Document:

Exhibit 10.3 REIT

TAX PROTECTION AGREEMENT

THIS TAX PROTECTION AGREEMENT (this “Agreement”) is made and entered into as of October 7, 2013 by and among Empire State Realty Trust, Inc., a Maryland corporation (the “REIT”), Empire State Realty OP, L.P., a Delaware limited partnership (the “Partnership”), Anthony E. Malkin and Peter L. Malkin, on behalf of themselves and the other persons set forth on Schedule 2.1(i) hereof (each a “Protected Partner,” and collectively the “Protected Partners”).
WHEREAS, pursuant to certain transaction agreements, dated as of November 28, 2011 (the “Transaction Agreements”), various entities of which the Protected Partners were members or partners and that directly or indirectly own or lease real property (the “Existing Entities”), as identified in such Transaction Agreements, subject to specified liabilities merged with the Partnership or a Subsidiary of the Partnership, with the Protected Partners receiving common units (“OP Units”) of limited partnership interest in the Partnership (the “Transaction”).
WHEREAS, it is intended for federal income tax purposes that the Transaction be treated as a transfer of the equity interests in the Existing Entities to the Partnership in exchange for OP Units under Section 721 of the Code (as defined below) including, where applicable, pursuant to the “assets over” form of transaction set forth in Treasury Regulation Section 1.708-1(c)(3);
WHEREAS, in accordance with Section 2.1(b)(ix) of the Transaction Agreements and in consideration for the agreement of the Protected Partners to consummate the Transaction, the parties desire to enter into this Agreement regarding certain tax matters associated with the Transaction; and
WHEREAS, the REIT and the Partnership desire to evidence their agreement regarding amounts that may be payable as a result of certain actions being taken by the Partnership regarding the disposition of certain of the assets of Partnership or other contributed assets and certain debt obligations of the Partnership, its partners and its subsidiaries.
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein and in the Transaction Agreements, the parties hereto hereby agree as follows:
ARTICLE I 
DEFINITIONS
To the extent not otherwise defined herein, capitalized terms used in this Agreement have the meanings ascribed to them in the Transaction Agreements (as defined above).
"Agreement" has the meaning set forth in the recitals.
“Closing Date” means the date hereof.
“Code” means the Internal Revenue Code of 1986, as amended.
“Consent” means the prior written consent to do the act or thing for which the consent is required or solicited, which consent may be executed by a duly authorized officer or agent of the party granting such consent.
“Deficit Restoration Obligation” or “DRO” means a written obligation by a Protected Partner to become a “DRO Partner” as defined in the Partnership Agreement.
"DRO Amounts" has the meaning set forth in Section 3.8.
"Existing Entities" has the meaning set forth in the recitals.
“Guaranteed Amount” means the aggregate amount of each Guaranteed Debt that is guaranteed at any time by Partner Guarantors.

	
			
	 
	 
	 

“Guaranteed Debt” means any loan existing, incurred (or assumed) by the Partnership or any of its Subsidiaries that is guaranteed in whole or in part by Partner Guarantors at any time on or after the Closing Date pursuant to Article 3 hereof.
“Minimum Liability Amount” means, for each Protected Partner, the amount set forth on Schedule 3.2 hereto next to such Protected Partner’s name, as amended from time to time.
“Nonrecourse Liability” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
“OP Units” means units of limited partnership interest of the Partnership owned by the Protected Partners, as described in the Partnership Agreement, and any other partnership interest into which such OP Units may be converted.
“Partner Guarantor” means a Protected Partner who has guaranteed any portion of a Guaranteed Debt.  The Partner Guarantors and each Partner Guarantor’s dollar amount share of the Guaranteed Amount with respect to the Guaranteed Debt, of the Closing Date will be set forth on Schedule 3.3 hereto as amended from time to time.
“Partnership” means Empire State Realty OP, L.P., a Delaware limited partnership.
“Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of October 1, 2013 as amended through the Closing Date, and as the same may be further amended in accordance with the terms thereof.
"Proceeding" has the meaning set forth in Section 7.1.
“Protected Gain” shall mean all of the gain that would be allocable to and/or recognized by a Protected Partner under Section 704(c) of the Code in the event of the sale of a Protected Property or a direct or indirect interest therein in a fully taxable transaction, with such initial Protected Gain calculated on the Closing Date assuming the consideration equal to the Section 704(c) Value of such Protected Property as set forth in Schedule 2.1(ii) and Schedule 2.1(iii) hereto, as applicable, and as adjusted from time to time pursuant to the Code and the Treasury Regulations.  For purposes of calculating the amount of Section 704(c) gain that is allocated to a Protected Partner, any “reverse Section 704(c) gain” allocated to such Partner pursuant to Treasury Regulations § 1.704-3(a)(6) shall not be taken into account unless, as a result of adjustments to the Gross Asset Value (as defined in the Partnership Agreement) of any Protected Property pursuant to clause (b) of the definition of Gross Asset Value as set forth in the Partnership Agreement, all or a portion of the gain recognized by the Partnership that would have been Section 704(c) gain without regard to such adjustments becomes or is treated as “reverse Section 704(c) gain” or Section 704(b) gain under Section 704 of the Code, then such gain shall continue to be treated as Section 704(c) gain.
“Protected Indebtedness” has the meaning set forth in Section 3.1.
“Protected Partner” means (i) any person set forth on Schedule 2.1(i) hereto as a “Protected Partner” and (ii) any person who acquires OP Units from a Protected Partner in a transaction in which gain or loss is not recognized in whole or in part and in which such transferee’s adjusted basis, as determined for federal income tax purposes, is determined in whole or in part by reference to the adjusted basis of a Protected Partner in such OP Units.
“Protected Property” means (i) each of the properties identified as a Protected Property on Schedule 2.1(ii) or Schedule 2.1(iii) hereto; (ii) a direct or indirect interest owned by the Partnership in any Subsidiary that owns an interest in a Protected Property, if the disposition of such interest would result in the recognition of Protected Gain with respect to a Protected Partner; and (iii) any other property that the Partnership directly or indirectly receives that is in whole or in part a “substituted basis property” as defined in Section 7701(a)(42) of the Code with respect to a Protected Property or interest therein.  For the avoidance of doubt, if any Protected Property is transferred to another entity in a transaction in which gain or loss is not recognized, and if the acquiring entity’s disposition of such Protected Property would cause the Protected Partners to recognize gain or loss as a result thereof, such Protected Property shall still be subject to this Agreement.

	
			
	 
	2
	 

"Qualified Guarantee" has the meaning set forth in Section 3.3.
"Qualified Guarantee Indebtedness" has the meaning set forth in Section 3.3.
"REIT" means Empire State Realty Trust, Inc., a Maryland corporation.
"REIT Shares" means the Class A common stock, par value $0.01 per share, or the Class B common stock, par value $0.01 per share, of the REIT.
“Section 704(c) Value” means the fair market value of a Protected Property as set forth next to each Protected Property on Schedule 2.1(ii) or Schedule 2.1(iii).  For purposes of this Agreement, the agreed Section 704(c) Value for all Protected Properties acquired by the Partnership from the Protected Partners in the Transaction will be the agreed value of the OP Units to be issued in the Transaction with respect to the Protected Properties plus the mortgage debt secured by or allocable to such properties outstanding on the Closing Date.  The Section 704(c) Value for each Protected Property shall be as determined pursuant to this Agreement and the Transaction Agreements.  The Partnership shall initially carry each Protected Property on its books at a value equal to the Section 704(c) Value of such Protected Property as set forth above.
“Subsidiary” means any entity in which the Partnership owns a direct or indirect interest.
“Successor Partnership” has the meaning set forth in Section 2.2.
"Tax Claim" has the meaning set forth in Section 7.1.
“Tax Protection Period” means (i) with respect to the obligations of the Partnership set forth in Article II hereof (X) with respect to the Protected Property set forth on Schedule 2.1(ii) the period commencing on the Closing Date and ending at 12:01 AM on the day after the twelve (12) year anniversary of the Closing Date and (Y) with respect to the Protected Properties set forth on Schedule 2.1(iii), the later of (A) the period commencing on the Closing Date and ending at 12:01 AM on the day after the eight (8) year anniversary of the Closing Date and (B) the death of both Peter L. Malkin and Isabel W. Malkin, and (ii) with respect to the obligations of the Partnership set forth in Article III hereof the period commencing on the Closing Date and ending at the earlier of (A) the date on which a Protected Partner no longer owns (directly or indirectly) a number of OP Units and/or REIT shares equal to 50% of the OP Units and REIT shares it received in the Transaction.
"Transaction" has the meaning set forth in the recitals.  
ARTICLE II     
RESTRICTIONS ON DISPOSITIONS OF 
PROTECTED PROPERTIES
2.1.    General Prohibition on Disposition of Protected Properties.  The REIT and the Partnership agree for the benefit of the Protected Partners, for the term of the Tax Protection Period and without the consent of Anthony E. Malkin not to directly or indirectly sell, exchange, transfer, or otherwise dispose of a Protected Property or any interest therein (without regard to whether such disposition is voluntary or involuntary) in a transaction that would cause a Protected Partner to recognize any Protected Gain.  Without limiting the foregoing, (i) any transaction or event which would cause a Protected Partner to recognize or be allocated gain for federal income tax purposes with respect to any Protected Property or any direct or indirect interest therein will be treated as a disposition of a Protected Property, and (ii) a disposition shall include any transfer, voluntary or involuntary, in a foreclosure proceeding, pursuant to a deed in lieu of foreclosure, or in a bankruptcy proceeding.  Notwithstanding anything in this Agreement to the contrary, this Article 2 shall not apply to a condemnation or other taking of any Protected Property or any direct or indirect interest therein by a governmental entity or authority in an eminent domain proceeding.  However, if a transfer of a Protected Property or any direct or indirect interest therein occurs pursuant to the preceding sentence, the Partnership shall use its best efforts to qualify such transfer as an involuntary conversion under Section 1033 of the Code that does not result in the recognition of Protected Gain by a Protected Partner.

	
			
	 
	3
	 

2.2.    Exceptions Where No Gain Recognized.  Notwithstanding the restrictions set forth in Section 2.1, the Partnership may dispose of any Protected Property (or an interest therein) if and to the extent that such disposition qualifies as a like-kind exchange under Section 1031 of the Code, or an involuntary conversion under Section 1033 of the Code, or other transaction (including, but not limited to, a contribution of property to any entity that qualifies for the non-recognition of gain under Section 721 or Section 351 of the Code, or a merger or consolidation of the Partnership with or into another entity that qualifies for taxation as a “partnership” for federal income tax purposes (a “Successor Partnership”)) that, does not result (in the year of such disposition or in a later year within the Tax Protection Period) in the recognition of any Protected Gain to a Protected Partner.  In further clarification thereof:
(i)    in the case of a Section 1031 like-kind exchange, if such exchange is with a “related party” within the meaning of Section 1031(f)(3) of the Code, any direct or indirect disposition by such related party of the Protected Property or any other transaction prior to the expiration of the two (2) year period following such exchange and within the Tax Protection Period that would cause Section 1031(f)(1) of the Code to apply with respect to such Protected Property (including by reason of the application of Section 1031(f)(4) of the Code) and a result of which is to cause a Protected Partner to recognize Protected Gain shall be considered a violation of Section 2.1 by the Partnership; and

(ii)    in the event that at the time of the exchange or other disposition the Protected Property is secured, directly or indirectly, by indebtedness that is guaranteed by a Partner Guarantor (or for which a Protected Partner otherwise has personal liability) and the transferee is not a "pass-through" Subsidiary of the Partnership that both is 100% owned, directly or indirectly, by the Partnership and is and will continue to be under the legal control of the Partnership, (a) in the Partnership's sole discretion, either (I) such indebtedness shall be repaid in full or (II) the Partnership shall obtain from the lenders with respect to such indebtedness a full and complete release of liability for each of the Protected Partners that has guaranteed, or otherwise has liability for, such indebtedness and (b) if such indebtedness is a Guaranteed Debt and the Tax Protection Period with respect to Article 3 shall not have expired, the Partnership shall comply with its covenants set forth in Article 3 below with respect to such Guaranteed Debt and the Partner Guarantors that are considered to have liability for such Guaranteed Debt (determined under Section 3.5 treating such events as a repayment of the Guaranteed Debt). 

2.3.    Mergers.  Any merger or consolidation involving the Partnership or any Subsidiary, whether or not the Partnership or Subsidiary is the surviving entity in such merger or consolidation, that results in a Protected Partner being required to recognize part or all of the Protected Gain shall be deemed to be a disposition of the Protected Property for purposes of Section 2.1, and Article 4 shall fully apply.  In the event of a merger or consolidation involving the Partnership (or any Subsidiary) and a Successor Partnership, the Successor Partnership shall have agreed in writing for the benefit of the Protected Partners that all of the restrictions contained in this Agreement shall continue to apply, including but not limited to, those with respect to each Protected Property.
ARTICLE III     
ALLOCATION OF LIABILITIES; GUARANTEE OPPORTUNITY  
AND DEFICIT RESTORATION OBLIGATIONS
3.1.    Maintenance of Certain Existing Indebtedness.  The Operating Partnership shall maintain the existing indebtedness secured by each of the Protected Properties (the "Protected Indebtedness") until maturity and shall at no time prepay any amounts outstanding under such Protected Indebtedness; provided that the Operating Partnership may refinance any Protected Indebtedness so long as the principal amount of such refinanced Protected Indebtedness is at least equal to the principal amount of the current Protected Indebtedness and the maturity date is no earlier than the existing maturity date.  In addition, prior to each such Protected Indebtedness becoming due and payable at maturity, the Operating Partnership shall use commercially reasonable efforts to refinance each such Protected Indebtedness at its current principal amount outstanding, or, in the event such Protected Indebtedness cannot be refinanced at its current principal amount outstanding, at the highest principal amount possible.  In the event any such Protected Indebtedness cannot be refinanced at its current principal amount at or prior to maturity, the remaining provisions of this Article III shall be applicable to ensure that each Protected Partner that is currently allocated a share 

	
			
	 
	4
	 

of such Protected Indebtedness secured by a Protected Property continues to be allocated such Protected Partner's Minimum Liability Amount.
3.2.    Minimum Liability Allocations.  During the Tax Protection Period, the Partnership will offer to each Protected Partner at the Protected Partner's option the opportunity (i) to enter into a “bottom dollar guarantee" (whether individually or as part of a group of partners) of indebtedness of the Partnership or a wholly-owned "pass-through" Subsidiary of the Partnership or (ii) in the event the Partnership has sufficient recourse debt outstanding and the Protected Partner agrees in lieu of entering into a bottom dollar guarantee pursuant to clause (i) above, to enter into a DRO, in such amount or amounts so as to cause the amount of Partnership liabilities allocated to such Protected Partner for purposes of Section 752 of the Code to be not less than such Protected Partner’s Minimum Liability Amount and to cause the amount of Partnership liabilities with respect to which such Protected Partner will be considered to be “at risk” for purposes of Section 465 of the Code to be not less than such Protected Partner’s Minimum Liability Amount.  In the event a Protected Partner has elected to enter into a DRO in an amount less than its Minimum Liability Amount, at least every two years following the establishment of such DRO during the Tax Protection Period, the Partnership shall provide such Protected Partner with the opportunity to increase the amount of such DRO to an amount equal to such Protected Partner's Minimum Liability Amount.  In order to minimize the need for Protected Partners to enter into guarantees or DROs, the Partnership will use the optional method under Treasury Regulation Section 1.752-3(a)(3) to allocate Nonrecourse Liabilities considered secured by any property acquired by the Partnership pursuant to the Transaction to and for the benefit of the Protected Partners to the extent that the “built-in gain” allocable to the Protected Partner under Section 704(c) of the Code with respect to those properties exceeds the amount of the Nonrecourse Liabilities considered secured by such property allocated to the Protected Partners under Treasury Regulation Section 1.752-3(a)(2).  A bottom dollar guarantee or a DRO entered into by a Protected Partner pursuant to this Section 3.2 shall, for purposes of this Agreement, be presumed to cause a Protected Partner to be allocated an amount of liabilities equal to such Protected Partner’s Guaranteed Amounts of Guaranteed Debt or such Protected Partner's DRO amount, as applicable, for purposes of Sections 465 and 752 of the Code.
3.3.    Qualified Guarantee Indebtedness and Qualified Guarantee; Treatment of Qualified Guarantee Indebtedness as Guaranteed Debt.  In order for an offer by the Partnership of an opportunity to guarantee indebtedness to satisfy the requirements of Section 3.2, (1) the indebtedness to be guaranteed must also satisfy conditions (i) through (vi) set forth in this Section 3.3 (indebtedness satisfying all such conditions is referred to as “Qualified Guarantee Indebtedness”); (2) the guarantee by the Partner Guarantors must be pursuant to a Guarantee Agreement substantially in the form attached hereto as Schedule 3.9 or containing substantially similar terms and conditions if the lender of the indebtedness to be guaranteed requires use of its form guarantee agreement that satisfies the conditions set forth in Sections 3.3(i) and (iii) below (a “Qualified Guarantee”); (3) the amount of indebtedness offered to be guaranteed by the Partner Guarantor, if pursuant to Section 3.5, must not exceed the portion of the Guaranteed Amount for which a replacement guarantee is being offered; and (4) the indebtedness to be guaranteed must be considered indebtedness of the Partnership for purposes of determining the adjusted tax basis of the interests of partners in the Partnership in their OP Units.  If, and to the extent that, a Partner Guarantor elects to guarantee Qualified Guarantee Indebtedness pursuant to an offer made in accordance with this Article 3, such indebtedness thereafter shall be considered a Guaranteed Debt of the Partnership and subject to all of this Article 3.
The conditions that must be satisfied at all times with respect to any Guaranteed Debt offered pursuant to this Article 3 hereof and the guarantees with respect thereto are as follows:

(i)    each such guarantee shall be a "bottom dollar guarantee" in that the lender for the Guaranteed Debt is required to pursue all other collateral and security for the Guaranteed Debt (other than any bottom dollar guarantees permitted pursuant to this clause (i) prior to seeking to collect on such a guarantee, and the lender shall have recourse against the guarantee only if, and solely to the extent that, the total amount recovered by the lender with respect to the Guaranteed Debt after the lender has exhausted its remedies as set forth above is less than the aggregate of the Guaranteed Amounts with respect to such Guaranteed Debt (plus the aggregate amounts of any other guarantees (x) that are in effect with respect to such Guaranteed Debt at the time the guarantees pursuant to this Article 3 are entered into, or (y) that are entered into after the date the guarantees pursuant to this Article 3 are entered into with respect to such Guaranteed Debt and that comply with Section 3.6 below, but only to the extent that, in either case, such guarantees 

	
			
	 
	5
	 

are bottom dollar guarantees with respect to the Guaranteed Debt), and the maximum aggregate liability of each Partner Guarantor for all Guaranteed Debt shall be limited to the amount actually guaranteed by such Partner Guarantor;

(ii)    the fair market value of the property collateral (not including any guarantees) against which the lender has recourse pursuant to the Guaranteed Debt, determined as of the time the guarantee is entered into (an independent appraisal relied upon by the lender in making the loan will be the conclusive evidence of such fair market value when the guarantee is being entered into in connection with the closing of such loan), shall not be less than (X) 350% of the sum of the Guaranteed Debt, provided that if interest on such liability is not required to be paid at least annually or if the documents evidencing such liability permit the borrower to borrow additional amounts that are secured by the property collateral, the outstanding principal amount of such liability shall include the maximum amount that could be so added to the principal amount of such liability without a default; and (Y) 500% of the aggregate Guaranteed Amounts with respect to the Guaranteed Debt at the time the guarantee is executed;

(iii)    (A) the executed guarantee must be executed by and delivered to the lender, (B) the execution of the guarantee by the Partner Guarantors must be acknowledged by the lender, and (C) the guarantee must be enforceable under the laws of the state governing the loan and in which the property securing the loan is located;

(iv)    as to each Partner Guarantor that is executing a guarantee pursuant to this Agreement, there must be no other person that would be considered to “bear the economic risk of loss,” within the meaning of Treasury Regulation Section 1.752-2, or would be considered to be “at risk” for purposes of Section 465(b) with respect to that portion of such debt for which such Partner Guarantor is being made liable for purposes of satisfying the Partnership’s obligations to such Partner Guarantor under this Article 3;

(v)    the aggregate Guaranteed Amounts with respect to the Guaranteed Debt will not exceed 50% of the amount of the Guaranteed Debt outstanding at the time the guarantee is executed.  Except for guarantees already in place at the time a guarantee opportunity is presented to the Protected Partners, at no time can there be guarantees with respect to the Guaranteed Debt that are provided by other persons that are “pari passu” with or at a lower level of risk than the guarantees provided by the Protected Partners.  If there are guarantees already in place at the time a guarantee opportunity is presented to the Protected Partners that are “pari passu” with or at a lower level of risk than the guarantees provided by the Protected Partners, then the amount of Guaranteed Debt subject to such existing guarantees shall be added to the Guaranteed Amount for purposes of calculating the 35% limitation set forth in this Section 3.3(v); and

(vi)    the obligor with respect to the Guaranteed Debt is the Partnership or a non-corporate entity in which the Partnership owns, directly and indirectly, 100% of the economic interests and which is and will continue to be under the legal control of the Partnership.

The Partnership shall be deemed to satisfy the requirements of Sections 3.3(i), (ii) and (v) if, in lieu of offering a bottom dollar guarantee of indebtedness secured by specific properties, it offers a bottom dollar guarantee (or an indemnity of an existing guarantor) of a general unsecured obligation of the Partnership which is recourse, without limitation, to all of the assets of the Partnership and is made by a third party institutional lender with financial covenants that are standard for such a loan.

3.4.    Covenant With Respect to Guaranteed Debt Collateral.  The Partnership covenants with the Partner Guarantors with respect to the Guaranteed Debt that (A) it will comply with the requirements set forth in Section 2.2(ii) upon any disposition of any collateral for a Guaranteed Debt, whether during or following the Tax Protection Period, and (B) it will not at any time, whether during or following the Tax Protection Period, pledge the collateral for a Guaranteed Debt to secure any other indebtedness (unless such other indebtedness is, by its terms, subordinate in all respects to the Guaranteed Debt for which such collateral is security) or otherwise voluntarily dispose of or reduce the amount of such collateral unless either (i) after giving effect thereto the conditions in Section 3.3 would continue to be satisfied with respect to the Guaranteed Debt and the Guaranteed Debt otherwise would continue to be Qualified Guarantee Indebtedness, or (ii) the Partnership (A) obtains from the lender with respect to the original Guaranteed Debt a full and complete release of any Partner Guarantor unless the Partner Guarantor expressly requests that it not be released, and (B) if the Tax Protection Period has not expired, offers to each Partner Guarantor with respect to such 

	
			
	 
	6
	 

original Guaranteed Debt, not less than 30 days prior to such pledge or disposition, the opportunity to enter into a Qualified Guarantee of other Partnership indebtedness that constitutes Qualified Guarantee Indebtedness (with such replacement indebtedness thereafter being considered a Guaranteed Debt and subject to this Article 3) or, in the event the Partnership has sufficient recourse indebtedness and the Protected Partner agrees in lieu of entering into a Qualified Guarantee of replacement indebtedness to enter into a DRO in an amount equal to the amount of such original Guaranteed Debt that was guaranteed by such Partner Guarantor.
3.5.    Repayment or Refinancing of Guaranteed Debt.  The Partnership shall not, at any time during the Tax Protection Period applicable to a Partner Guarantor, repay or refinance all or any portion of any Guaranteed Debt or otherwise take any action that would result in a decrease in the amount of Partnership liabilities allocated to a Partner Guarantor, unless (i) after taking into account such repayment or other action, each Partner Guarantor would be entitled, pursuant to Section 752 of the Code and the Treasury Regulations thereunder, to include in its adjusted tax basis for its OP Units an amount of Partnership liabilities at least equal to its Minimum Liability Amount or (ii) alternatively, the Partnership, not less than 30 days prior to such repayment, refinancing or other action, offers to the applicable Partner Guarantors at their election the opportunity either (A) to enter into a Qualified Guarantee with respect to other indebtedness of the Partnership or a wholly-owned "pass-through" Subsidiary of the Partnership or (B) in the event the Partnership has sufficient recourse debt outstanding and the Protected Partner agrees in lieu of entering into a Qualified Guarantee pursuant to clause (A) above, to enter into a DRO, in either case in an amount sufficient so that, taking into account such guarantees of such other indebtedness or DROs and taking into account the presumption in the last sentence of Section 3.2, each such Partner Guarantor would be entitled, pursuant to Section 752 and the Treasury Regulations thereunder, to include in its adjusted tax basis for its OP Units an amount of Partnership liabilities equal to the Minimum Liability Amount for such Partner Guarantor.  
3.6.    Limitation on Additional Guarantees With Respect to Debt Secured by Collateral for Guaranteed Debt.  The Partnership shall not offer the opportunity or make available to any person or entity other than a Protected Partner a guarantee of any Guaranteed Debt or other debt that is secured, directly or indirectly, by any collateral for Guaranteed Debt unless (i) such debt by its terms is subordinate in all respects to the Guaranteed Debt or, if such other guarantees are of the Guaranteed Debt itself, such guarantees by their terms must be paid in full before the lender can have recourse to the Partner Guarantors (i.e., the first dollar amount of recovery by the applicable lenders must be applied to the Guaranteed Amount); provided that the foregoing shall not apply with respect to additional guarantees of Guaranteed Debt so long as the conditions set forth in Sections 3.3(ii) and (v) would be satisfied immediately after the implementation of such additional guarantee (determined in the case of Section 3.3(ii), based upon the fair market value of the collateral for such Guaranteed Debt at the time the additional guarantee is entered into and adding the amount of such additional guarantee(s) to the sum of the applicable Guaranteed Amounts plus any other preexisting bottom dollar guarantees previously permitted pursuant to this Section 3.6 or Sections 3.4(i) and (ii) above, for purposes of making the computation provided for in Section 3.3(ii)), and (ii) and such other guarantees do not have the effect of reducing the amount of the Guaranteed Debt that is includible by any Partner Guarantor in its adjusted tax basis for its OP Units pursuant to Treasury Regulation Section 1.752-2.
3.7.    Process.  Whenever the Partnership is required under this Article 3 to offer to a Partner Guarantor an opportunity to guarantee indebtedness or enter into a DRO, the Partnership shall be considered to have satisfied its obligation if the other conditions in this Article 3 are satisfied and, not less than thirty (30) days prior to the date that such guarantee or DRO would be required to be executed in order to satisfy this Article 3, the Partnership sends by first class certified mail to the last known address of such Partner Guarantor (as reflected in the records of the Partnership) a guarantee agreement or, if such Partner Guarantor has agreed to enter into a DRO, a consent to DRO form to be executed, and a brief letter explaining the relevant circumstances (including, as applicable, that the offer is being made pursuant to this Article 3, the circumstances giving rise to the offer, a brief summary of the terms of the indebtedness to be guaranteed (or, in the case of a DRO, the terms of the Partnership recourse debt), a brief description of the collateral for the indebtedness, a statement of the amount to be guaranteed (or DRO amount), the address to which the executed guarantee agreement (or consent to DRO form) must be sent and the date by which it must be received, and a statement to the effect that, if the Protected Partner fails to execute and return such guarantee agreement (or consent to DRO form) within the time period specified, the Partner Guarantor thereafter would lose its rights under this Article 3 with respect to the amount of debt that the Partnership is required to offer to be guaranteed (or that would be subject to the 

	
			
	 
	7
	 

DRO) and depending upon the Partner Guarantor’s circumstances and other circumstances related to the Partnership, the Partner Guarantor could be required to recognize taxable gain as a result thereof, either currently or prior to the expiration of the Tax Protection Period, that otherwise would have been deferred).  If a notice is properly sent in accordance with this procedure, the Partnership shall have no responsibility as a result of the failure of a Partner Guarantor either to receive such notice or to respond thereto within the specified time period.
3.8.    Deficit Restoration Obligation.  In the event a Protected Partner has elected to enter into a DRO, the Partnership will maintain an amount of indebtedness of the Partnership that would be considered “recourse” indebtedness of the Partnership at least equal to the sum of the “DRO Amounts” (as defined in the Partnership Agreement) of all Protected Partners (plus, the DRO Amounts, if any, of other partners in the Partnership).  The DRO entered into by the Protected Partner pursuant to this Agreement shall be presumed for purposes of this Agreement, to cause the Protected Partner to be allocated an amount of liabilities equal to the DRO Amount of such Protected Partner for purposes of Sections 465 and 752 of the Code.
3.9.    Presumption as to Schedule 3.9.  A guarantee in the form of the Guarantee Agreement attached hereto as Schedule 3.9 that is (A) properly executed by the Partner Guarantor and the lender and (B) delivered to the lender shall be conclusively presumed to satisfy the conditions set forth in Section 3.3(i) and 3.3(iii) and to have caused the Guaranteed Debt to be considered allocable to the Protected Partner who enters into such Guarantee Agreement pursuant to Treasury Regulation Section 1.752-2 so long as all of the following conditions are met with respect such Guaranteed Debt:
(i)    there are no other guarantees in effect with respect to such Guaranteed Debt (other than the guarantees contemporaneously being entered into by the Partner Guarantors pursuant to this Article 3 or that are otherwise permitted pursuant to 3.3(i) and (v));

(ii)    the collateral securing such Guaranteed Debt is not, and shall not thereafter become, collateral for any other indebtedness that is senior to or pari passu with such Guaranteed Debt;

(iii)    no additional guarantees with respect to such Guaranteed Debt will be entered into during the applicable Tax Protection Period pursuant to the proviso set forth in Section 3.6;

(iv)    the lender with respect to such Guaranteed Debt is not the Partnership, any Subsidiary or other entity in which the Partnership owns a direct or indirect interest, the REIT, any other partner in the Partnership, or any person related to any partner in the Partnership as determined for purposes of Treasury Regulation Section 1.752-2 or any person that would be considered a “related party” as determined for purposes of Section 465 of the Code; and

(v)    none of the REIT, nor any other partner in the Partnership, nor any person related to any partner in the Partnership as determined for purposes of Treasury Regulation Section 1.752-2 shall have provided, or shall thereafter provide, collateral for, or otherwise shall have entered into, or shall thereafter enter into, a relationship that would cause such person to be considered to bear the economic risk of loss with respect to such Guaranteed Debt, as determined for purposes of Treasury Regulation Section 1.752-2 or that would cause such person to be considered “at risk” with respect to such Guaranteed Debt, as determined for purposes of Section 465 of the Code.

Notwithstanding the foregoing, if, due to a change in law, a Protected Partner believes that such Protected Partner may no longer continue to be allocated such Protected Partner's Guaranteed Amount of a Guaranteed Debt, such Protected Partner may request a modification of such Guarantee Agreement and the Partnership will use its commercially reasonable efforts to work with the lender with respect to such Guaranteed Debt to have the Guarantee Agreement amended in a manner that will permit such Protected Partner to be allocated such Protected Partner's Guaranteed Amount with respect to the Guaranteed Debt, or such Protected Partner, at its option shall be offered the opportunity to enter into a DRO, in an amount equal to such Guaranteed Amount so that the amount of Partnership liabilities allocated to such Protected Partner shall not decrease as a result of the change in law.

	
			
	 
	8
	 

ARTICLE IV     
REMEDIES FOR BREACH
4.1.    Monetary Damages.  In the event that the Partnership or a Subsidiary breaches its obligations set forth in Article 2 or Article 3 with respect to a Protected Partner, the Protected Partner’s sole right shall be to receive from the Partnership, and the Partnership shall pay to Protected Partner as damages, an amount equal to:
(i)    in the case of a violation of Article 3, the aggregate federal, state and local income taxes (including any applicable federal unearned income Medicare contribution under Section 1411 of the Code) incurred by the Protected Partner as a result of the income or gain allocated to, or otherwise recognized by, such Protected Partner by reason of such breach; and
(ii)     in the case of a violation of Article 2, the aggregate federal, state, and local income taxes (including any applicable federal unearned income Medicare contribution under Section 1411 of the Code) incurred with respect to the Protected Gain incurred with respect to the Protected Property that is allocable to such Protected Partner under the Partnership Agreement;
plus an additional amount so that, after the payment by such Protected Partner of all federal, state and local income taxes on amounts received pursuant to this Section 4.1 (including any tax liability incurred as a result of such Protected Partner's receipt of such indemnity payment), such Protected Partner retains an amount equal to its total federal, state and local income tax liability incurred as a result of such breach.
For purposes of computing the amount of federal, state, and local income taxes required to be paid by a Protected Partner, (i) any deduction for state and local income taxes payable as a result thereof shall be treated as fully deductible for purposes of computing federal income taxes, and (ii) a Protected Partner’s tax liability shall be computed using the highest federal, state and local marginal income tax rates that would be applicable to such Protected Partner's taxable income (taking into account the character of such income or gain) for the year with respect to which the taxes must be paid, and, except as described in clause (i), without regard to any deductions, losses or credits that may be available to such Protected Partner that would reduce or offset its actual taxable income or actual tax liability if such deductions, losses or credits could be utilized by the Protected Partner to offset other income, gain or taxes of the Protected Partner, either in the current year, in earlier years, or in later years.
4.2.    Process for Determining Damages. If the Partnership or a Subsidiary has breached or violated any of the covenants set forth in Article 2 or Article 3 (or a Protected Partner asserts that the Partnership or a Subsidiary has breached or violated any of the covenants set forth in Article 2 or Article 3), the Partnership and the Protected Partner agree to negotiate in good faith to resolve any disagreements regarding any such breach or violation and the amount of damages, if any, payable to such Protected Partner under Section 4.1.  If any such disagreement cannot be resolved by the Partnership and such Protected Partner within (i) 60 days after the receipt of notice from the Partnership of such breach pursuant to Section 4.3, (ii) 60 days after the receipt of a notice from the Protected Partner that the Partnership or a Subsidiary has breached its obligations under this Agreement, which notice shall set forth the amount of income asserted to be recognized by the Protected Partner and the payment required to be made to such Protected Partner under Section 4.1 as a result of the breach, (iii) 10 days following the date that the Partnership notifies the Protected Partner of its intention to settle, compromise and/or concede any Tax Claim or Proceeding pursuant to Section 7.2, or (iv) 10 days following any final determination of any Tax Claim or Proceeding, the Partnership and the Protected Partner shall jointly retain a nationally recognized big four independent public accounting firm (an "Accounting Firm") to act as an arbitrator to resolve as expeditiously as possible all points of any such disagreement (including, without limitation, whether a breach of any of the covenants set forth in Article 2 and Article 3 has occurred and, if so, the amount of damages to which the Protected Partner is entitled as a result thereof, determined as set forth in Section 4.1).  All determinations made by the Accounting Firm with respect to the resolution of any breach or violation of any of the covenants set forth in Article 2 and Article 3 and the amount of damages payable to the Protected Partner under Section 4.1 shall, subject to any subsequent Tax Claim or Proceeding, and subject to the last sentence of this Section 4.2, be final, conclusive and binding on the Partnership and the Protected Partner.  The fees and expenses of any Accounting Firm incurred in connection with any such determination shall be shared equally by the Partnership and the Protected Partner, provided, that if the amount determined by the Accounting Firm to be owed by the Partnership to the Protected 

	
			
	 
	9
	 

Partner is more than 5% higher than the amount proposed by the Partnership to be owed to such Protected Partner prior to the submission of the matter to the Accounting Firm, then all of the fees and expenses of any Accounting Firm incurred in connection with any such determination shall be paid by the Partnership, and if the amount determined by the Accounting Firm to be owed by the Partnership to the Protected Partner is less than 95% of the amount proposed by the Protected Partner to be owed to the Protected Partner prior to the submission of the matter to the Accounting Firm then all fees and expenses of any Accounting Firm incurred in connection with any such determination shall be paid by the Protected Partner.  In the case of any Tax Claim or Proceeding that is resolved pursuant to a final determination or that is settled, compromised and/or conceded pursuant to Section 7.2, the amount of taxes due to the Internal Revenue Service or other taxing authority shall, to the extent that such taxes relate to matters covered in this Agreement, be presumed to be damages resulting from a breach of this Agreement, and the amount of any such damages shall be increased by any interest and penalties required to be paid by the Protected Partner with respect to such taxes (other than interest and penalties resulting from a failure of the Protected Partner to timely and properly file any tax return or to timely pay any tax, unless such failure resulted solely from the Protected Partner reporting and paying its taxes in a manner consistent with the Partnership) so that the amount of the damages under Section 4.1 shall not be less than the amount required to be paid to the Internal Revenue Service or other taxing authority that pertains to matters covered in this Agreement.
4.3.    Required Notices; Time for Payment. In the event that there has been a breach of Article 2 or Article 3, the Partnership shall provide to the Protected Partners notice of the transaction or event giving rise to such breach, along with a calculation of the amount of income to be recognized by any Protected Partner and the amount required to be paid to such Protected Partner under Section 4.1 by reason thereof, not later than 30 days following the date that the Partnership becomes aware that such transaction or event constitutes a breach of this Agreement.  All payments required to be made under Section 4.1 to any Protected Partner shall be made to such Protected Partner on or before April 15 of the year following the year in which the transaction or event giving rise to such payment took place; provided, that if the Protected Partner is required to make estimated tax payments that are required to be calculated by reference to any income resulting from such transaction or event, the Partnership shall make a payment to the Protected Partner on or before the due date for such estimated tax payment, and such payment from the Partnership shall be in an amount that corresponds to the amount of the estimated tax required to be paid by such Protected Partner with respect to such income at such time; and further provided, that any payment required to be made under Section 4.1 to any Protected Partner resulting from a Tax Claim or Proceeding shall be made on or before the date that the relevant taxes are required to be paid as a result of any final determination of such Tax Claim or Proceeding or any settlement, compromise and/or concession of such Tax Claim or Proceeding pursuant to Section 7.2.  In the event of a payment made after the date required pursuant to this Section 4.3, interest shall accrue on the aggregate amount required to be paid from such date to the date of actual payment at a rate equal to the higher of (i) the "prime rate" of interest, as published in the Wall Street Journal (or if no longer published there, as announced by Citibank) effective as of the date the payment is required to be made plus 10% or (ii) 20%, but not to exceed the maximum amount permitted by law.
ARTICLE V     
SECTION 704(C) METHOD AND ALLOCATIONS
5.1.    Application of “Traditional Method.”  Notwithstanding any provision of the Partnership Agreement, the Partnership shall use the “traditional method” under Treasury Regulation Section 1.704-3(b) for purposes of making all allocations under Section 704(c) of the Code with respect to the Protected Properties and all other properties acquired by the Partnership pursuant to the Transaction Agreements (with no “curative allocation” to offset the effects of the “ceiling rule,” including upon any sale of such a property).
ARTICLE VI     
ALLOCATIONS OF LIABILITIES PURSUANT TO TREASURY REGULATIONS 
UNDER SECTION 752
6.1.    Allocation Methods to be Followed.  Absent a determination to the contrary by the Internal Revenue Service or a court and subject to Section 6.2, all tax returns prepared by the Partnership with respect to the Tax Protection Period that allocate liabilities of the Partnership for purposes of Section 752 and the Treasury Regulations thereunder 

	
			
	 
	10
	 

shall treat each Partner Guarantor as being allocated for federal income tax purposes an amount of recourse debt (in addition to any nonrecourse debt otherwise allocable to such Partner Guarantor in accordance with the Partnership Agreement and Treasury Regulation Section 1.752-3 and any other recourse liabilities allocable to such Partner Guarantor by reason of guarantees of indebtedness entered into pursuant to other agreements with the Partnership) pursuant to Treasury Regulation Section 1.752-2 equal to the sum of such Partner Guarantor’s Minimum Liability Amount, as set forth on Schedule 3.2 hereto and as may be reduced pursuant to the terms of this Agreement (including, if a Partner Guarantor declines an opportunity to guarantee indebtedness of the Partnership or enter into a DRO pursuant to Section 3.7 of this Agreement, and the Partnership and the REIT shall not, during or with respect to the Tax Protection Period, take any contrary or inconsistent position in any federal, state or local income tax returns (including, without limitation, information returns, such as Schedules K-1, provided to partners in the Partnership and returns of Subsidiaries of the Partnership).
6.2.    Exception to Required Allocation Method.  Notwithstanding the provisions of this Agreement, the Partnership shall not be required to make allocations of Guaranteed Debt or other recourse debt of the Partnership to the Protected Partners as set forth in this Agreement if and to the extent that the Partnership is provided an opinion of a law firm recognized as expert in such matters or a nationally recognized public accounting firm to the effect that there is not “substantial authority” (within the meaning of Section 6662(d)(2)(B)(i) of the Code) for such allocations or there has been a judicial determination in a proceeding to which the Partnership is a party and as to which the Protected Partners have been allowed to participate as and to the extent contemplated in Article 7 to the effect that such allocations are not correct.  In no event shall this Section 6.2 be construed to relieve the Partnership from any liability arising from a failure by the Partnership to comply with one or more of the provisions of Article 3 of this Agreement.
6.3.    No Representation With Regard to Tax Treatment.  The REIT and the Partnership (a) make no representation to any Protected Partner or Partner Guarantors regarding  and (b) provided that the REIT and the Partnership comply with their obligations under this Agreement have no liability to any Protected Partner for  or in respect of, the tax consequences to such partners of the Transaction or any other transactions contemplated herein including whether becoming a Partner Guarantor of Guaranteed Debt or entering into a DRO shall be respected for federal income tax purposes as causing such partner to be considered to “bear the economic risk of loss” with respect to indebtedness for purposes of Section 752 or Section 465 of the Code.

ARTICLE VII    
TAX PROCEEDINGS

7.1.    Notice of Tax Audits.  If any claim, demand, assessment (including a notice of proposed assessment) or other assertion is made with respect to Taxes against any Protected Partner or the Partnership the calculation of which involves a matter covered in this Agreement or the income tax treatment of the Transaction (a “Tax Claim”), or if the REIT or the Partnership receives any notice from any jurisdiction with respect to any current or future audit, examination, investigation or other proceeding involving the Protected Partners or the Partnership or that otherwise could involve a matter covered in this Agreement and could directly or indirectly affect (adversely or otherwise) the Protected Partners (a "Proceeding"), then (i) in the case of a notification of a Tax Claim or Proceeding received by the REIT or the Partnership, the REIT or the Partnership, as applicable, shall promptly notify the Protected Partners of such Tax Claim or Proceeding, but in no event later than 20 business days after receipt of such notice, and (ii) in the case of a notification of a Tax Claim or Proceeding received by any Protected Partner, or any notice of any current or future audit, examination, investigation or other proceeding received by a Protected Partner that involves or could involve a matter covered in this Agreement or the income tax treatment of the Transaction, the Protected Partner shall promptly notify the Partnership of such Tax Claim, Proceeding, or other notice, but in no event later than 20 business days after receipt of such notice.
7.2.    Control of Tax Proceedings.  The Partnership shall have the right to control the defense, settlement or compromise of any Proceeding or Tax Claim; provided, however, that the Partnership shall keep the Protected Partners duly informed of the progress thereof to the extent that such Proceeding or Tax Claim could directly or indirectly affect (adversely or otherwise) the Protected Partners; the Protected Partners shall have the right to participate in such Proceeding or Tax Claim at their own expense; and the  Partnership shall not settle, compromise and/or concede such 

	
			
	 
	11
	 

Proceeding or Tax Claim without the Consent of the Protected Partners, which Consent shall not be unreasonably withheld, delayed or conditioned.
ARTICLE VIII     
AMENDMENT OF THIS AGREEMENT; WAIVER OF CERTAIN PROVISIONS;  
APPROVAL OF CERTAIN TRANSACTIONS
8.1.    Amendment.  This Agreement may not be amended, directly or indirectly (including by reason of a merger between the Partnership and another entity) except by a written instrument signed by the REIT, as general partner of the Partnership, and each of the Protected Partners.
8.2.    Waiver.  Notwithstanding the foregoing, upon written request by the Partnership, each Protected Partner in its sole discretion, may waive the payment of any damages that is otherwise payable to such Protected Partner pursuant to Article 4 hereof.  Such a waiver shall be effective only if obtained in writing from the affected Protected Partner.
ARTICLE IX     
MISCELLANEOUS
9.1.    Additional Actions and Documents.  Each of the parties hereto hereby agrees to take or cause to be taken such further actions, to execute, deliver, and file or cause to be executed, delivered and filed such further documents, and will obtain such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.
9.2.    Assignment.  No party hereto shall assign its or his rights or obligations under this Agreement, in whole or in part, except by operation of law, without the prior written consent of the other parties hereto, and any such assignment contrary to the terms hereof shall be null and void and of no force and effect.
9.3.    Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the Protected Partners.  This Agreement shall be binding upon the REIT, the Partnership, and any entity that is a direct or indirect successor, whether by merger, transfer, spin-off or otherwise, to all or substantially all of the assets of either the REIT or the Partnership (or any prior successor thereto as set forth in the preceding portion of this sentence), provided, that none of the foregoing shall result in the release of liability of the REIT and the Partnership hereunder.  The REIT and the Partnership covenant with and for the benefit of the Protected Partners not to undertake (directly or indirectly) any transfer of all or substantially all of the assets of either entity (whether by merger, spin-off or transfer, including a transfer by a Subsidiary, or otherwise) unless the transferee has in writing acknowledged and agreed to be bound by this Agreement, provided, that the foregoing shall not be deemed to permit any transaction otherwise prohibited by this Agreement.
9.4.    Captions.  The Article and Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.
9.5.    Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered, mailed or transmitted, and shall be effective upon receipt, if delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like changes of address) or sent by electronic transmission to the telecopier number specified below:
(i)    if to the Partnership, or the REIT, to:
Empire State Realty OP, L.P.
c/o Empire State Realty Trust, Inc.

	
			
	 
	12
	 

60 E. 42nd Street
New York, New York 10165

(ii)    if to a Protected Partner, to the address on file with the Partnership.
Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent.  Each notice, demand, request, or communication which shall be hand delivered, sent, mailed, or faxed in the manner described above, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or (with respect to a facsimile) the answerback being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
9.6.    Counterparts.  This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and each of which shall be deemed an original.
9.7.    Governing Law.  The interpretation and construction of this Agreement, and all matters relating thereto, shall be governed by the laws of the State of Delaware, without regard to the choice of law provisions thereof.
9.8.    Consent to Jurisdiction; Enforceability.
(i)    This Agreement and the duties and obligations of the parties hereunder shall be enforceable against any of the parties in the courts of the State of Delaware.  For such purpose, each party hereto hereby irrevocably submits to the nonexclusive jurisdiction of such courts and agrees that all claims in respect of this Agreement may be heard and determined in any of such courts.
(ii)    Each party hereto hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating to this Agreement shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
9.9.    Severability.  If any part of any provision of this Agreement shall be invalid or unenforceable in any respect, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provision or the remaining provisions of this Agreement.
9.10.    Costs of Disputes.  Except as otherwise expressly set forth in this Agreement, the nonprevailing party in any dispute arising hereunder shall bear and pay the costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the prevailing party or parties in connection with resolving such dispute.

	
			
	 
	13
	 

IN WITNESS WHEREOF, the REIT, the Partnership, and Anthony E. Malkin and Peter L. Malkin, on behalf of themselves and the other Protected Partners, have caused this Agreement to be signed by their respective officers (or general partners) thereunto duly authorized all as of the date first written above.
EMPIRE STATE REALTY TRUST, INC., a Maryland corporation
		
	By:
	/s/ Thomas P. Durels     
Name:  Thomas P. Durels 
Title:  Executive Vice President and Chief of Property Operations and Leasing 

EMPIRE STATE REALTY OP, L.P.,
a Delaware limited partnership
By:    EMPIRE STATE REALTY TRUST, INC.,
its sole General Partner
		
	By:
	/s/ Thomas P. Durels     
Name:   Thomas P. Durels 
Title: Executive Vice President and Chief of Property Operations and Leasing

/s/ Anthony E. Malkin    
 
Anthony E. Malkin

/s/ Peter L. Malkin    
 
Peter L. Malkin

	
			
	 
	14
	 

Schedule 2.1(i) 

Protected Partners

	
		
	Name of Protected Partner
	 

	 
	 

	 
	PLM Nominee Family 9 LLC

	 
	AEM/Andrew 1999 Trust

	 
	AEM/George 1999 Trust

	 
	Cynthia M Blumenthal/Michael 2006 Trust

	 
	Cynthia M Blumenthal/Matthew 2004 Trust

	 
	Cynthia M Blumenthal/David 2010 Trust

	 
	Cynthia M Blumenthal/Custodian Claire

	 
	Cynthia M Blumenthal

	 
	Anthony E Malkin/Rebecca 2006 Trust

	 
	Anthony E Malkin/Louisa 2010 Trust

	 
	Anthony E Malkin/Elizabeth 2009 Trust

	 
	Anthony E Malkin

	 
	Peter L Malkin

	 
	Peter L Malkin Family 9 LLC

	 
	Peter L Malkin/SL 2005 Family Trust

	 
	Peter L Malkin Family 2000 LLC

	 
	Isabel W Malkin

	 
	Anthony E Malkin, as Agent

	 
	PLM/Michael 1998 Trust

	 
	Anthony & Rachelle Malkin as Joint Tenants

	 
	Blutt/Usdan Trustees RBM/AEM 1998 Family Trust

	 
	PLM/Andrew 1998 Trust

	 
	PLM/Claire 1998 Trust

	 
	PLM/David 1998 Trust

	
			
	 
	 
	 

	
		
	 
	PLM/Elizabeth 1998 Trust

	 
	PLM/Emily 1998 Trust

	 
	PLM/George 1998 Trust

	 
	PLM/Louisa 1998 Trust

	 
	PLM/Matthew 1998 Trust

	 
	PLM/Rebecca 1998 Trust

	 
	Isabel W. Malkin 4 Year GRAT

	 
	PLM 4 Year GRAT

	 
	Andrew L Morse

	 
	Douglas A. Morse

	 
	Lester S Morse, Jr.

	 
	Leslie A Nelson

	 
	Mitchell J. Nelson

	 
	Enid W Morse

	 
	Station Place, LLC

	 
	 

	 
	 

	 
	 

	
			
	 
	 
	 

Schedule 2.1(ii) 

Protected Properties, Section 704(c) Value and Estimated Initial Protected Gain 
for Protected Partners (000s omitted)

	
			
	Protected Partner
	 
	First Stamford Place: Protected Gain

	PLM Nominee Family 9 LLC
	 
	-

	AEM/Andrew 1999 Trust
	 
	-

	AEM/George 1999 Trust
	 
	-

	Cynthia M Blumenthal/Michael 2006 Trust
	 
	267

	Cynthia M Blumenthal/Matthew 2004 Trust
	 
	290

	Cynthia M Blumenthal/David 2010 Trust
	 
	290

	Cynthia M Blumenthal/Custodian Claire
	 
	290

	Cynthia M Blumenthal
	 
	350

	Anthony E Malkin/Rebecca 2006 Trust
	 
	67

	Anthony E Malkin/Louisa 2010 Trust
	 
	67

	Anthony E Malkin/Elizabeth 2009 Trust
	 
	67

	Anthony E Malkin
	 
	2,662

	Peter L Malkin
	 
	8,143

	Peter L Malkin Family 9 LLC
	 
	11,281

	Peter L Malkin/SL 2005 Family Trust
	 
	369

	Peter L Malkin Family 2000 LLC
	 
	66

	Isabel W Malkin
	 
	-

	Anthony E Malkin, as Agent
	 
	6

	PLM/Michael 1998 Trust
	 
	-

	Anthony & Rachelle Malkin as Joint Tenants
	 
	-

	Blutt/Usdan Trustees RBM/AEM 1998 Family Trust
	 
	-

	PLM/Andrew 1998 Trust
	 
	-

	PLM/Claire 1998 Trust
	 
	-

	PLM/David 1998 Trust
	 
	-

	PLM/Elizabeth 1998 Trust
	 
	-

	
			
	 
	 
	 

	
			
	Protected Partner
	 
	First Stamford Place: Protected Gain

	PLM/Emily 1998 Trust
	 
	-

	PLM/George 1998 Trust
	 
	-

	PLM/Louisa 1998 Trust
	 
	-

	PLM/Matthew 1998 Trust
	 
	-

	PLM/Rebecca 1998 Trust
	 
	-

	Isabel W. Malkin 4 Year GRAT
	 
	180

	PLM 4 Year GRAT
	 
	1,223

	Andrew L Morse
	 
	-

	Douglas A. Morse
	 
	249

	Lester S Morse, Jr.
	 
	7,200

	Leslie A Nelson
	 
	175

	Mitchell J. Nelson
	 
	118

	Enid W Morse
	 
	3,666

	Station Place, LLC
	 
	-

	 
	 
	 

	 
	 
	 

	Total Protected Gain:
	 
	37,026

	 
	 
	 

	704(c) Value:
	 
	250,136

	
			
	 
	 
	 

Schedule 2.1(iii) 

Protected Properties, Section 704(c) Value and Estimated Initial Protected Gain 
for Protected Partners (000s omitted)

	
									
	Protected Partner
	 
	Metro Center Protected Gain
	 
	10 Bank Street Protected Gain
	 
	1542 Third Avenue
Protected Gain
	 
	Total Protected Gain

	PLM Nominee Family 9 LLC
	 
	-
	 
	-
	 
	-
	 
	-

	AEM/Andrew 1999 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	AEM/George 1999 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	Cynthia M Blumenthal/Michael 2006 Trust
	 
	-
	 
	-
	 
	-
	 
	267

	Cynthia M Blumenthal/Matthew 2004 Trust
	 
	-
	 
	-
	 
	-
	 
	290

	Cynthia M Blumenthal/David 2010 Trust
	 
	-
	 
	-
	 
	-
	 
	290

	Cynthia M Blumenthal/Custodian Claire
	 
	-
	 
	-
	 
	-
	 
	290

	Cynthia M Blumenthal
	 
	-
	 
	2,913
	 
	2,741
	 
	6,004

	Anthony E Malkin/Rebecca 2006 Trust
	 
	-
	 
	-
	 
	-
	 
	67

	Anthony E Malkin/Louisa 2010 Trust
	 
	-
	 
	-
	 
	-
	 
	67

	Anthony E Malkin/Elizabeth 2009 Trust
	 
	-
	 
	-
	 
	-
	 
	67

	Anthony E Malkin
	 
	13,066
	 
	3,048
	 
	2,868
	 
	21,644

	Peter L Malkin
	 
	40,177
	 
	7,222
	 
	6,796
	 
	62,338

	Peter L Malkin Family 9 LLC
	 
	16,765
	 
	3,180
	 
	2,992
	 
	34,218

	Peter L Malkin/SL 2005 Family Trust
	 
	-
	 
	-
	 
	-
	 
	369

	Peter L Malkin Family 2000 LLC
	 
	-
	 
	-
	 
	-
	 
	66

	Isabel W Malkin
	 
	39,543
	 
	-
	 
	-
	 
	39,543

	Anthony E Malkin, as Agent
	 
	-
	 
	-
	 
	-
	 
	6

	
			
	 
	 
	 

	
									
	PLM/Michael 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	Anthony & Rachelle Malkin as Joint Tenants
	 
	-
	 
	-
	 
	-
	 
	-

	Blutt/Usdan Trustees RBM/AEM 1998 Family Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Andrew 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Claire 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/David 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Elizabeth 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Emily 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/George 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Louisa 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Matthew 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	PLM/Rebecca 1998 Trust
	 
	-
	 
	-
	 
	-
	 
	-

	Isabel W. Malkin 4 Year GRAT
	 
	-
	 
	7,222
	 
	6,796
	 
	14,198

	PLM 4 Year GRAT
	 
	-
	 
	-
	 
	-
	 
	1,223

	Andrew L Morse
	 
	-
	 
	-
	 
	-
	 
	-

	Douglas A. Morse
	 
	-
	 
	-
	 
	-
	 
	249

	Lester S Morse, Jr.
	 
	-
	 
	135
	 
	127
	 
	7,462

	Leslie A Nelson
	 
	-
	 
	-
	 
	-
	 
	175

	Mitchell J. Nelson
	 
	-
	 
	-
	 
	-
	 
	118

	Enid W Morse
	 
	-
	 
	-
	 
	-
	 
	3,666

	Station Place, LLC
	 
	11,543
	 
	-
	 
	-
	 
	11,543

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 

	Total Protected Gain:
	 
	121,094
	 
	23,720
	 
	22,320
	 
	204,160

	 
	 
	 
	 
	 
	 
	 
	 
	 

	704(c) Value:
	 
	138,178
	 
	43,748
	 
	35,363
	 
	467,425

	
			
	 
	 
	 

Schedule 3.2
Minimum Liability Amount

	
		
	Protected Partner
	Minimum Liability Amount

	PLM Nominee Family 9 LLC
	-

	AEM/Andrew 1999 Trust
	-

	AEM/George 1999 Trust
	-

	Cynthia M Blumenthal/Michael 2006 Trust
	273

	Cynthia M Blumenthal/Matthew 2004 Trust
	295

	Cynthia M Blumenthal/David 2010 Trust
	291

	Cynthia M Blumenthal/Custodian Claire
	278

	Cynthia M Blumenthal
	4,916

	Anthony E Malkin/Rebecca 2006 Trust
	64

	Anthony E Malkin/Louisa 2010 Trust
	64

	Anthony E Malkin/Elizabeth 2009 Trust
	34

	Anthony E Malkin
	17,296

	Peter L Malkin
	40,963

	Peter L Malkin Family 9 LLC
	-

	Peter L Malkin/SL 2005 Family Trust
	1,283

	Peter L Malkin Family 2000 LLC
	-

	Isabel W Malkin
	27,986

	Anthony E Malkin, as Agent
	10

	PLM/Michael 1998 Trust
	-

	Anthony & Rachelle Malkin as Joint Tenants
	67

	Blutt/Usdan Trustees RBM/AEM 1998 Family Trust
	57

	PLM/Andrew 1998 Trust
	-

	PLM/Claire 1998 Trust
	-

	PLM/David 1998 Trust
	-

	PLM/Elizabeth 1998 Trust
	-

	PLM/Emily 1998 Trust
	-

	PLM/George 1998 Trust
	-

	PLM/Louisa 1998 Trust
	-

	PLM/Matthew 1998 Trust
	-

	PLM/Rebecca 1998 Trust
	-

	Isabel W. Malkin 4 Year GRAT
	8,766

	PLM 4 Year GRAT
	1,166

	Andrew L Morse
	-

	Douglas A. Morse
	125

	Lester S Morse, Jr.
	-

	Leslie A Nelson
	53

	Mitchell J. Nelson
	-

	
			
	 
	 
	 

	
		
	Enid W Morse
	1,158

	Station Place, LLC
	8,170

	 
	 

	 
	 

	 
	 

	
			
	 
	 
	 

Schedule 3.3
Guaranteed Debt

	
		
	Partner Guarantor
	Guaranteed Debt

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	   Total 
	$0Exhibit 10.4 REIT

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT ("Agreement") is made and entered into as of the 7th day of October 2013, by and among EMPIRE STATE REALTY TRUST, INC., a Maryland corporation (the "Company"), EMPIRE STATE REALTY OP, L.P., a Delaware limited partnership (the "Partnership" and together with the Company, the "Indemnitors"), and Peter L. Malkin (the "Indemnitee").
WHEREAS, the Indemnitee is the Chairman Emeritus of the Company and in such capacity is performing a valuable service for the Company and/or the Partnership and was a member, manager, officer, director, partner or agent of Malkin Holdings LLC and/or its affiliates (collectively, "Malkin Holdings"), an entity that owned an interest in one of the 18 real properties or two acres of land that are going to be or were contributed to the Company, the Partnership or their subsidiaries (each, a "Contributing Entity") in connection with the reorganization and consolidation of Malkin Holdings and the Contributing Entities into the Company and the Partnership and was an agent for the participants in a Contributing Entity or any direct or indirect partner or member thereof; 
WHEREAS, to induce the Indemnitee to provide services to the Company and/or the Partnership as the Chairman Emeritus of the Company, and to provide the Indemnitee with specific contractual assurance that indemnification will be available to the Indemnitee regardless of, among other things, any amendment to or revocation of the Charter of the Company (the "Charter") or the Bylaws of the Company (the "Bylaws"), the Agreement of Limited Partnership of the Partnership (the "Partnership Agreement"), or any acquisition transaction relating to the Company or the Partnership, the Indemnitors desire to provide the Indemnitee with protection against personal liability as set forth herein; and
WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Indemnitors and the Indemnitee do hereby covenant and agree as follows:
Section 1.Definitions.  For purposes of this Agreement:
(a)    "Board of Directors" means the Board of Directors of the Company.
(b)    "Change in Control" means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date:

	
			
	 
	 
	80-40476364

		
	(1)
	any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of all of the Company's then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person's attaining such percentage interest; 

		
	(2)
	the consummation by the Company, directly or indirectly, of a merger or consolidation, other than a transaction upon the completion of which 50% or more of the beneficial ownership of the voting power of the Company, the surviving entity or entity directly or indirectly controlling the Company or the surviving entity, as the case may be, is held by the same persons, in substantially the same proportion, as held the "beneficial ownership" (as defined in Rule 13(d)(3) under the Exchange Act) of the voting power of the Company immediately prior to the transaction (except that upon the completion thereof, employees or employee benefit plans of the Company may be a new holder of such beneficial ownership); or

		
	(3)
	at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company's stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election or nomination for election was previously so approved.

(c)    "Corporate Status" means the status of a person (i) as a present or former director, officer, employee, agent or controlling person of the Company and/or the Partnership, (ii) as a director, trustee, officer, partner (limited or general), manager, managing member, fiduciary, employee, agent or controlling person of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and/or the Partnership or (iii) as (A) a former member, manager, shareholder, director, limited partner, general partner, officer or controlling person of (1) Malkin Holdings, (2) any Contributing Entity in the Company's initial public offering or (3) any direct or indirect partner or member, or any employee benefit plan or other enterprise thereof (provided, that, in the case such direct or indirect partner or member owns direct or indirect interests in any properties not being contributed to the Company, the Partnership or their subsidiaries in the Company's initial public offering, only to the extent such service relates to the business of Malkin Holdings or any Contributing Entity) or (B) any agent for participants in any Contributing Entity or any direct or indirect partner or member thereof (provided, that, in the case such direct or indirect partner or member owns direct or indirect interests in any properties not being contributed to the Company or the Partnership, only to the extent such service relates to the business of Malkin Holdings or any Contributing Entity).  As a clarification and without limiting the circumstances in which the Indemnitee may be serving at the request of the Company or the Partnership, service by the Indemnitee shall be deemed to be at the request of the Company or the Partnership if the Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, real 

	
			
	 
	2
	 

	 
	 
	 

estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i) of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management of which is controlled directly or indirectly by the Company. The Company shall be deemed to have requested the Indemnitee to serve on an employee benefit plan where the performance of the Indemnitee's duties to the Company also imposes or imposed duties on, or otherwise involves or involved services by, the Indemnitee to the plan or participants or beneficiaries of the plan.
(d)    "Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by the Indemnitee.
(e)    "Effective Date" means the date set forth in the first paragraph of this Agreement.
(f)    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
(g)    "Expenses" means any and all reasonable and out-of-pocket attorneys' fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding.  Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent.  
(h)    "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent:  (i) the Company, Malkin Holdings, a Contributing Entity or the Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advancement of Expenses hereunder.  Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing the Company or the Indemnitee in an action to determine the Indemnitee's rights under this Agreement.  If a Change in Control has not occurred, Independent Counsel shall be selected by the Board of Directors, with the approval of the Indemnitee, which approval shall not be unreasonably withheld.  If a Change in Control has occurred, Independent Counsel shall be selected by the Indemnitee, with the approval of the Board of Directors, which approval shall not be unreasonably withheld.
(i)    "Proceeding" means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation (including an internal investigation), inquiry, administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, 

	
			
	 
	3
	 

	 
	 
	 

administrative or investigative (formal or informal) nature, including any appeal therefrom in which the Indemnitee was, is or will be involved as a party by reason of the Indemnitee's Corporate Status and, whether or not Indemnitee is an employee of the Company at the time a Proceeding arises, except one initiated by the Indemnitee pursuant to Section 12 of this Agreement to enforce such Indemnitee's rights under this Agreement.  If the Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding.
Section 2.    Services by the Indemnitee.  The Indemnitee serves or will serve as an officer, employee, agent or member of the Board of Directors of the Company and/or the Partnership.  However, this Agreement shall not impose any independent obligation on the Indemnitee, the Company or the Partnership to continue the Indemnitee's service to the Company and/or the Partnership.  This Agreement shall not be deemed an employment contract between the Company (or any other entity) and the Indemnitee.
Section 3.    General.  The Indemnitors shall, jointly and severally, indemnify, and advance Expenses to, the Indemnitee (a) as provided in this Agreement, (b) as provided in the Charter and Bylaws and (c) otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to the Indemnitee hereunder based on Maryland law as in effect on the Effective Date.  The rights of the Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the "MGCL").
Section 4.    Standard for Indemnification.  The Indemnitee shall be entitled to the rights of indemnification provided in this Agreement, including Section 3 and this Section 4 and under applicable law, the Charter, the Bylaws, the Partnership Agreement, any other agreement, or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise if, by reason of the Indemnitee's Corporate Status, the Indemnitee is, or is threatened to be, made a party to or a witness in any Proceeding.  Notwithstanding the preceding sentence, the indemnification provided for in this Section 4 shall not cover any Indemnitee's personal tax liabilities (federal, state, foreign or other) resulting from such Indemnitee's Corporate Status as described in (iii) of the definition thereof.  For the avoidance of doubt, the rights of indemnification provided in this Agreement in favor of the Indemnitee shall protect the acts performed by such Indemnitee (by reason of such Indemnitee's Corporate Status or by reason of being named as a person who is about to become a director) prior to or on the Effective Date, including acts performed, or omissions taking place, prior to the formation of the Company.  Pursuant to this Section 4, the Indemnitee shall be indemnified hereunder, to the maximum extent permitted by Maryland law in effect from time to time (provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to the Indemnitee hereunder based on Maryland law as in effect on the Effective Date), against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his behalf in connection with a Proceeding by reason of his Corporate Status unless it is established that (i) the act or omission of the Indemnitee was material to the matter giving rise to the Proceeding and (x) was committed in bad faith or 

	
			
	 
	4
	 

	 
	 
	 

(y) was the result of active and deliberate dishonesty, (ii) the Indemnitee actually received an improper personal benefit in money, property or services or (iii) in the case of any criminal Proceeding, the Indemnitee had reasonable cause to believe that his conduct was unlawful.
Section 5.    Certain Limits on Indemnification.  Notwithstanding any other provision of this Agreement (other than Section 6), the Indemnitee shall not be entitled to:
(a)    indemnification hereunder if the Proceeding was one by or in the right of the Company and the Indemnitee is adjudged in a final, non-appealable judgment by a court of appropriate jurisdiction to be liable to the Company; 
(b)    indemnification hereunder if the Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received by such Indemnitee in any Proceeding charging improper personal benefit to the Indemnitee, whether or not involving action in the Indemnitee's Corporate Status; or
(c)    indemnification or advance of Expenses hereunder if the Proceeding was brought by the Indemnitee unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement or, (ii) the Charter or the Bylaws or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors expressly provides otherwise.
Section 6.    Court-Ordered Indemnification.  Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of the Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:
(a)    if such court determines that the Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case the Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or
(b)    if such court determines that the Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper.  However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.
Section 7.    Indemnification for Expenses of an Indemnitee Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, and without limiting any such provision, and in addition to any right to payment of expenses under any such provision, to the extent that the Indemnitee was or is, by reason of his Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, the Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.  If the Indemnitee is not wholly successful 

	
			
	 
	5
	 

	 
	 
	 

in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Indemnitors shall, jointly and severally, indemnify the Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis.  
Section 8.    Advance of Expenses for an Indemnitee.  Notwithstanding anything in this Agreement to the contrary, and in addition to any right under any other provision of this Agreement, if the Indemnitee is or was or becomes a party to or is otherwise involved in any Proceeding, or is or was threatened to be made a party to or a participant in any Proceeding, by reason of the Indemnitee's Corporate Status, or by reason of (or arising in part out of) any actual or alleged event or occurrence related to the Indemnitee's Corporate Status, or by reason of any actual or alleged act or omission on the part of the Indemnitee taken or omitted in or relating to the Indemnitee's Corporate Status, then the Indemnitors shall, without requiring a preliminary determination of the Indemnitee's ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of the Indemnitee in connection with such Proceeding within ten (10) days after the receipt by the Company of a statement or statements from the Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by the Indemnitee and shall include or be preceded or accompanied by a written affirmation by the Indemnitee of the Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Indemnitors as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of the Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to the Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met by the Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement.  To the extent that Expenses advanced to the Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis.  The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of the Indemnitee and shall be accepted without reference to the Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor.
Section 9.    Indemnification and Advance of Expenses as a Witness or Other Participant.  Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is or may be, by reason of his Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether instituted by the Company or any other party, and to which the Indemnitee is not a party, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith within ten (10) days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by the Indemnitee.

	
			
	 
	6
	 

	 
	 
	 

Section 10.    Procedure for Determination of Entitlement to Indemnification.
(a)    To obtain indemnification under this Agreement, the Indemnitee shall submit to the Indemnitors a written request, including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.  The Indemnitee may submit one or more such requests from time to time and at such time(s) as the Indemnitee deems appropriate in his sole discretion.  The officer of the Company receiving any such request from the Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that the Indemnitee has requested indemnification.
(b)    Upon written request by the Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law, with respect to the Indemnitee's entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee, which Independent Counsel shall be selected by the Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall not be unreasonably withheld, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to the Indemnitee or (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company.  If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within ten (10) days after such determination.  The Indemnitee shall cooperate with the person, persons or entity making such determination with respect to the Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b).  Any Expenses incurred by the Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Indemnitors (irrespective of the determination as to the Indemnitee's entitlement to indemnification) and the Indemnitors shall indemnify and hold the Indemnitee harmless therefrom.
(c)    The Indemnitors shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.
Section 11.    Presumptions and Effect of Certain Proceedings.
(a)    In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for 

	
			
	 
	7
	 

	 
	 
	 

indemnification in accordance with Section 10(a) of this Agreement, and the Indemnitors shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.  
(b)    The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, entry of an order of probation prior to judgment, or by dismissal, with or without prejudice, does not create a presumption that the Indemnitee did not meet the requisite standard of conduct described herein for indemnification.
(c)    The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to the Indemnitee for purposes of determining any other right to indemnification under this Agreement.
Section 12.    Remedies of the Indemnitee.
(a)    If (i) a determination is made pursuant to Section 10(b) of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the Charter or the Bylaws of the Company is not made within ten (10) days after a determination has been made that the Indemnitee is entitled to indemnification, the Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses.  Alternatively, the Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which the Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by the Indemnitee to enforce his rights under Section 7 of this Agreement.  Except as set forth herein, the provisions of Maryland law (without regard to its conflict of laws rules) shall apply to any such arbitration.  The Indemnitors shall not oppose the Indemnitee's right to seek any such adjudication or award in arbitration.  
(b)    In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement or otherwise and the Indemnitors shall have the burden of proving that the Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.  If the Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, the Indemnitee shall not be required to reimburse the Indemnitors for any advances pursuant to Section 

	
			
	 
	8
	 

	 
	 
	 

8 of this Agreement until a final non-appealable judgment by a court of appropriate jurisdiction is made with respect to the Indemnitee's entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).  The Indemnitors shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Indemnitors are bound by all of the provisions of this Agreement.
(c)    If a determination shall have been made pursuant to Section 10(b) of this Agreement that the Indemnitee is entitled to indemnification, the Indemnitors shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee's statement not materially misleading, in connection with the request for indemnification.
(d)    In the event that the Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement or otherwise, the Indemnitee shall be entitled to recover from the Indemnitors, and shall be indemnified by the Indemnitors for, any and all Expenses actually and reasonably incurred by him in such judicial adjudication or arbitration.  If it shall be determined in such judicial adjudication or arbitration that the Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by the Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.  
(e)    Interest shall be paid by the Indemnitors to the Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Indemnitors pay or are obligated to pay for the period (i) commencing with either the tenth day after the date on which the Indemnitors were requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 10(b) above and (ii) ending on the date such payment is made to the Indemnitee by the Indemnitors.
Section 13.    Defense of the Underlying Proceeding.
(a)    The Indemnitee shall notify the Indemnitors promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding.  The failure to give any such notice shall not disqualify the Indemnitee from the right, or otherwise affect in any manner any right of the Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Indemnitors' ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

	
			
	 
	9
	 

	 
	 
	 

(b)    Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Indemnitors shall have the right to defend the Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify the Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 13(a) above.  The Indemnitors shall not, without the prior written consent of the Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against the Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of the Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of the Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to the Indemnitee or (iii) would impose any Expense, judgment, fine, penalty or limitation on the Indemnitee.  This Section 13(b) shall not apply to a Proceeding brought by the Indemnitee under Section 12 of this Agreement.
(c)    Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which the Indemnitee is a party by reason of the Indemnitee's Corporate Status, (i) the Indemnitee reasonably concludes, based upon the advice of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) the Indemnitee reasonably concludes, based upon the advice of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between the Indemnitee and the Indemnitors, or (iii) if the Indemnitors fail to assume the defense of such Proceeding in a timely manner, the Indemnitee shall be entitled to be represented by separate legal counsel of the Indemnitee's choice, subject to the prior approval of the Indemnitors of the choice of such counsel, which approval shall not be unreasonably withheld, at the expense of the Indemnitors.  In addition, if the Indemnitors fail to comply with any of their obligations under this Agreement or in the event that the Indemnitors or any other person takes any action to declare this Agreement void or unenforceable, or institute any Proceeding to deny or to recover from the Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the Indemnitee shall have the right to retain counsel of the Indemnitee's choice, subject to the prior approval of the Indemnitors, which approval shall not be unreasonably withheld, at the expense of the Indemnitors (subject to Section 12(d) of this Agreement), to represent the Indemnitee in connection with any such matter.
Section 14.    Non-Exclusivity; Survival of Rights; Subrogation.
(a)    The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time be entitled under applicable law, the Charter or the Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise.  Unless consented to in writing by the Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by such the Indemnitee in his Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal.  No right or remedy herein conferred is intended to be exclusive of any other right or 

	
			
	 
	10
	 

	 
	 
	 

remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.
(b)    In the event of any payment under this Agreement, the Indemnitors shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Indemnitors to bring suit to enforce such rights.
Section 15.    Insurance.  
(a)    The Company will use its reasonable best efforts to acquire and maintain directors and officers liability insurance ("D&O Insurance"), on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, that includes coverage for the Indemnitee or any claim made against the Indemnitee by reason of his Corporate Status and coverage for the Indemnitors for any indemnification or advance of Expenses made by the Indemnitors to the Indemnitee for any claims made against the Indemnitee by reason of his Corporate Status.  Without in any way limiting any other obligation under this Agreement, the Indemnitors shall indemnify the Indemnitee for any payment by the Indemnitee arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by the Indemnitee in connection with a Proceeding over the coverage of any D&O Insurance.  The purchase, establishment and maintenance of any D&O Insurance shall not in any way limit or affect the rights or obligations of the Indemnitors or the Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Indemnitors and the Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies.  If, at the time the Indemnitors receive notice from any source of a Proceeding to which the Indemnitee is a party or a participant (as a witness or otherwise) and the Company has D&O Insurance in effect, the Indemnitors shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.
(b)    For a period of six (6) years and one (1) month after the date of termination of the Indemnitee's employment, the Company shall maintain in effect a "tail" directors' and officers' liability insurance policy with coverage in an amount and scope at least as favorable as the Company's existing coverage on the date of termination of the Indemnitee's employment and with at least as highly-rated an insurer; provided, that, in no event shall the Company be required to expend in the aggregate in excess of 200% of the ratable portion of the annual premium paid by the Company for such insurance in effect on the date of termination of the Indemnitee's employment.  In the event that 200% of the ratable portion of the annual premium paid by the Company for such existing insurance is insufficient for such coverage, the Company shall spend up to that amount to purchase such lesser coverage as may be obtained with such amount.
Section 16.    Coordination of Payments.  The Indemnitors shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable 

	
			
	 
	11
	 

	 
	 
	 

as Expenses hereunder if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
Section 17.    Reports to Stockholders.  To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amount for indemnification of, or advance of Expenses to, the Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Indemnitors with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting.
Section 18.    Duration of Agreement; Binding Effect.
(a)    The Indemnitors' obligations under this Agreement with respect to a Proceeding shall continue until and terminate on the date that the Indemnitee is no longer subject to that Proceeding (including any rights of appeal thereto and any Proceeding commenced by the Indemnitee pursuant to Section 12 of this Agreement).  
(b)    The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or, substantially all or a substantial part, of the business and/or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company, and shall inure to the benefit of the Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(c)    The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(d)    The Indemnitors and the Indemnitee agree hereby that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause the Indemnitee irreparable harm.  Accordingly, the parties hereto agree that the Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, the Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled.  The Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith.  The Indemnitors acknowledge that, 

	
			
	 
	12
	 

	 
	 
	 

in the absence of a waiver, a bond or undertaking may be required of the Indemnitee by a court, and the Indemnitors hereby waive any such requirement of such a bond or undertaking.
Section 19.    Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 20.    Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.
Section 21.    Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 22.    Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
Section 23.    Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed on the day of such delivery or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
(a)    If to the Indemnitee, to the address set forth on the signature page hereto.
(b)    If to the Indemnitors to:
One Grand Central Place
60 East 42nd Street
New York, New York 10165
Attn: General Counsel

	
			
	 
	13
	 

	 
	 
	 

or to such other address as may have been furnished in writing to the Indemnitee by the Indemnitors or to the Indemnitors by the Indemnitee, as the case may be.

Section 24.    Governing Law.  The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.
Section 25.    Time of the Essence.  Time is of the essence regarding all dates and time periods set forth or referred to in this Agreement.
Section 26.    Miscellaneous.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]

	
			
	 
	14
	 

	 
	 
	 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 

COMPANY:

EMPIRE STATE REALTY TRUST, INC.

By:  _/s/ Thomas P. Durels___________________
Name:  Thomas P. Durels
Title: Executive Vice President and Chief of Property Operations and Leasing

INDEMNITEE

 
__/s/ Peter L. Malkin________________________
Name:  Peter L. Malkin
Address:  One Grand Central Place, 60 East 42nd Street, New York, NY  10165

	
			
	AMR-439766-v2
	 
	80-40476364

EXHIBIT A
FORM OF AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
The Board of Directors of EMPIRE STATE REALTY TRUST, Inc.

Re:  Affirmation and Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

This affirmation and undertaking is being provided pursuant to that certain Indemnification Agreement dated the 7th day of October, 2013, by and among EMPIRE STATE REALTY TRUST, Inc., a Maryland corporation (the "Company"), EMPIRE STATE REALTY OP, L.P., a Delaware limited partnership (the "Partnership" and, together with the Company, or the "Indemnitor") and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the "Proceeding").
Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.
I am subject to the Proceeding by reason of my actual or alleged Corporate Status or by reason of alleged actions or omissions by me in such capacity.  I hereby affirm my good faith belief that at all times, insofar as I was involved as a member, an officer, an employee, a partner, an agent and/or the Chairman Emeritus of the Company, Malkin Holdings and/or a Contributing Entity, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.
In consideration of the advance of Expenses by the Indemnitors for reasonable attorneys' fees and related Expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established without interest.  
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___ day of ____________________, 20____.

_____________________________

	
			
	AMR-249927-v1D
	Exhibit A
	80-40458388

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}]]