**Exhibit 10.19****CONTRIBUTION AGREEMENT****AMONG****NEW YORK STATE COMMON RETIREMENT FUND****AND****LIBERTY PROPERTY LIMITED PARTNERSHIP****AND****LIBERTY WASHINGTON, LP**
 

 
**TABLE OF CONTENTS**           **Page** 1. CONTRIBUTION OF OWNERSHIP INTERESTS  1   1.1 Description of the Ownership Interests  1   1.2 Description of the Property  1   1.3 Schedule of Parcels  2   1.4 Value of the Interests  2 2. FORMATION OF THE COMPANY; CONTRIBUTIONS; CLOSING PROCEDURES  2   2.1 Contribution Procedures  2   2.2 Tax Treatment  3 3. PRE-CLOSING MATTERS  3   3.1 Information Provided to NYSCRF  3   3.2 Additional Service Contracts  3   3.3 Additional Tenant Leases  3   3.4 Existing Loans  3   3.5 Estoppel Letters  4 4. REPRESENTATIONS, WARRANTIES AND COVENANTS  4   4.1 Liberty’s Representations and Warranties  4   4.2 Delivery of Documents  8   4.3 Knowledge Defined  8   4.4 Liberty’s Covenants  8   4.5 Indemnity For Breach by Liberty  10   4.6 NYSCRF’s Representations and Warranties  10 5. CONDITIONS OF CLOSING  11   5.1 Closing Conditions For NYSCRF’s Benefit; Removal of a Parcel  11 
 

 
           **Page**   5.2 Conditions Precedent for Liberty’s Benefit  12 6. CLOSING  13   6.1 Closing  13   6.2 Title Insurance  15   6.3 Delivery of Documents, Possession, Keys and Other Items  15   6.4 Closing Costs; Transfer Taxes  15 7. PRORATIONS  16   7.1 Initial Proration  16   7.2 Adjustments; Reproration  17   7.3 Indemnity  17 8. SURVIVAL  18   8.1 Survival  18 9. COMMISSIONS  18   9.1 Liberty’s Indemnity  18   9.2 NYSCRF’s Indemnity  18 10. FURTHER INSTRUMENTS  19 11. TERMINATION AND REMEDIES  19   11.1 Liberty’s Default  19   11.2 NYSCRF’s Default  19   11.3 Costs and Expenses; Limitation  20   11.4 Limitation of NYSCRF Liability  20 12. RISK OF LOSS  20 13. PROVISIONS REGARDING HAZARDOUS SUBSTANCES  21   13.1 Definitions  21   13.2 Liberty’s Environmental Representations and Warranties  22 
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           **Page**   13.3 Environmental Covenant  22   13.4 Environmental Indemnification  22 14. NO ASSUMPTION  24   14.1 No Assumption  24 15. NOTICES  24   15.1 Notices  24 16. MISCELLANEOUS  25   16.1 Entire Agreement  25   16.2 Counterparts  25   16.3 Time of the Essence  25   16.4 Assignment  25   16.5 Dates  26   16.6 Binding on Successors and Assigns  26   16.7 Records  26   16.8 Confidentiality and Public Disclosure  26   16.9 Termination  26   16.10 Reporting Person  26   16.11 Paragraph Headings  26   16.12 Facsimile Signatures  26   16.13 Exculpation  27   16.14 AS IS  27   16.15 Governing Law  28   16.16 Receipt of Written Notice Defined  28 
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**CONTRIBUTION AGREEMENT**     THIS CONTRIBUTION AGREEMENT (the “**Agreement**”) is entered into among NEW YORK STATECOMMON RETIREMENT FUND (“**NYSCRF**”), LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvanialimited partnership (“**Liberty**”), and LIBERTY WASHINGTON, LP, a Delaware limited partnership(the “**Company**”).     **1. CONTRIBUTION OF OWNERSHIP INTERESTS**     1.1 Description of the Ownership Interests. In consideration of the terms andconditions hereinafter set forth, Liberty shall contribute, or cause to be contributed, to theCompany, all of Liberty’s ownership interests (the “**Contributed Interests**”) in certain ofthose entities identified on **Exhibit A** attached hereto (each a “**Contributed Entity**”and collectively, the “**Contributed Entities**”), including, without limitation, thefollowing:          (a) Liberty’s voting, approval and consent rights with respect to the Contributed Entities,whether under the Contributed Entities’ Operating Agreements (as defined in Section4.1(a)(ii)) or state law;          (b) Liberty’s rights to cash flow distributions, and other payments or distributions ofcapital, return on capital, reimbursements, repayments, fees, surplus, profits, sales proceeds orborrowings of or from the Contributed Entities (whether during the term of the Contributed Entitiesor in connection with the liquidation of the Contributed Entities), to the extent arising from andafter the Closing Date; and          (c) Liberty’s right to any allocations of tax items of the Contributed Entities that accruefor tax purposes on or after the Closing Date (as defined in Section 6.1).The terms Purchased Entities (as defined in **Schedule 2.1(b)(ii)** attached hereto) andContributed Entities are sometimes referred to herein individually as an “**Entity**” andcollectively as the “**Entities**”.     1.2 Description of the Property. Each Entity owns, directly or indirectly, eithersolely or together with another Entity, one or more office properties as expressly identified on**Exhibit A** attached hereto, including all of the following described property with respectto the applicable office property (collectively, the “**Property**”):          (a) Land. The real property at the addresses identified on **Exhibit B** attachedhereto and more fully described on **Exhibit B** attached hereto, together with all rights andappurtenances pertaining to such real property, including, without limitation, all crossaccess/reciprocal access easements and any and all right, title, and interest of the Entities inand to adjacent roads, alleys, easements, streets and ways (collectively, the “**Land**”);          (b) Improvements. All physical improvements, structures and fixtures owned by theEntities and placed, constructed or installed on the Land (collectively, the“**Improvements**”);          (c) Tenant Leases. The Entities’ interest in leases and rental agreements withtenants occupying space situated in the Improvements or otherwise having contractual rights withregard to use of the Land or the Improvements as of the Closing Date (collectively, the “**TenantLeases**”), and all existing unapplied security deposits or like payments, if any, paid
 

 
by tenants under the Tenant Leases or other security provided in connection with the Tenant Leases andidentified on the Rent Roll (as defined in Section 4.1 hereof);          (d) Service Contracts. The Entities’ interest in all (i) management and/or brokeragecontracts relating to the Land or Improvements; (ii) maintenance, repair, service and pest controlcontracts relating to the Land or Improvements; and (iii) other contracts pursuant to whichservices or goods are provided to the Land or Improvements, not to include any management agreementaffecting the Land or Improvements (collectively, the “**Service Contracts**”);          (e) Warranties, etc. The Entities’ interest in all warranties, guaranties and bondsrelating to the Land and the Improvements;          (f) Plans. All site plans, surveys, plans and specifications, floor plans, art work,brochures, and tenant correspondence files in each Entity’s possession or in the possession ofLiberty’s leasing and management agents for the Property and which relate specifically to the Landor the Improvements; and          (g) Intangible Property. All intangible property owned or held by the Entities or inwhich an Entity has an interest, if any, and the right to the use thereof, including but notlimited to, the Entities’ rights under governmental permits or approvals (to the extent same areassignable) and the right to the use of (without warranty as to exclusivity or otherwise) thenames, trade marks, trade names and telephone numbers and listings employed exclusively inconnection with the Land or the Improvements or the operations thereon (the “**IntangibleProperty**”).     1.3 Schedule of Parcels. The Property consists of separate parcels, each of which isidentified on **Exhibit A** hereto and referred to herein individually as a “**Parcel**”,and collectively as the “**Parcels**”. Each Parcel is owned directly or indirectly by theEntity identified on **Exhibit A**.     1.4 Value of the Interests. The Parties acknowledge and agree that the Interests, ashereinafter defined, have the gross value ascribed to them on **Exhibit A**, which ascribedvalue is referred to herein as the “**Gross Asset Value**”.     **2. FORMATION OF THE COMPANY; CONTRIBUTIONS; CLOSING PROCEDURES**     2.1 Contribution Procedures. When the conditions to Closing (as defined inSection 6.1) set forth in Sections 5.1 and 5.2 have been satisfied orwaived by the party for whose benefit the conditions are included, the following shall occur:          (a) Formation of Company. The parties shall execute and deliver the LimitedPartnership Agreement of the Company in the form of **Exhibit F** (the “**Partnership****Agreement**”). Liberty hereby designates Liberty Washington Venture, LLC (the“**LLC**”) to receive the general partnership interests in the Company to which Liberty isentitled by reason of its contributions hereunder. The LLC has filed or caused to be filed thecertificate of limited partnership for the Company with the Secretary of State of the Sate ofDelaware on September 21, 2007.          (b) Capital Contributions.               (i) On the day prior to the Closing Date, subject to the adjustments provided for herein, inconsideration of the terms and conditions set forth herein,
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NYSCRF shall contribute cash to theCompany an amount (herein referred to as the “**Contribution Amount**”) equal to$415,063,748.00.               (ii) On the Closing Date, the parties shall undertake the Additional Closing Proceduresdescribed on **Schedule 2.****1(b)(ii)** attached hereto, in the order set forth therein. Thetransactions described in **Schedule 2.****1(b)(ii)** shall result in Liberty making a capitalcontribution to the Company on behalf of the LLC in the aggregate amount of $138,354,583.00.          (c) Closing Costs. The Company shall pay all Closing Costs.          (d) Management and Leasing Agreement. Immediately following the completion of thecontributions referred to in Section 2.1(b) above, the Company shall cause its subsidiariesthat own the Parcels to enter into a Management and Leasing Agreement in the form of **ExhibitG**, attached hereto, for its respective parcel (the “**Management Agreement**”).Notwithstanding the foregoing, in the event that lender approval is not obtained for the assumptionof any of the Assumed Financing (as defined in Section 3.4) prior to the contribution orsale of the applicable Entity to the Company, the then-existing management agreement for suchEntity (the “**Existing Management Agreement**”) shall remain in place and effective until suchapproval is obtained or such Assumed Financing is paid off, defeased or refinanced; provided,however, that as between the Manager and the “Owner” under such Existing Management Agreement, thefees and obligations set forth in the form of Management and Leasing Agreement attached hereto as**Exhibit G** shall control.     2.2 Tax Treatment. Upon completion of the events described in Section 2.1,except as otherwise provided herein, the transaction contemplated hereby will be treated, forfederal income tax purposes, as a contribution to the Company of a twenty-five percent (25%)undivided interest in the Contributed Interests in exchange for an interest in the Company and asale to the Company of a seventy-five percent (75%) undivided interest in the Contributed Interestsin exchange for an amount realized equal to the amount of the Merger Loan (and all otherindebtedness or liabilities to which the Contributed Interests are subject or treated as subjectfor tax purposes).     **3. PRE-CLOSING MATTERS**     3.1 Information Provided to NYSCRF. NYSCRF acknowledges that Liberty has furnished ormade available to NYSCRF all of the items described on **Exhibit D** attached hereto(collectively, the “**Due Diligence Items**”).     3.2 Additional Service Contracts. From and after the date hereof, and continuinguntil Closing or the earlier terminationof this Agreement (in whole or, with respect to any Interest being terminated pursuant to thisAgreement, in part), Liberty shall not enter into any new Service Contracts with respect to theProperty without the prior consent of NYSCRF, which consent shall not be unreasonably withheld,conditioned or delayed.     3.3 Additional Tenant Leases. From and after the date hereof, and continuing untilClosing or the earlier termination of this Agreement (in whole or, with respect to any ContributedInterest being terminated pursuant to this Agreement, in part), Liberty shall not enter into anynew Tenant Leases with respect to the Property without the prior consent of NYSCRF, which consentshall not be unreasonably withheld, conditioned or delayed.     3.4 Existing Loans. Nine (9) of the Parcels are currently encumbered by mortgageloans, and one (1) Contributed Entity currently maintains a secured revolving line of credit, eachas more particularly shown on **Schedule 3.4** attached hereto (collectively, the “**ExistingLoans**"**)**. Liberty intends to undertake the following actions with respect to the Existing Loansat
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or before Closing, all at the sole cost and expense of the Company: (i) the construction loancurrently encumbering 1129 20th Street, NW will be repaid in full; (ii) the line of credit will berepaid in full; (iii) the mortgage loans currently encumbering Lakeside I & II and WillowWood III &IV will be defeased in accordance with the procedures described in **Schedule 2.****1(b)(ii)**; and(iv) the remaining Existing Loans will remain in place and will be “assumed” by the Company. TheExisting Loans described in Clauses (i)-(iii) above are referred to herein as the “**SatisfiedLoans****”**, and the Existing Loans described in Clause (iv) above are referred to herein as the**“****Assumed Financing****”**. The Assumed Financing and the Liberty Loan are referred to hereincollectively as the “**Permanent Financing**”.     3.5 Estoppel Letters. Liberty shall use diligent efforts to obtain and deliver toNYSCRF, on or before the Closing Date, estoppel letters, substantially in the form of **ExhibitJ** attached hereto, or, in the case of leases with the General Services Administration (the“**GSA**”), a Lease Status Report in the GSA’s standard form, executed by tenants occupyingmore than 25,000 square feet of the Property on the date of this Agreement.     **4. REPRESENTATIONS, WARRANTIES AND COVENANTS**     4.1 Liberty’s Representations and Warranties. Liberty represents and warrants toNYSCRF (and to the Company, as of the Closing Date) as follows (which representations andwarranties shall be true and correct as of the date hereof and as of the Closing):          (a) Entities.               (i) Each Entity is a duly formed, validly existing limited liability company or limitedpartnership organized under the laws of the State of Delaware and is duly qualified or registeredto do business in the Commonwealth of Virginia or the District of Columbia, as applicable basedupon the location of the Parcel owned by such Entity, if any.               (ii) The limited liability company agreement or partnership agreement, whichever is applicable(the “**Operating Agreements**”), of each Entity is in full force and effect, has not beenmodified, supplemented, amended or terminated and, together with the applicable Certificate ofFormation or Certificate of Limited Partnership, constitutes the sole agreement and understanding(written or oral) among the parties thereto with respect to the applicable Entity. A true andcorrect copy of the Operating Agreement of each Entity has been delivered to NYSCRF.               (iii) On the Closing Date, Liberty will be the only beneficial and legal owner of theContributed Interests, free and clear of all liens, security interests, pledges, assignments,claims, options, encumbrances, charges, commitments, and equitable interests or rights of others,of any kind whatsoever, other than the Assumed Financing and the Merger Loan.               (iv) Neither Liberty nor any Entity is the subject of any bankruptcy or other insolvencyproceeding.               (v) The Entities have no assets other than their direct or indirect interest in the Propertyas shown on **Exhibit A**, and, where applicable, direct or indirect ownership interests inEntities that own the Property.               (vi) The Entities have not conducted any business that is unrelated to their respectiveownership of the Property and, where applicable, direct or indirect ownership interests in Entitiesthat own the Property.
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               (vii) No Entity employs employees who manage, maintain or service the Property and whom theCompany would be obligated to employ subsequent to Closing. There are no collective bargainingagreements or other similar contracts or agreements with any labor union or bargaining unitrespecting the Property or the Entities.               (viii) None of the Entities is a “foreign person” within the meaning of Sections 1445 and 7701the Internal Revenue Code of 1986, as amended (hereinafter, the “**Code**”).               (ix) The Entities are not delinquent in filing any tax returns which are required to have beenfiled by them. The Entities have no outstanding liability for any Taxes (as hereinafter defined),with the exception of Tax for the current tax year that are to be allocated between Seller andBuyer as set forth in Section 7.1(f). “Tax” means any federal, state, county, provincial,local or foreign income, gross receipts, sales, use, *ad valorem*, employment, severance, transfer,gains, profits, excise, franchise, property, capital stock, premium, minimum and alternativeminimum or other taxes, fees, levies, duties, assessments or charges of any kind or naturewhatsoever imposed by any government, any governmental entity, department, commission, board,agency or instrumentality, and any court, tribunal or judicial body, in each case whether federal,state, county, provincial, local or foreign (“**Governmental Authority**”), whether such Tax ispayable directly or by withholding, together with any interest, penalties (civil or criminal),additions to or additional amounts imposed by, any Governmental Authority with respect thereto.          (b) Property.               (i) Title. Each Entity or its subsidiary that is the fee owner of the Parcel inquestion, holds or will hold as of Closing, a title insurance policy insuring fee simple ownershipof the Land and the Improvements for its respective Parcel. To Liberty’s knowledge,the Entities do not own or lease any personal property in connection with the Land andImprovements.               (ii) Litigation. There is no pending nor, to Liberty’s knowledge, threatenedlitigation or administrative proceedings that, if resolved adversely to Liberty or any Entity wouldadversely affect title to the Property or any part thereof or the ability of Liberty to perform anyof its obligations hereunder or the use of the Property by the Company as it is presently beingused or otherwise materially and adversely affect the Property, except as set forth on **Schedule4.****1(b)(ii)** (the “**Existing Litigation**”).               (iii) Notice of Liens. Liberty has not received written notice of the intention ofany governmental authority to file or impose any liens (other than statutory liens for real estatetaxes not yet due and payable) or special assessments against any of the Property, nor, toLiberty’s knowledge, do there currently exist any facts or circumstances that would allow anygovernmental authority the right to file or impose such liens or assessments.               (iv) Schedule of Leases; Rent Roll; Tenant Leases. To Liberty’s knowledge, theSchedule of Lease Documents (the “**Schedule of Leases**”) provided to NYSCRF pursuant toSection 3.1 hereof is a complete and correct list of all Tenant Leases and amendmentsthereto in effect as of the date of this Agreement. To Liberty’s knowledge, the rent roll providedto NYSCRF pursuant to Section 3.1 hereof (the “**Rent Roll**”) sets forth with respectto each of the Tenant Leases in effect on the date hereof (i) the square footage of the spacecovered thereby, (ii) the expiration date of the term thereof, (iii) the rents and other chargespayable thereunder, (iv) the amount of the security deposit thereunder, if any, and (v) anybrokerage or leasing fees due and payable thereunder. To Liberty’s knowledge, no Tenant Lease hasbeen modified, altered or amended in any respect except as set forth in the Schedule of
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Leases. To Liberty’s knowledge, there are no leases, tenancies or other rights of occupancy or use for anyportion of the Property other than pursuant to Tenant Leases, copies of which have been deliveredto NYSCRF.               (v) Encumbrances on Tenant Leases. To Liberty’s knowledge, subject to the AssumedFinancing, none of the Tenant Leases and none of the rents or other amounts payable thereunder hasbeen assigned, pledged or encumbered by Liberty, except for any assignment, pledge or encumbrancethat Liberty will cause to be terminated or released at or prior to Closing.               (vi) Brokerage or Leasing Commissions. Except as disclosed on the Rent Roll, toLiberty’s knowledge, no brokerage or leasing commissions or other compensations are due or payableby Liberty to any person, firm, corporation, partnership, limited liability company or other entity(each a “**Person**”) with respect to or on account of the current term of any of the TenantLeases. Except as disclosed in the Rent Roll or set forth in the Tenant Leases, to Liberty’sknowledge, no brokerage or leasing commissions or other compensations are due or payable by thelandlord on any extension or expansion of any Tenant Lease.               (vii) Obligations to Tenants under Tenant Leases. Except as set forth on **Schedule4.****1(b)(vii)** attached hereto, with respect to tenants in occupancy under Tenant Leases as of theClosing Date, to Liberty’s knowledge, there are no unperformed obligations to provide any tenantunder any Tenant Lease with any painting, repair, alteration, carpeting, appliance or any otherequipment or work of any kind, under any Tenant Lease or under any other oral or written agreementwhatsoever that would excuse such tenant from accepting its Premises under the terms of its lease,except for obligations (i) that will be performed and paid for by Liberty before the Closing or(ii) to complete any portion of the Premises covered by the Tenant Lease not yet occupied by thetenant thereunder and not required to be completed underthe terms of the Tenant Lease as of the Closing Date or pursuant to renewal rights underTenant Leases.               (viii) Enforceability of Tenant Leases. To Liberty’s knowledge, each of the TenantLeases is valid and subsisting and in full force and effect in accordance with its terms,provisions and conditions and constitutes the legal, valid, binding and enforceable obligation ofthe tenant thereunder, subject to laws applicable generally to creditor’s rights. As of the dateof this Agreement, neither Liberty nor, to the knowledge of Liberty, the tenant is in materialdefault thereunder. To Liberty’s knowledge, as of the date of this Agreement, (i) each tenantunder a Tenant Lease scheduled to be in possession as of the date hereof has accepted the premisescovered by its Tenant Lease and is in possession of such premises in accordance with its TenantLease, and (ii) all initial installation work, if any, required of Liberty in order for the tenantto accept the premises then in actual occupancy by a tenant under the terms of its lease has beenfully performed, paid for and accepted by each such tenant. To Liberty’s knowledge, no tenantunder a Tenant Lease that has been signed as of the date hereof has any pending litigation, offsetsor counterclaims against Liberty that, if successfully asserted, would reduce the rent payablethereunder or result in the cancellation or termination thereof. No tenant has given any writtennotice to Liberty of such tenant’s intention of instituting litigation with respect to any TenantLease or terminating its tenancy. Each of the representations and warranties set forth in thisSection 4.1(viii) is subject to the matters disclosed on **Schedule 4.1(viii)**attached hereto.               (ix) Agreements to Acquire or Possess the Property. Except as set forth in the TenantLeases, to Liberty’s knowledge, no tenant or other occupant under the Tenant Leases and no otherPerson (other than, pursuant to this Agreement, the Company) has any right or option to acquire anyfee or leasehold ownership interest in the Property, or any part thereof, from Liberty or anyEntity. Neither Liberty nor, to Liberty’s knowledge, any Entity has entered
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into any agreementwith any Person granting the right to possess the Property, other than (i) tenants in possessionpursuant to the Tenant Leases described in the Schedule of Leases, (ii) tenants under Tenant Leasesentered into by the Entities after the date hereof in accordance with Section 3.3; or (iii)matters of public record.               (x) Defects; Violations; Condemnation Proceedings. With respect to the Property,neither Liberty nor, to Liberty’s knowledge, any Entity has received any written notice from anyinsurance company, governmental agency or any other Person of (i) any condition, defect, orinadequacy affecting the Property that, if not corrected, would result in termination of insurancecoverage or materially increase its cost, (ii) any pending or threatened condemnation proceedings,or (iii) any proceedings that could or would reasonably be likely to cause the change or othermaterial modification of the zoning classification or other legal requirements, applicable to theProperty or any part thereof which would materially and adversely affect the Property. ToLiberty’s knowledge, there does not exist any court order, nor does there exist any restriction orrestrictive covenant (save and except matters of public record and all laws, statutes, ordinancesand regulations of applicable governmental authorities) or other private or public limitation, thatis reasonably likely to materially and adversely affect the use of the Property as presently beingoperated.               (xi) Mechanic’s Liens. At Closing, except for payments currently due or to become dueunder existing contracts for tenant improvements under the Tenant Leases in force and effect as ofthe date hereof and except for any payments currently due or to become due under the constructioncontracts for the development of the Parcel located at 1129 20th Street, NW, Washington, D.C., toLiberty’s knowledge, there will not be any unpaid charges, debts, liabilities, claims orobligations of Liberty or any Entity arising from the construction, occupancy, ownership, use oroperation of the Property which could give rise to any mechanics’ or materialmen’s or otherstatutory liens against any of the Property that will not be paid by Liberty or an Entity at theClosing (or bonded over in a manner reasonably acceptable toNYSCRF and the Title Company and in accordance with the provisions of any applicable statutesor regulations or affirmatively insured against by the Title Company to NYSCRF’s reasonablesatisfaction or for which Liberty may be willing to escrow funds, to the reasonable satisfaction ofNYSCRF).               (xii) Governmental Requirements. Neither Liberty nor, to Liberty’s knowledge, anyEntity has received a written notice from any Governmental Authority asserting a violation of anyuncured restrictive covenants, deed restrictions or zoning requirements or other applicableGovernmental Requirements (as defined in Section 13.1(a) hereof) affecting the Property.               (xiii) Streets and Highways. Neither Liberty nor, to Liberty’s knowledge, any Entityhas received a written notice of any existing plans to widen, modify or realign any streetadjoining the Property.               (xiv) Unfulfilled Binding Commitments. No commitments have been made by Liberty nor,to Liberty’s knowledge, any Entity to any Governmental Authority, utility company, school board,church or other religious body, or any homeowners or homeowners’ association, or any otherorganization, group or individual, relating to the Property (other than with respect to anydeclaration in place at the Property) that would impose an obligation upon the Company or itssuccessors or assigns to make any contribution or dedications of money or land or to construct,install or maintain any improvements of a public or private nature on or off the Property, exceptfor obligations due under the Tenant Leases and all recorded instruments.
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               (xv) Service Contracts, Tenant Leases, etc. To Liberty’s knowledge, there are noother contracts (including collective bargaining agreements), other than the Service Contracts, theTenant Leases and matters of public record, that materially and adversely affect the Property orthe operation thereof except as provided to NYSCRF pursuant to Section 3.1.          (c) Liberty.               (i) Existence; Authority. Liberty has been formed as a limited partnership under thelaws of the Commonwealth of Pennsylvania and is in good standing under the laws of suchcommonwealth. The execution and delivery of, and Liberty’s performance under, this Agreement arewithin Liberty’s powers and have been duly authorized by all requisite action. The Personsexecuting this Agreement on behalf of Liberty have the authority to do so. This Agreementconstitutes the legal, valid and binding obligation of Liberty and is enforceable against Libertyin accordance with its terms, subject to laws applicable generally to creditor’s rights. Except tothe extent lender approval for the assumption by the Company of the Assumed Financing is notobtained prior to Closing, performance of this Agreement will not result in any breach of, orconstitute any default under, or result in the imposition of any lien or encumbrance upon theProperty under, any agreement or other instrument to which Liberty is a party or by which Libertyor the Property is bound. Except as disclosed on **Exhibit H** hereto, no consent or approvalof any Person, Entity or of any Governmental Authority is required with respect to the executionand delivery of this Agreement by Liberty or the consummation by Liberty of the transactionscontemplated hereby or the performance by Liberty of its obligations hereunder.               (ii) Foreign Person. Liberty is not a “foreign person” within the meaning of Sections1445 and 7701 of the Code.     4.2 Delivery of Documents. To Liberty’s knowledge, all of the Leases, Service Contracts and financial informationpertaining to the Property (collectively, the “**Documents**”) submitted by or on behalf ofLiberty to NYSCRF hereunder that Liberty or Liberty’s employees or agents prepared shall be true,correct and complete in all material respects. Liberty has no knowledge that any of the Documentssubmitted by or on behalf of Liberty to NYSCRF hereunder which were prepared by third partiescontain material inaccuracies or omissions. The copies of Documents submitted shall be completeand correct copies of the documents in Liberty’s possession.     4.3 Knowledge Defined. Whenever a representation or warranty is made herein as being“to the knowledge of” or “known” to Liberty, or phrases of similar import, such phrase shall meanfacts actually known to the following officers of Liberty on the date hereof without anyindependent investigation: Michael Hagan, Chief Investment Officer, and Richard Casey, Director ofDue Diligence.     4.4 Liberty’s Covenants. Liberty hereby covenants and agrees with NYSCRF that, afterthe date of this Agreement and until the earlier of the termination of this Agreement or theClosing:          (a) No Assignment or Transfer. Liberty shall not convey the Contributed Interests inthe Contributed Property except to NYSCRF or its permitted assigns, and Liberty shall not make anymaterial amendments to the Operating Agreements nor cause any alterations to any portion of theProperty except as otherwise expressly permitted under this Agreement.          (b) Operation and Management of the Property. From Liberty’s acquisition of theContributed Interests and until the Closing, Liberty shall cause the Property to be operated andmaintained in at least the same quality and manner as Republic operated and maintained the
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Propertyprior to the date hereof. Without the prior written consent of NYSCRF, Liberty will not initiateor permit any zoning reclassification of the Property or seek any variance under existing zoningordinances applicable to the Property to use or permit the use of the Property in such a mannerthat would result in such use becoming a nonconforming use under applicable zoning ordinances orother Governmental Requirements. Liberty will not impose any restrictive covenants or encumbrances(other than Tenant Leases) on the Property or execute or file any subdivision plat affecting theProperty without the prior written consent of NYSCRF.          (c) Insurance. Liberty hereby agrees that from Liberty’s acquisition of theContributed Interests and until the Closing, it will maintain, or cause to be maintained, in fullforce and effect full replacement value and/or all risk fire and extended coverage insurance uponthe Property and public liability insurance with respect to damage or injury to persons or propertyoccurring on the Property in such amounts as is maintained by Republic on the date of thisAgreement (such amounts to be increased, if necessary, upon further construction).          (d) No Solicitation. Liberty, on behalf of itself, its agents, contractors andrepresentatives, agrees that from the date hereof until the earlier of the Closing or the date thatthis Agreement is terminated, it will not accept any offers to purchase or otherwise acquire theEntities or the Property from any party other than the Company or NYSCRF and will not market theEntities or the Property to any other parties.          (e) Condemnation; Injury; Damages. Promptly upon obtaining knowledge of theinstitution of any proceedings for the condemnation of the Property, or any portion thereof, or anyother proceedings arising out of injury or damage to the Property, or any portion thereof, Libertywill notify NYSCRF of the pendency of such proceedings.          (f) Governmental Requirements; Litigation. Liberty will advise NYSCRF promptly of anylitigation, arbitration or administrative hearing concerning or affecting the Property or theownership and/or operation thereof of which Liberty has actual knowledge or written notice.          (g) Liens. Except for the liens of the Assumed Financing and liens that Liberty shallbe obligated to release at or prior to Closing, Liberty shall not grant, consent or permit thefiling of any lien or encumbrance against the Property or any portion thereof subsequent to thedate hereof. Liberty will not, without the prior written consent of NYSCRF, sell, lease, exchange,assign, transfer, convey or otherwise dispose of all or any part of the Property or any interesttherein, or permit any of the foregoing, except pursuant to Tenant Leases and other leases approvedin writing in advance by NYSCRF pursuant to the terms hereof.          (h) Existence. Liberty will continuously maintain Liberty’s existence as a limitedpartnership. From and after Liberty’s acquisition of the Contributed Interests and until theClosing, Liberty will continuously maintain the Entities’ existence as limited liability companiesor limited partnerships, as applicable.          (i) Books and Records. From and after Liberty’s acquisition of the ContributedInterests and until the Closing, Liberty will keep or cause to be kept accurate books and recordsof the operation of the Property in substantially the same manner as Liberty or its predecessors ininterest have maintained such books and records prior to the date of this Agreement, and in whichfull, true and correct entries shall be made as soon as reasonably practical as to all operationson the Property, and all such books and records shall at all times during reasonable business hoursbe subject to inspection by NYSCRF and its duly authorized representatives, subject to Republic’sapproval.
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          (j) Tenant Improvements; Leasing Commissions. After Closing, Liberty shall, atLiberty’s sole cost and expense, cause the completion of the tenant improvement work listed on**Schedule 4.4(j)** in accordance with terms of the applicable lease or other agreement givingrise to the obligation. Furthermore, Liberty shall be solely responsible for the payment of thoseleasing commissions listed on **Schedule 4.4(j)**. This Section 4.4(j) shall surviveClosing.          (k) Severance Payments. Liberty shall, at Liberty’s sole cost and expense, pay anyand all severance payments to any employee or former employee of RPLP, or any Entity, triggered bythe transactions contemplated by this Agreement. This Section 4.4(k) shall surviveClosing.          (l) Existing Litigation. Liberty agrees to indemnify, defend and hold NYSCRF and theCompany harmless from and against any claim, loss, cost or damage arising by reason of the ExistingLitigation. This Section 4.4(l) shall survive Closing.     4.5 Indemnity For Breach by Liberty. Subject to the other provisions hereof(including the provisions of Section 11.1), if Closing occurs, Liberty shall indemnifyNYSCRF and the Company and their successors and assigns, against and shall defend and hold NYSCRFand the Company and their successors and assigns, harmless from, all costs, expenses, and actualdamages, including reasonable attorneys’ fees, that NYSCRF, the Company and/or NYSCRF’s or theCompany’s successors or assigns actually incur because of any breach of any of the representations,warranties or covenants of Liberty herein contained incurred prior to [The confidential material contained herein hasbeen omitted and has been separately filedwith the Commission.] after theClosing. Notwithstanding the foregoing, if NYSCRF has actual knowledge of any such breach prior toClosing and nonetheless proceeds with the Closing, then in such event any such breach shall bedeemed waived byNYSCRF. NYSCRF and the Company hereby specifically waive any and all rights which they mayhave to exemplary, punitive or consequential damages as a result of Liberty’s default under thisAgreement.     4.6 NYSCRF’s Representations and Warranties. NYSCRF represents and warrants toLiberty as follows (which representations and warranties shall be true and correct as of the datehereof and as of the Closing Date):          (a) Authority. NYSCRF has duly and validly authorized and executed this Agreement,and it has full right, title, power and authority to enter into this Agreement and to carry out allof its terms;          (b) No Violation; Consent. The execution and delivery by NYSCRF of, consummation oftransactions provided for in, and compliance by NYSCRF with all of the provisions of this Agreementwill not violate the organizational documents of NYSCRF and do not require any approval or consentof any trustee or holders of any of its debt (except for approvals already obtained).          (c) Sophisticated Investor. NYSCRF is a sophisticated investor experienced incommercial real estate investments. NYSCRF has sufficient experience of and knowledge about theoperations of multi-tenant commercial properties to be able to exercise its approval powers in thisAgreement and under the Partnership Agreement in a commercially reasonable manner and withoutdelay.          (d) Indemnity For Breach by NYSCRF. Subject to the other provisions hereof (includingthe provisions of Section 11.2), if Closing occurs NYSCRF shall indemnify Liberty and theCompany and their successors and assigns, against and shall defend and hold Liberty and the Companyand their successors and assigns, harmless from, all costs, expenses, and actual damages, includingreasonable attorneys’ fees, that Liberty, the Company and/or Liberty’s or the Company’s successorsor assigns actually incur because of any breach of any of
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the representations, warranties orcovenants of NYSCRF herein contained incurred prior to one (1) year after the Closing.Notwithstanding the foregoing, if Liberty has actual knowledge of any such breach prior to Closingand nonetheless proceeds with the Closing, then in such event any such breach shall be deemedwaived by Liberty. Liberty and the Company hereby specifically waive any and all rights that theymay have to exemplary, punitive or consequential damages as a result of NYSCRF’s default under thisAgreement.     **5. CONDITIONS OF CLOSING**     5.1 Closing Conditions For NYSCRF’s Benefit. The obligations of NYSCRF to consummatethe transaction contemplated hereby are subject to the following conditions, any of which, if notfulfilled by the Closing or as otherwise provided herein, shall entitle NYSCRF (at its option) toterminate this Agreement as provided below:          (a) Merger. All conditions to the merger of RPLP with and into Liberty (the“**Merger**”), as well as the merger of Republic Property Trust with and into LibertyAcquisition LLC (the **REIT Merger**”), pursuant to that certain Agreement of Plan and Merger,dated as ofJuly 23, 2007 (the “**Merger Agreement**”), shall have been satisfied in accordance withthe terms of the Merger Agreement.          (b) Absence of Judicial Action. The transactions contemplated under this Agreement tobe effected on the Closing Date shall not have been restrained or prohibited by any injunction ororder or judgment rendered by any court or other governmental agency of competent jurisdiction andno proceeding shall have been instituted and be pending in which any creditor of Liberty or anyother Person seeks to restrain such transactions or otherwise to attach any of the Property,*provided*that any such proceeding or action contemplated by this Section 5.1(a) shall notbe deemed to include any proceeding or action brought by, through or under NYSCRF.          (c) Representations and Warranties. All representations and warranties made byLiberty herein shall at the time of Closing be true and correct in all material respects.          (d) Absence of Litigation. On the Closing Date, Liberty shall have received nowritten notice of any litigation pending or threatened against the Entities or the Property that,if resolved adversely to the Entities or the Property, would have a material adverse effect on theEntities or the Property, except for litigation related to the matters disclosed on **Schedule4.1(b)(ii)**.          (e) Covenants of Liberty. On the Closing Date, all of the covenants and agreementsherein on the part of Liberty to be complied with or performed on or before the Closing Date shallhave been fully complied with and performed in all material respects, and there shall exist nomaterial default or material breach by Liberty under this Agreement.          (f) Insolvency. On the Closing Date, Liberty and the Entities shall not be insolvent(*i.e*., unable to pay its debts as they become due), shall not have been held or alleged to havemade a transfer in fraud of creditors and shall not have made a general assignment for the benefitof creditors.          (g) Receiver. On the Closing Date, neither a receiver nor a trustee nor a custodianshall have been appointed for, or shall have taken possession of, all or substantially all of theassets of Liberty or any Entity or any of the Property, either in a proceeding brought by Libertyor in a proceeding brought against Liberty or an Entity.
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          (h) Bankruptcy. On the Closing Date, neither Liberty nor any Entity shall have fileda petition for relief under the Federal Bankruptcy Code or any other present or future federal orstate insolvency, bankruptcy or similar law (all of the foregoing hereinafter collectively called“**Applicable Bankruptcy Law**”) nor shall an involuntary petition for relief have been filedagainst Liberty or any Entity under any Applicable Bankruptcy Law and not been dismissed, nor shallany order for relief naming Liberty or an Entity have been entered under any Applicable BankruptcyLaw, nor shall any composition, rearrangement, extension, reorganization or other relief of debtorsnow or hereafter existing have been requested or consented to by Liberty or any Entity.          (i) Execution. On the Closing Date, neither the Property nor any part thereof or anyinterest therein shall have been taken by execution or other process of law in any action againstLiberty or an Entity.          (j) Completion of the Partnership Agreement. All Exhibits not attached to the form ofthe Partnership Agreement attached hereto as **Exhibit F** shall have been completed and suchExhibits reasonably approved by Liberty and NYSCRF.          (k) Owner’s Policies. On the Closing Date, the Title Company shall be unconditionallycommitted to deliver the Owner’s Policy to each Entity (or its subsidiary) that directly ownsProperty, in accordance with Section 6.2.If any one or more of the above conditions is not satisfied by the Closing Date, NYSCRF may at itsoption either (i) waive such remaining conditions and proceed to Closing; or (ii) if such failureis not satisfied prior to closing on the Merger, NYSCRF may terminate this Agreement by writtennotice thereof to Liberty and, except for such obligations and indemnities that expressly survivethe termination of this Agreement, the parties shall have no further right or obligation hereunder;*provided, however*, if such failure to satisfy any condition is a result of a default or breach byLiberty under this Agreement, NYSCRF shall also have the rights provided under Section11.1(b) hereof.     5.2 Conditions Precedent for Liberty’s Benefit. The obligations of Liberty toconsummate the transactions contemplated hereby are subject to the following conditions which, ifnot fulfilled by the Closing or as otherwise provided herein, shall entitle Liberty, at its option,to terminate the Agreement:          (a) Merger. All conditions to the Merger and the REIT Merger shall have beensatisfied in accordance with the terms of the Merger Agreement.          (b) Covenants of NYSCRF. All of the covenants and agreements herein on the part ofNYSCRF to be complied with or performed on or before the Closing Date shall have been fullycomplied with and performed.          (c) Representations and Warranties. All representations and warranties made by NYSCRFherein shall have been and remain true and correct in all material respects.          (d) Completion of the Partnership Agreement. All exhibits not attached to the form ofthe Partnership Agreement attached hereto as **Exhibit F** shall be completed and such Exhibitsreasonably approved by Liberty and NYSCRF.          (e) Absence of Judicial Action. The transactions contemplated under this Agreement tobe effected on the Closing Date shall not have been restrained or prohibited by any injunction ororder or judgment rendered by any court or other governmental agency of competent jurisdiction.
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          (f) Owner’s Policies. On the Closing Date, the Title Company shall be unconditionallycommitted to deliver the Owner’s Policy to each Entity (or its subsidiary) that directly ownsProperty, in accordance with Section 6.2.     **6. CLOSING**     6.1 Closing. The closing of the transactions contemplated herein shall be held on thedate of the Merger (the “**Closing Date**” or the “**Closing**”), unless otherwisespecified herein. The Closing shall be held at the Philadelphia, Pennsylvania offices of Wolf,Block, Schorr and Solis-Cohen LLP, or at such other location as may be acceptable to Liberty andNYSCRF, or at the election of either party, by delivery of documents in escrow to the Title Companytogether with escrow instructions that otherwise comport with the terms of this Agreement.          (a) Liberty Closing Obligations. At the Closing, Liberty shall deliver or cause to bedelivered executed counterparts of the Partnership Agreement and the Management Agreement.          (b) Liberty Closing Documents. At or before Closing (as the case may be pursuant tothis Agreement), Liberty shall deliver or cause to be delivered for the benefit of the Company theitems specified herein (with copies to NYSCRF) and the following documents and instruments, eachduly executed and, where necessary, acknowledged:               (i) a promissory note for the Merger Loan;               (ii) an assignment and assumption agreement (the “**Liberty Loan Assignment**”) in theform of **Exhibit K** attached hereto, whereby Liberty assigns, and the Company assumes, all ofthe rights and obligations of the borrower under the Liberty Loan Documents;               (iii) one or more assignment of interests (the “**Assignments**”) in the form of**Exhibit E** attached hereto, dated as of the Closing Date, conveying the ContributedInterests to the Company;               (iv) the Purchase Money Loan Documents, and an assignment to the Company of the lender’srights thereunder;               (v) copies of the assignments of the Purchased Interests to the Company;               (vi) if necessary, tenant notification agreements, dated the Closing Date, containingLiberty’s authorization to the tenants of the Property for payment of rental directly to theCompany or the Company’s managing agent, in form acceptable to NYSCRF and Liberty (the “**TenantNotices**”);               (vii) a Schedule of Leases and Rent Roll for the Property that is current as of August 31,2007, containing all the matters described in Section 4.1(b)(iv), certified by Liberty toLiberty’s knowledge, to be true, complete and correct in all material respects as of the ClosingDate and showing no changes in the Schedule of Leases and Rent Roll, except for additional TenantLeases, terminations of Tenant Leases that have expired by their terms, terminations of TenantLeases for reasons other than the expiration of their terms not in excess of, in the aggregate,[The confidential material contained herein hasbeen omitted and has been separately filedwith the Commission.] square feet of gross leaseable area, and other changes approved by NYSCRF in writing orotherwise permitted pursuant to the terms hereof, or that do not constitute a material adverseeffect;
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               (viii) evidence reasonably acceptable to the Title Company authorizing the consummation byLiberty of the transactions contemplated hereby and the execution and delivery of the closingdocuments on behalf of Liberty;               (ix) such documents, if any, as may be required to assign or withdraw Liberty’s right to usethe trade names, if any, of the Property;               (x) an executed certificate with respect to Liberty’s non-foreign status sufficient to complywith the requirements of Section 1445 of the Code, commonly known as the Foreign Investment in RealProperty Tax Act of 1980, and regulations applicable thereto;               (xi) an executed copy of Internal Revenue Service Form 1099 as required by the Tax Reform Actof 1986, and all regulations applicable thereto;               (xii) copies of executed Tenant Leases, to the extent in Liberty’s control and not previouslydelivered to NYSCRF;               (xiii) executed counterparts of the Partnership Agreement; and               (xiv) executed counterparts of the Management Agreement.          (c) NYSCRF Closing Obligations. At or before the Closing (as the case may be pursuantto this Agreement), NYSCRF, or its permitted assignee, shall do the following:               (i) on the day before the Closing, deposit with LaSalle Bank National Association (theTransfer Agent for the Merger) the Contribution Amount, adjusted as provided herein, by wiretransfer in immediately available funds; and               (ii) on the day of Closing, deliver executed counterparts of the Partnership Agreement.          (d) Company Obligations. At or prior to Closing (as the case may be pursuant to thisAgreement), NYSCRF and Liberty shall cause the Company to assume all obligations of Liberty underthe Operating Agreements, and the Assumed Financing pursuant to the forms of documents referencedin Section 6.1(b). In addition, at Closing, NYSCRF and Liberty shall cause the Company todo the following:               (i) deliver evidence acceptable to the Title Company and reasonably acceptable to Liberty,authorizing the consummation by the Company of the transactions contemplated hereby and theexecution and delivery of the closing documents on behalf of the Company;               (ii) execute and deliver the agreements of sale contemplated by the Recitals, if any;               (iii) deliver the Purchase Money Loan Documents to RPLP in accordance with the Recitals, ifany;               (iv) execute and deliver an assignment and assumption agreement sufficient for the Company toacquire the Purchased Interests pursuant to the Recitals, if applicable;               (v) fund the Merger Loan;
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               (vi) execute and deliver the Liberty Loan Assignment; and               (vii) deliver executed counterparts of the Management Agreement.To the extent the consent of NYSCRF is required under the Partnership Agreement or otherwise inorder for the Company to perform any of the foregoing actions or deliver any of any of the aboveitems, NYSCRF hereby consents.          (e) Further Assurances. At the Closing, the Company, Liberty and NYSCRF shall executeand deliver, or cause to be executed or delivered, such other instruments and documents as may benecessary in order to complete the Closing of the transactions contemplated hereunder, the form andcontent of which shall be reasonably acceptable to Liberty and NYSCRF.          (f) Delivery of Closing Documents. The Company, Liberty and NYSCRF acknowledge andagree to use commercially reasonable efforts to execute and deliver to the Title Company to hold inescrow all documents required to be delivered at the Closing pursuant to this Section 6.1at least two (2) business days prior to the Closing Date.     6.2 Title Insurance. At the Closing, Commonwealth Land Title Insurance Company (the“**Title Company**”) shall furnish each Entity (or its subsidiary that is the direct owner of Property)with an owner’s policy of title insurance (an “**Owner’s Policy**”) that substantially conforms to themarked-up title commitments previously delivered by Liberty to NYSCRF. The Owner’s Policies to beissued at Closing shall contain (to the extent available in the applicable jurisdiction): (i) anaffirmative endorsement insuring the Company that there are no violations of any restrictivecovenants affecting the Property, (ii) an access endorsement insuring vehicular and pedestrianaccess to all contiguous streets from all present points of entry; (iii) a contiguity endorsement,if applicable; (iv) a survey endorsement; (v) a location endorsement; (vi) an endorsement deletingthe creditor’s rights exception; (vii) a non-imputation endorsement; and (viii) a zoningendorsement (completed structures, including parking and loading dock). The Title Company hasexecuted the joinder attached to this Agreement to evidence its agreement to, among other things,the provisions of this Section 6.2.     6.3 Delivery of Documents, Possession, Keys and Other Items. At the Closing, Libertyshall (i) provide the Company with the originals of all available documents within Liberty’spossession or control, copies of which were provided to NYSCRF pursuant to Section 3.1hereof, and (ii) deliver or cause to be delivered to the Company all books and records in Liberty’spossession pertaining to the Entities. All such documents which are located at the Property may bedelivered with the Property. Any other such documents shall be made available to the Company byLiberty at a mutually convenient time and place, and Liberty may retain additional copies of suchitems as it deems necessary or convenient. NYSCRF acknowledges that the Company and Liberty havethe same principal offices and that no physical transfer of such documents will be required.     6.4 Closing Costs; Transfer Taxes.          (a) [The confidential material contained herein hasbeen omitted and has been separately filedwith the Commission.]
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          (c) Liberty and NYSCRF each shall pay their respective legal fees incurred in negotiating thisAgreement, the Partnership Agreement and related joint venture documents.          (d) In the event of any post-Closing increase or decrease in the amount of transfer taxpayable hereunder, the parties hereto shall pay or be reimbursed for such increase or decrease, asthe case may be, in accordance with, and in proportion to, each party’s obligation as set forth inthis Section 6.4. This Section 6.4(d) shall survive Closing.     **7. PRORATIONS**     7.1 Initial Proration. Within [The confidential material contained herein hasbeen omitted and has been separately filedwith the Commission.] days after the Closing Date, theparties shall prorate the following items as of the Closing Date:          (a) Taxes. All real estate taxes with respect to the Property shall be proratedbetween Liberty and the Company as of the Closing Date.          (b) Rents. Rent shall be prorated as of the Closing Date, except that no prorationshall be made for rents delinquent as of the Closing Date (hereinafter called the “DelinquentRents”). The Company shall have no liability to Liberty for the Delinquent Rents and shall have noobligation to collect same, *provided, however*, amounts collected by the Company or the Entitiesfrom tenants owing Delinquent Rents shall be applied first to rents owed by such tenant accruingfrom and after the Closing Date and then to Delinquent Rents. Any such amounts applicable toDelinquent Rents received by the Company or the Entities shall be forwarded to Liberty withinfifteen (15) days of receipt thereof. Liberty reserves the right to pursue legal remedies againsttenants owing Delinquent Rents so long as pursuit of its legal remedies does not cause the tenantto be evicted.          (c) Operating Costs. All operating expenses, including utilities (to the extent notpaid directly by tenants), maintenance and other operating costs and expenses incurred by theEntities in connection with the ownership, operation, maintenance and management of the Propertyshall be prorated between Liberty and the Company as of the Closing.          (d) Insurance Premiums. Insurance premiums shall be prorated as of the Closing Date.          (e) Other Income and Expenses. All other income from, and expenses of, the Property,including but not limited to public utility charges, maintenance charges and service
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charges, shallbe prorated as of the Closing Date and the Company shall assume such expenses for periodssubsequent to Closing.          (f) Federal, State and Local Taxes. To the maximum extent permissible, for Federal,State and local tax purposes the parties will cause the Entities and their subsidiaries to treatthe Closing Date as the beginning of a fiscal period. Liberty will file all returns and pay alltaxes owing for periods through the day preceding the Closing Date and the Company will file allreturns and pay all taxes owing for periods beginning with the Closing Date. If and to the extentthat such filing of separate returns is not permitted by any taxing authority, and as to any taxthat applies to a period both before and after the Closing Date, the parties will cooperate in thefurnishing of information necessary to the preparation and filing of returns, and will pay theirrespective shares of tax liability in proportion to their respective shares of the thing taxed (forexample, gross receipts or net income). The obligations of the parties hereunder shall surviveClosing until each such tax return has been filed, all such taxes owing have been paid and suchreturns and payments are no longer subject to contest by the taxing authority. Notwithstanding theforegoing, for tax purposes, closing shall be deemed to occur at 11:59 p.m. (local Washington, D.C.time) on the day preceding the Closing Date.          (g) Assumed Financing. Interest, credits, costs and expenses (other than the costsand expenses described in Section 6.4(b)(iii), which shall be the sole obligation of the Company)related to the Assumed Financing will be adjusted and apportioned between Liberty and the Companyin accordance with the following: (i) prepaid interest will be paid to Liberty by the Company andaccrued, but unpaid interest will be paid by Liberty with both to be apportioned as of the daypreceding the Closing Date; and (ii) Liberty will be entitled to receive the amounts (includingaccrued interest) of any escrow and other sums on deposit with a lender under the Assumed Financing(including any escrow reserves) when disbursed by the holder of such Assumed Financing.     7.2 Adjustments; Reproration. After receipt of final financial statements for theEntities for the current year or applicable fiscal period, Liberty shall prepare and present toNYSCRF a calculation of the reproration of the profits and losses of the Entities to be passedthrough to the Company. The parties shall make the appropriate adjusting payment between themwithin 30 days after presentment to NYSCRF of Liberty’s calculation. This provision shall survivethe Closing.     7.3 Indemnity.          (a) Except for items to be prorated and reprorated by Liberty and NYSCRF pursuant to thisArticle 7, Liberty hereby assumes full responsibility for any and all demands, claims,legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens,judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs),whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account ofor in any way be connected with the ownership of the Interests, Entities or the Property firstarising or accruing prior to the Closing Date, including, without limitation, the ExistingLitigation. Liberty also agrees to indemnify, defend and hold the Company and NYSCRF harmless fromany claims, liabilities or costs (including reasonable attorneys’ fees) arising from Liberty’sfailure to perform said obligations.          (b) Except for items to be prorated and reprorated by Liberty and NYSCRF pursuant to thisArticle 7, the Company hereby assumes full responsibility for any and all demands, claims,legal or administrative proceedings, losses, liabilities, damages, penalties,fines, liens, judgments, costs or expenses whatsoever (including, without limitation,attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen(“Losses
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and Liabilities”), which may arise on account of or in any way be connected with theownership of the Property first arising or accruing on or after to the Closing Date, excluding,however, any Liberty Losses and Liabilities (hereinafter defined). The Company also agrees toindemnify, defend and hold Liberty harmless from any claims, liabilities or costs (includingreasonable attorneys’ fees) arising from the Company’s failure to perform said obligations,provided the same do not arise on account of Liberty Losses and Liabilities. As used herein,“Liberty Losses and Liabilities” are any Losses and Liabilities which may arise on account of or inany way be connected with any action by Liberty or the LLC (a) that was not taken in the reasonablebelief that it was within their scope of authority under the Partnership Agreement, (b)constituting fraud, bad faith, negligence or willful misconduct, or a breach of the standards setforth in Section 6.02(d) of the Partnership Agreement, or (c) in violation of securitieslaws or criminal laws.          (c) The provisions of this Section 7.3 shall survive the Closing.     **8. SURVIVAL**     8.1 Survival. Except as otherwise expressly provided herein, all warrantiesrepresentations, covenants, obligations and agreements contained in this Agreement shall survivethe execution and delivery of this Agreement and shall survive the Closing for a period of one (1)year and any right of action for the breach of any representation, warranty or covenant containedherein shall not merge with the Assignment but shall survive the Closing for such one (1) yearperiod and may be enforced by the Company. In addition to all other remedies that NYSCRF and/orthe Company may have at law or in equity, the Company may offset any final, non-appealable judgmentit obtains against Liberty against any distributions due to Liberty from the Company.Notwithstanding anything contained in this Agreement to the contrary, the representations andwarranties contained in Section 4.1(a) shall survive the Closing.     **9. COMMISSIONS**     9.1 Liberty’s Indemnity. LIBERTY SHALL INDEMNIFY NYSCRF AND THE COMPANY AND HOLD ANDDEFEND NYSCRF AND THE COMPANY HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, LIABILITIES,DAMAGES, DEMANDS, COSTS AND EXPENSES (INCLUDING ACTUAL, REASONABLE ATTORNEYS’ FEES AT OR BEFORE THETRIAL LEVEL AND ANY APPELLATE PROCEEDINGS) ARISING OUT OF ANY CLAIM MADE BY ANY REALTOR, BROKER,FINDER, OR ANY OTHER INTERMEDIARY WHO CLAIMS TO HAVE BEEN ENGAGED, CONTRACTED OR UTILIZED BYLIBERTY IN CONNECTION WITH THE TRANSACTIONS THAT ARE THE SUBJECT MATTER OF THIS AGREEMENT. THISINDEMNIFICATION SHALL SURVIVE THE CLOSING.     9.2 NYSCRF’s Indemnity. NYSCRF SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND LIBERTY ANDTHE COMPANY FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, DEMANDS, COSTS ANDEXPENSES (INCLUDING ACTUAL, REASONABLE ATTORNEYS’ FEES AT OR BEFORE THE TRIAL LEVEL AND ANYAPPELLATE PROCEEDINGS) ARISING OUT OF ANY CLAIM MADE BY ANY REALTOR, BROKER, FINDER OR ANY OTHERINTERMEDIARY WHOCLAIMS TO HAVE BEEN ENGAGED, CONTRACTED OR UTILIZED BY NYSCRF IN CONNECTION WITH THETRANSACTIONS THAT ARE THE SUBJECT MATTER OF
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THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY ANDALL FEES PAYABLE TO HEITMAN CAPITAL MANAGEMENT LLC IN CONNECTION WITH THE TRANSACTIONS THAT ARE THESUBJECT MATTER OF THIS AGREEMENT. THIS INDEMNIFICATION SHALL SURVIVE THE CLOSING.     **10. FURTHER INSTRUMENTS**     Liberty will, whenever reasonably requested by NYSCRF, and NYSCRF will, whenever reasonablyrequested by Liberty, execute, acknowledge and deliver, or cause to be executed, acknowledged anddelivered, any and all conveyances, assignments and all other instruments and documents as may bereasonably necessary in order to complete the transaction herein provided and to carry out theterms and provisions of this Agreement.     **11. TERMINATION AND REMEDIES**     11.1 Liberty’s Default.          (a) Subject to the provisions of Section 11.1(b) below, if Liberty has not terminatedthis Agreement pursuant to any of the provisions hereof authorizing such termination, and if priorto or at the Closing Liberty defaults hereunder or shall have failed to have performed any of thematerial covenants and/or agreements contained herein that are to be performed by Liberty at orprior to the Closing, or if any warranty or representation made by Liberty herein is not true andcorrect in all material respects, NYSCRF may, at its option, as its sole and exclusive remedies,either (i) seek specific performance of this Agreement, or (ii) terminate this Agreement.          (b) Notwithstanding anything in Section 11.1(a) to the contrary, NYSCRF will, prior tothe exercise of the remedies contained in Section 11.1(a), give Liberty written notice(“**NYSCRF’s Default Notice**”) specifying the nature of such default. Until the date that isfive (5) days after receipt of NYSCRF’s Default Notice, Liberty may, at its option, elect to curesuch default or waive the option to cure the default; *provided, however*, Liberty’s failure to giveNYSCRF written notice of its election within this time period shall be deemed an election byLiberty to waive its right to cure the default. If Liberty waives or is deemed to have waived itsright to cure the default, NYSCRF shall thereafter be entitled to exercise the remedies inaccordance with the terms of Section 11.1(a). If Liberty elects to cure the defaultspecified in NYSCRF’s Default Notice, Liberty shall commence to cure such default within fifteen(15) days from the date of such election and diligently pursue such cure to completion withinforty-five (45) days (“**Liberty’s Cure Period**”). If Liberty fails to cure such defaultwithin Liberty’s Cure Period to NYSCRF’s reasonable satisfaction, NYSCRF may exercise its remediesin accordance with the terms of Section 11.1(a) hereof.     11.2 NYSCRF’s Default.          (a) If NYSCRF has not terminated this Agreement pursuant to any of the provisions hereofauthorizing such termination and NYSCRF defaults hereunder and fails to perform any of thecovenants and/or agreements contained herein which are to be performed by NYSCRF, Liberty shall beentitled to, at its option, as its sole and exclusive remedies either (i) seek specific performanceof this Agreement, or (ii) terminate this Agreement.          (b) Notwithstanding anything in Section 11.2(a) to the contrary, Liberty will, priorto the exercise of the remedies contained in Section 11.2(a), give NYSCRF written notice(“**Liberty’s Default Notice**”) specifying the nature of such default. Until the date that isfive (5)
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days after receipt of Liberty’s Default Notice, NYSCRF may, at its option, elect to curesuch default or waive the option to cure the default; *provided, however*, NYSCRF’s failure to giveLiberty written notice of its election within this time period shall be deemed an election byNYSCRF to waive its right to cure the default. If NYSCRF waives or is deemed to have waived itsright to cure the default, Liberty shall thereafter be entitled to exercise the remedies inaccordance with the terms of Section 11.2(a). If NYSCRF elects to cure the defaultspecified in Liberty’s Default Notice, NYSCRF shall commence to cure such default within fifteen(15) days from the date of such election and shall thereafter diligently pursue such cure tocompletion within forty-five (45) days (“**NYSCRF’s Cure Period**”). If NYSCRF is unable tocure such default within NYSCRF’s Cure Period to Liberty’s reasonable satisfaction, Liberty mayexercise its remedies in accordance with the terms of Section 11.2(a) hereof.     11.3 Costs and Expenses; Limitation. In the event of any default or alleged defaultby either Liberty or NYSCRF hereunder that results in a party seeking to exercise its rights orremedies pursuant to Section 11.1 or Section 11.2 above, the prevailing party underthis Agreement shall be able to recover from the non-prevailing party on demand all actual,reasonable and necessary out-of-pocket expenses actually paid or incurred by the prevailing partyin connection with the exercise of its remedies hereunder including, without limitation, reasonableattorneys’ fees. In no event shall either party hereto, or any direct or indirect partner, member,shareholder, beneficiary, owner or affiliate thereof, or any officer, director, employee, trustee,or agent of any of the foregoing or any affiliate or controlling person thereof, be liable to anyindemnified party in contract, tort or otherwise with respect to any indirect, consequential,punitive or exemplary damages arising from or relating to this Agreement or any closing document.     11.4 Limitation of NYSCRF Liability. Notwithstanding anything to the contrarycontained herein or in any other agreement executed in connection herewith, Liberty and the Companyexpressly agree that NYSCRF shall not be liable personally or otherwise for any breach or defaultby NYSCRF under this Agreement or any other agreement executed in connection with this Agreement,except to the extent of, and only to the extent of, the NYSCRF’s Partnership Interest in theCompany. Except only for NYSCRF’s Partnership Interest in the Company, no assets of NYSCRF may beliened, encumbered, attached, levied or executed upon to satisfy any liability of or judgmentagainst NYSCRF arising out of this Agreement or any other agreement executed in connection withthis Agreement. This Section 11.4 shall survive Closing.     **12. RISK OF LOSS**     If, prior to Closing, the Property or any part thereof shall be condemned or destroyed ormaterially damaged by fire or other casualty (that is, damage or destruction that NYSCRF reasonablyestimates will cost in excess of [The confidential material contained herein hasbeen omitted and has been separately filedwith the Commission.] to repair or restore or that materially impedes access tothe Property or any material part thereof), NYSCRF shall elect to do one of the following, whichelection shall be made not later than the later of (i) ten (10) days prior to Closing, or (ii) ten(10) days following the date NYSCRF receives written notice of the condemnation or material damage:(A) terminate this Agreement as to the Contributed Entity that owns the affected Parcel only,whereupon the parties shall negotiate an equitable reduction in the Contribution Amount hereunderor, if the parties do not reach agreement on such a reduction within thirty (30) days after suchcasualty, NYSCRF shall be entitled to terminate this Agreement in its entirety; or (B) consummatethe transaction contemplated by this Agreementwithout terminating this Agreement as to the affected Parcel notwithstanding suchcondemnation, destruction or material damage. If NYSCRF elects to consummate the
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transactioncontemplated by this Agreement without terminating this Agreement as to the Contributed Entity thatowns the affected Parcel, the Company shall be entitled to receive all of the condemnation proceedsor settle the loss under all policies of insurance applicable to the destruction or damage andreceive all of the proceeds of insurance applicable thereto, and Liberty shall, at Closing andthereafter, execute and deliver to the Company all required proofs of loss, assignments of claimsand other similar items. If there is any other damage or destruction (that is, damage ordestruction that NYSCRF reasonably estimates will cost [The confidential material contained herein hasbeen omitted and has been separately filedwith the Commission.] or less to repair or restore, orthat does not materially impede access to the Property or any material part thereof), Liberty shalleither completely repair or cause to be repaired such damage prior to Closing in a mannerreasonably satisfactory to NYSCRF or, at NYSCRF’s option, assign all insurance claims pertaining tosuch damage or destruction to the Company by executing and delivering to the Company at Closing andthereafter all required proofs of loss, assignments of claims and other similar items.     Notwithstanding anything herein, Liberty shall be entitled to receive and retain, and shallnot be required to assign, any insurance proceeds for loss of the rents to have been paid prior toClosing.     **13. PROVISIONS REGARDING HAZARDOUS SUBSTANCES**     13.1 Definitions. Unless the context otherwise specifies or requires, the followingterms shall have the respective meanings herein specified:          (a) The term “**Governmental Requirements**” shall mean all laws, ordinances, statutes,codes, rules, regulations, orders and decrees of the United States, the state, the county, thecity, or any other political subdivision in which the Property is located, and any other politicalsubdivision, agency or instrumentality exercising jurisdiction over Liberty or the Property,including Hazardous Materials Laws.          (b) The term “**Hazardous Materials**” shall mean (i) any “hazardous waste” as defined bythe Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as amendedfrom time to time, and regulations promulgated thereunder (“**RCRA**”); (ii) any “hazardoussubstance” as defined by the Comprehensive Environmental Response, Compensation and Liability Actof 1980 (42 U.S.C. Section 9601 et seq.), as amended from time to time, and regulations promulgatedthereunder (“**CERCLA**”) (including petroleum-based products as described therein); (iii)other petroleum and petroleum-based products; (iv) asbestos in any quantity or form which wouldsubject it to regulation under any applicable Hazardous Materials Law (hereinafter defined); (v)polychlorinated biphenyls; (vi) any substance, the presence of which on the Property is prohibitedby any Hazardous Materials Law; (vii) any “extremely hazardous substance” or “hazardous chemical”as those terms are defined in the Emergency Planning and Community Right-To-Know Act (42 U.S.C.Section 11001 et seq.) as amended from time to time, and regulations promulgated thereunder(“**EPCRA**”); (viii) any “chemical substance” as that term is defined in the Toxic SubstancesControl Act (15 U.S.C. Section 2601) as amended from time to time, and regulations promulgatedthereunder (“**TSCA**”); (ix) any hazardous substances identified under the law of the state inwhich the Property is located; and (x) any other substance, including toxic substances, that, byany Hazardous Materials Laws, requires special handling in its collection, storage, treatment,management, recycling or disposal. Hazardous Materials shall not include consumer products, officesupplies,and cleaning and maintenance supplies stored and used in the ordinary course of operation ofthe Property and in compliance with applicable Hazardous Materials Laws.
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          (c) The term “**Hazardous Materials Laws**” shall mean all Governmental Requirements,including, without limitation, RCRA and CERCLA, relating to the handling, storage, existence of orotherwise regulating any hazardous wastes, hazardous substances, toxic substances, radioactivematerials, pollutants, chemicals, contaminants or industrial substances or relating to the removalor remediation of any of the foregoing.          (d) “**Losses**” means any and all losses, liabilities, damages (whether actual,consequential, punitive or otherwise denominated), demands, claims, actions, judgments, causes ofaction, assessments, fines, penalties, costs, and out-of-pocket expenses (including, withoutlimitation, attorneys’ fees and the fees of environmental consultants), of any and every kind orcharacter, foreseeable and unforeseeable, liquidated and contingent, proximate and remote.          (e) The terms “release,” “disposal,” “storage” and “treatment” shall have the meaning setforth in CERCLA, RCRA, the regulations promulgated thereunder and any other similar HazardousMaterials Laws.     13.2 Liberty’s Environmental Representations and Warranties. Liberty herebyrepresents and warrants to NYSCRF that except as set forth on **Exhibit I** or in those certainPhase I Environmental Site Assessments delivered to NYSCRF by Liberty and listed on **Schedule13.2** attached hereto (collectively, the “**Environmental Reports**”):          (a) Liberty has not received any written notice of any civil, criminal or administrative suit,claim, hearing, violation, investigation, proceeding or demand against the Property or againstLiberty or the Company with respect to the Property relating in any way to a release or use ofHazardous Materials or compliance with Hazardous Materials Laws.          (b) Liberty has received no written notice that the Property violates Hazardous MaterialsLaws.          (c) To Liberty’s actual knowledge, there are no under ground storage tanks at the Property.          (d) Liberty has received no written notice asserting that there are Hazardous Materials on, inor under the Property in violation of any Hazardous Materials Laws.          (e) The Property has never been used by Liberty, or to Liberty’s best knowledge, by any thirdparties, to generate, treat, store, dispose of or transport Hazardous Materials in quantities thatrequire remediation under, or are otherwise in violation of, any Hazardous Materials Laws.     13.3 Environmental Covenant. Liberty shall not knowingly conduct or authorizeHazardous Materials Contamination at the Property occurring after the date hereof and on or priorto the Closing Date, and shall promptly notify NYSCRF in writing of any existing or pendinginvestigation or inquiry by any governmental authority in connection with any Hazardous MaterialsLaws relating to the Property of which Liberty has received written notice or has actual knowledge(as defined in Section 4.3).     13.4 Environmental Indemnification.          (a) Liberty hereby agrees to indemnify, defend and hold harmless NYSCRF and the Company fromand against any Losses arising out of any material misrepresentation by Liberty in therepresentations and warranties set forth in Section 13.2 or by any willful breach of thecovenants set forth in Section 13.3.
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          (b) Assumption of Defense.               (i) If a party entitled to indemnification hereunder (the “**Indemnified Party**”)notifies the party liable for such indemnification (the “**Indemnifying Party**”) of any claim,demand, action, administrative or legal proceeding, investigation or allegation adverse to theIndemnified Party and as to which the indemnity provided for in Section 13.4(a) applies (a“**Potential Claim**”), Indemnifying Party shall assume on behalf of Indemnified Party andconduct with due diligence and in good faith the investigation and defense thereof and the responsethereto and shall be entitled, at Indemnifying Party’s sole discretion, to settle or otherwisedispose of any such Potential Claim; provided, that Indemnifying Party shall have the right to curesuch matter that is the subject of the Potential Claim (subject to the rights of the owner of theProperty at the time of such cure to approve the manner of such cure) if such cure will not resultin additional liability or material loss of rights to Indemnified Party, and provided further thatIndemnified Party have the right to be represented by advisory counsel of its own selection and atits own expense; and provided further, that if any such claim, demand, action, proceeding,investigation or allegation involves both Indemnifying Party and Indemnified Party and IndemnifiedParty shall have reasonably concluded that there may be legal defenses available to it which areinconsistent with or in addition to those available to Indemnifying Party, then Indemnified Partyshall have the right to select separate counsel reasonably acceptable to Indemnifying Party toparticipate in the investigation and defense of and response to such claim, demand, action,proceeding, investigation or allegation on its own behalf at Indemnifying Party’s expense.               (ii) If any claim, demand, action, proceeding, investigation or allegation arises as to whichthe indemnity provided for in this Section 13.4 applies, and Indemnifying Party fails toassume as soon as reasonably practical the defense of Indemnified Party, then Indemnified Party maycontest (or, with the prior written consent of Indemnifying Party, settle) the claim, demand,action, proceeding, investigation or allegation at Indemnifying Party’s expense using counselselected by Indemnified Party and reasonably acceptable to Indemnifying Party.          (c) Notice of Losses. If Indemnified Party receives a written notice of Losses thatIndemnified Party believes are covered by this Section 13.4, then Indemnified Party shallpromptly furnish a copy of such notice to Indemnifying Party. The failure to so provide a copy ofthe notice to Indemnifying Party shall not excuse Indemnifying Party from its obligations underthis Section 13.4; provided, that if Indemnifying Party is unaware of the matters describedin the notice and such failure renders unavailable defenses that Indemnifying Party might otherwiseassert, or precludes actions that Indemnifying Party might otherwise take to minimize itsobligations hereunder, then Indemnifying Party shall be excused from its obligation to indemnifyIndemnified Party against assessments, fines, costs and expenses, if any, which would not have beenincurred but for such failure. For example, if Indemnified Party fails to provide IndemnifyingParty with a copy of a notice of an obligation covered by the indemnity set out in Sections13.4(a) and Indemnifying Party is not otherwise already aware of such obligation, and if as aresult of such failure Indemnified Party becomes liable for penalties and interest covered by theindemnity in excess of the penalties and interest that would have accrued if Indemnifying Party hadbeen promptly provided with a copy of the notice, then Indemnifying Party will be excused from anyobligation to Indemnified Party to pay the excess and Indemnified Party shall indemnifyIndemnifying Party with respect to any such excess.          (d) Rights Cumulative. The rights of NYSCRF and the Company under this Article13 shall be in addition to any other rights and remedies of NYSCRF and the Company againstLiberty pursuant to CERCLA and NYSCRF and the Company each expressly retain any right ofreimbursement or contribution thereunder.
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     **14. NO ASSUMPTION**     14.1 No Assumption. The Company is not and is not deemed to be, a successor ofLiberty, it being understood that Liberty is contributing to and the Company is acquiring only theContributed Interests and the Purchase Money Loan Documents, subject to the Merger Loan, theLiberty Loan and the Assumed Financing, and the rights and obligations arising thereunder; and itis expressly understood and agreed that, except as may otherwise be expressly provided in thisAgreement and in the documents delivered at the Closing, NYSCRF has not and does not hereby assumeor agree to assume any liability whatsoever of Liberty.     **15. NOTICES**     15.1 Notices. Any notice, request, demand, instruction or other communication to begiven to either party hereunder, except those required to be delivered at the Closing, shall be inwriting, and shall be deemed to be delivered (a) upon receipt, if delivered by facsimile, (b) uponreceipt or rejection if sent by hand delivery or (c) upon delivery to a nationally recognizedovernight air courier service such as UPS or Federal Express, each addressed as follows:       If to NYSCRF: New York State Common Retirement Fund    c/o Office of the State Comptroller    59 Maiden Lane, 30th Floor    New York, NY 10038-4502    Attn: Assistant Comptroller for Real Estate    Fax No.: 212-383-1331    Telephone No.: 212-383-1508       with additional copies to: New York State Common Retirement Fund    c/o Office of the State Comptroller    59 Maiden Lane, 30th Floor    New York, NY 10038-4502    Attn: Assistant Deputy Counsel    Fax No.: 212-681-1331    Telephone No.: 212-383-1330       with additional copies to: Heitman Capital Management LLC    191 North Wacker Drive    Suite 2500    Chicago, IL 60606    Attn: Jerome Claeys    Fax No.: 312-251-5445    Telephone No.: 312-541-6740       with additional copies to: Cox, Castle & Nicholson LLP    2049 Century Park East, 28th Floor    Los Angeles, CA 90067-3284    Attn: Amy H. Wells, Esq.    Fax No.: 310-277-7889    Telephone No.: 310-284-2233
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       and with additional copies to: Heitman Capital Management LLC    191 North Wacker Drive    Suite 2500    Chicago, IL 60606    Attn: Anthony Ferrante    Fax No.: (312) 541-6789    Telephone No.: (312) 251-5458       If to Liberty: Liberty Property Limited Partnership    500 Chesterfield Parkway    Malvern, Pennsylvania 19355    Attention: Mr. Michael T. Hagan    Fax: 610-644-4129    Phone No: (610) 648-1716       with additional copies to: Wolf Block Schorr and Solis-Cohen LLP    1650 Arch Street, 22nd Floor    Philadelphia, Pennsylvania 19103-2097    Attention: Herman C. Fala, Esquire    Fax: 215-405-2976    Phone No.: 215-977-2076Any notice under this Agreement delivered prior to Closing by Liberty to NYSCRF or by NYSCRF toLiberty shall be deemed to be simultaneously delivered to and received by the Company.     **16. MISCELLANEOUS**     16.1 Entire Agreement. This Agreement and the exhibits attached hereto contain theentire agreement between the parties and supersede all prior and contemporaneous agreements orunderstandings. No modification or amendment of this Agreement shall be of any force or effectunless made in writing and executed by NYSCRF, Liberty and the Company.     16.2 Counterparts. This Agreement may be executed in any number of counterparts whichtogether shall constitute the agreement of the parties.     16.3 Time of the Essence Time is of the essence with respect to the performance ofall obligations provided herein and the consummation of all transactions contemplated hereby.     16.4 Assignment. This Agreement, and the rights and obligations of NYSCRF hereunder,may be assigned by NYSCRF at any time without the consent of Liberty to any wholly owned affiliateof NYSCRF. Upon any such assignment by NYSCRF, NYSCRF shall remain liable for all of itsobligations hereunder. In the event of any such assignment, Liberty agrees to close thetransaction contemplated hereunder with the assignee of NYSCRF. Liberty may not assign thisAgreement without the prior written consent of NYSCRF.
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     16.5 Dates. Whenever any determination is to be made or action is to be taken on adate specified in this Agreement, if such date shall fall on Saturday, Sunday or legal holidayunder the laws of the Commonwealth of Virginia or District of Columbia, then in such event saiddate shall be extended to the next day which is not a Saturday, Sunday or legal holiday. Allreferences in this Agreement to “the date hereof,” “the date of this Agreement” or similarreferences shall be deemed to refer to the date on which this Agreement has been executed anddelivered by Liberty and NYSCRF.     16.6 Binding on Successors and Assigns. This Agreement and the terms and provisionshereof shall inure to the benefit of and be binding upon the parties hereto and their respectivesuccessors and permitted assigns whenever the context so requires or admits.     16.7 Records. NYSCRF shall not file this Agreement, nor any memorandum hereof, in anypublic records without the prior written consent of Liberty, and any such memorandum which is filedwithout such consent shall be, in Liberty’s sole discretion, automatically deemed null and void;provided that Liberty may file a copy of this Agreement as an exhibit to a filing it may make withthe Securities and Exchange Commission (the “**SEC**”).     16.8 Confidentiality and Public Disclosure. NYSCRF shall hold, and shall instruct allof its employees and agents to hold, all information furnished to it pursuant to this Agreement,and all information which it obtains pursuant to its inspection, testings and investigationsundertaken in connection herewith in confidence except as and to the extent required by law.Liberty and NYSCRF covenant and agree that, prior to Closing, they will not issue any pressreleases or otherwise disclose the existence or terms of this Agreement and that they will eachhold this Agreement and the particulars thereof and the parties thereto in confidence, except withthe reasonable approval of the other party hereto and except as may be required by law, providedthat the foregoing will not restrict the ability of Liberty to file this Agreement (and some or allof the exhibits) as an exhibit to a filing it may make with the SEC and to make disclosuresregarding the transactions provided for by this Agreement to the extent Liberty reasonably believesnecessary to enable Liberty to comply with securities laws and SEC regulations, the rules of anystock exchange, or the requirements of any filing or registration made by Liberty Property Trust asthe issuer of publicly traded securities or as part of information provided to its investors and/orfinancial analysts. Liberty and NYSCRF shall work to prepare a joint press release, to be issuedat Closing, respecting the transactions contemplated by this Agreement.     16.9 Termination. Upon any termination permitted under the terms of this Agreement,NYSCRF and Liberty shall be automatically released and discharged from all further liability andobligations under and in connection with this Agreement, subject however, to the express provisionsof this Agreement that provide for survival of certain agreements and indemnities. No terminationof this Agreement shall be effective unless executed by the terminating party and delivered to theother party.     16.10 Reporting Person. The Title Company is hereby designated as the “ReportingPerson” pursuant to Section 6045 of the Code and the regulations promulgated thereunder.     16.11 Paragraph Headings. .The paragraph headings contained in the Agreement are forconvenience only and shall in no way enlarge or limit the scope or meaning of the various andseveral paragraphs hereof.     16.12 Facsimile Signatures. Executed facsimile or electronically delivered copies ofthis Agreement shall be binding upon the parties herein, and facsimile or electronically deliveredsignatures appearing hereon shall be deemed to be original signatures. Following execution byfacsimile or electronic delivery by both parties, NYSCRF shall execute four (4) originals of thisAgreement and forward them by overnight courier to Liberty; Liberty shall execute such
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counterparts and deliver two of the same to NYSCRF the day following receipt thereof from NYSCRF.     16.13 Exculpation.          (a) No recourse shall be had for any obligation of Liberty under this Agreement or under anydocument executed in connection herewith or pursuant hereto, or for any claim based thereon orotherwise in respect thereof, against any past, present or future trustee, partner, officer oremployee of Liberty, whether by virtue of any statute or rule of law, or by the enforcement of anyassessment or penalty or otherwise, all such liability being expressly waived and released byNYSCRF and the Company and all parties claiming by, through or under NYSCRF or the Company.          (b) No recourse shall be had for any obligation of NYSCRF under this Agreement or under anydocument executed in connection herewith or pursuant hereto, or for any claim based thereon orotherwise in respect thereof, against any past, present or future trustee, shareholder, officer oremployee of NYSCRF, whether by virtue of any statute or rule of law, or by the enforcement of anyassessment or penalty or otherwise, all such liability being expressly waived and released byLiberty and the Company and all parties claiming by, through or under Liberty or the Company.     16.14 AS IS. THE PROPERTY IS BEING CONVEYED TO THE COMPANY (BY CONTRIBUTION OF THECONTRIBUTED INTERESTS AND PURCHASE OF THE PURCHASED INTERESTS) ON AN “AS IS, WHERE IS” BASIS, ANDLIBERTY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY,THE PHYSICAL CONDITION, FITNESS FOR USE, TITLE OR ANY OTHER MATTER RELATING TO THE PROPERTY, EXCEPTAS EXPRESSLY AND SPECIFICALLY SET FORTH IN THIS AGREEMENT. NYSCRF REPRESENTS THAT IT ISKNOWLEDGEABLE OF REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE, THAT OF NYSCRF’SCONSULTANTS, AND THE REPRESENTATIONS AND WARRANTIES OF LIBERTY CONTAINED IN THIS AGREEMENT,SUBJECT, HOWEVER, TO THE LIMITATIONS CONTAINED HEREIN UPON SUCH REPRESENTATIONS AND WARRANTIES, ANDTHAT LIBERTY HAS OR SHALL HAVE AFFORDED NYSCRF WITH A FULL AND COMPLETE OPPORTUNITY TO MAKE ITS OWNINDEPENDENT INVESTIGATION OF THE PROPERTY AND ALL MATTERS PERTAINING THERETO DURING THE INSPECTIONPERIOD INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF AND, UPONCLOSING, SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSEPHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY NYSCRF’S INSPECTIONS ANDINVESTIGATIONS. NYSCRF ACKNOWLEDGES AND AGREES THAT, UPON CLOSING, LIBERTY SHALL CONVEY TO THECOMPANY, BY CONVEYANCE OF THE CONTRIBUTED INTERESTS, THE PROPERTY “AS IS, WHERE IS” WITH ALLFAULTS, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIESOR REPRESENTATIONS (EXCEPT AS HEREIN SPECIFICALLY PROVIDED), COLLATERAL TO OR AFFECTING ANY OFTHE PROPERTY BY LIBERTY, ANY AGENT OF LIBERTY OR ANY THIRD PARTY. NYSCRF EXPRESSLY AGREES THAT THETERMS AND CONDITIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING OR TERMINATION OF THIS AGREEMENTAND NOT MERGE THEREIN AND LIBERTY IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTENSTATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL ESTATEBROKER, AGENT, EMPLOYEE,
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SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH ORREFERRED TO IN THIS AGREEMENT.     16.15 Governing Law. This Agreement shall be governed by and construed in accordancewith the internal laws of the State of Delaware and the laws of the United States applicable totransactions in Virginia and the District of Columbia without regard to the principles of conflictsof laws of any jurisdiction.     16.16 Receipt of Written Notice Defined. Whenever in this Agreement the statement ismade that Liberty has or has not received written notice of certain matters (such as, by way ofexample and not limitation, in Sections 4.1(b) or 13), “receipt of written notice”by Liberty, and words of similar import, shall mean the receipt of written notice by LibertyProperty Trust or Liberty prior to the closing of the REIT Merger, and under no circumstances shalldelivery of written notice to Republic Property Trust or its affiliates prior to the completion ofthe REIT Merger be deemed or imputed to be receipt of written notice by Liberty for purposes ofthis Agreement or the transactions contemplated hereby.
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     IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of the dates setforth below.     EXECUTED by NYSCRF on the 4th day of  October , 2007.      **NEW YORK STATE COMMON RETIREMENT FUND**