Exhibit 10.9

 

 
AGREEMENT OF PURCHASE AND SALE
 
between
 
570 7TH AVENUE PROPERTY OWNER, L.L.C., the SELLER
 
and
 
ARC NYC570SEVENTH, LLC, the BUYER
 
Dated as of October 11, 2014
 

 

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TABLE OF CONTENTS
 
 
Page
 
 
 
ARTICLE I DEFINITIONS
1
 
 
 
SECTION 1.1.
Defined Terms
1
 
 
 
ARTICLE II SALE, PURCHASE PRICE AND CLOSING
9
 
 
 
SECTION 2.1.
Sale of Asset
9
 
 
 
SECTION 2.2.
Purchase Price
10
 
 
 
SECTION 2.3.
Deposit
10
 
 
 
SECTION 2.4.
Closing
10
 
 
 
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
11
 
 
 
SECTION 3.1.
General Seller Representations and Warranties
11
 
 
 
SECTION 3.2.
Representations and Warranties of the Seller as to the Asset
11
 
 
 
SECTION 3.3.
Covenants of the Seller Prior to Closing
15
 
 
 
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
20
 
 
 
SECTION 4.1.
Representations and Warranties of the Buyer
20
 
 
 
ARTICLE V CONDITIONS PRECEDENT TO CLOSING
22
 
 
 
SECTION 5.1.
Conditions Precedent to the Seller’s Obligations
22
 
 
 
SECTION 5.2.
Conditions Precedent to the Buyer’s Obligations
23
 
 
 
SECTION 5.3.
Waiver of Conditions Precedent
24
 
 
 
ARTICLE VI CLOSING DELIVERIES
25
 
 
 
SECTION 6.1.
Buyer Closing Deliveries
25
 
 
 
SECTION 6.2.
Seller Closing Deliveries
26
 
 
 
ARTICLE VII INSPECTIONS; RELEASE
28
 
 
 
SECTION 7.1.
Right of Inspection
28

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SECTION 7.2.
Examination; No Contingencies
28
 
 
 
SECTION 7.3.
Release
30
 
 
 
ARTICLE VIII TITLE AND PERMITTED EXCEPTIONS
31
 
 
 
SECTION 8.1.
Title Insurance and Survey
31
 
 
 
SECTION 8.2.
Title Commitment; Survey
31
 
 
 
SECTION 8.3.
Delivery of Title
31
 
 
 
SECTION 8.4.
The Buyer’s Right to Accept Title
32
 
 
 
SECTION 8.5.
Cooperation
32
 
 
 
SECTION 8.6.
Violations
33
 
 
 
ARTICLE IX TRANSACTION COSTS; RISK OF LOSS
33
 
 
 
SECTION 9.1.
Transaction Costs
33
 
 
 
SECTION 9.2.
Risk of Loss
34
 
 
 
ARTICLE X ADJUSTMENTS
35
 
 
 
SECTION 10.1.
Fixed Rents and Additional Rents
35
 
 
 
SECTION 10.2.
Taxes and Assessments
36
 
 
 
SECTION 10.3.
Water and Sewer Charges
37
 
 
 
SECTION 10.4.
Utility Charges
37
 
 
 
SECTION 10.5.
Contracts
37
 
 
 
SECTION 10.6.
Security Deposits
38
 
 
 
SECTION 10.7.
Leasing Costs
38
 
 
 
SECTION 10.8.
Elevator Renovation
38
 
 
 
SECTION 10.9.
Other
39
 
 
 

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SECTION 10.10.
Re-Adjustment
39
 
 
 
ARTICLE XI INDEMNIFICATION
39
 
 
 
SECTION 11.1.
Indemnification by the Seller
39

SECTION 11.2.
Indemnification by the Buyer
39
 
 
 
SECTION 11.3.
Limitations on Indemnification
40
 
 
 
SECTION 11.4.
Survival
40
 
 
 
SECTION 11.5.
Indemnification as Sole Remedy
40
 
 
 
ARTICLE XII TAX CERTIORARI PROCEEDINGS
40
 
 
 
SECTION 12.1.
Prosecution and Settlement of Proceedings
40
 
 
 
SECTION 12.2.
Application of Refunds or Savings
41
 
 
 
SECTION 12.3.
Survival
41
 
 
 
ARTICLE XIII TERMINATION AND DEFAULT
41
 
 
 
SECTION 13.1.
THE BUYER’S DEFAULT; FAILURE OF CONDITIONS
41
 
 
 
SECTION 13.2.
THE SELLER’S DEFAULT; FAILURE OF CONDITIONS
42
 
 
 
ARTICLE XIV EMPLOYEE MATTERS
43
 
 
 
SECTION 14.1.
Union Employees
43
 
 
 
SECTION 14.2.
Collective Bargaining Agreements
45
 
 
 
SECTION 14.3.
Multiemployer Plan
45
 
 
 
ARTICLE XV MISCELLANEOUS
46
 
 
 
SECTION 15.1.
Use of Carlyle’s Name and Address
46
 
 
 
SECTION 15.2.
Exculpation
46
 
 
 
SECTION 15.3.
Broker
46
 
 
 
SECTION 15.4.
Confidentiality; Press Release; IRS Reporting Requirements
47
 
 
 

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SECTION 15.5.
Escrow Provisions
48
 
 
 
SECTION 15.6.
Successors and Assigns; No Third-Party Beneficiaries
49
 
 
 
SECTION 15.7.
Assignment
49
 
 
 
SECTION 15.8.
Further Assurances
49
 
 
 
SECTION 15.9.
Notices
49

SECTION 15.10.
Entire Agreement
50
 
 
 
SECTION 15.11.
Amendments
51
 
 
 
SECTION 15.12.
No Waiver
51
 
 
 
SECTION 15.13.
Governing Law
51
 
 
 
SECTION 15.14.
Submission to Jurisdiction
51
 
 
 
SECTION 15.15.
Severability
51
 
 
 
SECTION 15.16.
Section Headings
51
 
 
 
SECTION 15.17.
Counterparts
51
 
 
 
SECTION 15.18.
Acceptance of Deed
51
 
 
 
SECTION 15.19.
Construction
52
 
 
 
SECTION 15.20.
Recordation
52
 
 
 
SECTION 15.21.
Schedules
52
 
 
 
SECTION 15.22.
Waiver of Jury Trial
52
 
 
 
SECTION 15.23.
Attorneys’ Fees
52
 
 
 
SECTION 15.24.
Section 3.14 Audit
52
 
 
 

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ARTICLE XV Joinder of Seller Guarantor
53
 
 
 
SECTION 16.1.    Guaranty
53
 
 
 
SECTION 16.2.
Representations and Warranties of the Seller Guarantor
54
 
 
 
SECTION 16.3.
Net Worth of the Seller Guarantor
54

 
SCHEDULES
 
Schedule A – Description of Land
 
Schedule 1.1(a) – Non-Permitted Exceptions
 
Schedule 1.1(b) – Seller Work Contracts
 
Schedule 3.1(c) – Consent

Schedule 3.2(a) – Contracts
 
Schedule 3.2(b)(1) – Leases
 
Schedule 3.2(b)(2) – Defaults
 
Schedule 3.2(b)(3) – Security Deposits
 
Schedule 3.2(c) – Arrearages
 
Schedule 3.2(e) – Litigation
 
Schedule 3.2(f)(i) –Leasing Costs
 
Schedule 3.2(f)(ii) – Lease Termination Payments
 
Schedule 3.2(g) – Insurance Coverage
 
Schedule 3.2(l) – Union Employees
 
Schedule 3.2(m) – Subleases/Recognition Agreements
 
Schedule 3.2(o) – Brokerage Agreements
 
Schedule 3.2(q) – Remaining Work Under the Model Services Lease
 
Schedule 3.3(b)(ii) – Terminated Contracts
 
Schedule 3.3(b)(iii) – Assumed Contracts
 
Schedule 10.8(a) – Elevator Renovation Contracts
 
Schedule 10.8(b) – Elevator Renovation Purchase Orders
 

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Schedule 12.1 – Tax Reduction Proceedings
 
EXHIBITS
 
Exhibit A – Wire Instructions
 
Exhibit B-1 – Form of Tenant Estoppel
 
Exhibit B-2 – Form of Seller Estoppel
 
Exhibit C – Form of Assignment and Assumption of Assumed Contracts
 
Exhibit D – Form of Assignment of Leases
 
Exhibit E – Form of Deed
 
Exhibit F – Form of Bill of Sale
 
Exhibit G – Form of FIRPTA Affidavit
 
Exhibit H – Form of Title Affidavit
 
Exhibit I – Form of Tenant Direction Letter
 
Exhibit J – Form of Notice Letter to Service Providers
 
Exhibit K – Title Commitment
 
Exhibit L – Other CapX Work Plans and Specifications
 
Exhibit M – Form of Post-Closing Escrow Agreement (Seller Work)
 
Exhibit N – Form of Master Lease
 
Exhibit O – Seller’s Local Law 11 Work Plans and Specifications
 
Exhibit P – Elevator Renovation Plans and Specifications
 

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AGREEMENT OF PURCHASE AND SALE
 
AGREEMENT OF PURCHASE AND SALE (this “Agreement”), made as of the 11th day of
October, 2014, between 570 7TH AVENUE PROPERTY OWNER, L.L.C., a Delaware limited
liability company (the “Seller”) and ARC NYC570SEVENTH, LLC, a Delaware limited
liability company (the “Buyer”).
 
Background
 
A.           Seller is the owner and holder of the fee simple estate in and to
that certain plot, piece and parcel of land located at 570 7th Avenue, New York,
New York and more particularly described in Schedule A (the “Land”), together
with the building and all other improvements located on the Land (collectively,
the “Building”; the Building and the Land being sometimes referred to
hereinafter, collectively, as the “Property”).
 
B.           The Property, together with the Asset-Related Property (as defined
below), shall be referred to herein, collectively, as the “Asset”.
 
C.           The Seller desires to sell to the Buyer, and the Buyer desires to
purchase from the Seller, the Asset on the terms and conditions hereinafter set
forth.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
 
ARTICLE I
 
DEFINITIONS
SECTION 1.1.   Defined Terms.
 
The capitalized terms used herein will have the following meanings.
 
“Additional Rent” shall have the meaning assigned thereto in Section 10.1(a).
 
“Affiliates” means with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with, such
first Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract or otherwise.
 
“Agreement” shall have the meaning set forth in the Preamble to this Agreement.
 
“Anti-Money Laundering and Anti-Terrorism Laws” shall have the meaning assigned
thereto in Section 3.2(k)(i).
 
“Asset” shall have the meaning assigned thereto in the Background Paragraph B.
 
“Asset Manager” shall mean Capstone Equities LLC.
 
“Asset-Related Property” shall have the meaning assigned thereto in Section
2.1(b).
 
“Assignment of Assumed Contracts” shall have the meaning assigned thereto in
Section 6.1(a)(i).
 

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“Assignment of Leases” shall have the meaning assigned thereto in Section
6.1(a)(ii).
 
“Assumed Contracts” shall have the meaning assigned thereto in Section
3.3(b)(ii).
 
“Basket Limitation” shall mean an amount equal to $150,000.
 
“Bill of Sale” shall have the meaning assigned thereto in Section 6.2(a)(ii).
 
“Broker” shall mean Eastdil Secured.
 
“Brokerage Agreements” shall mean all brokerage, leasing agency or similar
agreements relating to the Asset.
 
“Building” shall have the meaning assigned thereto in the Background Paragraph
A.
 
“Business Day” shall mean any day other than a Saturday, Sunday, or other day on
which banks are authorized or required by law to be closed in the city of New
York, NY.
 
“Buyer” shall have the meaning assigned thereto in the Preamble to this
Agreement, but subject to the provisions of Section 15.7.
 
“Buyer-Related Entities” shall have the meaning assigned thereto in Section
11.1.
 
“Buyer’s Leasing Costs” shall have the meaning assigned thereto in Section
10.7(a).
 
“Buyer Local Law 11 Work Credit” shall have the meaning assigned thereto in
Section 3.3(i)(ii).
 
“Buyer’s Local Law 11 Plans and Specifications” shall have the meaning assigned
thereto in Section 3.3(ii).
 
“Buyer’s Local Law 11 Work” shall mean the work in respect of the south and west
elevation facades of the Building at the Property as required pursuant to The
New York City Local Law No. 11 and the Buyer Local Law 11 Plans and
Specifications.
 
“Buyer Waived Breach” shall have the meaning assigned thereto in Section 11.3.
 
“Cap Limitation” shall mean an amount equal to $3,000,000.
 
“CBA” shall have the meaning assigned thereto in Section 14.2.
 
“Claims” shall have the meaning assigned thereto in Section 7.3.
 
“Closing” shall have the meaning assigned thereto in Section 2.4(a).
 
“Closing Date” shall have the meaning assigned thereto in Section 2.4(a).
 
“Closing Documents” shall mean collectively, all certificates, Seller Estoppels
(if any), assignments, instruments or other documents delivered at the Closing
pursuant to this Agreement.
 
“Closing Statement” shall have the meaning assigned thereto in Section
6.1(a)(iv).
 
“Condition of the Asset” shall have the meaning assigned thereto in Section
7.2(b).
 
“Contracts” shall have the meaning assigned thereto in Section 3.2(a).

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“Court Order” shall mean that certain Civil Court of the City of New York County
of New York Part 52 Decision and Judgment, dated April 28, 2014 (index #:
061153/2014).
 
“Current Billing Period” shall have the meaning assigned thereto in Section
10.5.
 
“Deed” shall have the meaning assigned thereto in Section 6.2(a)(i).
 
“Deposit” shall have the meaning assigned thereto in Section 2.3(a).
 
“Effective Date” shall mean the date of this Agreement.
 
“Elevator Renovation” shall mean the renovation of the elevators in the Building
in accordance with the Elevator Plans and Specifications.
 
“Elevator Renovation Contract” shall have the meaning assigned thereto in
Section 10.8.
 
“Elevator Renovation Plans Specifications” shall mean the plans and
specifications for the Elevator Renovation attached hereto as Exhibit P
 
“Elevator Renovation Purchase Orders” shall have the meaning assigned thereto in
Section 10.8.
 
“Environmental Laws” shall have the meaning assigned thereto in Section 3.2(i).
 
“ERISA” shall have the meaning assigned thereto in Section 14.3.
 
“Escrow Account” shall have the meaning assigned thereto in Section 2.3(b).
 
“Escrow Agent” shall have the meaning assigned thereto in Section 2.3(a).
 
“Exceptions” means any exception, lien, mortgage, security interest, claim,
charge, reservation, Lease, easement, right of way, encroachment, restrictive
covenant, condition, limitation or other encumbrance affecting title to the
Property.
 
“Executive Order” shall have the meaning assigned thereto in Section 3.2(k)(i).
 
“Existing Asset Management Agreement” means that certain Asset Management
Agreement dated as of August 27, 2013 between Seller and Asset Manager, as
amended.
 
“Existing Management Agreements” means collectively the Existing Asset
Management Agreement and the Existing Property Management Agreement.
 
“Existing Property Management Agreement” means that certain Management Agreement
dated as of August 27, 2013 between Seller and Property Manager, as amended.
 
“Existing Mortgage” shall mean those mortgages securing the Existing Mortgage
Loans.
 
“Existing Mortgage Loans” shall mean those certain mortgage loans encumbering
the Property originated by Manufactures and Traders Trust Company.
 
“Existing Survey” shall mean that Survey made by S.P. Belcher, dated November
17, 1925, and most recently visually certified by Joseph Nicoletti as of August
12, 2013, and a survey by Charles J. Dearing, dated April 25, 1956, and most
recently visually certified by the Surveyor as of August 12, 2013.
 

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“Fixed Rents” shall have the meaning assigned thereto in Section 10.1(a).
 
“Fund” shall have the meaning assigned thereto in Section 14.3.
 
“Governmental Authority” shall mean any federal, state or local government or
other political subdivision thereof, including, without limitation, any agency
or entity exercising executive, legislative, judicial, regulatory or
administrative governmental powers or functions, in each case to the extent the
same has jurisdiction over the Person or property in question.
 
“Government List” shall mean any of (i) the two lists maintained by the United
States Department of Commerce (Denied Persons and Entities), (ii) the list
maintained by the United States Department of the Treasury (Specially Designated
Nationals and Blocked Persons), and (iii) the two lists maintained by the United
States Department of State (Terrorist Organizations and Debarred Parties).
 
“Hazardous Materials” shall have the meaning assigned thereto in Section
7.2(b)(i).
 
“IRS” shall mean the Internal Revenue Service.
 
“IRS Reporting Requirements” shall have the meaning assigned thereto in Section
15.4(b).
 
“Land” shall have the meaning assigned thereto in the Background Paragraph A.
 
“Leasing Costs” shall mean, with respect to a particular Lease, all costs and
expenses required to be incurred or paid by the landlord under the relevant
Lease for (a) capital improvements, equipment, painting, decorating,
partitioning and other items to satisfy the initial construction obligations of
the landlord under such Lease, (b) tenant improvement allowances, (c) leasing
and brokerage commissions due in connection with a Lease, in each case to the
extent the landlord is responsible for the payment of such cost or expense under
the relevant Lease or otherwise.
 
“Leases” shall mean all leases, licenses and other occupancy agreements for all
or any portion of the Property and all amendments, modifications, extensions and
other written agreements pertaining thereto.
 
“Lease Termination Payments shall have the meaning assigned thereto in Section
3.2(f).
 
“Losses” shall have the meaning assigned thereto in Section 11.1.
 
“Material Casualty” shall have the meaning assigned thereto in Section 9.2(b).
 
“Material Condemnation” shall have the meaning assigned thereto in Section
9.2(b).
 
“Model Services Lease” shall mean that Lease identified on Schedule 3.2(b)(1) as
being with Model Service Agency, LLC and Gotham Talent Agency, LLC, as tenants.
 
“New Leases” shall have the meaning assigned thereto in Section 10.7(a).
 
“Other CapX Work” shall mean the capital improvements, alterations, repairs or
replacements in or to the Property in accordance with the Other CapX Plans and
Specifications. For the avoidance of doubt, the Other CapX Work shall not
include the Elevator Renovation and the Local Law 11 Work.
 
“Other CapX Plans and Specifications” shall mean the plans and specifications
for the Other CapX Work attached hereto as Exhibit L.
 
“Permitted Exceptions” shall mean (i) subject to Section 8.3(a), the matters set
forth in the Existing Survey or in the Title Commitment (except for the
Exceptions marked as deleted on the Title Commitment

4

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attached as Schedule 1.1(a)), (ii) liens for current real estate taxes which are
not yet due and payable, (iii) standard exceptions and provisions contained in
the title jacket of the form of title insurance policies, (iv) any state of
facts which an update of the Existing Survey would disclose; (v) any Exception
which is waived by the Buyer pursuant to Section 8.3(b), (vi) any violations of
building codes or other regulations whether or not noted in the Title Commitment
or filed against the Property; and (vii) laws, regulations, resolutions or
ordinances, including, without limitation, building, zoning and environmental
protection, as to the use, occupancy, subdivision, development, conversion or
redevelopment of the Property currently or hereinafter imposed by any
governmental or quasi governmental body or authority.
 
“Person” shall mean a natural person, partnership, limited partnership, limited
liability company, corporation, trust, estate, association, unincorporated
association or other entity.
 
“Property” shall have the meaning assigned thereto in the Background Paragraph
A.
 
“Property Manager” shall mean George Comfort & Sons, Inc.
 
“Purchase Price” shall have the meaning assigned thereto in Section 2.2(a).
 
“Recognition Agreement” means, with respect to any sublease, license or other
occupancy agreement under any Lease, an agreement to the effect that if the
applicable Lease terminates during the term of such sublease, license or other
occupancy agreement for any reason other than by reason of the occurrence of a
fire or other casualty, or a condemnation, or the Tenant’s exercising the
Tenant’s right to terminate the applicable Lease in accordance with the express
terms of the applicable Lease, then (i) Seller will not evict such subtenant,
licensee or other occupant, disturb such subtenant’s, licensee’s or other
occupant’s possession or terminate or disturb such subtenant’s, licensee’s or
other occupant’s occupancy of the space that such sublease, license or other
occupancy agreement demises, and will recognize such subtenant, licenses or
other occupant as the direct tenant of Seller, subject to and in accordance with
the terms and conditions of such agreement, and (ii) such subtenant, licensee,
or other occupant will recognize Seller as such subtenant’s direct landlord,
subject to and in accordance with the terms and conditions of such agreement.
 
“Releasees” shall have the meaning assigned thereto in Section 7.3.
 
“Rents” shall have the meaning assigned thereto in Section 10.1(a).
 
“Reporting Person” shall have the meaning assigned thereto in Section 15.4(b).
 
“Required Estoppels” shall have the meaning assigned thereto in Section 5.2(f).
 
“SEC” shall have the meaning assigned thereto in Section 15.24.
 
“Seller” shall have the meaning assigned thereto in the Preamble to this
Agreement.
 
“Seller Estoppels” shall have the meaning assigned thereto in Section 5.2(f).
 
“Seller Guarantor” shall have the meaning assigned thereto in Section 16.1(a).
 
“Seller-Related Entities” shall have the meaning assigned thereto in Section
11.2.
 
“Seller Work” shall mean, individually or collectively as the context may
require, the Other CapX Work and the Seller’s Local Law 11 Work.
 
“Seller’s Knowledge” shall mean the actual knowledge of the Seller based upon
the actual knowledge of Andrew Chung or Brian Vetter, without any duty on the
part of any such officers or other Persons to conduct any independent
investigation or make any inquiry of any Person.

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“Seller’s Leasing Costs” shall have the meaning assigned thereto in Section
10.7(b).
 
“Seller Local Law 11 Work Escrow” shall have the meaning assigned thereto in
Section 3.3(h)(ii).  
 
“Seller Local Law 11 Work Escrow Amount” shall have the meaning assigned thereto
in Section 3.3(h)(ii).  
 
“Seller’s Local Law 11 Work” shall mean the work in respect of the north and
east elevation facades of the Building at the Property as required pursuant to
Seller’s Local Law 11 Work Plans and Specifications and The New York City Local
Law No. 11.
 
“Seller’s Local Law 11 Work Plans and Specifications” shall mean those plans and
specifications attached hereto as Exhibit O, solely to the extent such plans and
specifications relate to the north and east elevation facades of the Building at
the Property, and such other plans and specifications generated by Vidaris in
connection with the Seller’s Local Law 11 Work between the Effective Date and
Closing.
 
“Seller Work Contracts” shall mean the Contracts, agreements and purchase orders
in connection with the Seller Work which the Seller is a party (or by which
Seller is bound) as described in Schedule 1.1(b).  
 
“Seller Work Escrow” shall have the meaning assigned thereto in Section
3.3(h)(ii).  
 
“Seller Work Escrow Amount” shall have the meaning assigned thereto in Section
3.3(h)(ii).  
 
“Surrender Agreement” shall mean that certain Surrender Agreement dated March
28, 2014 between Seller and Seventh Avenue Showcase, Inc. D/B/A The New York
Look.
 
“Surety Period” shall have the meaning assigned thereto in Section 14.3.
 
“Survival Period” shall have the meaning assigned thereto in Section 11.4.
 
“Tax Reduction Proceedings” shall mean all tax reduction proceedings set forth
on Schedule 12.1.
 
“Tenant” shall mean any tenant or licensee at the Property pursuant to any
Lease.
 
“Tenant Occupied Square Footage” shall mean the total square footage for the
office space portion of the Building occupied by tenants under any Lease.
 
“Terminated Contracts” shall have the meaning assigned thereto in Section
3.3(b)(ii).
 
“Title Affidavit” shall have the meaning assigned thereto in Section 8.5.
 
“Title Commitment” shall mean that certain title commitment issued by the Title
Company on August 24, 2014, with a title reference number of 14-7406-34057-NYM,
as attached hereto as Exhibit K.
 
“Title Company” shall mean Fidelity National Title Insurance Company, 485
Lexington Avenue, New York, New York 10017, Attention: Nick DeMartini, being the
lead agent and the title insurance company, provided that Buyer may select a
nationally recognized title company to provide co-insurance with respect to 50%
of the Title Policy coverage amount to be obtained at Closing.
 
“Title Policy” shall mean an ALTA owner’s title insurance policy issued by the
Title Company insuring the Buyer’s title to the Property subject only to the
Permitted Exceptions in an amount equal to the Purchase Price.
 

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“Transfer Taxes” shall have the meaning assigned thereto in Section 9.1(a).
 
“Union Employees” shall have the meaning assigned thereto in Section 14.1(a).
 
“Vidaris” shall have the meaning assigned thereto in Section 3.3(i)(ii).
 
“Vidaris Estimate” shall have the meaning assigned thereto in Section
3.3(i)(ii).
 
“Violations” shall have the meaning assigned thereto in Section 8.6.
 
ARTICLE II
 
SALE, PURCHASE PRICE AND CLOSING
 
SECTION 2.1.   Sale of Asset.
 
(a)          On the Closing Date and pursuant to the terms and subject to the
conditions set forth in this Agreement, the Seller shall sell to the Buyer, and
the Buyer shall purchase from the Seller, the Asset.
 
(b)          The transfer of the Asset to the Buyer shall include the transfer
of all Asset-Related Property. For purposes of this Agreement, “Asset-Related
Property” shall mean all of the Seller’s right, title and interest in and to the
following:
 
(i)          all rights of way, appendages, appurtenances, easements, sidewalks,
alleys, gores or strips of land adjoining or appurtenant to the Land or any
portion thereof and used in conjunction therewith;
 
(ii)         the land lying in the bed of any street, highway, road or avenue,
opened or proposed, public or private, in front of or adjoining the Land, to the
center line thereof;
 
(iii)        all development rights appurtenant to the Land or any portion
thereof;
 
(iv)        any award or payment made or to be made in lieu of any of the
foregoing or any portion thereof and any unpaid award for damage to the Land or
any of the Improvements by reason of change of grade or closing of any street,
road or avenue;
 
(v)         all furniture, fixtures, equipment and other personal property which
are now, or may hereafter, prior to the Closing Date, be, placed in or attached
to the Property and are used in connection with the operation of the Property
(but not including (i) items relating to the Elevator Renovation unless Buyer
elects and pays for such items pursuant to Section 10.8 and (ii) items owned or
leased by Tenants, Asset Manager or the Property Manager, or items which are
leased by the Seller);
 
(vi)        to the extent they may be transferred under applicable law, all
licenses, permits and authorizations presently issued in connection with the
operation of all or any part of the Property as it is presently being operated;
 
(vii)       to the extent assignable, all warranties, if any, issued to the
Seller by any manufacturer or contractor in connection with construction or
installation of equipment or any component of the improvements included as part
of the Property;
 
(viii)      the Assumed Contracts; and
 
(ix)         the Leases.
 

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SECTION 2.2.   Purchase Price.
 
(a)          The consideration for the purchase of the Asset shall be
$170,296,169.12 (the “Purchase Price”), which shall be paid by the Buyer to the
Escrow Agent at the Closing in immediately available funds by wire transfer to
such account or accounts that the Escrow Agent shall designate to the Buyer as
set forth on Exhibit A; provided that such amount shall be reduced by the
Deposit, and adjusted for Closing adjustments as described herein, with such
funds to be delivered by the Escrow Agent to the Seller in accordance with the
terms of this Agreement at Closing. No portion of the Purchase Price is
attributable to any personal property constituting part of the Asset-Related
Property.
 
(b)          No adjustment shall be made to the Purchase Price except as
explicitly set forth in this Agreement.
 
SECTION 2.3.   Deposit.
 
(a)          On the Effective Date, Buyer will deposit with Title Company, as
escrow agent (in such capacity, “Escrow Agent”), cash in an amount equal to
$17,029,616 (together with all accrued interest thereon, the “Deposit”). The
Deposit once delivered shall be non-refundable except as may be expressly
provided in this Agreement. The Escrow Agent shall hold the Deposit as security
for performance of Buyer's obligations under this Agreement, pursuant to the
terms and conditions hereinafter set forth.
 
(b)          The Deposit, upon delivery by the Buyer to Escrow Agent, will be
deposited by Escrow Agent in an interest-bearing account acceptable to the Buyer
and the Seller (the “Escrow Account”) and shall be held in escrow in accordance
with the provisions of Section 15.5. All interest earned on the Deposit while
held by Escrow Agent shall be paid to the party to whom the Deposit is paid,
except that if the Closing occurs, the Buyer shall receive a credit against the
Purchase Price for such interest in accordance with Section 2.2(a).
 
SECTION 2.4.   Closing.
 
(a)          The closing of the sale and purchase of the Asset (the “Closing”)
shall take place on October 27, 2014 (the “Closing Date”). Time shall be of the
Essence with respect to the Buyer’s and the Seller’s obligations hereunder to
close the purchase and sale of the Asset as set forth in this Agreement on the
Closing Date (subject only to such adjournments of the Closing Date as are
expressly permitted hereunder).
 
(b)          The Closing shall be held on the Closing Date at 10:00 A.M. at the
offices of the attorneys for Seller, or at the offices of Buyer’s lender’s
attorney’s office in New York County or as the parties shall otherwise mutually
agree.
 
(c)          Notwithstanding Section 2.4(b) above, at the election of Seller or
Buyer, this transaction may be closed through an escrow established with the
Title Company in accordance with customary escrow instructions agreed upon by
Seller, Buyer and the Title Company. Upon the creation of such escrow, anything
herein to the contrary notwithstanding, the transfer and conveyance of the
Asset, the payment of funds and the delivery of the Closing Documents and any
other documents required to be delivered to consummate the transaction
contemplated by this Agreement shall be made through such escrow. The Closing
shall take place through a so-called “New York Style” closing, i.e., so that the
Title Policy will be delivered to Buyer and Seller shall receive the net sale
proceeds on the Closing Date.
 
ARTICLE III
 
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
 
SECTION 3.1.   General Seller Representations and Warranties. The Seller hereby
represents and warrants to the Buyer as follows:
 

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(a)          Formation; Existence. It is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware.
 
(b)          Power and Authority. It has all requisite power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions provided
for in this Agreement have been duly authorized by all necessary action on its
part. This Agreement has been duly executed and delivered by it and constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
and by general principles of equity (whether applied in a proceeding at law or
in equity).
 
(c)          No Consents. Except as set forth in Schedule 3.1(c), no consent,
license, approval, order, permit or authorization of, or registration, filing or
declaration with, any court, administrative agency or commission or other
Governmental Authority or instrumentality, domestic or foreign, or any third
party, is required to be obtained or made in connection with the execution,
delivery and performance of this Agreement by the Seller or any of the
transactions required or contemplated hereby.
 
(d)          No Conflicts. The execution, delivery and compliance with, and
performance of the terms and provisions of, this Agreement, and the sale of the
Asset, will not (i) conflict with or result in any violation of its
organizational documents, (ii) conflict with or result in any violation of any
provision of any bond, note, or other instrument of indebtedness, contract,
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party in its individual capacity or (iii) violate
any existing term or provision of any order, writ, judgment, injunction, decree,
statute, law, rule or regulation applicable to it or its assets or properties.
 
(e)          Foreign Person. It is not a “foreign person” as defined in Internal
Revenue Code Section 1445 and the regulations issued thereunder.
 
SECTION 3.2.   Representations and Warranties of the Seller as to the Asset. The
Seller hereby represents and warrants to the Buyer as follows:
 
(a)          Contracts.  All service, maintenance, supply and management
contracts and equipment leases (“Contracts”) affecting the Property to which the
Seller is a party (or by which Seller is bound) as of the Effective Date are set
forth on Schedule 3.2(a) attached hereto and the same have not been modified or
amended, except as set forth on Schedule 3.2(a). As of the Effective Date,
Seller has not sent nor, to Seller’s Knowledge, received any notices of any
material default under the Contracts, nor, to Seller’s Knowledge, has any event
occurred, which but for the passage of time or the giving of notice would
constitute a material default under any of the Contracts.
 
(b)          Leases. (i) The leases listed on Schedule 3.2(b)(1) constitute all
the Leases relating to the Property under which the Seller is the holder of the
landlord’s interest, (ii) the Leases have not been modified or amended except as
set forth on Schedule 3.2(b)(1), (iii) the Leases are, as of the Effective Date,
in full force and effect and contain the entire agreement between Seller and the
Tenants thereunder regarding the Property, (iv) as of the Effective Date, fixed
rent and additional rent are currently being collected under and in accordance
with the Leases without offset, counterclaim or deduction (subject to rent
abatements or credits expressly provided in the Leases), (v) a true and complete
copy of the Leases have been made available to the Buyer, (vi) as of the
Effective Date, Seller has not received any written notice from any Tenant under
the Leases that Seller is in default of any obligation under any Lease which
default remains uncured, (vii) as of the Effective Date and except as disclosed
on Schedule 3.2(b)(2), Seller has not delivered any written notice to a Tenant
under any of the Leases that such Tenant is in default of any obligation under
any Lease which default remains uncured, and (viii) set forth on Schedule
3.2(b)(3) is a true and complete list of all security deposits required to be
held by the landlord under the Leases as of the Effective Date.
 

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(c)          Arrearages. Except as disclosed on Schedule 3.2(c) attached hereto,
as of the Effective Date, no Tenants are in arrears of the payment of the rent
payable under its Lease.
 
(d)          Condemnation.  As of the Effective Date, there are no pending
condemnation or similar proceedings affecting the Property, and to the Seller’s
Knowledge, no such action is threatened or contemplated.
 
(e)          Litigation.  Except as disclosed on Schedule 3.2(e) attached
hereto, as of the Effective Date, there are no actions, complaints, suits or
proceedings pending against or affecting Seller or the Asset in any court or
before or by an arbitration tribunal or regulatory commission, department or
agency and to the Seller’s Knowledge, no such actions, complaints, suits or
proceedings have been threatened or contemplated, which in each case, if
determined adversely to Seller or the Asset, would adversely affect the Asset or
the ability of Seller to perform its obligations hereunder.
 
(f)          Leasing Costs. Except as disclosed on Schedule 3.2(f)(i) attached
hereto, there are no Leasing Costs (other than Leasing Costs that may be due
under a Lease with respect to the renewal, extension or expansion options set
forth in such Lease exercised after the Closing Date) owing or outstanding with
respect to the Leases for which Seller is (or the Buyer after the Closing Date
would be) responsible. Schedule 3.2(f)(ii) lists all termination payments
payable by the landlord with respect to the early termination of any Leases (the
“Lease Termination Payments”).
 
(g)          Insurance. Attached hereto as Schedule 3.2(g) is a true, correct
and complete list of the types and amounts of insurance coverage maintained by
Seller in connection with the Property as of the Effective Date.
 
(h)          Purchase Options. No party has any right or option to acquire the
Property or any portion thereof (including, without limitation, any right of
first refusal or other similar right).
 
(i)          Environmental Matters. As of the Effective Date, Seller has not
received any written notice from any governmental or regulatory authority of a
violation of any applicable Environmental Laws, which have not been corrected.
For the purposes of this Section, “Environmental Laws” means any and all
federal, state, county and local statutes, laws, regulations and rules in effect
on the date of this Agreement relating to the protection of the environment or
to the use, transportation and disposal of Hazardous Materials.
 
(j)          Bankruptcy. Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by the Seller’s creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of the Seller’s assets, which remains pending or (iv)
suffered the attachment or other judicial seizure of all, substantially all of
the Seller’s assets, which remains pending.
 
(k)          Anti-Terrorism Law.
 
(i)          The Seller is not in violation of any laws relating to terrorism
financing, money laundering or Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Action of 2001, Public Law 107-56 and Executive Order No. 13224
(Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism) (the “Executive Order”) (collectively,
the “Anti-Money Laundering and Anti-Terrorism Laws”).
 
(ii)         The Seller is not acting, directly or indirectly, on behalf of
terrorists, terrorist organizations or narcotics traffickers, including those
persons or entities that appear on the Annex to the Executive Order, or are
included on any relevant lists maintained by the Office of Foreign Assets
Control of the U.S. Department of the Treasury or the U.S. Department of State.
 

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(iii)        None of the Seller or, to Seller’s Knowledge, without inquiry, any
of its brokers or other agents that act in any capacity at the instruction of
the Seller in connection with the purchase of the Property (A)conducts any
business or engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any person included in the lists set forth in
the preceding paragraph, (B) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to the
Executive Order, or (C) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Money Laundering and
Anti-Terrorism Laws.
  
(iv)        The Seller understands and acknowledges that the Buyer may become
subject to further anti-money laundering regulations and agrees, at Buyer’s sole
cost and expense, to use commercially reasonable efforts (but in no event shall
Seller be obligated) to execute instruments, provide information, or perform any
other acts as may be required by such regulations, for the purpose of: (A)
carrying out due diligence as may be required by applicable law to establish the
Seller’s identity and source of funds; (B) maintaining records of such
identities and sources of funds, or verifications or certifications as to the
same; and (C) taking any other actions as may be required to comply with and
remain in compliance with anti-money laundering regulations applicable to the
Seller; provided that, in no event shall delivery of any of the foregoing
subject the Seller to any liabilities or obligations. Nothing in this Section
3.2(k)(iv) shall be a condition to Buyer’s obligation to consummate the
transaction contemplated hereby.
 
(v)         Neither the Seller, nor any person controlling or controlled by the
Seller, is a country, territory, individual or entity named on a Government
List, and the monies used in connection with this Agreement and amounts
committed with respect thereto, were not and are not derived from any activities
that contravene any applicable anti-money laundering or anti-bribery laws and
regulations (including funds being derived from any person, entity, country or
territory on a Government List or engaged in any unlawful activity defined under
Title 18 of the United States Code, Section 1956(c)(7)).
 
(l)          Employees. As of the Effective Date, Schedule 3.2(l) attached
hereto is a list of all Union Employees who, as of the Effective Date, are
employed in connection with the use, management, maintenance or operation of the
Property, along with their respective employer and union affiliation. There are
no employees employed by the Seller, or an entity related to the Seller, engaged
in the management, maintenance or operation of the Property.
 
(m)          Subleases. As of the Effective Date, to Seller’s Knowledge and
except as set forth on Schedule 3.2(m), no Person has the right to occupy the
Property other than the Tenants pursuant to the Leases. As of the Effective
Date, Seller has not entered into any Recognition Agreements other than those
Recognition Agreements listed on Schedule 3.2(m) and a true and complete copy of
the Recognition Agreements have been made available to the Buyer.
 
(n)          Asset-Related Property. The Asset-Related Property is owned by
Seller and are, or will on the Closing Date be, free of all liens and
encumbrances, except for the Permitted Exceptions.
 
(o)          Brokerage Agreements. The Brokerage Agreements listed on Schedule
3.2(o) are the only brokerage, leasing agency or similar agreements with respect
to the leasing of portions of the Asset entered into by Seller, or which are
binding on Seller (or Buyer after the Closing), and to Seller’s Knowledge, that
affect the Asset.
 
(p)          Tax Reduction Proceedings. Other than as set forth on Schedule
12.1, Seller has not commenced, and there are not pending, any tax assessment
reduction or tax certiorari proceedings with respect to the Premises.
 
(q)          Model Services Lease. Except as set forth on Schedule 3.2(q), all
work required to be performed by Seller, as landlord under the Model Services
Lease, as of the Effective Date has been completed in accordance with the Model
Services Lease.
 

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(r)          Amendment to Representations and Warranties. Subject to the final
sentence of this Section 3.2(r), the Seller shall have the right to amend and
supplement the representations and warranties (including, the Schedules to this
Agreement) from time to time prior to the Closing to reflect changes since the
Effective Date by providing a written copy of such amendment or supplement to
the Buyer; provided, however, that any amendment or supplement to such
representations and warranties (including the Schedules to this Agreement) shall
have no effect for the purposes of determining whether the conditions precedent
to Buyer’s obligations as set forth in Section 5.2 have been satisfied but shall
have effect only for the purpose of limiting the defense and the indemnification
obligations of Seller for the inaccuracy or untruth of the original
representation or warranty being qualified by such amendment or supplement. It
being acknowledged that if any such amendment or supplement of the
representations or warranties contained herein discloses a misrepresentation or
breach of Seller’s obligations hereunder, then Buyer shall have the right to
exercise any rights granted to Buyer hereunder in the event of a
misrepresentation or breach by Seller hereunder, subject in all respects to the
provisions of Section 11.3.
 
(s)          Notwithstanding anything in this Agreement to the contrary and for
the avoidance of doubt, if the representations and warranties relating to the
Contracts or Leases set forth in this Section 3.2 and the status of the Tenants
under the Leases were true and correct as of the Effective Date, no change in
circumstances or status of such Contracts, Leases or Tenants (e.g., defaults,
bankruptcies or other adverse matters relating to such Tenants) occurring after
the Effective Date shall permit the Buyer to terminate this Agreement or
constitute grounds for the Buyer’s failure to consummate the transaction
contemplated hereby, provided that any change in circumstances or status does
not result from an agreement between Seller and such Tenant in violation of this
Agreement.
 
SECTION 3.3.   Covenants of the Seller Prior to Closing. From the Effective Date
until Closing or earlier termination of this Agreement, the Seller or the
Seller’s agents shall:
 
(a)          Operation.  Operate and maintain the Property substantially in
accordance with the Seller’s past practices with respect to the Property;
provided, however, that Seller shall not make any capital or other repairs,
replacements or improvements to the Property, other than (i) as required
pursuant to Section 3.3(h), (ii) to the extent reasonably necessary in order to
protect the Property or persons in the event of an emergency as set forth in
clause (b) below, or (iii) to maintain the Property in the ordinary course of
business, without Buyer’s consent, which consent may be withheld in Buyer’s sole
discretion. From and after the Effective Date, Seller shall not request an
increase to the staffing level of the Union Employees without the Buyer’s
consent, which consent may be withheld in Buyer’s sole discretion.
 
(b)          Contracts.
 
(i)          Without the prior written consent of the Buyer, which consent may
not be unreasonably withheld, not enter into any contracts, equipment leases or
other agreements related to the Property (including without limitation, any
renewals of CBAs or other union agreement, but not new CBAs or other union
agreements the execution of which shall require Buyer’s consent, which consent
may be withheld in Buyer’s sole discretion); provided that (i) the Seller may
enter into third party contracts without the Buyer’s consent, if such contract
is necessary to protect the Property or Persons in the event of an emergency at
the Property, and (ii) the Seller may enter into third party contracts without
the Buyer’s consent if such contract (A) is terminable on 30 days or less
notice, without penalty or cost to Buyer, and (B) is entered into in the course
of customary maintenance and repairs at the Property. If the Seller enters into
any third party contracts after the Effective Date, then the Seller shall
promptly provide written notice and a copy thereof to the Buyer and, unless such
contract required the Buyer’s approval pursuant to this paragraph and such
approval was not obtained, the Buyer shall assume such contract at Closing and
the schedule of contracts attached to the Assignment of Assumed Contracts shall
be so modified, and such contract shall be deemed added to Schedule 3.2(a)
attached hereto and Schedule 3.2(a) shall be deemed amended at the Closing to
include such contracts.
 

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(ii)         Prior to the Closing, Seller shall terminate, at Seller’s sole cost
and expense, each of the Contracts listed on Schedule 3.3(b)(ii) (the
“Terminated Contracts”). The Terminated Contracts will not be assigned to, or
assumed by Buyer.
 
(iii)        At the Closing, Buyer shall only be obligated to assume those
Contracts listed on Schedule 3.3(b)(iii) that are assignable by Seller (such
Contracts being referred to herein as the “Assumed Contracts”). The Assumed
Contracts are the only Contracts that will be assigned to, and assumed by,
Buyer.

(c)          Litigation; Violations.
 
(i)          Advise the Buyer promptly of any commenced or, to Seller knowledge,
threatened litigation, arbitration, proceeding or administrative hearing
(including condemnation) before any Governmental Authority which affects or
relates to (A) the Seller’s ability to consummate the transactions contemplated
by this Agreement or (B) the Asset.
 
(ii)         Deliver to Buyer promptly after receipt thereof copies of any
notices of violations or other material notices regarding the Property received
by the Seller, Asset Manager or Property Manager (including, without limitation,
notices of defaults or notices of lawsuits relating to, or in connection with,
the Leases, the Assumed Contracts or the Asset).
 
(d)          Insurance. Maintain insurance with respect to the Property that is
at least equivalent in all material respects to the insurance set forth on
Schedule 3.2(g) attached hereto.
 
(e)          Leasing. Seller shall not enter into any leases, licenses or
occupancy agreements with respect to the Property without Buyer’s prior written
consent, which consent may be withheld in Buyer’s sole discretion.
 
(f)          Performance Under Leases. Perform, or cause its agents to perform,
in all material respects, all obligations of landlord or lessor under the
Leases. Use commercially reasonable efforts to require the Tenants under the
Leases to perform all of their obligations under the Leases. Not modify, amend
or terminate the Leases without Buyer’s prior written consent, which consent may
be withheld in Buyer’s sole discretion, unless, in each case, required by the
terms of the applicable Lease.
 
(g)          Tenant Estoppels. Prior to the Closing Date, prepare and deliver an
estoppel certificate in the form attached hereto as Exhibit B-1 to all Tenants
and shall use commercially reasonable efforts to cause each such Tenant to
execute and deliver to Seller such estoppel certificate substantially in the
form attached hereto as Exhibit B-1.
 
(h)          Seller Work.
 
(i)          Other CapX Work. Seller shall continue to perform the Other CapX
Work prior to the Closing in accordance, in all material respects, with the
Other CapX Plans and Specifications; provided that, the completion of the Other
CapX Work shall not be a condition precedent to Buyer’s obligations to close
under this Agreement. In the event Seller does not complete the Other CapX Work
prior to the Closing, Seller shall complete, or cause to be completed, the Other
CapX Work in accordance, in all material respects, with the Other CapX Plans and
Specifications after the Closing at the sole cost and expense of the Seller, and
Buyer shall reasonably cooperate with Seller in connection therewith. At the
Closing, Seller shall deposit in escrow with Escrow Agent (the “Other CapX Work
Escrow”) a portion of the proceeds of the Purchase Price in an amount equal to
Three Million Seventy One Thousand Four Hundred Sixty Nine Dollars
($3,071,469)(the “Other CapX Work Escrow Amount”), which amount constitutes 115%
of the estimated remaining cost (as of the Effective Date) to complete the Other
CapX Work; provided that on the Closing Date, such amount shall be reduced by
the reasonable out-of-pocket costs paid by Seller (or its affiliates) in the
performance of the Other CapX Work between the Effective

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Date and the Closing Date (upon delivery of invoices therefor and reasonably
supporting backup documentation related to the charges set forth therein).
 
(ii)         Seller Local Law 11 Work. Seller shall continue to perform the
Seller’s Local Law 11 Work prior to the Closing in accordance, in all material
respects, with the Seller’s Local Law 11 Work Plans and Specifications and The
New York City Local Law No. 11; provided that, the completion of the Seller’s
Local Law 11 Work shall not be a condition precedent to Buyer’s obligations to
close under this Agreement. In the event Seller does not complete the Seller’s
Local Law 11 Work prior to the Closing, Seller shall complete, or cause to be
completed, the Seller’s Local Law 11 Work in accordance, in all material
respects, with Seller’s Local Law 11 Work Plans and Specifications and The New
York City Local Law No. 11 after the Closing at the sole cost and expense of the
Seller, and Buyer shall reasonably cooperate with Seller in connection
therewith. At the Closing, Seller shall deposit in escrow with Escrow Agent (the
“Seller Local Law 11 Work Escrow”; and together with the Other CapX Work Escrow,
the “Seller Work Escrow”) a portion of the proceeds of the Purchase Price in an
amount equal to One Hundred Ninety Four Thousand Five Hundred Sixty Six Dollars
($194,566) (the “Seller Local Law 11 Work Escrow Amount”; and together with the
Other CapX Escrow Amount, the “Seller Work Escrow Amount”), which amount
constitutes 115% of the estimated remaining cost (as of the Effective Date) to
complete the Seller’s Local Law 11 Work.
 
(iii)        The Seller Work Escrow Amount shall be held in escrow and
subsequently disbursed in accordance with the terms hereof and the terms and
conditions of the escrow agreement attached hereto as Exhibit M (the
“Post-Closing Escrow Agreement (Seller Work)”). If the cost to complete the
Seller Work exceeds the Seller Work Escrow Amount, then Seller shall be
obligated to pay such excess in a timely manner. Seller shall have the right to
withdraw funds from the Seller Work Escrow from time to time in accordance with
the terms hereof and the terms of the Post-Closing Escrow Agreement (Seller
Work) in an amount equal to the costs expended or which are due under the Seller
Work Contracts for the portion of the Seller Work then completed. Upon
completion of the Seller Work and inspection and approval thereof by Vidaris
(with respect to the Seller’s Local Law 11 Work) and DOB (to the extent such
Seller Work must be inspected and approved by DOB pursuant to applicable laws),
any undisbursed portion of the Seller Work Escrow shall be released to Seller
pursuant to the terms hereof and the terms of the Post-Closing Escrow Agreement
(Seller Work). Subject to this Section 3.3(h), if (A) the Other CapX Work is not
completed within one hundred eighty (180) days after the Closing Date or (B) the
Seller’s Local Law 11 Work is not completed within two hundred and seventy (270)
days after the Closing Date, then in either case Buyer may elect, by notice
given to Seller at any time after the expiration of such period of one hundred
eighty (180) days or two hundred and seventy (270) days, as applicable, to
complete the Other CapX Work or the Seller’s Local Law 11 Work (as the case may
be) in accordance, in all material respects, with the Other CapX Plans and
Specifications or The New York City Local Law No. 11, as applicable, on Seller’s
behalf and withdraw funds from the Seller Work Escrow as provided herein and in
the Post-Closing Escrow Agreement (Seller Work) to reimburse Buyer for the
actual cost of performing the Other CapX Work or the Seller’s Local Law 11 Work
(as the case may be). If a lien is recorded against the Property as a result of
the Seller Work, then Seller, within fifteen (15) days after receipt of notice
of such lien, shall (x) pay the amount of such lien, (y) bond over such lien, or
(z) cause the vendor that filed such lien to discharge and release same, all at
Seller’s sole cost and expense, but Seller shall be permitted to draw upon funds
in the Seller Work Escrow to pay such amounts. If Seller fails to take any
action under the foregoing clause (x), clause (y) or clause (z), then Buyer
shall have the right to withdraw funds from the Seller Work Escrow to pay such
mechanic’s lien, provided that if there are not sufficient funds available in
the Seller Work Escrow, Seller shall reimburse Buyer for the cost thereof within
fifteen (15) days after Buyer gives Seller an invoice therefor, together with
reasonable supporting documentation for the amount set forth therein. If Buyer
so elects to complete the Seller Work in accordance, in all material respects,
with the Other CapX Plans and Specifications or in accordance with The New York
City Local Law No. 11, as applicable, then Seller shall have no right to
withdraw funds from the Seller Work Escrow for such Seller Work that has not
been completed from and after the date that Buyer makes such election. If the
cost to complete such Seller Work exceeds the Seller Work Escrow Amount, then
Seller shall be obligated to pay such excess, and Seller shall reimburse Buyer
for the costs incurred by Buyer in completing such Seller Work within thirty
(30)

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days after Buyer completes such Seller Work and sends Seller an invoice showing
in reasonable detail the work performed to complete such Seller Work not
completed by Seller for which such costs have been incurred by Buyer.
 
(iv)        Upon completion of the Other CapX Work and the Seller’s Local Law 11
Work, as applicable, Seller shall assign, or cause to be assigned, to Buyer all
rights, warranties and guaranties under the Seller Work Contracts or obtained in
connection with the Other CapX Work and the Seller’s Local Law 11 Work.
 
(v)         The provisions of this Section 3.3(h) shall survive the Closing.
 
(i)          Buyer’s Local Law 11 Work.
 
(i)          Promptly after the Effective Date, Seller, at its sole cost and
expense, shall take all commercially reasonable actions to cause Vidaris, Inc.
(“Vidaris”) to (1) perform visual inspections (“drops”) over the south and west
elevation facades of the Building to determine the scope of work required to
cause such façade to comply with The New York City Local Law No. 11 and prepare
a scope of work therefor (“Buyer’s Local Law 11 Plans and Specifications”), and
(2) upon completion of such inspection and Buyer’s Local Law 11 Plans and
Specifications, a final cost estimate of the cost to complete the Buyer’s Local
Law 11 Work (such cost estimate is referred to herein as the “Vidaris Estimate”)
and the project soft costs projected to be incurred by Vidaris and the Buyer
associated therewith (the “Soft Costs”). If Vidaris is unable to complete the
Vidaris Estimate in a reasonable time after the Effective Date, Seller and Buyer
shall reasonably agree upon a replacement façade consultant to complete such
estimate and the estimate of such mutually agreed consultant shall be deemed to
be the Vidaris Estimate for all purposes of this Agreement.
 
(ii)         At Closing, Seller shall give Buyer a credit against the Purchase
Price in an amount equal to (x) 150% of the Vidaris Estimate, plus (y) 150% of
the Softs Costs (such amount is referred to herein as the “Buyer Local Law 11
Work Credit”); provided that, in no event shall the Buyer Local Law Work Credit
exceed $1,250,000.00 and, from and after the Closing, the Seller shall have no
obligations whatsoever with respect to Buyer’s Local Law 11 Work.
 
(iii)        Seller shall be entitled to one or more adjournments of the Closing
Date, not exceeding 60 days in the aggregate with all other adjournment rights
contained in this Agreement, in order to obtain the Vidaris Estimate. If Seller
elects to adjourn the Closing one or more times in order to obtain the Vidaris
Estimate, the Closing shall occur five (5) Business Days after Seller obtains
such Vidaris Estimate. If, for any reason whatsoever, the Vidaris Estimate has
not been obtained prior to Closing, then, at Closing, Seller shall deposit
$1,250,000.00 into an escrow account with Escrow Agent. At any time within 1
year after Closing, upon receipt of the Vidaris Estimate, if the Buyer Local Law
11 Work Credit is less than $1,250,000.00, then, within 5 business days after
Seller’s written request to Escrow Agent and Buyer, Escrow Agent shall (x)
release from such escrow account to the Seller an amount equal to (a) $1,250,000
minus (b) the Buyer Local Law 11 Work Credit, and (y) release from such escrow
account to Buyer the Buyer Local Law 11 Work Credit; provided, however, that
Escrow Agent shall not release such amount to Seller in the event that Escrow
Agent and Seller each receive a notice within 5 business days after receipt of
Seller’s notice reasonably disputing the amount set forth in such notice from
Seller as being due to Seller. If the Vadaris Estimate is not received within 1
year after Closing, then, on the day that is the 1 year anniversary after
Closing, Escrow Agent shall release the $1,250,000.00 in such escrow account to
Buyer.
 
(iv)        The provisions of this Section 3.3(i) shall survive the Closing.
 
(j)          Liens. Seller shall not create, incur or suffer to exist any
mortgage, deed of trust, lien, pledge or other encumbrance in any way affecting
any portion of the Asset unless cured in accordance with Section 8.3(a).
 

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(k)          Asset-Related Property. Seller shall not transfer or remove any
Asset-Related Property from the Property except for the purpose of repair or
replacement thereof. Any items of Asset-Related Property replaced after the date
hereof shall be installed prior to Closing and shall be of substantially similar
quality of the item of Asset-Related Property being replaced.
 
(l)          Surrender Agreement Deposit. Seller shall deposit or cause to be
deposited with Belkin Burden Wenig & Goldman, LLP, as escrow agent, the
$4,000,000 surrender deposit in accordance with the terms of the Surrender
Agreement no later than the date required under the Surrender Agreement (if such
date occurs prior to Closing). After Closing, upon Buyer’s written request, the
Seller shall reasonably cooperate with the Buyer, at Buyer’s sole cost and
expense to substitute Buyer as the relevant party in connection with the Court
Order; provided that, such cooperation shall not subject Seller to any
liabilities or obligations. This Section 3.3(l) shall survive Closing for the
Survival Period. At Closing, Seller shall give Buyer a credit against the
Purchase Price in an amount equal to $60,500.00 for the transfer taxes payable
pursuant to the Surrender Agreement.
 

ARTICLE IV
 
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
 
SECTION 4.1.   Representations and Warranties of the Buyer. The Buyer hereby
represents and warrants to the Seller as follows:
 
(a)          Formation; Existence. It is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware.
 
(b)          Power; Authority. It has all requisite power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement, the purchase of the Asset and the consummation of the
transactions provided for herein have been duly authorized by all necessary
action on the part of the Buyer. This Agreement has been duly executed and
delivered by the Buyer and constitutes the legal, valid and binding obligation
of the Buyer enforceable against the Buyer in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights and by general principles
of equity (whether applied in a proceeding at law or in equity).
 
(c)          No Consents. No consent, license, approval, order, permit or
authorization of, or registration, filing or declaration with, any court,
administrative agency or commission or other Governmental Authority or
instrumentality, domestic or foreign, is required to be obtained or made in
connection with the execution, delivery and performance of this Agreement or any
of the transactions required or contemplated hereby.
 
(d)          No Conflicts. The execution, delivery and compliance with, and
performance of the terms and provisions of, this Agreement, and the purchase of
the Asset, will not (i) conflict with or result in any violation of its
organizational documents, (ii) conflict with or result in any violation of any
provision of any bond, note or other instrument of indebtedness, contract,
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party in its individual capacity, or (iii) violate
any existing term or provision of any order, writ, judgment, injunction, decree,
statute, law, rule or regulation applicable to it or its assets or properties.
 
(e)          Bankruptcy. It has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by the Buyer’s creditors (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of the Buyer’s assets, which remains pending or (iv) suffered
the attachment or other judicial seizure of all, substantially all of the
Buyer’s assets, which remains pending.
 
(f)          Anti-Terrorism Law.

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(i)          The Buyer is not in violation of the Anti-Money Laundering and
Anti-Terrorism Laws.
 
(ii)         The Buyer is not acting, directly or indirectly, on behalf of
terrorists, terrorist organizations or narcotics traffickers, including those
persons or entities that appear on the Annex to the Executive Order, or are
included on any relevant lists maintained by the Office of Foreign Assets
Control of the U.S. Department of the Treasury or the U.S. Department of State.
 
(iii)        None of the Buyer or, to the Buyer’s actual knowledge without
inquiry, any of its brokers or other agents that act in any capacity at the
instruction of the Buyer in connection with the purchase of the Property (A)
conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any person included in the
lists set forth in the preceding paragraph, (B) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order, or (C) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Money
Laundering and Anti-Terrorism Laws.
 
(iv)        The Buyer understands and acknowledges that the Seller may become
subject to further anti-money laundering regulations and agrees, at Seller’s
sole cost and expense, to use commercially reasonable efforts (but in no event
shall Buyer be obligated) to execute instruments, provide information, or
perform any other acts as may be required by such regulations, for the purpose
of: (A) carrying out due diligence as may be required by applicable law to
establish the Buyer’s identity and source of funds; (B) maintaining records of
such identities and sources of funds, or verifications or certifications as to
the same; and (C) taking any other actions as may be required to comply with and
remain in compliance with anti-money laundering regulations applicable to the
Buyer; provided, that in no event shall delivery of any of the foregoing subject
the Buyer to any liabilities or obligations. Nothing in this Section 4.1(f)(iv)
shall be a condition to Seller’s obligation to consummate the transaction
contemplated hereby.
 
(v)         Neither the Buyer, nor any person controlling or controlled by the
Buyer, is a country, territory, individual or entity named on a Government List,
and the monies used in connection with this Agreement and amounts committed with
respect thereto, were not and are not derived from any activities that
contravene any applicable anti-money laundering or anti-bribery laws and
regulations (including funds being derived from any person, entity, country or
territory on a Government List or engaged in any unlawful activity defined under
Title 18 of the United States Code, Section 1956(c)(7)).
 
ARTICLE V
 
CONDITIONS PRECEDENT TO CLOSING
 
SECTION 5.1.   Conditions Precedent to the Seller’s Obligations. The obligation
of the Seller to consummate the transfer of the Asset to the Buyer on the
Closing Date is subject to the satisfaction (or waiver by the Seller) as of the
Closing of the following conditions:
 
(a)          Each of the representations and warranties made by the Buyer in
this Agreement shall be true and correct in all material respects when made and
on and as of the Closing Date as though such representations and warranties were
also made on and as of the Closing Date.
 
(b)          Intentionally Omitted.
 
(c)          No order or injunction of any court or administrative agency of
competent jurisdiction nor any statute, rule, regulation or executive order
promulgated by any Governmental Authority of competent jurisdiction shall be in
effect as of the Closing which restrains or prohibits the acquisition by the
Buyer of the Asset or the consummation of any other transaction contemplated
hereby.
 

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(d)          The Seller shall have received all of the documents required to be
delivered by the Buyer under Section 6.1.
 
(e)          The Seller shall have received the Purchase Price in accordance
with Section 2.2(a) and all other amounts due to the Seller hereunder.
 
The conditions set forth in this Section 5.1 are solely for the benefit of
Seller and may be waived, in writing, only by Seller. Seller shall, at all times
prior to the termination of this Agreement, have the right to waive any of these
conditions.
 
SECTION 5.2.   Conditions Precedent to the Buyer’s Obligations. The obligation
of the Buyer to purchase and pay for the Asset on the Closing Date is subject to
the satisfaction (or waiver by the Buyer) as of the Closing of the following
conditions:
 
(a)          Each of the representations and warranties made by the Seller in
this Agreement shall be true and correct in all material respects when made and
on and as of the Closing Date as though such representations and warranties were
also made on and as of the Closing Date, unless such representation or warranty
is made expressly as of a specific date, in which case such representation or
warranty shall be true and correct in all material respects as of such date and
shall be updated by Seller through the Closing Date.
 
(b)          The Seller shall have performed or complied in all material
respects with each obligation and covenant required by this Agreement to be
performed or complied with by the Seller on or before the Closing. Seller shall
deliver notice to Buyer at Closing pursuant to Section 3.2(r) if there are any
necessary updates to Seller’s representations and warranties.
 
(c)          No order or injunction of any court or administrative agency of
competent jurisdiction nor any statute, rule, regulation or executive order
promulgated by any Governmental Authority of competent jurisdiction shall be in
effect as of the Closing which restrains or prohibits the transfer of the Asset
or the consummation of any other transaction contemplated hereby.
 
(d)          Title to the Property shall be delivered to the Buyer in the manner
required under Article VIII.
 
(e)          The Buyer shall have received all of the documents required to be
delivered by the Seller under Section 6.2.
 
(f)          Seller shall have delivered to Buyer tenant estoppel certificates
from Tenants under Leases demising at least sixty-five percent (65%) of the
Tenant Occupied Square Footage (the estoppel certificates from Tenants under
Leases demising at least sixty five percent (65%) of the Tenant Occupied Square
Footage are collectively referred to herein as “Required Estoppels”). Buyer
shall have no right to object (and this closing condition shall be deemed to
have been satisfied) if Seller delivers to Buyer any Required Estoppels which
are substantially in the form of Exhibit B-1 attached hereto, or such other form
as is provided in the Lease for the applicable Tenant (subject to (i)
non-material modification thereof, (ii) such Tenant making note of items which
constitute Permitted Exceptions or items which Seller otherwise agrees to
discharge, (iii) modifications thereof to conform the same to the applicable
Lease or other information delivered to Buyer prior to the Effective Date and
(iv) such Tenant limiting its statements "to tenant's knowledge" or words of
similar import) . For avoidance of doubt, if a Tenant is required or permitted
under the terms of its Lease to provide less information or to otherwise make
different statements in a certification of such nature than are set forth on the
form attached as Exhibit B-1, then Buyer shall accept any modifications made to
such form of estoppel certificate to the extent that such modifications to such
form are consistent with the minimum requirements set forth in the applicable
Lease (it being understood by Buyer that a Tenant shall not be required to make
any certifications not specifically enumerated in the applicable Lease estoppel
requirements even if the applicable Lease requires the Tenant to certify to any
additional items "reasonably requested" or words of similar import). In
addition, Buyer shall have no right to object to a estoppel certificate (i)
which references a general condition statement such as "we reserve all rights"
or words of similar

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import or (ii) which references Tenant defaults or breaches or other matters
described in Section 3.2(n), provided that any such estoppel certificate that
references a default, breach or other adverse matter shall not limit the Buyer’s
rights hereunder for any misrepresentation or default by Seller hereunder. In
the event all Required Estoppels have not been obtained by the Closing Date and
Buyer has not waived the condition to closing contained in this Section 5.2(f),
Seller shall be entitled to one or more adjournments of the Closing Date, not,
exceeding 60 days in the aggregate with all other adjournment rights contained
in this Agreement, in order to obtain any Required Estoppels that have not
theretofor been obtained by Seller. Notwithstanding anything to the contrary in
this Section 5.2(f), if Seller is unable to obtain all of the Required Estoppels
from Tenants under Leases demising at least sixty-five percent (65%) of the
Tenant Occupied Square Footage as of the Closing Date (whether before or after
any adjournments permitted under this Section 5.2(f)), Seller may (but shall not
be obligated to) deliver certificates executed by Seller in the form attached as
Exhibit B-2 hereto (each, a “Seller Estoppel”) for such number of Leases
required to satisfy the Required Estoppel condition. In addition, Seller shall
be released from any liability with respect to any Seller Estoppel upon the
delivery to Buyer of an executed Required Estoppel from such Tenant for which
the Seller has delivered such Seller Estoppel. If Seller elects to adjourn the
Closing one or more times in order to obtain the Required Estoppels, the Closing
shall occur five (5) Business Days after Seller obtains such Required Estoppels
or elects to deliver Seller Estoppels as provided above.
 
The conditions set forth in this Section 5.2 are solely for the benefit of Buyer
and may be waived, in writing, only by Buyer. Buyer shall, at all times prior to
the termination of this Agreement, have the right to waive any of these
conditions.
 
SECTION 5.3.   Waiver of Conditions Precedent. The Closing shall constitute
conclusive evidence that the Seller and the Buyer have respectively waived any
conditions precedent to Closing set forth in Section 5.1 hereof or Section 5.2
hereof, as the case may be, which have not been satisfied as of the Closing
Date.
 
ARTICLE VI
 
CLOSING DELIVERIES
 
SECTION 6.1.   Buyer Closing Deliveries. The Buyer shall deliver the following
documents at Closing:
 
(a)          with respect to the Asset:
 
(i)          an assignment and assumption of the Assumed Contracts (an
“Assignment of Assumed Contracts”) duly executed by the Buyer in substantially
the form of Exhibit C attached hereto;
 
(ii)         an assignment and assumption of the Leases (an “Assignment of
Leases”) duly executed by Buyer in substantially the form of Exhibit D attached
hereto;
 
(iii)        a tenant direction letter in the form of Exhibit I attached hereto
with respect to each Lease (the “Tenant Direction Letters”), duly executed by
Buyer; and
 
(iv)        The master lease agreement with respect to the vacant space in the
Building in the form attached hereto as Exhibit N (the “Master Lease”) duly
executed by Buyer.
 
(v)         The Post-Closing Escrow Agreement (Seller Work) duly executed by
Buyer.
 
(vi)        The Post-Closing Escrow Agreement (Buyer Work) duly executed by
Buyer.
 
(b)          with respect to the transactions contemplated hereunder:
 
(i)          such other assignments, instruments of transfer, and other
documents as the Seller may reasonably require in order to complete the
transactions contemplated hereunder;

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(ii)         a duly executed and sworn officer’s certificate from the Buyer (or
the general partner or managing member of the Buyer, where appropriate)
certifying that the Buyer has taken all necessary action to authorize the
execution of all documents being delivered hereunder and the consummation of all
of the transactions contemplated hereby and that such authorization has not been
revoked, modified or amended;
 
(iii)        all transfer tax returns which are required by law and the
regulations issued pursuant thereto in connection with the payment of all state
or local real property transfer taxes that are payable or arise as a result of
the consummation of the transactions contemplated by this Agreement, in each
case, as prepared by the Seller, reasonably approved by the Buyer and duly
executed by the Buyer; and
 
(iv)        a closing statement prepared and approved by the Seller and the
Buyer, consistent with the terms of this Agreement (a “Closing Statement”);
 
SECTION 6.2.   Seller Closing Deliveries. The Seller shall deliver the following
documents at Closing:
 
(a)         with respect to the Asset:
 
(i)          a bargain and sale deed without covenants (a “Deed”) in
substantially the form of Exhibit E attached hereto duly executed by the Seller;
 
(ii)         a bill of sale (a “Bill of Sale”) duly executed by the Seller in
substantially the form of Exhibit F attached hereto, relating to all fixtures,
chattels, equipment and articles of personal property owned by the Seller which
are currently located upon or attached to the Property and used in connection
with the operation of the Property (but not including items owned or leased by
any Tenants at the Property or Asset Manager or Property Manager or items leased
by Seller);
 
(iii)        an Assignment of Assumed Contracts duly executed by the Seller;
 
(iv)        an affidavit that the Seller is not a “foreign person” within the
meaning of the Foreign Investment in Real Property Tax Act of 1980, as amended,
in substantially the form of Exhibit G attached hereto duly executed by Seller;
 
(v)         a Closing Statement duly executed by Seller;
 
(vi)        an Assignment of Leases duly executed by the Seller;
 
(vii)       the Title Affidavit duly executed by Seller;
 
(viii)      the Tenant Direction Letters, duly executed by Seller;
 
(ix)        a notice letter to each service provider under the Assumed Contracts
in the form of Exhibit J attached hereto with respect to the Assumed Contracts
duly executed by Seller;
 
(x)          Seller shall deliver to Buyer all keys to any portion of the Asset,
to the extent in Seller’s possession or control;
 
(xi)        All Tenant files, including, without limitation, all correspondence
and originals of the Leases, to the extent in Seller’s possession or control;
 
(xii)       Any estoppel certificates received by Seller or, any Seller Estoppel
if delivered in accordance with Section 5.2(f);
 

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(xiii)      In accordance with Section 10.6, all security deposits under the
Leases;
 
(xiv)      A Form 1099-S Statement for Recipient of Proceeds from Real Estate
Transaction duly executed by Seller;
 
(xv)       The Master Lease duly executed by Seller.
 
(xvi)      The Post-Closing Escrow Agreement (Seller Work) duly executed by
Seller.
 
(xvii)     The Post-Closing Escrow Agreement (Buyer Work) duly executed by
Seller.
 
(b)          with respect to the transactions contemplated hereunder:
 
(i)          such other assignments, instruments of transfer, and other
documents as the Buyer may reasonably require in order to complete the
transactions contemplated hereunder or to evidence compliance by the Seller with
the covenants, agreements, representations and warranties made by it hereunder,
in each case, duly executed by the Seller;
 
(ii)         a duly executed and sworn officer’s certificate from the Seller
certifying that the Seller has taken all necessary action to authorize the
execution of all documents being delivered hereunder and the consummation of all
of the transactions contemplated hereby and that such authorization has not been
revoked, modified or amended;
 
(iii)        an executed and acknowledged incumbency certificate from the Seller
certifying the authority of the officers of the Seller to execute this Agreement
and the other documents delivered by the Seller to the Buyer at the Closing; and
 
(iv)        all transfer tax returns which are required by law and the
regulations issued pursuant thereto in connection with the payment of all state
or local real property transfer taxes that are payable or arise as a result of
the consummation of the transactions contemplated by this Agreement, in each
case, as prepared by the Seller, reasonably approved by the Buyer and duly
executed by the Seller (including, without limitation, a Real Property Transfer
Tax Return with respect to the New York City Real Property Transfer Tax, a New
York State Real Estate Transfer Tax Return and Credit Line Mortgage Certificate
with respect to the New York State Real Estate Transfer Tax, a New York State
Real Property Transfer Report Form RP-5217 NYC and a Department of Housing
Preservation and Development Affidavit in Lieu of Registration Statement).
 
(c)         In the event any Asset Related Property is not assignable, the
Seller shall use commercially reasonable efforts after Closing to provide the
Buyer, at no cost to the Seller, with the economic benefits of such property by
enforcing such property (solely at the Buyer’s direction) for the benefit of the
Buyer. The provisions of this Section 6.2(c) shall survive the Closing
hereunder.
 
ARTICLE VII
 
INSPECTIONS; RELEASE
 
SECTION 7.1.   Right of Inspection. Prior to the Closing Date, the Buyer and its
agents, attorneys, advisors and consultants shall have the right, upon
reasonable prior written notice to the Seller (which shall in any event be at
least 2 Business Days in advance) and at the Buyer’s sole cost, risk and expense
to enter and inspect the Property during business hours on Business Days,
provided that any such entry and inspection shall not unreasonably impede the
normal day-to-day business operation of the Property, and provided further that
the Seller shall be entitled to accompany the Buyer and its agents on any entry
or inspection. Notwithstanding the foregoing, the Buyer shall not have the right
to interview any employee of the Asset Manager or Property Manager or any
Tenant, or to do any invasive testing of the Property, in each case without the
prior written consent of the Seller in its

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sole discretion and the Seller shall be entitled to accompany the Buyer and its
agents on any such permitted interviews and testing. The Buyer’s right of access
of the Property shall be subject to the rights of any Tenants. Prior to any such
inspection, Buyer or any Buyer contractor shall furnish to Seller, in form
reasonably satisfactory to Seller, a certificate or certificates of insurance,
naming Seller, as an additional insured, evidencing Commercial General Liability
Insurance which includes contractual liability and products and completed
operations with limits not less than $1,000,000.00 per occurrence and
$2,000,000.00 in the aggregate for bodily injury, including death, and property
damage combined. The Buyer hereby indemnifies and agrees to defend and hold the
Seller and the Seller Related Entities harmless from and against any claim for
losses, liabilities, expenses, costs (including, without limitation, reasonable
attorneys’ fees), damage or injuries suffered or incurred to property or persons
to the extent arising out of, resulting from, relating to or in connection with
or from (i) any such inspection by the Buyer or its agents and (ii) any breach
of the provisions of this Section 7.1 by the Buyer; provided, however, that the
Buyer shall not be obligated to so indemnify Seller pursuant to this Section 7.1
for any pre-existing condition at the Property, except to the extent that such
pre-existing conditions are exacerbated by the actions of Buyer. The provisions
of this Article VII shall survive the Closing or the termination of this
Agreement.
 
SECTION 7.2.   Examination; No Contingencies.
 
(a)          In entering into this Agreement, the Buyer has not been induced by
and has not relied upon any written or oral representations, warranties or
statements, whether express or implied, made by the Seller, or any partner of
the Seller, or any affiliate, agent, employee, or other representative of any of
the foregoing or by any broker or any other person representing or purporting to
represent the Seller with respect to the Asset, the Condition of the Asset or
any other matter affecting or relating to the transactions contemplated hereby
except for those representations and warranties expressly set forth herein. The
Buyer’s obligations under this Agreement shall not be subject to any due
diligence conditions or contingencies or similar rights to terminate. The Buyer
acknowledges and agrees that, except as expressly set forth herein or in the
documents executed and delivered by the Seller at Closing, the Seller makes no
representations or warranties whatsoever, whether express or implied or arising
by operation of law, with respect to the Asset or the Condition of the Asset.
THE BUYER AGREES THAT THE ASSET WILL BE SOLD AND CONVEYED TO (AND ACCEPTED BY)
THE BUYER AT THE CLOSING IN THE THEN EXISTING CONDITION OF THE ASSET, AS IS,
WHERE IS, WITH ALL FAULTS, AND WITHOUT ANY WRITTEN OR VERBAL REPRESENTATIONS OR
WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED OR ARISING BY OPERATION OF
LAW, other than as expressly set forth in this Agreement or in the documents
executed and delivered by the Seller at Closing. Without limiting the generality
of the foregoing, except as set forth in this Agreement or in the documents
executed and delivered by the Seller at Closing, the transactions contemplated
by this Agreement are without statutory, express or implied warranty,
representation, agreement, statement or expression of opinion of or with respect
to the Condition of the Asset or any aspect thereof, including, without
limitation, (i) any and all statutory, express or implied representations or
warranties related to the suitability for habitation, merchantability, or
fitness for a particular purpose, (ii) any statutory, express or implied
representations or warranties created by any affirmation of fact or promise, by
any description of the Asset or by operation of law, and (iii) all other
statutory, express or implied representations or warranties by the Seller
whatsoever. The Buyer acknowledges that the Buyer has knowledge and expertise in
financial and business matters that enable the Buyer to evaluate the merits and
risks of the transactions contemplated by this Agreement.
  
(b)          For purposes of this Agreement, the term “Condition of the Asset”
means the following matters:
 
(i)           Physical Condition of the Property. The quality, nature and
adequacy of the physical condition of the Property, including, without
limitation, the quality of the design, labor and materials used to construct the
improvements included in the Property; the condition of structural elements,
foundations, roofs, glass, mechanical, plumbing, electrical, HVAC, sewage, and
utility components and systems; the capacity or availability of sewer, water, or
other utilities; the geology, soils, subsurface conditions, groundwater,
landscaping, and irrigation of or with respect to the Property, the location of
the Property in or near any special taxing district, flood hazard zone, wetlands
area, protected habitat, geological fault or subsidence zone, hazardous waste
disposal or clean-up site, or other special area, the existence, location, or

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condition of ingress, egress, access and parking; the condition of the personal
property and any fixtures; and the presence of any asbestos or other Hazardous
Materials, dangerous, or toxic substance, material or waste in, on, under or
about the Property and the improvements constituting a part thereof. “Hazardous
Materials” means (A) those substances included within the definitions of any one
or more of the terms “hazardous substances,” “toxic pollutants”, “hazardous
materials”, “toxic substances”, and “hazardous waste” in the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.
(as amended), the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Sections 1801 et seq., the Resource Conservation and Recovery Act of 1976 as
amended, 42 U.S.C. Section 6901 et seq., Section 311 of the Clean Water Act, 15
U.S.C. § 2601 et seq., 33 U.S.C. § 1251 et seq., 42 U.S.C. 7401 et seq., the
regulations and publications issued under any such laws and New York
Environmental Conservation Law, Section 27-0901 et seq. (B) petroleum (within
the meaning of Section 12 of the New York State Navigation Law and the
regulations adopted and publication promulgated pursuant to the above), radon
gas, lead based paint, asbestos or asbestos containing material and
polychlorinated biphenyls and (C) mold.
 
(ii)         Adequacy of the Asset. The economic feasibility, cash flow and
expenses of the Asset, and habitability, merchantability, fitness, suitability
and adequacy of the Property for any particular use or purpose.
 
(iii)        Legal Compliance of the Asset. The compliance or non-compliance of
the Seller or the operation of the Property or any part thereof in accordance
with, and the contents of, (i) all codes, laws, ordinances, regulations,
agreements, licenses, permits, approvals and applications of or with any
Governmental Authorities asserting jurisdiction over the Property, including,
without limitation, those relating to zoning, building, public works, parking,
fire and police access, handicap access, life safety, subdivision and
subdivision sales, and Hazardous Materials, dangerous, and toxic substances,
materials, conditions or waste, including, without limitation, the presence of
Hazardous Materials in, on, under or about the Property that would cause state
or federal agencies to order a clean up of the Property under any applicable
legal requirements and (ii) all agreements, covenants, conditions, restrictions
(public or private), condominium plans, development agreements, site plans,
building permits, building rules, and other instruments and documents governing
or affecting the use, management, and operation of the Property.
 
(iv)        Matters Disclosed in the Schedules. Those matters referred to in
this Agreement and the documents listed on the schedules attached hereto.
 
(v)         Insurance. The availability, cost, terms and coverage of liability,
hazard, comprehensive and any other insurance of or with respect to the
Property.
 
(vi)        Condition of Title. Subject to Article VIII, the condition of title
to the Property, including, without limitation, vesting, legal description,
matters affecting title, title defects, liens, encumbrances, boundaries,
encroachments, mineral rights, options, easements, and access; violations of
restrictive covenants, zoning ordinances, setback lines, or development
agreements; the availability, cost, and coverage of title insurance; leases,
rental agreements, occupancy agreements, rights of parties in possession of,
using, or occupying the Property; and standby fees, taxes, bonds and
assessments.
 
SECTION 7.3.   Release. The Buyer hereby agrees that the Seller, and each of its
partners, members, trustees, directors, officers, employees, representatives,
property managers, asset managers, agents, attorneys, affiliates and related
entities, heirs, successors, and assigns (collectively, the “Releasees”) shall
be, and are hereby, fully and forever released and discharged from any and all
liabilities, losses, claims (including third party claims), demands, damages (of
any nature whatsoever), causes of action, costs, penalties, fines, judgments,
reasonably attorneys’ fees, consultants’ fees and costs and experts’ fees
(collectively, the “Claims”), whether direct or indirect, known or unknown,
foreseen or unforeseen, that may arise on account of or in any way be connected
with the Asset or the Property including, without limitation, the physical,
environmental and structural condition of the Property or any law or regulation
applicable thereto, including, without limitation, any Claim or matter
(regardless of when it first appeared) relating to or arising from (a) the
presence of any environmental problems, or

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the use, presence, storage, release, discharge, or migration of Hazardous
Materials on, in, under or around the Property regardless of when such Hazardous
Materials were first introduced in, on or about the Property, (b) any patent or
latent defects or deficiencies with respect to the Property, (c) any and all
matters related to the Property or any portion thereof, including without
limitation, the condition and/or operation of the Property and each part
thereof, (d) any and all matters related to the current or future zoning or use
of the Property, including without limitation, any conditions imposed by the New
York Department of Buildings or similar governmental agencies and (e) the
presence, release and/or remediation of asbestos and asbestos containing
materials in, on or about the Property regardless of when such asbestos and
asbestos containing materials were first introduced in, on or about the
Property; provided, however, that in no event shall Releasees be released from
any Claims arising pursuant to the provisions of this Agreement or the Seller’s
obligations, if any, under the Closing Documents. The Buyer hereby waives and
agrees not to commence any action, legal proceeding, cause of action or suits in
law or equity, of whatever kind or nature, including, but not limited to, a
private right of action under the federal Superfund laws, 42 U.S.C. Sections
9601 et seq (as such law and statute may be amended, supplemented or replaced
from time to time), directly or indirectly, against the Releasees or their
agents in connection with Claims described above and all similar provisions or
rules of law.
 
ARTICLE VIII
 
TITLE AND PERMITTED EXCEPTIONS
 
SECTION 8.1.   Title Insurance and Survey. The Property shall be sold and is to
be conveyed, and the Buyer agrees to purchase the Property, subject only to the
Permitted Exceptions.
 
SECTION 8.2.   Title Commitment; Survey. The Buyer has received and reviewed a
copy of the Title Commitment and the Existing Survey. Except as expressly set
forth in Section 8.3(a), all Exceptions set forth in the Title Commitment and
Existing Survey shall be deemed Permitted Exceptions and are hereby approved by
the Buyer.
 
SECTION 8.3.   Delivery of Title.
 
(a)          At the Closing, the Seller shall obtain (i) releases of any
Exceptions encumbering the Property affirmatively placed on the Property by the
Seller after the Effective Date, (ii) releases of any other Exception (other
than Permitted Exceptions) encumbering the Property which Seller is not
obligated otherwise in this Agreement to discharge and which can be discharged
by the payment of a liquidated sum of money, provided, however, that Seller
shall not be obligated to expend more than $750,000 to discharge the items set
forth in this Section 8.3(a)(ii), and (iii) release of any mortgage created by
Seller encumbering the Property, including, without limitation the Existing
Mortgage (subject to Section 9.1(b)) (the Exceptions described in clauses (i)
through (iii) of this Section 8.3(a) are referred to herein collectively as
“Required Removal Exceptions”). Notwithstanding anything to the contrary set
forth herein, the Seller shall not be obligated to obtain releases of any liens
if the Title Company agrees to “insure over” the applicable lien and issue the
Title Policy without exception for the applicable lien, at no additional cost to
the Buyer. Subject to this Section 8.3(a) and Section 8.3(b) hereof, the Seller
shall not be required to take or bring any action or proceeding or any other
steps to remove any Exception (other than Required Removal Exceptions) or to
expend any moneys therefor (other than in the case of Required Removal
Exceptions), nor shall the Buyer have any right of action against the Seller, at
law or in equity, for the Seller’s inability to convey title subject only to the
Permitted Exceptions, other than for Seller’s failure to remove Required Removal
Exceptions.
 
(b)          Subject to Seller’s obligation to remove or discharge, or cause to
be removed or discharged, any Required Removal Exception, in the event that the
Seller is unable to convey title subject only to the Permitted Exceptions, and
the Buyer has not, prior to the Closing Date, given notice to the Seller that
the Buyer is willing to waive objection to each Exception which is not a
Permitted Exception, the Seller shall have the right, in the Seller’s sole and
absolute discretion, to elect to either (i) take such action as the Seller shall
deem advisable to attempt to discharge each such Exception which is not a
Permitted Exception or (ii) not remove or discharge, or cause to be removed or
discharged, each any such Exception and terminate this Agreement. In the event
that the Seller shall elect to attempt to discharge such Exceptions which are
not Permitted Exceptions, the Seller shall be

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entitled to one or more adjournments of the Closing Date not exceeding 60 days
in the aggregate with all other adjournments of the Closing Date set forth in
this Agreement. If, for any reason whatsoever, the Seller has not discharged
such Exceptions which are not Permitted Exceptions, prior to the expiration of
such sixty (60) day period, and if the Buyer is not willing to waive objection
to such Exceptions, this Agreement shall be terminated as of the expiration of
the last day of such adjournment. Subject to Section 13.2(c), in the event of a
termination of this Agreement pursuant to this Section 8.3(b), the Deposit shall
be returned to the Buyer, and neither party shall have any further rights or
obligations hereunder except for those that expressly survive the termination of
this Agreement. Nothing in this Section 8.3(b) shall require the Seller, despite
any election by the Seller to attempt to discharge any Exceptions (other than
Required Removal Exceptions), to take or bring any action or proceeding or any
other steps to remove any Exception (other than Required Removal Exceptions) or
to expend any moneys therefor (other than in the case of Required Removal
Exceptions).
 
SECTION 8.4.   The Buyer’s Right to Accept Title. Notwithstanding the foregoing
provisions of this Article VIII, the Buyer, by notice given to the Seller at any
time prior to the fifth (5th) days after Buyer receives notice from Seller
electing to proceed under clause (ii) of Section 8.3(b), may elect to accept
title to the Property subject to any such Exceptions that Seller elects not to
remove or discharge, or cause to be removed or discharged, of record. In such
event, this Agreement shall remain in effect and the parties shall proceed to
Closing and, at Closing, Buyer shall receive a credit against the Purchase Price
in an amount equal to the lesser of (i) the amount necessary to discharge such
Exceptions and (ii) $750,000 less any amounts incurred by Seller in connection
with its obligations to under Section 8.3(a)(ii).
 
SECTION 8.5.   Cooperation. In connection with obtaining the Title Policy, the
Buyer and the Seller, as applicable, and to the extent requested by the Title
Company, will deliver the Title Company (a) evidence sufficient to establish (i)
the legal existence of the Buyer and the Seller and (ii) the authority of the
respective signatories of the Seller and the Buyer to bind the Seller and the
Buyer, as the case may be, and (b) a certificate of good standing of the Seller.
In addition, the Seller will deliver to the Title Company at Closing an owner’s
title affidavit in the form attached hereto as Exhibit H (the “Title
Affidavit”).
  
SECTION 8.6.   Violations. The Buyer agrees to purchase the Property subject to
any and all notes or notices of violations of law, or municipal ordinances,
orders, designations or requirements whatsoever noted in or issued by any
Governmental Authority (collectively, “Violations”), whether existing before or
after the Effective Date. The Seller shall have no duty to remove, cure or
otherwise comply with any such Violations and, at the Closing, the Buyer shall
accept the Property subject to all such Violations, except that Seller shall be
responsible for the payment of any penalties, fees, or fines (or interest
thereon) imposed on or before the Closing in connection with any Violations.
 
ARTICLE IX
 
TRANSACTION COSTS; RISK OF LOSS
 
SECTION 9.1.   Transaction Costs.
 
(a)          Seller shall pay, and shall otherwise be liable for, the New York
State Transfer Tax in accordance with Article 31 of the New York State Tax Law
and the New York City Real Property Transfer Tax in accordance with Title 11,
Chapter 21 of the New York City Administrative Code (the “Transfer Taxes”).
Seller and Buyer agree that the Transfer Taxes will be paid based upon the
Purchase Price. In addition to the foregoing and their respective apportionment
obligations hereunder, (i) the Seller and the Buyer shall each be responsible
for the payment of the costs of their respective legal counsel, advisors and
other professionals employed thereby in connection with the sale of the Asset,
(ii) the Buyer shall be responsible for all costs and expenses associated with
(1) the premiums, endorsements, search costs, charges for any update to the
Title Commitment and other title charges related to the Title Policy (in each
case to the extent requested by the Buyer), other than the costs in connection
with discharging any Exceptions which are the obligation of the Seller
hereunder, (2) the Buyer’s due diligence, (3) payment, at the Closing, of the
recording charges and fees (other than deed recordation taxes, which shall be
paid by Seller) for the documents necessary to transfer the Asset, (4) obtaining
any financing the Buyer may

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elect to obtain (including any fees, financing costs, transfer taxes, mortgage
and recordation taxes and intangible taxes in connection therewith) and (5) all
other costs which are the responsibility under applicable law for the Buyer to
pay. The costs and fees of Escrow Agent shall be divided equally between the
Seller and the Buyer.
 
(b)          If the Buyer requests that the Existing Mortgage Loans be assigned
to the Buyer at Closing, then Seller shall use commercially reasonable efforts
to cause the holder of the Existing Mortgage Loans encumbering the Property to
assign the Existing Mortgage Loans and the lien related thereto to Buyer’s
financing provider; provided that at, and as a condition to Seller’s obligation
to consummate the Closing, Buyer shall (i) pay (x) all fees (including legal
fees) charged by the mortgagee of the Existing Mortgage Loan for such assignment
and (y) all recording and filing costs in connection with such assignment (the
“Mortgage Assignment Costs”), and (ii) pay Seller an amount equal to 50% of the
net mortgage recording tax savings received by Buyer as a result of such
assignment, after deducting the Mortgage Assignment Costs.
 
(c)           Each party to this Agreement shall indemnify the other parties and
their respective successors and assigns from and against any and all loss,
damage, cost, charge, liability or expense (including court costs and reasonable
attorneys’ fees) which such other party may sustain or incur as a result of the
failure of either party to timely pay any of the aforementioned taxes, fees or
other charges for which it has assumed responsibility under this Section 9.1.
The provisions of this Section 9.1 shall survive the Closing or the termination
of this Agreement.
 
SECTION 9.2.   Risk of Loss.
 
(a)          If, on or before the Closing Date, the Property or any portion
thereof shall be (i) damaged or destroyed by fire or other casualty or (ii)
taken as a result of any condemnation or eminent domain proceeding, the Seller
shall promptly notify the Buyer and, at Closing, the Seller will (x) credit
against the Purchase Price payable by the Buyer at the Closing an amount equal
to the proceeds (other than on account of business or rental interruption
relating to the period prior to Closing), if any, received by the Seller as a
result of such casualty or condemnation, together with a credit for any
deductible under such insurance, less any reasonable costs incurred by Seller in
the repair or restoration of the Property in accordance with the terms hereof,
and (y) assign to the Buyer all rights of the Seller, if any, to the insurance
or condemnation proceeds attributable to the Property (other than on account of
business or rental interruption relating to the period prior to Closing) and to
all other rights or claims attributable to the Property arising out of or in
connection with such casualty or condemnation, to the extent payable after the
Closing.
 
(b)          Notwithstanding the provisions of Section 9.2(a), if, on or before
the Closing Date, the Property or any portion thereof shall be (i) damaged or
destroyed by a Material Casualty or (ii) taken as a result of a Material
Condemnation or (iii) the subject of a notice of a Material Condemnation, the
Buyer shall have the right, exercised by notice to the Seller no more than 30
days after the Buyer has received notice of such Material Casualty or actual or
pending Material Condemnation, to terminate this Agreement, in which event the
Deposit shall be returned to the Buyer and neither party shall have any further
rights or obligations hereunder other than those which expressly survive the
termination of this Agreement. If the Buyer fails to timely terminate this
Agreement in accordance with this Section 9.2(b), the provisions of Section
9.2(a) shall apply. As used in this Section 9.2(b), a “Material Casualty” shall
mean any damage to the Property or any portion thereof by fire or other casualty
that, in the reasonable judgment of an independent third-party selected by the
Seller and approved by the Buyer, may be expected to cost in excess of ten
percent (10%) of the Purchase Price to repair. As used in this Section 9.2(b), a
“Material Condemnation” shall mean (x) a taking of the Property or more than 5%
thereof, (y) a taking that adversely affects access to the Property, or (z) a
taking that materially impairs the use of the Property or more than 5% of the
value of the Property, and which cannot be restored to substantially the same
use or value as before the taking.
 
(c)          The provisions of this Section 9.2 are intended to supersede those
of Section 5-1311 of the General Obligations Law of New York and are hereby
deemed to constitute an express agreement to the contrary.
 

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ARTICLE X
 
ADJUSTMENTS
 
Unless otherwise provided below, the following are to be adjusted and prorated
between the Seller and the Buyer as of 11:59 P.M. on the day preceding the
Closing, based upon a 365 day year, and the net amount thereof under this
Article X shall be added to (if such net amount is in the Seller’s favor) or
deducted from (if such net amount is in the Buyer’s favor) the Purchase Price
payable at Closing:
 
SECTION 10.1.   Fixed Rents and Additional Rents.
 
(a)          Fixed rents (collectively, “Fixed Rents”) and Additional Rents
(Fixed Rents and Additional Rents being together referred to herein as “Rents”)
paid or payable by the Tenants in connection with their occupancy of the
Property shall be adjusted and prorated on an if, as and when collected basis.
Any Rents collected by the Buyer or the Seller after the Closing from a Tenant
if such Tenant owes Rents for periods prior to the Closing, shall be applied (i)
first, in payment of Rents owed by such tenant for the month in which the
Closing occurs, (ii) second, in payment of Rents owed by such tenant for the
month after the month in which the Closing occurs, (iii) third, in payment of
Rents owed by such tenant for the month immediately prior to the month in which
the Closing Date occurs, (iv) fourth, in payment of Rents due and owed by such
tenant, if any, for any period after the month in which the Closing Date occurs,
and (v) fifth, in payment of any remaining Rents owed by such tenant for any
period prior to the month in which the Closing occurs. Each such amount, less
any costs of collection (including reasonable counsel fees) reasonably allocable
thereto, shall be adjusted and prorated as provided above, and the party who
receives such amount shall promptly pay over to the other party the portion
thereof to which it is so entitled. For the purposes of this provision, the term
“Additional Rent” shall mean amounts payable under the Leases for (i) the
payment of additional rent based upon a percentage of the tenant’s business
during a specified annual or other period (sometimes referred to as “percentage
rent”), (ii) so-called common area maintenance or “CAM” charges, and (iii)
so-called “escalation rent” or additional rent based upon increases in real
estate taxes or operating expenses or labor costs or cost of living or porter’s
wages or otherwise. As to any Additional Rent in respect of an accounting period
that shall have expired prior to the Closing but which is payable after the
Closing, the Buyer shall pay the entire amount over to the Seller upon the
Buyer’s receipt thereof.
 
(b)          The Buyer shall use commercially reasonable efforts to collect any
arrearages in the Rents set forth on Scheduled 3.2(c) that remain outstanding at
Closing, but the Buyer shall not be obligated to engage a collection agency or
take legal action to collect such arrearages in Rents. Notwithstanding the
foregoing, if the Buyer shall be unable to collect such past due Rents, the
Seller shall have the right to pursue the Tenants to collect such delinquencies
(including, without limitation, the prosecution of one or more lawsuits) but the
Seller shall not take any action to evict, or terminate the Lease of any Tenant
or which may reasonably be expected to lead to the termination of the Lease of
any Tenant. The Seller shall furnish to the Buyer all information relating to
the period prior to the Closing that is reasonably necessary for the billing of
such Rent and, promptly after request from Seller, the Buyer will deliver to the
Seller copies of all statements relating to Rent for a period prior to the
Closing. The Buyer shall bill tenants for Rents for accounting periods prior to
the Closing in accordance with and on the basis of such information furnished by
the Seller.
 
(c)          To the extent that any portion of Additional Rent is required to be
paid monthly by tenants on account of estimated amounts for any calendar year
(or, if applicable, any lease year or tax year or any other applicable
accounting period), and at the end of such calendar year (or lease year, tax
year or other applicable accounting period, as the case may be), such estimated
amounts are to be recalculated based upon the actual expenses, taxes and other
relevant factors for that calendar (lease or tax) year or other applicable
accounting period, with the appropriate adjustments being made with such
tenants, then such portion of the Additional Rent shall be prorated between the
Seller and the Buyer at the Closing based on such estimated payments actually
paid by tenants (i.e., with the Seller entitled to retain all monthly or other
periodic installments of such amounts paid by tenants with respect to periods
prior to the calendar month or other applicable installment period in which the
Closing occurs (on a pro-rata basis for any partial months), the Seller to pay
to the Buyer at the Closing all monthly or other periodic installments of such
amounts theretofore received by the Seller with respect to periods following the
calendar month

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or other applicable installment period in which the Closing occurs and the
Seller and the Buyer to apportion as of the Closing all monthly or other
periodic installments of such amounts paid by tenants with respect to the
calendar month or other applicable installment period in which the Closing
occurs). At the time(s) of final calculation and collection from (or refund to)
each tenant of the amounts in reconciliation of actual Additional Rent for a
period for which estimated amounts paid by such tenant have been prorated, there
shall be a re-proration between the Seller and the Buyer. If, with respect to
any Tenant, the recalculated Additional Rent exceeds the estimated amount paid
by such tenant, upon collection from the tenant, such excess shall be
apportioned between the Seller and the Buyer as of the Closing in accordance
with paragraph (a), (b) and (c) of this Section 10.1. If, with respect to any
Tenant, the recalculated Additional Rent is less than the estimated amount paid
by such Tenant, such shortfall shall be apportioned between the Seller and the
Buyer as of the Closing, with the Seller paying to the Buyer the portion of such
shortfall so allocable to the Seller. Seller and Buyer agree that as soon as
reasonably possible after the close of the calendar year in which the Closing
occurs that the parties shall undertake a final master reconciliation of
Additional Rent. Such reconciliation shall be final. For purposes hereof, Seller
and Buyer shall each prepare tenant reconciliations for their respective
applicable periods of ownership of the Asset and Buyer agrees to transmit such
information to the tenants.
 
(d)          Until the earlier to occur of (i) such time as all amounts required
to be paid to the Seller by the Buyer pursuant to this Section 10.1 shall have
been paid in full and (ii) one (1) year after Closing, the Buyer shall furnish
to the Seller, upon the Seller’s request, a reporting of rents which have been
collected by the Buyer after the Closing with respect to the Leases with
delinquent Rents as of the Closing. The Seller shall also have the right from
time to time following the Closing, upon reasonable prior notice to Buyer and
during ordinary business hours, to review the Buyer’s rental records with
respect to such Leases.
 
SECTION 10.2.   Taxes and Assessments. Real estate (ad valorem) and personal
property taxes and assessments assessed with respect to the year in which the
Closing occurs shall be adjusted and prorated based on (a) the periods of
ownership by the Seller and the Buyer during such year and (b) the most current
official real property tax information available from the county assessor’s
office where the Property is located or other assessing authorities. If real
property tax and assessment figures for the taxes or assessments to be
apportioned between the Buyer and the Seller pursuant to this Section are not
available, real property taxes shall be prorated based on the most recent
assessment, subject to further and final adjustment when the tax rate and/or
assessed valuation for such taxes and assessments for the Property is fixed.
 
SECTION 10.3.   Water and Sewer Charges. Water rates, water meter charges, sewer
rents and vault charges, if any (other than any such charges, rates or rents
which are payable by any Tenant pursuant to the Leases, for which no adjustment
shall be made), will be paid by the Seller to the Closing Date. If there is a
water meter, or meters, on the Property, the Seller agrees that it shall at the
Closing furnish a reading of same to a date not more than 30 days prior to the
Closing and the unfixed meter charges and the unfixed sewer rent thereon for the
time intervening from the date of the last reading shall be apportioned on the
basis of such last reading, and shall be appropriately readjusted after the
Closing on the basis of the next subsequent bills. Unmetered water charges shall
be apportioned on the basis of the charges therefor for the same period of the
preceding calendar year, but applying the current rate thereto.
 
SECTION 10.4.   Utility Charges. Gas, steam, electricity and other public
utility charges (other than any such charges which are payable by any Tenant
pursuant to the Leases, for which no adjustment will be made) will be paid by
the Seller to the utility company to the Closing Date. The Seller shall arrange
for a final reading of all utility meters (covering gas, water, steam and
electricity) as of the Closing, except meters the charges of which are payable
by any Tenant under the Leases. To the extent necessary, the Seller and the
Buyer shall jointly execute a letter to each of such utility companies advising
such utility companies of the termination of the Seller’s responsibility for
such charges for utilities furnished to the Property as of the date of the
Closing and commencement of the Buyer’s responsibilities therefor from and after
such date. If a bill is obtained from any such utility company as of the
Closing, the Seller shall pay such bill on or before the Closing. If such bill
shall not have been obtained on or before the Closing, the Seller shall, upon
receipt of such bill, pay all such utility charges as evidenced by such bill or
bills pertaining to the period prior to the Closing, and the Buyer shall pay all
such utility

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charges pertaining to the period thereafter. Any bill which shall be rendered
which shall cover a period both before and after the date of Closing shall be
apportioned between the Buyer and the Seller as of the Closing.
 
SECTION 10.5.   Contracts. Charges payable under the Contracts in respect of the
billing period of the related service provider in which the Closing Date occurs
(the “Current Billing Period”) shall be prorated on a per diem basis based upon
the number of days in the Current Billing Period prior to the Closing Date
(which shall be allocated to Seller) and the number of days in the Current
Billing Period on and after the Closing Date (which shall be allocated to Buyer)
and assuming that all charges are incurred uniformly during the Current Billing
Period, provided however, Seller shall, upon Buyer’s request, at Buyer’s sole,
cost and expense, terminate any terminable Contracts and, notwithstanding the
foregoing, on or prior to the date of Closing, Seller shall terminate any
existing management and leasing agreements at Seller’s sole cost and expense,
other than any liability under such leasing agreement in respect of leases or
extensions signed by Buyer from and after the Closing.
 
SECTION 10.6.   Security Deposits. The actual amounts of the security deposits
provided for under the Leases being held by the Seller as set forth on Schedule
3.2(b)(3) less any amounts that are applied against lease obligations in the
ordinary course of business or returned to tenants upon the expiration of Leases
shall, in the case of security deposits held in the form of cash, be credited to
the Buyer against the balance of the Purchase Price. Any security deposits in
form other than cash (including letters of credit) shall be transferred to the
Buyer, at Seller’s cost and expense, by way of appropriate instruments of
transfer or assignment as soon as practicable following the Closing.
 
SECTION 10.7.   Leasing Costs.
 
(a)          Buyer shall be responsible for the payment of all Leasing Costs
incurred or to be incurred in connection with (1) any lease entered into by
Seller with respect to the Property after the Effective Date in accordance with
the terms of this Agreement (a “New Lease”), (2) amendments entered into after
the Effective Date in accordance with this Agreement to renew, extend, expand or
otherwise amend existing Leases or New Leases, and (3) any renewals, extensions
or expansions of, or the exercise of any other option under, existing Leases or
New Leases exercised by tenants in accordance with the applicable Lease after
the Effective Date (the “Buyer’s Leasing Costs”). If, as of the Closing Date,
Seller shall have paid any of the Buyer’s Leasing Costs, Buyer shall reimburse
Seller therefor at Closing.
 
(b)          Seller shall pay prior to Closing or credit Buyer at Closing (to
the extent unpaid), all of the Leasing Costs and rent abatements set forth on
Schedule 3.2(f)(i) (the “Seller’s Leasing Costs”) and Lease Termination
Payments. If Buyer is given a credit at Closing for any of the Seller’s Leasing
Costs and Lease Termination Payments, then Buyer thereafter shall be obligated
to pay any such Seller’s Leasing Costs or Lease Termination Payments when due,
such obligation to survive the Closing. Buyer shall indemnify, defend, and hold
Seller and the other Seller-Related Entities harmless from and against any
losses, costs, claims, damages, and liabilities (including, without limitation,
reasonable attorneys’ fees and expenses), to the extent arising out of or
resulting from Buyer’s failure to timely pay such Seller’s Leasing Costs and
Lease Termination Payments for which Buyer received a credit at Closing. Buyer’s
obligations under this Section 10.7(b) shall survive the Closing. Seller shall
indemnify, defend, and hold Buyer and the other Buyer-Related Entities harmless
from and against any losses, costs, claims, damages, and liabilities (including,
without limitation, reasonable attorneys’ fees and expenses) to the extent
arising out of or resulting from Seller’s failure to timely pay any Seller’s
Leasing Costs and Lease Termination Payments for which Buyer did not receive a
credit at Closing. Seller’s obligations under this Section 10.7(b) shall survive
the Closing.
 
SECTION 10.8.   Elevator Renovation. If, within five (5) business days after the
Effective Date, Buyer requests that Seller assign the contracts listed on
Schedule 10.8(a) (the “Elevator Renovation Contracts”), the Elevator Renovation
Plans and Specifications, or the purchase orders listed on Schedule 10.8(b) (the
“Elevator Renovation Purchase Orders”) to Buyer at Closing, then, at Closing (i)
if Buyer requests an assignment of the Elevator Renovation Purchase Orders (a)
Buyer shall pay to Seller an amount equal to the payments, charges, fees and/or
deposits paid by Seller under the Elevator Renovation Purchase Orders as
reflected on Schedule 10.8(b) and (b) Seller shall transfer to the Buyer all of
Seller’s right, title and interest, pursuant to the Bill of Sale, to any

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materials and supplies previously delivered to Seller under the Elevator
Renovation Purchase Orders, and (ii) if Buyer requests assignment of the
Elevator Renovation Contracts and/or the Elevator Renovation Plans and
Specifications (a) Buyer shall pay to Seller an amount equal to the payments,
charges, fees and/or deposits paid by Seller for the Elevator Renovation
Contracts and/or the Elevator Renovation Plans and Specifications and (b) Seller
shall transfer to the Buyer all of Seller’s right, title and interest, pursuant
to the Assignment of Assumed Contracts, in, to and under the Elevator Renovation
Contracts and/or the Elevator Renovation Plans and Specifications (as the case
may be). For the avoidance of doubt, Seller shall not be obligated hereunder to
perform or commence any work related to the Elevator Renovation.
 
SECTION 10.9.   Other. If applicable, the Purchase Price shall be adjusted at
Closing to reflect the adjustment of any other item which, under the explicit
terms of this Agreement, is to be apportioned at Closing.
 
SECTION 10.10.   Re-Adjustment. If any items to be adjusted pursuant to this
Article X are not determinable at the Closing, the adjustment shall be made
subsequent to the Closing when the charge is determined. Any errors or omissions
in computing adjustments or readjustments at the Closing or thereafter shall be
promptly corrected or made, provided that the party seeking to correct such
error or omission or to make such readjustment shall have notified the other
party of such error or omission or readjustment on or prior to the date that is
365 days following the Closing. The provisions of this Article X and the
obligations of the Seller and the Buyer hereunder shall survive the Closing for
365 days, provided, however, that with respect to the taxes and assessments
under Section 10.2, the obligations of Buyer and Seller shall survive until a
final determination of such taxes and assessments.
 
ARTICLE XI
 
INDEMNIFICATION
 
SECTION 11.1.   Indemnification by the Seller. Following the Closing and subject
to Sections 11.3 and 11.4, the Seller shall indemnify and hold the Buyer, its
affiliates, members and partners, and the partners, shareholders, officers,
directors, employees, representatives and agents of each of the foregoing
(collectively, “Buyer-Related Entities”) harmless from and against any and all
costs, fees, expenses, damages, deficiencies, interest and penalties (including,
without limitation, reasonable attorneys’ fees and disbursements) suffered or
incurred by any such indemnified party in connection with any and all losses,
liabilities, claims, damages and expenses (“Losses”), arising out of, or in any
way relating to, (a) any breach of any representation or warranty of the Seller
contained in this Agreement or in any Closing Document and (b) any breach of any
covenant of the Seller which survives the Closing contained in this Agreement or
in any Closing Document.
 
SECTION 11.2.   Indemnification by the Buyer. Following the Closing and subject
to Sections 11.3 and 11.4, the Buyer shall indemnify and hold the Seller, its
affiliates, members and partners, and the partners, shareholders, officers,
directors, employees, representatives and agents of each of the foregoing
(collectively, “Seller-Related Entities”) harmless from any and all Losses to
the extent arising out of, or in any way relating to, (a) any breach of any
representation or warranty by the Buyer contained in this Agreement or in any
Closing Document and (b) any breach of any covenant of the Buyer which survives
the Closing contained in this Agreement or in any Closing Document.
 
SECTION 11.3.   Limitations on Indemnification. Notwithstanding the foregoing
provisions of Sections 11.1 or 14.1(a)(ii), (a) the Seller shall not be required
to indemnify the Buyer or any Buyer-Related Entities under this Agreement unless
the aggregate of all amounts for which an indemnity would otherwise be payable
by the Seller under Sections 11.1 or 14.1(a)(ii) exceeds the Basket Limitation,
in which case the Buyer shall be entitled to recover all Losses incurred by the
Buyer without regard to the Basket Limitation, (b) in no event shall the
liability of the Seller with respect to the indemnification provided for in
Sections 11.1 and 14.1(a)(ii) exceed in the aggregate the Cap Limitation and (c)
in the event the Buyer obtains knowledge of any inaccuracy or breach of any
representation, warranty, or covenant of the Seller contained in this Agreement
(a “Buyer Waived Breach”) after the Effective Date but prior to the Closing, and
the Closing occurs, then the Buyer and any Buyer-Related Entities shall be
deemed to have waived and forever renounced any right to assert a claim for
indemnification under this Article

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XI for, or any other claim or cause of action under this Agreement, at law or in
equity on account of any such Buyer Waived Breach. In no event shall the Buyer
be entitled to seek or obtain consequential, special, punitive or exemplary
damages against the Seller. In no event shall the Seller be entitled to seek or
obtain consequential, special, punitive or exemplary damages against the Buyer.
 
SECTION 11.4.   Survival. The representations, warranties and covenants
contained in this Agreement and the Closing Documents shall survive for a period
of nine (9) months after the Closing (the “Survival Period”) unless a longer or
shorter survival period is expressly provided for in this Agreement.
Additionally, the Survival Period shall be extended to the date on which a final
non-appealable judgment is entered in connection with any action commenced by
Buyer against Seller or notice of claim is delivered by Buyer to Seller under
Section 11.1, provided that Buyer shall be required to commence an action
against Seller within 30 days of the delivery of such claim.
 
SECTION 11.5.   Indemnification as Sole Remedy. If the Closing has occurred, the
sole and exclusive remedy available to a party in the event of a breach by the
other party to this Agreement of any representation, warranty, covenant or other
provision of this Agreement or any Closing Document which survives the Closing
shall be the indemnifications provided for under this Article XI.
 
ARTICLE XII
 
TAX CERTIORARI PROCEEDINGS
 
SECTION 12.1.   Prosecution and Settlement of Proceedings. If any Tax Reduction
Proceedings in respect of the Property, relating to any fiscal years ending
prior to the fiscal year in which the Closing occurs are pending at the time of
the Closing, the Seller reserves and shall have the right to continue to
prosecute and/or settle the same. If any Tax Reduction Proceedings in respect of
the Property, relating to the fiscal year in which the Closing occurs, are
pending at the time of Closing, then the Seller reserves and shall have the
right to continue to prosecute and/or settle the same; provided, however, that
the Seller shall not settle any such proceeding without the Buyer’s prior
written consent, which consent shall not be unreasonably withheld or delayed,
and, if Seller fails to continue to prosecute same, then Buyer shall have the
right to prosecute and settle same without Seller’s prior written consent. The
Buyer shall reasonably cooperate with the Seller in connection with the
prosecution of any such tax reduction proceedings relating to a fiscal year in
which the Closing occurs.
 
SECTION 12.2.   Application of Refunds or Savings. Any refunds or savings in the
payment of taxes resulting from such tax reduction proceedings applicable to
taxes payable during the period prior to the date of the Closing shall belong to
and be the property of the Seller and any refunds or savings in the payment of
taxes applicable to taxes payable from and after the date of the Closing shall
belong to and be the property of the Buyer (it being acknowledged that any
refunds or savings in the payment of taxes applicable to the fiscal year in
which the Closing occurs shall be apportioned pursuant to Section 10.2 hereof);
provided, however, that if any such refund creates an obligation to reimburse
the Tenants for any rents or additional rents paid or to be paid, that portion
of such refund equal to the amount of such required reimbursement (after
deduction of allocable expenses as may be provided in the applicable Lease)
shall, at the Seller’s election, either (a) be paid to the Buyer and the Buyer
shall disburse the same to the Tenant or (b) be paid by the Seller directly to
the Tenant. All reasonable attorneys’ fees and other expenses incurred in
obtaining such refunds or savings shall be apportioned between the Seller and
the Buyer in proportion to the gross amount of such refunds or savings payable
to the Seller and the Buyer, respectively (without regard to any amounts
reimbursable to Tenant); provided, however, that neither the Seller nor the
Buyer shall have any liability for any such fees or expenses in excess of the
refund or savings paid to such party unless such party initiated such
proceeding.
 
SECTION 12.3.   Survival. The provisions of this Article XII shall survive the
Closing.

 

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ARTICLE XIII
 
TERMINATION AND DEFAULT
 
SECTION 13.1.   THE BUYER’S DEFAULT; FAILURE OF CONDITIONS.
 
(a)          THIS AGREEMENT MAY BE TERMINATED BY THE SELLER BY WRITTEN NOTICE TO
BUYER IF (1) BUYER FAILS TO CLOSE THE ACQUISITION OF THE ASSET AS DESCRIBED
HEREIN OR (2) THERE IS A FAILURE OF ANY OR ALL OF THE CONDITIONS PRECEDENT TO
THE SELLER’S OBLIGATIONS SET FORTH IN SECTION 5.1 WHICH FAILURE HAS NOT BEEN
WAIVED BY THE SELLER ON OR PRIOR TO THE CLOSING DATE.
 
(b)          IN THE EVENT THIS AGREEMENT IS TERMINATED PURSUANT TO SECTION
13.1(a), THIS AGREEMENT SHALL BE NULL AND VOID AND OF NO FURTHER FORCE OR EFFECT
AND NEITHER PARTY SHALL HAVE ANY RIGHTS OR OBLIGATIONS AGAINST OR TO THE OTHER
EXCEPT (I) FOR THOSE PROVISIONS HEREOF WHICH BY THEIR TERMS EXPRESSLY SURVIVE
THE TERMINATION OF THIS AGREEMENT AND (II) AS SET FORTH IN SECTION 13.1(c).
 
(c)          IN THE EVENT THAT THE SELLER TERMINATES THIS AGREEMENT AS A RESULT
OF A DEFAULT BY THE BUYER OF ITS OBLIGATION TO PURCHASE THE ASSET ON THE CLOSING
DATE, AS THE SAME MAY BE ADJOURNED PURSUANT UNDER THIS AGREEMENT, THE SELLER
SHALL BE ENTITLED TO RECEIVE THE ENTIRE DEPOSIT. IN SUCH EVENT, THE ESCROW AGENT
SHALL IMMEDIATELY DISBURSE THE DEPOSIT TO THE SELLER AND THE SELLER SHALL HAVE
NO FURTHER OBLIGATIONS UNDER THIS AGREEMENT, EXCEPT THOSE WHICH EXPRESSLY
SURVIVE SUCH TERMINATION. THE BUYER AND THE SELLER HEREBY ACKNOWLEDGE AND AGREE
THAT IT WOULD BE IMPRACTICAL AND/OR EXTREMELY DIFFICULT TO FIX OR ESTABLISH THE
ACTUAL DAMAGE SUSTAINED BY THE SELLER AS A RESULT OF SUCH FAILURE TO CLOSE, AND
AGREE THAT THE DEPOSIT IS A REASONABLE APPROXIMATION THEREOF. ACCORDINGLY, IN
THE EVENT THAT THE BUYER DEFAULTS IN ITS OBLIGATION TO PURCHASE THE ASSET ON THE
CLOSING DATE, AS THE SAME MAY BE ADJOURNED PURSUANT TO THIS AGREEMENT, THE
DEPOSIT SHALL CONSTITUTE AND BE DEEMED TO BE THE AGREED AND LIQUIDATED DAMAGES
OF THE SELLER, AND SHALL BE PAID BY THE ESCROW AGENT TO THE SELLER AS SELLER’S
SOLE AND EXCLUSIVE REMEDY HEREUNDER; PROVIDED, HOWEVER, THE FOREGOING SHALL NOT
LIMIT THE BUYER’S OBLIGATION TO PAY TO THE SELLER ALL ATTORNEYS’ FEES AND COSTS
OF THE SELLER PURSUANT TO SECTION 15.23 IN THE EVENT SELLER IS SUCCESSFUL IN ANY
ACTION TO ENFORCE THE PROVISIONS OF THIS SECTION 13.1. THE PAYMENT OF THE
DEPOSIT AS LIQUIDATED DAMAGES IS NOT INTENDED TO BE A FORFEITURE OR PENALTY, BUT
IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES.
 
SECTION 13.2.   THE SELLER’S DEFAULT; FAILURE OF CONDITIONS
 
(a)          THIS AGREEMENT MAY BE TERMINATED BY THE BUYER PRIOR TO THE CLOSING
IF (I) ANY OF THE CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATIONS SET FORTH IN
SECTION 5.2 HAVE NOT BEEN SATISFIED OR WAIVED BY THE BUYER ON OR PRIOR TO THE
CLOSING DATE, AS REQUIRED UNDER THIS AGREEMENT OR (II) THERE IS A MATERIAL
BREACH OR DEFAULT BY THE SELLER IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND SUCH BREACH HAS NOT BEEN CURED BY THE SELLER BY THE EARLIER OF (x)
THE CLOSING DATE AND (y) THE THIRTIETH DAY AFTER THE SELLER’S ITS RECEIPT OF
NOTICE OF SUCH BREACH FROM THE BUYER.
 
(b)          UPON TERMINATION OF THIS AGREEMENT BY THE BUYER PURSUANT TO AND
SUBJECT TO SECTION 13.2(a), THE ESCROW AGENT SHALL DISBURSE THE DEPOSIT TO THE
BUYER AND UPON SUCH DISBURSEMENT AND REIMBURSEMENT TO BUYER THE SELLER AND THE

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BUYER SHALL HAVE NO FURTHER OBLIGATIONS UNDER THIS AGREEMENT, EXCEPT THOSE WHICH
EXPRESSLY SURVIVE SUCH TERMINATION AND AS SET FORTH IN SECTION 13.2(C).
 
(c)          IF THE SELLER SHALL DEFAULT IN THE PERFORMANCE OF ITS MATERIAL
OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, SELLER’S
FAILURE TO CAUSE THE SALE OF THE ASSET TO BUYER ON THE CLOSING DATE), THEN THE
BUYER, AT ITS OPTION, AS ITS SOLE AND EXCLUSIVE REMEDY, MAY EITHER (I) TERMINATE
THIS AGREEMENT, DIRECT THE ESCROW AGENT TO DELIVER THE DEPOSIT TO THE BUYER AND
RETAIN THE DEPOSIT AT WHICH TIME THIS AGREEMENT SHALL BE TERMINATED AND OF NO
FURTHER FORCE AND EFFECT EXCEPT FOR THE PROVISIONS WHICH EXPLICITLY SURVIVE SUCH
TERMINATION, OR (II) SPECIFICALLY ENFORCE THE TERMS AND CONDITIONS OF THIS
AGREEMENT; PROVIDED THAT SUCH SPECIFIC ENFORCEMENT ACTION MUST BE INITIATED NO
LATER THAN 60 DAYS FOLLOWING SUCH DEFAULT. IF SELLER WILLFULLY OR INTENTIONALLY
DEFAULTS IN THE PERFORMANCE OF ITS MATERIAL OBLIGATIONS UNDER THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, SELLER’S FAILURE TO CAUSE THE SALE OF THE ASSET
TO BUYER ON THE CLOSING DATE) AND BUYER HAS ELECTED TO TERMINATE THIS AGREEMENT
PURSUANT TO THE PRECEDING SENTENCE, THEN SELLER SHALL REIMBURSE THE BUYER FOR
THE COSTS THERETOFORE INCURRED BY THE BUYER, INCLUDING, WITHOUT LIMITATION,
FINANCING COSTS, AND THE COST OF PERFORMING TITLE EXAMINATIONS AND SURVEY FOR
THE PROPERTY (WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE THAT THE BUYER
SUBMITS TO SELLER A REASONABLY DETAILED INVOICE THEREFOR), PROVIDED THAT SUCH
LIABILITY SHALL NOT EXCEED THREE HUNDRED THOUSAND DOLLARS ($300,000.00) IN THE
AGGREGATE AT WHICH TIME THIS AGREEMENT SHALL BE TERMINATED AND OF NO FURTHER
FORCE AND EFFECT EXCEPT FOR THE PROVISIONS WHICH EXPLICITLY SURVIVE SUCH
TERMINATION. NOTHING CONTAINED IN THIS SECTION 13.2(c) SHALL LIMIT THE SELLER’S
OBLIGATION TO PAY TO THE BUYER ALL ATTORNEYS’ FEES AND COSTS OF THE BUYER
PURSUANT TO SECTION 15.23 IN THE EVENT THE BUYER IS SUCCESSFUL IN ANY ACTION TO
ENFORCE THE PROVISIONS OF THIS SECTION 13.2.
 
ARTICLE XIV
 
EMPLOYEE MATTERS
 
SECTION 14.1.   Union Employees.
 
(a)          
 
(i)          Effective as of the Closing Date, all Building employees listed on
Schedule 3.2(l) (and, subject to the limitations and conditions set forth in
Section 3.3(a) hereof, any replacements thereof) (the “Union Employees”), shall
be offered employment at the Building by Buyer, its property manager or a third
party contractor in accordance with the terms of the relevant CBA (as defined
below). Buyer, its property manager or a third party contractor, whichever
entity employs the Union Employees, shall be solely responsible for, and hereby
assumes, all liabilities whatsoever, the obligation with respect to, any and all
(A) salaries of any Union Employees earned during the period from and after the
Closing Date, (B) benefits attributable to the period after the Closing Date
payable to or for the benefit of the Union Employees, including payment of all
applicable plan contributions accrued after the Closing Date, (C) benefit
continuation and/or severance payments relating to any Union Employee that may
be payable upon any termination of employment of any such Union Employee from
and after the Closing Date and (D) notices, payments, fines or assessments due
pursuant to any laws, rules or regulations with respect to the employment,
discharge or layoff of Union Employees from and after the Closing Date,
including, but not limited to, such liability as arises under the Worker
Adjustment and Retraining Notification Act, Section 4980B of the Internal
Revenue Code (COBRA) and any rules or regulations as have been issued in
connection with any of the foregoing. Buyer hereby agrees to indemnify and
defend Seller and any Seller Related Entities against, and agrees to hold them
harmless from, any and all claims, losses, damages and expenses (including,
without limitation, reasonable attorneys' fees and expenses) and other
liabilities and

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obligations incurred or suffered as a result of any claim by any Union Employee
(or other representative thereof, including, without limitation, the union or
any fund trustee) that arises under federal, state or local statute (including,
without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1991, the Age Discrimination in Employment Act of 1967, the National
Labor Relations Act, the Equal Pay Act, the Americans with Disabilities Act of
1990, ERISA (as hereinafter defined), the Multi-Employer Pension Plan Amendments
Act of 1980, the Displaced Building Service Workers Protection Act of the City
of New York (“BSWPA”), and all other statutes regulating the terms and
conditions of employment), under any regulation or ordinance, under the common
law or in equity (including any claims for wrongful discharge or otherwise), or
under any policy, agreement, understanding or promise, written or oral, formal
or informal, in each case, arising out of actions, events or omissions that
occurred (or, in the case of omissions, failed to occur) from and after the
Closing Date.
 
(ii)         Seller hereby agrees to indemnify and defend Buyer and any
Buyer-Related Entities against, and agrees to hold them harmless from, any and
all claims, losses, damages and expenses (including, without limitation,
reasonable attorneys' fees and expenses) and other liabilities and obligations
incurred or suffered as a result of any claim by any Union Employee (or other
representative thereof, including, without limitation, the union or any fund
trustee) that arises under federal, state or local statute (including, without
limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Age Discrimination in Employment Act of 1967, the National Labor
Relations Act, the Equal Pay Act, the Americans with Disabilities Act of 1990,
ERISA (as hereinafter defined), the Multi-Employer Pension Plan Amendments Act
of 1980, the BSWPA, and all other statutes regulating the terms and conditions
of employment), under any regulation or ordinance, under the common law or in
equity (including any claims for wrongful discharge or otherwise), or under any
policy, agreement, understanding or promise, written or oral, formal or
informal, including any union agreement or CBA, in each case, arising out of
actions, events or omissions that occurred (or, in the case of omissions, failed
to occur) prior to the Closing Date.
 
(b)          The provisions of this Section 14.1 shall survive the Closing until
5 business days following the expiration of the Survival Period and shall be
subject to the limitations set forth in Sections 11.3 and 11.4.
 
SECTION 14.2.   Collective Bargaining Agreements. Seller is not party to any
collective bargaining agreements relating to the Property and/or the operation
of the Property. Effective as of the Closing Date, Buyer, its property manager
or its third party contractor (whichever entity employs employees in the
positions held by the Union Employees) shall have one or more collective
bargaining agreements with SEIU Local 32BJ (the “CBAs”) that will apply to the
positions currently held by the Union Employees; such employing entity will
observe, pay and perform all obligations and liabilities under, arising from or
otherwise relating to the CBAs, to the extent such obligations and liabilities
accrue on or after the Closing Date. Buyer, its property manager or third party
contractor shall have sole responsibility for all such obligations and
liabilities arising under or relating to the CBAs on or at any time after the
Closing Date and hereby agrees to indemnify, defend and hold Seller and any
Seller Related Party harmless from and against all loss, cost and expense
incurred by Seller or such Seller Related Party as a result of Buyer's failure
to so observe, pay and perform the same. By this Agreement, the parties have
availed themselves of the opt-out provision of §22-505(d) of the Displaced
Building Service Workers Protection Act, §22-505 of the Administrative Code of
the City of New York. The provisions of this Section 14.2 shall survive the
Closing.
 
SECTION 14.3.   Multiemployer Plan. Buyer and Seller or its Affiliates intend to
comply with Section 4204(a) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and to take any other action required or desirable,
so that no withdrawal liability is imposed upon Seller or its Affiliates as a
result of this transaction or any subsequent action or omission of Buyer. To
that end, Buyer agrees and covenants: (i) to contribute to the Building Service
32BJ Pension Fund (the “Fund”) for substantially the same number of contribution
base units, as defined in Section 4001(a)(11) of ERISA, for which Seller and/or
its Affiliates were obligated to contribute with respect to the Property prior
to the Closing Date, and (ii) unless a waiver is in effect or has been timely
requested but not yet acted upon by the Fund pursuant to Section 4204(c) of
ERISA, to provide to and for the benefit of the Fund, for the five plan years
commencing with the first plan year to begin after the Closing

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Date (the “Surety Period”), either a bond issued by a corporate surety company
that is an acceptable surety for purposes of Section 412 of ERISA, a letter of
credit or an amount held in escrow by a bank or similar financial institution,
in either case in an amount equal to the greater of (A) the average annual
contribution that Seller or its Affiliates were required to make with respect to
the Property for the three plan years preceding the plan year in which the
Closing Date occurs, or (B) the annual contribution that Seller or its
Affiliates were required to make with respect to the Property for the plan year
preceding the plan year in which the Closing Date occurs, which bond, letter of
credit or such amount held in escrow shall be paid to the Fund, if at any time
during the Surety Period, Buyer withdraws from the Fund or fails to make any
contribution to the Fund when due. If a waiver has been denied by the Fund or
was not timely requested pursuant to Section 4204(c) of ERISA, Buyer shall
deliver to the Fund by the first day of the plan year following the Closing
Date, with copies to the Seller, either the bond or evidence of the
establishment of an escrow described in the preceding sentence. Seller agrees to
reasonably cooperate with Buyer to provide information reasonably necessary for
Buyer to request a variance from the Fund. If Buyer or any successor in interest
thereto shall withdraw from the Fund in either a complete or partial withdrawal,
as such terms are used in Sections 4203 and 4205 of ERISA, during the first five
(5) plan years commencing with the first plan year beginning after the Closing
Date and withdrawal liability is imposed under Section 4201 of ERISA, Seller and
its affiliates agree that Seller and their Affiliates shall be secondarily
liable to the Fund for any withdrawal liability that they would have had to the
Fund in the absence of Section 4204 of ERISA. To the extent that any obligation
is imposed on Buyer herein, Buyer agrees to require each of its successors in
interest and assigns to specifically assume and accept the obligations assumed
by it under this Section 14.3. The provisions of this Section 14.3 shall survive
the Closing.
 
ARTICLE XV
 
MISCELLANEOUS
 
SECTION 15.1.   Use of Carlyle’s Name and Address. The Buyer hereby acknowledges
and agrees that neither the Buyer nor any affiliate, successor, assignee or
designee of Buyer shall be entitled to use the name “Carlyle” in any way
whatsoever. The provision of this Section 15.1 shall survive the Closing.
 
SECTION 15.2.   Exculpation.
 
(a)          Notwithstanding anything to the contrary contained herein, the
Seller’s shareholders, partners, members, the partners or members of such
partners or members, the shareholders of such partners, members, and the
trustees, officers, directors, employees, agents and security holders of the
Seller assume no personal liability for any obligations entered into on behalf
of the Seller and their individual assets shall not be subject to any claims of
any person relating to such obligations. The foregoing shall govern any direct
and indirect obligations of the Seller under this Agreement.
 
(b)          Notwithstanding anything to the contrary contained herein, the
Buyer’s shareholders, partners, members, the partners or members of such
partners, the shareholders of such partners, members, and the trustees,
officers, directors, employees, agents and security holders of the Buyer assume
no personal liability for any obligations entered into on behalf of the Buyer
and their individual assets shall not be subject to any claims of any person
relating to such obligations. The foregoing shall govern any direct and indirect
obligations of the Buyer under this Agreement.
 
SECTION 15.3.   Broker.
 
(a)          The Seller represents and warrants to the Buyer that it has dealt
with no broker, salesman, finder or consultant with respect to this Agreement or
the transactions contemplated hereby other than Broker. Upon the Closing of the
transactions contemplated under this Agreement, Seller shall be responsible for
the payment of any brokerage commission to Broker pursuant to a separate
agreement between Seller and Broker. The Seller agrees to indemnify, protect,
defend and hold the Buyer harmless from and against all claims, losses, damages,
liabilities, costs, expenses (including reasonable attorneys’ fees and
disbursements) and charges resulting from the Seller’s

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breach of the foregoing representation in this Section 15.3(a). The provisions
of this Section 15.3(a) shall survive the Closing and any termination of this
Agreement.
 
(b)          The Buyer represents and warrants to the Seller that it has dealt
with no broker, salesman, finder or consultant with respect to this Agreement or
the transactions contemplated hereby other than Broker. The Buyer agrees to
indemnify, protect, defend and hold the Seller harmless from and against all
claims, losses, damages, liabilities, costs, expenses (including reasonable
attorneys’ fees and disbursements) and charges resulting from the Buyer’s breach
of the foregoing representations in this Section 15.3(b). The provisions of this
Section 15.3(b) shall survive the Closing and any termination of this Agreement.
 
SECTION 15.4.   Confidentiality; Press Release; IRS Reporting Requirements.
 
(a)          Prior to Closing, the Buyer and the Seller, and each of their
respective affiliates, shall hold as confidential all information disclosed in
connection with the transactions contemplated hereby and concerning each other,
the Asset, this Agreement and the transactions contemplated hereby and shall not
release any such information to third parties without the prior written consent
of the other parties hereto, except (i) any information which was previously or
is hereafter publicly disclosed (other than in violation of this Agreement or
other confidentiality agreements), (ii) to their members, officers, directors,
partners, investors, potential investors, advisors, underwriters, analysts,
employees, affiliates, officers, directors, consultants, potential lenders,
accountants, legal counsel, title companies or other accountants, legal counsel
or advisors of any of the foregoing, provided that they are advised as to the
confidential nature of such information and are instructed to maintain such
confidentiality and (iii) to comply with any law, rule or regulation (including,
without limitation, a law, rule or regulation promulgated by the SEC
(hereinafter defined)). The foregoing shall constitute a modification of any
prior confidentiality agreement that may have been entered into by the parties.
Neither party shall have the right to issue any press release regarding the
transactions contemplated by this Agreement without the prior written consent of
the other party other than press releases required by law or the SEC. The
provisions of this Section 15.4(a) shall survive any termination of this
Agreement for a period of one year.
 
(b)          For the purpose of complying with any information reporting
requirements or other rules and regulations of the IRS that are or may become
applicable as a result of or in connection with the transaction contemplated by
this Agreement, including, but not limited to, any requirements set forth in
proposed Income Tax Regulation Section 1.6045-4 and any final or successor
version thereof (collectively, the “IRS Reporting Requirements”), the Seller and
the Buyer hereby designate and appoint the Escrow Agent to act as the “Reporting
Person” (as that term is defined in the IRS Reporting Requirements) to be
responsible for complying with any IRS Reporting Requirements. The Escrow Agent
hereby acknowledges and accepts such designation and appointment and agrees to
fully comply with any IRS Reporting Requirements that are or may become
applicable as a result of or in connection with the transactions contemplated by
this Agreement. Without limiting the responsibility and obligations of the
Escrow Agent as the Reporting Person, the Seller and the Buyer hereby agree to
comply with any provisions of the IRS Reporting Requirements that are not
identified therein as the responsibility of the Reporting Person, including, but
not limited to, the requirement that the Seller and the Buyer each retain an
original counterpart of this Agreement for at least four years following the
calendar year of the Closing.
 
SECTION 15.5.   Escrow Provisions.
 
(a)          The Escrow Agent shall hold the Deposit in escrow in the Escrow
Account until the Closing or sooner termination of this Agreement and shall hold
or apply such proceeds only in accordance with the terms of this Agreement. The
Seller and the Buyer understand that no interest is earned on the Deposit during
the time it takes to transfer into and out of the Escrow Account. At the
Closing, the Deposit shall be paid by the Escrow Agent to, or at the direction
of, the Seller. If for any reason the Closing does not occur and either party
makes a written demand upon the Escrow Agent for payment of the Deposit, the
Escrow Agent shall, within 24 hours give written notice to the other party of
such demand. If the Escrow Agent does not receive a written objection within 5
Business Days after the giving of such notice, the Escrow Agent is hereby
authorized to make such payment. If the Escrow Agent does receive such written
objection within such 5 Business Day period or if for any other reason the
Escrow Agent in good faith shall elect not to make such payment, the Escrow
Agent shall continue to hold such

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amount until otherwise directed by joint written instructions from the parties
to this Agreement or a final judgment of a court of competent jurisdiction.
However, the Escrow Agent shall have the right at any time to deposit the
Deposit with the clerk of the court of New York County. The Escrow Agent shall
give written notice of such deposit to the Seller and the Buyer. Upon such
deposit the Escrow Agent shall be relieved and discharged of all further
obligations and responsibilities hereunder.
 
(b)          The parties acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that the Escrow Agent
shall not be deemed to be the agent of either of the parties, and the Escrow
Agent shall not be liable to either of the parties for any act or omission on
its part, other than for its gross negligence or willful misconduct. The Seller
and the Buyer shall jointly and severally indemnify and hold the Escrow Agent
harmless from and against all costs, claims and expenses, including attorneys’
fees and disbursements, incurred in connection with the performance of the
Escrow Agent’s duties hereunder.
 
(c)          The Escrow Agent has acknowledged its agreement to these provisions
by signing this Agreement in the place indicated following the signatures of the
Seller and the Buyer.
 
(d)          Seller and Buyer agree that the Escrow Agent shall not be
responsible for any penalties, loss of principal or interest, or the
consequences of a delay in withdrawal of the Deposit which may be imposed as a
result of the making or the redeeming of the above investment, as the case may
be, pursuant to this Agreement. Seller and Buyer also agree that Escrow Agent
shall not be liable for any loss or impairment of the Deposit while the Deposit
is in the course of collection or if such loss or impairment results from the
failure, insolvency or suspension of the financial institution in which the
Deposit is deposited.
 
(e)          Escrow Agent shall be protected in relying upon the accuracy,
acting in reliance upon the contents, and assuming the genuineness of any
notice, demand, certificate, signature, instrument or other document which is
given to Escrow Agent without verifying the truth or accuracy of any such
notice, demand, certificate, signature, instrument or other document, provided
that Escrow Agent acted in good faith in so relying.
 
SECTION 15.6.   Successors and Assigns; No Third-Party Beneficiaries. The
stipulations, terms, covenants and agreements contained in this Agreement shall
inure to the benefit of, and shall be binding upon, the parties hereto and their
respective permitted successors and assigns (including any successor entity
after a public offering of stock, merger, consolidation, purchase or other
similar transaction involving a party hereto) and nothing herein expressed or
implied shall give or be construed to give to any person or entity, other than
the parties hereto and such assigns, any legal or equitable rights hereunder.
 
SECTION 15.7.   Assignment. Neither this Agreement nor any of the rights of
Buyer hereunder (nor the benefits of such rights) may be assigned, transferred
or encumbered by Buyer without the Seller’s prior written consent (which may be
granted or withheld in Seller’s sole and absolute discretion). Any transfer of
direct or indirect interests in Buyer shall be deemed to be an assignment of
this Agreement by Buyer. Any such purported assignment, transfer or encumbrance
without Seller’s prior written consent, unless otherwise permitted hereunder,
shall be void and constitute a material default by Buyer under this Agreement.
Notwithstanding the foregoing, Buyer may assign this Agreement to an entity that
is majority owned and controlled by Buyer, American Realty Capital New York City
REIT, Inc. or New York REIT, Inc. without Seller’s consent as long as Buyer has
provided Seller with at least 5 days advance notice of any such assignment. In
the event of any assignment permitted under this Section 15.7 or otherwise
approved by Seller, as a condition to the effectiveness of such assignment,
Buyer and the permitted assignee shall be required to execute and deliver an
assignment and assumption agreement in form reasonably acceptable to Seller
whereby such permitted assignee assumes all of Buyer’s obligations under this
Agreement.
 
SECTION 15.8.   Further Assurances. From time to time, as and when requested by
any party hereto, the other party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions as such other party may
reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.
 

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SECTION 15.9.   Notices. All notices, demands or requests made pursuant to,
under or by virtue of this Agreement must be in writing and shall be (i)
personally delivered, (ii) delivered by express mail, Federal Express or other
comparable overnight courier service, (iii) telecopied, with written
confirmation within one (1) Business Day, or (iv) delivered by electronic mail
in the form of a “pdf” file, with written confirmation within one (1) Business
Day, as follows:
 
(a)          To the Seller:
 
c/o The Carlyle Group
520 Madison Avenue
New York, New York 10022
Attn: Andrew Chung
Facsimile: (212) 813-4843
Telephone: (212) 813-4964
Email: andrew.chung@carlyle.com
 
with copies thereof to:
 
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Attention: Scott M. Kobak, Esq.
Facsimile: 212-455-2502
Telephone: 212-455-7210
Email: skobak@stblaw.com
 
(b)          To the Buyer:
 
c/o American Realty Capital
405 Park Avenue
Attention: Michael Ead
Facsimile:
Telephone: (212) 415-6500
Email: mead@arlcap.com
 
with copies thereof to:
 
c/o American Realty Capital
405 Park Avenue
Attention: Michael A. Happel
Facsimile:
Telephone: (212) 415-6500
Email: MHappel@nyrt.com
 
(c)          To the Title Company/Escrow Agent:
 
Fidelity National Title Insurance Company
485 Lexington Avenue, 18th Floor
New York, New York 10017
Attention: Nick De Martini
Facsimile:
Telephone: 212-845-3132
Email: NDeMartini@fnf.com
 

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All notices (i) shall be deemed to have been given on the date that the same
shall have been received in accordance with the provisions of this Section, or
upon failure to accept delivery and (ii) may be given either by a party or by
such party’s attorneys. Any party may, from time to time, specify as its address
for purposes of this Agreement any other address upon the giving of 10 days’
prior notice thereof to the other parties.
 
SECTION 15.10.   Entire Agreement. This Agreement, along with the Exhibits and
Schedules hereto, contains all of the terms agreed upon between the parties
hereto with respect to the subject matter hereof, and all understandings and
agreements heretofore had or made among the parties hereto are merged in this
Agreement which alone fully and completely expresses the agreement of the
parties hereto.
 
SECTION 15.11.   Amendments. This Agreement may not be amended, modified,
supplemented or terminated, nor may any of the obligations of the Seller or the
Buyer hereunder be waived, except by written agreement executed by the party or
parties to be charged.
 
SECTION 15.12.   No Waiver. No waiver by either party of any failure or refusal
by the other party to comply with its obligations hereunder shall be deemed a
waiver of any other or subsequent failure or refusal to so comply.
 
SECTION 15.13.   Governing Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with, the laws of the State of
New York.
 
SECTION 15.14.   Submission to Jurisdiction. Each of the Buyer and the Seller
irrevocably submits to the jurisdiction of and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in (a) any state court
in the city and county of New York and (b) the United States District Court for
the Southern District of New York for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the Buyer and the Seller further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party’s respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction as set forth above in the immediately preceding
sentence.
 
SECTION 15.15.   Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
 
SECTION 15.16.   Section Headings. The headings of the various Sections of this
Agreement have been inserted only for purposes of convenience, are not part of
this Agreement and shall not be deemed in any manner to modify, explain, expand
or restrict any of the provisions of this Agreement.
 
SECTION 15.17.   Counterparts. This Agreement may be executed in two or more
counterparts and by facsimile or “pdf” signatures, which taken together will
constitute collectively one agreement. In making proof of this Agreement it
shall not be necessary to produce or account for more than one such counterpart
with each party’s counterpart or facsimile or “pdf” signature.
 
SECTION 15.18.   Acceptance of Deed. The acceptance of the Deed by the Buyer
shall be deemed full compliance by the Seller of all of the Seller’s obligations
under this Agreement except for those obligations of the Seller which are
specifically stated to survive the delivery of the Deed or the Closing
hereunder.
 
SECTION 15.19.   Construction. The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and that the normal rule
of construction to the 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 15.20.   Recordation. Neither this Agreement nor any memorandum or
notice of this Agreement may be recorded by any party hereto without the prior
written consent of the other party hereto. The provisions of this Section shall
survive the Closing or any termination of this Agreement. In furtherance of the
foregoing, the Buyer shall indemnify the Seller from and against any and all
liabilities, damages, losses, costs or expenses (including without limitation
attorneys’ fees and expenses) to the extent arising out of a breach of this
Section 15.20 by the Buyer. The provisions of this Section 15.20 shall survive
the Closing or any termination of this Agreement.
 
SECTION 15.21.   Schedules. The Seller and the Buyer agree that disclosure of
any fact or item on any schedule attached to this Agreement shall, should the
existence of such fact or item be relevant to any other schedule, be deemed to
be disclosure with respect to such other schedule so long as the relevance of
such disclosure to such other section is reasonably apparent.
 
SECTION 15.22.   Waiver of Jury Trial. The Seller and the Buyer hereby
irrevocably waive trial by jury in any action, proceeding or counterclaim
brought by one party against another party on any matter arising out of or in
any way connected with this Agreement.
 
SECTION 15.23.   Attorneys’ Fees. In any dispute between the parties hereunder,
the prevailing party shall be entitled to be reimbursed for its reasonable
attorneys’ fees and out of pocket expenses.
 
SECTION 15.24. Section 3.14 Audit. Upon Buyer’s request, for a period of one (1)
year after Closing, Seller shall make (or with respect to periods prior to
Seller’s ownership of the Property, shall use commercially reasonable efforts to
make) the financial statements prepared in accordance with United States
generally acceptable accounting principles, and any and all books, records,
correspondence, financial data, leases, delinquency reports and all other
documents and matters maintained by Seller or their agents and relating to
receipts and expenditures reasonably necessary to complete an audit pertaining
to the Property for the three (3) most recent full calendar years and the
interim period of the current calendar year (collectively, the “Records”)
available to Buyer and/or its auditors for inspection, copying and audit by
Buyer’s designated accountants, and at Buyer’s expense. Seller shall provide
Buyer and/or its auditors, but without expense to Seller, with copies of, or
access to, such factual and financial information as may be reasonably requested
by Buyer or its designated accountants, and in the possession or control of
Seller, to enable Buyer to file any filings required by the Securities and
Exchange Commission (the “SEC”) in connection with the purchase of the Property.
Seller understands and acknowledges that Buyer is required to file audited
financial statements related to the Property with the SEC within seventy-one
(71) days of the Closing Date and agrees to provide, at Buyer’s sole cost and
expense, any Records to the Buyer’s auditors, on a timely basis to facilitate
Buyer’s timely submission of such audited financial statements; provided that,
in no event shall Seller be deemed to have made any representation or warranty
with respect to the items delivered to Buyer or its auditors or agents as
contemplated by this Section 15.24.
  
ARTICLE XVI
 
JOINDER OF SELLER GUARANTOR
 
SECTION 16.1.   Guaranty. (a) Carlyle Realty Partners VI, L.P., Carlyle Realty
Foreign Investors VI, L.P. and Carlyle Realty Coinvestment VI, L.L.C.
(collectively, the “Seller Guarantor”) is executing this Agreement solely for
the purposes specified in this Article XVI. From and after the Closing Date, the
Seller Guarantor hereby guarantees, on a joint and several basis, to Buyer the
due and punctual payment and performance of Seller’s obligations under Sections
11.1 and 14.1(a)(ii) and promises to pay on demand each amount which the Seller
is liable to pay under Sections 11.1 and 14.1(a)(ii) (subject to any and all
limitations set forth in this Agreement including, without limitation, the Cap
Limitation, Basket Limitation and the Survival Period).
 
(b)          The terms of this Article XVI and the Seller Guarantor's
obligations hereunder are a continuing and irrevocable obligation of the Seller
Guarantor and shall remain in full force until payment, performance and/or
observation in full of the obligations hereunder. The Seller Guarantor's
guaranty and liability

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under this Article XVI are absolute and unconditional and shall not be affected,
released, terminated, discharged or impaired, in whole or in part, by any or all
of the following: (i) any amendment or modification of the terms of this
Agreement; (ii) subject to the terms of Section 11.4, any failure or delay of
Buyer to exercise, or any lack of diligence in exercising, any right or remedy
with respect to this Agreement; (iii) subject to the terms of Section 11.4, the
failure to give Sellers notice of any breach of this Agreement if such notice is
not required; and/or (iv) any other circumstance which might constitute a legal
or equitable discharge or defense available to the Seller Guarantor, whether
similar or dissimilar to the foregoing (including any bankruptcy of any Seller),
other than the defense of (a) payment and performance or (b) the claim against
any Seller is not due and owing under the terms of this Agreement or that
Sellers have performed (it being understood and agreed that Buyer will only be
required to litigate the existence of the same or similar defenses raised by
both Sellers and the Seller Guarantor in one action or proceeding). The Seller
Guarantor expressly waives the following: (i) notice of acceptance of this
Agreement; (ii) any requirement of promptness, diligence, presentment, protest,
notice of dishonor, notice of demand and notice of acceptance; (iii) the right
to trial by jury in any action or proceeding of any kind arising on, under, out
of, or by reason of or relating, in any way, to its obligations under this
Article XVI, or the interpretation, breach or enforcement of such obligations;
and (iv) all rights of subrogation and any other claims that it may now or
hereafter acquire against Sellers or any insider that arise from the existence,
payment, performance or enforcement of the Seller Guarantor's obligations under
this Article XVI until such time as the Seller Guarantor's obligations under
this Article XVI are performed and paid in full. The Seller Guarantor's guaranty
under this Article XVI is a present guaranty of payment and performance and not
of collection.
 
SECTION 16.2.   Representations and Warranties of the Seller Guarantor. The
Seller Guarantor hereby represents, warrants and certifies to Buyer as follows:
(i) the execution, delivery and performance under this Article XVI by the Seller
Guarantor will not violate any provision of any law, regulation, order or decree
of any Governmental Authority, bureau or agency or of any court binding on the
Seller Guarantor, or of any contract, undertaking or agreement to which the
Seller Guarantor is a party or which is binding on the Seller Guarantor, or of
any contract, undertaking or agreement to which the Seller Guarantor is a party
or which is binding upon or any of its property or assets, (ii) the Agreement,
with respect to this Article XVI, has been duly authorized, executed and
delivered by the Seller Guarantor and constitutes a legal, valid and binding
obligation of the Seller Guarantor, enforceable against the Seller Guarantor in
accordance with its terms, subject as to enforcement of remedies to any
applicable bankruptcy, reorganization, moratorium or other applicable laws
affecting the enforcement of creditors' rights generally and doctrines of equity
affecting the availability of specific enforcement as a remedy; and (iii) all
necessary resolutions, consents, licenses, approvals and authorizations of any
Person required in connection with the execution, delivery and performance of
this Article XVI have been duly obtained and are in full force and effect.
 
SECTION 16.3.   Net Worth of the Seller Guarantor. The Seller Guarantor hereby
represents, warrants and certifies to Buyer that the net worth of Seller
Guarantor is in excess of $100,000,000.
 
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of the day and year first above written.
 

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SELLER:
 
 
 
570 7TH AVENUE PROPERTY OWNER, L.L.C., a Delaware limited liability company
 
 
 
 
By:
/s/  David B. Daniel
 
Name:
David B. Daniel
 
Title:
Authorized Person
 
 
 
 
BUYER:
 
 
 
ARC NYC570SEVENTH, LLC, a Delaware limited liability company
 
 
 
 
By:
/s/  Michael A. Happel
 
Name:
Michael A. Happel
 
Title:
President

 
Seller Guarantor has executed this Agreement solely for the purpose of agreeing
to the provisions of Article 16 of this Agreement.
 
Carlyle Realty Partners VI, L.P., a Delaware limited partnership
 
By: Carlyle Realty VI, L.L.C., a Delaware limited liability company, its general
partner
 
By:
/s/  David B. Daniel
 
 
Name: David B. Daniel
 
 
Title: Authorized Person
 

 
Carlyle Realty Foreign Investors VI, L.P., a Delaware limited partnership
 
By: Carlyle Realty VI, L.L.C., a Delaware limited liability company, its general
partner
 
By:
/s/  David B. Daniel
 
 
Name: David B. Daniel
 
 
Title: Authorized Person
 

 
Carlyle Realty Coinvestment VI, L.L.C., a Delaware limited liability company
 

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By:
/s/  David B. Daniel
 
 
Name: David B. Daniel
 
 
Title: Authorized Person
 

 
JOINDER BY ESCROW AGENT
 
Fidelity National Title Insurance Company, referred to in this Agreement as the
“Escrow Agent,” hereby acknowledges that it received this Agreement executed by
the Seller and the Buyer, and accepts the obligations of the Escrow Agent as set
forth herein. Escrow Agent further acknowledges that it received the Deposit.
The Escrow Agent hereby agrees to hold and distribute the Deposit in accordance
with the terms and provisions of the Agreement.
 
 
 
Fidelity National Title Insurance Company
 
 
 
 
By:
/s/  David B. Daniel
 
Name:
Nick DeMartini
 
Title:
Senior Vice President

 

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