the
time periods after Closing, Seller shall have no obligation to pay all or any
portion of the principal amount of any such assessments, except to the extent
required under the terms of such assessments to be paid prior to Closing;
(iii)    utility charges for which Seller is liable, if any, such charges to be
apportioned at Closing on the basis of the most recent meter reading occurring
prior to Closing (dated not more than fifteen (15) days prior to Closing) or, if
unmetered, on the basis of a current bill for each such utility;
(iv)    all amounts payable with respect to Operating Agreements (except as
provided in Section 3.3(c) above) and all Leasing Commissions and Tenant
Inducement Costs as provided in Section 4.5(b)(v) below;
(v)    all rents and other amounts payable under the Ground Lease(s) and the
Parking Lease;
(vi)    any other operating expenses or other items pertaining to the Properties
which are customarily prorated between a buyer and a seller in the County in
which the Properties are located.
(b)    Notwithstanding anything contained in Section 4.5(a) hereof:
(i)    At Closing, Seller shall credit to the account of Buyer the amount of
such Security Deposits of which Seller is in possession (to the extent such
Security Deposits have not been properly applied against delinquent Rents)
provided that from and after the Effective Date Seller shall not apply any such
Security Deposits against delinquent Rents, unless

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the applicable Lease shall be terminated by Seller prior to the Closing in the
ordinary course of Seller’s business and consistent with past practices. A
schedule of Security Deposits that are not in Seller’s possession is attached
hereto as Schedule 4.5(b)(i). Seller shall assign and deliver to Buyer at
Closing all letters of credit (and any assignment document required by the
issuing institution), lease guarantees and other forms of credit enhancement;
provided, however, that any transfer or similar fees charged or collected by the
issuer or surety providing any such letter of credit, lease bond or similar
non-cash Security Deposit shall be the responsibility of Buyer;
(ii)    At Closing, Seller shall assign to Buyer its rights to the security
deposit under the Ground Lease for the Ground Lease Property, and Seller shall
receive a credit at Closing for the same;
(iii)    Any property taxes and assessments paid at or prior to Closing shall be
prorated based upon the amounts actually paid. If taxes and assessments due and
payable during the year of Closing have not been paid before Closing, Seller
shall be charged at Closing an amount equal to that portion of such taxes and
assessments which relates to the period before Closing and Buyer shall pay the
taxes and assessments prior to their becoming delinquent and if such amounts are
not yet known, such amounts shall be based on the most recent tax rate and/or
assessed valuation fixed and shall be reprorated between the parties within
thirty (30) days after such amounts are determined.
(iv)    Any such apportionment made with respect to a tax year for which the
most recent tax rate or assessed valuation, or both, have not yet been fixed
shall be based upon the most recent tax rate and/or assessed valuation fixed. To
the extent that the actual taxes and assessments for the current year differ
from the amount apportioned at Closing, the parties shall make all necessary
adjustments following the Closing by appropriate payments between themselves
within thirty (30) days after such amounts are determined, subject to the
provisions of Section 4.5(d) hereof. Buyer shall pay all supplemental taxes
resulting from the change in ownership and reassessment occurring as the result
of the Closing pursuant to this Agreement to the extent such supplemental taxes
apply to the period from and after the Closing Date, and Seller shall pay any
such supplemental taxes that apply to the period prior to the Closing Date;
(v)    Charges referred to in Section 4.5(a) hereof which are payable by any
tenant directly to a third party shall not be apportioned hereunder, and Buyer
shall accept title subject to any of such charges unpaid and Buyer shall look
solely to the tenant responsible therefor for the payment of such charges. If
Seller shall have paid any of such charges on behalf of any tenant, and shall
not have been reimbursed therefor by the time of Closing, Buyer shall deliver
over to Seller an amount equal to all such charges so collected by Buyer on
account thereof, when and if collected from such tenant;
(vi)    As to utility charges referred to in Section 4.5(a)(iv) hereof, Seller
may upon notice to Buyer elect to pay one or more of all of said items accrued
to the date hereinabove fixed for apportionment directly to the person or entity
entitled thereto, and to the extent Seller so elects, such item shall not be
apportioned hereunder, and Seller’s obligation to pay such item directly in such
case shall survive the Closing or any termination of this Agreement;

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(vii)    Subject to the provisions of Sections 5.3(b) below, on the Closing
Date, Buyer shall be responsible for the payment of all Tenant Inducement Costs
(as hereinafter defined) and Leasing Commissions (as hereinafter defined) which
become due and payable (whether before or after Closing) as a result of any New
Lease Documents (as defined below) executed prior to Closing and approved or
deemed approved by Buyer pursuant to Section 5.3(b); provided however, to the
extent any tenant under a New Lease Document signed or executed after the
Effective Date and prior to the Closing commences payment of Rent under such New
Lease Document prior to the Closing, then with respect to such Tenant Inducement
Costs and Leasing Commissions relating thereto, the same shall be prorated
between Buyer and Seller, with Buyer responsible for that portion thereof equal
to the number of days in the stated term of such New Lease Document after the
Closing and Seller responsible for that portion thereof equal to the number of
days in the stated term prior to the Closing; provided, however, that should any
such Leasing Commissions or Tenant Inducement Costs be due and payable prior to
Closing, Seller shall pay such commission or cost and upon Closing, Seller shall
receive a credit equal to the amount of Buyer’s pro rata share of such Leasing
Commissions or Tenant Inducement Costs paid. For purposes of the foregoing
sentence only, the Sixth Amendment of Lease Agreement between Barnabas Health
Medical Group, P.C., and Seller, dated September 22, 2014, with respect to Suite
101 at the Morristown Property, shall be deemed a “New Lease Document signed or
executed after the Effective Date and prior to the Closing.” The term “Tenant
Inducement Costs” shall mean (A) any and all rent concessions, rent abatements,
or rent credits under any Lease, and (B) any payments required under a Lease to
be paid by the landlord thereunder to or for the benefit of the tenant
thereunder which is in the nature of a tenant inducement, including
specifically, without limitation, tenant improvement costs, lease buyout costs,
and moving, design, refurbishment, free rent, and club membership allowances
(other than with respect to the Master Leases (as hereinafter defined), which
shall be governed by the specific terms thereof). The term “Leasing Commissions”
includes all expenses connected with or arising out of the negotiation,
execution and delivery of the Leases, including brokers’ commissions, leasing
fees and legal fees, if any (other than with respect to the Master Leases).
Seller shall be responsible for all Leasing Commissions and Tenant Inducement
Costs with respect to all Leases executed or signed prior to the Effective Date.
Seller shall give Buyer a credit at Closing in the amount of any and all Tenant
Inducement Costs and Leasing Commissions which relate to the current term of the
Leases and are unpaid or unperformed.
(viii)    No credit shall be given Seller for accrued and unpaid Rents or any
other non-current sums due from tenants, on account of periods prior to the
Closing Date, until these sums are paid. Buyer will use commercially reasonable
efforts after Closing to collect all Rents in the usual course of Buyer's
operation of the Properties, but Buyer will not be obligated to institute any
lawsuit or other collection procedures to collect delinquent Rents. Seller may
attempt to collect any delinquent Rents owed to Seller for a period not to
exceed six (6) months after Closing; provided Seller does not sue to evict any
tenants or terminate any Leases. Unpaid and delinquent Rent collected by Seller
and Buyer after the date of Closing shall be delivered as follows: (a) if Seller
collects any unpaid or delinquent Rent for the Properties, Seller shall, within
fifteen (15) days after the receipt thereof, deliver to Buyer any such Rent
which Buyer is entitled to hereunder relating to the date of Closing and any
period thereafter, and (b) if Buyer collects any unpaid or delinquent Rent from
the Properties, Buyer shall, within fifteen (15) days after the receipt thereof,
deliver to Seller any such Rent which Seller is entitled to hereunder

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relating to the period prior to the date of Closing. Notwithstanding the
foregoing, Seller and Buyer agree that all Rent received by Seller or Buyer
after the date of Closing shall be applied (w) first to the Rent for the month
of Closing (and shall be prorated between Buyer and Seller as if such Rent were
received prior to the Closing Date), then (x) to current Rent due Buyer, then
(y) to delinquent Rent due Buyer, and then (z) to delinquent Rent due Seller, if
any, in the inverse order of maturity.
(ix)    Intentionally omitted.
(x)    Any percentage rent, escalation or other charges for real estate taxes,
parking charges, operating and maintenance expenses, escalation rents or
charges, electricity charges, cost of living increases or any other charges of a
similar nature other than fixed or base rent under the Leases (collectively, the
"Additional Rents") shall be prorated on the Closing Date between Buyer and
Seller based on the best estimate of Buyer and Seller (and taking into account
the prior year adjustments). Not more than ten (10) Business Days, nor less than
five (5) Business Days before the Closing, Seller shall deliver to Buyer for its
review and approval a statement setting forth its estimate of the proration of
such Additional Rents and the amount of reimbursable expenses paid by Seller
prior to Closing. Buyer and Seller shall complete a final proration of
Additional Rents and expenses by the earlier of May 15, 2015 and ten (10)
Business Days following completion of all final reconciliations under the Leases
(the "Reconciliation Date"). On the Reconciliation Date, Buyer shall deliver to
Seller a reconciliation of all expenses reimbursable by tenants under the Leases
for the prior calendar year, and the amount of Additional Rents received by
Seller and Buyer relating thereto (the “Reconciliation”). Upon reasonable notice
and during normal business hours, each party shall make available to the other
all information reasonably required to confirm the Reconciliation. In the event
of any overpayment of Additional Rents by the tenants to Seller, Seller shall
promptly, but in no event later than fifteen (15) days after receipt of the
Reconciliation, pay to Buyer the amount of such overpayment and Buyer, as the
landlord under the particular Leases, shall pay or credit to each applicable
tenant the amount of such overpayment. In the event of an underpayment of
Additional Rents by the tenants to Seller, Buyer shall pay to Seller the amount
of such underpayment within fifteen (15) days following Buyer's receipt of any
such amounts from the tenants. Notwithstanding anything to the contrary herein,
Seller shall deliver to Buyer or credit against the Purchase Price at Closing
any amounts collected by Seller on account of Additional Rents from tenants,
which based upon Seller's estimates, exceeds the actual Additional Rent owing
from such tenants through the Closing (i.e., amounts collected from such tenants
on account of Additional Rent in excess of such tenants' actual year-to-date
share of expenses for which the same have been collected).
(c)    Other than any appeals filed, in the ordinary course of Seller’s business
practice, prior to the Effective Date, Seller may not prosecute any appeal of
the real property tax assessment for any Property for tax years prior to and
including the tax year in which the Closing occurs. Seller shall, however,
cooperate with Buyer in connection with any appeal filed by Buyer and collection
of a refund of real property taxes paid, provided that Seller shall not be
obligated to incur any out-of-pocket costs or other material costs in doing so.
If Buyer elects to prosecute such appeal, Buyer shall be entitled to all right,
title and interest in and to such appeal and refund, and all amounts payable in
connection therewith shall be paid directly to Buyer by

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the applicable authorities. If such refund or any part thereof is received by
Seller, then Seller shall promptly pay such amount to Buyer. Notwithstanding
anything to the contrary herein, if Seller has formally appealed any real
property tax assessment before the Effective Date, which affects taxes (i) for
any years prior to the year of Closing, then Seller may prosecute such appeal
without the consultation of Buyer and shall be entitled to collect any refund
with respect to such period(s) or (ii) for the year of Closing and/or
thereafter, Seller shall notify Buyer of same and Seller may prosecute such
appeal with the consultation of Buyer, and Seller may not settle or discontinue
such proceeding without Buyer’s prior written consent, which consent shall not
be unreasonably withheld, conditioned or delayed. Seller shall be entitled to
collect any refund with respect to the period up to (but not including) the
Closing Date, and Buyer shall be entitled to collect any refund with respect to
the period after the Closing Date. Buyer shall cooperate with Seller, at no out
of pocket cost to Buyer, in connection with such appeal; provided, however, to
the extent any portion of such refund (less any out-of-pocket costs incurred by
Seller in connection therewith) is payable to any tenant of a Property pursuant
to any Leases assigned to Buyer at Closing, Seller shall promptly pay to such
tenant its share thereof as reasonably determined by Seller.
(d)    The Title Company shall prepare and deliver to Seller and Buyer no later
than five (5) Business Days prior to the Closing Date an estimated closing
statement which shall set forth all costs payable, and the prorations and
credits provided for in this Agreement. Seller shall prepare and deliver to
Title Company all such information necessary in order for Escrow Agent to
prepare and deliver the closing statement to Seller and Buyer in accordance with
the foregoing provision. Buyer and Seller shall notify the Title Company and
each other of any items which they dispute and the parties shall attempt in good
faith to reconcile any differences not later than two (2) Business Days before
the Closing Date. The estimated closing statement as adjusted as aforesaid and
approved in writing by the parties shall be referred to therein as the “Closing
Statement”. If the prorations and credits made under the Closing Statement shall
prove to be incorrect or incomplete for any reason, then the parties shall
proceed in good faith to correct the same; provided, however, that any
adjustment shall be made, if at all, within one hundred and eighty (180) days
after the Closing Date except as otherwise set forth in subsection (e) below,
and if a party fails to request an adjustment to the Closing Statement by a
written notice delivered to the other party within the applicable period set
forth above (such notice to specify in reasonable detail the items within the
Closing Statement that such party desires to adjust and the reasons for such
adjustment), then the prorations and credits set forth in the Closing Statement
shall be binding and conclusive against such party.
(e)    Except as otherwise provided herein, any revenue or expense amount which
cannot be ascertained with certainty as of Closing shall be prorated on the
basis of the parties’ reasonable estimates of such amount, and shall be the
subject of a final proration one hundred eighty (180) days after Closing, or as
soon thereafter as the precise amounts can be ascertained. Buyer shall promptly
notify Seller when it becomes aware that any such estimated amount has been
ascertained. Once all revenue and expense amounts have been ascertained, Buyer
shall prepare a final proration statement which shall be subject to Seller’s
approval. Unless Seller objects in writing within thirty (30) days after
receiving any final proration statement submitted by Buyer, such statement shall
be conclusively deemed to be accurate and final. Any such revenue or expense
amount shall be paid by Buyer to Seller, or Seller to Buyer,

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as the case may be, in cash as soon as practicable following Closing. Seller
shall be responsible for all charges, expenses and bills attributable to the
period prior to the Closing Date received or discovered during such one hundred
eighty (180) day period, unless otherwise covered by Additional Rents actually
collected and prorated as provided above.
(f)    The provisions of this Section 4.5 shall survive Closing, as provided
therein, and Seller’s obligations under this Section 4.5 shall not be subject to
the Basket and Cap limitations of Section 5.2, but shall be secured by the
Holdback Escrow Account.
Section 4.6    Transaction Taxes and Closing Costs. Seller and Buyer shall
execute such returns, questionnaires and other documents as shall be required
with regard to all applicable real property transaction taxes imposed by
applicable federal, state or local law or ordinance
(a)    Seller shall pay the fees of any counsel representing Seller in
connection with this transaction. Seller shall also pay the following costs and
expenses:
(i)    one-half (1/2) of the escrow fee, if any, which is charged by the Escrow
Agent;
(ii)    any recording fees incurred in connection with the satisfaction of
Seller’s obligations hereunder (if any), other than those fees relating to the
recordation of the Deeds and any documents described in Section 4.6(b)(ii)
below;
(iii)    the brokerage fees due to Seller’s Advisor (as defined in Section 8.1
below), if any; and
(iv)    any documentary transfer tax or similar tax (including, without
limitation, City, County and State documentary transfer taxes, as applicable)
which becomes payable by reason of the transfer of the Properties (collectively,
“Transfer Taxes”).
(b)    Buyer shall pay the fees of any counsel representing Buyer in connection
with this transaction. Buyer shall also pay the following costs and expenses:
(i)    one-half (1/2) of the escrow fee, if any, which is charged by the Escrow
Agent;
(ii)    the fees for recording the Deeds, any documents or instruments in
connection with the assumption of the Ground Leases and any additional recording
fees incurred in connection with the satisfaction of Buyer’s obligations
hereunder (if any);
(iii)    with respect to each Property, the premium for each of the Lender’s and
the Owner’s Policy of Title Insurance or Leasehold Policy of Title Insurance to
be issued to Buyer or the lender by the Title Company at Closing, and the entire
cost of all endorsements thereto; and

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(v)    the cost of any New Survey(s) and Buyer’s own due diligence expenses.
(c)    The Personal Property is included in this sale without charge, however,
Buyer shall be responsible for the amount of any and all sales or similar taxes
payable in connection with the transfer of the Personal Property;
(d)    All costs and expenses incident to this transaction and the Closing
thereof, and not specifically described above or elsewhere in this Agreement
shall be paid by the party incurring same; and
(e)    The provisions of this Section 4.6 shall survive the Closing.
Section 4.7    Conditions Precedent to Obligation of Buyer. The obligation of
Buyer to consummate the transaction contemplated hereunder shall be subject to
the fulfillment on or before the date of Closing of all of the conditions set
forth in this Section 4.7 below, any or all of which may be waived by Buyer in
its sole and absolute discretion. In the event Buyer terminates this Agreement,
which termination shall apply to all, but not less than all, of the Properties,
due to the nonsatisfaction of any such conditions, then the termination
provisions set forth in Section 3.7 above shall apply, along with the provisions
of Section 4.1(a) above.
(a)    Seller shall have delivered to Buyer (or to Buyer through the Escrow
Agent) all of the items required to be delivered to Buyer pursuant to the terms
of this Agreement, including but not limited to, those provided for in Section
4.3 hereof
(b)    All of the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects as of the date of
Closing except as otherwise permitted herein.
(c)    Seller shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by
Seller as of the date of Closing.
(d)    The Title Company shall have issued or is irrevocably committed to issue
the Title Policies.
(e)    No later than five (5) Business Days prior to Closing, Seller shall have
obtained and delivered to Buyer the Lessor Estoppels and the Required Tenant
Estoppels (including Seller Estoppels, as permitted under this Agreement)
substantially in the form attached hereto as Exhibit F-1 with respect to the
Tenant Estoppels and substantially in the form described in Section 3.5(b) with
respect to the Lessor Estoppels. Such Tenant Estoppels shall be consistent with
the respective Lease, shall not reveal any material adverse default by Seller
and/or Tenant, any right to offset rent by the Tenant, or any claim of the same,
unless Seller confirms that it will pay such claim or credit Buyer the amount of
such claim at or prior to Closing, shall not reveal any other material adverse
condition, and shall be dated no earlier than sixty (60) days prior to Closing.
Lessor Estoppels shall be consistent with the respective Ground Lease or Parking
Lease, shall not reveal any default by any party thereto, shall be dated no

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earlier than forty five (45) days prior to Closing, and shall not reveal any
other material adverse condition.
(f)    There shall have been no material and adverse change in the physical
condition of the Properties as described in the Casualty and Condemnation
provisions herein, from the end of the Contingency Period through the Closing
Date.
Section 4.8    Conditions Precedent to Obligation of Seller. The obligation of
Seller to consummate the transaction contemplated hereunder shall be subject to
the fulfillment on or before the date of Closing of all of the following
conditions, any or all of which may be waived by Seller in its sole and absolute
discretion:
(a)    Seller shall have received the Purchase Price as adjusted as provided
herein, and payable in the manner provided for in this Agreement;
(b)    Buyer shall have delivered to Seller (or to Seller through the Escrow
Agent) all of the items required to be delivered to Seller pursuant to the terms
of this Agreement, including but not limited to, those provided for in Section
4.3 hereof;
(c)    All of the representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects as of the date of
Closing; and
(d)    Buyer shall have performed and observed, in all material respects, all
covenants and agreements of this Agreement to be performed and observed by Buyer
as of the date of Closing.
Section 4.9    Conditions Relating to Specific Properties. Notwithstanding
anything in this Agreement to the contrary, Seller’s obligation to sell, or
cause to be sold and Buyer’s obligation to purchase, each Property set forth
below shall be subject to and contingent upon the satisfaction or waiver of the
conditions precedent set forth in this Section 4.9 prior to the date of Closing.
In the event Buyer terminates this Agreement, which termination shall apply to
all, but not less than all, of the Properties, due to the nonsatisfaction of any
such conditions, then the termination provisions set forth in Section 3.7 above
shall apply, along with the provisions of Section 4.1(a) above.
(a)    With respect to the Ground Lease Property, and the Parking Lease
Property, Seller and Buyer shall have obtained all consents required in
connection with the assignment of Seller’s, or its Affiliates’, as applicable,
right, title and interest as tenant/lessee in and to the Ground Leases and the
Parking Lease; and
(b)    With respect to the Lease between Seller and Harvard Vanguard Medical
Associates, Inc. (“HVMA”) at the Davis Square Property (the “HVMA Lease”),
Seller shall have provided Buyer with evidence that HVMA, the current holder of
the right of first offer or right of first refusal under the HVMA Lease (the
“HVMA ROFR”), shall have (to the extent applicable and required to terminate the
applicable pre-emptive right or cause such right to lapse with respect to this
transaction) refused or failed to exercise timely such pre-emptive right as set
forth in the HVMA Lease as to this transaction (the “Davis Square ROFR
Condition”), which

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evidence may include a statement in the Tenant Estoppel from HVMA confirming
that HVMA has elected not to exercise its right of first offer or right of first
refusal, and which evidence shall be reasonably satisfactory to Buyer and the
Title Company. Seller shall provide Buyer with copies of all correspondence
between Seller and HVMA related to the Davis Square ROFR Condition as it applies
to the transactions contemplated by this Agreement. Seller shall provide HVMA
with the notice of the intent to sell the Davis Square Property required under
the HVMA Lease within one (1) Business Day after the Contingency Period
Expiration Date.
ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1    Representations and Warranties of Seller. Seller hereby
represents and warrants to Buyer as of the Effective Date that:
(a)    Organization. Seller has been duly organized, is validly existing under
the laws of the State of Delaware, and is qualified to do business in the States
in which the Properties are located;
(b)    Authority. Subject to obtaining the consent of the ground lessors to the
assignments of the Ground Leases, Seller has the full right and authority to
enter into this Agreement, to transfer all of the Properties and to consummate
or cause to be consummated the transaction contemplated by this Agreement and
the execution and delivery of this Agreement will not conflict with or result in
a breach of or constitute a default under any of the organizational documents of
Seller, under any agreement to which Seller is a party, under any law or any
order, writ injunction or decree of any court or governmental authority or
results in any lien, charge or encumbrance upon its property pursuant to any
such agreement or instrument;
(c)    Authorization. The persons signing this Agreement on behalf of Seller are
authorized to do so;
(d)    Non-Foreign Person. Seller is not a “foreign person” within the meaning
of Section 1445 of the Internal Revenue Code of 1986, as amended;
(e)    Leases. Schedule 5.1(e) attached hereto sets forth, in all material
respects, a true, correct and complete (i) list of the common name of each
tenant under the Leases as of the Effective Date, together with the building and
suite number of the space occupied by each tenant, (ii) schedule of all Security
Deposits held by Seller under the Leases as of the Effective Date, (iii)
arrearage schedule of all rent and other amounts owed by Tenants to Seller and
(iv) schedule of expiration date of each Lease (the “Rent Roll”). To Seller’s
knowledge, other than the Leases shown on the Rent Roll, the Ground Leases, the
Parking Lease and this Agreement, there are no leases, subleases or other rights
of possession in or to all or any part of the Properties. Seller is the landlord
under the Leases and is entitled to assign the Leases to Buyer without the
consent of any third party. Seller has delivered or made available to Buyer true
and complete copies of the Leases. Each of the Leases is in full force and
effect. Seller has not delivered to any tenant nor has Seller received from any
tenant, a written notice of any default under such

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tenant’s respective Lease, and to Seller’s knowledge there exists no condition
or circumstance or written notice of any condition or circumstance which, with
the passage of time, would constitute a default under any of the Leases by any
party. No tenant has asserted to Seller, in writing, any claim of offset or
other defense in respect of its or Seller’s obligations under its respective
Lease. To Seller’s knowledge, no tenant has (A) filed for bankruptcy, (B)
discontinued operations at the Properties or (C) given notice to Seller, in
writing, of its intention to do any of the foregoing. Schedule 4.5(b)(i) is a
true, correct and complete list of all Security Deposits that are not in
Seller’s possession.
(f)    Tenant Inducement Costs and Leasing Commissions. Except as disclosed on
Schedule 5.1(f), (i) there are no Tenant Inducement Costs or Leasing Commissions
now or hereafter due with respect to the Leases in effect as of the Effective
Date, pursuant to written agreements and (ii) Seller has not entered into any
brokerage or leasing commission agreements with respect to any Property, where a
Leasing Commission for any Lease in effect as of the Effective Date has been
earned but not fully paid;
(g)    Condemnation. Seller has not received any written notice of any pending
condemnation proceedings against any Property have been instituted or are
pending, nor to Seller’s Knowledge are any such proceedings threatened;
(h)    Litigation. Except as disclosed on Schedule 5.1(h), Seller has not
received any written notice of any pending action, suit, arbitration or other
legal proceeding pending, or to Seller’s Knowledge, threatened, affecting (i)
any Property, which are not covered by applicable insurance and which, if
adversely determined, do not, or are not reasonably expected to, prevent Seller
from undertaking the transactions contemplated by this Agreement; or (ii)
Seller;
(i)    Violation of Laws. Seller has not received written notice of any material
violation of any federal, state or local law relating to the use or operation of
any Property which have not been heretofore corrected or will be corrected on or
prior to the Closing. Seller has not received any written notice, from an
applicable Governmental Authority, of an intention to revoke any certificate of
occupancy, license, or permit issued in connection with any Property;
(j)    Insurance. Seller has not received any written notice from any insurance
carrier of any material defects or inadequacies in any Real Property or
Improvements. To Seller’s Knowledge, there are no pending insurance claims made
by or on behalf of Seller (or any of its lenders) relating to any damage or
destruction of any Real Property or Improvements;
(k)    Hazardous Materials. Except as may be set forth in the Environmental
Reports), during the period of time that Seller or Seller’s Affiliate has owned
each Property, Seller has not received any written notice of, any generation,
transportation, storage, treatment or disposal at or from such Property of any
Hazardous Materials in violation of any applicable Environmental Laws. For
purposes of this Agreement, the term “Hazardous Materials” shall mean any
chemical, compound, material, mixture or substance that is now or hereafter
listed in any Environmental Laws as a “hazardous substance”, “toxic substance”,
or the like, or any petroleum product, underground storage tanks, medical waste
or radioactive or nuclear material. For purposes of this Agreement, the term
“Environmental Laws” shall mean the

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Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. § 1801 et seq.), the Medical Waste Tracking Act (42 U.S.C. § 6992
et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), and any
similar applicable state and local laws and ordinances and the regulations
implementing such statutes;
(l)    Operating Agreements. Attached as Schedule 5.1(l) is a list of all
Operating Agreements, which list is true, correct and complete in all material
respects and Seller has delivered to Buyer (or made available to Buyer in the
Dropbox) true and complete copies of all Operating Agreements. Seller has not,
within the last year, received any written notice of any material default under
any Operating Agreement that has not been cured or waived;
(m)    Parking Lease. Seller has delivered to Buyer a correct and complete copy
of the Parking Lease, and to Seller’s Knowledge, the Parking Lease is in full
force and effect and has not been amended or modified, except as has been
disclosed and provided to Buyer. Seller is lessee under the Parking Lease.
Seller has not received any written notice from the lessor under the Parking
Lease and has not delivered any written notice to the lessor alleging that
Seller or lessor, as applicable, is in default of any material obligation to be
performed by Seller or lessor, as applicable, under the Parking Lease which such
default has not been cured prior to the Effective Date, other than the defaults
listed on Schedule 5.1(m), which Seller represents will be cured prior to the
Closing Date in all material respects. To Seller’s Knowledge, no consent of any
third party is required for the assignment of the Parking Lease to Buyer;
(n)    Employees; Labor Agreements.    Seller has no employees in connection
with the Properties. Seller is not a party to any union or other labor agreement
with respect to any employees at, the Property;
(o)    Ground Leases. Seller has delivered to Buyer correct and complete copies
of the Ground Leases, and to Seller’s Knowledge, the Ground Leases are in full
force and effect and have not been amended or modified, except as has been
disclosed and provided to Buyer. Seller is lessee under the Ground Leases.
Seller has not received any written notice from any of the ground lessors under
the Ground Leases and has not delivered any written notice to the ground lessors
alleging that Seller or ground lessor, as applicable, is in default of any
material obligation to be performed by Seller or ground lessor, as applicable,
under the Ground Leases which such default has not been cured prior to the
Effective Date, other than the defaults listed on Schedule 5.1(o), which Seller
represents will be cured prior to the Closing Date in all material respects;
(p)    Bankruptcy.    Seller has not (a) made a general assignment for the
benefit of creditors, (b) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition by Seller's creditors, (c) suffered the
appointment of a receiver to take possession of all or substantially all of
Seller's assets, (d) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (e) admitted in writing its inability
to pay its debts as they come due or (f) made an offer of settlement, extension
or composition to its creditors generally;

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(q)    Zoning. Seller has not received any written notice of any formal pending
material zoning action being undertaken by any governmental authority relating
to any of the Properties, nor has Seller filed any zoning action with respect to
any of the Properties;
(r)    Tax Appeals. Except as disclosed to Buyer, there are no tax reduction
proceedings pending with respect to any of the Properties;
(s)    Financial Statements.     To Seller’s knowledge, the financial and
operating statements provided to Buyer in the Property Documents are, to
Seller’s Knowledge, true, correct and complete, fairly represent the financial
condition of the Properties in all material respects, and contain no material
misstatements or omissions; and
(t)    Title; Right of First Refusal. Seller owns fee simple title and leasehold
title, as applicable, to the interests in the Real Properties, subject only to
the Permitted Exceptions. Other than in connection with the Davis Square ROFR
Condition, Seller has not granted to any person, firm, or entity, other than
Buyer, and has no knowledge of, any right to purchase the Properties or any part
thereof that will remain outstanding as of the Closing Date, including any
rights of first refusal, rights of reverter, or options to purchase.
(u)    OFAC. Neither Seller nor any of its Affiliates, nor any of their
respective partners, members, shareholders or other equity owners, and none of
their respective, officer or directors, is, nor will they become, a person or
entity with whom United States 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, without limitation, 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.
(v)    Material Commitments. Other than the leases at 2300 Westchester Avenue,
Bronx, New York and 18-44 Holland Avenue, Somerville, Massachusetts (and any
related agreements), Seller has not entered into any material commitments or
agreements with any governmental authorities or agencies affecting any of the
Properties.
(w)    Declarations. Seller has not received any written notice from any
association, declarant or easement holder requiring the correction of any
condition with respect to any Property, or any part thereof, by reason of a
violation of any other restrictions or covenants recorded against such Property,
or alleging a default under any such restrictions or covenants, which has not
been remedied.
The term “Knowledge” as used herein with respect to Seller, shall mean the
current actual and not implied or constructive knowledge, and without the duty
of investigation or independent inquiry, of Joshua Dolgin and Meyer Chetrit with
respect to all of the Properties, but without any personal liability in each
case. Seller represents and warrants to Buyer that the

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foregoing named individuals are the most knowledgeable regarding the current
condition and operation of the Properties.
Section 5.2    Survival of Seller’s Representations and Warranties. The
representations and warranties of Seller set forth in Section 5.1 hereof, as
updated as of the Closing in accordance with the terms of this Agreement shall
survive Closing for a period of six (6) months following the Closing (the
“Outside Claim Date”). No claim for a breach of any representation or warranty
of Seller or under any such Seller Estoppel shall be actionable or payable if
the breach in question results from or is based on a condition, state of facts
or other matter which was actually known to Buyer prior to Closing, if Buyer
elects to consummate the transactions described herein with such actual
knowledge. Seller shall have no liability to Buyer for a breach of any
representation or warranty unless (a) the valid claims for all such breaches
collectively delivered pursuant hereto or thereto aggregate more than Seventy
Five Thousand Dollars ($75,000.00) (the “Basket”), in which event the amount of
such valid claims, shall be actionable for the full amount of such claims, up to
the Cap (as defined in this Section), and (b) written notice containing a
description of the specific nature of such breach shall have been given by Buyer
to Seller on or prior to the Outside Claim Date, and an action shall have been
commenced by Buyer against Seller within three (3) months after the Outside
Claim Date. Buyer agrees to first seek recovery under any applicable insurance
policies, service contracts and/or Leases prior to seeking recovery from Seller,
and Seller shall not be liable to Buyer to the extent Buyer’s claim is satisfied
from such insurance policies, service contracts or Leases. As used herein, the
term “Cap” shall mean the total aggregate amount equal to $2,000,000.00 in the
aggregate.
At the Closing, Seller and Buyer shall create an escrow fund (the “Holdback
Escrow Fund”) by Seller depositing with Escrow Agent, pursuant to an escrow
agreement substantially in the form of Exhibit Q (the “Holdback Escrow
Agreement”), an amount of cash equal to the Cap, which shall secure Seller’s
liability under this Agreement as provided herein. Subject to the provisions of
the Holdback Escrow Agreement, Seller shall be entitled to receive, and the
Escrow Agent shall promptly pay to Seller, an amount equal to all amounts
remaining in the Holdback Escrow Fund, together with interest earned thereon,
(i) if there are no claims for indemnification against Seller or if there are no
outstanding claims for which payment has not been made or are in dispute, under
this Agreement, within one (1) Business Day after the Outside Claim Date or (ii)
within one (1) Business Day after the final determination of all timely claimed
indemnification payments owed to Buyer under this Agreement and the payment
thereof to Buyer.
Section 5.3    Covenants of Seller. Seller hereby covenants with Buyer as
follows:
(a)    Property Maintenance. From the Effective Date hereof until the Closing or
earlier termination of this Agreement, Seller shall operate and maintain the
Properties in a manner generally consistent with the manner in which Seller has
operated and maintained the Properties prior to the Effective Date.
Notwithstanding anything in this Agreement to the contrary, from the Effective
Date hereof until the Closing or earlier termination of this Agreement, Seller
shall not sell, mortgage, pledge, encumber, hypothecate the Properties that

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will not be satisfied and removed prior to Closing, or otherwise transfer or
dispose of all or of the Properties or any majority interest therein without the
prior written consent of Buyer, which may be given or withheld in Buyer’s sole
and absolute discretion; and Seller shall not consent to, approve or otherwise
take any voluntary action with respect to zoning or any other governmental rules
or regulations presently applicable to all or any part of the Properties, unless
mandated by applicable law, rule, code or regulation. Seller shall promptly
inform Buyer in writing if any information, document, agreement or other
material delivered to Buyer is amended, superseded, modified or supplemented;
provided, however, Seller makes no representation or warranty that any of the
tenants will be in possession of their respective demised premises at the time
of Closing or paying rent and the same shall not be deemed to be a “material and
adverse change” if they were to occur.
(b)    Leasing. Following the Effective Date and prior to the expiration of the
Contingency Period, Seller shall have the right to enter into any amendment,
renewal, termination, extension, waiver or expansion of the existing Lease or of
any new Lease respecting the Property (as applicable, each a “New Lease
Document”) so long as such New Lease Document is consistent with Seller’s
current leasing policies and practices and the Leasing Commissions and Tenant
Inducement Costs do not exceed the amount set forth on Schedule 5.3(b) attached
hereto, without Buyer’s written consent, which consent shall not be unreasonably
withheld; provided, however, that Seller shall provide Buyer with a copy of such
proposed New Lease Document (together with any brokerage agreements, listing
agreements or other agreements relating to the payment of any Leasing
Commissions or Tenant Inducement Costs in connection with such New Lease
Document) at least seven (7) Business Days for Buyer’s review and comment prior
to executing the same. From and after the expiration of the Contingency Period,
any New Lease Document which Seller wishes to execute shall be submitted to
Buyer prior to execution by Seller. Buyer shall also have seven (7) Business
Days after its receipt thereof to notify Seller in writing of either its
approval or disapproval thereof, including all Tenant Inducement Costs and
Leasing Commissions to be incurred in connection therewith. If Buyer informs
Seller within such seven (7) Business Day period that Buyer does not approve
such New Lease Document (or the same is deemed disapproved pursuant to the
following sentence), which approval may be withheld in Buyer’s sole discretion,
then this Agreement shall continue in full force and effect and Seller shall not
enter into such New Lease Document. If Buyer fails to notify Seller in writing
of its approval or disapproval within such seven (7) Business Day period set
forth above, then Buyer shall be deemed to have disapproved of such New Lease
Document. At Closing, Buyer shall reimburse Seller for any Tenant Inducement
Costs and Leasing Commissions or other expenses, including legal fees, incurred
by Seller pursuant to and all New Lease Documents approved (or deemed approved
prior to the expiration of the Contingency Period) by Buyer pursuant hereto in
accordance with and subject to the terms of Section 4.5(b)(vii) above. Seller
shall deliver to Buyer copies of all invoices, leasing broker agreements, and
other supporting documentation, in Seller’s possession or control, reasonably
requested by Buyer in connection with the foregoing expenses, it being
understood that Buyer shall be under no obligation to reimburse Seller for any
expenses for which reasonable supporting documentation is not provided, which
shall be deemed to include cancelled checks.
(c)    Intentionally Omitted.

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(d)    Tenant Improvement Work. From the Effective Date hereof until the Closing
or earlier termination of this Agreement, in connection with any Lease, Seller
shall fund the cost of tenant improvement work and capital expenditures in the
ordinary course of Seller’s business prior to Closing.
(e)    Insurance. From the Effective Date hereof until the Closing or earlier
termination of this Agreement, Seller shall use commercially reasonable efforts
to maintain or cause to be maintained all policies of insurance currently in
effect with respect to the Properties (or comparable replacements thereof).
(f)    Operating Agreements. From the Effective Date hereof until the Closing,
Seller shall not, without the prior written consent of Buyer, enter into any new
Operating Agreement or amend any existing Operating Agreement unless such
Operating Agreement provides that it may be terminated at any time without cause
and without payment of a fee or penalty upon (30) days notice; provided,
however, Seller will deliver to Buyer, within three (3) days of signing, copies
of each new Operating Agreement and each Operating Agreement amended after the
Effective Date;
(g)    Compliance With Leases. From the Effective Date until Closing, Seller
shall use commercially reasonable efforts to comply with all of the material
terms, conditions, and provisions to be performed or observed by the Seller
under the Leases, the Parking Lease, the Ground Leases and any restrictions
recorded against the Properties and not cause or, but for force majeure, allow
to occur any material event of default with respect to any of Seller’s
obligations under the Leases, the Parking Lease, the Ground Leases and any
agreements recorded against the Properties and Seller shall promptly notify
Buyer of any default notice received under the Ground Leases, the Parking Lease,
any Lease or any restrictive recorded agreement (but in no event later than five
(5) business days following the date Seller receives such written notice). From
and after the Contingency Period Expiration until Closing or earlier termination
of this Agreement, Seller shall not amend or terminate any of the Leases without
Buyer’s prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Seller shall promptly notify Buyer in writing of any
amendments or terminations of the Leases during the Contingency Period, which
written notice shall include copies of such amendments or terminations. From and
after the Effective Date until Closing or earlier termination of this Agreement,
Seller shall not amend or terminate any of the Ground Leases or the Parking
Lease without Buyer’s prior written consent, which consent may be withheld in
Buyer’s sole discretion.
(h)    Rent Rolls.    From the Effective Date until Closing, Seller shall
provide to Buyer updated Rent Rolls and arrearage reports on a monthly basis;
(i)    Representations and Warranties. Seller shall promptly give written notice
to the Buyer of the occurrence of any material change to any representation or
warranty made or to be made by Seller under or pursuant to this Agreement and
provide Buyer with a copy of all written notices or orders concerning the
Properties received by Seller from any governmental authority with jurisdiction
over the Properties or Seller; and

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(j)    Estoppels; Recognition Agreement. Seller shall promptly deliver to Buyer
any Tenant Estoppels or Lessor Estoppels upon receipt by Seller. If requested by
Buyer during the Contingency Period, Seller shall request, so that Buyer
receives by Closing, a recognition and non-disturbance agreement from the prime
ground lessor under the Ground Lease affecting a portion of the Morristown
Property, which agreement will be substantially in the form proposed by Buyer;
provided, however, that the receipt and/or content of such agreement shall not
be a condition to Closing.
(k)    Cooperation with S-X 3-14 Audit. Seller acknowledges that that it is
Buyer’s intention that the ultimate acquirer of the Property will be affiliated
with a publicly registered Real Estate Investment Trust (“Registered Company”). 
Seller acknowledges that it has been advised that if such acquirer is affiliated
with a Registered Company, such Registered Company (and such acquirer) are
required to make certain filings with the Securities and Exchange Commission
(the “SEC Filings”) that relate to the most recent pre-acquisition fiscal year
(the “Audited Year”) and the current fiscal year through the date of acquisition
(the “Stub Period”) for the Properties. To assist Buyer and Registered Company,
as an accommodation only, in preparing the SEC Filings, Seller agrees that no
later than five (5) Business Days after the Effective Date, Seller shall provide
Buyer and the Registered Company with the following information (to the extent
such items are not duplicative of items contained in the Property Documents and
are in Seller’s possession or control): (i) copies of bank statements for the
Audited Year and Stub Period; (ii) rent roll as of the end of the Audited Year
and Stub Period; (iii) operating statements for the Audited Year and Stub
Period; (iv) copies of the general ledger for the Audited Year and Stub Period;
(v) cash receipts schedule for each month in the Audited Year and Stub Period;
(vi) access to invoice for expenses and capital improvements in the Audited Year
and Stub Period; (vii) accounts payable ledger and accrued expense
reconciliations; (viii) check register for the 3-months following the Audited
Year and Stub Period; (ix) all leases and 5-year lease schedules; (x) copies of
all insurance documentation for the Audited Year and Stub Period and (xi) copies
of accounts receivable aging as of the end of the Audited Year and Stub Period
along with an explanation, to the extent there is any such explanation and any
such explanation is actually known to Seller (provided that Seller shall have no
duty of inquiry with respect to such accounts receivable beyond any inquiries
normally made in the ordinary course of Seller’s business operations), for all
accounts over 30 days past due as of the end of the Audited Year and Stub
Period. In addition, no later than two (2) Business Days prior to the Closing
Date, Seller shall provide to Buyer: (1) a signed representation letter in the
form attached hereto as Exhibit R-1 (the “Representation Letter”); (2) a signed
audit request letter in the form attached hereto as Exhibit R-2; and (3) a
signed audit response letter from Seller’s attorney in the form attached hereto
as Exhibit R-3 (the “Audit Response Letter”). In the event that the S-X 3-14
Audit will not be completed until after the Closing Date, Seller agrees to
provide to Buyer with an updated Representation Letter following Closing, within
ten (10) days after receipt of a written request therefor. Any third party
out-of-pocket costs of the Seller (in addition to any costs of Buyer) in
connection with the Representation Letter, the Audit Response Letter, and the
Seller’s cooperation with the S-X 3-14 audit shall be the sole responsibility of
Buyer, including without limitation, attorneys’ auditors’ and accountants’ fees.
Seller shall present Buyer with copies of all invoices and other documentation
reasonably requested by Buyer evidencing such third party costs of Seller.
Furthermore, Buyer acknowledges and agrees that:

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(A)
Seller shall have no liability for any financial statement or SEC Filing
prepared by Buyer from any material provided by Seller as part of its
cooperation with the S-X 3-14 audit.

(B)
If Buyer does not deliver a Termination Notice on or before the Contingency
Period Expiration Date, Buyer shall not have the right to terminate this
Agreement after the Contingency Period Expiration Date based on the results of
the S-X 3-14 Audit; provided that the foregoing shall not preclude Buyer from
exercising any rights that may otherwise be available to Buyer under any express
provisions of this Agreement [other than this Section 5.3(k)] due to the failure
of a condition precedent or for a breach of such other express provision of this
Agreement.

(C)
Buyer agrees to indemnify and hold Seller harmless from and against any claims
made by third parties against Seller as a result of Seller’s cooperation with
the S-X 3-14 Audit to the extent that such claims do not arise directly from and
as a consequence of (I) the fraud or intentional and willful misrepresentations
or omissions of Seller or (II) Seller’s gross negligence or willful misconduct,
subject on all respect so the limitations on liability set forth in this
Agreement.

The provisions of this Section 5.3(k) shall survive Closing.
(l)    Bulk Sale Compliance. On or before fifteen (15) days before the Closing,
Buyer shall submit (and simultaneously provide a copy thereof to the Seller) a
completed form C-9600, Notification of Sale, Transfer or Assignment in Bulk, to
the Bulk Sale Section of the Department of Treasury, Division of Taxation, State
of New Jersey, in order to provide sufficient time for the Director of the
Division of Taxation to advise the parties whether any sums from the sale
proceeds shall be held by the Buyer’s attorney in escrow (the “Bulk Sale
Escrow”) and paid over, in whole or in part, to the Department of Treasury upon
its demand for same. On or before fifteen (15) days before the Closing and upon
receipt of a completed copy of the form C-9600, Seller shall deliver to the
Department of Treasury, Division of Taxation, State of New Jersey or the Buyer
(at the Seller’s election) a completed “Asset Transfer Tax Declaration”.
Following receipt by the Buyer’s attorney of a tax clearance letter from the
Division of Taxation, the amount, if any, not required to be held in escrow
shall be paid over to the Seller. The parties shall cooperate with each other to
expedite the filing of the Bulk Sales Application with the Department of
Treasury. The provisions of this Section shall survive the Closing.
(m)    Monthly Operating Statements. Seller shall provide Buyer with a copy of
the monthly operating statement for the operation of each of the Properties on
or before the day which is ten (10) Business Days after the end of each month,
commencing with the month during which, provided Buyer has not theretofore
terminated this Agreement in accordance with the terms of Section 3.6 of this
Agreement, the Contingency Period Expiration Date occurs and continuing for each
full calendar month thereafter until the Closing Date.

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(n)    Compliance with Laws and Regulations. At all times prior to Closing,
Seller shall not intentionally take any action that is designed to result in a
failure to comply in all material respects with all applicable statutes, rules,
regulations and requirements of all federal, state and local commissions,
boards, bureaus and agencies applicable to the Real Properties, it being
understood and agreed that prior to Closing, Seller will have the right to
contest any of the same.
Section 5.4    Representations and Warranties of Buyer. Buyer hereby represents
and warrants to Seller as of the Effective Date that Buyer has been duly
organized and is validly existing and in good standing under the laws of the
State of Delaware. Buyer has the full right and authority to enter into this
Agreement and to consummate or cause to be consummated the transaction
contemplated by this Agreement. The person signing this Agreement on behalf of
Buyer is authorized to do so. There is no action, suit, arbitration, unsatisfied
order or judgment, government investigation or proceeding pending against Buyer
which, if adversely determined, could individually or in the aggregate
materially interfere with the consummation of the transaction contemplated by
this Agreement. Buyer is solvent, has, to its knowledge, filed all tax returns
to be filed by it (or obtained extensions for filing) and Buyer is not in
default in the payment of any taxes levied or assessed against it or any of its
assets. The representations and warranties contained in this Section 5.4 shall
be deemed to have been made again as of the Closing, subject to Section 4.3(d)
hereof.
Section 5.5    Survival of Buyer’s Representations and Warranties. The
representations and warranties of Buyer set forth in Section 5.4 hereof as
updated as of the Closing in accordance with the terms of this Agreement, shall
survive Closing for a period of six (6) months following the Closing.
Section 5.6    Covenants of Buyer.
(a)    Seller may be selling the Properties (or portions thereof) as part of a
multi-property transaction to qualify as a tax-free exchange, including
potentially a so-called reverse Starker exchange (“1031 Exchange”) under Section
1031 of the Internal Revenue Code of 1986, as amended. Buyer shall, to the
extent provided below, cooperate with Seller’s reasonable request to allow
Seller to attempt to qualify for the 1031 Exchange; provided, however, that
Buyer’s obligation to cooperate with Seller shall be limited and conditioned as
follows:
(i)    Buyer shall receive written notice from Seller at least five (5) Business
Days prior to the scheduled Closing Date, which shall identify the parties
involved in such 1031 Exchange and enclose all document for which Buyer’s
signature shall be required;
(ii)    in no event shall Buyer be required to execute any document or
instrument which may (A) subject Buyer to any additional liability or obligation
to Seller or any other individual, entity or governmental agency, (B) diminish
or impair Buyer’s rights under this Agreement, or (C) unreasonably delay
Closing;
(iii)    Seller shall not be relieved of any of its obligations under this
Agreement by reason of the 1031 Exchange; and

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(iv) Buyer shall not be required to incur any costs or expenses in connection
with the 1031 Exchange.
Seller’s failure to effectuate any intended 1031 Exchange shall not relieve
Seller from its obligations to consummate the purchase and sale transaction
contemplated by this Agreement and the consummation of such 1031 Exchange shall
not be a condition precedent to Seller’s obligations under this Agreement. Buyer
shall not be responsible for compliance with or be deemed to have warranted to
Seller that Seller’s 1031 Exchange in fact complies with Section 1031 of the
Internal Revenue Code.
(b)    Buyer shall cooperate with Seller’s, or its Affiliates’, as applicable,
efforts to obtain the consent of any lessor under the Ground Leases to the
proposed assignment of Seller’s, or its Affiliates’, as applicable, right, title
and interest as tenant/lessee in and to such Ground Leases and the release of
liability of Seller or its Affiliate thereunder (if and to the extent expressly
provided in the Ground Leases or Parking Lease) from and after the Closing and
under the Parking Lease; provided that if any fees or expense reimbursements are
imposed by the lessors in connection with such consents and releases, Seller
shall be responsible for such fees and reimbursements. With respect to the
Ground Leases, such cooperation shall include, but not be limited to, the
submission to the City of New York of accurate (in all material respects),
completed Vendor Information Exchange System (VENDEX) questionnaires, and the
submission to such lessors of any other information reasonably requested by any
such lessor.
ARTICLE VI

DEFAULT
Section 6.1    Default by Buyer. If the sale of the Properties as contemplated
hereunder is not consummated due solely to Buyer's default hereunder, then
Seller shall be entitled, as its sole and exclusive remedy, to terminate this
Agreement and retain the Deposit as liquidated damages as more particularly set
forth in Section 1.7 above. Provided that all conditions precedent to Buyer’s
obligations to close are satisfied, it shall be deemed a default by Buyer
hereunder if Buyer, other than by reason of a Seller default, fails to
consummate the transaction on the Closing Date.
Section 6.2    Default by Seller.
Except as provided in subsection (b) below, if the sale of the Properties as
contemplated hereunder is not consummated due solely to Seller’s default
hereunder, then Buyer shall be entitled, as its sole and exclusive remedy, to
elect, as may be applicable, one of the following remedies:
(a)    If Seller’s default was not the result of a willful and intentional
breach of this Agreement by Seller, Buyer shall be entitled to terminate this
Agreement and receive the return of the Deposit, plus reimbursement of Buyer’s
actually incurred out of pocket costs in connection with this Agreement up to a
maximum amount of $350,000, which return shall operate to terminate this
Agreement and release Seller from any and all liability hereunder.

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The foregoing reimbursement obligation shall survive the termination of this
Agreement.
(b)    If Seller’s default was the result of a willful and intentional act by
Seller (including, if Seller intentionally takes or intentionally fails to take
actions intended to cause and does cause any condition to Buyer’s obligation to
close hereunder to fail as determined by a final, non-appealable judgment of a
court of competent jurisdiction), Buyer shall be entitled to (i) terminate this
Agreement and receive the return of the Deposit, plus reimbursement of Buyer’s
actually incurred out of pocket costs in connection with this Agreement up to a
maximum amount of $350,000, or (ii) provided that Buyer has (A) waived all
applicable conditions to Closing; (B) has fully complied with and performed all
of Buyer's other obligations under this Agreement; and (C) is not otherwise in
breach or default under this Agreement, commence an action for specific
performance, but not for damages (in any event), compelling Seller to consummate
the Closing. Notwithstanding anything set forth herein to the contrary, if Buyer
has funded the balance of the Purchase Price at Closing in accordance with this
Agreement and Seller has defaulted, Buyer shall, if entitled, be promptly
returned the balance of the Purchase Price from escrow; provided that in
connection with any action for specific performance brought by Buyer, Buyer
shall provide proof of immediately available funds or post any bond that may be
required by the court or applicable law, in the amount of the balance of the
Purchase Price, in connection with such action. The reimbursement obligations
set forth in Section 6.2(b)(i) above shall survive the termination of this
Agreement.
    
ARTICLE VII

RISK OF LOSS
Section 7.1    Minor Damage. In the event of loss or damage to any Property or
any portion thereof due to casualty or condemnation which is not “Major” (as
hereinafter defined), Seller shall promptly notify Buyer of such occurrence,
this Agreement shall remain in full force and effect provided that Seller shall
assign to Buyer all of Seller’s right, title and interest in and to any claims
and proceeds Seller may have with respect to any casualty insurance policies or
condemnation awards relating to the Property in question. The Allocated Purchase
Price for such Property shall be reduced by an amount equal to the deductible
amount under Seller’s insurance policy and any uninsured loss. Upon Closing,
full risk of loss with respect to the Properties shall pass to Buyer.
Section 7.2    Major Damage. Seller shall promptly notify Buyer of the
occurrence of any “Major” loss or damage, which notice shall state the cost of
repair or restoration thereof as opined by an architect or other qualified
expert in accordance with Section 7.3 hereof. In the event of any such “Major”
loss or damage, Buyer shall have the right, exercisable by giving written notice
to Seller within fifteen (15) Business Days after receipt of Seller’s written
notice, to terminate this Agreement with respect all Properties in which event
this Agreement shall terminate as to all Properties. If Buyer does not elect to
terminate this Agreement within said fifteen (15) Business Day period, then
Buyer shall be deemed to have elected to proceed with Closing. In that event
Seller shall cause the Closing to occur promptly and assign to Buyer through
Escrow all of Seller’s right, title and interest in and to any claims

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and proceeds Seller may have with respect to any casualty insurance policies or
condemnation awards relating to the Property in question. The Allocated Purchase
Price for the affected Property shall be reduced by an amount equal to the
deductible amount under Seller’s insurance policy. Upon Closing, full risk of
loss with respect to the Properties shall pass to Buyer.
Section 7.3    Definition of “Major” Loss or Damage. For purposes of Sections
7.1 and 7.2, “Major” loss or damage refers to the following: (a) loss or damage
to any Property such that the cost of repairing or restoring the Property in
question to substantially the same condition which existed prior to the event of
damage would be, in the opinion of an architect or other qualified expert
selected by Seller and reasonably approved by Buyer, equal to or greater than
six percent (6%) of the Allocated Purchase Price for such Property; (b) any
material loss or condemnation which materially impacts the current use of any
Property (including, loss of access, loss of parking spaces or rights, or which
deems the Property a non-conforming use); or (c) any loss or damage to such
Property or condemnation that entitles a Major Tenant thereof to cancel
its/their Leases due to such casualty or condemnation; (d) any loss or damage to
such Property or condemnation that entitles the lessor under any Ground Lease or
the lessor under the Parking Lease to cancel any of the Ground Leases or the
Parking Lease due to such casualty or condemnation; (e) any loss or damage to
such Property pursuant to which the insurance carrier has denied liability for
the payment of such costs, if Buyer elects to receive the insurance proceeds on
account thereof; or (f) if such Property is subject to the lien of a mortgage or
deed of trust, the lender accelerates or claims a default due to such casualty
or condemnation. If Buyer does not give written notice to Seller of Buyer’s
reasons for disapproving an architect or other qualified expert within five (5)
Business Days after receipt of notice of the proposed architect or other
qualified expert, then Buyer shall be deemed to have disapproved the architect
or other qualified expert selected by Seller.
Section 7.4    Provisions Control Over Applicable Law. The provisions of this
Article VII shall supersede any law applicable to any Property and which may
govern the treatment of fire or other casualty or condemnation at or of real
property which is the subject of a contract for purchase or sale.
ARTICLE VIII

COMMISSIONS
Section 8.1    Brokerage Commissions. With respect to the transaction
contemplated by this Agreement, Seller and Buyer each represents to the other
that to the best of its knowledge, no brokerage commission, finder’s fee or
other compensation of any kind is due or owing to any person or entity, other
than Seller’s advisor, HealthAmerica Realty Group (“Seller’s Advisor”). Except
for Seller’s Advisor, whose fees shall be paid by Seller pursuant to the terms
of a separate written agreement between Seller and Seller’s Advisor, each party
hereby agrees that if any person or entity makes a claim for brokerage
commissions or finder’s fees related to the sale of the Properties by Seller to
Buyer, and such claim is made by, through or on account of any acts or alleged
acts of said party or its representatives, then said party will protect,
indemnify, defend and hold the other party free and harmless from and against
any and all loss, liability, cost, damage and expense (including reasonable
attorneys’ fees) in connection

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therewith. The provisions of this paragraph shall survive Closing or any
termination of this Agreement.
ARTICLE IX

DISCLAIMERS AND WAIVERS
Section 9.1    AS IS SALE; DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT:
(a)    SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PROPERTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS
AS TO HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(b)    UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT
THE PROPERTIES “AS IS, WHERE IS, WITH ALL FAULTS”. BUYER HAS NOT RELIED AND WILL
NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED
WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE PROPERTIES OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION,
OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTIES) MADE OR FURNISHED
BY SELLER, THE MANAGERS OF THE PROPERTIES, OR ANY REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, EXCEPT THOSE MADE IN THIS
AGREEMENT. ALL MATERIALS, DATA AND INFORMATION DELIVERED BY SELLER TO BUYER IN
CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREBY ARE PROVIDED TO BUYER AS A
CONVENIENCE ONLY AND ANY RELIANCE ON OR USE OF SUCH MATERIALS, DATA OR
INFORMATION BY BUYER SHALL BE AT THE SOLE RISK OF BUYER, EXCEPT AS OTHERWISE
EXPRESSLY STATED HEREIN. NEITHER SELLER, NOR ANY AFFILIATE OF SELLER, NOR THE
PERSON OR ENTITY WHICH PREPARED ANY REPORT OR REPORTS DELIVERED BY SELLER TO
BUYER SHALL HAVE ANY LIABILITY TO BUYER FOR ANY INACCURACY IN OR OMISSION FROM
ANY SUCH REPORTS. BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS AND TAKES
INTO ACCOUNT THAT THE PROPERTIES ARE BEING SOLD “AS IS.”
(c)    BUYER REPRESENTS AND COVENANTS TO SELLER THAT BUYER HAS CONDUCTED, OR
WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTIES, INCLUDING
BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER
DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE
PROPERTIES AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH
RESPECT TO ANY HAZARDOUS MATERIALS OR TOXIC

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SUBSTANCES ON OR DISCHARGED FROM THE PROPERTIES, AND WILL RELY SOLELY UPON SAME
AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR
EMPLOYEES WITH RESPECT THERETO.
(d)    UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING
BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER,
UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER
(AND SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR
UNKNOWN, WHICH BUYER MIGHT HAVE AGAINST SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR
ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS,
OR VIOLATIONS OF ANY APPLICABLE LAWS AND ANY ALL OTHER ACTS, OMISSIONS, EVENTS,
CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTIES.
Section 9.2    Survival of Disclaimers. The provisions of this Article IX shall
survive Closing or any termination of this Agreement.
ARTICLE X

MISCELLANEOUS
Section 10.1    Confidentiality. Buyer and its representatives shall hold in
confidence all data and information obtained from Seller or its agents with
respect to the Properties or this transaction (other than data and information
which is publicly available), whether obtained before or after the execution and
delivery of this Agreement, and shall not disclose the same to others; provided,
however, that Buyer may disclose such data and information to the employees,
lenders, financial partners, advisors, consultants, accountants and attorneys of
Buyer. If this Agreement is terminated or Buyer fails to perform hereunder,
Buyer shall promptly provide written notice to Seller that Buyer has destroyed
any statements, documents, schedules, exhibits or other written information
obtained from Seller in connection with this Agreement or the transaction
contemplated herein. In the event of a breach or threatened breach by Buyer or
its agents or representatives of this Section 10.1, Seller shall be entitled to
an injunction restraining Buyer or its agents or representatives from
disclosing, in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting Seller from pursuing any other available
remedy at law or in equity for such breach or threatened breach. The provisions
of this Section 10.1 shall survive any termination of this Agreement for a
period of six (6) months.
Notwithstanding anything herein or in Section 10.2 below to the contrary:

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(a)    Each party and their representatives and any of their employees or other
agents may disclose to any and all persons, without limitation of any kind, the
“tax treatment” and “tax structure,” within the meaning of Treasury Regulation
Section 1.6011-4, of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure (but no other details regarding
matters covered by this Agreement, including, without limitation, the identities
of the parties); provided, however, that if the transactions contemplated hereby
constitute an asset or stock acquisition described in Treasury Regulation
Section 1.6011-4(b)(3)(ii)(B), then disclosure of the tax treatment and tax
structure and materials referred to above (but no other details regarding
matters covered by this Agreement, including, without limitation, the identities
of the parties) shall be permitted as provided above upon the earlier to occur
of (i) the date of the public announcement of discussions relating to the
transactions contemplated hereby, (ii) the date of the public announcement of
the transactions contemplated hereby, or (iii) the date of execution of this
Agreement; provided however, that each party recognizes that the privilege each
has to maintain, in its sole discretion, the confidentiality of a communication
relating to the transactions contemplated hereby, including all confidential
communications with its attorney or a confidential communication with a
federally authorized tax practitioner under Section 7525 of the Internal Revenue
Code, is not intended to be affected by the foregoing.
(b)    Seller acknowledges that it is Buyer’s intention that the ultimate
acquirer be a subsidiary of Buyer, which is a subsidiary of Griffin-American
Healthcare REIT III, Inc., which is or intends to qualify as a publicly
registered real estate investment trust; and that, as such, it is subject to
certain filing and reporting requirements in accordance with federal laws and
regulations, including but not limited to, regulations promulgated by the
Securities and Exchange Commission. Accordingly, and notwithstanding any
provision of this Agreement, Buyer may publically file, disclose, report or
publish any and all information related to this transaction that may be
reasonably interpreted as being required by federal law or regulation. Seller
and Buyer agree that the provisions of this Section 10.1(b) govern and control
as to confidentiality in lieu of the provisions of Section 7 of that certain
Access and Indemnity Agreement between Buyer and Seller, dated August 14, 2014.
Section 10.2    Public Disclosure. Prior to the Closing, except for the
disclosures described in Section 10.1(b) above, any release to the public of
information with respect to the sale contemplated herein or any matters set
forth in this Agreement will be made only in the form approved by Buyer and
Seller. The provisions of this Section 10.2 shall survive the Closing or any
termination of this Agreement. Nothing in Sections 10.1 and 10.2 hereof shall
limit Buyer’s ability to disclose information with respect to the Properties and
the transaction contemplated in this Agreement after Buyer has consummated the
Closing.
Section 10.3    Assignment.
(a)        Subject to the provisions of this Section 10.3(b) below, the terms
and provisions of this Agreement are to apply to and bind the permitted
successors and assigns of the parties hereto. Buyer may not assign its rights
under this Agreement without first obtaining Seller's written approval, which
approval may be given or withheld in Seller's sole discretion and further
provided that such assignment does not delay Closing. In the event that

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Buyer desires to assign its rights hereunder, (i) Buyer shall send Seller
written notice of its request at least ten (10) Business Days prior to Closing,
which request shall include the legal name and structure of the proposed
assignee, as well as any other information that Seller may reasonably request,
(ii) if such proposed assignee is approved by Seller, then Buyer and the
proposed assignee shall execute an assignment and assumption of this Agreement
in form and substance reasonably satisfactory to Seller, and (iii) in no event
shall any assignment of this Agreement release or discharge Buyer from any
liability or obligation hereunder unless expressly agreed otherwise by Seller in
writing. Any transfer, directly or indirectly at any tier or level of ownership
(whether by merger, consolidation or otherwise) of any stock, partnership
interest or other ownership interest in Buyer or any other transaction which
results (whether directly or indirectly) in a change in Control of Buyer shall
constitute an assignment of this Agreement.
(b)    Notwithstanding anything to the contrary herein:
(i)    Buyer may assign its rights under this Agreement in whole or in part
(i.e., with respect to the right to acquire one or more of the Properties) to
any Affiliate (as defined in Section 1.1(c)), without Seller's consent;
provided, however, that (A) Buyer shall provide written notice thereof to Seller
not less than ten (10) Business Days prior to the Closing, (B) concurrent with
such notice, Buyer shall deliver to Seller an executed assignment (or partial
assignment) and assumption of this Agreement by Buyer and such Affiliate and (C)
the provisions of Section 10.3(a)(iii) above shall apply.
(ii)    Without relieving Buyer of any liability under the contractual nature of
this Agreement, and without assigning all or any portion of this Agreement,
Buyer may also take title to one or more of the Properties in the name of an
Affiliate nominee of Buyer upon giving Seller notice of such action not less
than ten (10) days prior to the Closing.

Section 10.4    Notices. Any notice pursuant to this Agreement shall be given in
writing by (a) personal delivery, (b) reputable overnight delivery service with
proof of delivery, (c) United States Mail, postage prepaid, registered or
certified mail, return receipt requested, or (d) electronic mail with
confirmation of receipt, sent to the intended addressee at the address set forth
below, or to such other address or to the attention of such other person as the
addressee shall have designated by written notice sent in accordance herewith.
Any notice so given shall be deemed to have been given upon receipt or refusal
to accept delivery, or, in the case of electronic mail transmission, as of the
date of the e-mail transmission provided that an original of such e-mail is also
sent to the intended addressee by means described in clauses (a), (b) or (c)
above. Unless changed in accordance with the preceding sentence, the addresses
for notices given pursuant to this Agreement shall be as follows:
If to Seller
Kalmon Dolgin Affiliates, Inc,
 
101 Richardson Street
 
Brooklyn, New York 11211
 
Attn: Mr. Kalmon Dolgin
 
Telehpone No.: (718) 388-7700
 
Email: josh@kalmondolgin.com
 
 
 
 
 
 
 
 

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And to:
Juda Chetrit
 
c/o The Chetrit Group
 
404 Fifth Avenue, 6th Floor
 
New York, New York 10018
 
Email: juda@chetritgroup.com
 
 
 
 
with copies to:
Steven I. Holm, Esq.
 
Levy Holm Pellegrino & Drath LLP
 
950 Third Avenue, Suite 3101
 
New York, NEw York 10022
 
Telephone: 212-759-8205
 
Email: sholm@lhpdlaw.com
 
 
 
 
If to Buyer:
Griffin-American Healthcare REIT III, Inc.
 
18191 Von Karman Avenue, Suite 300
 
Irvine, CA 92612
 
Phone: (949) 270-9201
 
E-mail: DProsky@ahinvestors.com
 
 
 
 
with copies to:
Kaplan, Voekler Cunningham & Frank, PLC
 
1401 E. Cary Street
 
Richmond, Virginia 23219
 
Attn: Joseph J. McQuade
 
Telephone: (804) 823-4004
 
E-mail: jmcquade@kv-legal.com
 
 
 
 

Section 10.5    Modifications. This Agreement cannot be changed orally, and no
executory agreement shall be effective to waive, change, modify or discharge it
in whole or in part unless such executory agreement is in writing and is signed
by the parties against whom enforcement of any waiver, change, modification or
discharge is sought.
Section 10.6    Entire Agreement. This Agreement, including the exhibits and
schedules hereto, contains the entire agreement between the parties hereto
pertaining to the subject matter hereof and fully supersedes all prior written
or oral agreements and understandings between the parties pertaining to such
subject matter.
Section 10.7    Further Assurances. Each party agrees that it will execute and
deliver such other documents and take such other action, whether prior or
subsequent to Closing, as may be reasonably requested by the other party to
consummate the transaction contemplated by this Agreement. The provisions of
this Section 10.7 shall survive Closing.

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Section 10.8    Counterparts. This Agreement may be executed in counterparts,
all such executed counterparts shall constitute the same agreement, and the
signature of any party to any counterpart shall be deemed a signature to, and
may be appended to, any other counterpart.
Section 10.9    Facsimile Signatures. In order to expedite the transaction
contemplated herein, telecopied (or portable document format transmitted via
email (“pdf”)) signatures may be used in place of original signatures on this
Agreement or any document delivered pursuant hereto (other than the Deeds or
other recordable documents, the notarized originals of which shall be required
prior to Closing). Seller and Buyer intend to be bound by the signatures on the
telecopied (or pdf) document, are aware that the other party will rely on the
telecopied (or pdf) signatures, and hereby waive any defenses to the enforcement
of the terms of this Agreement based on the form of signature. Following any
facsimile transmittal or pdf, the party shall promptly deliver the original
instrument by reputable overnight courier in accordance with the notice
provisions of this Agreement. Notwithstanding anything to the contrary in this
Section 10.9, in the event that the Escrow Agent reasonably requires originals
of any documents in order to close, Seller and/or Buyer, as applicable, shall
deliver such originals at or prior to Closing.
Section 10.10    Severability. If any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement shall nonetheless remain in full force and effect;
provided that the invalidity or unenforceability of such provision does not
materially adversely affect the benefits accruing to any party hereunder.
Section 10.11    Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
any principle or rule of law that would require the application of the law of
any other jurisdiction. Buyer and Seller agree that the provisions of this
Section 10.11 shall survive the Closing or any termination of this Agreement.
Section 10.12    No Third-Party Beneficiary. The provisions of this Agreement
and of the documents to be executed and delivered at Closing are and will be for
the benefit of Seller and Buyer only and are not for the benefit of any third
party; and, accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing.
Section 10.13    Captions. The section headings appearing in this Agreement are
for convenience of reference only and are not intended, to any extent and for
any purpose, to limit or define the text of any section or any subsection
hereof.
Section 10.14    Construction. The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and that the normal rule
of construction to take effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Agreement
or any exhibits or amendments hereto.

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Section 10.15    Recordation. This Agreement many not be recorded by any party
hereto without the prior written consent of the other party hereto. The
provisions of this Section 10.15 shall survive the Closing or any termination of
this Agreement.
Section 10.16    Attorneys’ Fees. Notwithstanding anything to the contrary in
this Agreement, in the event either party files a lawsuit or demand for
arbitration or other legal action (including in bankruptcy court) in connection
with this Agreement, or any provisions contained herein, then the party that
prevails in such action shall be entitled to recover, in addition to all other
remedies to which it is entitled, reasonable attorneys’ fees and costs incurred
in such action. Any court costs and attorneys’ fees shall be set by the court or
arbitrator and not by jury. The provisions of this Section 10.16 shall survive
the Closing or any termination of this Agreement.
Section 10.17    Time of the Essence. Time is of the essence (a) of each and
every provision of this Agreement with respect to Buyer and (b) as to those
provisions as particularly provided for in this Agreement, Seller, subject to
any rights to adjourn Closing expressly granted to either Buyer or Seller in
this Agreement.
Section 10.18    Intentionally Deleted.
Section 10.19    Changes to Property Entitlements. Nothing contained in this
Agreement shall be construed as authorizing Buyer to apply for a zoning change,
variance, subdivision map, lot line adjustment or other discretionary
governmental act, approval or permit with respect to the Properties prior to the
Closing, and Buyer and Seller agree not to do so without the other party’s prior
written approval, which approval shall not be unreasonably withheld. Buyer
agrees not to submit any reports, studies or other documents, including, without
limitation, plans and specifications, impact statements for water, sewage,
drainage or traffic, environmental review forms, or energy conservation
checklists to any governmental agency, or any amendment or modification to any
such instruments or documents prior to the Closing unless first approved by
Seller, which approval Seller may withhold in Seller’s sole discretion. Buyer’s
obligation to purchase the Properties shall not be subject to or conditioned
upon Buyer’s obtaining any variances, zoning amendments, subdivision maps, lot
line adjustment, or other discretionary governmental act, approval or permit.
Section 10.20    Dates. If, pursuant to this Agreement, any date indicated
herein falls on any non-Business Day, the date so indicated shall mean the next
Business Day following such date. As used herein, the term “Business Day” shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which national banks in the City of New York, New York are authorized, or
obligated, by law or executive order, to close. Any day observed as a religious
holiday by the Jewish faith on which no work is permitted shall not be deemed a
Business Day for the calculation of dates under this Agreement.
Section 10.21    Exclusivity. From and after the Effective Date and provided
Buyer has not terminated this Agreement in accordance with Section 3.6 of this
Agreement, Seller and its respective agents, representatives and employees shall
immediately cease all marketing of the Properties until such time as this
Agreement is terminated, and Seller shall not directly or

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through an agent or intermediary intentionally make, accept, negotiate,
entertain or otherwise pursue any offers for the sale of any of the Properties.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date.
SELLER:

KADIMA MEDICAL PROPERTIES, LLC,
a Delaware limited liability company

By:    /s/ Joshua Dolgin                
Its:    Co-President                    

By:    /s/ Juda Chetrit                
Its:    Co-President                    

BUYER:

GAHC3 INDEPENDENCE MOB PORTFOLIO, LLC, a Delaware limited liability company

By:      Griffin-American Healthcare REIT III
Holdings, LP, a Delaware limited partnership
Its:       Sole Member

By:      Griffin-American Healthcare REIT
III, Inc., a Maryland corporation
Its:       General Partner

By: /s/ Danny Prosky
Name:  Danny Prosky
Title: President & Chief Operating
Officer     

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CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (a) accept the foregoing
Agreement, (b) be Escrow Agent under said Agreement and (c) be bound by said
Agreement in the performance of its duties as Escrow Agent; provided, however,
the undersigned shall have no obligations, liability or responsibility under
(i) this Consent or otherwise unless and until said Agreement, fully signed by
the parties, has been delivered to the undersigned or (ii) any amendment to said
Agreement unless and until the same shall be accepted by the undersigned in
writing.
DATED: 10/15/14
FIRST AMERICAN TITLE INSURANCE COMPANY

By:         /s/ Brett Habermann                        
Name:     Brett Habermann                            
Its:          Underwritting Counsel                    

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