Exhibit 10.1

EXECUTION COPY

 

 

 

EQUITY INTEREST PURCHASE AGREEMENT

by and between

INLAND AMERICAN REAL ESTATE TRUST, INC.

(“Seller”)

and

AR CAPITAL, LLC,

(“Buyer”)

dated as of

August 8, 2013

 

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

ARTICLE I        DEFINITIONS AND RULES OF CONSTRUCTION   

Section 1.1 Definitions

     1   

Section 1.2 Terms Defined Elsewhere in this Agreement

     10   

Section 1.3 Rules of Construction

     11    ARTICLE II   

PURCHASE AND SALE; CLOSING; DILIGENCE PERIOD; PRE-CLOSING CONSENTS

AND WAIVERS

  

Section 2.1 Purchase and Sale of Equity Interests

     12   

Section 2.2 Consideration

     12   

Section 2.3 Deposit; Payment on Closing

     13   

Section 2.4 Closing Statement

     13   

Section 2.5 The Closings

     14   

Section 2.6 Closing Deliverables

     17   

Section 2.7 Proration Calculation Principles

     18   

Section 2.8 Closing Costs

     21   

Section 2.9 Diligence Materials; Diligence Period Access; Defects

     22   

Section 2.10 Third Party Approvals and Notifications; Further Assurances

     27   

Section 2.11 Kickout Period

     28   

ARTICLE III

  

REPRESENTATIONS AND WARRANTIES RELATING TO SELLER

  

Section 3.1 Organization of Seller

     29   

Section 3.2 Authorization; Enforceability

     29   

Section 3.3 No Conflict

     30   

Section 3.4 Litigation

     30   

Section 3.5 Brokers’ Fees

     30   

Section 3.6 Ownership of Equity Interests

     30   

ARTICLE IV

  

REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANIES AND THE PURCHASED
SUBSIDIARIES

  

Section 4.1 Organization of the Companies and the Purchased Subsidiaries

     31   

Section 4.2 No Conflict; Regulatory Approvals

     31   

Section 4.3 Capitalization of the Companies and the Purchased Subsidiaries

     32   

Section 4.4 Real Property

     33   

Section 4.5 No Employees

     33   

Section 4.6 Contracts

     33   

Section 4.7 Litigation

     34   

Section 4.8 Environmental Matters

     34   

Section 4.9 Legal Compliance

     35   

Section 4.10 Permits

     35   

Section 4.11 Tax Matters

     35   

Section 4.12 No Other Operations

     36   

 

-i-

--------------------------------------------------------------------------------

ARTICLE V       

REPRESENTATIONS AND WARRANTIES RELATING

   TO BUYER   

Section 5.1 Organization of Buyer

     36   

Section 5.2 Authorization; Enforceability

     36   

Section 5.3 No Conflict

     36   

Section 5.4 Litigation

     37   

Section 5.5 Brokers’ Fees

     37   

Section 5.6 Financial Ability

     37   

Section 5.7 Investment Representation

     37   

ARTICLE VI

  

COVENANTS

  

Section 6.1 Conduct of Business Pending the Closings

     38   

Section 6.2 Books and Records; Post-Closing Access

     39   

Section 6.3 Risk of Loss

     39   

Section 6.4 Notice of Certain Events

     40   

Section 6.5 Seller Marks

     40   

Section 6.6 Publicity

     40   

Section 6.7 Confidentiality; Non-Disparagement

     41   

Section 6.8 Property Management Agreements

     42    ARTICLE VII    CONDITIONS TO OBLIGATIONS   

Section 7.1 Conditions to Obligations of Buyer and Seller

     43   

Section 7.2 Conditions to Obligations of Buyer

     43   

Section 7.3 Conditions to the Obligations of Seller

     44    ARTICLE VIII    INDEMNIFICATION   

Section 8.1 Survival

     44   

Section 8.2 Indemnification

     45   

Section 8.3 Indemnification Procedures

     46   

Section 8.4 Limitations on Liability of Seller

     47   

Section 8.5 Waiver of Other Representations

     48   

Section 8.6 Purchase Price Adjustment

     49   

Section 8.7 Remedies; Limited Recourse; Limitations on Damages

     49    ARTICLE IX    TERMINATION   

Section 9.1 Termination

     52   

Section 9.2 Effect of Termination

     53    ARTICLE X    MISCELLANEOUS   

Section 10.1 Notices

     55   

Section 10.2 Successors and Assigns

     56   

 

-ii-

--------------------------------------------------------------------------------

Section 10.3 Rights of Third Parties

     57   

Section 10.4 Expenses

     57   

Section 10.5 Counterparts; Electronic Signatures

     57   

Section 10.6 Entire Agreement

     57   

Section 10.7 Disclosure Schedule

     57   

Section 10.8 Amendments; Waiver

     58   

Section 10.9 Severability

     58   

Section 10.10 Mutual Drafting

     58   

Section 10.11 Governing Law; Jurisdiction

     58   

Annexes and Exhibits   

Annex A

 

Companies

  

Annex B

 

Assumed Existing Loans

  

Annex C

 

Joint Ventures

  

Annex D

 

Prepaid Existing Loans

  

Annex E

 

Property Allocations

  

Annex F

 

Purchased Subsidiaries

  

Annex G

 

Required Tenant Waivers

  

Annex H

 

Form of Buyer Assignment

  

Annex I

 

Form of Irrevocable Guarantee

  

Annex J

 

Title Issues Identified By Buyer

  

Annex K

 

Environmental Issues Identified By Buyer

  

Annex L

 

Form of Joinder

  

Exhibit A

 

Form of Deposit Escrow Agreement

  

 

-iii-

--------------------------------------------------------------------------------

EQUITY INTEREST PURCHASE AGREEMENT

This EQUITY INTEREST PURCHASE AGREEMENT, dated as of August 8, 2013 (this
“Agreement”), is entered into by and between INLAND AMERICAN REAL ESTATE TRUST,
INC., a corporation organized and existing under the laws of the State of
Maryland (“Seller”), and AR CAPITAL, LLC, a limited liability company organized
and existing under the laws of the State of Delaware (“Buyer”).

RECITALS

WHEREAS, Seller owns, directly or indirectly, and desires to sell or cause to be
sold to Buyer, and Buyer desires to purchase from Seller, on the terms and
subject to the conditions set forth herein, 100% of the outstanding equity
interests of the entities set forth on Annex A (collectively, the “Companies”
and each, a “Company”).

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.1 Definitions.

As used herein, the following terms shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person that Controls,
is Controlled by or is under common Control with, such specified Person,
directly or indirectly, through one or more intermediaries or otherwise.

“Annualized Operating Expenses” means the annualized Operating Expenses of a
Real Property transferred to Buyer, determined as of the Third Closing or, if
this Agreement is terminated after the Initial Closing but prior to the Third
Closing, as of such date of termination (in each case, regardless of the date
such Real Property is transferred), and calculated based on (a) the actual 2013
calendar year Operating Expenses for such Real Property incurred through the
applicable Closing Date and (b) the budgeted (if applicable) 2013 calendar year
Operating Expenses for such Real Property from such applicable Closing Date
through the end of calendar year 2013, in each case, regardless of the calendar
year in which the Closing occurs and consistent with the methodology set forth
on Section 1.1(e) of the Disclosure Schedule.

“Assumed Existing Loans” means the Existing Loans set forth on Annex B, which
Existing Loans are secured by a mortgage and are not in default and shall, from
and after the applicable Closing, remain outstanding in the name of the Company
or Purchased Subsidiary party thereto.

--------------------------------------------------------------------------------

“Business Day” means any day that is not a Saturday, Sunday or legal holiday in
the State of Illinois or New York or a federal holiday in the United States.

“Cap Rate” means seven and twenty-four hundredths percent (7.24%).

“Closing Cash Payment” means, with respect to any Closing, an amount equal to
(a) the aggregate Property Allocations of all Real Properties to be transferred
at such Closing, minus, (b) the outstanding principal amount of, and any accrued
and unpaid interest on (each, as of the applicable Closing Date), all Assumed
Existing Loans in respect of any Real Property to be transferred at such
Closing, plus or minus, as applicable, (c) the Prorated Items as of such Closing
Date in respect of the Real Properties to be transferred at such Closing.

“Confidentiality Agreement” means that certain agreement between Buyer or its
Affiliate and Seller, dated June 12, 2013.

“Contract” means any legally binding agreement, commitment, lease, license or
contract, in each case, which is executory.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by Contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Cutoff Date” means 9:00 A.M. New York time on July 21, 2013.

“Defect” means any Title Defect or any Environmental Defect.

“Deposit Escrow Agent” means the national office of Chicago Title Insurance
Company located at 10 South LaSalle Street, Suite 3100, Chicago, IL 60603.

“Diligence Period” means, with respect to each Real Property and any Diligence
Materials in respect thereof, (a) with respect to any Pre-Cutoff Materials, the
period on or prior to 5:00 P.M. New York time on July 25, 2013 and (b) with
respect to any Post-Cutoff Materials, the period expiring at 5:00 P.M on the
fourth (4th) Business Days after the date of Seller’s delivery thereof to Buyer
(it being understood that posting on Seller’s electronic dataroom shall be
deemed to constitute delivery).

“Diligence Materials” means the Title Materials and the Environmental Materials.

“Disclosure Schedule” means the disclosure schedules attached hereto.

“Dollars” or “$” mean the lawful currency of the United States.

“Encumbered Property” means any Lender Encumbered Property, Tenant Encumbered
Property or JV Encumbered Property.

 

-2-

--------------------------------------------------------------------------------

“Environmental Law” means any United States federal, state or local statute,
regulation or ordinance currently in effect relating to the environment or
natural resources, including the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Oil Pollution Act
of 1990 (33 U.S.C. § 2701 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. § 2601 et seq.) and the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. § 136 et seq.), as to each, as amended, and the regulations
promulgated pursuant thereto and as each is in effect on and as interpreted on
the date of this Agreement.

“Environmental Permits” means any permit, license, approval, authorization,
consent, or certificate of a Governmental Authority with respect to the lease,
ownership or operation of the Real Property by the Companies and the Purchased
Subsidiaries under any applicable Environmental Law.

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

“Existing Loans” means all loans for borrowed money made with respect to the
Real Property, and all other loans or debt for borrowed money of each Company or
Purchased Subsidiary, in each case, including all outstanding principal and
accrued and unpaid interest thereunder.

“Fundamental Buyer Representations” means the representations and warranties of
Buyer contained in Section 5.1 (Organization of Buyer), Section 5.2
(Authorization, Enforceability), Section 5.5 (Broker’s Fees), Section 5.6
(Financial Ability) and Section 5.7 (Investment Representation).

“Fundamental Seller Representations” means the representations and warranties of
Seller contained in Section 3.1 (Organization of Seller), Section 3.2
(Authorization, Enforceability), Section 3.5 (Broker’s Fees), Section 3.6
(Ownership of Equity Interests) and Section 4.3(a) (Capitalization of the
Companies).

“GAAP” means, with respect to each document or action stated in this Agreement
to have been or to be prepared or taken in accordance therewith, generally
accepted accounting principles of the United States in effect at the time of
such document’s issuance or such action’s undertaking, as the case may be,
consistently applied.

“Governmental Authority” means any United States or foreign, federal, state,
provincial, municipal, local or similar governmental authority, regulatory or
administrative agency, tribunal or court.

“Hazardous Material” means any substance, material or waste that is regulated,
classified or otherwise characterized under or pursuant to any Environmental Law
as “hazardous,” “toxic,” “radioactive” or words of similar meaning or effect,
including petroleum and its by-products, asbestos, and polychlorinated
biphenyls.

“Joint Ventures” means the Companies and Purchased Subsidiaries set forth on
Annex C.

 

-3-

--------------------------------------------------------------------------------

“JV Agreements” means the Organizational Documents of the Joint Ventures.

“JV Counterparty” means any Company’s or Purchased Subsidiary’s counterparty to
any JV Agreement.

“JV Encumbered Property” means any Real Property which is owned by a Joint
Venture, or which a Joint Venture has the right to use.

“JV Equity Interests” means the Equity Interests or Subsidiary Equity Interests,
as applicable, of any Joint Venture.

“Kickout Period” means, with respect to each Real Property, the period
commencing on the date of this Agreement and expiring at 5:00 P.M. New York time
on the earlier of (a) the date that is twenty-four (24) calendar days from the
date Seller delivers written notice to Buyer (or its Representatives) granting
Buyer (or such Representatives) access to such Real Property for purposes of its
inspections thereof and (b) the date that is thirty (30) calendar days from the
date of this Agreement.

“Knowledge” as to Buyer means the actual knowledge of those persons listed in
Section 1.1(a) of the Disclosure Schedule, and as to Seller means the actual
knowledge of those persons listed in Section 1.1(b) of the Disclosure Schedule.

“Law” means any applicable law, rule, regulation, ordinance, order, judgment or
decree of a Governmental Authority that has the force of law, including in
relation to Taxes, in each case as in effect on and as interpreted on the date
of this Agreement.

“Leased Real Property” means the real property leased or subleased by any
Company or any Purchased Subsidiary from a third party landlord or sublessor, as
set forth in Section 1.1(c) of the Disclosure Schedule, including the buildings,
fixtures and improvements located thereon.

“Legal Proceeding” means (a) any lawsuit, action, claim or other proceeding at
law or in equity by or before a Governmental Authority or (b) any arbitral
action.

“Lender Consent” means any consent of a Lender to the transactions contemplated
by this Agreement and the Transaction Documents, which consent is required
(a) to be obtained pursuant to the terms of any Assumed Existing Loan in order
for such Assumed Existing Loan to remain outstanding from and after the
applicable Closing in the name of the Company or Purchased Subsidiary party
thereto, and (b) to cause Seller (or any Affiliate thereof that is not a Company
or Purchased Subsidiary) to be released from any guaranty and any other
obligation or liability of any kind whatsoever arising in connection with an
Assumed Existing Loan.

“Lender Encumbered Property” means any Real Property which, as of the applicable
Closing, is encumbered by an Assumed Existing Loan.

“Lenders” means the holders of the Existing Loans.

“Lien” means, with respect to any property or asset, any lien, encumbrance,
pledge, mortgage, deed of trust, hypothecation or security interest in respect
of such property or asset.

 

-4-

--------------------------------------------------------------------------------

“Losses” means any losses, liabilities or damages that are actually suffered or
sustained, whether resulting from the operation of this Agreement, a judgment, a
settlement or an award, including those arising out of any Legal Proceeding, Law
or Contract, including, the costs and expenses (including reasonable fees and
expenses of counsel, consultants, experts, and other professional fees)
associated therewith.

“Material Adverse Effect” means a material adverse effect on the results of
operations, business or condition (financial or otherwise) of the Companies and
the Purchased Subsidiaries (taken as a whole); provided that any effect
resulting or arising from any of the following (either alone or in combination)
shall not be considered when determining whether a Material Adverse Effect shall
have occurred:

(a) any change in general economic conditions or in the industries or markets in
which the Companies and the Purchased Subsidiaries (taken as a whole) operate;

(b) any act of war (whether or not declared), armed hostilities or terrorism or
other international or national calamity or any worsening of any of the
foregoing;

(c) any hurricane, earthquake, flood, fire or other natural disaster or act of
God;

(d) any effect of any proposed or actual institution of any new, or change of
interpretation of any existing, applicable Laws affecting any of the Companies,
Purchased Subsidiaries, Real Property or Seller, its Affiliates or the industry
in which the Companies and the Purchased Subsidiaries operate or any change in
GAAP or the interpretation thereof;

(e) the negotiation, execution, delivery, performance, consummation, potential
consummation or public announcement of this Agreement or the transactions
contemplated by this Agreement, including any litigation resulting therefrom or
with respect thereto, and any adverse change in, or loss of, Property Tenant,
landlord, Lender or similar relationships resulting therefrom or with respect
thereto, including as a result of the identity of Buyer;

(f) any change or development in financial, credit or capital markets (including
interest rates or exchange rates), general economic or business conditions, or
political, social or regulatory conditions;

(g) the outcome of any litigation, investigation, regulatory proceeding or
inquiry involving Seller that has been disclosed in Section 1.1(d) of the
Disclosure Schedule;

(h) any change arising from or relating to Buyer’s stock price or ratings;

(i) any business decision made or action taken by any competitor of Buyer or any
of Buyer’s Affiliates; and

(j) any omission to act or action taken by any of the Companies or any of the
Purchased Subsidiaries, in each case, to the extent permitted by the terms of
this Agreement or otherwise with the consent or upon the request of Buyer
(including those omissions to act or actions taken which are required by this
Agreement);

 

-5-

--------------------------------------------------------------------------------

provided that in the case of clauses (a), (b), (c) or (f) only to the extent
such effect does not, individually or in the aggregate, have a materially
disproportionate adverse impact on the Companies and the Purchased Subsidiaries
(taken as a whole) relative to other Persons or properties in the affected
geographic regions or industries.

“Operating Expenses” means the operating expenses required to be paid by a
Company or Purchased Subsidiary pursuant to any Property Lease or in connection
with any vacant Real Property and any rental payments and operating expenses
required to be paid under any Ground Leases, as specified and calculated in
accordance with Section 1.1(e) of the Disclosure Schedule. For the avoidance of
doubt, “Operating Expenses” does not include costs and expenses incurred in
connection with capital improvements or leasing costs (including tenant
improvements).

“OpEx Target” means two million four hundred twenty thousand Dollars
($2,420,000); provided, that to the extent any Real Property becomes a Withheld
Property in accordance with the terms of this Agreement, the OpEx Target shall
be reduced by deducting the applicable Operating Expenses attributable to such
Withheld Property as set forth on Section 1.1(e) of the Disclosure Schedule.

“Organizational Documents” means any charter, certificate of incorporation,
declaration of partnership, articles of association, bylaws, operating
agreement, limited liability company agreement, partnership agreement or similar
formation or governing documents and instruments.

“Owned Real Property” means the real property owned by any Company or any
Purchased Subsidiary, as set forth in Section 1.1(f) of the Disclosure Schedule,
including the buildings, fixtures and improvements located thereon.

“Parties” means, collectively, Seller and Buyer and “Party” means any one of
Seller or Buyer.

“PCRs” means the property condition reports with respect to the Real Properties,
which have been ordered by Buyer from third party providers prior to the date
hereof.

“Permits” means any authorization, license, permit or certificate issued by a
Governmental Authority, other than Environmental Permits, but including
professional licenses.

“Permitted Liens” means (a) statutory Liens for current Taxes, assessments or
other governmental charges, in each case, not yet delinquent or the amount or
validity of which is being contested in good faith by appropriate proceedings,
(b) zoning, entitlement and other land use and environmental regulations
promulgated by any Governmental Authority, (c) Liens of public record, (d) Liens
incurred or in existence in connection with the Existing Loans, (e) Property
Leases and all matters caused or arising by, through or under a Property Tenant
or a Property Lease, (f) restrictive covenants, easements and defects,
imperfections or irregularities of title or Liens, if any, that do not
materially detract from the value or use of the property encumbered thereby,
(g) all defects, exceptions, restrictions, licenses, reservations, covenants,
conditions, easements, rights of way and encumbrances disclosed in any real
property files that have been made available to Buyer including, without
limitation, all title policies, surveys and zoning reports, (h) Liens listed in
Section 1.1(g) of the Disclosure Schedule and (i) Liens created by Buyer, or its
successors and assigns.

 

-6-

--------------------------------------------------------------------------------

“Person” means any individual, firm, corporation, partnership, limited liability
company, incorporated or unincorporated association, joint venture, joint stock
company, Governmental Authority or other entity of any kind.

“Pooled Loan” means any Existing Loan that encumbers a pool of multiple Real
Properties.

“Pooled Property” means any Lender Encumbered Property subject to a Pooled Loan.

“Post-Cutoff Materials” means any Title Materials or Environmental Materials
provided by Seller to Buyer after the Cutoff Date (it being agreed and
understood that any Title Materials or Environmental Materials made available in
Seller’s electronic dataroom to which Buyer has access shall be deemed to have
been provided by Seller to Buyer pursuant to this sentence).

“Pre-Cutoff Materials” means any Title Materials or Environmental Materials
provided by Seller to Buyer on or before the Cutoff Date (it being agreed and
understood that any Title Materials or Environmental Materials made available in
Seller’s electronic dataroom to which Buyer has access shall be deemed to have
been provided by Seller to Buyer pursuant to this sentence).

“Prepaid Existing Loans” means the Existing Loans set forth on Annex D, which
Existing Loans shall be fully prepaid or defeased by Seller or the applicable
Company or Purchased Subsidiary prior to or concurrently with, whether out of
proceeds received from Buyer or otherwise, the applicable Closing, and which
shall thereupon terminate and cease to be in effect.

“Property Allocation” means, with respect to any Real Property, an amount equal
to the quotient of (a) the amount set forth across from the description of such
Real Property on Annex E, divided by (b) the Cap Rate.

“Property MAE” means, with respect to any Real Property, any condition that
(a) materially and adversely affects (i) the applicable Company’s or Purchased
Subsidiary’s fee simple title to, or leasehold interest in, such Real Property
or (ii) the current use or operation of such Real Property or (b) triggers an
obligation under an applicable Environmental Law to conduct a Phase II and/or
material Remedial Action, in each case, which condition would reasonably be
expected to require the incurrence of remediation or cure costs, or adversely
impact the fair market value of such Real Property, in an aggregate amount in
excess of ten percent (10%) of such Real Property’s Property Allocation.

“Property Tenants” means the tenants under the Property Leases.

 

-7-

--------------------------------------------------------------------------------

“Purchase Price Credit Escrow Amount” means an amount equal to the quotient of
(a) the difference between (i) Annualized Operating Expenses as determined by
Buyer pursuant to Section 2.7(e) minus (ii) the greater of (A) the Annualized
Operating Expenses set forth in the OpEx Statement and (B) the OpEx Target,
divided by (b) 7.24%.

“Purchased Subsidiaries” means the Persons set forth on Annex F.

“Real Property” means the Owned Real Property and the Leased Real Property.

“Reasonable Efforts” means good faith efforts in accordance with reasonable
commercial practice and without the incurrence of unreasonable cost or expense.

“Reimbursable Tenant Expenses” means payments required to be paid by any
Property Tenant under the applicable Property Lease for such Property Tenant’s
share of insurance, utilities, common area maintenance and other expenses of the
applicable Real Property which are not more than thirty (30) days past due on
the Closing Date.

“Remedial Action” means all actions required by an applicable Environmental Law
to (a) clean up, remove or treat any Hazardous Material or (b) perform
pre-remedial studies and investigations or post-remedial monitoring and care,
provided that in each case, such actions shall be consistent with the current
commercial or industrial use of the subject Real Property, and shall, to the
extent practicable, utilize risk-based options under state and federal Law,
including deed restrictions and institutional controls.

“Representatives” means, as to any Person, its Affiliates, and its and their
respective equity holders, officers, directors, managers, employees, counsel,
accountants, advisers, consultants and agents.

“Specified Covenants” means, the post-Closing covenants and agreements set forth
in Section 6.2 (Books and Records; Post-Closing Access), Section 6.3 (Risk of
Loss), Section 6.5 (Seller Marks), Section 6.6 (Publicity), Section 6.7
(Confidentiality; Non-Disparagement), Section 9.2 (Effect of Termination;
Payment of Deposit), Article VIII (Indemnification), Article X (Miscellaneous),
the penultimate sentence of Section 2.7(e) and in the parenthetical immediately
preceding the first proviso in Sections 2.9(c)(i) and 2.9(c)(iii) (Post-Closing
Adjustment of Pooled Loan Defected Property).

“Subsidiary” means, with respect to any Person, (a) a corporation of which more
than 50% of the combined voting power of the outstanding voting stock is owned,
directly or indirectly, by such Person or by one of more other Subsidiaries of
such Person or by such Person and one or more other Subsidiaries thereof, (b) a
partnership of which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the general partner and has the power to direct the policies,
management and affairs of such partnership, (c) a limited liability company of
which such Person or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, is
the managing member and has the power to direct the policies, management and
affairs of such company or (d) any other Person (other than a corporation,
partnership or limited liability company) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has the majority ownership power
to direct the policies, management and affairs thereof.

 

-8-

--------------------------------------------------------------------------------

“Tax Authority” means any Governmental Authority having jurisdiction over the
assessment, determination, collection or imposition of any Tax.

“Tax Benefit” means, with respect to a Loss, an amount by which the Tax
liability of a Person (or group of corporations filing a Tax Return that
includes the Person), with respect to a taxable period, is reduced as a result
of such Loss or the amount of any Tax refund or Tax credit that is generated
(including by deduction, loss, credit or otherwise) as a result of such Loss,
and any related interest received from any relevant Tax Authority.

“Tax Returns” means any report, return, election, document, estimated tax
filing, declaration or other filing provided to any Tax Authority including any
amendments thereto.

“Taxes” means all taxes, assessments, charges, duties, fees, levies, imposts or
other similar charges imposed by a Governmental Authority (whether disputed or
not), including all income, franchise, profits, capital gains, capital stock,
transfer, gross receipts, sales, use, service, occupation, ad valorem, property,
excise, severance, windfall profits, premium, stamp, license, payroll,
employment, social security, unemployment, disability, alternative minimum,
add-on, value-added, withholding and other taxes, assessments, charges, duties,
fees, levies, imposts or other similar charges of any kind whatsoever (whether
payable directly or by withholding and whether or not requiring the filing of a
Tax Return), and all estimated taxes, deficiency assessments, additions to tax,
additional amounts imposed by any Governmental Authority, penalties and
interest.

“Tenant Encumbered Property” means any Real Property which is subject to a
Required Tenant Waiver.

“Tenant Waiver” means the waiver by any Property Tenant of rights under the
applicable Property Lease (including rights of first offer or refusal) arising
as a result of the transactions contemplated by this Agreement and the
Transaction Documents, which waiver is required to be obtained pursuant to the
terms of the applicable Property Lease in order for such Property Lease to
remain in full force and effect from and after the applicable Closing.

“Transaction Documents” means any agreements, instruments or documents executed
or delivered by any Party (or Affiliate thereof) to any other Party (or
Affiliate thereof) pursuant to the terms of this Agreement.

“Unencumbered Property” means any Real Property, other than any Encumbered
Property.

“United States” means United States of America.

 

-9-

--------------------------------------------------------------------------------

Section 1.2 Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, the following terms have the meanings set forth in the sections
indicated:

 

Term

   Section Agreement    Preamble Assignee Parent    10.2 Buyer    Preamble Buyer
Assignee    10.2 Buyer Indemnified Parties    8.2(a) Cap    8.4(c) Claim Notice
   8.3(a) Closing    2.5(g) Closing Date    2.5(g) Closing Statement    2.4 Code
   9.2(d) Companies or Company    Recitals Deductible    8.4(b) Defect Notice   
2.9(c) Defected Property    2.9(c) Deposit    2.3(a) Deposit Escrow Agreement   
2.3(a) Disclosing Party    6.7(c) Environmental Defect    2.9(c) Environmental
Materials    2.9(a) Equity Interests    4.3(a) Excess    2.7(e) Final Purchase
Price    2.2 Ground Leases    4.6(a)(i) Indemnified Party    8.3(a) Indemnifying
Party    8.3(a) Initial Closing    2.5(a) Initial Closing Date    2.5(a) Initial
Purchase Price    2.2 JV Condition    7.1(b)(iii) JV Redemptions    7.1(b)(iii)
Kickout Notice    2.11 Lender Condition    7.1(b)(i) Material Contracts   
4.6(a) Maximum Kickout Properties    2.11 Non-Party Affiliate    8.7(e)
Notifying Party    6.4 OpEx Statement    2.7(e) Outside Date    9.1(d) Potential
Contributor    8.4(h) Pre-Signing Environmental Materials    2.9(a) Pre-Signing
Title Materials    2.9(a) Property Leases    4.6(a)(i) Property Management
Agreements    4.6(a)(iii) Prorated Items    2.7 Purchase Price Credit    2.7(e)
Qualifying Income    9.2(d) Receiving Party    6.7(c)

 

-10-

--------------------------------------------------------------------------------

Required Lender Consent    7.1(b)(i) Required Tenant Waiver    7.1(b)(ii) Second
Closing    2.5(b) Second Closing Date    2.5(b) Seller    Preamble Seller
Indemnified Parties    8.2(b) Seller Marks    6.5 Subsidiary Equity Interests   
4.3(b) Tenant Condition    7.1(b)(ii) Termination Threshold    2.9(d) Third
Closing    2.5(c) Third Closing Date    2.5(c) Third Party Approvals and
Notifications    2.10(a) Third Party Claim    8.3(a) Title Defect    2.9(c)
Title Materials    2.9(a) Updated Diligence Materials    2.9(a) Updated
Environmental Materials    2.9(a) Updated Title Materials    2.9(a) Withheld
Property    2.5(d)

Section 1.3 Rules of Construction.

(a) All article, section, schedule, annex and exhibit references used in this
Agreement are to articles, sections, schedules, annexes and exhibits to this
Agreement unless otherwise specified. The schedules, annexes and exhibits
attached to this Agreement constitute a part of this Agreement and are
incorporated herein for all purposes.

(b) Unless otherwise specified herein, when calculating the period of time
before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. Unless otherwise specified herein, if
the last day of such period is a non-Business Day, the period in question shall
end on the next succeeding Business Day.

(c) If a term is defined as one part of speech (such as a noun), it shall have a
corresponding meaning when used as another part of speech (such as a verb).
Terms defined in the singular have the corresponding meanings in the plural, and
vice versa. Unless the context of this Agreement clearly requires otherwise,
words importing the masculine gender shall include the feminine and neutral
genders and vice versa. The term “includes” or “including” shall mean “including
without limitation.” The words “hereof,” “hereto,” “hereby,” “herein,”
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular section or article
in which such words appear.

(d) The Parties acknowledge that each Party and its attorney has reviewed and
participated in the drafting of this Agreement and that any rule of construction
to the effect that any ambiguities are to be resolved against the drafting
Party, or any similar rule operating against the drafter of an agreement, shall
not be applicable to the construction or interpretation of this Agreement.

 

-11-

--------------------------------------------------------------------------------

(e) The captions in this Agreement are for convenience only and shall not be
considered a part of or affect the construction or interpretation of any
provision of this Agreement.

(f) All references to currency herein shall be to, and all payments required
hereunder shall be paid in, Dollars unless a different currency is specifically
stated.

(g) All accounting terms used herein and not expressly defined herein shall have
the meanings given to them under GAAP.

ARTICLE II

PURCHASE AND SALE; CLOSING; DILIGENCE PERIOD; PRE-CLOSING

CONSENTS AND WAIVERS

Section 2.1 Purchase and Sale of Equity Interests.

At each Closing, upon the terms and subject to the conditions set forth in this
Agreement, Seller shall, or shall cause one of its Subsidiaries to, sell,
assign, transfer and convey to Buyer, and Buyer shall purchase and acquire from
Seller, the applicable Equity Interests, free and clear of any Liens other than
transfer restrictions imposed thereon by applicable securities Laws, the Assumed
Existing Loans and the Property Leases.

Section 2.2 Consideration.

The aggregate consideration payable by Buyer to Seller (or Seller’s designee) at
the Closings for the applicable Equity Interests shall be paid by wire transfer
of immediately available funds, in an amount in cash equal to Two Billion Two
Hundred Ninety One Million Six Hundred Twenty Five Thousand Nine Hundred Sixty
Seven Dollars ($2,291,625,967.00) (the “Initial Purchase Price”) (which amount
represents the quotient of (x) the aggregate amounts set forth on Annex E
divided by (y) the Cap Rate), which shall be (a) decreased by the outstanding
principal amount of, and any accrued and unpaid interest on (each, as of the
applicable Closing Date), all Assumed Existing Loans (other than any Assumed
Existing Loans related to the Withheld Properties) to be assumed as of the
applicable Closing Date, (b) increased or decreased, as applicable, by the
amount of the Prorated Items with respect to the Companies and Purchased
Subsidiaries transferred as of the applicable Closing Date and (c) decreased by
the aggregate Property Allocations of the Withheld Properties (if any) as of the
applicable Closing Date (the amount determined as a result of the foregoing
calculation, the “Final Purchase Price”). For the avoidance of doubt, the Final
Purchase Price shall be equal to the aggregate of the Closing Cash Payments made
at each Closing.

 

-12-

--------------------------------------------------------------------------------

Section 2.3 Deposit; Payment on Closing.

(a) No later than the 5:00 P.M. New York time on the date hereof, Buyer shall
deposit One Hundred Million Dollars ($100,000,000) with the Deposit Escrow Agent
(together with all interest and earnings thereon, the “Deposit”) by wire
transfer of immediately available funds. The Deposit shall be allocated on a pro
rata basis among the Real Properties in accordance with the Property
Allocations. The Deposit shall be held in a segregated interest-bearing account
in accordance with the provisions of a deposit escrow agreement, substantially
in the form of Exhibit A (the “Deposit Escrow Agreement”). At each Closing, a
portion of the Deposit shall be disbursed to Seller, pro rata, in accordance
with the Property Allocations of the Real Properties being transferred to Buyer
at such Closing, and such disbursement shall be applied against the Closing Cash
Payment to be paid to Seller at such Closing; provided, that in no event shall
the aggregate amount of the Deposit to be disbursed to Seller at the First
Closing and the Second Closing exceed Forty Million Dollars ($40,000,000);
provided further that if, as of the Third Closing, the then-remaining Deposit
exceeds the Closing Cash Payment to be paid at the Third Closing, then the
Deposit Escrow Agent shall only disburse to Seller a portion of the
then-remaining Deposit in an amount equal to the Closing Cash Payment to be paid
at the Third Closing, and any excess of the then-remaining Deposit thereover
shall be disbursed to Buyer at the Third Closing. If any Closing does not occur
or if this Agreement otherwise terminates, the then-remaining Deposit shall be
disbursed as provided in Section 9.2.

(b) On each Closing Date, Buyer shall deliver to the Deposit Escrow Agent, by
wire transfer of immediately available funds the Closing Cash Payment applicable
to such Closing (less the applicable portion of the Deposit), without
withholdings of any kind. Without limiting the foregoing, but in furtherance
thereof, Buyer and Seller hereby agree that on each Closing Date, the Deposit
Escrow Agent shall be instructed to disburse the Closing Cash Payment applicable
thereto in accordance with a Closing Statement approved by Buyer and Seller in
accordance with Section 2.4 and prepared consistent with the terms of this
Agreement. Seller and Buyer agree that a portion of each Closing Cash Payment
shall be used to pay the Lenders in respect of the Prepaid Existing Loans (if
any) to be prepaid or defeased at such Closing, in such amounts as are necessary
to fully prepay or defease each such Prepaid Existing Loan, thereby causing
(i) each such Prepaid Existing Loan to terminate as of, and cease to be in
effect from and after, such Closing and (ii) Seller and its Affiliates to be
released (in form and substance reasonably satisfactory to Seller or such
Affiliates) from any guaranty or other obligation or liability of any kind
whatsoever arising in connection with the applicable Prepaid Existing Loan,
whether arising before, on or after such Closing Date.

Section 2.4 Closing Statement.

At least five (5) Business Days prior to each Closing, the Deposit Escrow Agent
shall cause to be prepared and delivered to Buyer a statement, consistent with
and calculated in accordance with the principles set forth in Section 2.7,
setting forth the Deposit Escrow Agent’s calculation of the Closing Cash Payment
applicable to such Closing (including the components of such calculation
described in the definition thereof (each, a “Closing Statement”)). In the event
that Buyer or Seller objects to all or any portion of such Closing Statement,
Buyer and

 

-13-

--------------------------------------------------------------------------------

Seller shall work together in good faith to agree upon the amounts set forth
therein prior to such Closing, but if the Parties are unable to resolve any such
objection, the amount set forth in such Closing Statement shall control. In the
event any of the amounts set forth in any Closing Statement prove to be
incorrect because they were not calculated in accordance with the principles set
forth in Sections 2.7 and 2.8, the applicable Party shall be entitled to recover
Losses with respect thereto by making a claim for indemnification pursuant to,
and in accordance with, the provisions of Article VIII.

Section 2.5 The Closings.

The Closings shall take place as follows:

(a) The initial closing of the transactions contemplated by this Agreement (the
“Initial Closing”) shall take place at the offices of the Deposit Escrow Agent,
commencing at 10:00 a.m. local time on September 23, 2013, or such other date or
location as Buyer and Seller may mutually determine (the “Initial Closing
Date”), in each case, so long as all of the conditions to the obligations of the
Parties to consummate the Initial Closing as set forth in Article VII have been
satisfied or waived as of such date (other than conditions with respect to
actions the Parties shall take at the Initial Closing itself or which, by their
nature, cannot be satisfied until the Initial Closing, but subject to the
satisfaction of such conditions at the Initial Closing). At the Initial Closing,
Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall
purchase and acquire from Seller, the Equity Interests of those Companies that
own or have the right to use (or that own Purchased Subsidiaries which own or
have the right to use) (i) any Unencumbered Property or (ii) any Encumbered
Property in respect of which, in the case of this clause (ii), all Required
Lender Consents and Required Tenant Waivers have been obtained, and all JV
Redemptions have been effected, as of the Initial Closing Date. Notwithstanding
anything in the foregoing to the contrary, in the event that any Company or any
Purchased Subsidiary to be transferred to Buyer at the Initial Closing owns or
has the right to use (or owns one or more Purchased Subsidiaries that
collectively own or have the right to use) both (A) Unencumbered Property and
(B) any Encumbered Property that will not be transferred to Buyer at the Initial
Closing pursuant to the foregoing clause (ii), the Parties shall take such
actions as are reasonably necessary prior to the Initial Closing to (1) cause
such Company or Purchased Subsidiary to transfer the applicable Encumbered
Property to another Company or Purchased Subsidiary, which other Company or
Purchased Subsidiary will be transferred to Buyer at the Second Closing or the
Third Closing or (2) amend this Agreement to provide for additional sellers
hereto, such that any such Company or Purchased Subsidiary may transfer
applicable Subsidiary Equity Interests to Buyer directly. The Initial Closing
shall be deemed to have been consummated at 12:01 a.m. on the Initial Closing
Date. Neither Party will need to be present at the Initial Closing, it being
anticipated that the Parties will deliver the Initial Closing documents and
deliverables in escrow to the Deposit Escrow Agent prior to the Initial Closing
Date.

(b) The second closing of the transactions contemplated by this Agreement (the
“Second Closing”) shall take place at the offices of the Deposit Escrow Agent,
commencing at 10:00 a.m. local time on December 6, 2013, which date may be
extended for up to 45 days by Seller in its sole discretion, by providing
written notice to Buyer of such extension at least five (5) Business Days prior
thereto, or otherwise such other date or location as Buyer and Seller may

 

-14-

--------------------------------------------------------------------------------

mutually determine (the “Second Closing Date”), in each case, so long as all of
the conditions to the obligations of the Parties to consummate the Second
Closing as set forth in Article VII have been satisfied or waived as of such
date (other than conditions with respect to actions the Parties shall take at
the Second Closing itself or which, by their nature, cannot be satisfied until
the Second Closing, but subject to the satisfaction of such conditions at the
Second Closing). At the Second Closing, Seller shall sell, assign, transfer and
convey to Buyer, and Buyer shall purchase and acquire from Seller, the Equity
Interests of those Companies that own or have the right to use (or that own
Purchased Subsidiaries which own or have the right to use) any Encumbered
Property which was not transferred to Buyer in connection with the Initial
Closing and in respect of which, all Required Lender Consents and Required
Tenant Waivers have been obtained, and all JV Redemptions have been effected, as
of the Second Closing Date. Notwithstanding anything in the foregoing to the
contrary, in the event that any Company or any Purchased Subsidiary to be
transferred to Buyer at the Second Closing owns or has the right to use (or owns
one or more Purchased Subsidiaries that collectively own or have the right to
use) any Encumbered Property that will not be transferred to Buyer at the Second
Closing pursuant to the immediately preceding sentence, the Parties shall take
such actions as are reasonably necessary prior to the Second Closing to
(i) cause such Company or Purchased Subsidiary to transfer the applicable
Encumbered Property to another Company or Purchased Subsidiary, which other
Company or Purchased Subsidiary will be transferred to Buyer at the Third
Closing or (ii) amend this Agreement to provide for additional sellers hereto,
such that any such Company or Purchased Subsidiary may transfer applicable
Subsidiary Equity Interests to Buyer directly. The Second Closing shall be
deemed to have been consummated at 12:01 a.m. on the Second Closing Date.
Neither Party will need to be present at the Second Closing, it being
anticipated that the Parties will deliver the Second Closing documents and
deliverables in escrow to the Deposit Escrow Agent prior to the Second Closing
Date.

(c) Subject to Section 2.5(d), the third closing of the transactions
contemplated by this Agreement (the “Third Closing”) shall take place at the
offices of the Deposit Escrow Agent, commencing at 10:00 a.m. local time on the
third Business Day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the Third Closing as set forth in
Article VII (other than conditions with respect to actions the Parties shall
take at the Third Closing itself or which, by their nature, cannot be satisfied
until the Third Closing, but subject to the satisfaction of such conditions at
the Third Closing) or such other date or location as Buyer and Seller may
mutually determine (the “Third Closing Date”). At the Third Closing, Seller
shall, subject to Section 2.5(d), sell, assign, transfer and convey to Buyer,
and Buyer shall purchase and acquire from Seller, the Equity Interests that were
not sold, assigned transferred and conveyed to Buyer at the Initial Closing or
the Second Closing. The Third Closing shall be deemed to have been consummated
at 12:01 a.m. on the Third Closing Date. Neither Party will need to be present
at the Third Closing, it being anticipated that the Parties will deliver the
Third Closing documents and deliverables in escrow to the Deposit Escrow Agent
prior to the Third Closing Date.

(d) In the event that all of the conditions to the Third Closing set forth in
Article VII have been satisfied or waived as of the Outside Date, other than any
of the Lender Condition, the Tenant Condition and/or the JV Condition as a
result of the failure to obtain any Required Lender Consent or Required Tenant
Waiver or the failure to effect any JV Redemption, respectively, then the
Parties shall cause the Third Closing to occur on the Outside Date but shall

 

-15-

--------------------------------------------------------------------------------

exclude from such Third Closing (i) any Lender Encumbered Property (or the
Company or Purchased Subsidiary that owns or has the right to use such Lender
Encumbered Property, so long as such Company or Purchased Subsidiary does not
own or have the right to use any other Real Property) which is subject to any
unobtained Required Lender Consent. (ii) any Tenant Encumbered Property (or the
Company or Purchased Subsidiary that owns or has the right to use such Tenant
Encumbered Property, so long as such Company or Purchased Subsidiary does not
own or have the right to use any other Real Property) which is subject to any
unobtained Required Tenant Waiver and (iii) any JV Encumbered Property (or the
Company or Purchased Subsidiary that owns or has the right to use such JV
Encumbered Property, so long as such Company or Purchased Subsidiary does not
own or have the right to use any other Real Property) with respect to which a JV
Redemption has not been effected (any of the Lender Encumbered Properties,
Tenant Encumbered Properties or JV Encumbered Properties (or any of the
Companies or Purchased Subsidiaries that owns or has the right to use any of the
foregoing) which is excluded from the Third Closing pursuant to the foregoing
clauses, (i), (ii) or (iii), together with any Real Property excluded from any
Closing pursuant to Sections 2.9(c) or 2.11, a “Withheld Property”), in which
event, (A) any such Withheld Property shall not be transferred to Buyer pursuant
to this Agreement, (B) Buyer and Seller shall have no further rights or
obligations under this Agreement relating to any such Withheld Property and
(C) any such Withheld Property shall cease to be considered “Real Property”, a
“Company” or a “Purchased Subsidiary” hereunder, as applicable.

(e) The Parties hereby acknowledge that each Lender that provides a Lender
Consent may do so upon such terms and conditions (including with respect to
timing and schedule), as are agreed upon between the Parties and such Lender.
Notwithstanding any difference between the provisions of this Agreement and the
timing and scheduling terms and conditions of any Lender Consent, the Parties
agree to cooperate with each other and to use Reasonable Efforts to cause the
Closings to occur on the Closing Dates provided for in this Section 2.5 and
otherwise as expeditiously as practicable. In the event that any Lender requires
that a Closing with respect to the applicable Lender Encumbered Property take
place on a date other than the Closing Dates provided for in this Section 2.5,
the Parties will agree to hold a Closing on such date and all applicable
provisions of this Agreement shall apply to such Closing mutatis mutandis.

(f) The Parties hereby agree and acknowledge that the transactions contemplated
by this Agreement are for the purchase and sale of the Companies and the
Purchased Subsidiaries and that it is intended that such entities do not own or
lease (directly or indirectly) any real property other than the Real Property
and certain assets related thereto. If the Parties determine at any time prior
to the applicable Closing that any Company or Purchased Subsidiary owns or has
the right to use any asset or property (including any real property) other than
the Real Property and assets related specifically to same (including any
Defected Property that is intended to be excluded from this Agreement), the
Parties shall take such actions as are necessary (including by amending,
modifying or supplementing this Agreement, the annexes or exhibits hereto or the
Disclosure Schedule, whether to provide for additional Sellers, Companies or
Purchased Subsidiaries hereto, or otherwise) in order to provide that the
Companies and Purchased Subsidiaries conveyed to Buyer at the Closings only own
or have the right to use the Real Property that are to be transferred pursuant
to this Agreement and are required to meet the obligations of such Company or
Purchased Subsidiary as landlord under the applicable Property

 

-16-

--------------------------------------------------------------------------------

Lease and no other asset or property (including any real property). In addition,
notwithstanding anything in this Agreement to the contrary (including anything
in Section 6.1), but subject to the prior written approval of Buyer (which
approval shall not be unreasonably withheld, conditioned or delayed), prior to
the applicable Closing (it being agreed and understood that Buyer hereby
consents to Seller taking the actions set forth in Section 2.5(f) of the
Disclosure Schedule), Seller, the Companies and the Purchased Subsidiaries shall
be expressly permitted to take such actions as are necessary and effect such
internal restructurings as are necessary (including by distributing,
dividending, assigning or otherwise transferring any assets, property (including
real property), Persons or equity interests) in order to ensure that the only
assets owned by the Companies and the Purchased Subsidiaries are the Real
Property that are to be transferred pursuant to this Agreement and the Persons
(or the equity interests in such Persons) that own or have the right to use such
Real Property.

(g) Notwithstanding anything in this Agreement to the contrary, (i) the term
“Closing”, as it is used in this Agreement, shall refer to any of the Initial
Closing, the Second Closing or the Third Closing, as applicable, and (ii) the
term “Closing Date” shall refer to any of the Initial Closing Date, the Second
Closing Date or the Third Closing Date, as applicable.

Section 2.6 Closing Deliverables.

The following deliveries shall be made at the applicable Closing:

(a) Seller shall deliver or cause to be delivered to Buyer or the Deposit Escrow
Agent, as applicable:

(i) certificates representing the Equity Interests to be transferred at such
Closing, to the extent such Equity Interests are certificated, and to the extent
such Equity Interests are not certificated, duly executed counterparts to
assignment and assumption agreements effecting the assignment thereof;

(ii) subject to Section 2.5(d), the Required Lender Consents in respect of the
Lender Encumbered Properties to be transferred at such Closing;

(iii) subject to Section 2.5(d), the Required Tenant Waivers in respect of the
Tenant Encumbered Properties to be transferred at such Closing;

(iv) subject to Section 2.5(d), evidence of the JV Redemptions in respect of the
JV Encumbered Properties to be transferred at such Closing;

(v) a duly executed copy of the Closing Statement applicable to such Closing, as
agreed upon between the Parties, pursuant to Section 2.4;

(vi) a duly executed counterpart to joint written instructions to the Deposit
Escrow Agent, directing the Deposit Escrow Agent to disburse the applicable
portion of the Deposit in accordance with Section 2.3(a);

 

-17-

--------------------------------------------------------------------------------

(vii) a certificate dated the applicable Closing Date, duly executed by an
authorized officer of Seller, certifying that the conditions to such Closing
specified in Sections 7.2(a) and 7.2(b) have been fulfilled;

(viii) a certificate dated the applicable Closing Date, duly executed by an
authorized officer of Seller, certifying (A) in the case of the Initial Closing,
the resolutions of the governing body of Seller approving and authorizing the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby and (B) in the case of each Closing, the
Organizational Documents of each Company and each Purchased Subsidiary to be
transferred at such Closing;

(ix) a certificate dated the applicable Closing Date, duly executed by an
authorized officer of Seller, certifying Seller’s non-foreign status in
accordance with Treasury Regulations Section 1.1445-2(b); and

(b) Buyer shall deliver or cause to be delivered to Seller or the Deposit Escrow
Agent, as applicable:

(i) the Closing Cash Payment applicable to such Closing (less the applicable
portion of the Deposit), in accordance with Section 2.3(b);

(ii) duly executed counterparts to the assignment and assumption agreements
described in Section 2.6(a)(i);

(iii) a duly executed copy of the Closing Statement applicable to such Closing,
as agreed upon between the Parties, pursuant to Section 2.4;

(iv) a duly executed counterpart to joint written instructions to the Deposit
Escrow Agent, directing the Deposit Escrow Agent to disburse the applicable
portion of the Deposit in accordance with Section 2.3(a); and

(v) a certificate, dated the applicable Closing Date, duly executed by an
authorized officer of Buyer, certifying that the conditions to such Closing
specified in Sections 7.3(a) and 7.3(b) have been fulfilled.

Section 2.7 Proration Calculation Principles.

The following items (collectively, the “Prorated Items”) shall be prorated
between the Seller and Buyer as of the applicable Closing Date (on the basis of
the actual number of days elapsed over the applicable period) in accordance with
the calculation principles set forth below, with Buyer being deemed to be the
owner of the Companies and the Purchased Subsidiaries transferred at any Closing
during the entire day on the applicable Closing Date and being entitled to
receive all operating income of the applicable Real Property, and being
obligated to pay all operating expenses of the applicable Real Property, with
respect to the applicable Closing Date:

 

-18-

--------------------------------------------------------------------------------

(a) All non-delinquent real estate and personal property Taxes and assessments
in respect of the Owned Real Property for the current year (including any Taxes
or assessments that are payable in installments) shall be prorated between
Seller and Buyer as of the applicable Closing Date on an accrual basis, based on
the actual number of days in the year during which the applicable Closing Date
occurs; provided, however, that if the Property Tenant under any Property Lease
is responsible for such Taxes and assessments, there shall be no proration for
any such Taxes or assessments in respect of such Property Lease. In no event
shall Seller be charged with or be responsible for any increase in the Taxes on
the Owned Real Property resulting from the sale of the Owned Real Property
contemplated by this Agreement or from any improvements made or leases entered
into on or after the applicable Closing Date.

(b) All fixed and additional rentals under the Property Leases, Reimbursable
Tenant Expenses and other charges owed by Property Tenants shall be prorated
between Seller and Buyer as of the applicable Closing Date on an accrual basis,
based on the actual number of days in the month (quarter, year or other
applicable period) during which the applicable Closing Date occurs. The Prorated
Items shall include a credit to Buyer in an amount equal to all prepaid rentals
for periods after the applicable Closing Date and all security deposits (or
remaining portions thereof) required to be returned under the applicable
Property Lease, in each case, to the extent the foregoing were paid by Property
Tenants and not otherwise paid or made available to Buyer. For a period of six
(6) months after the Closing Date, all delinquent rentals for periods prior to
the applicable Closing Date, to the extent any such delinquent rentals are paid
by Property Tenants after such Closing Date, shall be paid by Buyer to Seller
within ten (10) business days after receipt by Buyer; provided, that all
Property Tenant payments received subsequent to the applicable Closing shall be
applied first to current rents and any delinquencies arising after the Closing
Date and then to pre-Closing delinquent rents (it being agreed and understood
that Buyer may not use any amounts owed to Seller pursuant to this proviso as an
offset against other amounts owed by Seller to Buyer under, or claims that Buyer
may have against Seller in respect of, this Agreement); provided, further that
from and after the applicable Closing, Seller shall have the express right to
take all commercially reasonable actions necessary or desirable to, and Buyer
shall cooperate with Seller in Seller’s efforts to, obtain delinquent rentals
from any Property Tenants that owe such delinquent rentals. Notwithstanding the
foregoing, at the applicable Closing, Seller shall be entitled to a credit in
the amount of all delinquent rentals payable by the Property Tenant, as of such
Closing, in respect of the Real Property set forth on Section 2.7(b) of the
Disclosure Schedule.

(c) Any other items of operating income or operating expense that are not
payable by Property Tenants under Property Leases (including any water, gas,
electricity and other utility or similar fees) which are customarily apportioned
between the parties in real estate closings of comparable commercial properties
in the metropolitan area where the applicable Real Property is located, and
which are not included in the Reimbursable Tenant Expenses for any Property
Lease, shall be prorated between Seller and Buyer as of the applicable Closing
Date on an accrual basis, based on the actual number of days in the month
(quarter, year or other applicable period) during which the applicable Closing
Date occurs; provided, that Seller shall be entitled to a credit for any and all
deposits held by any utility company or other party on behalf of any Company or
any Purchased Subsidiary as of the applicable Closing Date.

(d) All rent payable under the Ground Leases which are not payable by any
Property Tenant shall be prorated between Seller and Buyer as of the applicable
Closing Date on an accrual basis, based on the actual number of days in the
month (quarter, year or other applicable period) during which the applicable
Closing Date occurs. Seller shall be responsible for all rent payable under the
Ground Leases attributable to the period before the applicable Closing Date and
Buyer shall be responsible for all rent payable under the Ground Leases
attributable to the period on and after the applicable Closing Date.

 

-19-

--------------------------------------------------------------------------------

(e) In the event that, after taking into account all of the Real Properties
being transferred at the Third Closing and the Real Properties transferred at
each previous Closing, the Annualized Operating Expenses for all such
transferred Real Properties exceeds the OpEx Target for all such transferred
Real Properties, then Buyer shall be entitled to a credit at the Third Closing
in an amount calculated pursuant to the methodology set forth in Section 1.1(e)
of the Disclosure Schedule (such credit, the “Purchase Price Credit”). If this
Agreement is terminated after the Initial Closing but prior to the Third
Closing, then the Purchase Price Credit (and the procedures for determining
same), if any, shall be effected by the Parties after such termination, but only
with respect to the Real Properties that were transferred at Closings that
occurred prior to such termination. At least five (5) Business Days prior to the
Third Closing, Seller shall deliver to Buyer a statement (the “OpEx Statement”)
(together with the financial information upon which such statement was prepared)
setting forth its calculations of the Annualized Operating Expenses and the
resulting Purchase Price Credit, if any. In the event that Buyer objects to all
or any portion of the OpEx Statement, Buyer and Seller shall work together in
good faith to agree upon the amounts set forth therein and the calculation of
the Annualized Operating Expenses and the resulting Purchase Price Credit, if
any, prior to the Third Closing, but if the Parties are unable to resolve any
such objection prior to the Third Closing, then Seller may elect to proceed to
the Third Closing (applying a Purchase Price Credit equal to an amount
determined on the basis of Buyer’s objections); provided, that at the Third
Closing, Buyer shall deposit into an escrow account (pursuant to a joint
instruction escrow agreement substantially similar to the Deposit Escrow
Agreement) an amount in cash in immediately available funds equal to the
Purchase Price Credit Escrow Amount (it being agreed and understood that, from
and after the Third Closing, the Parties shall resolve the dispute with respect
to the amounts set forth in the OpEx Statement in accordance with the dispute
resolution provisions of Section 10.11(b), and the Purchase Price Credit Escrow
Amount shall remain in the escrow account until resolution of such dispute);
provided, further, that if the Purchase Price Credit Escrow Amount exceeds Nine
Million Six Hundred Sixty Eight Thousand Five Hundred Eight Dollars and Twenty
Nine cents ($9,668,508.29) (the amount of such excess, the “Excess”), then
Seller may elect to either (A) delay the Third Closing until the dispute has
been resolved in accordance with the dispute resolution provisions of
Section 10.11(b) or (B) proceed to the Third Closing as described above (without
waiving its right to make a claim against the Purchase Price Credit Escrow
Amount or the Excess) with Buyer being required to deposit into escrow an amount
equal to Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight
Dollars and Twenty Nine cents ($9,668,508.29), and following the Third Closing
the Parties shall resolve their dispute with respect to the Purchase Price
Credit Escrow Amount (including the Excess) in accordance with the dispute
resolution provisions of Section 10.11(b). Notwithstanding the foregoing, the
references to “Nine Million Six Hundred Sixty Eight Thousand Five Hundred Eight
Dollars and Twenty Nine cents ($9,668,508.29)” in the immediately preceding
sentence shall be reduced by the percentage that the Initial Purchase Price is
decreased as a result of any Withheld Properties.

 

-20-

--------------------------------------------------------------------------------

(f) At the Third Closing, Buyer shall be entitled to a credit in the aggregate
amount of the capital improvements that are recommended in good faith by the PCR
(that are not reimbursable by the applicable Property Tenant) for any of the
Real Properties set forth in Section 2.7(f) of the Disclosure Schedule;
provided, however, that (i) Buyer shall not be entitled to a credit for capital
improvements with respect to any Real Property, unless the aggregate capital
improvements recommended in good faith by the PCR for such Real Property are in
excess of Thirty Five Thousand Dollars ($35,000) and (ii) in no event, shall
Buyer’s aggregate credit pursuant to this Section 2.7(f) exceed Nineteen Million
Dollars ($19,000,000). If this Agreement is terminated after the Initial Closing
but prior to the Third Closing, and any of the Real Properties set forth in
Section 2.7(f) of the Disclosure Schedule are transferred to Buyer at the
Initial Closing or the Second Closing, then the credit described by the first
sentence of this Section 2.7(f) shall be effected by the Parties after such
termination, but only with respect to the Real Properties that were transferred
at Closings that occurred prior to such termination.

(g) In the event that any Real Property set forth on Section 2.7(g) of the
Disclosure Schedule is transferred to Buyer at a Closing, Seller shall, at the
Closing at which such Real Property is transferred, give to Buyer a releasing
credit in the amount set forth across from such Real Property’s address in
Section 2.7(g) of the Disclosure Schedule.

Section 2.8 Closing Costs. In connection with the transactions contemplated by
this Agreement or the Transaction Documents, Buyer and Seller shall, subject to
the last sentence of this Section 2.8, each bear fifty percent (50%) of (a) the
costs, fees and expenses required to be incurred in connection with
(i) obtaining any Tenant Waivers or Lender Consents (including any Lender legal
fees, application fees, agency fees, transfer or pre-payment fees or penalties
(whether pursuant to the terms of the applicable Assumed Existing Loan or
otherwise) or any title or other miscellaneous search fees incurred in
connection therewith) or (ii) obtaining the Updated Diligence Materials, any
Uniform Commercial Code or judgment Lien searches or any surveys of the Real
Properties, (b) all transfer and similar Taxes incident to the sale of the
Equity Interests, (c) the fees and expenses of the Deposit Escrow Agent and
(d) all other similar costs, fees and expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement or the
Transaction Documents. In furtherance thereof, the Closing Statement for the
Third Closing shall provide for a credit to either Buyer or Seller, in such
amount as is necessary to provide for an equal sharing of the costs, fees, and
expenses as described by the immediately preceding sentence (or if this
Agreement is terminated after the Initial Closing but prior to the Third
Closing, then each Party shall be entitled to reimbursement from the other
Party, to the extent necessary to effect such an equal sharing of costs, fees
and expenses). Notwithstanding the foregoing, (A) each party shall bear the fees
and expenses of its and its Affiliates’ own (1) legal counsel (including, in the
case of Seller, Latham & Watkins LLP and Hunton & Williams LLP) and
(2) financial advisors, brokers, finders, investment bankers or other Persons
entitled to any brokerage fee, finders’ fee or other commission (including, in
the case of Seller, Goldman Sachs & Co., Gerrity Advisory and KG Consulting, and
in the case of Buyer, RCS Advisory Services, LLC), in each case, in connection
with the transactions contemplated by this Agreement or the Transaction
Documents, (B) in the event any Lender reasonably requires reserves or escrows,
principal loan reductions or other fees or costs not specifically required under
the current documents related to the Assumed Existing Loans in order to provide
a Lender Consent in respect of any Assumed Existing Loan, such amount shall be
paid by Buyer and (C) Seller shall bear any costs, fees and expenses required to
be incurred in connection with effecting any JV Redemptions.

 

-21-

--------------------------------------------------------------------------------

Section 2.9 Diligence Materials; Diligence Period Access; Defects.

(a) The Parties expressly agree and acknowledge that, as of the date of this
Agreement, Seller has made available to Buyer with respect to the Real Property
and to the extent in Seller’s possession, copies of (i) the Property Leases and
the Ground Leases, (ii) certain lender’s and/or owner’s title insurance policies
and related materials (the materials described in this clause (ii), the
“Pre-Signing Title Materials”), (iii) property surveys and site plans,
(iv) environmental reports (such reports, the “Pre-Signing Environmental
Materials”), (v) certificates of occupancy, (vi) current real estate tax bills,
(vii) rent rolls, (viii) operating statements and (ix) warranties related to
improvements constructed thereon. The Parties further agree and acknowledge
that, prior to the date hereof, Seller has ordered from applicable service
providers, updated title commitments for each Real Property (any such updated
title commitments, the “Updated Title Materials” and, together with the
Pre-Signing Title Materials, the “Title Materials”), in addition to updated
Phase I environmental reports for each Real Property (such updates, the “Updated
Environmental Materials” and, together with the Pre-Signing Environmental
Materials, the “Environmental Materials”, and the Updated Environmental
Materials, together with the Updated Title Materials, the “Updated Diligence
Materials”). From and after the date hereof, Seller shall provide to Buyer
copies of the Updated Diligence Materials as and when they become available to
Seller, but only to the extent Seller has not, as of the date of this Agreement,
already provided copies to Buyer of any such Updated Diligence Materials that
have been received by Seller (it being agreed and understood that any Updated
Diligence Materials made available in Seller’s electronic dataroom to which
Buyer and its Representatives have access shall satisfy Seller’s obligations
under this sentence). From and after the date hereof, Buyer shall cause the
third-party providers of the PCRs to deliver a copy of each PCR to Seller as and
when any such PCR is delivered to Buyer. The Parties acknowledge that prior to
the expiration of the Diligence Period with respect to the Pre-Cutoff Materials,
Buyer identified certain matters with respect to title and environmental
matters, as set forth on Annexes J and K, respectively that Buyer believes could
potentially constitute Defects. The Parties agree that the matters set forth in
Annexes J and K, and Buyer’s delivery to Seller thereof do not constitute Defect
Notices hereunder, and instead, the Title Materials and Environmental Materials
in respect of the matters set forth in Annexes J and K shall be deemed to be
Post-Cutoff Materials delivered to Buyer on the date of this Agreement. Buyer
will have (A) with respect to the Title Materials in respect of the matters set
forth on Annex J, four (4) Business Days from the date hereof to evaluate such
materials to determine whether to deliver a Defect Notice in respect thereof and
(B) four (4) Business Days from the date of receipt of any Updated Environmental
Materials to evaluate such Updated Environmental Materials (including the
Environmental Materials in respect of the matters set forth on Annex K) to
determine whether to deliver a Defect Notice in respect thereof.

(b) In addition to providing Buyer with the Updated Diligence Materials, during
each Real Property’s Diligence Period, Seller shall afford to Buyer and its
authorized Representatives reasonable access (at Buyer’s sole cost and risk,
during normal business hours and in such manner as not to unreasonably interfere
with the normal operation of Seller’s business) to such Real Property, and the
books, Contracts and records of the Company or the Purchased Subsidiary
(including the Subsidiary information used in connection with the calculation
contemplated on

 

-22-

--------------------------------------------------------------------------------

Section 1.1(e) of the Disclosure Schedule) that owns or otherwise has the right
to use such Real Property to the extent the same is in Seller’s possession (it
being agreed and understood that such books, Contracts or records made available
in Seller’s electronic dataroom to which Buyer and its Representatives have
access shall constitute sufficient access hereunder), in each case, as Buyer and
such Representatives may reasonably request; provided, that Buyer shall
indemnify, defend and hold harmless each Seller Indemnified Party from and
against any and all liabilities, claims and expenses (including reasonable
attorneys’ fees), including, without limitation, those for personal injury to or
death of any of Buyer’s directors, officers, employees, or other
Representatives, in each case arising out of or related to any access permitted
by this Section 2.9, except to the extent such claims arise from the gross
negligence or willful misconduct of the Seller Indemnified Parties, and Buyer
shall provide Seller with a liability insurance policy naming Seller as a named
insured in the amount of at least $2,000,000 with respect to Buyer’s and its
Representatives’ activities at the Real Property. Seller shall have the right to
have a Representative present at all times during any such inspections,
interviews and examinations. Additionally, Buyer shall hold in confidence all
such information (including the Updated Diligence Materials) on the terms and
subject to the conditions contained in the Confidentiality Agreement.
Notwithstanding the foregoing, Buyer shall have no right of access to, and
Seller shall have no obligation to provide to Buyer, information relating to
(i) bids received from others in connection with the sale process that gave rise
to the transactions contemplated by this Agreement, or in connection with any
other sale process related to the Real Property, or any information or analysis
(including financial analysis) relating to any such bids, (ii) any information
the disclosure of which would jeopardize any legal privilege or work-product
privilege available to Seller, any of the Companies or any of the Purchased
Subsidiaries or any of their respective Affiliates relating to such information
or would cause Seller, any of the Companies, or any of the Purchased
Subsidiaries or any of their respective Affiliates to breach a confidentiality
obligation, (iii) organizational, financial and other documents relating to
Seller or any of its Affiliates (other than any Company or any Purchased
Subsidiary), (iv) information contained in any internal financial analyses or
projections with respect to the Companies, the Purchased Subsidiaries or the
Real Property or (v) any information the disclosure of which would result in a
violation of Law or Contract. In addition to the foregoing, Seller shall, at
such time as requested and from time to time prior to ten (10) Business Days
after the Third Closing, upon reasonable notice and reasonable request from
Buyer, provide Buyer and its Representatives with access to financial
information that is reasonably necessary in the opinion of the outside third
party accountants of Buyer to enable Buyer and such accountants to timely
prepare financial statements in compliance with Rule 3-14 of Regulation S-X of
the Securities and Exchange Commission. Notwithstanding anything to the contrary
contained herein, prior to the applicable Closing, without the prior written
consent of Seller, (A) Buyer shall not contact any Property Tenants, landlords
under Ground Leases, JV Counterparties or Lenders or any of their respective
Representatives regarding the Real Property, this Agreement or the Transaction
Documents or the transactions contemplated hereby or thereby, and (B) Buyer
shall have no right to perform any physical or invasive testing (environmental,
structural or otherwise) at any Real Property (such as soil borings, water
samplings or the like).

(c) In the event that (i) the Title Materials in respect of any Real Property
reveal a condition that would reasonably be expected to result in a Property MAE
(a “Title Defect”) and which, in the case of the Post-Cutoff Materials, was not
revealed by the Pre-Cutoff Materials, or (ii) the Environmental Materials in
respect of any Real Property reveal a condition

 

-23-

--------------------------------------------------------------------------------

that would reasonably be expected to result in a Property MAE (an “Environmental
Defect”) and which, in the case of the Post-Cutoff Materials, was not revealed
by the Pre-Cutoff Materials, then Buyer may, prior to the expiration of the
applicable Diligence Period related to such Diligence Materials (as specified in
clauses (a) and (b) of the definition of “Diligence Period” depending on whether
the applicable Diligence Materials were Pre-Cutoff Materials or Post-Cutoff
Materials), deliver to Seller a written notice of Buyer’s intention to exclude
such Real Property (or the Company or Purchased Subsidiary that owns or has the
right to use such Real Property, so long as such Company or Purchased Subsidiary
does not own or have the right to use any other Real Property) from the
applicable Closing, describing in reasonable detail the Defect revealed by the
applicable Diligence Materials (such written notice, a “Defect Notice” and the
Real Property (or the Company or Purchased Subsidiary that owns or has the right
to use such Real Property, as applicable) to which such Defect Notice relates, a
“Defected Property”); provided, that if Buyer fails to provide a Defect Notice
with respect to any Real Property prior to the expiration of the applicable
Diligence Period for the Diligence Materials related to such Real Property (as
specified in clauses (a) and (b) of the definition of “Diligence Period”
depending on whether the applicable Diligence Materials were Pre-Cutoff
Materials or Post-Cutoff Materials), then, upon such expiration, such Real
Property shall be irrevocably deemed to have no Defects and may not be excluded
from any Closing or subject to any Property Allocation adjustment pursuant to
this Section 2.9(c) (unless such Real Property is subject to a Pooled Loan, with
respect to which all Pooled Properties subject thereto are excluded from the
Closings pursuant to Section 2.9(c)(iv) below). Upon delivery of any such Defect
Notice, the following provisions shall apply:

(i) in the event Buyer delivers to Seller a Defect Notice describing a Title
Defect with respect to any Real Property that is not a Pooled Property, then
within five (5) Business Days of Seller’s receipt of such Defect Notice, Seller
shall provide written notice to Buyer of its election to either (A) attempt to
cure, at Seller’s sole cost and expense, the Defect described therein (which
cure may be effected by causing such Defect to be removed or by causing the
applicable title company to affirmatively insure over any such Title Defect) or
(B) not exclude such Defected Property from the Closings, and instead enter into
negotiations with Buyer to agree upon an adjustment to such Defected Property’s
Property Allocation to account for the applicable Title Defect (it being agreed
and understood that if the Parties are not able to agree upon any such
adjustment prior to the applicable Closing, they shall proceed to the applicable
Closing using such Defected Property’s Property Allocation and shall resolve the
dispute with respect to the adjustment to such Property Allocation in accordance
with the dispute resolution provisions of Section 10.11(b)); provided, that if
Seller fails to provide such written notice to Buyer within such five
(5) Business Day period, then such Defected Property shall be deemed to be
irrevocably excluded from the Closings (and counted towards the Termination
Threshold); provided further, that if Seller elects to cure the applicable
Defect, Seller shall use Reasonable Efforts to effect such cure, and (1) if
Seller provides evidence of such cure reasonably satisfactory to Buyer prior to
the Second Closing or the Third Closing, then the applicable Defect shall be
deemed cured and such Real Property shall be included in the Second Closing or
the Third Closing (subject to satisfaction of the other conditions set forth in
this Agreement with respect to such Real Property), as applicable and (2) if
Seller fails to provide such evidence to Buyer prior to the Third Closing,
Seller shall be deemed to have elected to proceed pursuant to clause (B) of this
Section 2.9(c)(i) with respect thereto, and such Defected Property shall be
included in the Third Closing and shall be subject to a Property Allocation
adjustment;

 

-24-

--------------------------------------------------------------------------------

(ii) in the event Buyer delivers to Seller a Defect Notice describing an
Environmental Defect with respect to any Real Property that is not a Pooled
Property, then within five (5) Business Days of Seller’s receipt of such Defect
Notice, Seller shall provide written notice to Buyer of its election to either
(A) attempt to remediate, at Seller’s sole cost and expense, the Environmental
Defect described therein (which remediation may be effected by causing such
Defect to be removed or purchasing environmental insurance in respect thereof
reasonably acceptable to Buyer) or (B) exclude the applicable Defected Property
from the Closings; provided, that if Seller fails to provide such written notice
to Buyer within such five (5) Business Day period, then Seller shall be deemed
to have elected to proceed pursuant to clause (B) of this Section 2.9(c)(ii),
and such Real Property shall be excluded from the Closings (and counted towards
the Termination Threshold); provided further, that if Seller elects to remediate
the applicable Defect, Seller shall use Reasonable Efforts to effect such
remediation, and (1) if Seller provides evidence of such remediation reasonably
satisfactory to Buyer prior to the Second Closing or the Third Closing, then the
applicable Defect shall be deemed remediated and such Real Property shall be
included in the Second Closing or the Third Closing (subject to satisfaction of
the other conditions set forth in this Agreement with respect to such Real
Property), as applicable and (2) if Seller fails to provide such evidence to
Buyer prior to the Third Closing, Seller shall, subject to Section 2.9(c)(vi),
be deemed to have elected to proceed pursuant to clause (B) of this
Section 2.9(c)(ii) with respect thereto, and such Real Property shall be
excluded from the Closings (and counted towards the Termination Threshold);

(iii) in the event Buyer delivers to Seller a Defect Notice describing a Title
Defect with respect to any Pooled Property, then within five (5) Business Days
of Seller’s receipt of such Defect Notice, Seller shall provide written notice
to Buyer of its election to perform one or more of the following actions:
(A) attempt to cure, at Seller’s sole cost and expense, the Title Defect
described therein (which cure may be effected by causing such Defect to be
removed or by causing the applicable title company to affirmatively insure over
any such Title Defect), (B) attempt to exclude the applicable Defected Property
(and no other Real Properties subject to the applicable Pooled Loan) from the
Closings whether by removing such Real Property from the applicable Existing
Loan pursuant to a release provision in the applicable Existing Loan or
otherwise upon receipt of the consent of the applicable Lender and/or (C) not
exclude such Defected Property from the Closings, and instead enter into
negotiations with Buyer to agree upon an adjustment to such Defected Property’s
Property Allocation to account for the applicable Title Defect (it being agreed
and understood that if the Parties are not able to agree upon any such
adjustment prior to the applicable Closing, they shall proceed to the applicable
Closing using such Defected Property’s Property Allocation and shall resolve the
dispute with respect to the adjustment to such Property Allocation in accordance
with the dispute resolution provisions of Section 10.11(b)); provided, that if
Seller fails to provide such written notice to Buyer within such five
(5) Business Day period, then Seller shall be deemed to have elected to proceed
pursuant to clause (C) of this Section 2.9(c)(iii), and such Defected Property
shall be included in the applicable Closing and shall be subject to a Property
Allocation adjustment; provided further, that if Seller elects to cure the
applicable Defect and/or exclude the applicable Defected Property pursuant to
the foregoing clause (B), Seller shall use Reasonable Efforts to effect such
cure or exclusion, and (1) if Seller provides evidence of such cure

 

-25-

--------------------------------------------------------------------------------

reasonably satisfactory to Buyer or otherwise excludes such Defected Property
pursuant to the foregoing clause (B) prior to the Second Closing or the Third
Closing, then the applicable Defected Property shall be excluded from the
applicable Closing or the applicable Defect shall be deemed cured, as
applicable, and, if the Defect is cured, such Real Property shall be included in
the Second Closing or the Third Closing (subject to satisfaction of the other
conditions set forth in this Agreement with respect to such Real Property), as
applicable and (2) if Seller fails to provide such evidence of cure to Buyer or
fails to exclude such Defected Property pursuant to the foregoing clause
(B) prior to the Third Closing, Seller shall be deemed to have elected to
proceed pursuant to clause (C) of this Section 2.9(c)(iii) with respect thereto,
and such Defected Property shall be included in the Third Closing and shall be
subject to a Property Allocation adjustment.

(iv) in the event Buyer delivers to Seller a Defect Notice describing an
Environmental Defect with respect to any Pooled Property, then within five
(5) Business Days of Seller’s receipt of such Defect Notice, Seller shall
provide written notice to Buyer of its election to perform one or more of the
following actions: (A) attempt to remediate, at Seller’s sole cost and expense,
the Environmental Defect described therein (which remediation may be effected by
causing such Defect to be removed or purchasing environmental insurance in
respect thereof reasonably acceptable to Buyer), (B) attempt to exclude the
applicable Defected Property (and no other Real Properties subject to the
applicable Pooled Loan) from the Closings, whether by removing such Real
Property from the applicable Pooled Loan pursuant to a release provision in such
Pooled Loan or otherwise upon receipt of the consent of the applicable Lender
and/or (C) exclude all of the Real Properties subject to the applicable Pooled
Loan from the Closings; provided, that if Seller fails to provide such written
notice to Buyer within such five (5) Business Day period, then Seller shall be
deemed to have elected to proceed pursuant to clause (C) of this
Section 2.9(c)(iv), and all of the Real Properties subject to the applicable
Pooled Loan shall be excluded from the Closings (and counted towards the
Termination Threshold); provided further, that if Seller elects to remediate the
applicable Defect and/or exclude the applicable Defected Property pursuant to
the foregoing clause (B), Seller shall use Reasonable Efforts to effect such
remediation or exclusion, and (1) if Seller provides evidence of such
remediation reasonably satisfactory to Buyer or otherwise excludes such Defected
Property pursuant to the foregoing clause (B) prior to the Second Closing or the
Third Closing, then the applicable Defected Property shall be excluded from the
applicable Closing or the applicable Defect shall be deemed remediated, as
applicable, and, if the Defect is remediated, such Real Property shall be
included in the Second Closing or the Third Closing (subject to satisfaction of
the other conditions set forth in this Agreement with respect to such Real
Property), as applicable and (2) if Seller fails to provide such evidence of
remediation to Buyer or fails to exclude such Defected Property pursuant to the
foregoing clause (B) prior to the Third Closing, Seller shall, subject to
Section 2.9(c)(vi), be deemed to have elected to proceed pursuant to clause
(C) of this Section 2.9(c)(iv) with respect thereto, and all of the Real
Properties subject to the applicable Pooled Loan shall be excluded from the
Closings (and counted towards the Termination Threshold);

(v) the Parties hereby agree and acknowledge that, for purposes of this
Section 2.9(c), the failure of Seller to provide any Updated Environmental
Materials with respect to any Real Property, or the failure of Seller to
undertake and complete any recommendations of any such Updated Environmental
Materials to obtain a Phase II environmental report, shall be conclusively
deemed to be an unremediated Defect with respect to the applicable Real
Property;

 

-26-

--------------------------------------------------------------------------------

(vi) notwithstanding anything to the contrary in Sections 2.9(c)(ii) and
2.9(c)(iv), in the event Buyer and Seller have agreed to a plan of remediation
with respect to any Environmental Defect, which plan of remediation is
reasonably likely to extend past the Outside Date, the Parties will work
together in good faith to structure an alternative or deferred Closing with
respect to such Real Property upon completion of such remediation plan to the
reasonable satisfaction of Buyer;

(vii) without limiting the foregoing provisions, but in furtherance thereof,
(A) any Defected Property ultimately excluded from the Closings pursuant to this
Section 2.9(c) shall not be transferred to Buyer pursuant to this Agreement,
(B) Buyer and Seller shall have no further rights or obligations under this
Agreement relating to such Defected Property and (C) such Defected Property
shall cease to be considered “Real Property”, a “Company” or a “Purchased
Subsidiary” hereunder, as applicable.

(d) Notwithstanding anything in this Agreement to the contrary, at any time
after which (i) Buyer has provided Seller with Defect Notices (even if Seller
has elected to attempt to cure or remediate same) and (ii) the aggregate
Property Allocations (prior to any adjustments thereof) of the Defected
Properties affected by such unremediated Defects (including the aggregate
Property Allocations of all Pooled Properties that are included in the same
Pooled Loan as any such Defected Property) is greater than or equal to
$274,995,116.04 (such number of Defected Properties, the “Termination
Threshold”), then Seller shall have the right to terminate this Agreement in its
entirety (other than with respect to any Company, Purchased Subsidiary or Real
Property that has already been transferred to Buyer at the Initial Closing or
the Second Closing if such termination occurs after either such Closing) by
providing written notice of such termination to Buyer. Upon any such
termination, the provisions of Section 9.2 shall control the survival of certain
provisions hereof and the disbursement of the then-remaining Deposit.

Section 2.10 Third Party Approvals and Notifications; Further Assurances.

(a) Seller shall, and shall cause the Companies and the Purchased Subsidiaries
to, use Reasonable Efforts to, as soon as reasonably practicable, obtain such
consents, waivers, approvals, orders and authorizations (including the Required
Lender Consents, the Required Tenant Waivers and any consents, waivers or
approvals of the JV Counterparties required to effect the JV Redemptions), and
make such notifications (including to Lenders under the Prepaid Existing Loans
and to the JV Counterparties as required to effect the JV Redemptions), in each
case, as are reasonably necessary to consummate the transactions contemplated
hereby (collectively the “Third Party Approvals and Notifications”). Buyer shall
cooperate with Seller to assist Seller to obtain such Third Party Approvals and
Notifications.

(b) Without limiting the provisions of Section 2.10(a), but in furtherance
thereof, Buyer and Seller shall use Reasonable Efforts to cooperate in
connection with soliciting and obtaining the Required Lender Consents, including
the preparation and delivery of any information relating to Buyer, Seller or any
of their Affiliates as may be reasonably requested by any such Lender or any
loan servicer on behalf of any Lender and shall generally act in a coordinated
manner when soliciting and obtaining any such Required Lender Consents. In
furtherance thereof, (i) Buyer and Seller shall take such actions as are
necessary to obtain from

 

-27-

--------------------------------------------------------------------------------

the applicable Lender a valid and binding written release of Seller and its
Affiliates (in form and substance reasonably satisfactory to Seller and such
Affiliates) from any guaranty or other obligation or liability of any kind
whatsoever arising in connection with the applicable Assumed Existing Loan,
whether arising before, on or after the applicable Closing Date, (ii) if
required by any Lender in order to obtain any such release of Seller or its
Affiliates, Buyer shall provide, or cause a credit-worthy Affiliate of Buyer to
provide, a substitute guarantee to such Lender with terms that are at least as
favorable to such Lender as the terms of the guarantee being released by the
Lender, and Buyer shall take such other actions (including furnishing letters of
credit, instituting escrow arrangements, posting surety or performance bonds or
making other arrangements) as the Lender may reasonably request to cause Seller
to obtain such release and (iii) Buyer shall consent and agree to such
modifications and amendments to the Assumed Existing Loans as the applicable
Lender may reasonably require, including, without limitation, reserve or escrow
requirements, principal reductions or other matters required to “rebalance” the
Assumed Existing Loan and (iv) each Party shall provide the Lenders with such
other information as they may request in order to obtain the Required Lender
Consents and permit the transfer or assumption by Buyer of the Assumed Existing
Loans, including current and historical financial, capitalization and operating
information (including management experience) of Buyer and its Affiliates,
required confirmations to be delivered by Buyer from ratings agencies, legal
opinions delivered by Buyer (including non-consolidation opinions) and any other
data or information requested by such Lender. In connection with the foregoing,
(A) each Party shall give the other Party no less than four (4) Business Days to
review and comment on all materials or documents to be provided to any Lender in
connection with obtaining any Required Lender Consents and any such materials or
documents shall be revised by Buyer or Seller, as applicable, to reflect the
reasonable comments of the other Party, (B) neither Seller, nor any of its
Representatives, shall engage or participate in any material meeting or proposed
material meeting with any Lender or any loan servicer with respect to the
Required Lender Consents without providing Representatives of Buyer reasonable
opportunity to participate (it being agreed and understood that neither Buyer
nor its Representatives will contact any Lender without the prior written
consent of Seller).

(c) Subject to, and not in limitation of, Sections 2.10(a) and 2.10(b), each of
Buyer and Seller shall, and Seller shall cause the Companies and the Purchased
Subsidiaries to, use their respective Reasonable Efforts to (i) take all actions
necessary or appropriate to consummate the transactions contemplated by this
Agreement (including by executing and delivering to each other such other
documents, agreements or instruments of transfer as are reasonably necessary
therefor) and (ii) cause the fulfillment at the earliest practicable date of all
of the conditions to their respective obligations to consummate the transactions
contemplated by this Agreement.

Section 2.11 Kickout Period. At any time prior to the expiration of the
applicable Kickout Period, Buyer may, in its sole discretion, deliver to Seller
written notice (a “Kickout Notice”) of Buyer’s intention to exclude from the
Closings up to that number of Real Properties, the aggregate Property
Allocations of which is less than or equal to $183,330,077.36 (such number of
Real Properties the “Maximum Kickout Properties”); provided, that in no event
shall the Maximum Kickout Properties be greater than thirteen (13) Real
Properties; provided further, that in no event shall Buyer be permitted to
deliver a Kickout Notice with respect to the Real Property set forth on
Section 2.11 of the Disclosure Schedule; provided further, that if Buyer

 

-28-

--------------------------------------------------------------------------------

fails to deliver a Kickout Notice with respect to any Real Property prior to the
expiration of the applicable Kickout Period, then, upon such expiration, such
Real Property shall be irrevocably deemed to not be excluded from any Closing
pursuant to this Section 2.11 (unless such Real Property is subject to a Pooled
Loan, with respect to which all Pooled Properties subject thereto are excluded
from the Closings pursuant to the immediately following proviso); provided
further, however, that if Buyer delivers a Kickout Notice with respect to any
Pooled Property, all other Lender Encumbered Properties subject to the Pooled
Loan encumbering such Pooled Property shall be excluded from the Closings
pursuant to this Section 2.11, and all such Lender Encumbered Properties shall
be counted towards (and may not exceed) the Maximum Kickout Properties. In no
event, however, shall Buyer deliver a Kickout Notice with respect to a Pooled
Property if all such Lender Encumbered Properties subject to the Pooled Loan
would exceed the Maximum Kickout Properties. Without limiting the foregoing
provisions, but in furtherance thereof, (i) any Real Property ultimately
excluded from the Closings pursuant to this Section 2.11 shall not be
transferred to Buyer pursuant to this Agreement, (ii) Buyer and Seller shall
have no further rights or obligations under this Agreement relating to such Real
Property and (iii) such Real Property shall cease to be considered “Real
Property”, a “Company” or a “Purchased Subsidiary” hereunder, as applicable.

ARTICLE III

REPRESENTATIONS AND WARRANTIES RELATING TO SELLER

Except as disclosed in the Disclosure Schedule, Seller hereby represents and
warrants to Buyer as follows:

Section 3.1 Organization of Seller.

Seller is a corporation, duly incorporated, existing and in good standing under
the Laws of the State of Maryland and has the requisite power and authority to
own or lease its assets and to conduct its business as it is now being
conducted.

Section 3.2 Authorization; Enforceability.

Seller has all requisite power and authority to execute and deliver this
Agreement and the Transaction Documents to which it is a party and to perform
all obligations to be performed by it hereunder or thereunder. The execution and
delivery of this Agreement and the Transaction Documents and the consummation of
the transactions contemplated hereby or thereby have been duly and validly
authorized and approved by all requisite action on the part of Seller. This
Agreement has been, and as of the applicable Closing Date, each of the
Transaction Documents to be delivered on or prior to such Closing Date will be,
duly and validly executed and delivered by Seller and constitutes, or in the
case of the Transaction Documents to be delivered on or prior to such Closing
Date, will constitute a legally valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, in each case, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar Laws affecting creditors’ rights generally and subject,
as to enforceability, to general principles of equity.

 

-29-

--------------------------------------------------------------------------------

Section 3.3 No Conflict.

(a) None of the execution and delivery by Seller of this Agreement or the
Transaction Documents to which it is a party, the consummation of the
transactions contemplated hereby or thereby, or the compliance by Seller with
any of the provisions hereof or thereof will (i) conflict with, or result in any
violation of, its Organizational Documents or any Law or (ii) conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination or cancellation under,
any Contract to which Seller is a party or by which such Seller or its
properties or assets are bound, except, in the case of this clause (ii), for
such conflicts, violations, defaults, terminations or cancellations as would not
reasonably be expected to, individually or in the aggregate, interfere with,
prevent or materially delay the ability of Seller to enter into and perform its
obligations under this Agreement or the Transaction Documents to which it is a
party or consummate the transactions contemplated hereby or thereby.

(b) No consent, waiver, approval, order or Permit of, or declaration or filing
with, or notification to any Person, including any Governmental Authority, is
required on the part of Seller in connection with the execution and delivery by
Seller of this Agreement or the Transaction Documents to which it is a party or
the consummation by Seller of the transactions contemplated hereby or thereby,
except as would not reasonably be expected to, individually or in the aggregate,
interfere with, prevent or materially delay the ability of Seller to enter into
and perform its obligations under this Agreement or the Transaction Documents to
which it is a party or consummate the transactions contemplated hereby or
thereby.

Section 3.4 Litigation.

There are no (a) Legal Proceedings pending or, to the Knowledge of Seller,
threatened against Seller or (b) outstanding orders or unsatisfied judgments
from any Governmental Authority binding upon Seller, in each case, that would
reasonably be expected to, individually or in the aggregate, interfere with,
prevent or materially delay the ability of Seller to enter into and perform its
obligations under this Agreement or the Transaction Documents to which it is a
party or consummate the transactions contemplated hereby or thereby.

Section 3.5 Brokers’ Fees.

Except for Goldman Sachs & Co., Gerrity Advisory and KG Consulting whose fees
will be paid by Seller, no broker, finder, investment banker or other Person is
entitled to any brokerage fee, finders’ fee or other commission in connection
with the transactions contemplated by this Agreement or the Transaction
Documents based upon any Contract with Seller or any of its Affiliates.

Section 3.6 Ownership of Equity Interests.

Seller has good title to, holds of record, and owns beneficially the Equity
Interests free and clear of any Liens other than transfer restrictions imposed
thereon by applicable securities Law, the Existing Loans, the JV Agreements and
the Property Leases. Upon consummation of

 

-30-

--------------------------------------------------------------------------------

the transactions contemplated by this Agreement, Buyer will own the Equity
Interests free and clear of all Liens other than (i) transfer restrictions
imposed thereon by applicable securities Laws, the Assumed Existing Loans and
the Property Leases and (ii) any Liens created by Buyer or its Affiliates.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANIES AND THE PURCHASED
SUBSIDIARIES

Except as disclosed in the Disclosure Schedule, Seller hereby represents and
warrants to Buyer as follows:

Section 4.1 Organization of the Companies and the Purchased Subsidiaries.

Each of the Companies and each of the Purchased Subsidiaries is the type of
entity set forth across from its name on Section 4.1 of the Disclosure Schedule,
duly organized, validly existing and in good standing, under the Laws of its
jurisdiction and has the requisite power and authority to own or lease its
assets and to conduct its business as it is now being conducted. Each Company
and each Purchased Subsidiary is duly licensed or qualified in each jurisdiction
in which the ownership or operation of its assets or the character of its
activities is such as to require it to be so licensed or qualified, except where
such failures to be so licensed or qualified would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

Section 4.2 No Conflict; Regulatory Approvals.

(a) None of the execution and delivery by Seller of this Agreement or the
Transaction Documents to which Seller is a party, the consummation of the
transactions contemplated hereby or thereby, or the compliance by Seller with
any of the provisions hereof or thereof will (i) conflict with, or result in any
violation of, the Organizational Documents of any of the Companies or any of the
Purchased Subsidiaries or any Law, or (ii) conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination or cancellation under, any
provision of any Contract to which any of the Companies or any of the Purchased
Subsidiaries is a party or by which any of the Companies or any of the Purchased
Subsidiaries or any of their respective properties or assets are bound, except,
in the case of this clause (ii), for such conflicts, violations, defaults,
terminations or cancellations as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

(b) No consent, waiver, approval, order, Permit or authorization of, or
declaration or filing with, or notification to any Person, including any
Governmental Authority, is required on the part of any of the Companies or any
of the Purchased Subsidiaries in connection with the execution and delivery by
Seller of this Agreement or the Transaction Documents to which Seller is a Party
or the consummation of the transactions contemplated hereby or thereby except as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

-31-

--------------------------------------------------------------------------------

Section 4.3 Capitalization of the Companies and the Purchased Subsidiaries.

(a) Section 4.3(a) of the Disclosure Schedule sets forth the number of
authorized equity interests of each of the Companies. All of the issued and
outstanding equity interests of each of the Companies were duly authorized for
issuance and are validly issued, fully paid and non-assessable (such issued and
outstanding equity interests, collectively, the “Equity Interests”), and all
such Equity Interests (other than any JV Equity Interests owned by a JV
Counterparty) are, or on the applicable Closing Date will be, owned by Seller
free and clear of all Liens other than (i) transfer restrictions imposed thereon
by applicable securities Laws, the Existing Loans, the JV Agreements and the
Property Leases and (ii) any Liens created by Buyer or its Affiliates. None of
the Equity Interests was issued in violation of any preemptive rights. Except
pursuant to any JV Agreement or any Property Lease, there are no options,
warrants, convertible securities, phantom interests or other rights, agreements,
arrangements or commitments of any character relating to the Equity Interests.
Except pursuant to any JV Agreement or any Property Lease, no Company has
granted or otherwise entered into any written agreement with respect to any
options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to the Equity Interests of
such Company or obligating Seller or such Company to issue or sell any such
Equity Interests, or any other interest in, such Company. Except pursuant to any
JV Agreement or any Property Lease, there are no outstanding contractual
obligations of any of the Companies to repurchase, redeem or otherwise acquire
any Equity Interests of such Company. Except pursuant to any JV Agreement, any
Property Lease or any Existing Loan, there are no voting trusts, stockholder
agreements, proxies or other agreements or understandings in effect with respect
to the voting or transfer of any of the Equity Interests.

(b) None of the Companies has any Subsidiaries, other than the Purchased
Subsidiaries. Section 4.3(b) of the Disclosure Schedule sets forth the number of
authorized equity interests of each of the Purchased Subsidiaries. All of the
issued and outstanding equity interests of each of the Purchased Subsidiaries
were duly authorized for issuance and are validly issued, fully paid and
non-assessable (such issued and outstanding equity interests, collectively, the
“Subsidiary Equity Interests”), and each such Subsidiary Equity Interest is, or
on the applicable Closing Date will be, owned by a Company (other than JV Equity
Interests owned by any JV Counterparty) free and clear of all Liens other than
(i) transfer restrictions imposed thereon by applicable securities Laws, the
Existing Loans, the JV Agreements and the Property Leases and (ii) any Liens
created by Buyer or its Affiliates. None of the Subsidiary Equity Interests was
issued in violation of any preemptive rights. Except pursuant to any JV
Agreement or any Property Lease, there are no options, warrants, convertible
securities or other rights, agreements, arrangements or commitments of any
character relating to the Subsidiary Equity Interests. Except pursuant to any JV
Agreement or any Property Lease, the Purchased Subsidiaries have not granted or
otherwise entered into any written agreement with respect to any options,
warrants, convertible securities, phantom interests or other rights, agreements,
arrangements or commitments of any character relating to the Subsidiary Equity
Interests or obligating any Company or any Purchased Subsidiary to issue or sell
any Subsidiary Equity Interests, or any other interest in, the Purchased
Subsidiaries. Except pursuant to any JV Agreement or any Property Lease, there
are no outstanding contractual obligations of the Purchased Subsidiaries to
repurchase, redeem or otherwise acquire any Subsidiary Equity Interests. Except
pursuant to any JV Agreement, any Property Lease or any Existing Loan, there are
no voting trusts, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any of the
Subsidiary Equity Interests.

 

-32-

--------------------------------------------------------------------------------

Section 4.4 Real Property.

(a) As of the applicable Closing Date, the Owned Real Property will constitute
all the real property owned by any of the Companies or any of the Purchased
Subsidiaries, and the Leased Real Property will constitute all the real property
leased or subleased by any of the Companies or any of the Purchased Subsidiaries
as a tenant thereunder.

(b) Each Company or Purchased Subsidiary has good and marketable fee simple
title to the Owned Real Property, and good and valid leasehold title to the
Leased Real Property, in each case, which is indicated on Section 4.4(a) of the
Disclosure Schedule as being owned or leased by such Company or Purchased
Subsidiary, as applicable, free and clear of all Liens, other than Permitted
Liens.

(c) Except pursuant to the Property Leases, no Person other than the Companies
and the Purchased Subsidiaries has the right to use or occupy the Owned Real
Property as of the date hereof. To the Knowledge of Seller, as of the date
hereof, (i) the current use and operation of the Real Property is in material
compliance with all applicable zoning, building codes and other land use laws
imposed by any Governmental Authority regulating the use or occupancy of the
Real Property or the activities conducted thereon and (ii) there are no pending
or threatened condemnation proceedings with respect to the Real Property that
would have a Material Adverse Effect. No Company or Purchased Subsidiary has any
outstanding obligation to provide any Property Tenant with an allowance to
construct, or to construct at its own expense, any tenant improvements at any of
the Real Property.

Section 4.5 No Employees.

At no time has any Company or any Purchased Subsidiary had any employees, nor
has there been any “defined benefit plan” within the meaning of ERISA,
maintained by any Company or any Purchased Subsidiary or any predecessor
thereto.

Section 4.6 Contracts.

(a) Section 4.6(a) of the Disclosure Schedule sets forth the following Contracts
to which any of the Companies or any of the Purchased Subsidiaries is a party in
effect on the date of this Agreement (each Contract that is required to be
listed in Section 4.6(a) of the Disclosure Schedule, being “Material
Contracts”):

(i) each Contract pursuant to which a Company or a Purchased Subsidiary
(A) leases any of the Owned Real Property, or subleases any of the Leased Real
Property, to a third-party tenant (collectively, the “Property Leases”) or
(B) leases any of the Leased Real Property from a third-party landlord
(collectively, the “Ground Leases”);

(ii) any material agreement evidencing or securing the Existing Loans;

 

-33-

--------------------------------------------------------------------------------

(iii) any property management agreement in effect with respect to any Real
Property (the “Property Management Agreements”); and

(iv) each JV Agreement.

(b) As of the date of this Agreement, each Material Contract represents the
legally valid and binding obligation of the Company or Purchased Subsidiary
party thereto, and, to the Knowledge of Seller, the legally valid and binding
obligation of the other party or parties thereto, enforceable against such
Company, such Purchased Subsidiary or such other party or parties, as
applicable, in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity. None of the Companies or any of the Purchased
Subsidiaries or, to the Knowledge of Seller, any other party or parties to any
Material Contract is in material breach of or material default under any
Material Contract, which breaches or defaults, individually or in the aggregate,
would reasonably be expected to result in material liability to such Company or
such Purchased Subsidiary, as applicable, or otherwise materially interfere with
such Company’s or such Purchased Subsidiary’s use, ownership or operation of any
of the Real Property.

(c) Seller has provided Buyer with true, correct and complete copies of the
Property Leases and Ground Leases, and the rent payable by the Property Tenant
as of July 31, 2013 pursuant to each Property Lease is as set forth on
Section 4.6(c) of the Disclosure Schedule.

Section 4.7 Litigation.

As of the date of this Agreement, (a) there are no Legal Proceedings pending or,
to the Knowledge of Seller, threatened by any Person, against any of the
Companies, the Purchased Subsidiaries or the Real Property that would reasonably
be expected to, individually or in the aggregate, result in a Material Adverse
Effect and (b) there is no outstanding order or unsatisfied judgment against any
of the Companies, the Purchased Subsidiaries or the Real Property from any
Governmental Authority that, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect.

Section 4.8 Environmental Matters.

The representations and warranties contained in this Section 4.8 are the sole
and exclusive representations and warranties of Seller pertaining or relating to
any environmental matters, including any Environmental Permits and any other
matter arising under any Environmental Laws. To Seller’s Knowledge:

(a) the operations of the Companies and the Purchased Subsidiaries are, and
since January 1, 2012, have been, in compliance with all Environmental Laws in
all material respects, which compliance includes the possession and maintenance
of, and compliance with, all material Environmental Permits necessary to use,
own or operate the Real Property substantially in the same manner as currently
conducted;

 

-34-

--------------------------------------------------------------------------------

(b) each of the material Environmental Permits necessary to use, own or operate
the Real Property substantially in the same manner as currently conducted is in
full force and effect and no action is pending or threatened to revoke, suspend,
modify, or limit any such Environmental Permit;

(c) none of the Companies or any of the Purchased Subsidiaries is the subject of
any material outstanding administrative compliance order, consent decree or
judgment from any Governmental Authority under any Environmental Laws requiring
Remedial Action or the payment of any material fine or penalty; and

(d) none of the Companies or any of the Purchased Subsidiaries has received any
written notification of any of the matters set forth in this Section 4.8.

Section 4.9 Legal Compliance.

Except with respect to (a) compliance with Laws concerning Tax related matters
(as to which certain representations and warranties are made pursuant to
Section 4.11) and (b) compliance with Environmental Laws (as to which certain
representations and warranties are made pursuant to Section 4.8), the Companies,
the Purchased Subsidiaries and the Real Property are as of the date of this
Agreement, and, to the Knowledge of Seller, since January 1, 2012 have been, in
compliance with all Laws, except for noncompliance which would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

Section 4.10 Permits.

Except with respect to Environmental Permits (as to which certain
representations and warranties are made pursuant to Section 4.8), each Company
and each Purchased Subsidiary possesses all Permits necessary for it to use, own
and/or operate its business as currently conducted substantially in the same
manner as currently conducted by it, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect. All
such Permits are in full force and effect in all material respects and there are
no lawsuits or other proceedings pending or, to the Knowledge of Seller,
threatened before any Governmental Authority that seek the revocation,
cancellation, suspension or adverse modification thereof.

Section 4.11 Tax Matters. The representations and warranties contained in this
Section 4.11 are the sole and exclusive representations and warranties of Seller
pertaining or relating to any Tax matters. Except as would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect,
(a) all Tax Returns required to be filed by the Companies and the Purchased
Subsidiaries have been duly and timely filed (taking into account any extension)
with the appropriate Tax Authority, (b) all Taxes shown as due on such Tax
Returns have been timely paid in full, (c) there is no claim pending by any
applicable Tax Authority in connection with any such Tax, (d) none of such Tax
Returns are now under audit or examination by any Tax Authority, (e) no written
claim has been made by any Tax Authority in a jurisdiction where the applicable
Company or Purchased Subsidiary does not file a Tax Return that it is or may be
subject to taxation in that jurisdiction and (f) since the date of its
formation, each Company and each Purchased Subsidiary has been disregarded as an
entity separate from Seller for United States federal income tax purposes
pursuant to United States Treasury Regulation Section 301.7701-3(b).

 

-35-

--------------------------------------------------------------------------------

Section 4.12 No Other Operations. As of the applicable Closing Date, no Company
or any Purchased Subsidiary will (a) own or hold any assets, other than the
Owned Real Property, Leased Real Property, interests in Subsidiaries or pursuant
to any Material Contract, or (b) conduct any business, other than as set forth
in the immediately preceding clause (a), the operation of the Real Property, the
Leased Real Property or otherwise pursuant to any Material Contract.

ARTICLE V

REPRESENTATIONS AND WARRANTIES RELATING TO BUYER

Except as disclosed in the Disclosure Schedule, Buyer hereby represents and
warrants to Seller as follows:

Section 5.1 Organization of Buyer.

Buyer is a limited liability company duly organized, validly existing and in
good standing under the Laws of Delaware.

Section 5.2 Authorization; Enforceability.

Buyer has all requisite power and authority to execute and deliver this
Agreement and the Transaction Documents to which it is a party and to perform
all obligations to be performed by it hereunder or thereunder. The execution and
delivery of this Agreement and the Transaction Documents to which Buyer is a
party and the consummation of the transactions contemplated hereby or thereby
have been duly and validly authorized and approved by all requisite action on
the part of Buyer. This Agreement has been, and as of the applicable Closing
Date, each of the Transaction Documents to which Buyer is a party to be
delivered on or prior to such Closing Date will be, duly and validly executed
and delivered by Buyer and constitutes, or in the case of each of the
Transaction Documents to be delivered on or prior to such Closing Date, will
constitute a legally valid and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws
affecting creditors’ rights generally and subject, as to enforceability, to
general principles of equity.

Section 5.3 No Conflict.

(a) None of the execution and delivery by Buyer of this Agreement or the
Transaction Documents to which it is a party, the consummation of the
transactions contemplated hereby or thereby, or the compliance by Buyer with any
of the provisions hereof or thereof, will (i) conflict with, or result in any
violation of the Organizational Documents of Buyer or any Law or (ii) conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination or cancellation
under, any Contract to which Buyer is a party or by which Buyer or Buyer’s
properties or assets are bound, except, in the case of this clause (ii), for
such conflicts, violations, defaults, terminations or cancellations as would not
reasonably be expected to, individually or in the aggregate, interfere with,
prevent or materially delay the ability of Buyer to enter into and perform its
obligations under this Agreement or the Transaction Documents to which it is a
party or consummate the transactions contemplated hereby or thereby.

 

-36-

--------------------------------------------------------------------------------

(b) No consent, waiver, approval, order or Permit of, or declaration or filing
with, or notification to any Person, including any Governmental Authority, is
required on the part of Buyer in connection with the execution and delivery by
Buyer of this Agreement or the Transaction Documents to which it is a party or
the consummation by Buyer of the transactions contemplated hereby or thereby
except as would not reasonably be expected to, individually or in the aggregate,
interfere with, prevent or materially delay the ability of Buyer to enter into
and perform its obligations under this Agreement or the Transaction Documents to
which it is a party or consummate the transactions contemplated hereby or
thereby.

Section 5.4 Litigation.

There are no (a) Legal Proceedings pending or, to the Knowledge of Buyer,
threatened against Buyer or (b) outstanding orders or unsatisfied judgments from
any Governmental Authority binding upon Buyer, in each case, that would
reasonably be expected to, individually or in the aggregate, interfere with,
prevent or materially delay the ability of Buyer to enter into and perform its
obligations under this Agreement or consummate the transactions contemplated
hereby.

Section 5.5 Brokers’ Fees.

Except for RCS Advisory Services, LLC, whose fees will be paid by Buyer, no
broker, finder, investment banker or other Person is entitled to any brokerage
fee, finders’ fee or other commission in connection with the transactions
contemplated by this Agreement or the Transaction Documents based upon Contract
with Buyer or any of its Affiliates.

Section 5.6 Financial Ability.

Buyer will have sufficient cash on hand at each Closing to fund the consummation
of the transactions contemplated by this Agreement and the Transaction
Documents, perform its obligations under this Agreement and the Transaction
Documents and satisfy all other costs and expenses arising in connection
herewith and therewith.

Section 5.7 Investment Representation.

Buyer is purchasing the Equity Interests for its own account with the present
intention of holding the Equity Interests for investment purposes and not with a
view to or for sale in connection with any public distribution of the Equity
Interests. Buyer has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in the Equity Interests. Buyer acknowledges that the Equity Interests have not
been registered under any federal, state or foreign securities Laws and that the
Equity Interests may not be sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of unless such transfer, sale, assignment,
pledge, hypothecation or other disposition is registered under any federal,
state or foreign securities Laws or pursuant to an exemption from registration
under any federal, state or foreign securities Laws.

 

-37-

--------------------------------------------------------------------------------

ARTICLE VI

COVENANTS

Section 6.1 Conduct of Business Pending the Closings.

From the date of this Agreement until the applicable Closing, except (A) as set
forth in Section 6.1 of the Disclosure Schedule, (B) as required by Law, (C) as
otherwise contemplated by this Agreement or (D) with the prior written consent
of Buyer (which consent shall not be unreasonably withheld, delayed or
conditioned):

(a) Prior to the applicable Closing, Seller shall, and shall cause each Company
and each Purchased Subsidiary, to:

(i) use, own or operate the Real Property in substantially the same manner as
currently conducted, including entering into any Property Leases or Ground
Leases or other lease arrangements (or, in each case, modifications, amendments,
waivers and supplements thereto) to the extent consistent with the past
operation of the applicable Real Property; and

(ii) use Reasonable Efforts to preserve each Company’s and Purchased
Subsidiary’s (A) present operations and organization and (B) present
relationships with Property Tenants, landlords under the Ground Leases, JV
Counterparties, Lenders and other Persons with whom the Companies and the
Purchased Subsidiaries have similar relationships.

(b) Seller shall not, and shall cause each Company and each Purchased Subsidiary
not to, take any of the actions set forth in clauses (i) – (viii) below, in each
case with respect to the Companies and the Purchased Subsidiaries:

(i) transfer, issue, sell or dispose of any Equity Interest or Subsidiary Equity
Interest or grant options, warrants, calls or other rights to purchase or
otherwise acquire any Equity Interest or Subsidiary Equity Interest, other than
in connection with the JV Redemptions (other than any internal transfers or
other restructurings required to facilitate any Closing, as contemplated by
Section 2.5);

(ii) effect any liquidation, dissolution, recapitalization, reclassification or
like change in the capitalization of any of the Companies or any of the
Purchased Subsidiaries (other than in connection with the JV Redemptions) or
permit any of the Companies or any of the Purchased Subsidiaries to enter into
any merger or consolidation with any Person (other than any liquidations,
dissolutions, recapitalizations or other changes in capitalization required to
facilitate any Closing, as contemplated by Section 2.5);

(iii) amend the Organizational Documents (other than any of the JV Agreements)
of any of the Companies or any of the Purchased Subsidiaries, other than as
reasonably required in order to secure any Lender Consent;

(iv) other than in the ordinary course of business, (A) subject any of the Real
Property to any Lien other than Permitted Liens or (B) permit the Companies or
the Purchased Subsidiaries to incur any indebtedness for borrowed money or make
any loans, other than under the Existing Loans;

 

-38-

--------------------------------------------------------------------------------

(v) other than in the ordinary course of business or pursuant to the terms of a
Material Contract, acquire any material properties or assets or sell, assign,
license, transfer, convey, lease or otherwise dispose of any of the Real
Property (other than dispositions required to facilitate any Closing, as
contemplated by Section 2.5);

(vi) other than in the ordinary course of business, enter into, amend, terminate
or renew any Material Contract, other than (A) any automatic amendments,
terminations or renewals pursuant to the terms of any Material Contract,
(B) terminations of Existing Loans or (C) terminations of Property Management
Agreements as of the applicable Closing;

(vii) settle any material Legal Proceeding involving the Real Property or
relating to the transactions contemplated by this Agreement or the Transaction
Documents, other than settlements involving the payment of cash (and no ongoing
restrictions on the Real Property to be acquired directly or indirectly by
Buyer) for which Seller bears sole financial responsibility; or

(viii) agree to do anything prohibited by this Section 6.1(b).

Section 6.2 Books and Records; Post-Closing Access. After each Closing, except
in connection with a claim for indemnification between the Parties pursuant to
Article VIII, Buyer shall, and shall cause the Companies and the Purchased
Subsidiaries transferred to Buyer at such Closing to, afford to Seller and its
Representatives reasonable access, during normal business hours and in such
manner as to not unreasonably interfere with the normal operation of Buyer’s
business, to the properties, books, Contracts, commitments, Tax Returns, records
(including work papers) and counsel (subject to attorney-client privilege, which
shall not be waived or violated) and accountants of, and shall furnish Seller
and such Representatives with all financial and operating data and other
information concerning the affairs of, the Companies, the Purchased Subsidiaries
and the Real Property transferred to Buyer at such Closing, in each case, as
Seller or such Representatives reasonably request to the extent reasonably
required by Seller in connection with its accounting, tax, legal defense or
other similar needs. In furtherance of the foregoing, except as may otherwise be
required pursuant to Buyer’s records management policy, Buyer shall retain all
of the books and records of the Companies or the Purchased Subsidiaries existing
on the applicable Closing Date and not destroy or dispose of any thereof for a
period of six (6) years from such Closing Date or such longer time as may be
required by Law.

Section 6.3 Risk of Loss. In the event that, after the date hereof but prior to
the applicable Closing Date, any portion of any Real Property is taken pursuant
to eminent domain proceedings or the improvements on any Real Property are
materially damaged or destroyed by any casualty, Seller shall be required to
give Buyer prompt written notice of the same after Seller’s actual discovery of
the same, but shall have no obligation to contribute capital to any Person, or
to repair or replace (or cause to be repaired or replaced) any such damage,
destruction or taken property, and Buyer shall have no right to terminate this
Agreement by reason thereof; provided that if any such occurrence results in a
Property MAE after giving effect to the immediately following sentence, the
Parties will work together to agree upon an adjustment to the applicable Real
Property’s Property Allocation to account for such occurrence (it being agreed
and understood that if the Parties are not able to agree upon any such
adjustment prior to

 

-39-

--------------------------------------------------------------------------------

the applicable Closing, they shall proceed to the applicable Closing using such
Real Property’s Property Allocation and shall resolve the dispute with respect
to the adjustment to such Property Allocation in accordance with the dispute
resolution provisions of Section 10.11(b)). Except to the extent any
condemnation proceeds or insurance proceeds are (a) attributable to lost rents
or other items applicable to any period prior to the applicable Closing, or
(b) required for collection costs or repairs by Seller prior to the applicable
Closing Date, Seller shall, upon consummation of the transactions contemplated
hereby, assign to Buyer all claims of Seller respecting any condemnation or
casualty insurance coverage, as applicable, and all condemnation proceeds or
proceeds from any such casualty insurance received by Seller on account of any
casualty, as applicable.

Section 6.4 Notice of Certain Events. Prior to the applicable Closing Date, each
Party (in the context set forth in this Section 6.4, the “Notifying Party”)
shall promptly notify the other Party of: (i) any written notice or other
communication from any Governmental Authority to the Notifying Party in
connection with the transactions contemplated by this Agreement; (ii) any Legal
Proceedings commenced or, to the Notifying Party’s Knowledge, threatened
against, relating to, involving or otherwise affecting the consummation of the
transactions contemplated by this Agreement; (iii) the discovery by the
Notifying Party of any inaccuracy in or breach of any representation, warranty
or covenant of such Notifying Party contained in this Agreement; and (iv) the
discovery by the Notifying Party of any event, condition, fact or circumstance
that would make the timely satisfaction of any of the conditions to such
Notifying Party’s obligation to proceed to the applicable Closing, as set forth
in Article VII, impossible or unlikely.

Section 6.5 Seller Marks.

Buyer agrees that (a) Buyer has no, and after each Closing, none of the
Companies or any of the Purchased Subsidiaries being transferred to Buyer at
such Closing will have any, right, title or interest in or to the names
“Inland”, “Inland American” and “Inland American Real Estate”, or any service
marks, trademarks, trade names, identifying symbols, logos, emblems, signs or
insignia related thereto or containing or comprising the foregoing, including
any derivations, modifications or alterations thereof, and any word, name or
mark confusingly similar thereto (collectively, the “Seller Marks”), (b) Buyer
and each Company and each Purchased Subsidiary transferred to Buyer at any
Closing shall have no right to use the Seller Marks after the applicable Closing
Date and (c) Buyer shall not, and from and after the each Closing shall cause
each Company and each Purchased Subsidiary transferred to Buyer at such Closing
to cease to, use the Seller Marks after such Closing Date or hold itself out as
having any sponsorship, endorsement or affiliation with Seller or any of its
Affiliates. Within ten (10) Business Days after each Closing Date, Buyer shall
make such filings with Governmental Authorities as are necessary to formally
change the name of any Company or Purchased Subsidiary which was transferred to
Buyer at such Closing and which has a name using one or more of the Seller
Marks, to a name not using a Seller Mark.

Section 6.6 Publicity. Buyer and Seller shall not, and shall cause the Companies
and the Purchased Subsidiaries not to, issue any press release, public
announcement or other disclosure concerning this Agreement, the Transaction
Documents, the terms hereof and thereof and/or the transactions contemplated
hereby and thereby without obtaining the prior written approval of the other
Party, which approval will not be unreasonably withheld, conditioned or

 

-40-

--------------------------------------------------------------------------------

delayed, unless, in the reasonable judgment of Seller or Buyer, disclosure is
otherwise required by Law, provided that, to the extent required by Law, the
Party intending to make such release, public announcement or disclosure shall
use its Reasonable Efforts consistent with Law to consult with the other Party
with respect to the text thereof prior to the issuance of such release, public
announcement or disclosure.

Section 6.7 Confidentiality; Non-Disparagement.

(a) Buyer acknowledges that the information provided to it in connection with
this Agreement and the transactions contemplated hereby is subject to the terms
of the Confidentiality Agreement, the terms of which are incorporated herein by
reference. Effective upon, and only upon, the Third Closing, the Confidentiality
Agreement shall terminate, provided that Seller, Buyer, the Companies and the
Purchased Subsidiaries may disclose such information as may be necessary in
connection with seeking necessary consents and approvals as contemplated hereby.

(b) Seller shall not, and shall cause its Representatives not to, for a period
of three (3) years after each Closing Date, directly or indirectly, without the
prior written consent of Buyer, disclose to any third party (other than each
other and their respective Representatives) any confidential or proprietary
information related to the Real Property, the Companies or the Purchased
Subsidiaries transferred to Buyer at such Closing; provided that the foregoing
restriction shall not (i) apply to any information (A) generally available to,
or known by, the public (other than as a result of disclosure in violation of
this Section 6.7(b)) or (B) independently developed by Seller or any of its
Affiliates (other than by any of the Companies or any of the Purchased
Subsidiaries prior to the applicable Closing) without reference to or use of the
applicable confidential or proprietary information, or (ii) prohibit any
disclosure (x) required by Law so long as, to the extent legally permissible and
feasible, Seller provides Buyer with reasonable prior written notice of such
disclosure and a reasonable opportunity to contest such disclosure or (y) made
in connection with the enforcement of any right or remedy relating to this
Agreement or the transactions contemplated hereby. Notwithstanding anything to
the contrary set forth in this Section 6.7(b), Seller and its Representatives
shall be deemed to have satisfied their obligations hereunder with respect to
confidential or proprietary information related to the Real Properties, the
Companies and the Purchased Subsidiaries if they exercise the same degree of
care (but no less than a reasonable degree of care) as they take to preserve
confidentiality for their own similar information.

(c) For a period of three (3) years after the Third Closing, each Party (in the
context set forth in this Section 6.7(c), the “Receiving Party”) shall not, and
shall cause its respective Representatives not to, directly or indirectly,
without the prior written consent of the other Party (in the context set forth
in this Section 6.7(c), the “Disclosing Party”), disclose to any third party
(other than each Party’s respective Representatives) any confidential or
proprietary information of the Disclosing Party made available to the Receiving
Party pursuant to the provisions of, or in connection with the negotiation of,
this Agreement, the Confidentiality Agreement or the Transaction Documents;
provided, that the foregoing restrictions shall not (i) apply to any information
(A) generally available to, or known by, the public (other than as a

 

-41-

--------------------------------------------------------------------------------

result of disclosure in violation of this Section 6.7), (B) independently
developed by the Receiving Party or any of its Affiliates without reference to
or use of any such information disclosed by the Disclosing Party or (C) in the
case of Buyer, any information of any Company or Purchased Subsidiary which is
obtained by Buyer by virtue of the purchase and sale of the Equity Interests or
(ii) prohibit any disclosure (x) required by Law so long as, to the extent
legally permissible and feasible, the Receiving Party provides the Disclosing
Party with reasonable prior written notice of such disclosure and a reasonable
opportunity to contest such disclosure or (y) made in connection with the
enforcement of any right or remedy relating to this Agreement or the
transactions contemplated hereby. Notwithstanding anything to the contrary set
forth in this Section 6.7(c), the Receiving Party and its Representatives shall
be deemed to have satisfied its obligations hereunder with respect to
confidential or proprietary information of the Disclosing Party if they exercise
the same degree of care (but no less than a reasonable degree of care) as they
take to preserve confidentiality for their own similar information.

(d) Each Party agrees that, except as compelled by applicable Law or Legal
Proceeding (after provision of due prior notice of such Law or Legal Proceeding
to the other Party) or in connection with such Party’s enforcement of its rights
under, or defense against claims brought by the other Party under, this
Agreement or any of the Transaction Documents, it will not, and will cause its
directors and executive officers not to, directly or indirectly, (i) publicly
disparage the other Party or any of such other Party’s Representatives or
(ii) take any action that would reasonably be expected to cause any of such
Persons to suffer reputational damage in the eyes of the public or any
equity-holders, clients, tenants, landlords, joint venture partners, lenders,
employees or competitors of any such Person.

(e) Notwithstanding anything in this Section 6.7 to the contrary, in the event
Buyer desires to market any Real Property for sale prior to the applicable
Closing, Buyer shall be permitted to provide to any prospective purchaser of
such Real Property, Seller’s confidential or proprietary information with
respect to such Real Property; provided, that (i) prior to Buyer’s provision of
any such information, such prospective purchaser shall have entered into a
confidentiality agreement in a form substantially similar to the Confidentiality
Agreement (provided, that Seller shall be an express third party beneficiary to
any such confidentiality agreement), with respect to such confidential or
proprietary information and (ii) Seller shall not be required to deliver any
additional information to such prospective purchaser other than such information
as has already been delivered to Buyer.

Section 6.8 Property Management Agreements. The Parties shall, at Seller’s sole
cost and expense, take such actions as are reasonably required to cause each
Property Management Agreement to be terminated in its entirety, effective as of
the applicable Closing, and thereafter each such Property Management Agreement
shall be deemed terminated in its entirety.

 

-42-

--------------------------------------------------------------------------------

ARTICLE VII

CONDITIONS TO OBLIGATIONS

Section 7.1 Conditions to Obligations of Buyer and Seller.

The obligations of each Party to cause the Closings to occur are subject to the
satisfaction of the following conditions, any one or more of which may be waived
in writing by such Party:

(a) In the case of any Closing, there shall not be in force any Law restraining,
enjoining or prohibiting the consummation of the transactions contemplated by
this Agreement or the Transaction Documents to occur at such Closing;

(b) In the case of the Third Closing:

(i) Subject to Section 2.5(d), Seller shall have received the Lender Consents in
respect of the Assumed Existing Loans (collectively, the “Required Lender
Consents” and, the condition contained in this Section 7.1(b)(i), the “Lender
Condition”);

(ii) Subject to Section 2.5(d), Seller shall have received the Tennant Consents
set forth on Annex G (collectively, the “Required Tenant Waivers” and, the
condition contained in this Section 7.1(b)(ii), the “Tenant Condition”); and

(iii) Subject to Section 2.5(d), Seller shall have redeemed all JV Equity
Interests owned by any JV Counterparty in accordance with the JV Agreements
(collectively, the “JV Redemptions” and, the condition contained in this
Section 7.1(b)(iii), the “JV Condition”).

Section 7.2 Conditions to Obligations of Buyer. The obligations of Buyer to
cause any Closing to occur are subject to the satisfaction of the following
conditions, any one or more of which may be waived in writing by Buyer:

(a) (i) Each of the Fundamental Seller Representations (to the extent they
relate to the transactions being consummated at such Closing) shall be true and
correct in all material respects at and as of the date of this Agreement and at
and as of the applicable Closing Date as if made on such Closing Date (other
than such representations and warranties that expressly address matters only as
of another specified date, which need only be true and correct as of such date)
and (ii) each of the other representations and warranties of Seller contained in
Articles III and IV of this Agreement (to the extent they relate to the
transactions being consummated at such Closing), without giving effect to
materiality, Material Adverse Effect or other similar qualifications, shall be
true and correct at and as of the date of this Agreement and at and as of the
applicable Closing Date as if made at and as of such Closing Date (other than
such representations and warranties that expressly address matters only as of
another specified date, which need only be true and correct as of such date),
except where the failure of such representations and warranties to be so true
and correct would not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect.

 

-43-

--------------------------------------------------------------------------------

(b) Seller shall have performed and complied in all material respects with the
covenants and agreements required by this Agreement to be performed or complied
with by Seller on or before such Closing Date; and

(c) Seller shall have delivered to Buyer or the Deposit Escrow Agent, as
applicable, the items and documents set forth in Section 2.6(a) which are
required to be delivered by Seller at such Closing.

Section 7.3 Conditions to the Obligations of Seller.

The obligations of Seller to cause any Closing to occur are subject to the
satisfaction of the following conditions, any one or more of which may be waived
in writing by Seller:

(a) (i) Each of the Fundamental Buyer Representations (to the extent they relate
to the transactions being consummated at such Closing) shall be true and correct
in all material respects at and as of the date of this Agreement and at and as
of the applicable Closing Date as if made on such Closing Date (other than such
representations and warranties that expressly address matters only as of another
specified date, which need only be true and correct as of such date) and
(ii) each of the other representations and warranties of Buyer contained in
Article V of this Agreement (to the extent they relate to the transactions being
consummated at such Closing), without giving effect to materiality or other
similar qualifications, shall be true and correct at and as of the date of this
Agreement and at and as of the applicable Closing Date as if made at and as of
such Closing Date (other than such representations and warranties that expressly
address matters only as of another specified date, which need only be true and
correct as of such date), except where the failure of such representations and
warranties to be so true and correct would not reasonably be expected to,
individually or in the aggregate, interfere with, prevent or materially delay
the ability of Buyer to enter into and perform its obligations under this
Agreement or the other Transaction Documents or consummate the transactions
contemplated hereby.

(b) Buyer shall have performed and complied in all material respects with the
covenants and agreements required by this Agreement to be performed or complied
with by Buyer on or before such Closing Date; and

(c) Buyer shall have delivered to Seller or the Deposit Escrow Agent, as
applicable, the items and documents set forth in Section 2.6(b) which are
required to be delivered by Buyer at such Closing.

ARTICLE VIII

INDEMNIFICATION

Section 8.1 Survival.

All representations and warranties of the Parties contained in this Agreement,
to the extent they relate to the transactions being consummated at any
particular Closing, shall survive such Closing until six (6) months after the
applicable Closing Date. All of the Specified Covenants shall survive the
Closings until fully performed or fulfilled, unless and to the extent only that
non-compliance with any such Specified Covenant is waived in writing by the
Party

 

-44-

--------------------------------------------------------------------------------

entitled to such performance. All other covenants and agreements of the Parties
contained herein, to the extent they relate to the transactions being
consummated at any particular Closing, shall not survive such Closing, and the
Parties shall have no rights or remedies with respect thereto from and after
such Closing, except that the agreements set forth in the last sentence of
Section 2.4 shall survive the applicable Closing for a period of six (6) months.
No Party shall have any liability for indemnification claims made under this
Article VIII with respect to any such representation, warranty or covenant
unless a Claim Notice is provided by the non-breaching Party to the other Party
prior to the expiration of the applicable survival period for such
representation, warranty or covenant, as the case may be. The Parties
acknowledge and agree that with respect to any claim that any Party may have
against any other Party that is permitted pursuant to the terms of this
Agreement, the survival periods set forth and agreed to in this Section 8.1
shall govern when any such claim may be brought and shall replace and supersede
any statute of limitations that may otherwise be applicable. If a Claim Notice
has been timely given in accordance with this Agreement prior to the expiration
of the applicable survival period for such representation, warranty or covenant,
then the applicable representation, warranty or covenant shall survive as to
such claim, until such claim has been finally resolved.

Section 8.2 Indemnification.

(a) Subject to the provisions of this Article VIII, from and after each Closing,
Seller shall indemnify Buyer and its Representatives (“Buyer Indemnified
Parties”) from and against all Losses that Buyer Indemnified Parties incur to
the extent arising from or out of (i) any breach of any representation or
warranty of Seller in Articles III or IV (to the extent they relate to the
transactions being consummated at such Closing), (ii) any breach of any
Specified Covenant of Seller in this Agreement or (iii) the last sentence of
Section 2.4.

(b) Subject to the provisions of this Article VIII, from and after each Closing,
Buyer shall indemnify Seller and its Representatives (“Seller Indemnified
Parties”) from and against all Losses that Seller Indemnified Parties incur to
the extent arising from or out of (i) the operations, liabilities and
obligations of any of the Companies, the Purchased Subsidiaries or the Real
Property (relating to periods after the applicable Closing Date) to the extent
the Buyer Indemnified Parties are not entitled to indemnification for such
Losses pursuant to this Article VIII, (ii) any breach of any representation or
warranty of Buyer in Article V (to the extent they relate to the transactions
being consummated at such Closing), (iii) any breach of any Specified Covenant
of Buyer in this Agreement or (iv) the last sentence of Section 2.4.

(c) Notwithstanding anything to the contrary herein, the Parties shall have a
duty to use Reasonable Efforts to mitigate any Loss arising out of or relating
to this Agreement or the transactions contemplated hereby.

 

-45-

--------------------------------------------------------------------------------

Section 8.3 Indemnification Procedures.

Claims for indemnification under this Agreement shall be asserted and resolved
as follows:

(a) Any Buyer Indemnified Party or Seller Indemnified Party claiming
indemnification under this Agreement (an “Indemnified Party”) with respect to
any claim asserted against the Indemnified Party by a third party (“Third Party
Claim”) in respect of any matter that is subject to indemnification under
Section 8.2 shall promptly (i) notify the other Party (the “Indemnifying Party”)
of the Third Party Claim and (ii) transmit to the Indemnifying Party a written
notice (a “Claim Notice”) describing in reasonable detail the nature of the
Third Party Claim, a copy of all papers served with respect to such claim (if
any) and the basis of the Indemnified Party’s request for indemnification under
this Agreement. Subject to Section 8.1, failure to timely provide such Claim
Notice shall not affect the right of the Indemnified Party’s indemnification
hereunder, except to the extent (and only to the extent) that the Indemnifying
Party demonstrates such failure shall have caused the Losses (in whole or in
part) for which the Indemnifying Party is obligated to be greater than such
Losses would have been had the Indemnified Party given the Indemnifying Party
timely notice.

(b) The Indemnifying Party shall have the right to defend the Indemnified Party
against such Third Party Claim. The Indemnifying Party will notify the
Indemnified Party within fifteen (15) Business Days after having received any
Claim Notice with respect to whether or not it is exercising its right to defend
the Indemnified Party against the Third Party Claim. If the Indemnifying Party
notifies the Indemnified Party that the Indemnifying Party elects to assume the
defense of the Third Party Claim (such election to be without prejudice to the
right of the Indemnifying Party to dispute whether such claim is an
indemnifiable Loss under this Article VIII), then the Indemnifying Party shall
have the right to defend such Third Party Claim with counsel selected by the
Indemnifying Party (which counsel shall be subject to the approval of the
Indemnified Party, such approval not to be unreasonably withheld, conditioned or
delayed), by all appropriate proceedings, to a final conclusion or settlement at
the discretion of the Indemnifying Party in accordance with this Section 8.3(b).
The Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof; provided, however, that the
Indemnifying Party shall not enter into any compromise or settlement of any
Third Party Claim without the written consent of the Indemnified Party (which
consent shall not be unreasonably withheld, conditioned or delayed).
Notwithstanding the foregoing, such consent shall not be required if (i) the
settlement agreement contains a complete and unconditional general release by
the third party asserting the claim to all Indemnified Parties affected by the
claim and (ii) the settlement agreement does not contain any sanction or
restriction upon the conduct of any business by the Indemnified Party or its
Affiliates. The Indemnified Party may participate in, but not control, any
defense or settlement of any Third Party Claim controlled by the Indemnifying
Party pursuant to this Section 8.3(b), and the Indemnified Party shall bear its
own costs and expenses with respect to such participation. Notwithstanding the
foregoing, the Indemnified Party shall have the right to control the defense of
any Third Party Claim where the Third Party Claim alleges criminal charges
against the Indemnified Party.

(c) If the Indemnifying Party does not notify the Indemnified Party that the
Indemnifying Party elects to defend the Indemnified Party pursuant to
Section 8.3(b) within fifteen (15) Business Days after receipt of any Claim
Notice or the Indemnifying Party does not otherwise have the right to defend
such claim pursuant to Section 8.3(b), then the Indemnified Party shall have the
right to defend, and be reimbursed for its reasonable cost and expense (but only
if the Indemnified Party is actually entitled to indemnification hereunder) in
regard to the Third Party Claim with counsel selected by the Indemnified Party
(which counsel shall be subject to the approval of the Indemnified Party, such
approval not to be unreasonably withheld,

 

-46-

--------------------------------------------------------------------------------

conditioned or delayed), by all appropriate proceedings, which proceedings shall
be prosecuted diligently by the Indemnified Party. In such circumstances, the
Indemnified Party shall defend any such Third Party Claim in good faith and have
full control of such defense and proceedings; provided, however, that the
Indemnified Party may not enter into any compromise or settlement of such Third
Party Claim if indemnification is to be sought hereunder, without the
Indemnifying Party’s consent (which consent shall not be unreasonably withheld,
conditioned or delayed). The Indemnifying Party may participate in, but not
control, any defense or settlement controlled by the Indemnified Party pursuant
to this Section 8.3(c), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation.

(d) If requested by the Indemnifying Party, the Indemnified Party agrees, at the
sole cost and expense of the Indemnifying Party (but only if the Indemnified
Party is actually entitled to indemnification hereunder), to fully cooperate
with the Indemnifying Party and its counsel in contesting any Third Party Claim
which the Indemnifying Party elects to contest, including providing access to
documents, records and information. In addition, the Indemnified Party will make
its personnel available at no cost to the Indemnifying Party for conferences,
discovery, proceedings, hearings, trials or appeals as may be reasonably
required by the Indemnifying Party. The Indemnified Party also shall fully
cooperate with the Indemnifying Party and its counsel in the making of any
related counterclaim against the Person asserting the Third Party Claim or any
cross complaint against any Person and executing powers of attorney to the
extent necessary.

(e) Subject to the other provisions of this Article VIII, a claim for
indemnification for any matter not involving a Third Party Claim may be asserted
by notice to the Party from whom indemnification is sought; such notice
describing in reasonable detail the nature of the claim, the amount of the claim
or a reasonably detailed estimate thereof, a copy of all papers served with
respect to such claim (if any), and the basis of the Indemnified Party’s request
for indemnification under this Agreement. Subject to Section 8.1, failure to
timely provide such notice shall not affect the right of the Indemnified Party’s
indemnification hereunder except to the extent (and only to the extent) that the
Indemnifying Party demonstrates such failure shall have caused the Losses (in
whole or in part) for which the Indemnifying Party is obligated to be greater
than such Losses would have been had the Indemnified Party given the
Indemnifying Party timely notice.

Section 8.4 Limitations on Liability of Seller.

Notwithstanding anything to the contrary herein:

(a) a breach of any representation, warranty or covenant of Seller in this
Agreement in connection with any single item or group of related items that
results in Losses of less than $50,000 shall be deemed for all purposes of this
Article VIII not to be a breach of such representation, warranty or covenant;
provided, however, that claims for indemnification under Section 8.2(a)(iii)
shall not be subject to this Section 8.4(a);

 

-47-

--------------------------------------------------------------------------------

(b) Seller shall have no liability arising out of or relating to
Section 8.2(a)(i) except if the aggregate Losses actually incurred by Buyer
Indemnified Parties thereunder exceed one percent (1%) of the Initial Purchase
Price (and then, subject to Section 8.4(c), only to the extent such aggregate
Losses exceed such amount) (the “Deductible”); provided, however, that the
Deductible shall not apply to any single item, or group of related items, that
results in Losses (without regard to the Deductible, and the payment of which
shall not be counted towards the Deductible) that Buyer Indemnified Parties
actually incurred to the extent arising from or out of the breach of any
Fundamental Seller Representation;

(c) in no event shall Seller’s aggregate liability arising out of or relating to
Section 8.2(a)(i) exceed five percent (5%) of the Initial Purchase Price (the
“Cap”); provided, however, that the Cap shall not apply to any single item, or
group of related items, that results in Losses (the payment of which shall not
be counted towards the Cap) that Buyer Indemnified Parties actually incurred to
the extent arising from or out of the breach of any Fundamental Seller
Representation;

(d) notwithstanding anything to the contrary in Sections 8.4(b) and 8.4(c), in
no event shall Seller’s aggregate liability arising out of or relating to
Section 8.2(a) exceed the Final Purchase Price.

(e) in no event shall Seller be liable under Section 8.2(a) for any Losses
arising from the negligence, strict liability of or violation of any Law by
Buyer or any of its Affiliates or arising from an action taken or not taken by
Seller at the request of or with the consent of Buyer;

(f) the amount of any Loss for which a Buyer Indemnified Party claims
indemnification under this Agreement shall be reduced by: (i) any insurance
proceeds actually received by such Buyer Indemnified Party with respect to such
Loss; (ii) any Tax Benefits actually realized by such Buyer Indemnified Party
with respect to such Loss and (iii) indemnification or reimbursement payments
actually received by such Buyer Indemnified Party from third parties with
respect to such Loss, provided that such Buyer Indemnified Party shall use
Reasonable Efforts to obtain recoveries from insurers, including title insurers,
and other third parties in respect of this Section 8.4(f);

(g) if an Indemnified Party shall recover Losses in respect of a claim of
indemnification under this Article VIII, no other Indemnified Party shall be
entitled to recover the same Losses in respect of a claim for indemnification;

(h) if the Indemnified Party receives any payment from an Indemnifying Party in
respect of any Losses pursuant to Section 8.2 and the Indemnifying Party could
have recovered all or a part of such Losses from a third party, including any
provider of insurance (a “Potential Contributor”) based on the underlying claim
asserted against the Indemnifying Party, the Indemnified Party shall assign such
of its rights to proceed against the Potential Contributor as are necessary to
permit the Indemnifying Party to recover from the Potential Contributor the
amount of such payment; and

(i) Seller shall not be liable in respect of any claim for indemnification under
Section 8.2(a) if and to the extent that any Buyer or any of its Representatives
has Knowledge as of the date of this Agreement or as of the applicable Closing
Date of the fact, matter, event or circumstance which is the subject of the
claim and that such fact, matter, event or circumstance could reasonably be
expected to amount to a claim for indemnification hereunder.

 

-48-

--------------------------------------------------------------------------------

Section 8.5 Waiver of Other Representations.

(a) Buyer is an informed and sophisticated purchaser, who is familiar with the
ownership and operation of, and has engaged expert advisors, experienced in the
evaluation and purchase of, companies such as the Companies and the Purchased
Subsidiaries and real property such as the Real Property, each as contemplated
hereunder. Buyer has had adequate opportunity to undertake, and has undertaken,
such investigation and has been provided with access to and has evaluated such
documents and information as it has deemed necessary to enable it to make an
informed and intelligent decision with respect to the execution, delivery and
performance of this Agreement and the other Transaction Documents. Buyer shall
accept the Equity Interests, the Companies, the Subsidiary Equity Interests, the
Purchased Subsidiaries and the Real Property in the condition they are in on the
applicable Closing Date based upon Buyer’s own inspection, examination and
determination with respect thereto as to all matters, and without reliance upon
any express or implied representations or warranties of any nature made by or on
behalf of or imputed to Seller.

(b) Except for the specific representations and warranties expressly made by
Seller in Articles III and IV of this Agreement, (i) Buyer acknowledges and
agrees that (A) neither Seller nor any of its Representatives is making or has
made any representation or warranty, expressed or implied, at law or in equity,
in respect of the Real Property, the Companies, the Purchased Subsidiaries or
any of their respective operations, prospects, or condition (financial or
otherwise), including with respect to (1) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of any Real Property or any aspect or portion thereof, including,
structural elements, foundation, roof, appurtenances, access, landscaping,
parking facilities, electrical, mechanical, HVAC, plumbing, sewage, water and
utility systems, facilities and appliances, soils, geology and groundwater,
(2) the dimensions or lot size of any Real Property or the square footage of any
of the improvements thereon or of any tenant space therein, (3) the development
or income potential, or rights of or relating to, any Real Property, or the
fitness, suitability, value or adequacy of any Real Property for any particular
purpose, (4) the zoning or other legal status of any Real Property, (5) the
compliance of any Real Property or its operation with any applicable codes,
laws, regulations, statutes, ordinances, covenants, conditions and restrictions
of any Governmental Authority or of any other Person (including, the Americans
with Disabilities Act of 1990, as amended), (6) the ability of Buyer or any
Company or Purchased Subsidiary or any of their Affiliates to obtain any
necessary governmental approvals, licenses or permits for the use or development
of any Real Property, (7) the presence, absence, condition or compliance of any
Hazardous Materials on, in, under, above or about any Real Property or any
adjoining or neighboring property, (8) the quality of any labor and materials
used in any improvements at any Real Property, (9) the economics of, or the
income and expenses, revenue or expense projections or other financial matters,
relating to the operation of, any Real Property; or (10) the accuracy or
completeness of any confidential information memoranda, offering presentation,
documents, projections, material or other information (financial or otherwise)
regarding the Real Property, the Companies or the Purchased Subsidiaries
furnished to Buyer or its Representatives or made available to Buyer and its
Representatives in any “data rooms,” “virtual data rooms,” offering

 

-49-

--------------------------------------------------------------------------------

presentations, management presentations or in any other form in expectation of,
or in connection with, the transactions contemplated by this Agreement or the
Transaction Documents, or in respect of any other matter or thing whatsoever,
and (B) no Representative of Seller has any authority, express or implied, to
make any representations, warranties or agreements not specifically set forth in
this Agreement and subject to the limited remedies provided in this Agreement,
(ii) Buyer specifically disclaims that it is relying upon or has relied upon any
such other representations or warranties that may have been made by any Person,
and acknowledges and agrees that Seller has specifically disclaimed and does
hereby specifically disclaim any such other representation or warranty made by
any Person, (iii) Buyer specifically disclaims any obligation or duty by Seller
or any Person to make any disclosures of fact not required to be disclosed
pursuant to the specific representations and warranties set forth in Articles
III and IV of this Agreement and (iv) Buyer is acquiring the Real Property, the
Companies and the Purchased Subsidiaries subject only to the specific
representations and warranties of Seller set forth in Articles III and IV of
this Agreement as further limited by the specifically bargained-for exclusive
remedies as set forth in this Article VIII.

(c) Buyer hereby accepts Seller’s interest in the Companies, the Purchased
Subsidiaries and the Real Property in their present environmental and physical
condition on an “as-is”, “where-is”, “with all faults and defects” basis
regardless of how such faults and defects were caused or created (including by
Seller’s negligence, actions or fault or otherwise), and acknowledges that
(i) without this acceptance, the sale described in this Agreement would not have
been made, and (ii) Seller shall be under no obligation whatsoever to undertake
any improvement, repair, modification, alteration, removal, remediation or other
work of any kind with respect to all or any portion of Seller’s interest in any
Company, any Purchased Subsidiary or any Real Property.

Section 8.6 Purchase Price Adjustment.

The Parties agree to treat all payments made pursuant to this Article VIII as
adjustments to the Final Purchase Price for Tax purposes.

Section 8.7 Remedies; Limited Recourse; Limitations on Damages.

(a) The sole and exclusive remedies for breach of the terms and provisions of
this Agreement (including any representations and warranties set forth herein,
made in connection herewith or as an inducement to enter into this Agreement) or
any claim or cause of action otherwise arising out of or related to the
transactions contemplated by this Agreement shall be those remedies available at
law or in equity for breach of contract only (as such contractual remedies have
been further limited or excluded pursuant to the express terms of this
Agreement, including the indemnification provisions of this Article VIII), and
the Parties hereby agree that neither Party hereto shall have any remedies or
causes of action (whether in contract or in tort) for any statements,
communications, disclosures, failures to disclose, representation or warranties
not set forth in this Agreement.

 

-50-

--------------------------------------------------------------------------------

(b) Prior to the Third Closing, in the event either Party breaches any of such
Party’s representations, warranties, covenants or agreements hereunder (to the
extent such representations, warranties, covenants or agreements relate to
Companies, Purchased Subsidiaries or Real Property that have not yet been
transferred to Buyer at a Closing), which breach (i) in the case of Buyer’s
breach, is in effect at the time that this Agreement is terminable by either
Party pursuant to Section 9.1(d) and would result in the failure to satisfy any
of the conditions set forth in Sections 7.3(a) or 7.3(b) or (ii) in the case of
either Party’s breach, would give rise to the non-breaching Party’s right to
terminate this Agreement pursuant to Section 9.1(e) or (f), as applicable (after
giving effect to the cure periods set forth therein), then, in either case, the
non-breaching Party may exercise such right of termination and shall be entitled
to the then-remaining Deposit pursuant to Section 9.2(b) or (c), as applicable.
Notwithstanding the foregoing, in the event that prior to the applicable Closing
either Party breaches any of its representations, warranties, covenants or
agreements hereunder, which breach would result in the failure to satisfy any of
the conditions set forth in Sections 7.2(a) or 7.2(b) (in the event that Seller
is the breaching Party) or the conditions set forth in Sections 7.3(a) or 7.3(b)
(in the event that Buyer is the breaching Party) and the non-breaching Party
elects not to terminate this Agreement pursuant to Section 9.1, but instead
waives such breach and proceeds to the applicable Closing, the non-breaching
Party shall thereby expressly waive its right to recover, and forever release
the breaching Party from any liability in respect of, any Losses arising out of
or related to any such breach.

(c) Except as set forth in the second sentence of this Section 8.7(c), after the
applicable Closing, the sole and exclusive remedy for any and all claims, Losses
or other matters arising under, out of, or related to this Agreement or the
transactions contemplated hereby (except for claims of breach of this Agreement
which were waived prior to the applicable Closing pursuant to Section 8.7(b), as
to which no remedies shall exist) shall be the rights of indemnification set
forth in this Article VIII only (and in the case of indemnification sought
pursuant to Section 2.9(b), the rights of indemnification set forth therein) and
no Person will have any other entitlement, remedy or recourse, whether in
contract, tort, strict liability, equitable remedy or otherwise, it being agreed
that all of such other remedies, entitlements and recourse are expressly waived
and released by the Parties to the fullest extent permitted by Law.
Notwithstanding the foregoing, after the applicable Closing, the immediately
preceding sentence will not operate to interfere with or impede a Party’s right
to seek equitable remedies (including specific performance or injunctive relief)
for a breach or threatened breach of the Specified Covenants, and the Parties
expressly acknowledge that any breach or threatened breach of any such Specified
Covenant by the other Party or Parties shall result in irreparable and
continuing damage to the non-breaching Party or Parties for which no adequate
remedy at law will exist and that, in the event of any beach of any such
covenant, the non-breaching Party or Parties shall be entitled to injunctive
relief, including specific performance, and to such further and other relief as
may be necessary and proper to ensure compliance by the breaching Party or
Parties with this Agreement, and the Parties consent to the entry of such
relief, without necessity of posting bond or other security (any requirements
therefore being expressly waived). The Parties acknowledge that the provisions
of this Section 8.7(c) are reasonably necessary and commensurate with the need
to protect the Parties against irreparable harm and to protect their legitimate
business interests.

(d) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NO PARTY SHALL BE LIABLE
FOR, AND THE DEFINITION OF LOSSES SHALL NOT INCLUDE, ANY SPECIAL, PUNITIVE,
EXEMPLARY, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, INCLUDING ANY LOST
PROFITS OR LOST BENEFITS,

 

-51-

--------------------------------------------------------------------------------

LOSS OF ENTERPRISE VALUE, DIMINUTION IN VALUE OR MULTIPLES OF EARNINGS OF ANY
BUSINESS, DAMAGE TO REPUTATION OR LOSS TO GOODWILL, WHETHER BASED ON CONTRACT,
TORT, STRICT LIABILITY, OTHER LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM
ANY OTHER PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR
OTHER FAULT EXCEPT, WITH RESPECT TO THE DEFINITION OF LOSSES, TO THE EXTENT SUCH
DAMAGES ARE ACTUALLY AWARDED TO A GOVERNMENTAL AUTHORITY OR ANOTHER THIRD PARTY;
PROVIDED THAT THE FOREGOING LIMITATION SHALL NOT LIMIT SELLER’S RIGHT TO RECOVER
THE DEPOSIT IN CONNECTION WITH BUYER’S FAILURE TO CLOSE IN VIOLATION OF THIS
AGREEMENT.

(e) All claims or causes of action (whether in contract or in tort, in law or in
equity) that may be based upon, arise out of or relate to this Agreement, or the
negotiation, execution or performance of this Agreement (including any
representation or warranty made in or in connection with this Agreement or as an
inducement to enter into this Agreement), may be made only against the entities
that are expressly named as Parties hereto. No Person that is not a named party
to this Agreement, including any past, present or future director, officer,
employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney
or Representative of any named party to this Agreement (“Non-Party Affiliate”)
shall have any liability (whether in contract or in tort, in law or in equity,
or based on any theory that seeks to impose liability of an entity party against
its owners or affiliates) for any obligations or liabilities arising under, in
connection with or related to this Agreement or for any claim based on, in
respect of, or by reason of, this Agreement or its negotiation or execution; and
any each party hereto waives and releases all such liabilities and claims
against any such Non-Party Affiliates.

(f) The provisions of this Section 8.7 were specifically bargained-for between
Seller and Buyer and were taken into account by Seller and Buyer in arriving at
the Initial Purchase Price. Each of Seller and Buyer specifically relied upon
the provisions of this Section 8.7 in agreeing to the Initial Purchase Price and
in agreeing to provide the specific representations and warranties set forth in
Articles III and IV (in the case of Seller) and Article V (in the case of
Buyer).

ARTICLE IX

TERMINATION

Section 9.1 Termination.

At any time prior to the Third Closing, this Agreement may be terminated and the
transactions contemplated hereby abandoned (other than with respect to any
Company, Purchased Subsidiary or Real Property that has already been transferred
to Buyer at the Initial Closing or the Second Closing if such termination occurs
after either such Closing):

(a) by the mutual consent of Buyer and Seller as evidenced in writing signed by
Buyer and Seller;

 

-52-

--------------------------------------------------------------------------------

(b) by either Buyer or Seller if any Governmental Authority having competent
jurisdiction has issued a final, non-appealable order, decree, ruling or
injunction (other than a temporary restraining order) or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, which transactions have not been consummated at
a Closing occurring prior to such issuance by such Governmental Authority;
provided that the right to terminate this Agreement pursuant to this
Section 9.1(b) shall not be available to any Party whose failure to comply with
its obligations under this Agreement has been the primary cause of such order,
decree, ruling, injunction or other action;

(c) by Seller pursuant to Section 2.9(d);

(d) by either Buyer or Seller if the Third Closing has not occurred on or before
nine (9) months after the date of this Agreement (the “Outside Date”) or such
later date as the Parties may agree upon; provided that the right to terminate
this Agreement pursuant to this Section 9.1(d) shall not be available to any
Party whose failure to comply with its obligations under this Agreement has been
the primary cause of the failure of the Third Closing to occur by such date;

(e) by Buyer, in the event of any breach by Seller of any of Seller’s
representations, warranties, covenants or agreements contained herein, which
breach would result in the failure to satisfy any of the conditions set forth in
Section 7.2(a) or 7.2(b), and in each case, the failure of Seller to cure such
breach (if capable of cure) within thirty (30) days after receipt of notice from
Buyer requesting such breach to be cured; provided that the right to terminate
this Agreement pursuant to this Section 9.1(e) shall not be available to Buyer
at any time that Buyer is in material breach of any of Buyer’s representations,
warranties, covenants or agreements contained herein (to the extent such
representations, warranties, covenants or agreements relate to Companies,
Purchased Subsidiaries or Real Property that have not yet been transferred to
Buyer at a Closing); and

(f) by Seller, in the event of any breach by Buyer of any of Buyer’s
representations, warranties, covenants or agreements contained herein, which
breach would result in the failure to satisfy any of the conditions set forth in
Section 7.3(a) or 7.3(b), and in each case, the failure of Buyer to cure such
breach (if capable of cure) within thirty (30) days after receipt of notice from
Seller requesting such breach to be cured; provided that the right to terminate
this agreement pursuant to this Section 9.1(f) shall not be available to Seller
at any time that Seller is in material breach of any of Seller’s
representations, warranties, covenants or agreements contained herein (to the
extent such representations, warranties, covenants or agreements relate to
Companies, Purchased Subsidiaries or Real Property that have not yet been
transferred to Buyer at a Closing).

Section 9.2 Effect of Termination; Payment of Deposit.

(a) In the event of termination and abandonment of this Agreement prior to the
Third Closing pursuant to Section 2.9(d) or Section 9.1, this Agreement shall,
subject to Sections 9.2(b) and 9.2(c) below, forthwith become void and have no
effect, without any liability on the part of any Party (other than any liability
under Article VIII with respect to any Company, Purchased Subsidiary or Real
Property that has been transferred to Buyer at a Closing occurring prior to such
termination). The provisions of this Section 9.2, and of Sections 8.7, 10.1,
10.3, 10.4, 10.6 and 10.11 hereof shall survive any termination of this
Agreement. The Confidentiality Agreement shall not be affected by a termination
of this Agreement.

 

-53-

--------------------------------------------------------------------------------

(b) In the event that this Agreement is terminated prior to the Third Closing by
(i) either Party pursuant to Section 9.1(d) at a time when Buyer is in breach of
any of its representations, warranties, covenants or agreements contained
herein, which breach would result in the failure to satisfy any of the
conditions set forth in Section 7.3(a) or 7.3(b) or (ii) by Seller pursuant to
Section 9.1(f), then, within one (1) Business Day of such termination, Buyer and
Seller shall provide joint written instructions to the Deposit Escrow Agent,
instructing the Deposit Escrow Agent to disburse the then-remaining Deposit to
Seller, subject to the provisions of Section 9.2(d). In the event of any such
termination, the receipt of the then-remaining Deposit shall be the sole and
exclusive remedy of Seller for any breach or default of Buyer of this Agreement
(other than any remedy under Article VIII with respect to any Company, Purchased
Subsidiary or Real Property that has been transferred to Buyer at a Closing
occurring prior to such termination). The Parties acknowledge that the
agreements contained in this Section 9.2(b) are an integral part of the
transactions contemplated by this Agreement, that the damages resulting from
termination of this Agreement under circumstances where Seller is entitled to
the then-remaining Deposit are uncertain and incapable of accurate calculation
and that the delivery of the then-remaining Deposit is not a penalty but rather
shall constitute liquidated damages in a reasonable amount that will compensate
Seller in the circumstances where Seller is entitled to the then-remaining
Deposit for the efforts and resources expended and opportunities foregone while
negotiating this Agreement and in reliance on this Agreement and on the
expectation of the consummation of the transactions contemplated hereby, and
that, without these agreements, Seller would not enter into this Agreement.

(c) In the event that this Agreement is terminated prior to the Third Closing
pursuant to Sections 2.9(d), 9.1(a), 9.1(b), 9.1(c), 9.1(d) (other than in the
circumstances set forth in Section 9.2(b)) or 9.1(e), then, within one
(1) Business Day of such termination, Buyer and Seller shall provide joint
written instructions to the Deposit Escrow Agent, instructing the Deposit Escrow
Agent to disburse the then-remaining Deposit to Buyer.

(d) Notwithstanding anything herein to the contrary, the Deposit Escrow
Agreement shall provide that the Deposit or any portion thereof shall not be
released to Seller pursuant to this Section 9.2 unless the Deposit Escrow Agent
receives any one or combination of the following: (i) a letter from Seller’s
independent accountants indicating the maximum amount of the then-remaining
Deposit that can be paid by the Deposit Escrow Agent to Seller without causing
Seller to fail to meet the requirements of Sections 856(c)(2) and (3) of the
Internal Revenue Code of 1986, as amended (the “Code”), determined as if the
payment of such amount did not constitute income described in Sections 856(c)(2)
or 856(c)(3) of the Code (“Qualifying Income”) and Seller has $1,000,000 of
income from unknown sources during such year which is not Qualifying Income (in
addition to any known or anticipated income which is not Qualifying Income), in
which case the Deposit Escrow Agent shall release such amount to Seller, or
(ii) a letter from Seller’s counsel indicating that (A) Seller received a ruling
from the Internal Revenue Service holding that the receipt by Seller of the
then-remaining Deposit would either constitute Qualifying Income or would be
excluded from gross income within the meaning of Sections 856(c)(2) and (3) of
the Code or (B) Seller’s outside counsel has rendered a legal opinion to the

 

-54-

--------------------------------------------------------------------------------

effect that the receipt by Seller of the then-remaining Deposit should either
constitute Qualifying Income or should be excluded from gross income within the
meaning of Sections 856(c)(2) and (3) of the Code, in which case the Deposit
Escrow Agent shall release the remainder of the Deposit to Seller. The Buyer
agrees to amend this Section 9.2(d) at the reasonable request of Seller in order
to (i) maximize the portion of the then-remaining Deposit that may be
distributed from escrow to Seller hereunder without causing Seller to fail to
meet the requirements of Sections 856(c)(2) and (3) of the Code, (ii) improve
Seller’s chances of securing a favorable ruling described in this Section 9.2(d)
or (iii) assist Seller in obtaining a favorable legal opinion from its outside
counsel as described in this Section 9.2(d). Any amount of the Deposit that
remains unpaid as of the end of a taxable year shall be paid as soon as possible
during the following taxable year, subject to the foregoing limitations of this
Section 9.2(d).

ARTICLE X

MISCELLANEOUS

Section 10.1 Notices.

All notices and other communications under this Agreement shall be in writing
and shall be deemed given (a) when delivered personally by hand (with written
confirmation of receipt), (b) when sent by facsimile (with written confirmation
of transmission) or (c) one (1) Business Day after the day sent by nationally
recognized overnight courier (with written confirmation of receipt), in each
case at the following addresses and facsimile numbers (or to such other address
or facsimile number as a Party may have specified by notice given to the other
Party pursuant to this provision):

(a) If to Buyer, to:

AR Capital, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Attn: Michael Weil

Telecopy: (857) 207-3397

Email: mweil@arlcap.com

with mandatory copies (which shall not constitute notice) to:

AR Capital, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Attn: Jesse Galloway

Telecopy: (646) 861-7751

Email: jgalloway@arlcap.com

and

 

-55-

--------------------------------------------------------------------------------

AR Capital, LLC

7621 Little Avenue, Suite 200

Charlotte, NC 28226

Attn: James A. Mezzanotte

Telecopy: (212) 415-6507

Email: jmezzanotte@arlcap.com

(b) If to Seller, to:

Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL 60523

Attn: Scott Wilton

    Michael Podboy

Telecopy: (630) 954-5655

Email: wilton@inlandgroup.com

            podboy@inlandgroup.com

with mandatory copies (which shall not constitute notice) to:

Latham & Watkins LLP

233 South Wacker Drive, Suite 5800

Chicago, Illinois 60606

Attn: Cathy A. Birkeland

Telecopy: 312-993-9767

Email: Cathy.Birkeland@lw.com

Section 10.2 Successors and Assigns.

No assignment of this Agreement or of any rights or obligations hereunder may be
made by any Party, directly or indirectly (by operation of law or otherwise),
without the prior written consent of the other Parties and any attempted
assignment without the required consents shall be null and void and without any
legal effect; provided, however, that Buyer shall have the right to assign any
of its rights under this Agreement to any of its Affiliates (each, a “Buyer
Assignee”) pursuant to an assignment and assumption agreement substantially in
the form of Annex H so long as (a) each Buyer Assignee executes a joinder to
this Agreement in the form substantially set forth in Annex L, (b) each Buyer
Assignee is a wholly-owned Subsidiary of a real estate investment trust
sponsored by Buyer (“Assignee Parent”), and (c) prior to such assignment, each
Assignee Parent executes and delivers to Seller an irrevocable guarantee in
favor of Seller of Buyer Assignee’s payment and performance obligations
hereunder (whether arising before or after the Third Closing), substantially in
the form set forth in Annex I. In connection with any permitted assignment
hereof, the assignor shall remain jointly and severally liable for its
obligations and the obligations of its permitted assignee, including in the case
of Buyer, any Buyer Assignee. Upon any such permitted assignment, the references
in this Agreement to Seller or Buyer shall also apply to any such assignee. This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective permitted successors and assigns.

 

-56-

--------------------------------------------------------------------------------

Section 10.3 Rights of Third Parties.

Except for the indemnification provisions of Sections 2.9(b) and 8.2 which are
intended to be enforceable by the Persons respectively referred to therein,
nothing expressed or implied in this Agreement shall create or be deemed to
create any third party beneficiary rights in any Person not a party to this
Agreement.

Section 10.4 Expenses.

Except as otherwise provided herein (including pursuant to Section 2.8), each
Party shall bear its own expenses incurred in connection with this Agreement and
the transactions contemplated hereby whether or not such transactions shall be
consummated.

Section 10.5 Counterparts; Electronic Signatures.

This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement may be signed and transmitted by facsimile
machine or electronic mail (via .pdf or similar transmittal), and any signatures
so transmitted shall be treated as an original document.

Section 10.6 Entire Agreement.

This Agreement (together with the Disclosure Schedule, annexes and exhibits to
this Agreement), the Confidentiality Agreement and the Transaction Documents
constitute the entire agreement among the Parties and supersede any other
agreements, whether written or oral, that may have been made or entered into by
or among any of the Parties or any of their respective Affiliates relating to
the transactions contemplated hereby. The Parties have voluntarily agreed to
define their rights, liabilities and obligations respecting the transactions
contemplated hereby exclusively in contract pursuant to the express terms and
provisions of this Agreement, and the Parties expressly disclaim that they are
owed any duties or are entitled to any remedies not expressly set forth in this
Agreement. Furthermore, the Parties each hereby acknowledge that this Agreement
embodies the justifiable expectations of sophisticated parties derived from
arm’s-length negotiations, and all Parties to this Agreement specifically
acknowledge that no Party has any special relationship with another Party that
would justify any expectation beyond that of an ordinary buyer and an ordinary
seller in an arm’s-length transaction.

Section 10.7 Disclosure Schedule.

Unless the context otherwise requires, all capitalized terms used in the
Disclosure Schedule shall have the respective meanings assigned in this
Agreement. No reference to or disclosure of any item or other matter in the
Disclosure Schedule shall be construed as an admission or indication that such
item or other matter is material or that such item or other matter is required
to be referred to or disclosed in the Disclosure Schedule. No disclosure in the
Disclosure Schedule relating to any possible breach or violation of any
agreement or Law shall be construed as an admission or indication that any such
breach or violation exists or has actually occurred. The Disclosure Schedule
identifies items of disclosure with respect to a particular section of the
Disclosure Schedule by reference to the corresponding section of this Agreement,
provided, however, that each disclosure in the Disclosure Schedule shall be
deemed to qualify all representations and warranties of Seller, notwithstanding
the lack of a specific cross-reference or a different cross-reference, in each
case to the extent the relevance of such disclosure to any such representation
and warranty is reasonably apparent on the face of such disclosure.

 

-57-

--------------------------------------------------------------------------------

Section 10.8 Amendments; Waiver.

This Agreement may be amended, supplemented or modified in whole or in part if,
but only if, such amendment, supplement or modification is in writing and is
signed by each Party and specific reference to this Agreement is made in such
writing. Any provision of this Agreement may be waived if, but only if, such
waiver is in writing and is signed by the Party or Parties against whom
enforcement of any such waiver is sought and specific reference to this
Agreement is made in such writing. The waiver by any Party of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such Party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.

Section 10.9 Severability.

If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement shall remain
in full force and effect. The Parties further agree that if any provision
contained herein is, to any extent, held invalid or unenforceable in any respect
under the Laws governing this Agreement, they shall take any actions necessary
to render the remaining provisions of this Agreement valid and enforceable to
the fullest extent permitted by Law and, to the extent necessary, shall amend or
otherwise modify this Agreement to replace any provision contained herein that
is held invalid or unenforceable with a valid and enforceable provision giving
effect to the intent of the Parties to the greatest extent legally permissible.

Section 10.10 Mutual Drafting.

The Parties have participated jointly in the negotiation and drafting of this
Agreement and, if an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as jointly drafted by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any provision of this Agreement. Further, prior
drafts of this Agreement or any of the Transaction Documents or the fact that
any clauses have been added, deleted or otherwise modified from any prior drafts
of this Agreement or any Transaction Document shall not be used as an arise of
construction or otherwise constitute evidence of the intent of the Parties; and
no presumption or burden of proof shall arise favoring or disfavoring any Party
by virtue of such prior drafts.

Section 10.11 Governing Law; Jurisdiction.

(a) This Agreement shall be governed and construed in accordance with the Laws
of the State of Delaware without regard to the Laws of the State of Delaware or
any other jurisdiction that would call for the application of the substantive
laws of any jurisdiction other than Delaware. This Agreement is entered into in
express reliance by the Parties on Section 2708 of Title 6 of the Delaware Code.

 

-58-

--------------------------------------------------------------------------------

(b) The Parties hereby agree that any dispute arising under or in connection
with this Agreement (including the arbitrability of any such dispute and the
enforceability of this Section 10.11(b)) shall be arbitrated in the Court of
Chancery of the State of Delaware, pursuant to 10 Del. C. § 349 and the rules of
the Delaware Court of Chancery. Unless the Delaware Court of Chancery is unable
or unwilling to arbitrate any particular dispute as provided below, the Parties
hereby submit to the exclusive jurisdiction of the Delaware Court of Chancery in
connection with any action to compel arbitration, in aid of arbitration, or for
provisional relief to maintain the status quo or prevent irreparable harm prior
to the appointment of the arbitrator. If the Court of Chancery of the State of
Delaware cannot or will not agree to arbitrate any particular dispute or cannot
or will not agree to conduct such arbitration on a confidential basis, the
Parties hereby agree to the exclusive jurisdiction of the American Arbitration
Association for the resolution of disputes and either Party may, at its option,
submit the dispute to an arbitrator with the American Arbitration Association in
Chicago, Illinois for adjudication within thirty (30) days pursuant to the
Commercial Arbitration Rules utilizing expedited procedures. If any dispute is
submitted for resolution pursuant to this Section 10.11(b), the prevailing Party
shall be entitled to recover from the other Party reasonable attorneys’ fees,
costs and expenses incurred in connection therewith. Each Party shall submit to
the arbitrator and exchange with the other, in accordance with a procedure to be
established by the arbitrator, such Party’s best offer with respect to the
resolution of the dispute. If the losing Party in connection with such
arbitration fails to provide the relief determined by the arbitrator within five
(5) Business Days after such determination, the winning Party shall be entitled,
at the expense of the losing Party, to enforce the determination of the
arbitrator, utilizing the same expedited procedures in the Delaware Chancery
Court, if that court has issued the award to be enforced, or in the United
States District Court for the Northern District of Illinois if the award to be
enforced was made by the American Arbitration Association.

(c) To the extent that any Party has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each such Party hereby
irrevocably (i) waives such immunity in respect of its obligations with respect
to this Agreement and (ii) submits to the personal jurisdiction of any court
described in Section 10.11(b).

(d) THE PARTIES AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY DISPUTES BETWEEN ANY OF THE PARTIES ARISING OUT OF ALL RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

[Signature page follows.]

 

-59-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF this Agreement has been duly executed and delivered by each
Party as of the date first above written.

 

SELLER:

    INLAND AMERICAN REAL ESTATE TRUST, INC.     By:   /s/ Jack Potts     Name:  
Jack Potts     Title:   Treasurer

[Signature Page to Equity Interest Purchase Agreement]

--------------------------------------------------------------------------------

BUYER:

    AR CAPITAL, LLC     By:   /s/ Edward M. Weil, Jr.     Name:   Edward M.
Weil, Jr.     Title:   President

[Signature Page to Equity Interest Purchase Agreement]

--------------------------------------------------------------------------------

Exhibit A

FORM OF DEPOSIT ESCROW AGREEMENT

THIS DEPOSIT ESCROW AGREEMENT (this “Agreement”) is made and entered into as of
this             day of             , 2013 (the “Effective Date”), by and among
Inland American Real Estate Trust, Inc., a corporation organized and existing
under the laws of the State of Maryland (“Seller”), AR Capital, LLC, a Delaware
limited liability company (“Buyer”), and Chicago Title Insurance Company, a
Nebraska corporation (“Escrow Agent”). (Seller, Buyer and Escrow Agent are
sometimes referred to herein individually as a “Party”, and collectively as the
“Parties”).

WHEREAS, Seller and Buyer are parties to that certain Equity Interest Purchase
Agreement dated as of             , 2013 (the “Purchase Agreement”), for the
sale and purchase of 100% of the outstanding equity interests of the entities
set forth on Annex A thereto (collectively, the “Companies”), which entities own
the Real Property. All capitalized terms used, but not defined, in this
Agreement shall have the meaning set forth in the Purchase Agreement;

WHEREAS, Buyer is required to deposit certain monies into escrow with Escrow
Agent to be held as a Deposit for the benefit of Seller pursuant to the Purchase
Agreement in connection with the purchase of the Companies by Buyer; and

WHEREAS, Escrow Agent is willing to hold such Deposit in escrow, and invest and
disburse such Deposit, on the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereby agree as follows:

1. Deposit and Investment of Deposit

(a) Deposit and Acceptance of Deposit. No later than 5:00 P.M. New York time on
the date of the Purchase Agreement, Buyer shall deposit with Escrow Agent the
amount of one hundred million Dollars ($100,000,000.00) (together with all
interest and earnings thereon, the “Deposit”) by wire transfer of immediately
available funds. Escrow Agent shall acknowledge receipt of the Deposit by email
to the Parties.

(b) Escrow Account. Escrow Agent shall hold the Deposit in a separate escrow
account identified as account no. D2 201342522 (the “Escrow Account”) for the
benefit of Seller and Buyer pursuant to this Agreement, and shall not commingle
the Deposit with any other third-party deposits or its own funds. Because Escrow
Agent is not itself a bank, it may commingle the Deposit with other escrow
deposits in a trust account not used for payroll or accounts payable in order to
facilitate placing the Deposit in a segregated interest bearing account and to
disburse the Deposit once it has been removed from said segregated interest
bearing account in accordance with the terms of this Agreement.

 

1

--------------------------------------------------------------------------------

(c) Investment of Deposit. The Deposit or any portion thereof shall be invested
in direct obligations of the United States government or any agency or
instrumentality thereof; provided, however, that Escrow Agent shall not be
obligated to invest the Deposit or any portion thereof pursuant to this
Section 1(c) until both Seller and Buyer (i) provide their respective federal
tax identification number to Escrow Agent by the execution and delivery to
Escrow Agent of a completed IRS Form W-9, and (ii) execute and deliver to Escrow
Agent any investment forms or direction letters reasonably requested by Escrow
Agent. All interest and other amounts earned on the Deposit shall constitute
additional Deposit for all purposes of this Agreement. Buyer shall bear the risk
of loss of the Deposit, except to the extent resulting from the gross
negligence, willful default, intentional misconduct or breach of trust by Escrow
Agent, its managers, officers, employees or agents.

2. Disbursement of Deposit.

(a) Disbursement at Closing. At each Closing, a portion of the Deposit shall be
disbursed to Seller, pro rata, in accordance with the Property Allocations of
the Real Properties being transferred to Buyer at such Closing, and such
disbursement shall be applied against the Closing Cash Payment to be paid to
Seller at such Closing; provided, that in no event shall the aggregate amount of
the Deposit to be disbursed to Seller at the First Closing and the Second
Closing exceed forty million dollars ($40,000,000); provided further that if, as
of the Third Closing, the then-remaining Deposit exceeds the Closing Cash
Payment to be paid at the Third Closing, then the Deposit Escrow Agent shall
only disburse to Seller a portion of the then-remaining Deposit in an amount
equal to the Closing Cash Payment to be paid at the Third Closing, and any
excess of the then-remaining Deposit thereover shall be disbursed to Buyer at
the Third Closing. At each Closing, Buyer and Seller shall provide Escrow Agent
with joint written instructions to disburse a portion of the Deposit to Seller
and/or Buyer (if applicable) in such amount(s) as required by the Purchase
Agreement, and, upon receipt of such instructions, Escrow Agent shall disburse a
portion of the Deposit in accordance with such instructions

(b) Disbursement if Closing Not Consummated.

(i) In the event that the Purchase Agreement is validly terminated prior to the
Third Closing by (A) either Party pursuant to Section 9.1(d) of the Purchase
Agreement at a time when Buyer is in breach of any of its representations,
warranties, covenants or agreements contained therein, which breach would result
in the failure to satisfy any of the conditions set forth in Section 7.3(a) or
7.3(b) of the Purchase Agreement or (B) by Seller pursuant to Section 9.1(f) of
the Purchase Agreement, then, within one (1) Business Day of such termination,
Buyer and Seller shall provide joint written instructions to Escrow Agent,
instructing Escrow Agent to disburse the then-remaining Deposit to Seller,
subject to the provisions of Section 9.2(d) of the Purchase Agreement, and, upon
receipt of such instructions, Escrow Agent shall disburse the then-remaining
Deposit in accordance with such instructions.

(ii) In the event that the Purchase Agreement is validly terminated prior to the
Third Closing pursuant to Sections 2.9(d), 9.1(a), 9.1(b), 9.1(c), 9.1(d) (other
than in the circumstances set forth in Section 9.2(b) of the Purchase Agreement)
or 9.1(e) of the Purchase Agreement, then, within one (1) Business Day of such
termination, Buyer and Seller shall provide joint written instructions to Escrow
Agent, instructing Escrow Agent to disburse the then-remaining Deposit to Buyer,
and, upon receipt of such instructions, Escrow Agent shall disburse the Deposit
in accordance with such instructions.

 

2

--------------------------------------------------------------------------------

(iii) Notwithstanding the foregoing, if Buyer and Seller notify the Escrow Agent
that a dispute exists with respect to the disbursement of the then-remaining
Deposit, Escrow Agent shall have the right to deposit the Deposit with any court
of competent jurisdiction in Delaware and interplead Seller and Buyer. Upon
depositing the Deposit and filing its complaint in interpleader, Escrow Agent
shall be released from all liability under this Agreement regarding the Deposit,
except as otherwise expressly provided in this Agreement.

(iv) In the event that the Escrow Agent receives a notice from either Buyer or
Seller (but not both Buyer and Seller), which notice advises the Escrow Agent
that (A) the Purchase Agreement has been terminated, (B) a dispute exists with
respect to the disbursement of the then-remaining Deposit or (C) the
then-remaining Deposit should be disbursed to the Party deliverying such notice,
the Escrow Agent shall notify the Party that did not deliver such notice of the
Esrow Agent’s receipt of such notice, and shall refrain from taking any other
action with respect to the then-remaining Deposit until it has received either a
joint written instruction from Buyer and Seller, or a duly-issued court order,
directing disbursement of the then-remaining Deposit. In addition,
notwithstanding Buyer’s and Seller’s obligation to deliver joint written
instructions to the Escrow Agent within one Business Day following a valid
termination of the Purchase Agreement, as set forth in Sections 2(b)(i) and
2(b)(ii) hereof, in the event that Buyer and Seller provide such joint written
instructions to the Escrow Agent following such one Business Day period, the
Escrow Agent shall be entitled to rely on such joint written instructions and
may disburse all or any portion of the then-remaining Deposit in accordance with
such instructions.

3. Escrow Fees. All fees, costs and expenses of Escrow Agent with respect to the
escrow established pursuant to this Agreement (the “Escrow Fees”) shall be
shared equally between Seller and Buyer. All such Escrow Fees shall be due and
payable upon the disbursement of the Deposit.

4. Compliance with Court Orders. Seller and Buyer hereby acknowledge that Escrow
Agent may accept, obey and comply with any and all writs, orders, judgments or
decrees issued or entered by any court with or without jurisdiction (a “Court
Order”), in which case, notwithstanding anything to the contrary in this
Agreement, Escrow Agent shall not be liable to Seller or Buyer by reason of such
acceptance, obedience or compliance, regardless of whether such Court Order is
subsequently reversed, modified, annulled, set aside or vacated.

5. Release and Indemnification. Seller and Buyer hereby release Escrow Agent and
its officers, managers, employees and agents (each, an “Escrow Agent Party”),
from any liability, damage, loss, cost or expense incurred by Seller or Buyer to
the extent resulting from (i) any action taken or not taken in good faith upon
advice of Escrow Agent’s counsel given with respect to any questions relating to
its obligations under this Agreement, or (ii) any action taken or not taken in
reliance upon any document, including any written notice provided to Escrow
Agent pursuant to this Agreement, as to the due execution and the validity and
effectiveness of such

 

3

--------------------------------------------------------------------------------

document, and the truth and accuracy of any information contained therein, which
such Escrow Agent Party in good faith believes to be genuine, to have been
signed or presented by a duly authorized person or persons and to comply with
the terms of the Purchase Agreement and this Agreement, except to the extent
resulting from the gross negligence, willful default, intentional misconduct or
breach of trust by such Escrow Agent Party. Seller and Buyer, jointly and
severally, shall indemnify and hold harmless any Escrow Agent Party against any
liability, damage, loss, cost or expense, including, without limitation,
reasonable attorneys’ fees and court costs, incurred by such Escrow Agent Party
to the extent resulting from the performance by any Escrow Agent Party of Escrow
Agent’s obligations under this Agreement, except to the extent resulting from
the gross negligence, willful default, intentional misconduct or breach of trust
by such Escrow Agent Party.

6. Relationship of Parties. Seller and Buyer acknowledge and agree that Escrow
Agent is acting solely as a stakeholder at their request, and that Escrow Agent
shall not be deemed to be the agent of either Seller or Buyer.

7. Notices

(a) Method of Delivery. All notices and other communications under this
Agreement shall be in writing and shall be deemed given (a) when delivered
personally by hand (with written confirmation of receipt), (b) when sent by
facsimile (with written confirmation of transmission), (c) when sent by
electronic mail (with written or electronic confirmation of receipt), or (d) one
(1) Business Day after the day sent by nationally recognized overnight courier
(with written confirmation of receipt), in each case at the following addresses
and facsimile numbers (or to such other address or facsimile number as a Party
may have specified by notice given to the other Party pursuant to this
provision):

If to Seller:

Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL 60523

Attn: Scott Wilton

    Michael Podboy Telecopy: (630) 954-5655

Email: wilton@inlandgroup.com

            podboy@inlandgroup.com

with mandatory copies (which shall not constitute notice) to:

Latham & Watkins LLP

233 South Wacker Drive, Suite 5800

Chicago, Illinois 60606

Attn: Cathy A. Birkeland

Telecopy: 312-993-9767

Email: Cathy.Birkeland@lw.com

 

4

--------------------------------------------------------------------------------

If to Buyer:

AR Capital, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Attn: Michael Weil

Telecopy: (857) 207-3397

Email: mweil@arlcap.com

with mandatory copies (which shall not constitute notice) to:

AR Capital, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Attn: Jesse Galloway

Telecopy: (646) 861-7751

Email: jgalloway@arlcap.com

and

AR Capital, LLC

7621 Little Avenue, Suite 200

Charlotte, NC 28226

Attn: James A. Mezzanotte

Telecopy: (212) 415-6507

Email: jmezzanotte@arlcap.com

If to Escrow Agent:

Chicago Title Insurance Company

10 South LaSalle Street

Suite 3100

Chicago, Illinois 60603

Attn: Nancy Castro

Telecopy: 312-223-3409

Email: nancy.castro@ctt.com

(b) Change of Address. The Parties (and the Persons to whom copies of Notices
are to be delivered pursuant to Section 7(a)) shall have the right to change
their respective address and/or facsimile number for the purposes of this
Section 7 by providing a Notice of such change in address and/or facsimile as
required under this Section 7.

(c) Delivery by Party’s Counsel. The Parties agree that the attorney for such
Party shall have the authority to deliver Notices on such Party’s behalf to the
other Parties hereto.

 

5

--------------------------------------------------------------------------------

8. Assignment. No assignment of this Agreement or of any rights or obligations
hereunder may be made by any Party, directly or indirectly (by operation of law
or otherwise), without the prior written consent of the other Parties and any
attempted assignment without the required consents shall be null and void and
without any legal effect. Any such assignor shall remain jointly and severally
liable for its obligations and the obligations of its permitted assignee. Upon
any such permitted assignment, the references in this Agreement to Seller, Buyer
or Escrow Agent shall also apply to any such assignee.

9. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns pursuant to Section 8. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties any their
respective successors and permitted assigns pursuant to Section 8.

10. Conflict with Purchase Agreement. If any of the terms or provisions of this
Agreement conflict with, or are inconsistent with, any terms or provisions of
the Purchase Agreement, the terms and provisions of this Agreement shall
control.

11. Governing Law; Jurisdiction.

(a) This Agreement shall be governed and construed in accordance with the Laws
of the State of Delaware without regard to the Laws of the State of Delaware or
any other jurisdiction that would call for the application of the substantive
laws of any jurisdiction other than Delaware. This Agreement is entered into in
express reliance by the Parties on Section 2708 of Title 6 of the Delaware Code.

(b) The Parties hereby agree that any dispute arising under or in connection
with this Agreement (including the arbitrability of any such dispute and the
enforceability of this Section 11 shall be arbitrated in the Court of Chancery
of the State of Delaware, pursuant to 10 Del. C. § 349 and the rules of the
Delaware Court of Chancery. Unless the Delaware Court of Chancery is unable or
unwilling to arbitrate any particular dispute as provided below, the Parties
hereby submit to the exclusive jurisdiction of the Delaware Court of Chancery in
connection with any action to compel arbitration, in aid of arbitration, or for
provisional relief to maintain the status quo or prevent irreparable harm prior
to the appointment of the arbitrator. If the Court of Chancery of the State of
Delaware cannot or will not agree to arbitrate any particular dispute or cannot
or will not agree to conduct such arbitration on a confidential basis, the
Parties hereby agree to the exclusive jurisdiction of the American Arbitration
Association for the resolution of disputes and either Party may, at its option,
submit the dispute to an arbitrator with the American Arbitration Association in
Chicago, Illinois for adjudication within thirty (30) days pursuant to the
Commercial Arbitration Rules utilizing expedited procedures. If any dispute is
submitted for resolution pursuant to this Section 11, the prevailing Party shall
be entitled to recover from the other Party reasonable attorneys’ fees, costs
and expenses incurred in connection therewith. Each Party shall submit to the
arbitrator and exchange with the other, in accordance with a procedure to be
established by the arbitrator, such Party’s best offer with respect to the
resolution of the Dispute. If the losing Party in connection with such
arbitration fails to provide the relief determined by the arbitrator within five
(5) Business Days after such determination, the winning Party shall be entitled,
at the expense of the losing Party, to enforce the determination of the
arbitrator, utilizing the same expedited procedures in the Delaware Chancery
Court, if that court has issued the award to be enforced, or in the United
States District Court for the Northern District of Illinois if the award to be
enforced was made by the American Arbitration Association.

 

6

--------------------------------------------------------------------------------

(c) To the extent that any Party has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, each such Party hereby
irrevocably (i) waives such immunity in respect of its obligations with respect
to this Agreement and (ii) submits to the personal jurisdiction of any court
described in Section 11(b).

(d) THE PARTIES AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY DISPUTES BETWEEN ANY OF THE PARTIES ARISING OUT OF ALL RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

12. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. The Parties further agree
that if any provision contained herein is, to any extent, held invalid or
unenforceable in any respect under the Laws governing this Agreement, they shall
take any actions necessary to render the remaining provisions of this Agreement
valid and enforceable to the fullest extent permitted by Law and, to the extent
necessary, shall amend or otherwise modify this Agreement to replace any
provision contained herein that is held invalid or unenforceable with a valid
and enforceable provision giving effect to the intent of the Parties to the
greatest extent legally permissible.

13. Recitals. The recitals to this Agreement are incorporated herein by such
reference and made a part of this Agreement.

14. Entire Agreement; Amendments to Agreement. This Agreement and the Purchase
Agreement constitute the entire agreement among the Parties and supersede any
other agreements, whether written or oral, that may have been made or entered
into by or among any of the Parties or any of their respective Affiliates
relating to the transactions contemplated hereby. The Parties have voluntarily
agreed to define their rights, liabilities and obligations respecting the
transactions contemplated hereby exclusively in contract pursuant to the express
terms and provisions of this Agreement, and the Parties expressly disclaim that
they are owed any duties or are entitled to any remedies not expressly set forth
in this Agreement and the Purchase Agreement. Furthermore, the Parties each
hereby acknowledge that this Agreement embodies the justifiable expectations of
sophisticated parties derived from arm’s-length negotiations, and all Parties to
this Agreement specifically acknowledge that no Party has any special
relationship with another Party that would justify any expectation beyond that
of an ordinary buyer and an ordinary seller in an arm’s-length transaction.

15. Amendments; Waiver. This Agreement may be amended, supplemented or modified
in whole or in part if, but only if, such amendment, supplement or modification
is in writing and is signed by each Party and specific reference to this
Agreement is made in such writing. Any

 

7

--------------------------------------------------------------------------------

provision of this Agreement may be waived if, but only if, such waiver is in
writing and is signed by the Party or Parties against whom enforcement of any
such waiver is sought and specific reference to this Agreement is made in such
writing. The waiver by any Party of a breach of any provision of this Agreement
shall not operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure on the part
of any Party to exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such Party preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.

16. Counterparts; Electronic Signatures. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
be signed and transmitted by facsimile machine or electronic mail (via .pdf or
similar transmittal), and any signatures so transmitted shall be treated as an
original document.

[Remainder of page intentionally left blank;

Signatures on following pages]

 

8

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Seller, Buyer and Escrow Agent have caused this Agreement to
be executed and delivered in their names by their respective duly authorized
officers or representatives as of the Effective Date.

 

SELLER:

INLAND AMERICAN REAL ESTATE TRUST, INC.,

a Maryland corporation

By:     Name:     Title:     PURCHASER: AR CAPITAL, LLC, a Delaware limited
liability company By:     Name:     Title:     ESCROW AGENT:

CHICAGO TITLE INSURANCE COMPANY,

a Nebraska corporation

By:     Name:     Title:    

[Signature Page to Deposit Escrow Agreement]