Document:

Exhibit 10.1

 

 

PURCHASE AND SALE AGREEMENT

 

 

BETWEEN

 

 

THE ENTITIES SET FORTH ON SCHEDULE 1.1.1,

AS SELLER

 

 

AND

 

 

TRT ACQUISITIONS LLC,

AS PURCHASER

 

 

DATED:  MAY 3, 2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page No.

  
	
  ARTICLE 1 BASIC INFORMATION 

  	
  1

  
	
  1.1

  	
  Certain Basic Terms

  	
  1

  
	
  1.2

  	
  Closing Costs

  	
  3

  
	
  1.3

  	
  Notice Addresses:

  	
  4

  
	
   

  	
   

  
	
  ARTICLE 2 PROPERTY

  	
  5

  
	
  2.1

  	
  Property

  	
  5

  
	
   

  	
   

  
	
  ARTICLE 3 EARNEST MONEY

  	
  7

  
	
  3.1

  	
  Deposit and Investment of Earnest Money

  	
  7

  
	
  3.2

  	
  Independent Consideration

  	
  7

  
	
  3.3

  	
  Form; Failure to Deposit

  	
  7

  
	
  3.4

  	
  Disposition of Earnest Money

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 DUE DILIGENCE

  	
  8

  
	
  4.1

  	
  Due Diligence Materials To Be Delivered

  	
  8

  
	
  4.2

  	
  Physical Due Diligence

  	
  9

  
	
  4.3

  	
  Due Diligence/Financing Contingency Termination Rights.

  	
  11

  
	
  4.4

  	
  Updated Property Information

  	
  14

  
	
  4.5

  	
  Return of Documents and Reports

  	
  14

  
	
  4.6

  	
  Service Contracts

  	
  15

  
	
  4.7

  	
  Proprietary Information; Confidentiality

  	
  15

  
	
  4.8

  	
  No Representation or Warranty by Seller

  	
  15

  
	
  4.9

  	
  Purchaser’s Responsibilities

  	
  16

  
	
  4.10

  	
  Purchaser’s Agreement to Indemnify

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 TITLE AND SURVEY

  	
  16

  
	
  5.1

  	
  Title Commitments

  	
  16

  
	
  5.2

  	
  Updated Surveys

  	
  16

  
	
  5.3

  	
  Title Review

  	
  17

  
	
  5.4

  	
  Delivery of Title Policies at Closing

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 OPERATIONS AND
  RISK OF LOSS

  	
  18

  
	
  6.1

  	
  Ongoing Operations

  	
  18

  
	
  6.2

  	
  Casualty

  	
  19

  
	
  6.3

  	
  Condemnation.

  	
  20

  
	
  6.4

  	
  Estoppel Certificates/SNDAs.

  	
  21

  
	
  6.5

  	
  Acknowledgments

  	
  22

  
	
   

  	
   

  
	
  ARTICLE 7 CLOSING

  	
  23

  
	
  7.1

  	
  Closing

  	
  23

  
	
  7.2

  	
  Conditions to Parties’ Obligation to Close

  	
  23

  
	
  7.3

  	
  Seller’s Deliveries in Escrow

  	
  27

  
	
  7.4

  	
  Purchaser’s Deliveries in Escrow

  	
  28

  
	
  7.5

  	
  Closing Statements

  	
  29

  
	
  7.6

  	
  Purchase Price

  	
  29

  

 

ii

 

	
  7.7

  	
  Possession

  	
  29

  
	
  7.8

  	
  Delivery of Books and Records

  	
  29

  
	
  7.9

  	
  Notice to Tenants

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 PRORATIONS,
  DEPOSITS, COMMISSIONS

  	
  29

  
	
  8.1

  	
  Prorations for Taxes

  	
  29

  
	
  8.2

  	
  Prorations for Tenant-Paid Operating Expenses

  	
  30

  
	
  8.3

  	
  Prorations for Non-Tenant Paid Items

  	
  30

  
	
  8.4

  	
  Miscellaneous Prorations

  	
  32

  
	
  8.5

  	
  Leasing Costs

  	
  32

  
	
  8.6

  	
  Closing Costs

  	
  32

  
	
  8.7

  	
  Final Adjustment After Closing

  	
  32

  
	
  8.8

  	
  Tenant Deposits

  	
  32

  
	
  8.9

  	
  Commissions

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 REPRESENTATIONS
  AND WARRANTIES

  	
  33

  
	
  9.1

  	
  Seller’s Representations and Warranties

  	
  33

  
	
  9.2

  	
  Purchaser’s Representations and Warranties

  	
  36

  
	
  9.3

  	
  Survival of Representations and Warranties

  	
  37

  
	
   

  	
   

  
	
  ARTICLE 10 DEFAULT AND
  REMEDIES

  	
  39

  
	
  10.1

  	
  Seller’s Remedies

  	
  39

  
	
  10.2

  	
  Purchaser’s Remedies

  	
  40

  
	
  10.3

  	
  Attorneys’ Fees

  	
  40

  
	
  10.4

  	
  Other Expenses

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 DISCLAIMERS,
  RELEASE AND INDEMNITY

  	
  41

  
	
  11.1

  	
  Disclaimers By Seller

  	
  41

  
	
  11.2

  	
  Sale “As Is, Where Is”

  	
  41

  
	
  11.3

  	
  Seller Released from Liability

  	
  42

  
	
  11.4

  	
  “Hazardous Materials”
  Defined

  	
  43

  
	
  11.5

  	
  Intentionally Deleted

  	
  43

  
	
  11.6

  	
  Survival

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  	
  43

  
	
  12.1

  	
  Parties Bound; Assignment

  	
  43

  
	
  12.2

  	
  Headings

  	
  44

  
	
  12.3

  	
  Invalidity and Waiver

  	
  44

  
	
  12.4

  	
  Governing Law

  	
  44

  
	
  12.5

  	
  Survival

  	
  44

  
	
  12.6

  	
  Entirety and Amendments

  	
  44

  
	
  12.7

  	
  Time

  	
  44

  
	
  12.8

  	
  Intentionally Omitted.

  	
  45

  
	
  12.9

  	
  No Electronic Transactions

  	
  45

  
	
  12.10

  	
  Notices

  	
  45

  
	
  12.11

  	
  Construction

  	
  45

  
	
  12.12

  	
  Calculation of Time Periods; Business Day

  	
  45

  
	
  12.13

  	
  Execution in Counterparts

  	
  45

  
	
  12.14

  	
  Recordation

  	
  45

  

 

iii

 

	
  12.15

  	
  Further Assurances

  	
  46

  
	
  12.16

  	
  Discharge of Obligations

  	
  46

  
	
  12.17

  	
  ERISA

  	
  46

  
	
  12.18

  	
  No Third Party Beneficiary

  	
  46

  
	
  12.19

  	
  Reporting Person

  	
  46

  
	
  12.20

  	
  Post-Closing Access

  	
  47

  
	
  12.21

  	
  Waiver of Jury Trial

  	
  47

  
	
  12.22

  	
  Information and Audit Cooperation

  	
  47

  
	
  12.23

  	
  Bulk Sales Laws

  	
  47

  

 

iv

 

LIST OF DEFINED TERMS

 

	
   

  	
  Page No.

  
	
  Agreement

  	
  1

  
	
  Allocated Purchase Price

  	
  2

  
	
  Assignment

  	
  27

  
	
  Assignments

  	
  27

  
	
  Bridge Financing Commitment

  	
  12

  
	
  Bridge Loan

  	
  13

  
	
  Business Day

  	
  45

  
	
  Casualty

  	
  19

  
	
  Casualty Tenant Termination Event

  	
  20

  
	
  Casualty Tenant Termination Notice

  	
  20

  
	
  CERCLA

  	
  42

  
	
  Closing

  	
  23

  
	
  Closing Date

  	
  3

  
	
  Closing Date Extension Condition

  	
  13

  
	
  Co-Insurance

  	
  17

  
	
  Condemnation

  	
  20

  
	
  Condemnation Tenant Termination
  Event

  	
  20

  
	
  Condemnation Tenant Termination
  Notice

  	
  20

  
	
  Confidentiality Agreement

  	
  3

  
	
  Deed

  	
  27

  
	
  Deeds

  	
  27

  
	
  Demanding Party

  	
  8

  
	
  Due Diligence Termination Notice

  	
  11

  
	
  Earnest Money

  	
  2

  
	
  Effective Date

  	
  3

  
	
  Escrow Agent

  	
  2

  
	
  Estoppel Shortfall

  	
  24

  
	
  Fidelity

  	
  17

  
	
  Financial Advisor

  	
  3

  
	
  Financing Commitment Status Statement

  	
  12

  
	
  First American

  	
  17

  
	
  Guaranties

  	
  6

  
	
  Guaranty

  	
  6

  
	
  Harborside

  	
  3

  
	
  Harborside Earnest Money

  	
  7

  
	
  Harborside Membership Interests

  	
  3

  
	
  Harborside Purchase and Sale Agreement

  	
  3

  
	
  Harborside Seller

  	
  3

  
	
  Hazardous Materials

  	
  43

  
	
  IBM

  	
  19

  
	
  IBM Property

  	
  19

  
	
  Improvements

  	
  5

  
	
  Independent Consideration

  	
  7

  
	
  Inspection Period

  	
  3

  

 

v

 

	
  Intangible Personal Property

  	
  6

  
	
  iPortal

  	
  8

  
	
  iStar

  	
  3

  
	
  Land

  	
  5

  
	
  Lease

  	
  6

  
	
  Lease Files

  	
  9

  
	
  Leases

  	
  6

  
	
  License Agreements

  	
  7

  
	
  Mezzanine Loan

  	
  13

  
	
  Non-Demanding Party

  	
  8

  
	
  Non-Prime Tenants

  	
  24

  
	
  Operating Expenses

  	
  30

  
	
  Operating Statements

  	
  8

  
	
  Permitted Exceptions

  	
  17

  
	
  Prime Tenants

  	
  24

  
	
  Property

  	
  5

  
	
  Property Information

  	
  8

  
	
  Purchase Price

  	
  2

  
	
  Purchaser

  	
  1

  
	
  Real Property

  	
  6

  
	
  Rent Roll

  	
  8

  
	
  Reports

  	
  14

  
	
  ROFO Waivers

  	
  22

  
	
  Seller

  	
  1

  
	
  Seller Estoppel Cap

  	
  25

  
	
  Seller Estoppels

  	
  24

  
	
  Seller’s Representatives

  	
  38

  
	
  Senior Lender

  	
  12

  
	
  Service Contracts

  	
  6

  
	
  SNDA

  	
  22

  
	
  SNDAs

  	
  22

  
	
  Surveys

  	
  9

  
	
  Survival Period

  	
  37

  
	
  Tangible Personal Property

  	
  6

  
	
  Taxes

  	
  29

  
	
  Tenant Estoppel Certificate

  	
  21

  
	
  Tenant Receivables

  	
  30

  
	
  Term Financing Commitment

  	
  11

  
	
  Third Party Estoppel Certificate

  	
  21

  
	
  Third Party Estoppel Certificates

  	
  21

  
	
  Title Affidavits

  	
  27

  
	
  Title and Survey Review Period

  	
  3

  
	
  Title Commitment

  	
  16

  
	
  Title Commitments

  	
  16

  
	
  Title Company

  	
  2

  
	
  Title Policies

  	
  17

  

 

vi

 

	
  Title Policy

  	
  17

  
	
  Unbilled Tenant Receivables

  	
  30

  
	
  Uncollected Delinquent Tenant Receivables

  	
  30

  
	
  Updated Property Information

  	
  14

  

 

vii

 

PURCHASE AND SALE AGREEMENT

 

32  PROPERTIES DESCRIBED
GENERALLY ON SCHEDULE 1.1.1

 

This
Purchase and Sale Agreement (this “Agreement”) is
made and entered into by and between Purchaser and Seller.

 

RECITALS

 

A.                                   Defined terms
are indicated by initial capital letters. 
Defined terms shall have the meanings set forth herein, whether or not
such terms are used before or after the definitions are set forth.

 

B.                                     Purchaser
desires to purchase the Property and Seller desires to sell the Property, all
upon the terms and conditions set forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual terms, provisions, covenants and
agreements set forth herein, as well as the sums to be paid by Purchaser to
Seller, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Purchaser and Seller agree as follows:

 

ARTICLE 1

BASIC
INFORMATION

 

1.1                                 Certain Basic Terms.  The following defined terms shall have the
meanings set forth below:

 

1.1.1                              “Seller”:                 means each of the parties listed on Schedule
1.1.1.  It is understood and
agreed that each Seller owns the property generally described by common address
listed opposite such Seller party on Schedule
1.1.1 and, with respect to all references in this Agreement to
Seller and each and every reference to the “Property”,
“Land”, “Improvements”, “Real Property”, “Leases”,
“Guaranty”, “Guaranties”, “Tangible Personal Property”, “Service Contracts”, “Intangible
Personal Property”, “License
Agreements”, “Property Information”
(and each component thereof), “Property
Documents” (and each component thereof), “Updated Property Information” (and each component thereof), “Permitted Exceptions”, “Reports”, “Title Commitment”, “Title
Policy”, “Lease Casualty Event”,
“Material Damage”, “Materially Damaged”, “Condemnation”, “Lease Condemnation Event”, “Purchase
Price Adjustment Notice”, “Price
Adjustment Period”, “Operating
Expenses”, “Tenant Receivables”,
“Unbilled Tenant Receivables”, “Uncollected Delinquent Tenant Receivables”,
“Taxes” and “Hazardous Materials”, such reference shall
be limited to each of such items as they relate solely to the property
generally described by common address and the Seller associated therewith.  Additionally, all exhibits referencing any of
the foregoing listed items will indicate the common address to which such
exhibit, or portion thereof relates.

 

1.1.2                        “Purchaser”:                       TRT Acquisitions LLC, a Delaware limited liability company.

 

 

1.1.3                              “Purchase Price”:                                      $1,190,500,000.00; subject to adjustment as provided herein, and as
allocated as set forth on Schedule 1.1.3
(the “Allocated Purchase Price”).
The Allocated Purchase Price of each Property is only for (A) purposes of
determining (i) the amount of transfer taxes payable in connection with
the transfer of such Property, (ii) the amount of the reduction in the
Purchase Price due to the termination of this Agreement with respect to such
Property pursuant to the terms hereof and (iii) compliance with the
Estoppel Requirement, and (B) tax reporting and accounting purposes.  In no event shall the Allocated Purchase
Price of any individual Property be deemed or construed to reflect the sales
price of such individual Property in a stand alone transaction.

 

1.1.4                        “Earnest Money”:                                                $46,200,000.00, including all interest earned thereon, to be deposited in
accordance with Section 3.1 below together with the Harborside Earnest
Money if added thereto pursuant to Section 3.1.  All references herein to Earnest Money shall
be deemed to include only such portions thereof as have been deposited with
Escrow Agent in accordance with Section 3.1.

 

1.1.5                        “Title Company”:

 

First
American Title Insurance Company

National Commercial Services — Chicago

30 North LaSalle Street, Suite 2700

Chicago, Illinois 60602

 

Attn:  John E. Beckstedt, Jr.

Telephone number: (312) 917-7223 

Facsimile number: (888) 279-8547

E-mail: jbeckstedt@firstam.com

 

And

 

Fidelity
Title Insurance Company

8450 E. Crescent Parkway, Suite 410

Greenwood Village, CO 80111

Attn:  Ms. Valena Bloomquist

Telephone number: (303) 244-9198

Facsimile number:  (720) 489-7593

E-mail: valena.bloomquist@fnf.com

 

1.1.6                              “Escrow Agent”:

 

First
American Title Insurance Company

National Commercial Services — Chicago

30 North LaSalle Street, Suite 2700

Attn: John E. Beckstedt, Jr. 

Telephone number: (312) 917-7223

Facsimile number: (888) 279-8547

E-mail: jbeckstedt@firstam.com

 

2

 

1.1.7                        “Financial Advisor”: HFF
Securities L.P., an affiliate of Holliday Fenoglio Fowler, LP.

 

1.1.8                        “Effective Date”:  The date on which this Agreement is executed
by the latter to sign of Purchaser or Seller, as indicated on the signature page of
this Agreement.  If the execution date is
left blank by either Purchaser or Seller, the Effective Date shall be the
execution date inserted by the other party.

 

1.1.9                              “Title and Survey Review Period”:  The period ending on May 11, 2010.

 

1.1.10                  “Inspection Period”:  The period beginning on the Effective Date
and ending on May 11, 2010, subject to extension as provided in Section 6.1.4(1).

 

1.1.11                  “Closing Date”:  The date which is ten (10) days after
the expiration of the Inspection Period,  subject
to extension as provided in Section 4.3.2.

 

1.1.12                  “Confidentiality Agreement”:  The letter agreement dated March 31,
2010 between iStar Financial Inc., an affiliate of Seller (“iStar”), and Purchaser.

 

1.1.13                  “Harborside”: The property
commonly known as Harborside Financial Center Plaza X, Jersey City, New Jersey.

 

1.1.14                  “Harborside Membership Interests”:  The one hundred percent (100%) membership
interests of American Financial Exchange L.L.C. owned by Harborside Seller.

 

1.1.15                  “Harborside Purchase and Sale Agreement”:  That certain Member Interest Purchase and
Sale Agreement between Purchaser and Harborside Seller dated as of the date hereof.

 

1.1.16                  “Harborside Seller”: iStar
Harborside LLC, a Delaware limited liability company.

 

1.2                                 Closing Costs.  Closing costs shall be allocated and paid as
follows:

 

	
  Cost

  	
   

  	
  Responsible Party

  
	
  Title
  Commitments required to be delivered pursuant to Section 5.1

  	
   

  	
  Seller

  
	
  Premium
  for standard form Title Policies with extended coverage and Co-Insurance
  (subject to this Section 1.2 and Section 5.4) required to be
  delivered pursuant to Section 5.4

  	
   

  	
  Seller

  

 

3

 

	
  Premium
  for any upgrade of Title Policies for additional coverage, including, without
  limitation, the premium for any re-insurance, and any endorsements to the
  Title Policies desired by Purchaser, any inspection fee charged by the Title
  Company, tax certificates, municipal and utility lien certificates, and any
  other Title Company charges other than those required in connection with
  satisfying any liens which are not Permitted Exceptions

  	
   

  	
  Purchaser

  
	
  Any
  increase in the premium for the Title Policies attributable to obtaining
  Co-Insurance as provided in Section 5.4

  	
   

  	
  Purchaser

  
	
  Any
  costs required to cause the Title Company to issue the Title Policies with
  extended coverage

  	
   

  	
  Seller

  
	
  Costs
  of new surveys and/or any revisions, modifications or recertifications to the
  existing Surveys.

  	
   

  	
  Seller

  
	
  Costs
  for UCC Searches

  	
   

  	
  Purchaser

  
	
  Recording
  Fees

  	
   

  	
  Paid
  in accordance with local custom

  
	
  Any
  deed taxes, documentary stamps, transfer taxes, intangible taxes, mortgage
  taxes or other similar taxes, fees or assessments

  	
   

  	
  Paid
  in accordance with Schedule 1.2

  
	
  Any
  escrow fee charged by Escrow Agent for holding the Earnest Money or
  conducting the Closing

  	
   

  	
  Purchaser
  1⁄2 

  Seller
  1⁄2

  
	
  Real
  Estate Fee to Financial Advisor

  	
   

  	
  Seller

  
	
  All
  other closing costs and expenses incident to this transaction and the closing
  thereof shall be paid by the party incurring the same.

  	
   

  	
   

  

 

1.3                                 Notice Addresses:

 

All
notices required or permitted to be sent hereunder shall be sent as follows:

 

	
  Purchaser:

  	
  TRT
  Acquisitions LLC

  	
  Copies
  to:

  	
  TRT
  Acquisitions LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  518
  17th Street, Suite 1700

  	
   

  	
  518
  17th Street, Suite 1700

  
	
   

  	
  Denver,
  CO 80202

  	
   

  	
  Denver,
  CO 80202

  	
   

  
	
  Attention:
  

  	
  Mr. John
  Blumberg

  Mr. Greg Moran

  	
   

  	
  Attention:
    Joshua J. Widoff, Esq.

  
	
  Telephone:

  	
  303-228-2200

  	
   

  	
  Telephone:
  303-228-2200

  
	
  Facsimile:

  	
  303-577-9797

  	
   

  	
  Facsimile:  303-869-4602

  
	
  E-mail:

  	
  gmoran@dividendcapital.com

  	
   

  	
  E-mail: jwidoff@dividendcapital.com

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  and
  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Greenberg
  Traurig, LLP 

  

 

4

 

	
   

  	
   

  	
   

  	
  200
  Park Avenue

  New York, NY 10166

  Attention: Robert J. Ivanhoe, Esq.

  Telephone: 212-801-9333

  Facsimile:  212-801-6400

  E-mail: ivanhoer@gtlaw.com

  
	
   

  	
   

  	
   

  	
   

  
	
  Seller:

  	
  c/o iStar Financial Inc.

  	
  Copies to:

  	
  iStar
  Financial Inc.

  
	
   

  	
  1114
  Avenue of the Americas

  	
   

  	
  1114
  Avenue of the Americas

  
	
   

  	
  New
  York, NY 10036

  	
   

  	
  New
  York, NY 10036

  
	
   

  	
  Attention:
  Samantha Garbus

  	
   

  	
  Attn:
  Mary-Beth Roselle, Esq.

  
	
   

  	
  Telephone:
  212-930-9407

  	
   

  	
  Telephone:
  212-930-9481

  
	
   

  	
  Facsimile:
  212-930-9494

  	
   

  	
  Facsimile: 212-930-9494

  
	
   

  	
  E-mail: sgarbus@istarfinancial.com

  	
   

  	
  E-mail: mroselle@istarfinancial.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  iStar
  Asset Services Inc.

  180 Glastonbury Boulevard

  Glastonbury, CT 06033

  Attn: President

  Telephone: 860-815-5910

  Facsimile:  860-815-5901

  E-mail: brubin@istarfinancial.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Katten
  Muchin Rosenman LLP

  525 West Monroe St.

  Chicago, IL 60661-3693

  Attn: Gregory P.L. Pierce, Esq.

  Phone: 312-902-5541

  Fax:  312-577-8893

  Email: greg.pierce@kattenlaw.com

  

 

ARTICLE 2

PROPERTY

 

2.1                                 Property.  Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, the following property (individually and/or collectively, as the
context may require, the “Property”):

 

2.1.1                        Real Property.  The land described in Exhibit A
hereto (individually and/or collectively, as the context may require, the “Land”), together with (a) all
improvements located thereon, but expressly excluding improvements and
structures owned by any tenant or other third party pursuant to Leases
(individually and/or collectively, as the context may require, the “Improvements”), (b) all right, title
and interest of Seller, if any, in and to the rights, benefits, privileges,
easements, tenements, hereditaments, and appurtenances thereon or in anywise
appertaining thereto, including without limitation, any and all minerals and
mineral rights, oil, gas, and oil and gas rights, development rights, air
rights, water and water rights, wells, well rights and well permits, water and
sewer taps, and sanitary or storm sewer capacity,

 

5

 

and (c) all right,
title, and interest of Seller, if any, in and to all strips and gores and any
land lying in the bed of any street, road or alley, open or proposed, adjoining
the Land (the Land, together with items (a), (b) and (c) of this Section 2.1.1,
individually and/or collectively, as the context may require, the “Real Property”).

 

2.1.2                        Leases and Guaranties.  All of Seller’s right, title and interest,
without warranty except as set forth herein, in those leases, including any
amendments to such leases, described on Schedule
2.1.2 and all leases which may be made by Seller after the Effective
Date and prior to Closing as permitted by this Agreement (individually a “Lease” and collectively the “Leases”), all guaranties of such Leases,
including any amendments to such guaranties, described on Schedule 2.1.2 (individually a “Guaranty” and collectively the “Guaranties”), and all other collateral
securing the Leases or Guaranties, including without limitation all security
deposits and letters of credit.

 

2.1.3                        Tangible Personal Property.  All of Seller’s right, title and interest,
without warranty, except as set forth herein, in the equipment, machinery,
furniture, furnishings, supplies and other tangible personal property, if any,
owned by Seller and now or hereafter located in and used in connection with the
operation, ownership or management of the Real Property, but specifically
excluding any items of personal property owned or leased by any tenants at or
on the Real Property and further excluding any items of personal property owned
by third parties and leased to Seller (collectively, the “Tangible Personal Property”), which
excluded items of personal property are listed on Schedule 2.1.3.

 

2.1.4                        Intangible Personal Property.  All of Seller’s right, title and interest, if
any, without warranty, except as set forth herein, in all intangible personal
property related to the Real Property and the Improvements, including, without
limitation: all trade names and trade marks associated with the Real Property
and the Improvements, including Seller’s rights and interests, if any, in the
name of the Real Property; the plans and specifications and other architectural
and engineering drawings for the Improvements, if any (to the extent assignable
without cost to Seller); contract rights related to the operation, ownership or
management of the Real Property, including maintenance, service, construction,
supply and equipment rental contracts, if any, but not including Leases or
License Agreements (collectively, the “Service
Contracts”) (but only to the extent assignable without cost to
Seller; warranties (to the extent assignable without cost to Seller);
governmental permits, approvals and licenses, if any (to the extent assignable
without cost to Seller); and telephone exchange numbers (to the extent
assignable without cost to Seller) (all of the items described in this Section 2.1.4
collectively referred to as the “Intangible
Personal Property”).  To the
extent any items of Intangible Personal Property cannot be assigned to Purchaser
without cost to Seller, Purchaser shall have the option, to be exercised in
writing on or before the Closing Date, to accept such assignment and pay any
cost associated therewith, or to cause Seller to terminate the same (if
applicable) at Seller’s expense, or to permit Seller to retain the same.  Tangible Personal Property and Intangible
Personal Property shall not include (a) any appraisals or other economic
evaluations of, or projections with respect to, all or any portion of the
Property, including, without limitation, budgets prepared by or on behalf of
Seller or any affiliate of Seller, (b) any documents, materials or
information which are subject to attorney/client, work product or similar
privilege, which constitute attorney communications with respect to the
Property and/or Seller, or which are subject to a confidentiality agreement, (c) such
documents, materials or information received by

 

6

 

Seller from tenants and
covered by confidentiality agreements between such tenants and Seller, except
that such documents, materials or information shall be included in Tangible
Personal Property if Purchaser shall have agreed in writing to be bound by the
terms of such confidentiality agreements prior to Seller’s delivery of such
documents, materials and information to Purchaser, and (d) any trade name,
mark or other identifying material that includes the name “iStar” or any
derivative thereof.

 

2.1.5                        License Agreements.  All of Seller’s right, title and interest,
without warranty, except as set forth herein, in and to all agreements (other
than the Leases and the Guaranties), if any, for the leasing or licensing of
rooftop space or equipment, telecommunications equipment, cable access and
other space, equipment and facilities that are located on or within the Real
Property and generate income  to Seller
as the owner of the Real Property, including agreements which may be made by
Seller after the Effective Date and prior to Closing as permitted by this
Agreement (the “License Agreements”).

 

ARTICLE 3

EARNEST
MONEY

 

3.1                                 Deposit and Investment of Earnest Money.  Within two (2) Business Days after the
Effective Date, Purchaser shall deposit Twenty-Three Million One Hundred
Thousand and no/100 Dollars ($23,100,000.00) with Escrow Agent and deliver a
completed, executed Form W-9 to the Escrow Agent and the Seller.  Within two (2) Business Days after
Purchaser has delivered the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof, Purchaser shall deposit Twenty-Three Million One Hundred Thousand and
no/100 Dollars ($23,100,000.00) with Escrow Agent. Escrow Agent shall invest
the Earnest Money in the Federated Prime Obligations Fund (NASDAQ: POIXX),
shall not commingle the Earnest Money with any funds of Escrow Agent or others,
and shall promptly provide Purchaser and Seller with confirmation of the
investments made.  Such account shall
have no penalty for early withdrawal, and Purchaser accepts all risks with
regard to the investment of the Earnest Money. 
Upon any termination of the Harborside Purchase and Sale Agreement prior
to the closing thereunder except pursuant to Section 4.3.1, Section 4.3.2
or Article X thereof, Seller and Purchaser hereby direct Escrow Agent to
immediately add the earnest money held by Escrow Agent pursuant to the
Harborside Purchase and Sale Agreement (the “Harborside
Earnest Money”) to the Earnest Money and thereafter all references
herein to the Earnest Money shall be deemed to refer to the Earnest Money as
increased by the Harborside Earnest Money.

 

3.2                                 Independent Consideration.  If this Agreement terminates for any reason
and Purchaser is entitled to receive a return of the Earnest Money pursuant to
the terms hereof, the Escrow Agent shall first disburse to Seller One Hundred and
No/100 Dollars ($100.00) as independent consideration for Seller’s performance
under this Agreement (“Independent Consideration”),
which shall be retained by Seller in all instances.

 

3.3                                 Form; Failure to Deposit.  The Earnest Money shall be paid by wire
transfers to Escrow Agent of immediately available U.S. federal funds.  If Purchaser fails to timely deposit all of
the Earnest Money within the time periods required, Seller may terminate this
Agreement by written notice to Purchaser and Escrow Agent, in which event any
Earnest Money that has previously been deposited by Purchaser with Escrow Agent
shall be immediately delivered to

 

7

 

Seller and thereafter the parties hereto shall have
no further rights or obligations hereunder, except for rights and obligations
which, by their terms, survive the termination hereof.

 

3.4                                 Disposition of Earnest Money.  The Earnest Money shall be applied as a
credit to the Purchase Price at Closing. 
However, if this Agreement terminates pursuant to Sections 4.3.1 or
4.3.2, Escrow Agent shall pay the entire Earnest Money (less the Independent
Consideration) to Purchaser one (1) Business Day following the end of the
Inspection Period (as long as the current investment can be liquidated and
disbursed in one (1) Business Day). 
No notice to Escrow Agent from Seller shall be required for the release
of the Earnest Money to Purchaser by Escrow Agent if this Agreement terminates
pursuant to Section 4.3.1 or 4.3.2. 
In the event of a termination of this Agreement by either Seller or
Purchaser other than pursuant to Section 4.3.1 or 4.3.2, the party (the “Demanding Party”) seeking to terminate this Agreement shall
give written notice of such election to Escrow Agent and the other party (the “Non-Demanding Party”) to this Agreement.  Upon receipt of any such notice of
termination, Escrow Agent shall give notice to the Non-Demanding Party of
Escrow Agent’s receipt of such notice, enclosing a copy of the notice in
question.  If within five (5) Business
Days after the Non-Demanding Party is given or deemed to have been given notice
of Escrow Agent’s receipt of the notice in question, Escrow Agent has not
received from the Non-Demanding Party its notice of objection to the notice,
then Escrow Agent shall disburse the Earnest Money as requested by the notice
in question, on the sixth (6th) Business Day following its giving of such
notice to the Non-Demanding Party.  If
within said five (5) Business Day period Escrow Agent receives from the
Non-Demanding Party notice of objection, then Escrow Agent shall notify the
Demanding Party of the objection, and continue to hold the Earnest Money until
Escrow Agent is in receipt of a joint order direction or a court order
instructing Escrow Agent to disburse the Earnest Money.  In such event of objection, Escrow Agent may
interplead the Earnest Money into a court of competent jurisdiction in a New
York state court or federal court located in the State, City and County of New
York.  All attorneys’ fees and costs and
Escrow Agent’s costs and expenses incurred in connection with such interpleader
shall be assessed against the party that is not awarded the Earnest Money, or
if the Earnest Money is distributed in part to both parties, then in the
inverse proportion of such distribution.

 

ARTICLE 4

DUE
DILIGENCE

 

4.1                                 Due Diligence Materials To Be Delivered.  Seller has delivered to Purchaser complete
(to Seller’s knowledge) copies of, or made electronic copies available to
Purchaser on Seller’s iPortal internet site relating to the Property (“iPortal”), the following (the “Property
Information,”  or the “Property Documents”):

 

4.1.1                        Rent Roll.  A current rent roll in Seller’s standard form
(“Rent Roll”) for the Property;

 

4.1.2                        Financial Information.  A copy of operating statements and a summary
of capital expenditures pertaining to each Property for the 12 months preceding
the Effective Date (collectively, “Operating
Statements”);

 

8

 

4.1.3                        Environmental Reports.  A copy of any environmental reports or
environmental site assessments related to each Property prepared for the
benefit of Seller, it being acknowledged by Purchaser that Purchaser shall not
be entitled to rely thereon absent an express reliance letter from the company
issuing such environmental reports or environmental site assessments obtained
by Purchaser at Purchaser’s sole cost and expense;

 

4.1.4                        Tax Statements.  A copy of ad valorem tax statements relating
to each Property for the current tax period;

 

4.1.5                        Surveys.  A copy of the most current survey, if any, of
each Property in Seller’s possession (collectively, the “Surveys”);

 

4.1.6                        Service Contracts.  Copies of any Service Contracts for each
Property;

 

4.1.7                        Personal Property.  A list of Tangible Personal Property for each
Property;

 

4.1.8                        License Agreements.  Copies of any License Agreements for each
Property;

 

4.1.9                        Lease Files.  The lease file for each Lease affecting each
Property, including, without limitation, the Lease, any amendments thereto, the
Guaranty (if applicable), any amendments thereto, any letter agreements, any
assignments which are then in effect and any letters of credit which are then
in effect (collectively, the “Lease Files”);

 

4.1.10                  Maintenance Records and Warranties.  Maintenance work orders for each Property for
the 12 months preceding the Effective Date and warranties for each Property, if
any, on roofs, air conditioning units, fixtures and equipment;

 

4.1.11                  Plans and Specifications.  Building plans and specifications relating to
each Property, if any;

 

4.1.12                  Licenses, Permits and Certificates of Occupancy.  Licenses, permits and
certificates of occupancy relating to each Property; and

 

4.1.13                  Insurance Certificates.  Copies of certificates evidencing the
existing liability and casualty insurance coverage for each Property including
any liability and casualty insurance maintained by affiliates of Seller.

 

Except
for the Rent Roll contemplated in Section 4.1.1, Seller’s obligation to
deliver the items listed in this Section 4.1 shall be limited to the
extent such items are in the possession of Seller or its property management
company.

 

4.2                                 Physical Due Diligence.  Commencing on the Effective Date and
continuing until the Closing, subject to the terms of the Leases, Purchaser
shall have reasonable access to the Property at all reasonable times during
normal business hours, upon appropriate notice to tenants as permitted or
required under the Leases, for the purpose of conducting reasonably necessary
tests, including surveys and architectural, engineering, geotechnical and
environmental

 

9

 

inspections and tests, provided that (a) Purchaser
must give Seller the greater of (i) two (2) full Business Days’  or (ii) the minimum notice period required by the
applicable Lease(s) for such Property, written notice of any such
inspection or test, and with respect to any intrusive inspection or test (i.e.,
core sampling) must obtain Seller’s prior written consent (which consent shall
not be unreasonably withheld or conditioned), (b) prior to performing any
inspection or test, Purchaser must deliver a certificate of insurance to Seller
evidencing that Purchaser and its contractors, agents and representatives have
in place (and Purchaser and its contractors, agents and representatives shall
maintain during the pendency of this Agreement) (1) commercial general
liability insurance with limits of at least One Million Dollars ($1,000,000)
per occurrence and Two Million Dollars ($2,000,000) in the aggregate for bodily
injury or death and property damage insurance including coverage for
contractual liability and personal and advertising injury with respect to
Purchaser’s obligations hereunder, and (2) workers’ compensation and
employers’ liability insurance with limits of at least $100,000 each accident,
$100,000 each employee and $500,000 policy limit, all covering any accident
arising in connection with the presence of Purchaser, its contractors, agents
and representatives on the Property, which insurance, except for workers’
compensation and employers’ liability, shall (A) name as additional
insureds thereunder Seller and such other parties holding insurable interests
as Seller may designate and (B) be written by a reputable insurance
company having a rating of at least “A+:VII” by Best’s Rating Guide (or a
comparable rating by a successor rating service), and (C) otherwise be
subject to Seller’s prior approval, which approval shall not be unreasonably
withheld, conditioned or delayed, and (c) all such tests shall be
conducted by Purchaser in compliance with Purchaser’s responsibilities set
forth in Section 4.9 below.  The
requirement to carry the insurance specified in the preceding sentence may be
satisfied through blanket or umbrella insurance policies carried by Purchaser
or its affiliates.  Purchaser shall bear
the cost of all such inspections or tests and shall be responsible for and act
as the generator with respect to any wastes generated by those tests, which obligation
shall survive the termination of this Agreement.  Subject to the provisions of Section 4.7
hereof, Purchaser or Purchaser’s representatives may communicate with any
Seller-designated tenant representative; provided, however, Purchaser must
contact Seller at least three (3) full Business Days in advance by
telephone to inform Seller of Purchaser’s intended communication with any
Seller-designated tenant representative and allow Seller the opportunity to
participate in such communication if Seller desires.  No assurance or guaranty is afforded by
Seller that any Seller-designated tenant representative will communicate with
Purchaser or Purchaser’s representatives. 
Subject to the provisions of Section 4.7 hereof, Purchaser or
Purchaser’s representatives may, without Seller’s consent or participation,
communicate with any governmental authority for the sole purpose of gathering
information regarding current zoning compliance of the Real Property and
current entitlements with respect to the Real Property in connection with the
transaction contemplated by this Agreement. 
Other than as set forth in the previous sentence, Purchaser must contact
Seller at least three (3) full Business Days in advance by telephone to
inform Seller of Purchaser’s intended communication with any governmental
authority and to allow Seller the opportunity to participate in such
communication if Seller desires.  As used
in this Section 4.2, “communicate” and “communication” shall mean the
initiation of, response to, or sharing or exchange of information, knowledge or
messages, whether by oral, written or electronic methods or media, or by any
other means in person or otherwise, and includes requests for inspections or
other access to any Property.

 

10

 

4.3                                 Due Diligence/Financing Contingency
Termination Rights.

 

4.3.1                        Notwithstanding anything to the contrary in this Agreement, this
Agreement shall automatically terminate on the last day of the Inspection
Period unless Purchaser gives written notice waiving such termination and
containing such other information required by Section 4.3.2 hereof and Section 4.3.2
of the Harborside Purchase and Sale Agreement to Seller, Harborside Seller and
Escrow Agent (the “Due Diligence Waiver
Notice”) on or before the last day of the Inspection Period.  If Purchaser delivers a Due Diligence Waiver
Notice, this Agreement, and the Harborside Purchase and Sale Agreement pursuant
to the terms thereof, shall continue in full force and effect, subject to the provisions
of this Agreement and the Harborside Purchase and Sale Agreement, including Section 4.3.2
hereof and thereof, and Purchaser shall be deemed to have acknowledged that it
has received or had access to all Property Documents (as defined herein and in
the Harborside Purchase and Sale Agreement) and conducted all inspections and
tests of the Property and Harborside that it considers important.

 

4.3.2                        Notwithstanding anything to the contrary in this Agreement, this
Agreement, and the Harborside Purchase and Sale Agreement pursuant to the terms
thereof, shall automatically terminate on the last day of the Inspection Period
(as defined herein and in the Harborside Purchase and Sale Agreement) unless
Purchaser shall notify Seller and Harborside Seller in the Due Diligence Waiver
Notice that Purchaser (i) was able to obtain a financing commitment for
the transaction described herein and in the Harborside Purchase and Sale
Agreement from any lender which lender and the terms of such loan are
satisfactory to Purchaser in its sole and absolute discretion (the “Term Financing Commitment”) and Purchaser
has provided Seller and Harborside Seller with a fully executed copy of the
Term Financing Commitment, in which case Purchaser and Seller shall proceed to
Closing pursuant to the terms and provisions of this Agreement, Purchaser shall
proceed to closing the acquisition of the Harborside Membership Interests
pursuant to the Harborside Purchase and Sale Agreement and iStar shall have no
obligation to provide the Mezzanine Loan and iStar’s providing the Mezzanine
Loan and the closing of the loan contemplated by the Term Financing Commitment
shall not be conditions to Purchaser’s obligation to close hereunder or under
the Harborside Purchase and Sale Agreement, (ii) was able to obtain a
financing commitment or commitments for the GE Bridge Loan from General
Electric Capital Corporation (“GECC”)
pursuant to the terms of this Agreement and the Harborside Purchase and Sale
Agreement (such single or multiple commitments are referred to herein
collectively as the “GE Bridge Financing
Commitment”), which GE Bridge Financing Commitment is satisfactory
to Purchaser in its sole and absolute discretion and must specify all major
business terms of the GE Bridge Loan, including, without limitation, all major
amendments to the GE Loan, and Purchaser has provided Seller and Harborside
Seller with a fully executed copy of the GE Bridge Financing Commitment, in
which case iStar shall, subject to the terms of this Section 4.3.2 and Section 4.3.2
of the Harborside Purchase and Sale Agreement, provide the Mezzanine Loan
simultaneously with the closing of the GE Bridge Loan, Purchaser and Seller
shall proceed to Closing pursuant to the terms and provisions of this
Agreement, Purchaser shall proceed to closing the acquisition of the Harborside
Membership Interests pursuant to the Harborside Purchase and Sale Agreement
and, provided Purchaser has not subsequently elected to obtain alternative
financing, (x) iStar’s providing the Mezzanine Loan simultaneously with
the closing of the GE Bridge Loan and (y) GECC’s closing of the GE Bridge
Loan under the terms of the GE Bridge Financing Commitment on the Closing Date
(unless the GE Bridge Loan fails to close as a result of (A) Purchaser’s
uncured default under the GE Bridge Financing Commitment, (B) the failure
of one or more conditions to close which are within Purchaser’s

 

11

 

reasonable control to
satisfy, or (C) Purchaser’s failure to accept documentation for the GE
Bridge Loan that is commercially reasonable for debt assumption transactions)
shall be conditions to Purchaser’s obligation to close hereunder and under the
Harborside Purchase and Sale Agreement, (iii) was able to obtain a
financing commitment for a Bridge Loan from GECC or any alternative senior
lender the terms of which loan and identity of such lender are satisfactory to
Purchaser in its sole and absolute discretion (“Senior Lender”) pursuant to the terms of this Agreement and
the Harborside Purchase and Sale Agreement (the “Bridge Financing Commitment”) and Purchaser has provided
Seller and Harborside Seller with a fully executed copy of the Bridge Financing
Commitment, in which case iStar shall, subject to the terms of this Section 4.3.2
and Section 4.3.2 of the Harborside Purchase and Sale Agreement, provide
the Mezzanine Loan simultaneously with the closing of the Bridge Loan,
Purchaser and Seller shall proceed to Closing pursuant to the terms and
provisions of this Agreement and Purchaser shall proceed to closing the
acquisition of the Harborside Membership Interests pursuant to the Harborside
Purchase and Sale Agreement but the closing of the Bridge Loan and the
Mezzanine Loan (so long as iStar is not in default of its obligation to provide
the Mezzanine Loan as set forth herein and in the Harborside Purchase and Sale
Agreement) shall not be conditions to Purchaser’s obligations to close
hereunder or under the Harborside Purchase and Sale Agreement, or (iv) has
not obtained the Term Financing Commitment, the GE Bridge Financing Commitment
or the Bridge Financing Commitment on terms that are yet acceptable to
Purchaser in Purchaser’s sole and absolute discretion but that Purchaser (A) desires
to proceed to Closing hereunder and under the Harborside Purchase and Sale
Agreement notwithstanding that Purchaser does not have the Term Financing
Commitment, the GE Bridge Financing Commitment or the Bridge Financing
Commitment on terms that are yet acceptable to Purchaser in Purchaser’s sole
and absolute discretion and (B) requests an additional ten (10) day
period (the “Financing Commitment Extension
Period”) within which to obtain the Term Financing Commitment, the
GE Bridge Financing Commitment or the Bridge Financing Commitment on terms
acceptable to Purchaser, in which case Purchaser shall be deemed to have
acknowledged that it has received or had access to all Property Documents (as
defined herein and in the Harborside Purchase and Sale Agreement), conducted
all inspections and tests of the Property and Harborside that it considers
important, and completed its due diligence of, the Property and the Membership
Interests (items (i), (ii) and (iii) above are each referred to
herein individually as a “Financing
Commitment Status Statement”). 
If the Due Diligence Waiver Notice contains the information set forth in
this subsection (iv) above, prior to the end of the Financing Commitment
Extension Period, Purchaser shall deliver to Seller and Harborside Seller a
notice setting forth the Financing Commitment Status Statement applicable as of
the last day of the Financing Commitment Extension Period and the terms and
conditions in this subsection (iv) and in Section 4.3.2 of the
Harborside Purchase and Sale Agreement related thereto shall apply. If Purchaser
fails to deliver the applicable Financing Commitment Status Statement and a
fully executed copy of either the Term Financing Commitment, the GE Bridge
Financing Commitment or the Bridge Financing Commitment prior to the end of the
Financing Commitment Extension Period, this Agreement, and the Harborside
Purchase and Sale Agreement pursuant to the terms thereof, shall automatically
terminate as of the last day of the Financing Commitment Extension Period, in
which case the Earnest Money shall be immediately returned to Purchaser and the
parties hereto shall have no further rights or obligations, other than those
that by their terms survive the termination of this Agreement.  Any Financing Commitment Status Statement
delivered by Purchaser pursuant to the terms hereof shall be the same as the

 

12

 

Financing Commitment
Status Statement delivered by Purchaser pursuant to the Harborside Purchase and
Sale Agreement. If Purchaser obtains either the Term Financing Commitment, the
GE Bridge Financing Commitment or the Bridge Financing Commitment pursuant to
the terms of, and within the timeframes set forth in, this Section 4.3.2
and Section 4.3.2 of the Harborside Purchase and Sale Agreement, then
Purchaser or Seller may elect to extend the then current Closing Date from time
to time to a date that is not more than ten (10) days following the then
current Closing Date by delivering written notice to the other party at least
two (2) days prior to the then current Closing Date, respectively, solely
in order for (A) Purchaser to comply with the terms of the Term Financing
Commitment, the GE Bridge Financing Commitment or the Bridge Financing
Commitment (as applicable) or to obtain alternative financing and (B) Seller
to satisfy the conditions to Purchaser’s obligations to close set forth in Section 7.2.2
of this Agreement (the foregoing items (A) and (B) are each referred
to herein individually as, a “Closing Date
Extension Condition”); provided, however, neither Purchaser nor
Seller shall have the right to extend the Closing Date beyond the earlier of June 24,
2010 and the required closing date of the lender providing the financing for
Purchaser’s acquisition of the Property and the Harborside Membership Interests
as described in the Financing Commitment Status Statement; provided, further,
no election by Purchaser or Seller to extend the Closing Date shall be valid
unless either Purchaser or Seller shall have simultaneously elected to extend
the closing date of the Harborside Purchase and Sale Agreement in accordance
with the terms thereof. As used in this Section 4.3.2, “GE Bridge Loan” shall mean the assumption
of the existing loans from GECC secured by the Property and Harborside
(collectively, the “GE Loan”) less
a $100,000,000.00 pay down (or an assumption by Purchaser of such amount of the
GE Loan (following the $100,000,000.00 pay down) which when added to the
Mezzanine Loan would equal sixty-five percent (65%) of the aggregate Purchase
Price of the Property and the Harborside Membership Interests), which GE Bridge
Loan shall be secured by the documents and instruments evidencing the GE Loan,
as amended to reflect the assumption of the GE Loan by Purchaser, the
$100,000,000.00 pay down, and the terms of the GE Bridge Financing Commitment; “Bridge Loan” shall mean a loan of Eight
Hundred Million and no/100 Dollars ($800,000,000.00) (or such other amount
which when added to the Mezzanine Loan would equal sixty-five (65%) percent of
the aggregate Purchase Price of the Property and the Harborside Membership
Interests) from Senior Lender, which Bridge Loan shall (1) be secured by a
first mortgage or deed of trust on the Real Property and Harborside on terms no
less favorable to Purchaser and iStar than those set forth on Schedule 4.3.2, and (2) reflect the
terms of the Bridge Financing Commitment; and “Mezzanine Loan” shall mean a loan from iStar in the amount of
the lesser of (a) One Hundred Twenty Five Million and no/100 Dollars
($125,000,000.00) and (b) the difference between the GE Bridge Loan or the
Bridge Loan (as applicable) and sixty-five (65%) percent of the aggregate
Purchase Price of the Property and the Harborside Membership Interests, which
Mezzanine Loan shall be (x) on terms no less favorable to Purchaser and
iStar than those set forth on Schedule 4.3.2 and
(y) secured by indirect pledges of the equity interests in the affiliates
of Purchaser acquiring fee simple title to the Real Property and in AFE, PXR,
PXURA and PXLA.  iStar shall provide the
Mezzanine Loan so long as (a) the terms of the GE Bridge Loan or the
Bridge Loan (as applicable) generally comply with the terms of this Section 4.3.2
and Section 4.3.2 of the Harborside Purchase and Sale Agreement, and, with
respect to the Bridge Loan, Schedule 4.3.2
and (b) GECC with respect to the GE Bridge Loan or Senior Lender with
respect to the Bridge Loan (as applicable), enters into an intercreditor
agreement with iStar on such commercially reasonable terms and provisions, and
evidenced by commercially reasonable documents, which terms and provisions

 

13

 

shall include, without
limitation, the right but not the obligation of iStar to cure defaults under
the Mezzanine Loan and following an event of default under the Mezzanine Loan
to foreclose on the collateral securing the Mezzanine Loan.  Notwithstanding anything contained in this Section 4.3.2
to the contrary, in the event the Harborside Purchase and Sale Agreement is
terminated pursuant to the terms thereof (other than Article X), (w) the
GE Bridge Loan shall be deemed to mean only the assumption of that portion of
the GE Loan secured by the Property but shall otherwise be in the terms set
forth in this Section 4.3.2, (x) all references to the aggregate
Purchase Price of the Property and the Harborside Membership Interests shall be
deemed to only mean the Purchase Price of the Property and (y) all
references to Harborside Seller, the Harborside Purchase and Sale Agreement,
Harborside, AFE, PXR, PXURA and PXLA and any similar references set forth in
this Section 4.3.2 shall be deemed deleted.

 

4.4                                 Updated Property Information.  From the Effective Date through the Closing
Date, if and to the extent that Seller receives from an unaffiliated
third-party any additional Property Information not previously provided to
Purchaser, or if and to the extent that Seller receives any document, notice or
correspondence from an unaffiliated third-party or otherwise obtains actual
knowledge from an unaffiliated third-party source of a condition arising after
the Effective Date that would render any of the representations and warranties
of Seller in Section 9.1 untrue if and to the extent remade after the
Effective Date, Seller shall promptly so notify Purchaser and shall make
electronic copies of all such documents, notices, correspondence or other
information in Seller’s possession (“Updated Property
Information”) available to Purchaser on iPortal.  Updated Property Information may include any
information disclosed in the Tenant Estoppel Certificate, but such updated
information shall remain subject to Purchaser’s rights pursuant to Section 7.2.1(1) and
7.2.3.  The representations and
warranties of Seller in Section 9.1 shall be deemed amended to reflect
such Updated Property Information, provided that if the amendment or deemed
amendment of any representation or warranty reflects a fact or circumstance
that would trigger a termination, extension or other right of Purchaser under
this Agreement, the amendment or deemed amendment of any representation or
warranty to reflect such fact or circumstance shall not vitiate such right of
Purchaser.

 

4.5                                 Return of Documents and Reports.  As additional consideration for the
transaction contemplated herein, if Purchaser terminates this Agreement, Purchaser
shall provide to Seller, if requested by Seller, promptly following the receipt
of notice from Seller after the termination of this Agreement, copies of all “Reports”.  “Reports” mean (a) written
third-party reports, tests, investigations and studies that pertain to
contamination of, or environmental concerns regarding, the Property delivered
to Purchaser or its affiliates, and (b) all other written third party
reports, investigations and studies, other than economic analyses in each case
under (a) and (b) prepared for Purchaser in connection with its due
diligence review of the Property, including, without limitation, any and all
Reports involving structural or geological conditions, environmental, hazardous
waste or hazardous substances contamination of the Property, if any.  The Reports shall not include any documents,
materials or information which are subject to attorney/client, work product or
similar privilege, which constitute attorney communications with respect to the
Property and/or Purchaser, or which are subject to a confidentiality
agreement.  The Reports shall be
delivered to Seller at no cost to Seller and without any representation or
warranty as to the completeness or accuracy of the Reports or any other matter
relating thereto.  Purchaser’s obligation
to deliver the Reports to Seller shall survive the termination of this
Agreement.

 

14

 

4.6                                 Service Contracts.  On or prior to the Closing Date, Purchaser
will advise Seller in writing which Service Contracts Purchaser requests that
Seller terminate at or prior to Closing, provided Seller shall have no
obligation to terminate, and Purchaser shall be obligated to assume, any
Service Contracts which by their terms cannot be terminated without penalty or
payment of a fee (unless Purchaser agrees in writing to pay such fee).  Seller shall deliver at Closing notices of
termination of all Service Contracts that Purchaser so directs.  Purchaser shall assume the obligations
arising from and after the Closing Date under those Service Contracts (a) that
Purchaser has elected not to have Seller terminate, and (b) for which a
termination notice is delivered as of or prior to Closing but for which
termination is not effective until after Closing.  Notwithstanding the foregoing, Seller shall,
at its expense, terminate all Service Contracts which are management
agreements, other than with respect to Harborside.

 

4.7                                 Proprietary Information; Confidentiality.  Purchaser agrees that it is bound by the
Confidentiality Agreement as if it were a party thereto, and the
Confidentiality Agreement remains in full force and effect. Notwithstanding
anything to the contrary set forth in the Confidentiality Agreement, (a) each
party acknowledges that the other party shall be allowed to disclose the
existence of this Agreement and the contents thereof in order to comply with
certain disclosure requirements relating to public companies and their
affiliates and (b) provided Purchaser has delivered the Due Diligence
Waiver Notice pursuant to Section 4.3.1 hereof, Purchaser shall be allowed
to disclose the existence of this Agreement, and deliver the Property
Information and Updated Property Information, to third parties in connection
with such third parties’ potential acquisition from Purchaser of one or more of
the Properties or interests therein after the Closing Date so long as such
third parties have agreed in writing to be bound by the terms of the
Confidentiality Agreement prior to Purchaser’s disclosure of the existence of
this Agreement, and delivery of the Property Information and Updated Property
Information, to such third parties. The parties shall coordinate, in advance,
with respect to any such public filings and/or press releases.  After the Closing there shall be no restriction
as between Purchaser and Seller on Purchaser’s disclosure of Property
Information or Updated Property Information.

 

4.8                                 No Representation or Warranty by Seller.  Purchaser acknowledges that, except as
expressly set forth in this Agreement, Seller has not made and does not make
any warranty or representation regarding the truth, accuracy or completeness of
the Property Documents, the Updated Property Information or the source(s) thereof.  Purchaser further acknowledges that some if
not all of the Property Documents and Updated Property Information were
prepared by third parties other than Seller. 
Except as expressly set forth in this Agreement or in any of the
documents delivered at the Closing, (a) Seller expressly disclaims any and
all liability for representations or warranties, express or implied, statements
of fact and other matters contained in such information, or for omissions from
the Property Documents or Updated Property Information, or in any other written
or oral communications transmitted or made available to Purchaser, (b) Purchaser
shall rely solely upon its own investigation with respect to the Property,
including, without limitation, the Property’s physical, environmental or
economic condition, compliance or lack of compliance with any ordinance, order,
permit or regulation or any other attribute or matter relating thereto, and (c) 
Seller has not undertaken any independent investigation as to the truth,
accuracy or completeness of the Property Documents and Updated Property
Information and is providing the Property Documents and Updated Property
Information solely as an accommodation to Purchaser.

 

15

 

4.9                                 Purchaser’s Responsibilities.  In conducting any inspections, investigations
or tests of the Property, Property Documents and/or Updated Property
Information, Purchaser and its agents and representatives shall: (a) not
disturb the tenants or interfere with their use of the Property pursuant to
their respective Leases; (b) not interfere with the operation and
maintenance of the Property; (c) not damage any part of the Property or
any personal property owned or held by any tenant or any third party; (d) not
injure or otherwise cause bodily harm to Seller or its agents, guests,
invitees, contractors and employees or any tenants or their agents, guests,
invitees, contractors and employees; (e) comply with all applicable laws; (f) promptly
pay when due the costs of all tests, investigations, and examinations done with
regard to the Property; (g) not permit any liens to attach to the Real
Property by reason of the exercise of its rights hereunder; (h) subject to
the provisions of Section 4.10, repair any damage to the Real Property
resulting directly or indirectly from any such inspection or tests; and (i) not
reveal or disclose prior to Closing any information obtained during the
Inspection Period concerning the Property, the Property Documents and the
Updated Property Information to anyone other than the Permitted Recipients (as
defined in the Confidentiality Agreement), in accordance with the
confidentiality standards set forth in Section 4.7 above, or except as may
be otherwise required by law.  Purchaser’s
obligations under this Section 4.9 shall survive the termination of this
Agreement.

 

4.10                           Purchaser’s Agreement to Indemnify.  Purchaser hereby agrees to indemnify, defend
and hold Seller harmless from and against any and all liens, claims, causes of
action, damages, liabilities and expenses (including reasonable attorneys’
fees) arising out of Purchaser’s inspections or tests permitted under this
Agreement or any violation of the provisions of Sections 4.2, 4.7, and 4.9;
provided, however, the indemnity shall not protect Seller from any liabilities
for matters merely discovered by Purchaser (i.e., environmental contamination)
so long as Purchaser’s actions do not aggravate any pre-existing liability of
Seller it being agreed by Purchaser and Seller that the mere discovery by
Purchaser of such matters shall not constitute an aggravation of any
pre-existing liability of Seller. 
Purchaser also hereby agrees to indemnify, defend and hold any tenant
harmless from and against any and all claims, causes of action, damages,
liabilities and expenses which such tenant may suffer or incur due to Purchaser’s
breach of its obligation under Sections 4.7 and 4.9 above to maintain the
confidential nature of any Property Documents, Updated Property Information or
other information relative to such tenant. 
Purchaser’s obligations under this Section 4.10 shall survive the
termination of this Agreement and shall survive the Closing.

 

ARTICLE 5

TITLE AND
SURVEY

 

5.1                                 Title Commitments.  Purchaser acknowledges that copies of current
commitments for title insurance or preliminary title reports with respect to
the Property, together with copies of all documents of record referred to
therein (individually, a “Title Commitment”
and collectively, the “Title Commitments”)
issued by First American on ALTA 2006 Owners Forms or state promulgated forms
have been delivered or made available to Purchaser.

 

5.2                                 Updated Surveys.  Purchaser has arranged, at Seller’s expense,
for the preparation of new surveys or the revision, modification, or re-certification
of the existing

 

16

 

Surveys as necessary in order for First American to
delete the survey exceptions from the Title Policies.

 

5.3                                 Title Review.  During the Title and Survey Review Period, Purchaser
shall review title to the Property as disclosed by the Title Commitments and
the Surveys.  Seller shall have no
obligation to cure title objections except liens of an ascertainable amount
created by, under or through Seller, or assumed by Seller, which liens Seller
shall cause to be released at or prior to Closing (with Seller having the right
to apply the Purchase Price or a portion thereof for such purpose), and Seller
shall deliver the Property free and clear of any such liens; provided, however,
that the foregoing requirement to discharge liens shall not apply to liens on
any tenant’s leasehold estate.  Seller
further agrees to remove any exceptions or encumbrances to title which are
voluntarily created by, under or through Seller after the Effective Date
without Purchaser’s consent (if requested, such consent shall not be
unreasonably withheld or delayed).  The
term “Permitted Exceptions” shall mean: (A) the
exceptions (i) that are part of the promulgated title insurance form for
each Title Commitment, (ii) that the Title Company is unable to remove
under applicable insurance regulations, (iii) that the Title Company has
not agreed to remove from the Title Commitments notwithstanding that Seller has
delivered the Title Affidavits to the Title Company, (iv) that Purchaser
consents to, or is deemed to have consented to, as of the end of the Title and
Survey Review Period and (v) that Seller is not required to remove as
provided above; (B) matters created by, through or under Purchaser; (C) items
shown on the Surveys which have not been removed as of the end of the
Inspection Period (or if Purchaser does not obtain new Surveys, all matters
that current, accurate surveys of the Property would show); (D) real
estate taxes not yet due and payable; (E) rights of tenants under the
Leases; and (F) any encumbrances relating to the Property created by,
though or under any tenant of the Property that does not render title to such
Property unmarketable, provided such tenant is not otherwise in default under
its Lease.

 

5.4                                 Delivery of Title Policies at Closing.  The parties acknowledge that First American
Title Insurance Company, National Commercial Services — Chicago (“First American”) and Fidelity Title Insurance Company (“Fidelity”) constitute the Title Company.  First American shall act as the lead Title
Company and underwriter and shall issue the Title Policies (as hereinafter
defined); provided, however, that Purchaser may obtain co-insurance from
Fidelity in the amount of up to fifty percent (50%) of the Allocated Purchase
Price of each Property in the form of co-insurance endorsements (“Co-Insurance”) so long as (i) the cost of such
Co-Insurance does not increase the total cost of title insurance that Seller
would otherwise pay to First American if First American were insuring the full
Purchase Price unless Purchaser pays for such increased cost of title insurance
and (ii) the issuance of such Co-Insurance does not delay the Closing.
Purchaser, at Purchaser’s sole cost and expense, may obtain re-insurance with
respect to the Title Policies from such third parties as Purchaser may elect so
long as obtaining such re-insurance does not delay the Closing.  In the event that the Title Company does not
issue at Closing, or unconditionally commit at Closing to issue, to Purchaser,
owner’s title insurance policies and Co-Insurance in accordance with the Title
Commitments with extended coverage, insuring Purchaser’s title interest in each
Real Property in the amount of the Allocated Purchase Price, subject only to
the exclusions from coverage contained in the applicable policy and the
applicable Permitted Exceptions (individually, a “Title Policy”
and collectively, the “Title Policies”),
Purchaser shall have the right to terminate this Agreement in its entirety, in
which case the Earnest Money shall be immediately returned to Purchaser and the
parties hereto shall

 

17

 

have no further rights or obligations, other than
those that by their terms survive the termination of this Agreement, or,
subject to the limitations of Sections 7.2.1(4) and 7.2.2(9), in part with
respect only to those Properties with respect to which the Title Company is
unable to deliver such Title Policies, in which event the Purchase Price shall
be reduced by the aggregate Allocated Purchase Price for such Properties;
provided, however, if either Title Company alone is willing to deliver Title
Policies with respect to such Properties in the amount of the aggregate
Allocated Purchase Price for such Properties, Purchaser agrees to accept such
Title Policies and Purchaser shall have no right to terminate this Agreement
with respect to such Properties and receive any reduction in the Purchase
Price.

 

ARTICLE 6

OPERATIONS
AND RISK OF LOSS

 

6.1                                 Ongoing Operations.  From the Effective Date through Closing:

 

6.1.1                        Leases, Service Contracts and License Agreements.  Seller will perform its material
obligations under the Leases, Service Contracts and License Agreements unless
Seller is excused from performing such obligations pursuant to such Leases,
Services Contracts and License Agreements.

 

6.1.2                        New Contracts.  Except as provided in Section 6.1.4,
Seller will not enter into any contract that will be an obligation affecting
the Property subsequent to the Closing, except contracts entered into in the
ordinary course of business that are terminable without cause and without the
payment of any termination penalty on not more than 30 days’ prior notice.

 

6.1.3                        Maintenance of Improvements; Removal of Personal Property.  Subject to Sections 6.2  and 6.3, Seller shall maintain or use
reasonable efforts to cause the tenants under the Leases to maintain all
Improvements substantially in their present condition (ordinary wear and tear
and casualty excepted) and in a manner consistent with Seller’s maintenance of
the Improvements during Seller’s period of ownership.  Seller will not remove any Tangible Personal
Property except as may be required for necessary repair or replacement or with
respect to items that, in Seller’s judgment are obsolete, and replacement shall
be of approximately equal quality and quantity as the removed item of Tangible
Personal Property.

 

6.1.4                        Leasing; License Agreements.  Seller will not (i) amend or terminate
any existing Lease or License Agreement, (ii) consent to the assignment of
any Lease or License Agreement, (iii) enter into any new Lease or new
License Agreement or (iv) grant its consent, to the extent Seller’s
consent is required, to a sublease of the Property, a modification or
assignment of a sublease covering the Property, a substitution of the Property
covered by the Lease with The Goodyear Tire & Rubber Company as a
result of a Casualty or any other item for which a consent is required under
any Lease or License Agreement (the foregoing items (i), (ii), (iii) and (iv) are
each referred to herein as, a “Lease Event”)
after the Effective Date and prior to the Closing Date without first providing
Purchaser (a) all relevant supporting documentation, as reasonably
determined by Seller, including, without limitation, financial information for
the assignee, tenant, subtenant and any guarantor to the extent in Seller’s
possession, and (b) as to any Lease Event which is to be executed or
granted after the expiration of the Inspection Period, Seller’s request for
Purchaser’s approval.  If Purchaser’s
approval is requested by Seller as to any

 

18

 

Lease Event, Purchaser
shall be held to the same standard for approval as Seller is held to in the
document giving rise to such approval or consent right, and Purchaser agrees to
give Seller written notice of its approval or disapproval of a proposed Lease
Event within three (3) Business Days after Purchaser’s receipt of the
items in Section 6.1.4(a) and Section 6.1.4(b).  If Purchaser does not respond to Seller’s
request within such time period, then Purchaser will be deemed to have approved
such Lease Event.  Purchaser’s approval
rights and obligations will vary depending on whether such Lease Event is to be
executed or granted before or after the expiration of the Inspection Period, as
follows:

 

(1)                                  Purchaser’s approval shall not be required with regard to any Lease Event
which is to be executed or granted on or prior to the end of the Inspection
Period.  If Seller gives Purchaser notice
of the execution or grant of a Lease Event during the final three (3) Business
Days of the Inspection Period, the Inspection Period will be extended to the
third (3rd) Business Day following the date such notice
is given to Purchaser.

 

(2)                                  With respect to a request for approval delivered by Seller to Purchaser
for the execution or grant of a Lease Event after the expiration of the
Inspection Period, so long as Purchaser has complied with its standard for
review described above, Purchaser may withhold its approval in its reasonable
discretion, and Seller may not execute or grant such Lease Event without
Purchaser’s written approval.

 

Seller
shall not apply any tenant or licensee security deposits on account of any
alleged default by any tenant or licensee after the earlier of three (3) Business
Days before the end of the Inspection Period and the date when Purchaser has
delivered the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof unless Seller has terminated the applicable Lease or License Agreement
and obtained possession of the demised or licensed premises.  All tenant and licensee security deposits
collected and not applied by Seller as of the Effective Date are set forth on Schedule 6.1.4. Seller shall deliver to
Purchaser three (3) Business Days before the end of the Inspection Period
an update to Schedule 6.1.4 to
reflect the current amount of all security deposits collected and not applied
by Seller as of such date.

 

6.1.5                        Insurance.  Seller will not terminate or allow any
insurance with respect to the Properties maintained by Seller or its affiliate
to lapse unless replaced by equivalent coverage. Promptly upon Purchaser’s
delivery of the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof, Seller shall name Purchaser as an additional insured on all insurance
maintained by Seller or its affiliates with respect to the Properties and shall
provide to Purchaser evidence of same. .

 

6.2                                 Casualty.  If after the Effective Date and prior to the
Closing any Property is damaged by fire or other casualty (a “Casualty”),  Seller
shall, promptly upon receiving actual knowledge thereof, notify Purchaser of
the same.  If, as a result of such
Casualty, (a) the tenant of such Property other than the Property commonly
known as 1500/1600 Riveredge Parkway, Atlanta, GA (the “IBM
Property”) is entitled to and elects to
terminate its Lease with respect to such Property or (b) International
Business Machines (“IBM”) is
entitled to and elects to terminate its Lease with respect to the IBM Property
(each a “Casualty Tenant Termination

 

19

 

Event”), then Seller shall promptly upon receiving notice
of such Casualty Tenant Termination Event notify Purchaser of the same (a “Casualty Tenant Termination Notice”). Within five (5) days
after receipt of the Casualty Tenant Termination Notice (but in no event later
than the Closing Date), Purchaser shall notify Seller in writing of Purchaser’s
election to either (i) subject to the limitations of Sections 7.2.1(4) and
7.2.2(9), terminate this Agreement with respect to such Property, in which case
the Purchase Price shall be reduced by the Allocated Purchase Price for such
Property, or (ii) to acquire such Property notwithstanding the Casualty
Tenant Termination Event.  If (i) Purchaser
elects to acquire such Property notwithstanding the Casualty Tenant Termination
Event or fails to terminate this Agreement with respect to such Property within
such five (5) day period, or (ii) such Casualty does not give rise to
a Casualty Tenant Termination Event, then Purchaser shall proceed to Closing,
and as of Closing, (1) Seller shall (A) assign to Purchaser, without
representation or warranty by or recourse against Seller, all of Seller’s
rights in and to any resulting insurance proceeds (including any rent loss
insurance and rent abatement insurance applicable to any period beginning with
the Closing Date) due Seller as a result of such Casualty, and (B) provide
written confirmation from GECC that such insurance proceeds can be assigned to
Purchaser and will be available after Closing to Purchaser to effectuate the
needed repairs, (2) Purchaser shall assume full responsibility for all
needed repairs (as between Purchaser and Seller, but subject to the terms of
the applicable Lease with respect to any rights of the applicable tenant), and (3) Purchaser
shall receive a credit at Closing for any deductible amount under such
insurance policies to the extent not payable by the applicable tenant under the
applicable Lease.  Notwithstanding
anything contained herein to the contrary, if a Casualty shall occur to any
Property and, as a result of such Casualty, the lender providing the Term
Financing Commitment will not close the loan contemplated by the Term Financing
Commitment with respect to such Property, GECC will not close the GE Bridge
Loan with respect to such Property or GECC or Senior Lender (as applicable)
will not close the Bridge Loan with respect to such Property (as applicable
pursuant to Section 4.3.2), then, subject to the limitations of Sections
7.2.1(4) and 7.2.2(9), this Agreement shall automatically terminate with
respect to such Property and the Purchase Price shall be reduced by the
Allocated Purchase Price of such Property.

 

6.3                                 Condemnation.  If after the Effective Date and prior to the
Closing Seller receives notice of, or proceedings are instituted for, eminent
domain with respect to any Property or any portion thereof (a  “Condemnation”),  Seller shall, promptly upon receiving actual knowledge
thereof, notify Purchaser of the same. 
If, as a result of such Condemnation, (a) the tenant of such
Property other than the IBM Property is entitled to and elects to terminate its
Lease with respect to such Property or (b) IBM is entitled to and elects
to terminate its Lease with respect to the IBM Property (each a “Condemnation Tenant Termination Event”), then Seller shall
promptly upon receiving notice of such Condemnation Tenant Termination Event
notify Purchaser of the same (a “Condemnation Tenant
Termination Notice”). Within five (5) days after receipt of the
Condemnation Tenant Termination Notice (but in no event later than the Closing
Date), Purchaser shall notify Seller in writing of Purchaser’s election to
either (i) subject to the limitations of Sections 7.2.1(4) and
7.2.2(9), terminate this Agreement with respect to such Property, in which case
the Purchase Price shall be reduced by the Allocated Purchase Price for such
Property, or (ii) to acquire such Property notwithstanding the Condemnation
Tenant Termination Event. If (i) Purchaser elects to acquire such Property
notwithstanding the Condemnation Tenant Termination Event or fails to terminate
this Agreement with respect to such Property within such five (5) day
period, or (ii) such Condemnation does not give rise to a Condemnation
Tenant Termination Event, then Purchaser shall proceed to Closing, and as of

 

20

 

Closing,
Seller shall assign to Purchaser, without representation or warranty by or
recourse against Seller, all of Seller’s right, title and interest in and to
any condemnation award and resulting insurance proceeds due as a result of such
Condemnation (including any rent loss insurance and rent abatement insurance
applicable to any period beginning with the Closing Date), and Purchaser shall
have the sole right after the Closing (as between Purchaser and Seller, but
subject to the terms of the applicable Lease with respect to any rights of the
applicable tenant) to negotiate and otherwise deal with the condemning
authority in respect of such Condemnation. Notwithstanding anything contained
herein to the contrary, if a Condemnation shall occur to any Property and, as a
result of such Condemnation, the lender providing the Term Financing Commitment
will not close the loan contemplated by the Term Financing Commitment with
respect to such Property, GECC will not close the GE Bridge Loan with respect
to such Property or Senior Lender will not close the Bridge Loan with respect
to such Property (as applicable pursuant to Section 4.3.2), then, subject
to the limitations of Sections 7.2.1(4) and 7.2.2(9), this Agreement shall
automatically terminate with respect to such Property and the Purchase Price
shall be reduced by the Allocated Purchase Price of such Property.

 

6.4                                 Estoppel Certificates/SNDAs.

 

6.4.1                        Purchaser and Seller acknowledge and agree that as of the Effective Date
Seller has sent to each tenant (with a copy to Purchaser) to which space in the
Improvements is leased a request for an estoppel certificate in the form
approved by Purchaser (such estoppel certificates are referred to herein
individually as, a “Tenant Estoppel
Certificate”) and collectively as, the “Tenant Estoppel Certificates”).  Purchaser acknowledges that it has approved
the form of each Tenant Estoppel Certificate sent to each tenant as of the
Effective Date.  Seller shall not be
obligated to expend any funds in connection with obtaining any such Tenant
Estoppel Certificates, declare any default under any Lease or commence any
legal action for enforcement of any Lease in order to obtain any such Tenant
Estoppel Certificates. Seller shall copy Purchaser on the initial
correspondence soliciting the Tenant Estoppel Certificates and shall use
commercially reasonable efforts to forward to Purchaser any written
communications, including, without limitation, letters, memorandums, e-mails,
comments and conditions, received from the tenants in connection with the
tenants’ execution of the Tenant Estoppel Certificates.  With respect to any executed Tenant Estoppel
Certificate dated more than thirty (30) days prior to the Closing Date, Seller
agrees, upon the request of Purchaser, to send to the tenant who executed such
Tenant Estoppel Certificate a request for an updated Tenant Estoppel
Certificate or a letter of no change to the executed Tenant Estoppel
Certificate; provided, however, obtaining such updated Tenant Estoppel
Certificate or letter of no change shall (i) not be a condition to
Purchaser’s obligation to close pursuant to Section 7.2.2 and (ii) in
no way delay the Closing, it being agreed by Purchaser that any Tenant Estoppel
Certificate executed and delivered in the form approved by Purchaser regardless
of the date executed by the applicable tenant shall satisfy Purchaser’s
condition to close pursuant to Section 7.2.2 with respect to such tenant.

 

6.4.2                        Upon receipt from Purchaser of drafts of estoppel certificates addressed
to the parties listed on Schedule 6.4.2
(individually, a “Third Party Estoppel
Certificate” and collectively, the “Third Party Estoppel Certificates”), Seller shall promptly
send such Third Party Estoppel Certificates to the parties listed on Schedule 6.4.2.  Seller shall not be obligated to expend any
funds in connection with obtaining any such Third Party Estoppel Certificates,

 

21

 

declare any default under
any agreement or commence any legal action for enforcement of any agreement in
order to obtain any such Third Party Estoppel Certificates.  Seller shall copy Purchaser on the initial
correspondence soliciting the Third Party Estoppel Certificates and shall use
commercially reasonable efforts to forward to Purchaser any written
communications, including, without limitation, letters, memorandums, e-mails,
comments and conditions, received from the third parties in connection with the
third parties’ execution of the Third Party Estoppel Certificates.

 

6.4.3                        Seller shall promptly after the date on which Purchaser obtains the Term
Financing Commitment, the GE Bridge Financing Commitment or the Bridge
Financing Commitment send to each tenant to which space in the Improvements is
leased a request for a subordination, non-disturbance and attornment agreement
substantially in the form executed by such tenant in connection with the
closing of the GE Loan, or if any tenant did not execute a subordination,
non-disturbance and attornment agreement in connection with the GE Loan, a
subordination, non-disturbance and attornment agreement in a form otherwise
approved by Purchaser (such subordination, non-disturbance and attornment
agreements are referred to herein individually as, an “SNDA” and collectively as, the “SNDAs”). 
Notwithstanding the foregoing, Seller shall not be obligated to request
an SNDA from any tenant of the IBM Property other than IBM and PBS&J.  Seller shall not be obligated to expend any
funds in connection with obtaining any such SNDAs, declare any default under
any Lease or commence any legal action for enforcement of any Lease in order to
obtain any such SNDAs.  Seller shall copy
Purchaser on the initial correspondence soliciting the SNDAs and shall use
commercially reasonable efforts to forward to Purchaser any written
communications, including, without limitation, letters, memorandums, e-mails,
comments and conditions, received from the tenants in connection with the
tenants’ execution of the SNDAs.

 

6.5                                 Acknowledgments.  Seller has previously requested
acknowledgments from each tenant listed on Schedule 6.5
(each, a “ROFO Tenant” and collectively, the “ROFO Tenants”) that the rights of first refusal or rights of
first offer to purchase the applicable Property set forth in such tenants’
respective Leases do not apply to Purchaser’s acquisition of the applicable
Property pursuant to this Agreement (each, a “ROFO
Acknowledgment” and collectively, the “ROFO
Acknowledgements”).  Purchaser
acknowledges (i) that it has approved the form of each ROFO Acknowledgment
sent to each tenant as of the Effective Date, (ii) that is has received
and approved a copy of the ROFO Acknowledgement executed by each of IBM,
Arbella Capital Corporation, Northrop Grumman Space & Mission, and
Sybase Inc. and (iii) Purchaser will accept either a ROFO Acknowledgment
or a Tenant Estoppel Certificate containing a ROFO Acknowledgment (forms of
which Purchaser has reviewed and approved as of the Effective Date) executed by
all other ROFO Tenants for purposes of satisfying the requirement set forth in Section 7.2.2(7) of
this Agreement. Seller shall not be obligated to expend any funds in connection
with obtaining any such ROFO Acknowledgments, declare any default under the
applicable Lease or commence any legal action for enforcement of the applicable
Lease in order to obtain any such ROFO Acknowledgments.  Seller shall use commercially reasonable
efforts to forward to Purchaser any written communications, including, without
limitation, letters, memorandums, e-mails, comments and conditions, received
from the ROFO Tenants in connection with the ROFO Tenants’ execution of the
remaining ROFO Acknowledgments.  If any
ROFO Tenant exercises its right to purchase any Property, subject to the
limitations of Sections 7.2.1(4) and 7.2.2(9), this Agreement shall
terminate with respect to

 

22

 

such Property on the date of such notice, in which
event the Purchase Price shall be reduced by the Allocated Purchase Price for
such Property.

 

ARTICLE 7

CLOSING

 

7.1                                 Closing.  The consummation of the transaction
contemplated herein (“Closing”) shall
occur on the Closing Date at the offices of Escrow Agent (or such other
location as may be mutually agreed upon by Seller and Purchaser).  Funds shall be deposited into and held by
Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser
and Seller.  Upon satisfaction or
completion of all closing conditions and deliveries, the parties shall direct
Escrow Agent to immediately record those closing documents which are to be
recorded, and deliver originals or copies of the closing documents to the
appropriate parties and make disbursements according to the closing statements
executed by Seller and Purchaser.

 

7.2                                 Conditions to Parties’ Obligation to Close.  In addition to all other conditions set forth
herein, the obligation of Seller, on the one hand, and Purchaser, on the other
hand, to consummate the transactions contemplated hereunder are conditioned
upon the following:

 

7.2.1                        Conditions to Seller’s Obligations to Close.

 

(1)                                  Representations and Warranties.  Purchaser’s representations and warranties
contained herein shall be true and correct in all material respects as of the
Effective Date and the Closing Date;

 

(2)                                  Deliveries.  As of the Closing Date, Purchaser shall have
tendered all deliveries to be made by Purchaser at Closing;

 

(3)                                  Actions, Suits, etc.  There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against Purchaser that would materially and adversely affect
Purchaser’s ability to perform its obligations under this Agreement; and

 

(4)                                  Property.  It shall be a condition to Seller’s
obligation to close hereunder that this Agreement and the Harborside Purchase
and Sale Agreement (as applicable) shall not have been terminated with respect
to (x) more than three Properties or (y) any two of the Harborside,
Goodyear (it being understood that a termination of this Agreement with respect
to one or more of the separate sites constituting the Goodyear Properties or
one or more separate sites constituting the CEVA Properties shall be deemed in
both cases to be a termination of this Agreement with respect to only one
Property notwithstanding the Goodyear Lease and the CEVA Lease cover multiple Properties)
or Northrop (McLean, VA) Properties; provided, however, that a termination of
this Agreement with respect to a Property by reason of the exercise of a right
to purchase such Property by a ROFO Tenant shall be disregarded for purposes of
the application of the provisions of this Section 7.2.1(4).  For clarification, the parties agree that
while both this Agreement and the Harborside Purchase and Sale Agreement must
both

 

23

 

proceed
towards Closing at the same time, or both terminate at the end of the
Inspection Period together, it is possible for a closing condition under the
Harborside Purchase and Sale Agreement not to be satisfied (for example, the
bankruptcy of Schwab) which would allow Purchaser not to close and to terminate
with respect Harborside but proceed to closing under this Agreement.

 

7.2.2                        Conditions to Purchaser’s Obligations to Close.

 

(1)                                  Representations and Warranties.
Seller’s representations and warranties contained herein shall be true and
correct in all material respects as of the Effective Date and the Closing Date,
subject to the provisions of Sections 4.4 and 9.3.  Notwithstanding Sections 4.4 and 9.3, Seller
and Purchaser acknowledge and agree that Section 7.2.3 shall apply (subject
to the limitations of Sections 7.2.1(4) and 7.2.2(9)) to any material
change in the representations and warranties of Seller with respect to a
particular Property due to any Updated Property Information or changes that
that are not a result of a breach by Seller or any of its covenants;

 

(2)                                  Deliveries.  As of the Closing Date, Seller shall have
tendered all deliveries to be made by Seller at Closing;

 

(3)                                  Actions, Suits, etc.  There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against Seller that would materially and adversely affect Seller’s
ability to perform its obligations under this Agreement;

 

(4)                                  Tenant Estoppel Certificates.  Seller shall have delivered to Purchaser
Tenant Estoppel Certificates from (A) each of the following tenants:  The Goodyear Tire & Rubber Company,
Sybase, Inc., WellPoint, Inc. (which WellPoint, Inc. Tenant
Estoppel Certificate shall include an acknowledgement by WellPoint, Inc.,
in a form approved by Purchaser, that WellPoint, Inc.’s right of first
refusal and/or right of first offer to purchase the Property leased by
WellPoint, Inc. has terminated by its terms) and Northrop Grumman
Information Technology, Inc. (collectively, the “Prime Tenants”), and (B) the tenants
of single tenant buildings and tenants of more than 25,000 square feet in
multi-tenanted buildings, in all cases not leased to the Prime Tenants, for those
Properties which represent not less than seventy percent (70%) of the Purchase
Price allocated to all portions of the Property not leased to the Prime Tenants
(collectively, the “Non-Prime Tenants”)
(this item 7.2.2(4)(B) is referred to herein as, the “Estoppel Requirement”). Notwithstanding the
foregoing, to the extent the Estoppel Requirement has not been satisfied on or
prior to the Closing Date (the “Estoppel
Shortfall”), iStar shall execute and deliver, and Purchaser agrees
to accept, estoppel certificates (“Seller
Estoppels”) with respect to the Estoppel Shortfall, subject to the
Seller Estoppel Cap, in the form attached hereto as Exhibit I, in
which event such Seller Estoppels together with the Tenant Estoppel
Certificates shall satisfy the Estoppel Requirement; provided, however,

 

24

 

that
(i) the Seller Estoppels shall not be subject to the “basket” or “cap”
provisions with respect to Seller’s liability set forth in Section 9.3, (ii) the
Seller Estoppels shall not represent more than twenty (20%) percent of the
Estoppel Requirement (the “Seller Estoppel
Cap”) and (iii) a Seller Estoppel shall in no event eliminate
the need for Seller to deliver a ROFO Acknowledgment from all tenant from which
a ROFO Acknowledgment otherwise is required. 
A response from a tenant which materially contradicts the information
set forth in such tenant’s Lease or in the Exhibits attached hereto or in the
representations of Seller set forth herein shall not constitute a Tenant
Estoppel Certificate for purposes of this Section 7.2.2(4);

 

(5)                                  Occupancy/Non Bankruptcy.  It shall be a condition to Purchaser’s
obligations to close hereunder that (a) as of the Closing Date, no tenant
shall have terminated, or given notice of intent to terminate, its Lease,
except with respect to a Casualty Tenant Termination Event or a Condemnation
Tenant Termination Event and (b) from the end of the Inspection Period
through the Closing Date, no tenant shall have vacated, abandoned or ceased operations
at any Real Property, or filed for voluntary or involuntary bankruptcy or
similar protection;

 

(6)                                  Closing of GE Bridge Loan/Mezzanine Loan.  If Purchaser has elected pursuant to Section 4.3.2
to proceed to Closing with (i) the GE Bridge Financing Commitment and has
not elected thereafter to take an alternative financing, (A) the closing
of the Mezzanine Loan simultaneously with the Closing and (B) the closing
of the GE Bridge Loan on the Closing Date (unless the GE Bridge Loan fails to
close as a result of (x) Purchaser’s uncured default under the GE Bridge
Financing Commitment, (y) the failure of one or more conditions to close
which are within Purchaser’s reasonable control to satisfy, or (z) Purchaser’s
failure to accept documentation for the GE Bridge Loan that is commercially
reasonable for debt assumption transactions and implementation of such
modifications to the GECC Loan as are more specifically set forth in the GE
Bridge Financing Commitment) be conditions to Purchaser’s obligation to close
hereunder or (ii) the Bridge Financing Commitment and has not elected
thereafter to take an alternative financing, iStar being ready, willing and
able to close the Mezzanine Loan on the Closing Date is a condition to Closing
and, if the Bridge Loan closes, the closing of the Mezzanine Loan
simultaneously therewith is a condition to Closing.  In no event shall the closing of (w) the
loan contemplated by the Term Financing Commitment, (x) the Bridge Loan or
(y) any alternative financing be a condition of Purchaser’s obligation to
close hereunder;

 

(7)                                  ROFO Acknowledgments.  It shall be a condition to Purchaser’s
obligations to close hereunder that Seller shall have delivered the ROFO
Acknowledgements, subject to the last sentence of Section 6.5 with respect
to any ROFO Tenant that exercises its right to purchase any Property;

 

(8)                                  Title Policies.  It shall be a condition to Purchaser’s
obligations to close hereunder that the Title Company shall have issued the
Title Policies and Co-Insurance subject to, and in accordance, with Section 5.4;

 

25

 

(9)                                  Property.  It shall be a condition to Purchaser’s
obligation to close hereunder that this Agreement or the Harborside Purchase
and Sale Agreement (as applicable) shall not have been terminated with respect
to (x) more than three Properties or (y) any two of the Harborside,
Goodyear (it being understood that a termination of this Agreement with respect
to one or more of the separate sites constituting the Goodyear Properties or
one or more separate sites constituting the CEVA Properties shall be deemed in
both cases to be a termination of this Agreement with respect to only one
Property notwithstanding the Goodyear Lease and the CEVA Lease cover multiple
Properties) or Northrop (McLean, VA) Properties; provided, however, that a
termination of this Agreement with respect to a Property by reason of the
exercise of a right to purchase such Property by a ROFO Tenant shall be
disregarded for purposes of the application of the provisions of this Section 7.2.1(9).  For clarification, the parties agree that
while both this Agreement and the Harborside Purchase and Sale Agreement must
both proceed towards Closing at the same time, or both terminate at the end of
the Inspection Period together, it is possible for a closing condition under
the Harborside Purchase and Sale Agreement not to be satisfied (for example,
the bankruptcy of Schwab) which would allow Purchaser not to close and to
terminate with respect Harborside but proceed to Closing under this Agreement;
and

 

(10)                            SNDAs.  It shall be a condition to Purchaser’s
obligation to close hereunder that Seller shall have delivered SNDAs from all
tenants required by the terms of their respective Leases to provide SNDAs and
all tenants whose Leases are not automatically subordinate to any financing on
the applicable Property; provided, however, Seller shall not be obligated to
deliver an SNDA from any tenant of the IBM Property other than IBM and
PBS&J.

 

7.2.3                        Failure to Satisfy Conditions.  So long as a party is not in default
hereunder, if any condition to such party’s obligation to proceed with the
Closing hereunder has not been satisfied as of the Closing Date (or such
earlier date as is provided herein), subject to any applicable notice and cure
periods provided in Sections 10.1 and 10.2, such party may, in its sole
discretion:  (a) terminate this
Agreement with respect only to those Properties as to which the condition(s) to
proceed have not been satisfied (subject to the limitations of Sections 7.2.1(4) and
7.2.2(9)); or (b) if the condition(s) to close have not been
satisfied as to under Section 7.2.1(4) and 7.2.1(4) or where in
this Agreement provides for a termination of this Agreement in its entirety, to
terminate this Agreement in its entirety, in each case by delivering written
notice to the other party and Escrow Agent on or before the Closing Date (or
such earlier date as is provided herein), or elect to close notwithstanding the
non-satisfaction of such condition, in which event such party shall be deemed
to have waived any such condition.  In
the event such party elects to close, notwithstanding the non-satisfaction of
such condition, said party shall be deemed to have waived said condition, and
there shall be no liability on the part of any other party hereto for breaches
of representations and warranties of which the party electing to close had
knowledge at the Closing.  In the event
this Agreement is terminated in part with respect to certain Properties
(subject to the limitations of Sections 7.2.1(4) and 7.2.2(9)), the
Purchase Price shall be reduced by the Allocated Purchase Price for such
Properties.

 

26

 

7.3                                 Seller’s Deliveries in Escrow.  As of or prior to the Closing Date, Seller
shall deliver in escrow to Escrow Agent the following:

 

7.3.1                        Deeds.  A special or limited warranty deed in
substantially the form of Exhibit B hereto, warranting title only
against any party claiming by, through or under Seller, for each Real Property
(individually, a “Deed” and
collectively, the “Deeds”).  Each Deed shall (i) be in form
acceptable for recordation under the laws of the state where the applicable
Real Property is located, (ii) include a list of the Permitted Exceptions
to which the applicable conveyance shall be subject, (iii) be executed and
acknowledged by Seller and (iv) convey to Purchaser Seller’s interest in
the applicable Real Property.  The Deed
for each Property shall use as its legal description of such Property the
description contained in Seller’s vesting deed for such Property. If such
description differs from the description derived from the updated survey,
Seller shall also deliver a quit-claim deed using the description derived from
the updated survey.

 

7.3.2                        Assignments.  A Bill of Sale, Assignment and Assumption of
Leases and Contracts in the form of Exhibit C hereto for each
Property (individually, as “Assignment”
and collectively, the “Assignments”).  Each Assignment shall be executed and
acknowledged by Seller, vesting in Purchaser, without warranty except as set
forth herein, Seller’s right, title and interest in and to the property
described therein free of any claims, except for the Permitted Exceptions to
the extent applicable;

 

7.3.3                        Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing or transfer
tax forms or returns, if any, as are required to be delivered or signed by
Seller by applicable state and local laws in connection with the conveyance of
each Real Property;

 

7.3.4                        FIRPTA.  A Foreign Investment in Real Property Tax Act
affidavit in the form of Exhibit D hereto executed by Seller;

 

7.3.5                        Authority.  Evidence of the existence and authority of
Seller and of the authority of the persons executing documents on behalf of
Seller reasonably satisfactory to First American;

 

7.3.6                        Title Affidavits.  A title affidavit in form reasonably required
by First American as to the rights of tenants in occupancy, the status of
mechanics’ liens and “gap” indemnities, and such other matters as the First
American may reasonably require in order to issue the Title Policies
(collectively, the “Title Affidavits”);

 

7.3.7                        Additional Documents.  Any additional documents that First American
may reasonably require for the proper consummation of the transaction
contemplated by this Agreement (provided, however, no such additional document
shall expand any obligation, covenant, representation or warranty of Seller or
result in any new or additional obligation, covenant, representation or
warranty of Seller under this Agreement beyond those expressly set forth in
this Agreement);

 

7.3.8                        Tenant Estoppel Certificates/Seller
Estoppels.  Such
Tenant Estoppel Certificates as Seller shall have received and such Seller
Estoppels as are necessary to satisfy the Estoppel Requirement, it being agreed
that the failure of Seller to obtain any such Tenant

 

27

 

Estoppel Certificates
shall not (i) be a breach or default by Seller hereunder, (ii) constitute
grounds for Purchaser to delay the Closing or (iii) give rise to a
reduction of the Purchase Price;

 

7.3.9                        Third Party Estoppel Certificates.
Such Third Party Estoppel Certificates as Seller shall have received, it being
agreed that the failure of Seller to obtain any such Third Party Estoppel
Certificates shall not (i) be a breach or default by Seller hereunder, (ii) constitute
grounds for Purchaser to delay the Closing or (iii) give rise to a
reduction of the Purchase Price;

 

7.3.10                  ROFO Acknowledgments.  Such ROFO Acknowledgments as Seller shall
have received;

 

7.3.11                  Bringdown Certificate.
A certificate confirming that all of the representations and warranties of
Seller in Section 9.1 are true and accurate as of the Closing Date,
subject to Section 4.4 and the first sentence of Section 9.3;

 

7.3.12                  Updated Rent Roll.  A Rent Roll updated to the Closing Date, or
as close as possible; and

 

7.3.13                  SNDAs.  Such SNDAs as Seller shall have received.

 

7.4                                 Purchaser’s Deliveries in Escrow.  As of or prior to the Closing Date, Purchaser
shall deliver in escrow to Escrow Agent the following:

 

7.4.1                        Assignments.  The Assignments, executed and acknowledged by
Purchaser;

 

7.4.2                        ERISA Letter.  Intentionally Deleted.

 

7.4.3                        Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing or transfer
tax forms or returns, if any, as are required to be delivered or signed by
Purchaser by applicable state and local laws in connection with the conveyance
of each Real Property;

 

7.4.4                        Authority.  Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to First American;

 

7.4.5                        Additional Documents.  Any additional documents that Seller, Escrow
Agent or First American may reasonably require for the proper consummation of
the transaction contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Purchaser or result in any new or additional obligation, covenant,
representation or warranty of Purchaser under this Agreement beyond those
expressly set forth in this Agreement); and

 

7.4.6                        Bringdown Certificate.  A certificate confirming that all of the
representations and warranties of Purchaser in Section 9.2 are true and
accurate as of the Closing Date.

 

28

 

7.5                                 Closing Statements.  As of or prior to the Closing Date, Seller
and Purchaser shall deposit with Escrow Agent an executed closing statement
consistent with this Agreement in the form required by Escrow Agent.  Seller shall provide a draft of the same at
least one week prior to the scheduled Closing Date.

 

7.6                                 Purchase Price.  At or before 3:00 p.m. (Eastern Time) on
the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase Price,
less the Earnest Money, plus or minus applicable prorations and any adjustment
to the Purchase Price made in accordance with the terms of this Agreement, in
immediate, same-day U.S. federal funds wired for credit into Escrow Agent’s
escrow account, which funds must be delivered in a manner to permit Escrow Agent
to deliver good funds to Seller or its designee on the Closing Date (and, if
requested by Seller, by wire transfer); in the event that Escrow Agent is
unable to deliver good funds to Seller or its designee prior to 4:00 p.m.
(Eastern Time) on the Closing Date, then the closing statements and related
prorations will be revised as necessary. 
To the extent that Escrow Agent is unable to provide the amount of
interest constituting part of the Earnest Money up to the Closing Date, Escrow
Agent shall promptly remit any such interest not applied against the Purchase
Price to Purchaser after the Closing.

 

7.7                                 Possession.  Seller shall deliver possession of the
Property to Purchaser at the Closing subject only to the Permitted Exceptions.

 

7.8                                 Delivery of Books and Records.  Within ten (10) Business Days after the
Closing, Seller shall deliver to the offices of Purchaser: (i) original
Lease Files; (ii) original Service Contracts and License Agreements, (iii) to
the extent in Seller’s possession: (a) maintenance records and warranties;
(b) plans and specifications; (c) licenses, permits and certificates
of occupancy; (d) copies or originals of all books and records of account,
contracts, and copies of correspondence with tenants and suppliers; (e) advertising
materials; (f) booklets; and (g) keys.

 

7.9                                 Notice to Tenants.  Seller and Purchaser shall each execute, and
Purchaser shall deliver to each tenant immediately after the Closing, a notice
regarding the sale in substantially the form of Exhibit G hereto,
or such other form as may be required by applicable state law.  This obligation on the part of Purchaser
shall survive the Closing.

 

ARTICLE 8

PRORATIONS,
DEPOSITS, COMMISSIONS

 

8.1                                 Prorations for Taxes.  To the extent tenants are required to pay
real and personal ad valorem taxes (“Taxes”)
directly under their respective Leases, Taxes will not be prorated, and
accordingly, Purchaser shall look solely to the tenants under their respective
Leases for payment of all Taxes. To the extent tenants are not required to pay
Taxes directly under their respective Leases, then the following shall apply
with respect to the proration of Taxes:

 

8.1.1                        If Taxes for the year of Closing are not known or cannot be reasonably
estimated, Taxes shall be prorated based on Taxes for the year prior to
Closing; and

 

8.1.2                        Any additional Taxes relating to the year of Closing arising out of a
change in ownership shall be assumed by Purchaser effective as of Closing and
paid by

 

29

 

Purchaser when due and
payable, and Purchaser shall indemnify Seller from and against any and all such
Taxes, which indemnification obligation shall survive the Closing.

 

8.2                                 Prorations for Tenant-Paid Operating Expenses.  To the extent tenants are required to pay
operating costs and expenses of the Property (“Operating
Expenses”) directly under their respective Leases, which Operating
Expenses may include, without limitation, fees and assessments; prepaid
expenses; obligations under Service Contracts; any assessments by private
covenant; insurance; utilities; common area maintenance expenses; and other
operating costs and expenses incurred in connection with the ownership,
operation, maintenance and management of the Real Property, Operating Expenses
will not be prorated, and accordingly, Purchaser shall look solely to the
tenants under such Leases for payment of all Operating Expenses.

 

8.3                                 Prorations for Non-Tenant Paid Items.  To the extent tenants are not required to pay
Operating Expenses or Taxes directly under their respective Leases, but are
required to escrow Operating Expenses or Taxes under their respective Leases
and/or to reimburse their landlord for all or any portion of such Operating
Expenses or Taxes, then the following items shall be prorated as of the Closing
Date with all items of income and expense for such Property being borne by
Purchaser from and after (and including) the Closing Date and Seller prior to
the Closing Date:

 

8.3.1                        Utilities.  Purchaser shall take all steps necessary to
effectuate the transfer of utilities to its name as of the Closing Date, and
where necessary, post deposits with the utility companies.  Seller shall ensure that all utility meters
are read as of the Closing Date.  Seller
shall be entitled to recover any and all deposits held by any utility company
as of the Closing Date.

 

8.3.2                        Tenant Receivables.  Rents due from tenants under Leases and from
tenants or licensees under License Agreements and Operating Expenses and Taxes
payable by tenants under Leases and licenses under License Agreements
(collectively, “Tenant Receivables”)
and not collected by Seller as of Closing shall not be prorated between Seller
and Purchaser at Closing but shall be apportioned on the basis of the period
for which the same is payable and if, as and when collected, as follows:

 

(a)                                  Tenant Receivables and other income received
from tenants under Leases, and/or tenants or licensees under License Agreements
after Closing shall be applied in the following order of priority: (1) first,
to payment of the current Tenant Receivables then due for the month in which
the Closing Date occurs, which amount shall be apportioned between Purchaser
and Seller as of the Closing Date as set forth in Section 8.3 hereof (with
Seller’s portion thereof to be delivered to Seller); (2) second, to
payment of Tenant Receivables first coming due after Closing but applicable to
the period of time before Closing, (collectively, “Unbilled Tenant Receivables”), which amount shall be delivered
to Seller; (3) third, to Tenant Receivables first coming due after Closing
and applicable to the period of time after Closing, which amount shall be
retained by Purchaser; and (4) thereafter, to delinquent Tenant
Receivables which were due and payable as of Closing but not collected by
Seller as of Closing (collectively, “Uncollected
Delinquent Tenant Receivables”), which amount shall be delivered to
Seller.  Notwithstanding the foregoing,
Seller shall have the right to pursue the collection

 

30

 

of Uncollected Delinquent Tenant Receivables for a period of six (6) months
after Closing without prejudice to Seller’s rights or Purchaser’s obligations
hereunder, provided, however, Seller shall have no right to cause any such
tenant or licensee to be evicted or to exercise any other “landlord” remedy (as
set forth in such tenant’s Lease or licensee’s License Agreement) against such
tenant other than to sue for collection. 
Any sums received by Purchaser to which Seller is entitled shall be held
in trust for Seller on account of such past due rents payable to Seller, and
Purchaser shall remit to Seller any such sums received by Purchaser to which
Seller is entitled within ten (10) Business Days after receipt thereof
less reasonable, actual costs and expenses of collection, including reasonable
attorneys’ fees, court costs and disbursements, if any.  Seller expressly agrees that if Seller
receives any amounts after the Closing Date which are attributable, in whole or
in part, to any period from and after the Closing Date, Seller shall hold the
same in trust for Purchaser and remit to Purchaser that portion of the monies
so received by Seller to which Purchaser is entitled within ten Business Days
after receipt thereof.  With respect to
Unbilled Tenant Receivables, Purchaser covenants and agrees to (A) bill
the same when billable and (B) cooperate with Seller to determine the
correct amount of operating expenses and/or taxes due.  Seller shall provide Purchaser with the
necessary information to bill the same when billable and cooperate with
Purchaser to maximize collection of the Unbilled Tenant Receivables.  The provisions of this Section 8.3.2(a) shall
survive the Closing.

 

(b)                                 Purchaser acknowledges that Seller, as
landlord under the Leases (and/or as licensor under the License Agreements) may
be collecting from tenants under the Leases (and/or licensees under the License
Agreements) additional rent relating to Operating Expenses or Taxes.  To the extent that any such additional rent
is paid by any tenants to the landlord under the Leases (and/or by any
licensees to the licensor under the License Agreements) based on an estimated
payment basis (whether monthly, quarterly, or otherwise) for which a future
reconciliation of actual Operating Expenses or Taxes to estimated payments of
Operating Expenses or Taxes is required to be performed at the end of a
reconciliation period, Purchaser and Seller shall determine prior to the
Closing whether such tenants and/or licensees have, in the aggregate, made an
overpayment or underpayment of additional rent relating to Operating Expenses
or Taxes (such determination to be based on a comparison of reasonable
estimates of actual annual Operating Expenses and Taxes to the estimated
payments being made by such tenants and/or licensees).  If such determination indicates that such
tenants and/or licensees have made an overpayment of additional rent relating
to Operating Expenses or Taxes, Purchaser shall receive a credit toward the
Purchase Price in the amount of such overpayment and Purchaser shall assume all
obligations and liabilities relating to such overpayment.  If, however, such determination indicates
that such tenants and/or licensees have made an underpayment of additional rent
relating to Operating Expenses or Taxes, Purchaser shall bill the tenants for
the same promptly after the Closing and remit the same to Seller as and when
collected.  If such review indicates that
it cannot be determined as of the Closing Date whether a tenant has overpaid or
underpaid its additional rent relating to Operating Expenses or Taxes,
Purchaser shall bill the tenant for the same at the end of the reconciliation
period, and any overpayment with respect to the period prior to the Closing
Date shall be paid by Seller to Purchaser or any underpayment with respect to
the period prior to the Closing Date, when received from the tenant, shall

 

31

 

be paid by Purchaser to Seller. Notwithstanding anything contained
herein to the contrary, to the extent Purchaser or Seller receives a check or
wire transfer from any tenant in the exact amount of the item payable by such
tenant or referencing the item to which the check or wire transfer relates,
such check or wire transfer shall be (i) applied directly to the applicable
item or (ii) if such item was previously paid by Seller or Purchaser,
reimbursed to Seller or Purchaser, as applicable.

 

8.4                                 Miscellaneous Prorations.  Without duplication
of, and to the extent not addressed by Sections 8.1, 8.2 and 8.3, all other
items that are customarily subject to proration and adjustment, including
without limitation, “Base Rent”, shall be prorated as of the Closing Date, it
being agreed that for purposes of prorations and adjustments, Purchaser shall
be deemed the owner of the Property on the Closing Date.

 

8.5                                 Leasing Costs.  Seller agrees to pay or discharge at or prior
to Closing (and provide Purchaser with evidence of payment thereof), or provide
Purchaser with a credit at Closing in the amount of, all leasing commissions,
costs for tenant improvements, lease buyout costs, moving allowances, design
allowances, legal fees and other costs, expenses and allowances incurred in
order to induce a tenant to enter into a Lease or Lease renewal or extension or
to induce a licensee to enter into a License Agreement (collectively, the “Leasing Costs”) that are indicated on Schedule
9.1.5 as being payable by Seller. 
Purchaser agrees to pay all Leasing Costs indicated on Schedule 9.1.5 as being payable by Purchaser as and when
they become due. Seller shall have no obligation to pay, and as of Closing
Purchaser shall assume, the obligation to pay, all Leasing Costs payable with
respect to any option to renew or option to expand that has not been exercised
prior to the Effective Date, which obligation shall survive the Closing.  Additionally, as of Closing, Purchaser shall
assume Seller’s obligations for Leasing Costs incurred with respect to Leases
and Lease renewals and extensions and License Agreements and License Agreement
renewals and extensions executed subsequent to the Effective Date pursuant to
the terms of this Agreement.

 

8.6                                 Closing Costs.  Closing costs shall be allocated between
Seller and Purchaser in accordance with Section 1.2.

 

8.7                                 Final Adjustment After Closing.  If final bills are not available or cannot be
issued prior to Closing for any item being prorated under Sections 8.1, 8.3 and
8.5, then Purchaser and Seller agree to allocate such items on a fair and
equitable basis as soon as such bills are available, final adjustment to be
made as soon as reasonably possible after the Closing.  Payments in connection with the final
adjustment shall be due within thirty (30) days of written notice.  All such rights and obligations shall survive
the Closing.

 

8.8                                 Tenant Deposits.  All tenant and licensee security deposits
collected and not applied by Seller (and interest thereon if required by law or
contract) shall be transferred or credited to Purchaser at Closing.  As of the Closing, Purchaser shall assume
Seller’s obligations related to tenant and licensee security deposits, but only
to the extent they are credited or transferred to Purchaser.  Notwithstanding the foregoing provisions of
this Section 8.8, deposits in the form of letters of credit will not be
transferred or credited at the Closing. 
Rather, at the Closing, Seller shall deliver the letters of credit to
Purchaser and will cooperate with Purchaser to effect a transfer of the letters
of credit to Purchaser. Purchaser and Seller shall each pay one-half

 

32

 

(1/2) of the costs and expenses (including transfer
and other fees imposed by the issuer of the letter of credit) of transferring
the letters of credit to Purchaser.  In
the event that prior to a transfer of any such letter of credit to Purchaser,
Purchaser deems it advisable to draw on the same, Seller will cooperate in such
presentation, and direct payment by virtue of any such presentation to
Purchaser, and if Seller receives any such payment it will promptly deliver such
payment in the form received and endorsed, without recourse, to Purchaser.  Purchaser shall defend, indemnify and hold
Seller harmless from all claims, causes of actions, actions, damages, costs,
liabilities and expenses, including (without limitation) reasonable attorneys’
fees, that may arise out of any such presentation or related payment, other
than by reason of any actions of Seller other than at the written direction of
Purchaser.  If any Security Deposit is
held in a form other than cash or letter of credit, for example debt or equity
securities, at Closing Seller shall deliver to Purchaser such security, or
record evidence of Seller’s interest therein, and execute and deliver to
Purchaser such documents and instruments as are necessary to vest in Purchaser
the same ownership or security interest in such security deposit as held by
Seller, but in no event less than what was required to be granted by the
applicable tenant under and in accordance with the terms of the applicable
Lease.

 

8.9                                 Commissions.  Seller is responsible to Financial Advisor
for a real estate fee at Closing in accordance with a separate agreement
between Seller and Financial Advisor and at Closing Seller shall pay to
Financial Advisor the entire real estate fee due under the separate agreement
between Seller and Financial Advisor. 
Financial Advisor may share its commission with any other financial
advisor or licensed broker involved in this transaction.  Subject to Seller’s representations in this Section 8.9,
under no circumstances shall Seller owe a commission or other compensation
directly to any financial advisor, broker, agent or person other than Financial
Advisor.  No affiliate, subsidiary or
party related in any way to Purchaser shall claim a commission or fee from
Seller or Financial Advisor.  Seller
represents and warrants to Purchaser that no real estate brokerage commission
or real estate fee is payable to any person or entity in connection with the
transaction contemplated hereby other than Financial Advisor, and agrees to and
does hereby indemnify and hold Purchaser harmless against the payment of any
commission or real estate fee to any other person or entity claiming by,
through or under Seller including Financial Advisor. Purchaser represents and
warrants to Seller that no real estate brokerage commission or real estate fee
is payable to any person or entity in connection with the transaction
contemplated hereby, and agrees to and does hereby indemnify and hold Seller
harmless against the payment of any commission or real estate fee to any other
person or entity claiming by, through or under Purchaser excluding Financial
Advisor. The foregoing indemnifications shall extend to any and all claims,
liabilities, costs and expenses (including reasonable attorneys’ fees and
litigation costs) arising as a result of such claims and shall survive the
Closing.

 

ARTICLE 9

REPRESENTATIONS
AND WARRANTIES

 

9.1                                 Seller’s Representations and Warranties.  Each Seller represents and warrants to
Purchaser that:

 

9.1.1                        Organization and Authority.  Seller is validly existing, and in good
standing in the state in which it was formed. 
Seller has the full right and authority and has

 

33

 

obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby.  This Agreement has been, and all of the
documents to be delivered by Seller at the Closing will be, authorized and
executed and constitute, or will constitute, as appropriate, the valid and
binding obligation of Seller, enforceable in accordance with their terms.

 

9.1.2                        No Conflicts.  The execution, delivery and performance by
Seller of this Agreement and the instruments referenced herein and the
transaction contemplated hereby will not conflict with, or with or without
notice or the passage of time or both, result in a breach of, violate any term
or provision of, or constitute a default under any articles of formation,
bylaws, partnership agreement (oral or written), operating agreement,
indenture, deed of trust, mortgage, contract, agreement, judicial or
administrative order, or any law to which Seller or any portion of the Property
is bound.

 

9.1.3                        Consents; Binding Obligations.  No approval or consent is required from any
person (including any partner, shareholder, member, creditor, investor or
governmental body) for Seller to execute, deliver or perform this Agreement or
the other instruments contemplated hereby or for Seller to consummate the
transaction contemplated hereby.  This
Agreement and all documents required hereby to be executed by Seller are and
shall be valid, legally binding obligations of and enforceable against Seller
in accordance with their terms.

 

9.1.4                        Pending Actions.  To Seller’s knowledge, except as set forth on
Schedule 9.1.4, there is no action
or proceeding pending or threatened against Seller or relating to the
applicable Property.

 

9.1.5                        Leases, Guaranties, Tenants and Guarantors.  Schedule 2.1.2 is a true, correct and complete list of all
Leases, Guaranties, tenants and guarantors in effect as of the Effective
Date.  Seller has delivered or made
available to Purchaser true, correct and complete copies of the Leases and the
Guaranties.  To Seller’s knowledge, no
tenant or guarantor of any Lease has been released or discharged, voluntarily
or involuntarily, or by operation of law, from any obligation related to such
Lease.  To Seller’s knowledge, Seller has
not received notice of any default under, and to Seller’s knowledge, no other
party is in default under, any of its obligations under any of the Leases or
Guaranties, and to Seller’s knowledge, there is no event which with the giving
of notice or passage of time, or both, would be a default thereunder.  Without limiting the foregoing, to Seller’s
knowledge, Seller has not received any notice from any tenant or guarantor
under the Guaranties asserting any presently accrued defenses, offsets or
disputes thereunder (other than with respect to the curtain wall on the
Northrop Property as referenced in that certain Curtain Wall Snap Cover Failure
Investigation prepared by Wiss, Janney, Elstner Associates, Inc. dated April 23,
2010, which Purchaser has knowledge of). The Rent Roll is true and correct in
all material respects.  Except as
disclosed on Schedule 9.1.5, there
are no Leasing Costs or other obligations to brokers due or which will become
due under any of the Leases, except for Leasing Costs incurred with respect to
Leases and Lease renewals and extensions and License Agreements and License
Agreement renewals and extensions executed subsequent to the Effective Date
pursuant to the terms of this Agreement. Except as disclosed on Schedule 9.1.5, all Leasing Costs have been
fully paid and satisfied by Seller, except for Leasing Costs incurred with
respect to Leases and Lease renewals and extensions and

 

34

 

License Agreements and
License Agreement renewals and extensions executed subsequent to the Effective
Date pursuant to the terms of this Agreement.

 

9.1.6                        Service Contracts and License Agreements.  To Seller’s knowledge, Schedule 9.1.6 is a true, correct and
complete list of all Service Contracts and License Agreements with respect to
the Property.  To Seller’s knowledge,
Seller has delivered true, correct and complete copies of the Service Contracts
and License Agreements to Purchaser.  To
Seller’s knowledge, Seller has not received notice of any default under, and to
Seller’s knowledge, no other party is in default under, any of its obligations
under any of the Service Contracts or License Agreements, and to Seller’s
knowledge, there is no event which with the giving of notice or passage of
time, or both, would be a default thereunder. 
Without limiting the foregoing, to Seller’s knowledge, Seller has not
received any notice from any party under the Service Contracts or License
Agreements asserting any presently accrued defenses, offsets or disputes
thereunder.

 

9.1.7                        Notices
from Governmental Authorities.  To Seller’s knowledge, except as set forth on
Schedule 9.1.7 or as may be reflected
by the Property Documents or otherwise disclosed by Seller to Purchaser in
writing, Seller has not received from
any governmental authority written notice of any violation of any laws
applicable (or alleged to be applicable) to the Real Property, or any part
thereof, that has not been corrected.

 

9.1.8                        Prohibited Persons and Transactions.  Neither Seller nor any of its affiliates is,
nor will they become, a person or entity with whom U.S. persons or entities are
restricted from doing business under regulations of the Office of Foreign Asset
Control (“OFAC”) of the Department
of the Treasury (including those named on OFAC’s Specially Designated and
Blocked Persons List) or under any statute, executive order (including the September 24,
2001, Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism), or other
governmental action and is not and will not engage in any dealings or
transactions or be otherwise associated with such persons or entities.

 

9.1.9                        Operating Statements.  The Operating Statements delivered by Seller
or made available pursuant to Purchaser are true and complete copies of the
operating statements for the Property which the Seller relies upon for the
purposes of operating the Property.

 

9.1.10                  Insurance.  Schedule
9.1.10 is a true, correct and complete list of the insurance
maintained by Seller with respect to the Property.  Seller has not received any written notice or
request from any insurance company requesting the performance of any work or
alteration with respect to the Property, which have not been fully and
completely corrected.  Seller has not
received written notice from any insurance company concerning any defects or inadequacies
in the Property, which, if not corrected, would result in the termination of
insurance coverage or increase its cost.

 

9.1.11                  Employees.  There are no employees of Seller employed in
connection with the use, management, maintenance or operation of the Property
whose employment will continue after the Closing Date.  There is no bargaining unit or union contract
relating to any employees of Seller.

 

35

 

9.1.12                  Third Party Agreements.  To Seller’s knowledge, other than the Leases,
the License Agreements, the Service Contracts, the Permitted Exceptions and the
agreements set forth on Schedule 9.1.12,
there are no agreements related to the operation, maintenance or use of the
Property.  To Seller’s knowledge, except
as set forth on Schedule 9.1.12,
Seller is not in default of, and no other party is in default of, any of its
obligations under any of the agreements set forth on Schedule 9.1.12, and there is no event which, with the giving
of notice or passage of time, or both, would be a default thereunder.

 

9.1.13                  Seller’s Representatives.
Seller’s Representatives are the individuals involved in supervising Seller’s
ownership, operation, and maintenance of the Properties, have knowledge of the
operation and maintenance of the Properties and have reviewed the
representations of Seller set forth in, and the schedules and exhibits
referenced in, this Section 9.1.

 

9.1.14                  Subleases.  Schedule
9.1.14 is a true, correct and complete list of all subleases
covering the Real Property acknowledged, or consented to, by Seller and such
additional subleases as to which Seller has knowledge of.

 

9.2                                 Purchaser’s Representations and Warranties.  Purchaser represents and warrants to Seller
that:

 

9.2.1                        Organization and Authority.  Purchaser is validly existing as a limited
liability company in good standing in the State of Delaware. Subject to
obtaining approval of Purchaser’s Board of Directors prior to Purchaser’s
delivery of the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof, (a) Purchaser has the full right and authority and has obtained any and
all consents required to enter into this Agreement and to consummate or cause
to be consummated the transactions contemplated hereby, and (b) this Agreement
has been, and all of the documents to be delivered by Purchaser at the Closing
will be, authorized and properly executed and constitute, or will constitute,
as appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.

 

9.2.2                        No Conflicts.  The execution, delivery and performance by
Purchaser of this Agreement and the instruments referenced herein and the
transaction contemplated hereby will not conflict with, or with or without
notice or the passage of time or both, result in a breach of, violate any term
or provision of, or constitute a default under any articles of formation,
bylaws, partnership agreement (oral or written), operating agreement,
indenture, deed of trust, mortgage, contract, agreement, judicial or
administrative order, or any law to which Purchaser is bound.

 

9.2.3                        Consents; Binding Obligations.  Except as set forth in Section 9.2.1, (a) no
approval or consent is required from any person (including any partner,
shareholder, member, creditor, investor or governmental body) for Purchaser to
execute, deliver or perform this Agreement or the other instruments
contemplated hereby or for Purchaser to consummate the transaction contemplated
hereby, and (b) this Agreement and all documents required hereby to be executed
by Purchaser are and shall be valid, legally binding obligations of and
enforceable against Purchaser in accordance with their terms.

 

36

 

9.2.4                        Pending Actions.  There is no action or proceeding pending or,
to Purchaser’s knowledge, threatened against Purchaser which challenges or
impairs Purchaser’s ability to execute or perform its obligations under this
Agreement.

 

9.2.5                        ERISA.  (a) Purchaser is neither (i) an “employee
benefit plan” (as defined in Section 3(3) of the Employment Retirement Income
Security Act of 1974, as amended (“ERISA”))
which is subject to Title I of ERISA (an “ERISA
Plan”), nor (ii) a “plan” (as defined in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended (the “Code”)) which is subject to Section 4975 of the Code (a “Code Plan”); (b) the assets of Purchaser do
not constitute “plan assets” (as defined in Section 3(42) of ERISA) of one or
more ERISA Plans or Code Plans (“Plan Assets”)
because, at the time of the Closing, the stock of Purchaser’s parent
constitutes “publicly offered securities” (as defined in 29 C.F.R. Section
2510.3-101(b)(2)), which parent owns one hundred percent (100%) of the issued
and outstanding equity of Purchaser; (c) Purchaser is not using Plan Assets in
the performance or discharge of its obligations under this Agreement; (d)
Purchaser is not a “governmental plan” (within the meaning of Section 3(32) of
ERISA) and assets of Purchaser do not constitute plan assets of one or more
such plans; and (e) transactions by or with Purchaser are not in violation of
state statutes applicable to Purchaser regulating investments of and fiduciary
obligations with respect to governmental plans.

 

9.2.6                        Prohibited Persons and Transactions.  Neither Purchaser nor any of its affiliates
is, nor will they become, a person or entity with whom U.S. persons or entities
are restricted from doing business under regulations of OFAC (including those
named on OFAC’s Specially Designated and Blocked Persons List) or under any
statute, executive order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is
not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.

 

9.2.7                        Availability of Funds.  Subject to obtaining the financing
contemplated by either (x) the Term Financing Commitment, (y) the GE Bridge
Loan and the Mezzanine Loan or (z) the Bridge Loan and the Mezzanine Loan as
provided in Section 4.3.2,  Purchaser
currently has available and will at the Closing have available sufficient funds
to pay the Purchase Price and to pay any and all other amounts payable by
Purchaser pursuant to this Agreement and to effect the transactions
contemplated hereby.

 

9.3                                 Survival of Representations and Warranties.  The representations and warranties set forth
in this ARTICLE 9 are made as of the Effective Date, are remade as of the
Closing Date (subject to update for Updated Property Information pursuant to
Section 4.4 and, changes that are not the result of a breach by Seller or
Purchaser or any of their covenants in this Agreement), and shall not be deemed
to be merged into or waived by the instruments of Closing, but shall survive
the Closing for a period of nine (9) months (the “Survival
Period”).  Terms such as “to Seller’s
knowledge,” “to the best of Seller’s knowledge” or like phrases mean, (A)
with respect to all Properties, the actual knowledge of the following persons
with respect to all Properties: Barclay Jones, Executive Vice President,
Michael Dorsch, Executive Vice President, Samantha Garbus, Senior Vice
President, Nancy Zoeckler, Senior Vice President, Mary-Beth Roselle, Senior
Vice President, Scott Quigle, Vice President, and Carrie Crain, Vice President,

 

37

 

and (B) with respect to each Property, the actual
knowledge of the applicable persons whose names are set forth opposite each
Property on Schedule 9.3 (the persons
identified in the foregoing items (A) and (B) are referred to herein
collectively as, the “Seller’s Representatives”),
without any duty of inquiry or investigation except in connection with such
persons’ review of the representations and warranties of Seller set forth in
Section 9.1 hereof as provided in Section 9.1.13 hereof; provided that so
qualifying Seller’s knowledge shall in no event give rise to any personal
liability on the part of Seller’s Representatives, or any of them, or any other
officer or employee of Seller, on account of any breach of any representation
or warranty made by Seller herein.  Said
terms do not include constructive knowledge, imputed knowledge or knowledge
Seller or such persons do not have but could have obtained through further
investigation or inquiry.  No financial
advisor, broker, agent, or party other than Seller is authorized to make any
representation or warranty for or on behalf of Seller.  Subject to Section 9.4 of the Harborside
Purchase and Sale Agreement, each party shall have the right to bring an action
against the other on the breach of a representation or warranty or covenant hereunder
or in the documents delivered by Seller at the Closing, but only on the
following conditions: (1) the party bringing the action for breach first learns
of the breach after Closing and files such action within the Survival Period,
(2) Seller shall not have the right to bring a cause of action for a breach of
a representation or warranty or covenant unless the damage to Seller on account
of such breach (individually or when combined with damages from other breaches
including damages on account of breaches by Purchaser under the Harborside Purchase
and Sale Agreement) equals or exceeds $5,000,000, in which event Purchaser
shall be liable to Seller for one-half of all such damage up to $5,000,000 and
for all damage above $5,000,000, and (3) Purchaser shall not have the right to
bring a cause of action for a breach of a representation or warranty or
covenant unless the damage to Purchaser on account of such breach (individually
or in the aggregate), (i) equals or exceeds (A) $1,000,000 if such breach
relates to a Property with an Allocated Purchase Price of less than
$50,000,000, in which event Seller shall be liable to Purchaser for one-half of
all such damage up to $1,000,000 and for all such damage above $1,000,000 with
respect to such Property, or (B) $2,000,000 if such breach relates to a Property
with an Allocated Purchase Price equal to or greater than $50,000,000, in which
event Seller shall be liable to Purchaser for one-half of all such damage up to
$2,000,000 and for all such damage above $2,000,000 with respect to such
Property, or (ii) without duplication of any claims made pursuant to subclause
(i) of this clause (3), equals or exceeds $5,000,000 with respect to all
Properties (including damages on account of breaches by Harborside Seller under
the Harborside Purchase and Sale Agreement), in which event Seller shall be
liable to Purchaser for one-half of all such damage up to $5,000,000 and for
all such damage above $5,000,000 with respect to all Properties, subject to the
further provisions of this Section 9.3. 
Neither party shall have any liability after Closing for the breach of a
representation or warranty or covenant hereunder of which the other party
hereto had actual knowledge as of Closing. 
Notwithstanding any other provision of this Agreement, any closing
deliveries of Seller contemplated by this Agreement: (a) subject to Section 9.4
of the Harborside Purchase and Sale Agreement and other than the Seller
Estoppels and Leasing Costs, or any rights which Purchaser might otherwise have
at law, equity, or by statute, whether based on contract or some other claim,
Purchaser agrees that any liability of Seller to Purchaser pursuant to this
Section 9.3 and any liability of Harborside Seller to Purchaser pursuant to
Section 9.3 of the Harborside Purchase and Sale Agreement will in the aggregate
be limited to five percent (5%) of the aggregate Purchase Price of the Property
and the Harborside Membership Interests and (b) there shall be no threshold or
limitation or limitation on

 

38

 

survival on Seller’s obligation to pay or credit
Purchaser for Leasing Costs payable by Seller under Section 8.5 (and the
corresponding representation in Section 9.1.5 regarding Leasing Costs), whether
or not the obligations to pay any Leasing Costs first becomes known to
Purchaser before, at or after the Closing; i.e., Seller shall pay or credit
Purchaser for Leasing Costs payable by Seller under Section 8.5 (and the
corresponding representation in Section 9.1.5 regarding Leasing Costs)
regardless of the amount thereof and regardless of when the Leasing Cost
becomes known to Purchaser.  In no event
shall either party be liable to the other party for incidental, consequential,
or punitive damages as a result of the breach of any or all representations or
warranties set forth in this Agreement. 
The provisions of this Section 9.3 shall survive the Closing.  Any breach of a representation or warranty or
covenant that occurs prior to Closing shall be governed by ARTICLE 10.

 

ARTICLE 10

DEFAULT AND
REMEDIES

 

10.1                           Seller’s Remedies.  If Purchaser defaults on its obligations
hereunder, or under the Harborside Purchaser and Sale Agreement, at or prior to
Closing for any reason, or if prior to Closing any one or more of Purchaser’s
representations or warranties or covenants hereunder, or under the Harborside
Purchase and Sale Agreement, are breached in any material respect that impairs
Purchaser’s ability to close under this Agreement or under the Harborside
Purchase and Sale Agreement, and such default or breach is not cured by the
earlier of the third (3rd) Business Day after written notice thereof from
Seller or Harborside Seller (as applicable) or the Closing Date (except no
notice or cure period shall apply if Purchaser fails to consummate the purchase
of the Property hereunder or the Harborside Membership Interests pursuant to
the Harborside Purchase and Sale Agreement), Seller shall be entitled, as its
sole remedy hereunder (except as provided in Sections 4.10, 8.8, 10.3 and 10.4
hereof), to terminate this Agreement and recover the Earnest Money as
liquidated damages and not as a penalty, in full satisfaction of claims against
Purchaser hereunder.  Seller and
Purchaser agree that Seller’s damages resulting from Purchaser’s default are
difficult, if not impossible, to determine and the Earnest Money is a fair
estimate of those damages which has been agreed to in an effort to cause the
amount of such damages to be certain. 
Notwithstanding anything in this Section 10.1 to the contrary, in the
event of Purchaser’s default or a termination of this Agreement, Seller shall
have all remedies available at law or in equity in the event Purchaser or any
party related to or affiliated with Purchaser is asserting any claims or right
to the Property that would otherwise delay or prevent Seller from having clear,
indefeasible and marketable title to the Property.  In all other events Seller’s remedies shall
be limited to those described in this Section 10.1 and Sections 4.10, 8.8, 10.3
and 10.4 hereof.  If Closing is
consummated, Seller shall have all remedies available at law or in equity in
the event Purchaser fails to perform any obligation of Purchaser under this
Agreement. IN NO EVENT SHALL PURCHASER’S DIRECT OR INDIRECT PARTNERS,
SHAREHOLDERS, MEMBERS, MANAGERS, OWNERS OR AFFILIATES, ANY OFFICER, MANAGER,
DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING
PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER
LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER
BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.

 

39

 

10.2                           Purchaser’s Remedies. If Seller
defaults on its obligations hereunder, or Harborside Seller defaults in its
obligations under the Harborside Purchase and Sale Agreement, at or prior to
Closing for any reason, or if prior to Closing any one or more of Seller’s, or,
with respect to the Harborside Purchase and Sale Agreement, Harborside Seller’s,
representations or warranties or covenants are breached in any material respect
(subject to the provisions of Section 4.4 hereof and of the Harborside Purchase
and Sale Agreement and the first Sentence of Section 9.3 hereof and of the
Harborside Purchase and Sale Agreement) and such default or breach is not cured
by the earlier of the third (3rd) Business Day after written notice thereof
from Purchaser or the Closing Date (except no notice or cure period shall apply
if Seller fails to consummate the sale of the Property hereunder or Harborside
Seller fails to consummate the sale of Harborside Membership Interests under
the Harborside Purchase and Sale Agreement), Purchaser shall elect, as its sole
remedy hereunder, either to (a) terminate this Agreement in its entirety by
giving Seller timely written notice of such election prior to or at Closing and
recover the Earnest Money, in which event Seller shall be liable to Purchaser
for its out of pocket expenses incurred in connection with the transaction
contemplated hereby, but not to exceed $1,700,000.00, (b) terminate this
Agreement in part with respect to the Properties with respect to which Seller’s
representations or warranties or covenants are breached (subject to Sections
7.2.1(4) and 7.2.2(9)), in which event the Purchase Price shall be reduced by
the Allocated Purchase Price for such Properties, (c) enforce specific
performance to consummate the sale of the Property hereunder, or (d) waive said
failure or breach and proceed to Closing without any reduction in the Purchase
Price.  Notwithstanding anything herein
to the contrary, Purchaser shall be deemed to have elected to terminate this
Agreement in its entirety if Purchaser fails to deliver to Seller written
notice of its intent to proceed otherwise on or before ten (10) Business Days
following the scheduled Closing Date or, having given notice that it intends to
seek specific performance, fails to file a lawsuit asserting such claim or
cause of action in New York County, New York within two months following the
scheduled Closing Date.  EXCEPT FOR iSTAR’S
POTENTIAL LIABILITY PURSUANT TO THE SELLER ESTOPPELS AND/OR THE MEZZANINE LOAN,
IN NO EVENT SHALL SELLER’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, MEMBERS,
MANAGERS, OWNERS OR AFFILIATES, ANY OFFICER, MANAGER, DIRECTOR, EMPLOYEE OR
AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY
LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON
LAW, STATUTE, EQUITY OR OTHERWISE.

 

10.3                           Attorneys’ Fees.  In the event either party hereto employs an
attorney in connection with claims by one party against the other arising from
the operation of this Agreement, the non-prevailing party shall pay the
prevailing party all reasonable fees and expenses, including attorneys’ fees,
incurred in connection with such claims.

 

10.4                           Other Expenses.  If this Agreement is terminated due to the
default of a party, then the defaulting party shall pay any fees or charges due
to Escrow Agent for holding the Earnest Money as well as any escrow
cancellation fees or charges and any fees or charges due to the Title Company
for preparation and/or cancellation of the Title Commitments.

 

40

 

ARTICLE 11

DISCLAIMERS,
RELEASE AND INDEMNITY

 

11.1                           Disclaimers By Seller.  Except as expressly set forth in this
Agreement and/or the Closing documents, it is understood and agreed that Seller
and Seller’s agents or employees have not at any time made and are not now
making, and they specifically disclaim, any warranties, representations or
guaranties of any kind or character, express or implied, with respect to the
Property, including, but not limited to, warranties, representations or
guaranties as to (a) matters of title (other than Seller’s special warranty of
title to be contained in the Deeds), (b) environmental matters relating to the
Property or any portion thereof, including, without limitation, the presence of
Hazardous Materials in, on, under or in the vicinity of the Property, (c)
geological conditions, including, without limitation, subsidence, subsurface
conditions, water table, underground water reservoirs, limitations regarding
the withdrawal of water, and geologic faults and the resulting damage of past
and/or future faulting, (d) whether, and to the extent to which the Property or
any portion thereof is affected by any stream (surface or underground), body of
water, wetlands, flood prone area, flood plain, floodway or special flood
hazard, (e) drainage, (f) soil conditions, including the existence of
instability, past soil repairs, soil additions or conditions of soil fill, or
susceptibility to landslides, or the sufficiency of any undershoring, (g) the
presence of endangered species or any environmentally sensitive or protected
areas, (h) zoning or building entitlements to which the Property or any portion
thereof may be subject, (i) the availability of any utilities to the Property
or any portion thereof including, without limitation, water, sewage, gas and
electric, (j) usages of adjoining property, (k) access to the Property or any
portion thereof, (l) the value, compliance with the plans and specifications,
size, location, age, use, design, quality, description, suitability, structural
integrity, operation, title to, or physical or financial condition of the
Property or any portion thereof, or any income, expenses, charges, liens,
encumbrances, rights or claims on or affecting or pertaining to the Property or
any part thereof, (m) the condition or use of the Property or compliance of the
Property with any or all past, present or future federal, state or local
ordinances, rules, regulations or laws, building, fire or zoning ordinances,
codes or other similar laws, (n) the existence or non-existence of underground storage
tanks, surface impoundments, or landfills, (o) any other matter affecting the
stability and integrity of the Property, (p) the potential for further
development of the Property, (q) the merchantability of the Property or fitness
of the Property for any particular purpose, (r) the truth, accuracy or
completeness of the Property Documents or Updated Property Information, (s) tax
consequences, or (t) any other matter or thing with respect to the Property.

 

11.2                           Sale “As Is, Where Is”.  Purchaser acknowledges and agrees that upon
Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept
the Property “AS IS, WHERE IS, WITH ALL FAULTS,”
except to the extent expressly provided otherwise in this Agreement and any
document executed by Seller and delivered to Purchaser at Closing.  Except as expressly set forth in this
Agreement or such Closing documents, Purchaser has not relied and will not rely
on, and Seller has not made and is not liable for or bound by, any express or
implied warranties, guarantees, statements, representations or information
pertaining to the Property or relating thereto (including specifically, without
limitation, Property information packages distributed with respect to the
Property) made or furnished by Seller, or any property manager, real estate
broker, financial advisor, agent or third party representing or purporting to
represent Seller, to whomever made or given, directly or indirectly, orally or
in writing.  Purchaser

 

41

 

represents that it is a knowledgeable, experienced
and sophisticated purchaser of real estate and that, except as expressly set
forth in this Agreement, it is relying solely on its own expertise and that of
Purchaser’s consultants in purchasing the Property and shall make an
independent verification of the accuracy of any documents and information
provided by Seller.  Purchaser will
conduct such inspections and investigations of the Property as Purchaser deems necessary,
including, but not limited to, the physical and environmental conditions
thereof, and shall rely upon same.  By
failing to terminate this Agreement prior to the expiration of the Inspection
Period, Purchaser acknowledges that Seller has afforded Purchaser a full
opportunity to conduct such investigations of the Property as Purchaser deemed
necessary to satisfy itself as to the condition of the Property and the
existence or non-existence or curative action to be taken with respect to any
Hazardous Materials on or discharged from the Property, and will rely solely
upon same and not upon any information provided by or on behalf of Seller or
its agents or employees with respect thereto, other than such representations,
warranties and covenants of Seller as are expressly set forth in this Agreement.  Upon Closing, Purchaser shall assume the risk
that adverse matters, including, but not limited to, adverse physical or
construction defects or adverse environmental, health or safety conditions, may
not have been revealed by Purchaser’s inspections and investigations.  Purchaser hereby represents and warrants to
Seller that: (a) Purchaser is represented by legal counsel in connection with
the transaction contemplated by this Agreement; and (b) Purchaser is purchasing
the Property for business, commercial, investment or other similar purpose and
not for use as Purchaser’s residence. 
Purchaser waives any and all rights or remedies it may have or be
entitled to, deriving from disparity in size or from any significant disparate
bargaining position in relation to Seller.

 

11.3                           Seller Released from Liability. Purchaser
acknowledges that it will have the opportunity to inspect the Property during
the Inspection Period, and during such period, observe its physical
characteristics and existing conditions and the opportunity to conduct such
investigation and study on and of the Property and adjacent areas as Purchaser
deems necessary, and, except as set forth herein or in any Closing document,
Purchaser hereby FOREVER RELEASES AND DISCHARGES Seller from all responsibility
and liability, including without limitation, liabilities and responsibilities
for the landlord’s obligations under the Leases relating to the physical,
environmental or legal compliance status of the Property, whether arising
before or after the Effective Date, and liabilities under the Comprehensive
Environmental Response, Compensation and Liability Act Of 1980 (42 U.S.C.
Sections 9601 et seq.), as amended (“CERCLA”),
regarding the condition, valuation, salability or utility of the Property, or
its suitability for any purpose whatsoever (including, but not limited to, with
respect to the presence in the soil, air, structures and surface and subsurface
waters, of Hazardous Materials or other materials or substances that have been
or may in the future be determined to be toxic, hazardous, undesirable or
subject to regulation and that may need to be specially treated, handled and/or
removed from the Property under current or future federal, state and local
laws, regulations or guidelines, and any structural and geologic conditions,
subsurface soil and water conditions and solid and hazardous waste and
Hazardous Materials on, under, adjacent to or otherwise affecting the
Property).  Except as set forth herein or
in any closing documents, Purchaser further hereby WAIVES (and by Closing this
transaction will be deemed to have WAIVED) any and all objections and
complaints (including, but not limited to, federal, state and local statutory
and common law based actions, and any private right of action under any
federal, state or local laws, regulations or guidelines to which the Property
is or may be subject, including, but not limited to, CERCLA) concerning the
physical characteristics and any existing conditions of the Property,

 

42

 

including, without limitation, the landlord’s
obligations under the Leases relating to the physical, environmental or legal
compliance status of the Property, whether arising before or after the
Effective Date.  Purchaser further hereby
assumes the risk of changes in applicable laws and regulations relating to
past, present and future environmental conditions on the Property and the risk
that adverse physical characteristics and conditions, including, without
limitation, the presence of Hazardous Materials or other contaminants, may not
have been revealed by its investigation.

 

11.4                           “Hazardous
Materials” Defined.  For purposes hereof, “Hazardous
Materials” means “Hazardous Material,” “Hazardous Substance,” “Pollutant
or Contaminant,” and “Petroleum” and “Natural Gas Liquids,” as those terms are
defined or used in Section 101 of CERCLA, and any other substances regulated
because of their effect or potential effect on public health and the
environment, including, without limitation, PCBs, lead paint, asbestos, urea
formaldehyde, radioactive materials, putrescible materials, and infectious
materials.

 

11.5                           Intentionally Deleted.

 

11.6                           Survival.  The terms and conditions of this ARTICLE 11
shall expressly survive the Closing, and shall not merge with the provisions of
any closing documents.

 

Purchaser
acknowledges and agrees that the disclaimers and other agreements set forth
herein are an integral part of this Agreement and that Seller would not have
agreed to sell the Property to Purchaser for the Purchase Price without the
disclaimers and other agreements set forth above.

 

ARTICLE 12

MISCELLANEOUS

 

12.1                           Parties Bound; Assignment.  This Agreement, and the terms, covenants, and
conditions herein contained, shall inure to the benefit of and be binding upon
the heirs, personal representatives, successors, and assigns of each of the
parties hereto.  Purchaser may, at
Purchaser’s sole cost and expense and at no cost or expense to Seller, assign
its rights under this Agreement in whole or in part with respect to any
Property upon the following conditions: (a) the assignee of Purchaser must be
(i) an entity controlling, controlled by, or under common control with
Purchaser or (ii) an entity advised by an affiliate of Purchaser’s advisor,
Dividend Capital Total Advisors LLC, (b) all of the Earnest Money must have
been delivered in accordance herewith, (c) the Inspection Period shall have (or
be deemed to have) ended, (d) the assignee of Purchaser shall assume all
obligations of Purchaser hereunder, but Purchaser shall remain primarily liable
for the performance of Purchaser’s obligations, (e) a copy of the fully
executed written assignment and assumption agreement shall be delivered to
Seller at least five (5) Business Days prior to Closing, (f) the requirements
in Section 12.17 are satisfied and (g) such assignment shall in no event delay
the Closing.

 

43

 

12.2                           Headings.  The article, section, subsection, paragraph
and/or other headings of this Agreement are for convenience only and in no way
limit or enlarge the scope or meaning of the language hereof.

 

12.3                           Invalidity and Waiver.  If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative.  The
failure by either party to enforce against the other any term or provision of
this Agreement shall not be deemed to be a waiver of such party’s right to
enforce against the other party the same or any other such term or provision in
the future.

 

12.4                           Governing Law.  This Agreement shall be governed in all
respects, including validity, construction, interpretation and effect, by the
laws of the State of New York, without giving effect to its principles or rules
of conflict of laws to the extent such principles or rules would require or
permit the application of the laws of another jurisdiction.  Each of Purchaser and Seller hereby (i)
irrevocably submits to the jurisdiction of the courts of the State of New York
and the Federal courts of the United States of America located in the State,
City and County of New York for the purpose of any action or proceeding arising
out of this Agreement or any of the transactions contemplated by this
Agreement, (ii) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and
(iii) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than
a New York state court or federal court located in the State, City and County of
New York.  Each of Purchaser and Seller
hereby consents to and grants any such court jurisdiction over the person of
such party and over the subject matter of any such dispute and agrees that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 12.10, or in such other manner as
may be permitted by law, shall be valid and sufficient service thereof on such
party.

 

12.5                           Survival.  The provisions of this Agreement that
contemplate performance after the Closing and the obligations of the parties
not fully performed at the Closing (other than any unfulfilled closing
conditions which have been waived or deemed waived by the other party) shall
survive the Closing and shall not be deemed to be merged into or waived by the
instruments of Closing.

 

12.6                           Entirety and Amendments.  This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Property, except that letter of intent dated April 2, 2010
between iStar Financial Inc., on behalf of Seller, and Purchaser shall survive
the execution of this Agreement to the extent of the exclusivity obligations
and covenants under such letter.  This
Agreement may be amended or supplemented only by an instrument in writing
executed by the party against whom enforcement is sought.  All Schedules and Exhibits hereto are
incorporated herein by this reference for all purposes. All information
disclosed on any one Schedule and not disclosed on the other Schedules shall,
to the extent applicable, be deemed to be disclosed on such other Schedules.

 

12.7                           Time.  Time is of the essence in the performance of
this Agreement.

 

44

 

12.8                           Intentionally Omitted.

 

12.9                           No Electronic Transactions.  The parties hereby acknowledge and agree this
Agreement shall not be executed, entered into, altered, amended or modified by
electronic means.  Without limiting the
generality of the foregoing, the parties hereby agree the transactions
contemplated by this Agreement shall not be conducted by electronic means,
except as specifically set forth in the “Notices” section of this Agreement.

 

12.10                     Notices.  All notices required or permitted hereunder
shall be in writing and shall be served on the parties at the addresses set
forth in Section 1.3.  Any such
notices shall, unless otherwise provided herein, be given or served (a) by
depositing the same in the United States mail, postage paid, certified and
addressed to the party to be notified, with return receipt requested, (b) by
overnight delivery using a nationally recognized overnight courier, (c) by
personal delivery, or (d) by Portable Document Format (PDF) so long as a
copy thereof is also sent by one of the other delivery methods set forth in
Sections 12.10(a), (b) or (c). 
Notice given in accordance herewith for all permitted forms of notice
other than by electronic mail, shall be effective upon the earlier to occur of
actual delivery to the address of the addressee or refusal of receipt by the
addressee.  In no event shall this
Agreement be altered, amended or modified by electronic mail or electronic
record.  A party’s address may be changed
by written notice to the other party; provided, however, that no notice of a
change of address shall be effective until actual receipt of such notice.  Copies of notices are for informational
purposes only, and a failure to give or receive copies of any notice shall not
be deemed a failure to give notice.  Notices
given by counsel to the Purchaser shall be deemed given by Purchaser and
notices given by counsel to the Seller shall be deemed given by Seller.

 

12.11                     Construction.  The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and agree that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any exhibits or amendments hereto.

 

12.12                     Calculation of Time Periods; Business Day.  Unless otherwise specified, in computing any
period of time described herein, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day
of the period so computed is to be included, unless such last day is not a
Business Day, in which event the period shall run until the end of the next day
which is a Business Day.  The last day of
any period of time described herein shall be deemed to end at midnight local
time in New York, New York.  As used
herein, the term “Business Day”
means any day that is not a Saturday, Sunday or legal holiday for national
banks in the City of New York, New York or Colorado.

 

12.13                     Execution in Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one Agreement.

 

12.14                     Recordation.  Without the prior written consent of Seller,
there shall be no recordation of either this Agreement or any memorandum
hereof, or any affidavit pertaining hereto, and any such recordation of this
Agreement or memorandum or affidavit by Purchaser without the prior written
consent of Seller shall constitute a default hereunder by Purchaser,

 

45

 

whereupon Seller shall have the remedies set forth
in Section 10.1 hereof.  In addition
to any such remedies, Purchaser shall be obligated to execute an instrument in
recordable form releasing this Agreement or memorandum or affidavit, and
Purchaser’s obligations pursuant to this Section 12.14 shall survive any
termination of this Agreement as a surviving obligation.

 

12.15                     Further Assurances.  In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, but
without any obligation to incur any additional liability or expense, on or
after the Closing any further deliveries and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby or to further
perfect the conveyance, transfer and assignment of the Property to Purchaser.

 

12.16                     Discharge of Obligations.  The acceptance of the Deed by Purchaser shall
be deemed to be a full performance and discharge of every representation and
warranty made by Seller herein and every agreement and obligation on the part
of Seller to be performed pursuant to the provisions of this Agreement, except
those which are herein specifically stated to survive Closing.

 

12.17                     ERISA. Under no circumstances
shall Purchaser have the right to assign this Agreement to any person or entity
owned or controlled by an “employee benefit plan” (as defined in Section 3(3) of
ERISA) if Seller’s sale of the Property to such person or entity would, in the
reasonable opinion of Seller’s ERISA advisors or consultants, create or
otherwise cause a “prohibited transaction” under ERISA or any other applicable
law with an effect similar to that of Section 406 of ERISA including, but
not limited to, Section 4975 of the Code (each such law, a “Similar Law”). In the event Purchaser
assigns this Agreement or transfers any ownership interest in Purchaser, and
such assignment or transfer would make the consummation of the transaction
hereunder a “prohibited transaction” under ERISA or any Similar Law and would
therefore either (a) necessitate the termination of this Agreement, or (b) cause
Seller to incur liability under ERISA or such Similar Law if the transaction
were consummated, then, in either case, notwithstanding any contrary provision
which may be contained herein, Seller shall have the right to terminate this
Agreement.  Anything in this Section 12.17
to the contrary notwithstanding, Seller shall have no right to terminate this
Agreement under this Section 12.17 if Purchaser’s assignee expressly
reaffirms in a writing addressed to Seller the representation in Section 9.2.5.

 

12.18                     No Third Party Beneficiary.  The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered
at Closing, except that a tenant of the Property may enforce Purchaser’s
indemnity obligation under Section 4.10 hereof.

 

12.19                     Reporting Person.  Purchaser and Seller hereby designate First
American as the “reporting person” pursuant to the provisions of Section 6045(e) of
the Internal Revenue Code of 1986, as amended.

 

46

 

12.20                     Post-Closing Access.  From and after the Closing, the Purchaser
will, at Seller’s sole cost and expense, permit Seller and Seller’s agents and
representatives access (and will permit copying of materials pertaining to the
period prior to the Closing), during business hours from time to time, to the
Lease Files and other Property-related information upon reasonable advance
notice to the Purchaser.  This Section 12.20
shall survive the Closing.

 

12.21                     Waiver of Jury Trial.  SELLER AND PURCHASER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN SELLER AND PURCHASER RELATING TO THE SUBJECT
MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN SELLER
AND PURCHASER.  THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS).  THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, ANY RELATED DOCUMENTS, OR ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY RELATED TRANSACTIONS.  IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.

 

12.22                     Information and Audit Cooperation. Within 75
days after the Closing Date, Seller, at Purchaser’s sole cost and expense and
at no cost or expense to Seller, shall allow Purchaser’s auditors access to the
books and records of Seller relating to the operation of the Properties for the
two year period prior to the Closing Date to enable Purchaser to comply with
any financial reporting requirements applicable to Purchaser, upon at least
three (3) Business Days prior written notice to Seller. In addition,
Seller shall provide Purchaser’s designated independent auditors a
representation letter regarding the books and records of the Properties in
substantially the form attached hereto as Exhibit H.

 

12.23                     Bulk Sales Laws.  Seller shall (i) comply with the bulk
transfer requirements of the states in which the Property is located, (ii) keep
Purchaser apprised of Seller’s compliance with such requirements and (iii) indemnify,
defend and hold Purchaser harmless of and from any and all liabilities, claims,
demands and expenses of any kind or nature which arise out of the failure of
Seller to so comply with such requirements.

 

12.24                     Radon. The following statements apply to any Property
located in the State of Florida: (A) Radon is a naturally occurring
radioactive gas that, when it has accumulated in a building in sufficient
quantities, may present health risks to persons who are exposed to it over
time. (B) Levels of radon that exceed federal and state guidelines have
been found in buildings in Florida. (C) Additional information regarding
radon and radon testing may be obtained from

 

47

 

your
county health department. (D) Note: This provision is provided for
informational purposes pursuant to section 404.056(6), Florida Statutes.

 

[SIGNATURE PAGES, SCHEDULES AND EXHIBITS TO FOLLOW]

 

48

 

SIGNATURE PAGE TO AGREEMENT OF

PURCHASE AND SALE

BY AND BETWEEN

THE ENTITIES SET FORTH ON SCHEDULE 1.1.1,

AND

TRT ACQUISITIONS LLC,

AS PURCHASER

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year written below.

 

PURCHASER:

 

	
  TRT
  ACQUISITIONS LLC, a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  DCTRT
  Real Estate Holdco LLC, Its Sole Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Dividend
  Capital Total Realty Operating Partnership LP, Its Sole Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend
  Capital Total Realty Trust Inc., Its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Greg Moran

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Greg
  Moran

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  SVP

  	
   

  
	
   

  	
   

  	
   

  	
  Date:
  May 3, 2010

  	
   

  
	
   

  	
   

  
	
  SELLER:

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL SOUTH HAVANA — ENGLEWOOD LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL WATERVIEW — DALLAS LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL SHADELANDS — WALNUT CREEK LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL NORTH GLENVILLE — RICHARDSON LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL SHEILA — COMMERCE LLC, a Delaware limited
  liability company

  	
   

  

 

 

	
  iSTAR
  CTL COLUMBIA — RICHFIELD LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL COTTONWOOD — MILPITAS LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL NORTH FAIRWAY DRIVE — VERNON HILLS LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL DOOLITTLE — REDONDO BEACH LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL CROWN COLONY — QUINCY LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL RUE FERRARI — SAN JOSE LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL CORPORATE CENTER DRIVE — NEWBURY PARK LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL COLUMBIA — CAMPBELLSVILLE LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL SUNSET HILLS — RESTON LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL EAGLE LLC, a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL SYLVAN WAY — PARSIPPANY LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL INVERNESS — ENGLEWOOD LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL CORPORATE DRIVE — DIXON LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL RIVEREDGE SUMMIT — ATLANTA LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL CONNECTION — IRVING LLC, a Delaware limited
  liability company

  	
   

  

 

 

	
  iSTAR
  CTL CHARLESTON — MOUNTAIN VIEW LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL DUBLIN LLC, a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  GT, L.P., a Delaware limited partnership

  	
   

  
	
   

  	
   

  
	
  iSTAR
  NG LP, a Delaware limited partnership

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL MAPLE — EL SEGUNDO LLC, a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
  iSTAR
  CTL SW 80 — PLANTATION LLC, a Delaware limited
  liability company

  	
   

  

 

	
  By:

  	
  /s/
  Samantha K. Garbus

  	
   

  
	
  Name:

  	
  Samantha
  K. Garbus

  	
   

  
	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
  Date:
  May 3, 2010

  	
   

  

 

AGREED
TO FOR PURPOSES OF SECTIONS 4.3.2

AND
7.2.2(4):

 

iSTAR
FINANCIAL INC., a Maryland corporation

 

	
  By:

  	
  /s/
  Samantha K. Garbus

  	
   

  
	
  Name:

  	
  Samantha
  K. Garbus

  	
   

  
	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
  Date:
  May 3, 2010Exhibit 10.2

 

MEMBER INTEREST PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

iSTAR HARBORSIDE LLC,

AS SELLER

 

AND

 

TRT ACQUISITIONS LLC,

AS PURCHASER

 

DATED:  MAY 3, 2010

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  
	
  ARTICLE 1 BASIC INFORMATION

  	
  1

  
	
  1.1

  	
  Certain Basic Terms

  	
  1

  
	
  1.2

  	
  Closing Costs

  	
  5

  
	
  1.3

  	
  Notice Addresses

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 MEMBERSHIP
  INTERESTS

  	
  7

  
	
  2.1

  	
  Membership Interests

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 EARNEST MONEY

  	
  7

  
	
  3.1

  	
  Deposit and Investment of Earnest Money

  	
  7

  
	
  3.2

  	
  Independent Consideration

  	
  7

  
	
  3.3

  	
  Form; Failure to Deposit

  	
  8

  
	
  3.4

  	
  Disposition of Earnest Money

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 DUE DILIGENCE

  	
  9

  
	
  4.1

  	
  Due Diligence Materials To Be Delivered

  	
  9

  
	
  4.2

  	
  Physical Due Diligence

  	
  10

  
	
  4.3

  	
  Due Diligence/Financing Contingency Termination Rights

  	
  11

  
	
  4.4

  	
  Updated Property Information

  	
  14

  
	
  4.5

  	
  Return of Documents and Reports

  	
  14

  
	
  4.6

  	
  Service Contracts

  	
  15

  
	
  4.7

  	
  Proprietary Information; Confidentiality

  	
  15

  
	
  4.8

  	
  No Representation or Warranty by Seller

  	
  16

  
	
  4.9

  	
  Purchaser’s Responsibilities

  	
  16

  
	
  4.10

  	
  Purchaser’s Agreement to Indemnify

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 TITLE AND SURVEY

  	
  17

  
	
  5.1

  	
  Title Commitments

  	
  17

  
	
  5.2

  	
  Updated Surveys

  	
  17

  
	
  5.3

  	
  Title Review

  	
  17

  
	
  5.4

  	
  Delivery of Title Policy and Non-Imputation Endorsement at
  Closing

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 OPERATIONS AND
  RISK OF LOSS

  	
  18

  
	
  6.1

  	
  Ongoing Operations

  	
  18

  
	
  6.2

  	
  Casualty

  	
  21

  
	
  6.3

  	
  Condemnation

  	
  22

  
	
  6.4

  	
  Tenant Estoppel Certificate/SNDA/Management Agreement
  Estoppel Certificate

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 CLOSING

  	
  24

  
	
  7.1

  	
  Closing

  	
  24

  
	
  7.2

  	
  Conditions to Parties’ Obligation to Close

  	
  24

  
	
  7.3

  	
  Seller’s Deliveries in Escrow

  	
  27

  
	
  7.4

  	
  Purchaser’s Deliveries in Escrow

  	
  28

  
	
  7.5

  	
  Closing Statements

  	
  28

  
	
  7.6

  	
  Purchase Price

  	
  29

  

 

i

 

	
  7.7

  	
  Possession

  	
  29

  
	
  7.8

  	
  Delivery of Books and Records

  	
  29

  
	
  7.9

  	
  Notice to Schwab, Tenant’s and Licensees

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8
  PRORATIONS, DEPOSITS, COMMISSIONS

  	
  29

  
	
  8.1

  	
  Prorations for Taxes

  	
  29

  
	
  8.2

  	
  Prorations for Tenant-Paid Operating Expenses

  	
  30

  
	
  8.3

  	
  Prorations for Non-Tenant Paid Items

  	
  30

  
	
  8.4

  	
  Miscellaneous Prorations

  	
  32

  
	
  8.5

  	
  Leasing Costs

  	
  33

  
	
  8.6

  	
  Closing Costs

  	
  33

  
	
  8.7

  	
  Final Adjustment After Closing

  	
  33

  
	
  8.8

  	
  Tenant Deposits

  	
  33

  
	
  8.9

  	
  Commissions

  	
  34

  
	
  8.10

  	
  Accounts

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 REPRESENTATIONS
  AND WARRANTIES

  	
  34

  
	
  9.1

  	
  Seller’s Representations and Warranties

  	
  34

  
	
  9.2

  	
  Purchaser’s Representations and Warranties

  	
  40

  
	
  9.3

  	
  Survival of Representations and Warranties

  	
  41

  
	
  9.4

  	
  Company Representations

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 DEFAULT AND
  REMEDIES

  	
  43

  
	
  10.1

  	
  Seller’s Remedies

  	
  43

  
	
  10.2

  	
  Purchaser’s Remedies

  	
  44

  
	
  10.3

  	
  Attorneys’ Fees

  	
  44

  
	
  10.4

  	
  Other Expenses

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 DISCLAIMERS,
  RELEASE AND INDEMNITY

  	
  45

  
	
  11.1

  	
  Disclaimers By Seller

  	
  45

  
	
  11.2

  	
  Sale “As Is, Where Is”

  	
  45

  
	
  11.3

  	
  Seller Released from Liability

  	
  46

  
	
  11.4

  	
  “Hazardous Materials” Defined

  	
  47

  
	
  11.5

  	
  Intentionally Deleted

  	
  47

  
	
  11.6

  	
  Survival

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  	
  47

  
	
  12.1

  	
  Parties Bound; Assignment

  	
  47

  
	
  12.2

  	
  Headings

  	
  48

  
	
  12.3

  	
  Invalidity and Waiver

  	
  48

  
	
  12.4

  	
  Governing Law

  	
  48

  
	
  12.5

  	
  Survival

  	
  48

  
	
  12.6

  	
  Entirety and Amendments

  	
  48

  
	
  12.7

  	
  Time

  	
  48

  
	
  12.8

  	
  Intentionally Omitted

  	
  48

  
	
  12.9

  	
  No Electronic Transactions

  	
  48

  
	
  12.10

  	
  Notices

  	
  49

  
	
  12.11

  	
  Construction

  	
  49

  
	
  12.12

  	
  Calculation of Time Periods; Business Day

  	
  49

  

 

ii

 

	
  12.13

  	
  Execution in Counterparts

  	
  50

  
	
  12.14

  	
  Recordation

  	
  50

  
	
  12.15

  	
  Further Assurances

  	
  50

  
	
  12.16

  	
  Discharge of Obligations

  	
  50

  
	
  12.17

  	
  ERISA

  	
  50

  
	
  12.18

  	
  No Third Party Beneficiary

  	
  51

  
	
  12.19

  	
  Reporting Person

  	
  51

  
	
  12.20

  	
  Post-Closing Access

  	
  51

  
	
  12.21

  	
  Waiver of Jury Trial

  	
  51

  
	
  12.22

  	
  Information and Audit Cooperation

  	
  51

  
	
  12.23

  	
  Bulk Sales Laws

  	
  52

  

 

iii

 

LIST OF DEFINED TERMS

 

	
   

  	
  Page No.

  
	
   

  	
   

  
	
  AFE

  	
  2

  
	
  AFE LLC Agreement

  	
  4

  
	
  Agreement

  	
  1

  
	
  Assignment and Assumption

  	
  26

  
	
  Books and Records

  	
  5

  
	
  Bridge Financing Commitment

  	
  12

  
	
  Bridge Loan

  	
  14

  
	
  Business Day

  	
  49

  
	
  Casualty

  	
  21

  
	
  Casualty Tenant Termination Event

  	
  21

  
	
  Casualty Tenant Termination Notice

  	
  21

  
	
  CERCLA

  	
  46

  
	
  Closing

  	
  24

  
	
  Closing Date

  	
  2

  
	
  Closing Date Extension Condition

  	
  13

  
	
  Code

  	
  40

  
	
  Code Plan

  	
  40

  
	
  Co-Insurance

  	
  18

  
	
  Company Representations

  	
  42

  
	
  Condemnation

  	
  22

  
	
  Condemnation Tenant Termination
  Event

  	
  22

  
	
  Condemnation Tenant Termination
  Notice

  	
  22

  
	
  Confidentiality Agreement

  	
  2

  
	
  Demanding Party

  	
  8

  
	
  Due Diligence Termination
  Notice

  	
  11

  
	
  Earnest Money

  	
  1

  
	
  Effective Date

  	
  2

  
	
  ERISA

  	
  40

  
	
  ERISA Plan

  	
  40

  
	
  Escrow Agent

  	
  2

  
	
  Extended Coverage

  	
  5

  
	
  Fidelity

  	
  18

  
	
  Financial Advisor

  	
  2

  
	
  Financial Agreement

  	
  4

  
	
  Financial Statements

  	
  10

  
	
  Financing Commitment Extension Period

  	
  13

  
	
  Financing Commitment Status Statement

  	
  13

  
	
  First American

  	
  18

  
	
  GE Bridge Financing Commitment

  	
  12

  
	
  GE Bridge Loan

  	
  14

  
	
  GE Loan

  	
  14

  
	
  GECC

  	
  12

  
	
  Guaranties

  	
  3

  
	
  Guaranty

  	
  3

  

 

iv

 

	
  Hazardous Materials

  	
  46

  
	
  Improvements

  	
  3

  
	
  Indemnitor

  	
  42

  
	
  Independent Consideration

  	
  7

  
	
  Inspection Period

  	
  2

  
	
  Intangible Personal Property

  	
  4

  
	
  iPortal

  	
  8

  
	
  iStar

  	
  2

  
	
  Land

  	
  3

  
	
  Lease

  	
  3

  
	
  Lease Files

  	
  9

  
	
  Leases

  	
  3

  
	
  Leases and Guaranties

  	
  3

  
	
  Leasing Costs

  	
  32

  
	
  License Agreements

  	
  4

  
	
  Mack-Cali

  	
  5

  
	
  Mack-Cali Management Agreement

  	
  5

  
	
  Management Agreement Estoppel Certificate

  	
  23

  
	
  Mezzanine Loan

  	
  14

  
	
  Non-Demanding Party

  	
  8

  
	
  Non-Imputation Endorsement

  	
  18

  
	
  OFAC

  	
  36

  
	
  Operating Expenses

  	
  30

  
	
  Operating Statements

  	
  9

  
	
  Permitted Exceptions

  	
  17

  
	
  Permitted Liabilities

  	
  38

  
	
  Plan Assets

  	
  40

  
	
  Portfolio Property

  	
  3

  
	
  Portfolio Purchase and Sale Agreement

  	
  3

  
	
  Portfolio Seller

  	
  3

  
	
  Property

  	
  7

  
	
  Property Information

  	
  8

  
	
  Purchase Price

  	
  1

  
	
  Purchaser

  	
  1

  
	
  PXLA

  	
  3

  
	
  PXR

  	
  2

  
	
  PXURA

  	
  2

  
	
  Real Property

  	
  3

  
	
  Rent Roll

  	
  9

  
	
  Reports

  	
  14

  
	
  Schwab

  	
  4

  
	
  Second Street Option

  	
  37

  
	
  Seller

  	
  1

  
	
  Seller’s Ownership Period

  	
  5

  
	
  Seller’s Representatives

  	
  41

  
	
  Senior Lender

  	
  12

  

 

v

 

	
  Service Contracts

  	
  4

  
	
  Similar Law

  	
  50

  
	
  SNDA

  	
  23

  
	
  Subsidiary

  	
  3

  
	
  Subsidiary LLC Agreements

  	
  5

  
	
  Surveys

  	
  9

  
	
  Survival Period

  	
  41

  
	
  Tangible Personal Property

  	
  3

  
	
  Tax Proceeding

  	
  30

  
	
  Taxes

  	
  29

  
	
  Tenant Estoppel Certificate

  	
  22

  
	
  Tenant Receivables

  	
  30

  
	
  Term Financing Commitment

  	
  12

  
	
  The Subsidiaries

  	
  3

  
	
  Third Party Estoppel Certificate

  	
  23

  
	
  Third Party Estoppel Certificates

  	
  23

  
	
  Title Affidavits

  	
  27

  
	
  Title and Survey Review Period

  	
  2

  
	
  Title Commitment

  	
  17

  
	
  Title Company

  	
  1

  
	
  Title Policy

  	
  18

  
	
  Unbilled Tenant Receivables

  	
  31

  
	
  Uncollected Delinquent Tenant Receivables

  	
  31

  
	
  Updated Property Information

  	
  14

  

 

vi

 

MEMBER INTEREST PURCHASE AND SALE AGREEMENT

 

This
Member Interest Purchase and Sale Agreement (this “Agreement”)
is made and entered into by and between Purchaser and Seller.

 

RECITALS

 

A.            Defined terms are indicated
by initial capital letters.  Defined terms
shall have the meanings set forth herein, whether or not such terms are used
before or after the definitions are set forth.

 

B.            Purchaser desires to
purchase the Membership Interests and Seller desires to sell the Membership
Interests, all upon the terms and conditions set forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual terms, provisions, covenants and
agreements set forth herein, as well as the sums to be paid by Purchaser to
Seller, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Purchaser and Seller agree as follows:

 

ARTICLE 1

BASIC INFORMATION

 

1.1           Certain Basic Terms.  The following defined terms shall have the
meanings set forth below:

 

1.1.1          “Seller”:      iStar
Harborside LLC, a Delaware limited liability company.

 

1.1.2        “Purchaser”:        TRT
Acquisitions LLC, a Delaware limited liability company.

 

1.1.3          “Purchase Price”:             $212,000,000.00, subject to adjustment as provided herein.

 

1.1.4        “Earnest Money”:                $3,800,000.00,
including all interest earned thereon, to be deposited in accordance with Section 3.1
below.  All references herein to Earnest
Money shall be deemed to include only such portions thereof as have been
deposited with Escrow Agent in accordance with Section 3.1.

 

1.1.5        “Title Company”:

 

First
American Title Insurance Company

National Commercial Services — Chicago

30 North LaSalle Street, Suite 2700

Chicago, Illinois 60602

 

Attn:  John E. Beckstedt, Jr.

Telephone number: (312) 917-7223 

Facsimile number: (888) 279-8547

E-mail: jbeckstedt@firstam.com

 

 

And

 

Fidelity
Title Insurance Company

8450 E. Crescent Parkway, Suite 410

Greenwood Village, CO 80111

Attn:  Ms. Valena Bloomquist

Telephone number: (303) 244-9198

Facsimile number:  (720) 489-7593

E-mail: valena.bloomquist@fnf.com

 

1.1.6                              “Escrow Agent”:

 

First
American Title Insurance Company

National Commercial Services — Chicago

30 North LaSalle Street, Suite 2700

Attn: John E. Beckstedt, Jr. 

Telephone number: (312) 917-7223

Facsimile number: (888) 279-8547

E-mail: jbeckstedt@firstam.com

 

1.1.7        “Financial Advisor”:  HFF Securities L.P., an affiliate of Holliday
Fenoglio Fowler, LP.

 

1.1.8        “Effective Date”:  The date on which this Agreement is executed
by the latter to sign of Purchaser or Seller, as indicated on the signature page of
this Agreement.  If the execution date is
left blank by either Purchaser or Seller, the Effective Date shall be the
execution date inserted by the other party.

 

1.1.9          “Title and Survey Review Period”:  The period ending on May 11, 2010.

 

1.1.10      “Inspection Period”: The period beginning on
the Effective Date and ending on May 11, 2010, subject to extension as
provided in Section 6.1.4(1).

 

1.1.11      “Closing Date”:  The date which is ten (10) days after
the expiration of the Inspection Period,  subject
to extension as provided in Section 4.3.2.

 

1.1.12      “Confidentiality Agreement”:  The letter agreement dated March 31,
2010 between iStar Financial Inc., an affiliate of Seller (“iStar”), and Purchaser.

 

1.1.13      “AFE”: American Financial Exchange L.L.C., a
New Jersey limited liability company.

 

1.1.14      “PXR”: Plaza X Realty L.L.C., a New Jersey
limited liability company.

 

1.1.15      “PXURA”: Plaza X Urban Renewal Associates
L.L.C., a New Jersey limited liability company.

 

2

 

1.1.16      “PXLA”: Plaza X Leasing Associates L.L.C., a
New Jersey limited liability company.

 

1.1.17      “The Subsidiaries”: collectively, PXR, PXURA
and PXLA.  Each of PXR, PXURA and PXLA
are sometimes referred to herein as a “Subsidiary”.

 

1.1.18      “Portfolio Purchase and Sale Agreement”:
That certain Purchase and Sale Agreement between Purchaser and certain sellers
a party thereto (individually or collectively as the contest requires, “Portfolio Seller”) dated as of the date
hereof.

 

1.1.19      “Portfolio Property”: Those certain
properties described in the Portfolio Purchase and Sale Agreement.

 

1.1.20      “Real Property”:  The land described in Exhibit A
hereto (the “Land”), together with
(a) all improvements located thereon, including, without limitation, that
certain office building, but expressly excluding improvements and structures
owned by any tenant or other third party pursuant to Leases (the “Improvements”), (b) all right, title
and interest of AFE, if any, in and to the rights, benefits, privileges,
easements, tenements, hereditaments, and appurtenances thereon or in anywise
appertaining thereto, including without limitation, any and all minerals and
mineral rights, oil, gas, and oil and gas rights, development rights, air
rights, water and water rights, wells, well rights and well permits, water and
sewer taps, and sanitary or storm sewer capacity, and (c) all right,
title, and interest of AFE and, as applicable, PXURA, as ground lessor of the
Real Property, in and to all strips and gores and any land lying in the bed of
any street, road or alley, open or proposed, if any, adjoining the Land (the
Land, together with items (a), (b) and (c) of this Section 1.1.20,
collectively, the “Real Property”).

 

1.1.21      “Leases and Guaranties”: All of AFE’s and
the Subsidiaries’ (in each case, as applicable) right, title and interest,
without warranty except as set forth herein, in those existing leases and
subleases, including any amendments to such leases and subleases made by AFE
and the Subsidiaries (in each case, as applicable), described on Schedule 1.1.21 and all leases or subleases
which may be made by AFE and the Subsidiaries’ (in each case, as applicable)
after the Effective Date and prior to Closing as permitted by this Agreement
(individually a “Lease” and
collectively the “Leases”), all
guaranties of such Leases, including any amendments to such guaranties,
described on Schedule 1.1.21
(individually a “Guaranty” and
collectively the “Guaranties”),
and all other collateral securing the Leases or Guaranties, including without
limitation all security deposits and letters of credit.

 

1.1.22      “Tangible Personal Property”:  All of AFE’s and the Subsidiaries’ (in each
case, to the extent applicable) right, title and interest, without warranty,
except as set forth herein, in the equipment, machinery, furniture,
furnishings, supplies and other tangible personal property, if any, owned by
AFE or the Subsidiaries’ (in each case, to the extent applicable) and now or
hereafter located in and used in connection with the operation, ownership or
management of the Real Property, but specifically excluding any items of
personal property owned or leased by any tenants at or on the Real Property
(other than the Subsidiaries) and further excluding any items of personal property
owned by third parties and leased to AFE or the Subsidiaries (in each case, to
the extent applicable) (collectively, the “Tangible
Personal Property”), which excluded items of personal property are
listed on Schedule 1.1.22.

 

3

 

1.1.23      “Intangible Personal Property”:  All of AFE’s and the Subsidiaries’ (in each
case, to the extent applicable) right, title and interest, if any, without
warranty, except as set forth herein, in all intangible personal property
related to the Real Property and the Improvements, including, without
limitation: all trade names and trade marks associated with the Real Property
and the Improvements, including AFE’s and the Subsidiaries’ (in each case, to
the extent applicable) rights and interests, if any, in the name of the Real
Property; the plans and specifications and other architectural and engineering
drawings for the Improvements, if any; contract rights related to the
operation, ownership or management of the Real Property, including maintenance,
service, construction, supply and equipment rental contracts, if any, but not
including Leases or License Agreements (collectively, the “Service Contracts”) warranties;
governmental permits, approvals and licenses, if any; and telephone exchange
numbers (all of the items described in this Section 1.1.22 collectively
referred to as the “Intangible Personal
Property”).  Tangible Personal
Property and Intangible Personal Property shall not include (a) any
appraisals or other economic evaluations of, or projections with respect to,
all or any portion of the Property, including, without limitation, budgets
prepared by or on behalf of Seller, AFE, the Subsidiaries or any affiliate of
Seller, AFE or the Subsidiaries, (b) any documents, materials or
information which are subject to attorney/client, work product or similar
privilege, which constitute attorney communications with respect to the
Property, Seller, AFE and/or the Subsidiaries or which are subject to a
confidentiality agreement, (c) such documents, materials or information
received by Seller, AFE or the Subsidiaries from tenants and covered by
confidentiality agreements between such tenants and Seller, AFE or the
Subsidiaries, except that such documents, materials or information shall be
included in Tangible Personal Property if Purchaser shall have agreed in
writing to be bound by the terms of such confidentiality agreements prior to
Seller’s delivery of such documents, materials and information to Purchaser,
and (d) any trade name, mark or other identifying material that includes
the name “iStar” or any derivative thereof.

 

1.1.24      “License Agreements”:  All of AFE’s and the Subsidiaries’ (in each
case, to the extent applicable) right, title and interest, without warranty,
except as set forth herein, in and to all agreements (other than the Leases and
the Guaranties), if any, for the leasing or licensing of rooftop space or
equipment, telecommunications equipment, cable access and other space,
equipment and facilities that are located on or within the Real Property and
generate income to AFE or the Subsidiaries as the owner and tenants of the Real
Property, including agreements which may be made by AFE or the Subsidiaries
after the Effective Date and prior to Closing as permitted by this Agreement
(the “License Agreements”).

 

1.1.25      “Schwab”: Charles Schwab & Co., Inc.,
a California corporation.

 

1.1.26      “Financial Agreement”: that certain
Financial Agreement, together with all exhibit and schedules annexed thereto,
dated as of November 15, 2000 between PXURA and the City of Jersey City,
as amended by that certain Addendum to Financial Agreement, dated as of November 15,
2000 as further amended by that certain Amendment to Financial Agreement,
effective as of September 23, 2003.

 

1.1.27      “AFE LLC Agreement”: that certain Second
Amended and Restated Limited Liability Company Agreement of American Financial
Exchange L.L.C., dated June 26, 2008 and any amendments thereto, if any.

 

4

 

1.1.28      “Books and Records”: collectively, all books
and records maintained by AFE and the Subsidiaries and all books and records
maintained by Seller or Mack-Cali as the property manager on behalf of AFE and
the Subsidiaries (in each case, to the extent applicable) in connection with
the ownership or operation of the Real Property or Improvements or with respect
to the corporate matters of AFE and the Subsidiaries.

 

1.1.29      “Subsidiary LLC Agreements”: collectively, (i) that
certain Second Amended and Restated Limited Liability Company Agreement of PXR,
dated June 26, 2008, and any amendments thereto, if any, (ii) that
certain Second Amended and Restated Limited Liability Company Agreement of
PXURA, dated June 26, 2008, and any amendments thereto, if any, and (iii) that
certain Second Amended and Restated Limited Liability Company Agreement of
Plaza X Leasing Associates L.L.C., dated June 26, 2008, and any amendments
thereto, if any.

 

1.1.30      “Extended Coverage”: means the deletion of
exceptions 2, 3, 4 and 5 from Schedule B — Section 2 of the Title
Commitment.

 

1.1.31      “Mack-Cali”: Mack-Cali Realty, L.P., a
Delaware limited partnership, in its capacity as property manager under the
Mack-Cali Management Agreement.

 

1.1.32      “Mack-Cali Management Agreement”: Property
Management Agreement dated September 29, 2003 by and between PXLA and
Mack-Cali.

 

1.1.33      “Seller’s Ownership Period”: The period
beginning on the date Seller acquired the Membership Interests and continuing
through the Closing Date.

 

1.1.34      “Contracting Agreement”: that certain
Project Employment and Contracting Agreement between the City of Jersey City
and PXURA dated November 15, 2000.

 

1.2           Closing Costs. 
Closing costs shall be allocated and paid as follows:

 

 

	
  Cost

  	
   

  	
  Responsible Party

  
	
  Title
  Commitment required to be delivered pursuant to Section 5.1

  	
   

  	
  Seller

  
	
  Premium
  for standard form Title Policy with Extended Coverage, Co-Insurance and
  one-half (1/2) of the Non-Imputation Endorsement (subject to this
  Section 1.2 and Section 5.4) required to be delivered pursuant to Section 5.4

  	
   

  	
  Seller

  
	
  Premium
  for any upgrade of the Title Policy for additional coverage, including,
  without limitation, the premium for any re-insurance, and any endorsements to
  the Title Policy desired by Purchaser (except that Purchaser shall pay only
  one-half (1/2) of the premium for the Non-Imputation Endorsement), any
  inspection fee charged by the Title Company, tax certificates, municipal and
  utility lien certificates, and any other Title Company charges other than
  those required in connection with satisfying any liens which are not
  Permitted Exceptions

  	
   

  	
  Purchaser

  

 

5

 

	
  Any
  increase in the premium for the Title Policy attributable to obtaining
  Co-Insurance as provided in Section 5.4

  	
   

  	
  Purchaser

  
	
  Any
  costs required to cause the Title Company to issue the Title Policy with
  Extended Coverage

  	
   

  	
  Seller

  
	
  Costs
  of a new survey and/or any revisions, modifications or recertifications to
  the existing Survey.

  	
   

  	
  Seller

  
	
  Costs
  for UCC Searches

  	
   

  	
  Purchaser

  
	
  Recording
  Fees

  	
   

  	
  Paid
  in accordance with local custom

  
	
  Any
  deed taxes, documentary stamps, transfer taxes, intangible taxes, mortgage
  taxes or other similar taxes, fees or assessments

  	
   

  	
  Paid
  in accordance with Schedule 1.2

  
	
  Any
  escrow fee charged by Escrow Agent for holding the Earnest Money or
  conducting the Closing

  	
   

  	
  Purchaser
  1⁄2 

  Seller
  1⁄2

  
	
  Real
  Estate Fee to Financial Advisor

  	
   

  	
  Seller

  
	
  All
  other closing costs and expenses incident to this transaction and the closing
  thereof shall be paid by the party incurring the same.

  	
   

  	
   

  

 

1.3           Notice Addresses.  All notices required or permitted to be sent
hereunder shall be sent as follows:

 

 

	
  Purchaser: 

  	
  TRT
  Acquisitions LLC

  	
   

  	
  Copies
  to:

  	
  TRT
  Acquisitions LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  518
  17th Street, Suite 1700

  	
   

  	
   

  	
  518
  17th Street, Suite 1700

  
	
   

  	
  Denver,
  CO 80202

  	
   

  	
   

  	
  Denver,
  CO 80202

  
	
  Attention:

  	
  Mr. John
  Blumberg

  	
   

  	
   

  	
  Attention:

  	
  Joshua
  J. Widoff, Esq.

  
	
   

  	
  Mr. Greg
  Moran

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
  303-228-2200

  	
   

  	
   

  	
  Telephone:

  	
  303-228-2200

  
	
  Facsimile:

  	
  303-577-9797

  	
   

  	
   

  	
  Facsimile:

  	
  303-869-4602

  
	
  E-mail:

  	
  gmoran@dividendcapital.com

  	
   

  	
   

  	
  E-mail:

  	
  jwidoff@dividendcapital.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  and
  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Greenberg
  Traurig, LLP

  
	
   

  	
   

  	
   

  	
   

  	
  200
  Park Avenue

  
	
   

  	
   

  	
   

  	
   

  	
  New
  York, NY 10166

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:
  Robert J. Ivanhoe, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:
  212-801-9333

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:
  212-801-6400

  
	
   

  	
   

  	
   

  	
   

  	
  E-mail:
  ivanhoer@gtlaw.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seller: 

  	
  c/o iStar Financial Inc.

  	
   

  	
  Copies to:

  	
  iStar
  Financial Inc.

  
	
   

  	
  1114 Avenue of the Americas

  	
   

  	
   

  	
  1114
  Avenue of the Americas

  
	
   

  	
  New York, NY 10036

  	
   

  	
   

  	
  New
  York, NY 10036

  

 

6

 

	
   

  	
  Attention: Samantha Garbus

  	
   

  	
   

  	
  Attn:
  Mary-Beth Roselle, Esq.

  
	
   

  	
  Telephone: 212-930-9407

  	
   

  	
   

  	
  Telephone:
  212-930-9481

  
	
   

  	
  Facsimile: 212-930-9494

  	
   

  	
   

  	
  Facsimile: 212-930-9494

  
	
   

  	
  E-mail:
  sgarbus@istarfinancial.com

  	
   

  	
   

  	
  E-mail: mroselle@istarfinancial.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  iStar
  Asset Services Inc. 

  
	
   

  	
   

  	
   

  	
   

  	
  180
  Glastonbury Boulevard

  
	
   

  	
   

  	
   

  	
   

  	
  Glastonbury,
  CT 06033 

  
	
   

  	
   

  	
   

  	
   

  	
  Attn:
  President

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:
  860-815-5910

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:
  860-815-5901

  
	
   

  	
   

  	
   

  	
   

  	
  E-mail:
  brubin@istarfinancial.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Katten
  Muchin Rosenman LLP

  
	
   

  	
   

  	
   

  	
   

  	
  525
  West Monroe St.

  
	
   

  	
   

  	
   

  	
   

  	
  Chicago, IL
  60661-3693

  
	
   

  	
   

  	
   

  	
   

  	
  Attn:
  Gregory P.L. Pierce, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
  Phone:
  312-902-5541

  
	
   

  	
   

  	
   

  	
   

  	
  Fax:
  312-577-8893

  
	
   

  	
   

  	
   

  	
   

  	
  Email:
  greg.pierce@kattenlaw.com

  

 

ARTICLE 2

MEMBERSHIP INTERESTS

 

2.1           Membership Interests.  Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, one hundred percent (100%) of the membership interests in AFE (the
“Membership Interests”).

 

ARTICLE 3

EARNEST MONEY

 

3.1           Deposit and Investment of Earnest Money .  Within two (2) Business Days after the
Effective Date, Purchaser shall deposit One Million Nine Hundred Thousand and
no/100 Dollars ($1,900,000.00) with Escrow Agent and deliver a completed,
executed Form W-9 to the Escrow Agent and the Seller.  Within two (2) Business Days after
Purchaser has delivered the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof, Purchaser shall deposit One Million Nine Hundred Thousand and no/100
Dollars ($1,900,000.00) with Escrow Agent. Escrow Agent shall invest the
Earnest Money in the Federated Prime Obligations Fund (NASDAQ: POIXX), shall
not commingle the Earnest Money with any funds of Escrow Agent or others, and
shall promptly provide Purchaser and Seller with confirmation of the
investments made.  Such account shall
have no penalty for early withdrawal, and Purchaser accepts all risks with
regard to the investment of the Earnest Money.

 

3.2           Independent Consideration.  If this Agreement terminates pursuant to Section 4.3.1,
4.3.2 or Article 10 hereof and Purchaser is entitled to receive a return
of the Earnest Money pursuant to the terms hereof, the Escrow Agent shall first
disburse to Seller One Hundred

 

7

 

and No/100 Dollars ($100.00) as independent
consideration for Seller’s performance under this Agreement (“Independent Consideration”), which shall be retained by
Seller in all instances.

 

3.3           Form; Failure to Deposit.  The Earnest Money shall be paid by wire
transfers to Escrow Agent of immediately available U.S. federal funds.  If Purchaser fails to timely deposit all of
the Earnest Money within the time periods required, Seller may terminate this
Agreement by written notice to Purchaser and Escrow Agent, in which event any
Earnest Money that has previously been deposited by Purchaser with Escrow Agent
shall be immediately delivered to Seller and thereafter the parties hereto
shall have no further rights or obligations hereunder, except for rights and
obligations which, by their terms, survive the termination hereof.

 

3.4           Disposition of Earnest Money.  The Earnest Money shall be applied as a
credit to the Purchase Price at Closing. 
However, if this Agreement terminates pursuant to Section 4.3.1 or
4.3.2, Escrow Agent shall pay the entire Earnest Money (less the Independent
Consideration) to Purchaser one (1) Business Day following the end of the
Inspection Period (as long as the current investment can be liquidated and
disbursed in one (1) Business Day). 
No notice to Escrow Agent from Seller shall be required for the release
of the Earnest Money to Purchaser by Escrow Agent if this Agreement terminates
pursuant to Section 4.3.1 or 4.3.2. 
In the event of a termination of this Agreement by either Seller or
Purchaser other than pursuant to Section 4.3.1, 4.3.2 or Article 10,
Seller and Purchaser hereby direct Escrow Agent to immediately add the Earnest
Money held by Escrow Agent pursuant to the terms of this Agreement to the
earnest money held by Escrow Agent pursuant to the Portfolio Purchase and Sale
Agreement and thereafter the Earnest Money shall be held by Escrow Agent
pursuant to the terms of the Portfolio Purchase and Sale Agreement.  In the event of a termination of this
Agreement by either Seller or Purchaser pursuant to Article 10, the party
(the “Demanding Party”) seeking to terminate
this Agreement pursuant to Article 10 shall give written notice of such
election to Escrow Agent and the other party (the “Non-Demanding
Party”) to this Agreement. 
Upon receipt of such notice of termination pursuant to Article 10,
Escrow Agent shall give notice to the Non-Demanding Party of Escrow Agent’s
receipt of such notice, enclosing a copy of the notice in question.  If within five (5) Business Days after
the Non-Demanding Party is given or deemed to have been given notice of Escrow
Agent’s receipt of the notice in question, Escrow Agent has not received from
the Non-Demanding Party its notice of objection to the notice, then Escrow
Agent shall disburse the Earnest Money as requested by the notice in question,
on the sixth (6th) Business Day following its giving of such notice to the
Non-Demanding Party.  If within said five
(5) Business Day period Escrow Agent receives from the Non-Demanding Party
notice of objection, then Escrow Agent shall notify the Demanding Party of the
objection, and continue to hold the Earnest Money until Escrow Agent is in
receipt of a joint order direction or a court order instructing Escrow Agent to
disburse the Earnest Money.  In such
event of objection, Escrow Agent may interplead the Earnest Money into a court
of competent jurisdiction in a New York state court or federal court located in
the State, City and County of New York. 
All attorneys’ fees and costs and Escrow Agent’s costs and expenses
incurred in connection with such interpleader shall be assessed against the
party that is not awarded the Earnest Money, or if the Earnest Money is
distributed in part to both parties, then in the inverse proportion of such
distribution.

 

8

 

ARTICLE 4

DUE DILIGENCE

 

4.1           Due Diligence Materials To Be Delivered.  Seller has delivered to Purchaser complete
(to Seller’s knowledge) copies of, or made electronic copies available to
Purchaser on Seller’s iPortal internet site relating to the Real Property and
Membership Interests (“iPortal”), the
following (the “Property Information,”  or the “Property Documents”):

 

4.1.1        Rent Roll.  A current rent roll in Seller’s standard form
(“Rent Roll”) for the Real
Property and Improvements;

 

4.1.2        Financial Information.  Operating statements and summaries of capital
expenditures pertaining to the Real Property and Improvements during the Seller’s
Ownership Period (collectively, “Operating
Statements”);

 

4.1.3        Environmental Reports.  A copy of any environmental reports or
environmental site assessments related to the Real Property and Improvements
prepared for the benefit of Seller, AFE or the Subsidiaries (as applicable), it
being acknowledged by Purchaser that Purchaser shall not be entitled to rely
thereon absent an express reliance letter from the company issuing such
environmental reports or environmental site assessments obtained by Purchaser
at Purchaser’s sole cost and expense;

 

4.1.4        Tax and Financial Agreement Statements.
Ad valorem tax statements relating to the Real Property and Improvements,
statements sent by or on behalf of AFE and the Subsidiaries pursuant to the
Financial Agreement relating to the Real Property and Improvements during the
Seller’s Ownership Period and material correspondence received by AFE or the
Subsidiaries during the Seller’s Ownership Period and relating to the Financial
Agreement;

 

4.1.5        Surveys.  A copy of the most current survey, if any, of
the Real Property and Improvements in Seller’s possession (the “Survey”);

 

4.1.6        Service Contracts.  Copies of any Service Contracts for the Real
Property and Improvements;

 

4.1.7        Personal Property.  A list of Tangible Personal Property for the
Real Property and Improvements;

 

4.1.8        License Agreements.  Copies of any License Agreements for the Real
Property and Improvements;

 

4.1.9        Lease Files.  The lease file for the Leases affecting the
Real Property and Improvements, including, without limitation, the Leases, any
amendments thereto, the Guaranties (if applicable), any amendments thereto, any
letter agreements, any assignments which are then in effect and any letters of
credit which are then in effect (collectively, the “Lease File”);

 

9

 

4.1.10      Maintenance Records and Warranties.  Maintenance work orders for the Improvements
for the 12 months preceding the Effective Date and warranties for the
Improvements, if any, on roofs, air conditioning units, fixtures and equipment;

 

4.1.11      Plans and Specifications.  Building plans and specifications relating to
the Improvements, if any;

 

4.1.12      Licenses, Permits and Certificates of Occupancy.  Licenses, permits and
certificates of occupancy relating to the Improvements and umbrella policies
related thereto;

 

4.1.13      Insurance Certificates.  Copies of certificates evidencing the
existing liability and casualty insurance coverage for the Real Property and
Improvements maintained by AFE, the Subsidiaries (as applicable) and other
affiliates of Seller;

 

4.1.14      Tax Returns.  Copies of the federal, state and local tax
returns of Seller, AFE and the Subsidiaries (in each case, to the extent
applicable) for the past four (4) years (collectively, the “Tax Returns”);

 

4.1.15      Organizational Documents.  The AFE LLC Agreement, the Subsidiary LLC
Agreements, all related articles, charters, certificates of formation, and
registrations and minutes, and any amendments and modifications thereto;

 

4.1.16      Books and Records.  The Books and Records;

 

4.1.17      Financial Statements.
Audited financial statements filed by PXURA pursuant to the Financial Agreement
during the Seller’s Ownership Period and unaudited financial statements and
reports of AFE and the Subsidiaries in such form as compiled by Seller, AFE or
the Subsidiaries during the Seller’s Ownership Period (collectively, the “Financial Statements”).

 

Except
for the Rent Roll contemplated in Section 4.1.1, Seller’s obligation to
deliver the items listed in this Section 4.1 shall be limited to the
extent such items are in the possession of Seller, AFE, PXR, PXURA, PXLA or Mack-Cali.

 

4.2           Physical Due Diligence.  Commencing on the Effective Date and
continuing until the Closing, subject to the terms of the Leases, Purchaser
shall have reasonable access to the Real Property and Improvements at all
reasonable times during normal business hours, upon appropriate notice to
tenants as permitted or required under the Leases, for the purpose of
conducting reasonably necessary tests, including surveys and architectural,
engineering, geotechnical and environmental inspections and tests, provided
that (a) Purchaser must give Seller the greater of (i) two (2) full
Business Days’  or (ii) the minimum notice
period required by the applicable Leases for the Real Property or Improvements,
written notice of any such inspection or test, and with respect to any
intrusive inspection or test (i.e., core sampling) must obtain Seller’s prior
written consent (which consent shall not be unreasonably withheld or
conditioned), (b) prior to performing any inspection or test, Purchaser
must deliver a certificate of insurance to Seller evidencing that Purchaser and
its contractors, agents and representatives have in place (and Purchaser and
its contractors, agents and representatives shall maintain during the pendency
of this Agreement) (1) commercial general liability insurance with limits
of at least

 

10

 

One Million Dollar ($1,000,000) per occurrence and
Two Million Dollars ($2,000,000) in the aggregate for bodily injury or death
and property damage insurance including coverage for contractual liability and
personal and advertising injury with respect to Purchaser’s obligations
hereunder, and (2) workers’ compensation and employers’ liability
insurance with limits of at least $100,000 each accident, $100,000 each
employee and $500,000 policy limit, all covering any accident arising in
connection with the presence of Purchaser, its contractors, agents and
representatives on the Real Property or in the Improvements, which insurance,
except for workers’ compensation and employers’ liability, shall (A) name
as additional insureds thereunder Seller, AFE, the Subsidiaries and such other
parties holding insurable interests as Seller may designate and (B) be
written by a reputable insurance company having a rating of at least “A+:VII”
by Best’s Rating Guide (or a comparable rating by a successor rating service),
and (C) otherwise be subject to Seller’s prior approval, which approval
shall not be unreasonably withheld, conditioned or delayed, and (c) all
such tests shall be conducted by Purchaser in compliance with Purchaser’s
responsibilities set forth in Section 4.9 below.  The requirement to carry the insurance
specified in the preceding sentence may be satisfied through blanket or
umbrella insurance policies carried by Purchaser or its affiliates.  Purchaser shall bear the cost of all such
inspections or tests and shall be responsible for and act as the generator with
respect to any wastes generated by those tests, which obligation shall survive
the termination of this Agreement. 
Subject to the provisions of Section 4.7 hereof, Purchaser or
Purchaser’s representatives may communicate with any Seller-designated tenant
representative; provided, however, Purchaser must contact Seller at least three
(3) full Business Days in advance by telephone to inform Seller of
Purchaser’s intended communication with any Seller-designated tenant
representative and allow Seller the opportunity to participate in such
communication if Seller desires.  No
assurance or guaranty is afforded by Seller that any Seller-designated tenant
representative will communicate with Purchaser or Purchaser’s
representatives.  Subject to the
provisions of Section 4.7 and 4.10 hereof, Purchaser or Purchaser’s
representatives may, only with Seller’s consent or participation, communicate
with any governmental authority for the sole purpose of gathering information
regarding current zoning compliance of the Real Property and current
entitlements with respect to the Real Property in connection with the
transaction contemplated by this Agreement. 
Purchaser must contact Seller at least three (3) full Business Days
in advance by telephone to inform Seller of Purchaser’s intended communication
with any governmental authority and to allow Seller the opportunity to participate
in such communication if Seller desires. 
As used in this Section 4.2, “communicate” and “communication”
shall mean the initiation of, response to, or sharing or exchange of
information, knowledge or messages, whether by oral, written or electronic methods
or media, or by any other means in person or otherwise, and includes requests
for inspections or other access to the Real Property and Improvements.

 

4.3           Due Diligence/Financing Contingency Termination Rights.

 

4.3.1        Notwithstanding
anything to the contrary in this Agreement, this Agreement shall automatically
terminate on the last day of the Inspection Period unless Purchaser gives
written notice waiving such termination and containing such other information
required by Section 4.3.2 hereof and Section 4.3.2 of the Portfolio
Purchase  and Sale Agreement to Seller,
Portfolio Seller and Escrow Agent (the “Due
Diligence Waiver Notice”) on or before the last day of the
Inspection Period.  If Purchaser delivers
a Due Diligence Waiver Notice, this Agreement, and the Portfolio Purchase and
Sale Agreement pursuant to the terms thereof, shall

 

11

 

continue in full force and
effect, subject to the provisions of this Agreement and the Portfolio Purchase
and Sale Agreement, including Section 4.3.1 hereof and thereof, and
Purchaser shall be deemed to have acknowledged that it has received or had
access to all Property Documents (as defined herein and in the Portfolio
Purchase and Sale Agreement) and conducted all inspections and tests of the
Real Property, Improvements and Portfolio Property that it considers
important.

 

4.3.2        Notwithstanding
anything to the contrary in this Agreement, this Agreement, and the Portfolio
Purchase and Sale Agreement pursuant to the terms thereof, shall automatically
terminate on the last day of the Inspection Period (as defined herein and in
the Portfolio Purchase and Sale Agreement) unless Purchaser shall notify Seller
and Portfolio Seller in the Due Diligence Waiver Notice that Purchaser (i) was
able to obtain a financing commitment for the transaction described herein and
in the Portfolio Purchase and Sale Agreement from any lender which lender and
the terms of such loan are satisfactory to Purchaser in its sole and absolute
discretion (the “Term Financing Commitment”)
and Purchaser has provided Seller and Portfolio Seller with a fully executed copy
of the Term Financing Commitment, in which case Purchaser and Seller shall
proceed to Closing pursuant to the terms and provisions of this Agreement,
Purchaser shall proceed to closing the acquisition of the Portfolio Property
pursuant to the Portfolio Purchase and Sale Agreement and iStar shall have no
obligation to provide the Mezzanine Loan and iStar’s providing the Mezzanine
Loan and the closing of the loan contemplated by the Term Financing Commitment
shall not be conditions to Purchaser’s obligation to close hereunder or under
the Portfolio Purchase and Sale Agreement, (ii) was able to obtain a
financing commitment or commitments for the GE Bridge Loan from General
Electric Capital Corporation (“GECC”)
pursuant to the terms of this Agreement and the Portfolio Purchase and Sale
Agreement (such single or multiple commitments are referred to herein
collectively, as the “GE Bridge Financing Commitment”),
which GE Bridge Financing Commitment is satisfactory to Purchaser in its sole
and absolute discretion and must specify all major business terms of the GE
Bridge Loan, including, without limitation, all major amendments to the GE
Loan, and Purchaser has provided Seller and Portfolio Seller with a fully
executed copy of the GE Bridge Financing Commitment, in which case iStar shall,
subject to the terms of this Section 4.3.2 and Section 4.3.2 of the
Portfolio Purchase and Sale Agreement, provide the Mezzanine Loan
simultaneously with the closing of the GE Bridge Loan, Purchaser and Seller
shall proceed to Closing pursuant to the terms and provisions of this
Agreement, Purchaser shall proceed to closing the acquisition of the Portfolio
Property pursuant to the Portfolio Purchase and Sale Agreement and, provided
Purchaser has not subsequently elected to obtain alternative financing, (x) iStar’s
providing the Mezzanine Loan simultaneously with the closing of the GE Bridge
Loan and (y) GECC’s closing of the GE Bridge Loan under the terms of the
GE Bridge Financing Commitment on the Closing Date (unless the GE Bridge Loan
fails to close as a result of (A) Purchaser’s uncured default under the GE
Bridge Financing Commitment, (B) the failure of one or more conditions to
close which are within Purchaser’s reasonable control to satisfy, or (C) Purchaser’s
failure to accept documentation for the GE Bridge Loan that is commercially
reasonable for debt assumption transactions) shall be conditions to Purchaser’s
obligation to close hereunder and under the Portfolio Purchase and Sale
Agreement, (iii) was able to obtain a financing commitment for a Bridge
Loan from GECC or any alternative senior lender the terms of which loan and
identity of such lender are satisfactory to Purchaser in its sole and absolute
discretion (“Senior Lender”)
pursuant to the terms of this Agreement and the Portfolio Purchase and Sale
Agreement (the “Bridge Financing Commitment”)
and Purchaser has provided Seller and Portfolio Seller with a fully executed

 

12

 

copy of the Bridge
Financing Commitment, in which case iStar shall, subject to the terms of this Section 4.3.1
and Section 4.3.2 of the Portfolio Purchase and Sale Agreement, provide
the Mezzanine Loan simultaneously with the closing of the Bridge Loan,
Purchaser and Seller shall proceed to Closing pursuant to the terms and
provisions of this Agreement and Purchaser shall proceed to closing the
acquisition of the Portfolio Property pursuant to the Portfolio Purchase and
Sale Agreement but the closing of the Bridge Loan and the Mezzanine Loan (so
long as iStar is not in default of its obligation to provide the Mezzanine Loan
as set forth herein and in the Portfolio Purchase and Sale Agreement) shall not
be conditions to Purchaser’s obligations to close hereunder or under the
Portfolio Purchase and Sale Agreement, or (iv) has not obtained the Term
Financing Commitment, the GE Bridge Financing Commitment or the Bridge
Financing Commitment on terms that are yet acceptable to Purchaser but that
Purchaser (A) desires to proceed to Closing hereunder and under the
Portfolio Purchase and Sale Agreement notwithstanding that Purchaser does not
have the Term Financing Commitment, the GE Bridge Financing Commitment or the
Bridge Financing Commitment on terms that are yet acceptable to Purchaser in
its sole and absolute discretion and (B) requests an additional ten (10) day
period (the “Financing Commitment Extension
Period”) within which to obtain the Term Financing Commitment, the
GE Bridge Financing Commitment or the Bridge Financing Commitment on terms
acceptable to Purchaser, in which case Purchaser shall be deemed to have
acknowledged that it has received or had access to all Property Documents (as
defined herein and in the Portfolio Purchase and Sale Agreement), conducted all
inspections and tests of the Real Property, Improvements and the Portfolio
Property that it considers important, and completed its due diligence of, the
Membership Interests, the Real Property, the Improvements and the Portfolio
Property (items (i), (ii) and (iii) above are each referred to herein
individually as a “Financing Commitment
Status Statement”).  If the
Due Diligence Waiver Notice contains the information set forth in item (iv) above,
prior to the end of the Financing Commitment Extension Period, Purchaser shall
deliver to Seller and Portfolio Seller a notice setting forth the Financing
Commitment Status Statement applicable as of the last day of the Financing
Commitment Extension Period and the terms and conditions set forth above and in
Section 4.3.2 of the Portfolio Purchase and Sale Agreement related thereto
shall apply. If Purchaser fails to deliver the applicable Financing Commitment
Status Statement and a fully executed copy of either the Term Financing
Commitment, the GE Bridge Financing Commitment or the Bridge Financing
Commitment prior to the end of the Financing Commitment Extension Period, this
Agreement, and the Portfolio Purchase and Sale Agreement pursuant to the terms
thereof, shall automatically terminate as of the last day of the Financing
Commitment Extension Period, in which case the Earnest Money shall be
immediately returned to Purchaser and the parties hereto shall have no further
rights or obligations, other than those that by their terms survive the
termination of this Agreement.  Any
Financing Commitment Status Statement delivered by Purchaser pursuant to the
terms hereof shall be the same as the Financing Commitment Status Statement
delivered by Purchaser pursuant to the Portfolio Purchase and Sale Agreement.
If Purchaser obtains either the Term Financing Commitment, the GE Bridge
Financing Commitment or the Bridge Financing Commitment pursuant to the terms
of, and within the timeframes set forth in, this Section 4.3.1 and Section 4.3.2
of the Portfolio Purchase and Sale Agreement, then Purchaser or Seller may
elect to extend the then current Closing Date from time to time to a date that
is not more than ten (10) days following the then current Closing Date by
delivering written notice to the other 
party at least two (2) days prior to the then current Closing Date,
respectively, solely in order for (A) Purchaser to comply with the terms
of the Term

 

13

 

Financing Commitment, the
GE Bridge Financing Commitment or the Bridge Financing Commitment (as
applicable) or to obtain alternative financing and (B) Seller to satisfy
the conditions to Purchaser’s obligations to close set forth in Section 7.2.2
of this Agreement (the foregoing items (A) and (B) are each referred
to herein individually as, a “Closing Date
Extension Condition”); provided, however, neither Purchaser nor
Seller shall have the right to extend the Closing Date beyond the earlier of June 24,
2010 and the required closing date of the lender providing the financing for
Purchaser’s acquisition of the Membership Interests and the Portfolio Property
as described in the Financing Commitment Status Statement; provided, further,
no election by Purchaser or Seller to extend the Closing Date shall be valid
unless either Purchaser or Seller shall have simultaneously elected to extend
the closing date of the Portfolio Purchase and Sale Agreement in accordance
with the terms thereof. The terms “GE Bridge
Loan”, “GE Loan”, “Bridge Loan” and “Mezzanine Loan” used in this Section 4.3.2
and elsewhere in this Agreement shall have the meanings ascribed to such terms
in the Portfolio Purchase and Sale Agreement.

 

4.4           Updated Property Information.  From the Effective Date through the Closing
Date, if and to the extent that Seller, AFE or any Subsidiary receives from an
unaffiliated third-party any additional Property Information not previously
provided to Purchaser, or if and to the extent that Seller, AFE or any Subsidiary
receives any document, notice or correspondence from an unaffiliated
third-party or otherwise obtains actual knowledge from an unaffiliated
third-party source of a condition arising after the Effective Date that would
render any of the representations and warranties of Seller in Section 9.1
untrue if and to the extent remade after the Effective Date, Seller shall
promptly so notify Purchaser and shall make electronic copies of all such
documents, notices, correspondence or other information in Seller’s, AFE’s or
the Subsidiaries’ possession (“Updated Property
Information”) available to Purchaser on iPortal. Updated Property
Information may include any information disclosed in the Tenant Estoppel
Certificate, but such updated information shall remain subject to Purchaser’s
rights pursuant to Section 7.2.1(1) and 7.2.3.  The representations and warranties of Seller
in Section 9.1 shall be deemed amended to reflect such Updated Property
Information, provided that if the amendment or deemed amendment of any representation
or warranty reflects a fact or circumstance that would trigger a termination,
extension or other right of Purchaser under this Agreement, the amendment or
deemed amendment of any representation or warranty to reflect such fact or
circumstance shall not vitiate such right of Purchaser.  Additionally, Seller shall notify or
indirectly cause PXLA to notify Mack-Cali of the pending sale and transfer of
the Membership Interests to Purchaser pursuant to this Agreement and request
that Mack-Cali immediately notify PXLA and Seller of any notice received
affecting the Financial Agreement, the Schwab Lease, the Real Property or
Improvements and any other item for which Mack-Cali is responsible under the
Mack-Cali Management Agreement.

 

4.5           Return of Documents and Reports.  As additional consideration for the
transaction contemplated herein, if Purchaser terminates this Agreement,
Purchaser shall provide to Seller, if requested by Seller, promptly following
the receipt of notice from Seller after the termination of this Agreement,
copies of all “Reports”.  “Reports” mean (a) written third-party reports, tests,
investigations and studies that pertain to contamination of, or environmental
concerns regarding, the Real Property or Improvements delivered to Purchaser or
its affiliates, and (b) all other written third party reports,
investigations and studies, other than economic analyses in each case under (a) and
(b) prepared for Purchaser in connection with its due

 

14

 

diligence review of the Real Property and
Improvements, including, without limitation, any and all Reports involving
structural or geological conditions, environmental, hazardous waste or
hazardous substances contamination of the Real Property or Improvements, if
any.  The Reports shall not include any
documents, materials or information which are subject to attorney/client, work
product or similar privilege, which constitute attorney communications with
respect to the Property, Improvements and/or Purchaser, or which are
subject to a confidentiality agreement. 
The Reports shall be delivered to Seller at no cost to Seller and
without any representation or warranty as to the completeness or accuracy of
the Reports or any other matter relating thereto.  Purchaser’s obligation to deliver the Reports
to Seller shall survive the termination of this Agreement.

 

4.6           Service Contracts.  On or prior to the Closing Date, Purchaser
will advise Seller in writing which Service Contracts Purchaser requests that
Seller, AFE or the Subsidiaries (in each case, to the extent applicable)
terminate at or prior to Closing, provided Seller, AFE and the Subsidiaries (in
each case, to the extent applicable) shall have no obligation to terminate any
Service Contracts which by their terms cannot be terminated without penalty or
payment of a fee (unless Purchaser agrees in writing to pay such fee).  Seller shall deliver at Closing notices of
termination of all Service Contracts that Purchaser so directs.  AFE and the Subsidiaries (in each case, to
the extent applicable) shall from and after the Closing Date continue to be
bound by those Service Contracts (a) that Purchaser has elected not to
have Seller, AFE or the Subsidiaries (in each case, to the extent applicable)
terminate, and (b) for which a termination notice is delivered as of or
prior to Closing but for which termination is not effective until after
Closing. Notwithstanding the foregoing, Seller, AFE and the Subsidiaries (in
each case, to the extent applicable) shall not be obligated to terminate the
Mack-Cali Management Agreement and, to the extent not terminated on or prior to
the Closing Date, PXLA, the Real Property and Improvements shall continue to be
bound by the obligations of the Mack-Cali Management Agreement from and after
the Closing Date.

 

4.7           Proprietary Information; Confidentiality.  Purchaser agrees that it is bound by the
Confidentiality Agreement as if it were a party thereto, and the
Confidentiality Agreement remains in full force and effect. Notwithstanding
anything to the contrary set forth in the Confidentiality Agreement, (a) each
party acknowledges that the other party shall be allowed to disclose the
existence of this Agreement and the contents thereof in order to comply with
certain disclosure requirements relating to public companies and their
affiliates and (b) provided Purchaser has delivered the Due Diligence
Waiver Notice pursuant to Section 4.3.1 hereof, Purchaser shall be allowed
to disclose the existence of this Agreement, and deliver the Property
Information and Updated Property Information, to third parties in connection
with such third parties’ potential acquisition from Purchaser of the Membership
Interests, the Real Property, the Improvements or interests therein after the
Closing Date so long as such third parties have agreed in writing to be bound
by the terms of the Confidentiality Agreement prior to Purchaser’s disclosure
of the existence of this Agreement, and delivery of the Property Information
and Updated Property Information, to such third parties. The parties shall
coordinate, in advance, with respect to any such public filings and/or press
releases.  After the Closing there shall
be no restriction as between Purchaser, on the one hand, and Seller, AFE, PXR,
PXURA and PXLA, on the other hand, on Purchaser’s disclosure of Property
Information or Updated Property Information.

 

15

 

4.8           No Representation or Warranty by Seller.  Purchaser acknowledges that, except as
expressly set forth in this Agreement, Seller has not made and does not make
any warranty or representation regarding the truth, accuracy or completeness of
the Property Documents, the Updated Property Information or the source(s) thereof.  Purchaser further acknowledges that some if
not all of the Property Documents and Updated Property Information were
prepared by third parties other than Seller, AFE and the Subsidiaries.  Except as expressly set forth in this
Agreement or in any of the documents delivered at the Closing, (a) Seller
expressly disclaims any and all liability for representations or warranties,
express or implied, statements of fact and other matters contained in such
information, or for omissions from the Property Documents or Updated Property
Information, or in any other written or oral communications transmitted or made
available to Purchaser, (b) Purchaser shall rely solely upon its own
investigation with respect to the Membership Interests, the Real Property and
the Improvements, including, without limitation, their physical, environmental
or economic condition, compliance or lack of compliance with any ordinance,
order, permit or regulation or any other attribute or matter relating thereto,
and (c) Seller, AFE and the Subsidiaries have not undertaken any independent
investigation as to the truth, accuracy or completeness of the Property
Documents and Updated Property Information and are providing the Property
Documents and Updated Property Information solely as an accommodation to
Purchaser.

 

4.9           Purchaser’s Responsibilities.  In conducting any inspections, investigations
or tests of the Real Property, Improvements, Property Documents and/or
Updated Property Information, Purchaser and its agents and representatives
shall: (a) not disturb the tenants or interfere with their use of the Real
Property or Improvements pursuant to their respective Leases; (b) not
interfere with the operation and maintenance of the Property; (c) not
damage any part of the Real Property, Improvements or any personal
property owned or held by any tenant or any third party; (d) not injure or
otherwise cause bodily harm to Seller or its agents, guests, invitees,
contractors and employees or any tenants or their agents, guests, invitees,
contractors and employees; (e) comply with all applicable laws; (f) promptly
pay when due the costs of all tests, investigations, and examinations done with
regard to the Real Property or Improvements; (g) not permit any liens to
attach to the Real Property by reason of the exercise of its rights hereunder; (h) subject
to the provisions of Section 4.10, repair any damage to the Real Property
or Improvements resulting directly or indirectly from any such inspection or
tests; and (i) not reveal or disclose prior to Closing any information
obtained during the Inspection Period concerning the Real Property, the
Improvements, the Property Documents and the Updated Property Information to
anyone other than the Permitted Recipients (as defined in the Confidentiality
Agreement), in accordance with the confidentiality standards set forth in Section 4.7
above, or except as may be otherwise required by law.  Purchaser’s obligations under this Section 4.9
shall survive the termination of this Agreement.

 

4.10         Purchaser’s Agreement to Indemnify.  Purchaser hereby agrees to indemnify, defend
and hold Seller, AFE, PXR, PXURA and PXLA harmless from and against any and all
liens, claims, causes of action, damages, liabilities and expenses (including
reasonable attorneys’ fees) arising out of Purchaser’s inspections or tests
permitted under this Agreement or any violation of the provisions of Sections
4.2, 4.7, and 4.9; provided, however, the indemnity shall not protect Seller,
AFE, PXR, PXURA and PXLA from any liabilities for matters merely discovered by
Purchaser (i.e., environmental contamination) so long as Purchaser’s actions do
not aggravate any pre-existing liability of Seller, AFE, PXR, PXURA and PXLA it
being agreed

 

16

 

by Purchaser and Seller that the mere discovery by
Purchaser of such matters shall not constitute an aggravation of any
pre-existing liability of Seller, AFE, PXR, PXURA and PXLA.  Notwithstanding the foregoing, Seller and
Purchaser acknowledge and agree that Purchaser may communicate with
representatives of Jersey City, New Jersey and the Jersey City Redevelopment
Authority, as applicable, concerning the Financial Agreement and compliance
therewith by Seller, AFE or the Subsidiaries, and such communications shall not
be deemed to aggravate any pre-existing liability of Seller, AFE or the
Subsidiaries under this Section 4.10. 
Purchaser also hereby agrees to indemnify, defend and hold any tenant
harmless from and against any and all claims, causes of action, damages,
liabilities and expenses which such tenant may suffer or incur due to Purchaser’s
breach of its obligation under Sections 4.7 and 4.9 above to maintain the
confidential nature of any Property Documents, Updated Property Information or
other information relative to such tenant. 
Purchaser’s obligations under this Section 4.10 shall survive the
termination of this Agreement and shall survive the Closing.

 

ARTICLE 5

TITLE AND SURVEY

 

5.1           Title Commitments.  Purchaser acknowledges that a copy of a
current commitment for title insurance or a preliminary title report with
respect to the Real Property, together with copies of all documents of record
referred to therein (the “Title Commitment”)
issued by First American on an ALTA 2006 Owner’s Form or state promulgated
form has been delivered or made available to Purchaser.

 

5.2           Updated Surveys.  Purchaser has arranged, at Seller’s expense,
for the preparation of a new survey or the revision, modification, or
re-certification of the existing Survey as necessary in order for First
American to delete the survey exception from the Title Policy.

 

5.3           Title Review. 
During the Title and Survey Review Period, Purchaser shall review title
to the Real Property as disclosed by the Title Commitment and the Survey.  Seller shall have no obligation to cure title
objections except liens of an ascertainable amount created by, under or through
Seller, AFE, PXR, PXURA or PXLA, or assumed by Seller, AFE, PXR, PXURA or PXLA,
which liens Seller shall cause to be released at or prior to Closing (with
Seller having the right to apply the Purchase Price or a portion thereof for
such purpose), and Seller, AFE, PXR, PXURA or PXLA shall deliver the Real
Property and Improvements free and clear of any such liens; provided, however,
that the foregoing requirement to discharge liens shall not apply to liens on
any tenant’s  leasehold estate.  Seller further agrees to remove any
exceptions or encumbrances to title which are voluntarily created by, under or
through Seller, AFE, PXR, PXURA or PXLA after the Effective Date without
Purchaser’s consent (if requested, such consent shall not be unreasonably
withheld or delayed).  The term “Permitted Exceptions” shall mean: (A) the exceptions (i) that
are part of the promulgated title insurance form for each Title Commitment, (ii) that
the Title Company is unable to remove under applicable insurance regulations, (iii) that
the Title Company has not agreed to remove from the Title Commitments
notwithstanding that Seller, AFE, PXR, PXURA and PXLA have delivered the Title
Affidavits to the Title Company, (iv) that Purchaser consents to, or is
deemed to have consented to, as of the end of the Title and Survey Review
Period and (v) that Seller is not required to remove as provided above; (B) matters
created by, through or under Purchaser; (C) items shown on the

 

17

 

Survey which have not been removed as of the end of
the Inspection Period (or if Purchaser does not obtain a new Survey, all
matters that a current, accurate survey of the Real Property and Improvements
would show); (D) real estate taxes and payments under the Financial
Agreement, which are not yet due and payable; (E) rights of tenants under
the Leases; and (F) any encumbrances relating to the Property created by,
though or under any tenant of the Property that does not render title to the
Property unmarketable, provided such tenant is not otherwise in default under
its Lease.

 

5.4           Delivery of Title Policy and Non-Imputation Endorsement at Closing.  The parties acknowledge that First American
Title Insurance Company, National Commercial Services — Chicago (“First American”) and Fidelity Title Insurance Company (“Fidelity”) constitute the Title Company.  First American shall act as the lead Title
Company and underwriter and shall issue the Title Policy and the Non-Imputation
Endorsement; provided, however, that Purchaser may obtain co-insurance from
Fidelity in the amount of up to fifty percent (50%) of the Purchase Price of
the Property in the form of a co-insurance endorsement (“Co-Insurance”)
so long as (i) the cost of such Co-Insurance does not increase the total
cost of title insurance that Seller would otherwise pay to First American if
First American were insuring the full Purchase Price unless Purchaser pays for
such increased cost of title insurance and (ii) the issuance of such
Co-Insurance does not delay the Closing. Purchaser, at Purchaser’s sole cost
and expense, may obtain re-insurance with respect to the Title Policy from such
third parties as Purchaser may elect so long as obtaining such re-insurance
does not delay the Closing.  In the event
that the Title Company does not issue at Closing, or unconditionally commit at
Closing to issue, to Purchaser, (i) owner’s title insurance policy and
Co-Insurance in accordance with the Title Commitment with Extended Coverage,
insuring AFE’s title interest in the Real Property in the amount of the
Purchase Price, subject only to the exclusions from coverage contained in the
policy and the Permitted Exceptions (the “Title Policy”)
and (ii) a non-imputation endorsement in the form approved for issuance in
the State of New Jersey (the “Non-Imputation Endorsement”),
Purchaser shall have the right to terminate this Agreement, in which case
Escrow Agent shall immediately direct any Earnest Money previously deposited by
Purchaser with Escrow Agent in accordance with Section 3.4 hereof and the
parties hereto shall have no further rights or obligations, other than those
that by their terms survive the termination of this Agreement; provided,
however, if either Title Company alone is willing to deliver the Title Policy
in the amount of the Purchase Price and the Non-Imputation Endorsement,
Purchaser agrees to accept such Title Policy and Non-Imputation Endorsement and
Purchaser shall have no right to terminate this Agreement.

 

ARTICLE 6

OPERATIONS AND RISK OF LOSS

 

6.1           Ongoing Operations.  From the Effective Date through Closing:

 

6.1.1        Leases, Service Contracts and License Agreements.  Seller will cause AFE, PXR,
PXURA and PXLA to perform their material obligations under the Leases, Service
Contracts and License Agreements unless AFE, PXR, PXURA or PXLA are excused
from performing such obligations pursuant to such Leases, Services Contracts
and License Agreements.

 

18

 

6.1.2        New Contracts.  Except as provided in Section 6.1.4,
Seller will not cause AFE, PXR, PXURA and PXLA to enter into any contract that
will be an obligation affecting the Real Property or Improvements subsequent to
the Closing, except contracts entered into in the ordinary course of business
that are terminable without cause and without the payment of any termination
penalty on not more than 30 days’ prior notice.

 

6.1.3        Maintenance of Improvements; Removal of Personal Property.  Subject to Sections 6.2  and 6.3, Seller shall cause AFE, PXR,
PXURA and PXLA to maintain or cause AFE, PXR, PXURA and PXLA to use reasonable
efforts to cause the tenants under the Leases to maintain all Improvements
substantially in their present condition (ordinary wear and tear and casualty
excepted) and in a manner consistent with AFE’s, PXR’s, PXURA’s and PXLA’s
maintenance of the Improvements during AFE’s period of ownership.  Seller will cause AFE, PXR, PXURA and PXLA
not to remove any Tangible Personal Property except as may be required for
necessary repair or replacement or with respect to items that, in Seller’s
judgment are obsolete, and replacement shall be of approximately equal quality
and quantity as the removed item of Tangible Personal Property.

 

6.1.4        Leasing; License Agreements.  As used in this Section 6.1.4, “sublease” means a sublease, sub-sublease
and any other sublease at any level. 
Seller will cause AFE, PXR, PXURA and PXLA not to (i) amend or
terminate any existing Lease or License Agreement, (ii) consent to the
assignment of any Lease or License Agreement, (iii) enter into any new
Lease or new License Agreement, (iv) grant their consent, to the extent
AFE’s, PXR’s, PXURA’s or PXLA’s consent is required, to a sublease of the Real
Property, a modification of a sublease, an assignment of a sublease or other
item for which a consent is required under any Lease or License Agreement or (v) grant
an acknowledgement with respect to a sublease of the Real Property, a
modification of a sublease or an assignment of a sublease (the foregoing items
(i), (ii), (iii), (iv) and (v) are each referred to herein as, a “Lease Event”) after the Effective Date and
prior to the Closing Date without first providing Purchaser (a) all
relevant supporting documentation, as reasonably determined by Seller,
including, without limitation, financial information for the assignee, tenant,
subtenant and any guarantor to the extent in Seller’s, AFE’s, PXR’s, PXURA’s or
PXLA’s possession, and (b) as to any Lease Event which is to be executed
or granted after the expiration of the Inspection Period, Seller’s request for
Purchaser’s approval.  If Purchaser’s
approval is requested by Seller as to any Lease Event, Purchaser shall be held
to the same standard for approval as Seller, AFE, PXR, PXURA, or PXLA, as
applicable, is held to in the document giving rise to such approval, consent,
or acknowledgement right, and Purchaser agrees to give Seller written notice of
its approval or disapproval of a proposed Lease Event within three (3) Business
Days after Purchaser’s receipt of the items in Section 6.1.4(a) and Section 6.1.4(b).  If Purchaser does not respond to Seller’s
request within such time period, then Purchaser will be deemed to have approved
such Lease Event.  Purchaser’s approval
rights and obligations will vary depending on whether such Lease Event is to be
executed or granted before or after the expiration of the Inspection Period, as
follows:

 

(1)           Purchaser’s approval shall not be required with regard to any Lease Event
which is to be executed or granted on or prior to the end of the Inspection
Period.  If Seller gives Purchaser notice
of the execution or grant of a Lease Event during the final three (3) Business
Days of the Inspection Period, the Inspection

 

19

 

Period
will be extended to the third (3rd)
Business Day following the date such notice is given to Purchaser.

 

(2)           With respect to a request for approval delivered by Seller to Purchaser
for the execution or grant of a Lease Event after the expiration of the
Inspection Period, so long as Purchaser has complied with the standard for
review described above, Purchaser may withhold its approval in its reasonable
discretion, and Seller will cause AFE, PXURA and PXLA not to execute or grant
such Lease Event without Purchaser’s written approval.

 

Seller
shall cause AFE, PXR, PXURA and PXL, as applicable, not to apply any tenant or
licensee security deposits on account of any alleged default by any tenant or
licensee after the earlier of three (3) Business Days before the end of
the Inspection Period and the date when Purchaser has delivered the Due
Diligence Waiver Notice to Seller pursuant to Section 4.3.1 hereof unless
AFE, PXR,  PXURA or PXLA (as
applicable) has terminated the applicable Lease or License Agreement and
obtained possession of the demised or licensed premises.  All tenant and licensee security deposits
collected and not applied by AFE, PXR, PXURA or PXLA as of the Effective Date
are set forth on Schedule 6.1.4.
Seller shall deliver to Purchaser three (3) Business Days before the end
of the Inspection Period an update to Schedule
6.1.4 to reflect the current amount of all security deposits
collected and not applied by AFE, PXR, PXURA or PXLA as of such date.

 

6.1.5        Insurance.  Seller will cause AFE, PXR, PXURA and PXLA
not to terminate or allow any insurance maintained by AFE, PXR, PXURA or PXLA
with respect to the Real Property or Improvements or any umbrella coverage
insurance carried by any affiliate of Seller which insures the Real Property to
lapse unless replaced by equivalent coverage. Promptly upon Purchaser’s
delivery of the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof, Seller shall cause AFE, PXR, PXURA and PXLA and Seller’s affiliates to
name Purchaser as an additional insured on all insurance maintained by AFE,
PXR, PXURA and PXLA with respect to the Real Property or Improvements and on
all umbrella insurance coverage carried by any affiliate of Seller which
insures the Real Property.

 

6.1.6        No Amendment.  After the Effective Date, Seller shall not,
and Seller shall not permit AFE or any Subsidiary (as applicable), to amend the
AFE LLC Agreement or the Subsidiaries LLC Agreements.  After the Effective Date through the fourth
(4th) Business Day prior to the expiration of the Inspection Period, Seller
may, and Seller may cause AFE or the Subsidiaries (as applicable) to, amend the
Mack-Cali Management Agreement or the Financial Agreement, in each case without
Purchaser’s prior consent so long as Seller has provided prior notice thereof
to Purchaser.  From and after the third
(3rd) Business Day prior to the expiration of the Inspection Period through
Closing, Seller shall not, and Seller shall not permit AFE or any Subsidiary
to, amend the Mack-Cali Management Agreement or the Financial Agreement, in
each case without Purchaser’s consent (it being agreed that the settlement of
the pending audit related to the Financial Agreement shall be governed by Section 8.1.3
below).

 

6.1.7        No Merger. Seller shall not permit
AFE or any Subsidiary to merge or consolidate with or agree to merge or
consolidate with, or purchase or agree to purchase all or

 

20

 

substantially all of the
assets of, or otherwise acquire, any corporation, partnership or other business
organization.

 

6.1.8        Interests.  Seller shall not permit AFE or any Subsidiary
to authorize for issuance, issue, sell or delivery any additional membership
interests in AFE or any Subsidiary or grant any option, warrant or other right
to purchase any such membership interests. Seller shall not permit AFE or any
Subsidiary to split, combine or reclassify any of the membership interests of
AFE or any Subsidiary.

 

6.1.9        Debt.  Seller shall not permit AFE or any Subsidiary
to incur or become subject to, nor agree to incur, any debt for borrowed money,
guaranty any indebtedness, or incur any liabilities other than and specifically
excluding liabilities incurred in the ordinary course of business related to
the ownership and management of the Real Property and Improvements.

 

6.1.10      Conditions and Obligations.  To the extent performance of any obligation
of Seller under this Agreement or the satisfaction of any condition of
Purchaser’s obligation to close requires the performance of AFE or any of the
Subsidiaries, Seller shall cause AFE and the applicable Subsidiary, as the case
may be, to perform or satisfy same.

 

6.2           Casualty.  If after
the Effective Date and prior to the Closing the Real Property or Improvements
is damaged by fire or other casualty (a “Casualty”),
Seller shall, promptly upon Seller, AFE, PXR, PXURA or PXLA receiving actual
knowledge thereof, notify Purchaser of the same.  If, as a result of such Casualty, Schwab is
entitled to and elects to terminate its Lease with respect to the Real Property
or Improvements (a “Casualty Tenant
Termination Event”), then Seller shall promptly upon Seller, AFE,
PXR, PXURA or PXLA receiving notice of such Casualty Tenant Termination Event
notify Purchaser of the same (a “Casualty Tenant
Termination Notice”). Within five (5) days after receipt of the
Casualty Tenant Termination Notice (but in no event later than the Closing
Date), Purchaser shall notify Seller in writing of Purchaser’s election to
either (i) terminate this Agreement in which case, Escrow Agent shall
immediately direct any Earnest Money previously deposited by Purchaser with
Escrow Agent in accordance with Section 3.4 hereof and thereafter the
parties hereto shall have no further rights or obligations hereunder, except
for rights and obligations which, by their terms, survive the termination
hereof, or (ii) to acquire the Membership Interests notwithstanding the
Casualty Tenant Termination Event.  If (i) Purchaser
elects to acquire the Membership Interests notwithstanding the Casualty Tenant
Termination Event or fails to terminate this Agreement with respect to the
Membership Interests within such five (5) day period, or (ii) such
Casualty does not give rise to a Casualty Tenant Termination Event, then
Purchaser shall proceed to Closing, and as of Closing, (1) Seller shall
provide written confirmation that any resulting insurance proceeds (including
any rent loss insurance and rent abatement insurance applicable to any period
beginning with the Closing Date) due AFE, PXR, PXURA, PXLA or an affiliate of
Seller as a result of such Casualty will be available after Closing to AFE,
PXR, PXURA and PXLA to effectuate the needed repairs, (2) AFE, PXR, PXURA
and PXLA shall maintain full responsibility for all needed repairs (subject to
the terms of the Schwab Lease with respect to any rights of Schwab), and (3) Purchaser
shall receive a credit at Closing for any deductible amount under such
insurance policies to the extent not payable by Schwab.  Notwithstanding anything contained herein to
the contrary, if a Casualty shall occur to the Real Property or Improvements
and, as a result of such Casualty, the lender providing the Term Financing
Commitment will not

 

21

 

close the loan contemplated by the Term Financing
Commitment with respect to the Membership Interests, GECC will not close the GE
Bridge Loan with respect to the Membership Interests or Senior Lender will not
close the Bridge Loan with respect to the Membership Interests (as applicable
pursuant to Section 4.3.2), then, this Agreement shall automatically
terminate in which case, Escrow Agent shall immediately direct any Earnest
Money previously deposited by Purchaser with Escrow Agent in accordance with Section 3.4
hereof and thereafter the parties hereto shall have no further rights or
obligations hereunder, except for rights and obligations which, by their terms,
survive the termination hereof.

 

6.3           Condemnation.  If after the Effective Date
and prior to the Closing Seller, AFE, PXR, PXURA or PXLA receives notice of, or
proceedings are instituted for, eminent domain with respect to the Real
Property or Improvements or any portion thereof (a  “Condemnation”),  Seller shall,
promptly upon Seller, AFE, PXR, PXURA or PXLA receiving actual knowledge
thereof, notify Purchaser of the same. 
If, as a result of such Condemnation, Schwab is entitled to and elects
to terminate its Lease with respect to the Real Property or Improvements (a “Condemnation Tenant Termination Event”), then Seller shall
promptly upon Seller, AFE, PXR, PXURA or PXLA receiving notice of such
Condemnation Tenant Termination Event notify Purchaser of the same (a “Condemnation Tenant Termination Notice”). Within five (5) days
after receipt of the Condemnation Tenant Termination Notice (but in no event
later than the Closing Date), Purchaser shall notify Seller in writing of
Purchaser’s election to either (i) terminate this Agreement in which case,
Escrow Agent shall immediately direct any Earnest Money previously deposited by
Purchaser with Escrow Agent in accordance with Section 3.4 hereof and
thereafter the parties hereto shall have no further rights or obligations
hereunder, except for rights and obligations which, by their terms, survive the
termination hereof, or (ii) to acquire the Membership Interests
notwithstanding the Condemnation Tenant Termination Event. If (i) Purchaser
elects to acquire the Membership Interests notwithstanding the Condemnation
Tenant Termination Event or fails to terminate this Agreement with respect to
the Membership Interests within such five (5) day period, or (ii) such
Condemnation does not give rise to a Condemnation Tenant Termination Event,
then Purchaser shall proceed to Closing, and as of Closing, AFE, PXR, PXURA and
PXLA shall maintain the right to negotiate and otherwise deal with the
condemning authority in respect of such Condemnation (subject to the terms of
the Schwab Lease with respect to any rights of Schwab). Notwithstanding
anything contained herein to the contrary, if a Condemnation shall occur to the
Real Property and, as a result of such Condemnation, the lender providing the
Term Financing Commitment will not close the loan contemplated by the Term
Financing Commitment with respect to the Membership Interests, GECC will not
close the GE Bridge Loan with respect to the Membership Interests or Senior
Lender will not close the Bridge Loan with respect to the Membership Interests
(as applicable pursuant to Section 4.3.2), then this Agreement shall
automatically terminate in which case, Escrow Agent shall immediately direct
any Earnest Money previously deposited by Purchaser with Escrow Agent in
accordance with Section 3.4 hereof and thereafter the parties hereto shall
have no further right or obligations hereunder, except for rights and
obligations which, by their terms, survive the termination hereof.

 

22

 

6.4           Tenant Estoppel Certificate/SNDA/Management Agreement Estoppel
Certificate.

 

6.4.1        Purchaser
and Seller acknowledge and agree that as of the Effective Date PXLA has sent to
Schwab (with a copy to Purchaser) an estoppel certificate in the form approved
by Purchaser (the “Tenant Estoppel
Certificate”). Purchaser acknowledges that it has approved the form
of the Tenant Estoppel Certificate sent to Schwab as of the Effective
Date.  Seller, AFE, PXR, PXURA and PXLA
shall not be obligated to expend any funds in connection with obtaining the
Tenant Estoppel Certificate, declare any default under the Schwab Lease or
commence any legal action for enforcement of the Schwab Lease in order to
obtain the Tenant Estoppel Certificate. Seller shall copy Purchaser on the
initial correspondence soliciting the Tenant Estoppel Certificate and shall use
commercially reasonable efforts to forward to Purchaser any written
communications, including, without limitation, letters, memorandums, e-mails,
comments and conditions, received from Schwab in connection with the Schwab’s
execution of the Tenant Estoppel Certificate. 
If the executed Tenant Estoppel Certificate is dated more than thirty
(30) days prior to the Closing Date, Seller agrees, upon the request of
Purchaser, to send Schwab a request for an updated Tenant Estoppel Certificate
or a letter of no change to the executed Tenant Estoppel Certificate; provided,
however, obtaining such updated Tenant Estoppel Certificate or letter of no
change shall (i) not be a condition to Purchaser’s obligation to close
pursuant to Section 7.2.2 and (ii) in no way delay the Closing, it
being agreed by Purchaser that the Tenant Estoppel Certificate executed and
delivered in the form approved by Purchaser regardless of the date executed by
Schwab shall satisfy Purchaser’s condition to close pursuant to Section 7.2.2.

 

6.4.2        Upon
receipt from Purchaser of drafts of estoppel certificates addressed to the
parties listed on Schedule 6.4.2
(individually, a “Third Party Estoppel
Certificate” and collectively, the “Third Party Estoppel Certificates”), Seller, on behalf of AFE,
PXR, PXURA or PXLA (as applicable), shall promptly send such Third Party
Estoppel Certificates to the parties listed on Schedule 6.4.2.  Seller,
AFE, PXR, PXURA and PXLA shall not be obligated to expend any funds in
connection with obtaining any such Third Party Estoppel Certificates, declare
any default under any agreement or commence any legal action for enforcement of
any agreement in order to obtain any such Third Party Estoppel
Certificates.  Seller shall copy
Purchaser on the initial correspondence soliciting the Third Party Estoppel
Certificates and shall use commercially reasonable efforts to forward to
Purchaser any written communications, including, without limitation, letters,
memorandums, e-mails, comments and conditions, received from the third parties
in connection with the third parties’ execution of the Third Party Estoppel
Certificates.

 

6.4.3        Seller
shall promptly after the date on which Purchaser obtains the Term Financing
Commitment, the GE Bridge Financing Commitment or the Bridge Financing
Commitment send to Schwab a subordination, non-disturbance and attornment
agreement substantially in the form executed by Schwab in connection with the
closing of the GE Loan (the “SNDA”).  Seller, AFE, PXR, PXURA and PXLA shall not be
obligated to expend any funds in connection with obtaining the SNDA, declare
any default under the Schwab Lease or commence any legal action for enforcement
of the Schwab Lease in order to obtain the SNDA.  Seller shall copy Purchaser on the initial
correspondence soliciting the SNDA and shall use commercially reasonable
efforts to forward to Purchaser any written communications, including, without

 

23

 

limitation, letters,
memorandums, e-mails, comments and conditions, received from Schwab in
connection with Schwab’s execution of the SNDA.

 

6.4.4        Purchaser
and Seller acknowledge and agree that as of the Effective Date PXLA has sent to
Mack-Cali (with a copy to Purchaser) an estoppel certificate in the form
approved by Purchaser (the “Management
Agreement Estoppel Certificate”). 
Purchaser acknowledges that it has approved the form of the Management
Agreement Estoppel Certificate sent to Mack-Cali as of the Effective Date.
Seller shall copy Purchaser on the initial correspondence soliciting the
Management Agreement Estoppel Certificate and shall use commercially reasonable
efforts to forward to Purchaser any written communications, including, without limitation,
letters, memorandums, e-mails, comments and conditions, received from Mack-Cali
in connection with the Mack-Cali’s execution of the Management Agreement
Estoppel Certificate.

 

ARTICLE 7

CLOSING

 

7.1           Closing.  The
consummation of the transaction contemplated herein (“Closing”)
shall occur on the Closing Date at the offices of Escrow Agent (or such other
location as may be mutually agreed upon by Seller and Purchaser).  Funds shall be deposited into and held by
Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser
and Seller.  Upon satisfaction or
completion of all closing conditions and deliveries, the parties shall direct
Escrow Agent to immediately record those closing documents which are to be
recorded, and deliver originals or copies of the closing documents to the
appropriate parties and make disbursements according to the closing statements
executed by Seller and Purchaser.

 

7.2           Conditions to Parties’ Obligation to Close.  In addition to all other conditions set forth
herein, the obligation of Seller, on the one hand, and Purchaser, on the other
hand, to consummate the transactions contemplated hereunder are conditioned
upon the following:

 

7.2.1        Conditions to Seller’s Obligations to Close.

 

(1)           Representations and Warranties.  Purchaser’s representations and warranties
contained herein shall be true and correct in all material respects as of the
Effective Date and the Closing Date;

 

(2)           Deliveries.  As of the Closing Date, Purchaser shall have
tendered all deliveries to be made by Purchaser at Closing;

 

(3)           Actions, Suits, etc.  There shall exist no pending or threatened
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against Purchaser that would materially and adversely affect
Purchaser’s ability to perform its obligations under this Agreement; and

 

(4)           Portfolio Purchase and Sale Agreement.  It shall be a condition to Seller’s
obligation to close hereunder that the closing of the sale of the Portfolio
Property to Purchaser pursuant to the Portfolio Purchase and Sale Agreement

 

24

 

occur
simultaneously with the Closing of the sale of the Membership Interests
pursuant to this Agreement.

 

7.2.2        Conditions to Purchaser’s Obligations to Close.

 

(1)           Representations and Warranties.
Seller’s representations and warranties contained herein shall be true and
correct in all material respects as of the Effective Date and the Closing Date,
subject to the provisions of Sections 4.4 and 9.3.  Notwithstanding Sections 4.4 and 9.3, Seller
and Purchaser acknowledge and agree that Section 7.2.3 shall apply to any
material change in the representations and warranties of Seller due to any
Updated Property Information or changes that that are not a result of a breach
by Seller or any of its covenants;

 

(2)           Deliveries.  As of the Closing Date, Seller shall have
tendered and shall have caused AFE, PXR, PXURA and PXLA to have tendered all
deliveries to be made by Seller, AFE, PXR, PXURA and PXLA at Closing;

 

(3)           Actions, Suits, etc.  There shall exist (i) no pending or
threatened actions, suits, arbitrations, claims, attachments, proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings, against Seller, AFE, PXR, PXURA or PXLA
that would materially and adversely affect Seller’s ability to perform its
obligations under this Agreement or (ii) no objection to the transaction
hereunder by the City of Jersey City or the Jersey City Redevelopment
Authority;

 

(4)           Tenant Estoppel Certificate.  Seller shall have delivered to Purchaser the
Tenant Estoppel Certificate;

 

(5)           Occupancy/Non Bankruptcy.  It shall be a condition to Purchaser’s
obligations to close hereunder that (a) as of the Closing Date, Schwab
shall have not terminated, or given notice of intent to terminate, its Lease,
except with respect to a Casualty Tenant Termination Event or a Condemnation
Tenant Termination Event and (b) from the end of the Inspection Period
through the Closing Date, Schwab shall have not vacated, abandoned or ceased
operations at the Real Property, or filed for voluntary or involuntary
bankruptcy or similar protection;

 

(6)           Closing of GE Bridge Loan/Mezzanine Loan.
If Purchaser has elected pursuant to Section 4.3.1 to proceed to Closing
with (i) the GE Bridge Financing Commitment and has not elected thereafter
to take an alternative financing, (A) the closing of the Mezzanine Loan
simultaneously with the Closing and (B) the closing of the GE Bridge Loan
on the Closing Date (unless the GE Bridge Loan fails to close as a result of (x) Purchaser’s
uncured default under the GE Bridge Financing Commitment, (y) the failure
of one or more conditions to close which are within Purchaser’s reasonable
control to satisfy, or (z) Purchaser’s failure to accept documentation for
the GE Bridge Loan that is commercially reasonable for debt assumption
transactions and implementation of

 

25

 

such
modifications to the GECC Loan as are specifically set forth in the GE Bridge
Financing Commitment) be conditions to Purchaser’s obligation to close
hereunder or (ii) the Bridge Financing Commitment and has not elected
thereafter to take an alternative financing, iStar being ready, willing and
able to close the Mezzanine Loan on the Closing Date is a condition to Closing
and, if the Bridge Loan closes, the closing of the Mezzanine Loan
simultaneously therewith is a condition to Closing.  In no event shall the closing of (w) the
loan contemplated by the Term Financing Commitment, (x) the Bridge Loan or
(y) any alternative financing be a condition of Purchaser’s obligation to
close hereunder;

 

(7)           Intentionally Deleted;

 

(8)           Title Policy and Non-Imputation Endorsement. It shall be a condition to Purchaser’s obligations to close hereunder
that the Title Company shall have issued the Title Policy, Co-Insurance and the
Non-Imputation Endorsement subject to, and in accordance, with Section 5.4;

 

(9)           Portfolio Purchase and Sale Agreement.  It shall be a condition to Purchaser’s
obligation to close hereunder that the sale of the Portfolio Property to
Purchaser pursuant to the Portfolio Purchase and Sale Agreement occur
simultaneously with the Closing of the sale of the Membership Interests
pursuant to this Agreement;

 

(10)         SNDA.  It shall be a condition to Purchaser’s obligation
to close hereunder that Seller shall have delivered the SNDA;

 

(11)         Management Agreement Estoppel Certificate.
It shall be a condition to Purchaser’s obligation to close hereunder that
Seller shall have delivered the Management Agreement Estoppel Certificate.

 

7.2.3        Failure to Satisfy Conditions.  So long as a party is not in default
hereunder, if any condition to such party’s obligation to proceed with the
Closing hereunder has not been satisfied as of the Closing Date (or such
earlier date as is provided herein), subject to any applicable notice and cure
periods provided in Sections 10.1 and 10.2, such party may, in its sole
discretion either (i) terminate this Agreement in its entirety by
delivering written notice to the other party and Escrow Agent on or before the
Closing Date (or such earlier date as is provided herein) and Escrow Agent
shall immediately direct any Earnest Money previously deposited by Purchaser
with Escrow Agent in accordance with Section 3.4 hereof and thereafter the
parties hereto shall have no further rights or obligations hereunder, except
for rights and obligations which, by their terms, survive the termination
hereof, or (ii) elect to close notwithstanding the non-satisfaction of
such condition, in which event such party shall be deemed to have waived any
such condition. In the event such party elects to close, notwithstanding the
non-satisfaction of such condition, said party shall be deemed to have waived
said condition, and there shall be no liability on the part of any other party
hereto for breaches of representations and warranties of which the party
electing to close had knowledge at the Closing.

 

26

 

7.3           Seller’s Deliveries in Escrow.  As of or prior to the Closing Date, Seller
shall deliver, or shall cause the delivery by AFE and each Subsidiary, as
applicable, in escrow to Escrow Agent the following:

 

7.3.1        Assignment and Assumption of Membership Interests.  An assignment and assumption of
membership interests in substantially the form of Exhibit B hereto
(the “Assignment and Assumption”);

 

7.3.2        Intentionally Deleted.

 

7.3.3        Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing and transfer
tax forms or returns, if any, as are required to be delivered or signed by
Seller by applicable state and local laws in connection with the transfer of
the Membership Interests;

 

7.3.4        FIRPTA.  A Foreign Investment in Real Property Tax Act
affidavit in the form of Exhibit D hereto executed by Seller;

 

7.3.5        Authority.  Evidence of the existence and authority of
Seller, AFE, PXR, PXURA and PXLA and of the authority of the persons executing
documents on behalf of Seller, AFE, PXR, PXURA and PXLA reasonably satisfactory
to First American;

 

7.3.6        Title Affidavits.  Title affidavits in form reasonably required
by First American as to the rights of tenants in occupancy, the status of
mechanics’ liens and “gap” indemnities, and such other matters as the First
American may reasonably require in order to issue the Title Policy and the
Non-Imputation Endorsement (collectively, the “Title Affidavits”);

 

7.3.7        Additional Documents.  Any additional documents that First American
may reasonably require for the proper consummation of the transaction
contemplated by this Agreement (provided, however, no such additional document
shall expand any obligation, covenant, representation or warranty of Seller,
AFE, PXR, PXURA or PXLA or result in any new or additional obligation,
covenant, representation or warranty of Seller under this Agreement beyond
those expressly set forth in this Agreement);

 

7.3.8        Tenant Estoppel Certificates/Seller
Estoppels.  If
received by Seller, the Tenant Estoppel Certificate, it being agreed that the
failure of Seller to obtain the Tenant Estoppel Certificate shall not (i) be
a breach or default by Seller hereunder, (ii) constitute grounds for
Purchaser to delay the Closing or (iii) give rise to a reduction of the
Purchase Price;

 

7.3.9        Third Party Estoppel Certificates.
Such Third Party Estoppel Certificates as Seller shall have received, it being
agreed that the failure of Seller to obtain any such Third Party Estoppel
Certificates shall not (i) be a breach or default by Seller hereunder, (ii) constitute
grounds for Purchaser to delay the Closing or (iii) give rise to a
reduction of the Purchase Price;

 

7.3.10      Company Matters.

 

(1)           The Books and Records.

 

27

 

(2)           A Uniform Commercial Code Search, indicting that the Membership Interests
and the limited liability company interests in AFE and the Subsidiaries are
unencumbered by an lien, encumbrance or other security interest thereon, except
for liens, encumbrances or security interests in favor of GE pursuant to the GE
Loan, and federal and state law searches for Seller and each of the
Subsidiaries indicating the absence of any bankruptcy proceeding, federal or
state tax lien, litigation and unsatisfied judgments.

 

(3)           A good standing certificate dated within thirty (30) days of the Closing
Date from the Secretary of State of New Jersey as to the good standing of AFE
and each of the Subsidiaries in the State of New Jersey.

 

(4)           True, correct and complete copies of all insurance policies maintained by
iStar on behalf of AFE and the Subsidiaries.

 

7.3.11      Bringdown Certificate.
A certificate confirming that all of the representations and warranties of
Seller in Section 9.1 are true and accurate as of the Closing Date,
subject to Section 4.4 and the first sentence of Section 9.3;

 

7.3.12      Updated Rent Roll.  A Rent Roll updated to the Closing Date, or
as close as possible; and

 

7.3.13      SNDA.  If received by Seller, the SNDA, it being
agreed that the failure of Seller to obtain the SNDA shall not (i) be a
breach or default by Seller hereunder, (ii) constitute grounds for
Purchaser to delay the Closing or (iii) give rise to a reduction of the
Purchase Price.

 

7.4           Purchaser’s Deliveries in Escrow.  As of or prior to the Closing Date, Purchaser
shall deliver in escrow to Escrow Agent the following:

 

7.4.1        Assignment and Assumption.
An executed counterpart to the Assignment and 
Assumption.

 

7.4.2        Intentionally Deleted.

 

7.4.3        Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing or transfer
tax forms or returns, if any, as are required to be delivered or signed by
Purchaser by applicable state and local laws in connection with the transfer of
the Membership Interests;

 

7.4.4        Authority.  Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to First American;

 

7.4.5        Additional Documents.  Any additional documents that Seller, Escrow
Agent or First American may reasonably require for the proper consummation of
the transaction contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Purchaser or result in any new or additional obligation, covenant,
representation or warranty of Purchaser under this Agreement beyond those
expressly set forth in this Agreement); and

 

28

 

7.4.6        Bringdown
Certificate.  A
certificate confirming that all of the representations and warranties of
Purchaser in Section 9.2 are true and accurate as of the Closing Date.

 

7.5           Closing Statements.  As of or prior to the Closing Date, Seller
and Purchaser shall deposit with Escrow Agent an executed closing statement
with respect to the adjustments herein in the form required by Escrow
Agent.  Seller shall provide a draft of
the same at least one week prior to the scheduled Closing Date.

 

7.6           Purchase Price.  At or before 3:00 p.m. (Eastern Time) on
the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase Price,
less the Earnest Money, plus or minus applicable prorations and any adjustment
to the Purchase Price made in accordance with the terms of this Agreement, in
immediate, same-day U.S. federal funds wired for credit into Escrow Agent’s
escrow account, which funds must be delivered in a manner to permit Escrow
Agent to deliver good funds to Seller or its designee on the Closing Date (and,
if requested by Seller, by wire transfer); in the event that Escrow Agent is
unable to deliver good funds to Seller or its designee prior to 4:00 p.m.
(Eastern Time) on the Closing Date, then the closing statements and related
prorations will be revised as necessary. 
To the extent that Escrow Agent is unable to provide the amount of
interest constituting part of the Earnest Money up to the Closing Date, Escrow
Agent shall promptly remit any such interest not applied against the Purchase
Price to Purchaser after the Closing.

 

7.7           Possession.  As of Closing, there shall be no change in
AFE’s, PXURA’s and PXLA’s possession of the Real Property and Improvements.

 

7.8           Delivery of Books and Records.  Within ten (10) Business Days after the
Closing, Seller shall deliver to the offices of Purchaser: (i) original
Lease File; (ii) original Service Contracts and License Agreements, (iii) to
the extent in Seller’s, AFE’s, PXR’s, PXURA’s or PXLA’s possession: (a) maintenance
records and warranties; (b) plans and specifications; (c) licenses,
permits and certificates of occupancy; (d) copies or originals of all
books and records of account, contracts, and copies of correspondence with
tenants and suppliers; (e) advertising materials; (f) booklets; and (g) keys;
and (iv) the Books and Records.

 

7.9           Notice to Schwab, Tenant’s and Licensees.  Seller and Purchaser shall each execute and
Purchaser shall deliver (i) to Schwab immediately after the Closing, a
notice regarding the sale in substantially the form of Exhibit G
hereto, or such other form as may be required by applicable state law and (ii) notice
letters in the form of Exhibit G to the Portfolio Purchase and Sale
Agreement to any tenants or licensees of AFE, PXURA or PXLA.  This obligation on the part of Purchaser
shall survive the Closing.

 

ARTICLE 8

PRORATIONS, DEPOSITS, COMMISSIONS

 

8.1           Prorations for Taxes.  To the extent tenants are required to pay
real and personal ad valorem taxes and payments pursuant to the Financial
Agreement (“Taxes”) directly under their respective
Leases, Taxes will not be prorated, and accordingly, Purchaser shall look
solely to the tenants under their respective Leases for payment of all Taxes.
To the extent tenants are

 

29

 

not required to pay Taxes directly under their
respective Leases, then the following shall apply with respect to the proration
of Taxes:

 

8.1.1        If Taxes for the year of Closing are not
known or cannot be reasonably estimated, Taxes shall be prorated based on Taxes
for the year prior to Closing; and

 

8.1.2        Any additional Taxes relating to the
year of Closing arising out of a change in ownership shall be assumed by
Purchaser effective as of Closing and paid by Purchaser when due and payable,
and Purchaser shall indemnify Seller from and against any and all such Taxes,
which indemnification obligation shall survive the Closing.

 

8.1.3        Purchaser and Seller shall reasonably
cooperate to file all tax returns of AFE and the Subsidiaries in respect of the
tax year in which the Closing shall occur. 
Seller shall not take any action to apply for the reduction or review of
the assessed valuation of the Real Property and Improvements (a “Tax Proceeding”) under the Financial
Agreement, for the fiscal year in which Closing occurs, it being understood and
agreed that the pending settlement discussions relating to the pending audit of
the Financial Agreement are expressly excluded herefrom and after the Effective
Date through the Closing, Seller, AFE and the Subsidiaries (to the extent applicable)
shall not enter into a settlement agreement with respect to the pending audit
of the Financial Agreement without Purchaser’s prior consent (not to be
unreasonably withheld, conditioned or delayed); provided, however, Seller, AFE
and the Subsidiaries may enter a settlement agreement with respect to the
pending audit of the Financial Agreement at any time without Purchaser’s prior
consent if (i) Schwab consents to the terms of such settlement agreement, (ii) Schwab
agrees to be liable for any payments thereunder, (iii) Seller has provided
prior notice thereof to Purchaser and (iv) the material terms of such
settlement agreement are limited to: agreement to increase annual PILOT
payments up to $150,000.00 starting in Jersey City’s current fiscal year with a
one-time additional payment up to $150,000.00 on account of past due amounts
claimed by the City of Jersey City, New Jersey and such settlement agreement
releases all parties to the Financial Agreement and the Contracting Agreement
from the claims covered by such settlement agreement.

 

8.2           Prorations for Tenant-Paid Operating Expenses.  To the extent tenants are required to pay
operating costs and expenses of the Real Property or Improvements (“Operating Expenses”) directly under their respective Leases,
which Operating Expenses may include, without limitation, fees and assessments;
prepaid expenses; obligations under Service Contracts; any assessments by
private covenant; insurance; utilities; common area maintenance expenses; and
other operating costs and expenses incurred in connection with the ownership,
operation, maintenance and management of the Real Property, Operating Expenses
will not be prorated, and accordingly, Purchaser shall look solely to the
tenants under such Leases for payment of all Operating Expenses.

 

8.3           Prorations for Non-Tenant Paid Items.  To the extent tenants are not required to pay
Operating Expenses or Taxes directly under their respective Leases, but are
required to escrow Operating Expenses or Taxes under their respective Leases
and/or to reimburse their landlord for all or any portion of such Operating
Expenses or Taxes, then the following items shall be prorated as of the Closing
Date with all items of income and expense for the Property

 

30

 

being borne by AFE and the Subsidiaries for
Purchaser’s account from and after (and including) the Closing Date and Seller’s
account prior to the Closing Date:

 

8.3.1        Utilities.  Purchaser shall take all steps necessary to
post deposits with the utility companies on behalf of AFE and the Subsidiaries
for the period after the Closing Date. Seller shall ensure that all utility
meters are read as of the Closing Date. Seller shall be entitled to recover any
and all deposits held by any utility company on behalf of AFE and the
Subsidiaries as of the Closing Date.

 

8.3.2        Tenant
Receivables. Rents due from tenants under Leases and from
tenants or licensees under License Agreements and Operating Expenses and Taxes
payable by tenants under Leases and licenses under License Agreements
(collectively, “Tenant Receivables”)
and not collected by AFE, PXR, PXURA or PXLA as of Closing shall not be
prorated between Seller and Purchaser at Closing but shall be apportioned on
the basis of the period for which the same is payable and if, as and when
collected, as follows:

 

(a)           Tenant
Receivables and other income received from tenants under Leases, and/or tenants
or licensees under License Agreements after Closing shall be applied in the
following order of priority: (1) first, to payment of the current Tenant
Receivables then due for the month in which the Closing Date occurs, which
amount shall be apportioned between Purchaser and Seller as of the Closing Date
as set forth in Section 8.3 hereof (with Seller’s portion thereof to be
delivered to Seller); (2) second, to payment of Tenant Receivables first
coming due after Closing but applicable to the period of time before Closing,
(collectively, “Unbilled Tenant Receivables”),
which amount shall be delivered to Seller; (3) third, to Tenant
Receivables first coming due after Closing and applicable to the period of time
after Closing, which amount shall be retained by AFE and the Subsidiaries; and (4) thereafter,
to delinquent Tenant Receivables which were due and payable as of Closing but
not collected by AFE and the Subsidiaries as of Closing (collectively, “Uncollected Delinquent Tenant Receivables”),
which amount shall be delivered to Seller. 
Notwithstanding the foregoing, Seller shall have the right to pursue on behalf
of AFE and the Subsidiaries the collection of Uncollected Delinquent Tenant
Receivables for a period of six (6) months after Closing without prejudice
to Seller’s rights or Purchaser’s obligations hereunder, provided, however,
Seller shall have no right to cause AFE and the Subsidiaries to cause any such
tenant or licensee to be evicted or to exercise any other “landlord” remedy (as
set forth in such tenant’s Lease or licensee’s License Agreement) against such
tenant other than to sue for collection. 
Any sums received by AFE and the Subsidiaries to which Seller is
entitled shall be held in trust for Seller on account of such past due rents
payable to AFE and the Subsidiaries, and Purchaser shall remit to Seller any
such sums received by AFE or the Subsidiaries to which Seller is entitled
within ten (10) Business Days after receipt thereof less reasonable,
actual costs and expenses of collection, including reasonable attorneys’ fees,
court costs and disbursements, if any. 
Seller expressly agrees that if Seller receives any amounts after the
Closing Date which are attributable, in whole or in part, to any period from
and after the Closing Date, Seller shall hold the same in trust for AFE and the
Subsidiaries and remit to Purchaser that portion of the monies so received by
Seller to which AFE or the Subsidiaries is entitled within ten Business Days
after receipt thereof.  With respect to
Unbilled Tenant Receivables, Purchaser covenants and agrees to cause

 

31

 

AFE and the Subsidiaries to (A) bill the same when billable and (B) cooperate
with Seller to determine the correct amount of operating expenses and/or taxes
due.  Seller shall provide Purchaser with
the necessary information to bill the same when billable and cooperate with
Purchaser to maximize collection of the Unbilled Tenant Receivables.  The provisions of this Section 8.3.2(a) shall
survive the Closing.

 

(b)           Purchaser
acknowledges that AFE, PXURA and PXLA, as the landlords under the Leases
(and/or as the licensors under the License Agreements) may be collecting from
tenants under the Leases (and/or licensees under the License Agreements)
additional rent relating to Operating Expenses or Taxes.  To the extent that any such additional rent
is paid by any tenants to the landlord under the Leases (and/or by any
licensees to the licensor under the License Agreements) based on an estimated
payment basis (whether monthly, quarterly, or otherwise) for which a future
reconciliation of actual Operating Expenses or Taxes to estimated payments of
Operating Expenses or Taxes is required to be performed at the end of a
reconciliation period, Purchaser and Seller shall determine prior to the
Closing whether such tenants and/or licensees have, in the aggregate, made an
overpayment or underpayment of additional rent relating to Operating Expenses
or Taxes (such determination to be based on a comparison of reasonable
estimates of actual annual Operating Expenses and Taxes to the estimated
payments being made by such tenants and/or licensees).  If such determination indicates that such
tenants and/or licensees have made an overpayment of additional rent relating
to Operating Expenses or Taxes, Purchaser shall receive a credit toward the
Purchase Price in the amount of such overpayment and AFE and the Subsidiaries
shall retain all obligations and liabilities relating to such overpayment.  If, however, such determination indicates
that such tenants and/or licensees have made an underpayment of additional rent
relating to Operating Expenses or Taxes, Purchaser shall cause AFE or the
Subsidiaries to bill the tenants for the same promptly after the Closing and
remit the same to Seller as and when collected. 
If such review indicates that it cannot be determined as of the Closing Date
whether a tenant has overpaid or underpaid its additional rent relating to
Operating Expenses or Taxes, Purchaser shall cause AFE or the Subsidiaries to
bill the tenant for the same at the end of the reconciliation period, and any
overpayment with respect to the period prior to the Closing Date shall be paid
by Seller to Purchaser or any underpayment with respect to the period prior to
the Closing Date, when received from the tenant, shall be paid by Purchaser to
Seller. Notwithstanding anything contained herein to the contrary, to the
extent Purchaser, Seller, AFE, PXR, PXURA or PXLA receives a check or wire
transfer from any tenant in the exact amount of the item payable by such tenant
or referencing the item to which the check or wire transfer relates, such check
or wire transfer shall be (i) applied directly to the applicable item or (ii) if
such item was previously paid by AFE or the Subsidiaries during Seller’s
Ownership Period, reimbursed to Seller, or if such item was paid by AFE or the
Subsidiaries thereafter, reimbursed to Purchaser.

 

8.4           Miscellaneous Prorations.  Without duplication of, and to the extent not addressed by
Sections 8.1, 8.2 and 8.3, all other items that are customarily subject to
proration and adjustment, including without limitation, “Base Rent”, shall be
prorated as of the Closing Date, it being agreed that for purposes of
prorations and adjustments, Purchaser shall be deemed the owner of the
Membership Interests on the Closing Date.

 

32

 

8.5           Leasing Costs.  Seller agrees to cause AFE and the
Subsidiaries pay or discharge at or prior to Closing (and provide Purchaser
with evidence of payment thereof), or provide Purchaser with a credit at
Closing in the amount of, all leasing commissions, costs for tenant
improvements, lease buyout costs, moving allowances, design allowances, legal
fees and other costs, expenses and allowances incurred in order to induce a
tenant to enter into a Lease or Lease renewal or extension or to induce a licensee
to enter into a License Agreement (collectively, the “Leasing
Costs”) that are indicated on Schedule 9.1.5
as being payable by Seller.  Purchaser
agrees to cause AFE and the Subsidiaries to pay all Leasing Costs indicated on Schedule 9.1.5 as being payable by Purchaser as and when
they become due. Seller shall have no obligation to pay, and as of Closing AFE
and the Subsidiaries shall retain, the obligation to pay, all Leasing Costs
payable with respect to any option to renew or option to expand that has not
been exercised prior to the Effective Date, which obligation shall survive the
Closing.  Additionally, as of Closing,
AFE and the Subsidiaries shall retain all obligations for Leasing Costs
incurred with respect to Leases and Lease renewals and extensions and License
Agreements and License Agreement renewals and extensions executed subsequent to
the Effective Date pursuant to the terms of this Agreement.

 

8.6           Closing Costs.  Closing costs shall be allocated between
Seller and Purchaser in accordance with Section 1.2.

 

8.7           Final Adjustment After Closing.  If final bills are not available or cannot be
issued prior to Closing for any item being prorated under Sections 8.1, 8.3 and
8.5, then Purchaser and Seller agree to allocate such items on a fair and equitable
basis as soon as such bills are available, final adjustment to be made as soon
as reasonably possible after the Closing. 
Payments in connection with the final adjustment shall be due within
thirty (30) days of written notice.  All
such rights and obligations shall survive the Closing.

 

8.8           Tenant Deposits. All tenant
and licensee security deposits collected and not applied by AFE, PXR, PXURA or
PXLA (and interest thereon if required by law or contract) as of the Closing
Date shall be retained by AFE, PXR, PXURA or PXLA at Closing.  As of the Closing, AFE, PXR, PXURA and PXLA
shall retain their obligations related to tenant and licensee security
deposits, but only to the extent the security deposits are retained by AFE,
PXR, PXURA and PXLA at Closing. 
Notwithstanding the foregoing provisions of this Section 8.8,
deposits in the form of letters of credit will not be transferred or credited
at the Closing.  All letters of credit
will remain in the name of AFE, PXR, PXURA and PXLA at Closing.  Purchaser and Seller shall each pay one-half
(1/2) of the costs and expenses, if any, of delivering the letters of credit to
Purchaser. In the event that prior to a transfer of any such letter of credit
to Purchaser, Purchaser deems it advisable to cause AFE, PXR, PXURA or PXLA to
draw on the same, Seller will cooperate in such presentation, and direct
payment by virtue of any such presentation to AFE, PXR, PXURA or PXLA, and if
Seller receives any such payment it will promptly deliver such payment in the
form received and endorsed, without recourse, to Purchaser on behalf of AFE,
PXR, PXURA or PXLA.  Purchaser shall
defend, indemnify and hold Seller harmless from all claims, causes of actions,
actions, damages, costs, liabilities and expenses, including (without limitation)
reasonable attorneys’ fees, that may arise out of any such presentation or
related payment, other than by reason of any actions of Seller other than at
the written direction of Purchaser.  If
any security deposit is held in a form other than cash or a

 

33

 

letter of credit, for example, debt or equity
securities, at Closing, such debt or equity securities shall continue to be
held by AFE or the applicable Subsidiary.

 

8.9           Commissions.  Seller is responsible to Financial Advisor
for a real estate fee at Closing in accordance with a separate agreement
between Seller and Financial Advisor and at Closing Seller shall pay to
Financial Advisor the entire real estate fee due under the separate agreement between
Seller and Financial Advisor.  Financial
Advisor may share its commission with any other financial advisor or licensed
broker involved in this transaction. 
Subject to Seller’s representations in this Section 8.9, under no
circumstances shall Seller owe a commission or other compensation directly to
any financial advisor, broker, agent or person other than Financial
Advisor.  No affiliate, subsidiary or
party related in any way to Purchaser shall claim a commission or fee from
Seller or Financial Advisor.  Seller
represents and warrants to Purchaser that no real estate brokerage commission
or real estate fee is payable to any person or entity in connection with the
transaction contemplated hereby other than Financial Advisor, and agrees to and
does hereby indemnify and hold Purchaser harmless against the payment of any
commission or real estate fee to any other person or entity claiming by,
through or under Seller including Financial Advisor. Purchaser represents and
warrants to Seller that no real estate brokerage commission or real estate fee
is payable to any person or entity in connection with the transaction
contemplated hereby, and agrees to and does hereby indemnify and hold Seller
harmless against the payment of any commission or real estate fee to any other
person or entity claiming by, through or under Purchaser excluding Financial
Advisor. The foregoing indemnifications shall extend to any and all claims,
liabilities, costs and expenses (including reasonable attorneys’ fees and
litigation costs) arising as a result of such claims and shall survive the
Closing.

 

8.10         Accounts.  At or prior to Closing, Seller
shall cause all then existing accounts in the name of AFE or any Subsidiary, to
be closed and the proceeds therein distributed to Seller.

 

ARTICLE 9

REPRESENTATIONS AND WARRANTIES

 

9.1           Seller’s Representations and Warranties.  Each Seller represents and warrants to
Purchaser that:

 

9.1.1        Organization
and Authority.  Seller,
AFE, PXR, PXURA and PXLA are validly existing, and in good standing in the
states in which they were was formed. 
Seller has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause AFE
and the Subsidiaries to consummate the transactions contemplated hereby.  This Agreement has been, and all of the
documents to be delivered by Seller, AFE, PXR, PXURA and PXLA at the Closing
will be, authorized and executed and constitute, or will constitute, as
appropriate, the valid and binding obligation of Seller, AFE and the
Subsidiaries, enforceable in accordance with their terms.

 

9.1.2        No
Conflicts.  The execution,
delivery and performance by Seller, AFE and the Subsidiaries, as applicable, of
this Agreement and the instruments referenced herein and the transaction
contemplated hereby will not conflict with, or with or without notice or the
passage of time or both, result in a breach of, violate any term or provision
of, or constitute a

 

34

 

default under any articles
of formation, bylaws, partnership agreement (oral or written), operating
agreement, indenture, deed of trust, mortgage, contract, agreement, judicial or
administrative order, or any law to which Seller, AFE, PXR, PXURA, PXLA, the
Membership Interests or any portion of the Real Property or Improvements is
bound.

 

9.1.3        Consents;
Binding Obligations.  No
approval or consent is required from any person (including any partner,
shareholder, member, creditor, investor or governmental body) for Seller, AFE
or the Subsidiaries, as applicable, to execute, deliver or perform this
Agreement or the other instruments contemplated hereby or for Seller or the
Subsidiaries, as applicable, to consummate the transaction contemplated
hereby.  This Agreement and all documents
required hereby to be executed by Seller or the Subsidiaries, as applicable,
are and shall be valid, legally binding obligations of and enforceable against
Seller and the Subsidiaries in accordance with their terms.

 

9.1.4        Pending
Actions.  Except as set forth
on Schedule 9.1.4, there is no
action or proceeding pending or to Seller’s knowledge threatened, against
Seller, AFE or the Subsidiaries (as applicable) including, but not limited to,
those relating to the Membership Interests, the AFE LLC Agreement, the
Subsidiary LLC Agreements, the Mack-Cali Management Agreement, the Real
Property, the Improvements, the Leases and Guaranties, the Tangible Personal
Property or the Intangible Personal Property.

 

9.1.5        Leases,
Guaranties, Tenants and Guarantors.  Schedule
1.1.21 is a true, correct and complete list of all Leases,
Guaranties, tenants and guarantors in effect as of the Effective Date.  Seller has delivered, or has caused AFE and
the Subsidiaries to deliver, or has made available to Purchaser true, correct
and complete copies of  the Leases and
the Guaranties.  To Seller’s knowledge,
no tenant or guarantor of any Lease has been released or discharged,
voluntarily or involuntarily, or by operation of law, from any obligation
related to such Lease.  To Seller’s
knowledge, Seller, AFE, PXR, PXURA and PXLA have not received notice of any
default under, and to Seller’s knowledge, no other party is in default under,
any of its obligations under any of the Leases or Guaranties, and to Seller’s
knowledge, there is no event which with the giving of notice or passage of
time, or both, would be a default thereunder. 
Without limiting the foregoing, to Seller’s knowledge, Seller, AFE, PXR,
PXURA and PXLA have not received any notice from any tenant or guarantor under
the Guaranties asserting any presently accrued defenses, offsets or disputes
thereunder. The Rent Roll is true and correct in all material respects.  Except as disclosed on Schedule 9.1.5, there are no Leasing Costs
or other obligations to brokers due or which will become due under any of the
Leases, except for Leasing Costs incurred with respect to Leases and Lease
renewals and extensions and License Agreements and License Agreement renewals
and extensions executed subsequent to the Effective Date pursuant to the terms
of this Agreement. Except as disclosed on Schedule
9.1.5, all Leasing Costs have been fully paid and satisfied by
Seller, except for Leasing Costs incurred with respect to Leases and Lease
renewals and extensions and License Agreements and License Agreement renewals
and extensions executed subsequent to the Effective Date pursuant to the terms
of this Agreement.

 

9.1.6        Service
Contracts and License Agreements.  To Seller’s knowledge, Schedule 9.1.6 is a true, correct and
complete list of all Service Contracts and License Agreements with respect to
the Real Property and Improvements.  To
Seller’s knowledge, Seller has delivered or caused AFE and the Subsidiaries to
deliver true, correct and complete copies of

 

35

 

the Service Contracts and
License Agreements to Purchaser.  To
Seller’s knowledge, Seller, AFE, PXR, PXURA and PXLA have not received notice
of any default under, and to Seller’s knowledge, no other party is in default
under, any of its obligations under any of the Service Contracts or License
Agreements, and to Seller’s knowledge, there is no event which with the giving
of notice or passage of time, or both, would be a default thereunder.  Without limiting the foregoing, to Seller’s
knowledge, Seller, AFE, PXR, PXURA and PXLA have not received any notice from
any party under the Service Contracts or License Agreements asserting any
presently accrued defenses, offsets or disputes thereunder.

 

9.1.7        Notices from Governmental
Authorities.  To Seller’s
knowledge, except as set forth on Schedule 9.1.7 or
as may be reflected by the Property Documents or otherwise disclosed by Seller
to Purchaser in writing, Seller, AFE, PXR, PXURA and PXLA have not received from any governmental authority during the Seller’s
Ownership Period written notice of any violation of any laws, that has not been
corrected.  To Seller’s knowledge, except
as set forth on Schedule 9.1.7,
neither Seller nor any of the Subsidiaries has received from any governmental
authority, including without limitation, Jersey City or the Jersey City
Redevelopment Authority, notice of any violations of the Financial Agreement or
any notice of alleged non-compliance or disputes regarding any provision of the
Financial Agreement.

 

9.1.8        Prohibited
Persons and Transactions. 
Neither Seller nor any of its affiliates is, nor will they become, a
person or entity with whom U.S. persons or entities are restricted from doing
business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury
(including those named on OFAC’s Specially Designated and Blocked Persons List)
or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action
and is not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.

 

9.1.9        Operating
Statements.  The Operating
Statements delivered by Seller or made available to Purchaser are true and
complete copies of the operating statements for the Real Property and
Improvements which Seller, AFE, PXR, PXURA and PXLA rely upon for the purposes
of operating the Real Property and Improvements.

 

9.1.10      Insurance.  Schedule
9.1.10 is a true, correct and complete list of the insurance
maintained by Seller, AFE, PXR, PXURA and PXLA with respect to the Real
Property and Improvements.  Seller, AFE,
PXR, PXURA and PXLA have not received any written notice or request from any
insurance company requesting the performance of any work or alteration with
respect to the Real Property or Improvements, which have not been fully and
completely corrected.  Seller, AFE, PXR,
PXURA and PXLA have not received written notice from any insurance company
concerning any defects or inadequacies in the Real Property or Improvements,
which, if not corrected, would result in the termination of insurance coverage
or increase its cost.

 

9.1.11      Employees.  There are no employees of Seller, AFE, PXR,
PXURA or PXLA employed in connection with the use, management, maintenance or
operation of the Real Property and Improvements whose employment will continue
after the Closing Date.  There is

 

36

 

no bargaining unit or
union contract relating to any employees of Seller, AFE, PXR, PXURA or PXLA.

 

9.1.12      Third
Party Agreements. Other than the Leases, the License Agreements,
the Service Contracts, the Permitted Exceptions and the agreements set forth on
Schedule 9.1.12, there are no
agreements to which Seller, AFE or any Subsidiary is party to.  To Seller’s knowledge, except as set forth on
Schedule 9.1.12, Seller is not in
default of, and no other party is in default of, any of its obligations under
any of the agreements set forth on Schedule
9.1.12, and there is no event which, with the giving of notice or
passage of time, or both, would be a default thereunder.

 

9.1.13      Seller’s
Representatives. Seller’s Representatives are the individuals
involved in supervising Seller’s, AFE’s, PXR’s, PXURA’s and PXLA’s ownership,
operation, and maintenance of the Real Property and Improvements, have
knowledge of the operation and maintenance of the Real Property and
Improvements and have reviewed the representations of Seller set forth in, and
the schedules and exhibits referenced in, this Section 9.1.13.

 

9.1.14      Ownership.  (A) Seller is the sole member of, and
owns one hundred percent (100%) of the interests in, AFE, (B) AFE is the
sole member of, and owns one hundred percent (100%) of the interests in, PXR, (C) PXR
is the sole member of, and owns one hundred percent (100%) of the interests in,
PXURA, (D) PXR is the sole member of, and owns one hundred percent (100%)
of the interests, in PXLA and (E) AFE, via its sole membership in, and one
hundred percent (100%) ownership of, PXR, indirectly owns all of PXURA and
PXLA.   Except for (i) the liens,
encumbrances, liabilities, claims, covenants and restrictions relating to that
portion of the GE Loan secured by the Real Property and Improvements, which
will either be repaid or assumed by Purchaser at Closing, and (ii) that
certain Option Agreement by and between Second Street Holdings, L.L.C., a New
Jersey limited liability company, and Seller, dated as of September 29,
2003 (the “Second Street Option”),
(i) Seller owns its interests in AFE free and clear of all liens,
encumbrances, liabilities, claims, covenants and restrictions of any kind or
character, including but not limited to, any security interests or, any
restriction on sale or assignment or granting of any option, right or agreement
for the purchase or acquisition of the same or any interest in the same and
Seller has not transferred, assigned, sold, conveyed, pledged, mortgaged,
granted a security interest in, or otherwise disposed of any of such interests
or any portion thereof or interest therein or granted any option to any person
or entity to acquire any of such interests, (ii) AFE owns its interests in
PXR free and clear of all liens, encumbrances, liabilities, claims, covenants
and restrictions of any kind or character, including but not limited to, any
security interests or, any restriction on sale or assignment or granting of any
option, right or agreement for the purchase or acquisition of the same or any
interest in the same and AFE has not transferred, assigned, sold, conveyed,
pledged, mortgaged, granted a security interest in, or otherwise disposed of
any of such interests or any portion thereof or interest therein or granted any
option to any person or entity to acquire any of such interests and (iii) PXR
owns its interests in PXURA and PXLA free and clear of all liens, encumbrances,
liabilities, claims, covenants and restrictions of any kind or character,
including but not limited to, any security interests or, any restriction on
sale or assignment or granting of any option, right or agreement for the
purchase or acquisition of the same or any interest in the same, and PXR has
not transferred, assigned, sold, conveyed, pledged, mortgaged, granted a
security interest in,

 

37

 

or otherwise disposed of
any of such interest or any portion thereof or interest therein or granted any
option to any person or entity to acquire any of such interest.

 

9.1.15      PILOT
Matters. Seller has delivered to Purchaser a true, accurate and
complete copy of the Financial Agreement. To Seller’s knowledge, the Financial
Agreement is in full force and effect. Except as set forth on Schedule 9.1.15,  PXURA has made all payments required to be paid to date under
the Financial Agreement and filed all annual audited financial statements in
connection therewith required to be filed to date. Except as set forth on Schedule 9.1.15, neither Seller, AFE, PXR,
PXURA or PXLA has received any written notice that it has failed to pay or
perform any obligation on its part to be paid or performed under the Financial
Agreement (which remains uncured) or that it is in default (which remains
uncured) under the Financial Agreement. Except as set forth on Schedule 9.1.15, as of the date hereof,
there is no litigation or proceedings pending or, to Seller’s knowledge,
threatened in writing with respect to the Financial Agreement.

 

9.1.16      Subleases.
Schedule 9.1.16 is a true, correct
and complete list of all subleases (at whatever level) covering the Real
Property or Improvements acknowledged by, or consented to, AFE, PXR, PXURA or
PXLA and such additional subleases as to which Seller, AFE, PXR, PXURA, or PXLA
(as applicable) have knowledge of.

 

9.1.17      LLC
Agreements.  Seller has
delivered to Purchaser a true, complete and accurate copies of the AFE LLC
Agreement and the Subsidiary LLC Agreements, and all amendments thereto, all of
which are each in full force and effect and have not been amended or modified,
and there has been no material default by Seller, AFE or the Subsidiaries under
the AFE LLC Agreement and the Subsidiary LLC Agreements (as applicable) during
Seller’s Ownership Period.

 

9.1.18      Subsidiaries.  Other than AFE and the Subsidiaries, there
are no corporations, partnerships, joint ventures, associations or other
entities in which Seller owns, of record or beneficially, any direct or
indirect equity or other interest or  any
right to acquire same.

 

9.1.19      Books
and Records.  The Books
and Records contain accurate records of all meetings and accurately reflect all
other actions taken by the members, boards of directors and all committees of
AFE and the Subsidiaries. Complete and accurate copies of all Books and Records
of AFE and the Subsidiaries have been provided by Seller to the Purchaser

 

9.1.20      Bankruptcy.
No petition in bankruptcy (voluntary or, to Seller’s knowledge, involuntary),
assignment for the benefit of creditors or petition seeking reorganization or
arrangement or other action under federal or state bankruptcy or insolvency
laws is pending against or, to Seller’s knowledge, threatened against AFE or
any of the Subsidiaries.

 

9.1.21      Permitted
Liabilities.  AFE and the
Subsidiaries have no liabilities other than (i) those reflected on the
consolidated balance sheet of each respective entity, dated as of March 31,
2010 (collectively, the “Balance Sheets”)
and (ii) liabilities incurred in the ordinary course of AFE’s and the
Subsidiaries’ business related to the Real Property or Improvements from April 1,
2010 through the Effective Date, which ordinary course liabilities (A) shall
not

 

38

 

materially exceed the
corresponding line items for such ordinary course liabilities set forth in the
Balance Sheets except for accrued tax liabilities in an amount not to exceed
$135,000.00 for the month of April, 2010 and (B) are subject to Purchaser’s
consent rights otherwise contained in this Agreement (items (i) and (ii) of
this Section 9.1.21 are referred to herein collectively as, the “Permitted Liabilities”), which Permitted
Liabilities shall be paid prior to or at Closing except for (x) Permitted
Liabilities prorated in accordance with the terms of this Agreement and (y) if
Purchaser acquires the Membership Interests with the GE Bridge Loan, those
Permitted Liabilities relating to the GE Loan.

 

9.1.22      Financial
Statements.  Seller has
delivered to Purchaser true, correct and complete copies of the Financial
Statements. The Financial Statements present fairly in all material respects
the financial position, results of operations and cash flows of AFE and the
Subsidiaries as of the dates thereof and for the periods covered thereby, in
accordance with GAAP applied on a consistent basis.

 

9.1.23      Taxes
and Tax Returns.

 

(1)       AFE and each of the Subsidiaries has filed all federal, state
and local tax returns that are due for each year of its existence. AFE and each
of the Subsidiaries has paid or caused to be paid all Taxes required to be paid
by AFE and each of the Subsidiaries through the date hereof whether disputed or
not.

 

(2)       There are no pending or, to the best knowledge of the Seller
after due inquiry, threatened actions for the assessment or collection of Taxes
against AFE or any Subsidiary or (insofar as either relates to the activities
or income of AFE or any Subsidiary or could result in liability of AFE or any
Subsidiary on the basis of joint and/or several liability) any person that was
included in the filing of a Tax Return with the Seller on a consolidated,
combined or unitary basis and there are no Tax liens on any assets of AFE or
any Subsidiary.

 

(3)       Schedule 9.1.23(3) lists
all income, franchise and similar tax returns (federal, state, local and
foreign) and disclosures or certifications filed, including those required
under the Financial Agreement, with respect to each of AFE and the Subsidiaries
for taxable or reporting periods ended on or after Seller’s Ownership Period, (B) indicates
the most recent income, franchise or similar tax return for each relevant
jurisdiction for which an audit has been completed or the statute of
limitations has lapsed and (C) indicates all tax returns or certifications
or disclosures filed, including those required under the Financial Agreement,
that currently are the subject of audit; and

 

(4)       Seller has delivered to Purchaser correct and complete copies
of all federal, state and foreign income, franchise and similar tax returns,
examination reports and statements of deficiencies assessed against or agreed
to by AFE or any Subsidiary during Seller’s Ownership Period and (iii) Seller
has delivered to Purchaser a true and complete copy of any tax sharing or
allocation agreement or arrangement involving AFE or any Subsidiary and a true
and complete description of any such unwritten or informal agreement or
arrangement.

 

39

 

9.1.24                  Undisclosed Liabilities.  There is no basis for any present
action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand against AFE or any of  the
Subsidiaries (as applicable) giving rise to any liability, except for (i) liabilities
set forth on the Financial Statements and (ii) the Permitted Liabilities.

 

9.1.25                  Collective Bargaining and Employee Plans. 
Neither Seller, AFE nor any of the Subsidiaries is a party to any
collective bargaining or similar agreement with respect to the Real Property or
Improvements. As of the date hereof, there are no employee benefit plans or
arrangements with respect to AFE or the Subsidiaries.

 

9.1.26                  Second Street Option.  The Second Street Option is still in full
force and effect.  Neither Seller, AFE
nor any of the Subsidiaries has received any notice under the Second Street
Option purporting to exercise any right thereunder.  To Seller’s knowledge, no dispute or claim
exists between the parties to the Second Street Option.

 

9.2                                 Purchaser’s Representations and Warranties.  Purchaser represents and warrants to Seller
that:

 

9.2.1                        Organization and Authority.  Purchaser is validly existing as a limited
liability company in good standing in the State of Delaware. Subject to
obtaining approval of Purchaser’s Board of Directors prior to Purchaser’s
delivery of the Due Diligence Waiver Notice to Seller pursuant to Section 4.3.1
hereof, (a) Purchaser has the full right and authority and has obtained
any and all consents required to enter into this Agreement and to consummate or
cause to be consummated the transactions contemplated hereby, and (b) this
Agreement has been, and all of the documents to be delivered by Purchaser at
the Closing will be, authorized and properly executed and constitute, or will
constitute, as appropriate, the valid and binding obligation of Purchaser,
enforceable in accordance with their terms.

 

9.2.2                        No Conflicts.  The execution, delivery and performance by
Purchaser of this Agreement and the instruments referenced herein and the
transaction contemplated hereby will not conflict with, or with or without
notice or the passage of time or both, result in a breach of, violate any term
or provision of, or constitute a default under any articles of formation,
bylaws, partnership agreement (oral or written), operating agreement,
indenture, deed of trust, mortgage, contract, agreement, judicial or
administrative order, or any law to which Purchaser is bound.

 

9.2.3                        Consents; Binding Obligations.  Except as set forth in Section 9.2.1, (a) no
approval or consent is required from any person (including any partner,
shareholder, member, creditor, investor or governmental body) for Purchaser to
execute, deliver or perform this Agreement or the other instruments
contemplated hereby or for Purchaser to consummate the transaction contemplated
hereby, and (b) this Agreement and all documents required hereby to be
executed by Purchaser are and shall be valid, legally binding obligations of
and enforceable against Purchaser in accordance with their terms.

 

9.2.4                        Pending Actions.  There is no action or proceeding pending or,
to Purchaser’s knowledge, threatened against Purchaser which challenges or
impairs Purchaser’s ability to execute or perform its obligations under this
Agreement.

 

40

 

9.2.5                        ERISA.  (a) Purchaser is neither (i) an “employee
benefit plan” (as defined in Section 3(3) of the Employment
Retirement Income Security Act of 1974, as amended (“ERISA”)) which is subject to Title I of ERISA (an “ERISA Plan”), nor (ii) a “plan” (as
defined in Section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended (the “Code”)) which is
subject to Section 4975 of the Code (a “Code
Plan”); (b) the assets of Purchaser do not constitute “plan
assets” (as defined in Section 3(42) of ERISA) of one or more ERISA Plans
or Code Plans (“Plan Assets”)
because, at the time of the Closing, the stock of Purchaser’s parent
constitutes “publicly offered securities” (as defined in 29 C.F.R. Section 2510.3-101(b)(2)),
which parent owns one hundred percent (100%) of the issued and outstanding
equity of Purchaser; (c) Purchaser is not using Plan Assets in the
performance or discharge of its obligations under this Agreement; (d) Purchaser
is not a “governmental plan” (within the meaning of Section 3(32) of
ERISA) and assets of Purchaser do not constitute plan assets of one or more
such plans; and (e) transactions by or with Purchaser are not in violation
of state statutes applicable to Purchaser regulating investments of and
fiduciary obligations with respect to governmental plans.

 

9.2.6                        Prohibited Persons and Transactions.  Neither Purchaser nor any of its affiliates
is, nor will they become, a person or entity with whom U.S. persons or entities
are restricted from doing business under regulations of OFAC (including those
named on OFAC’s Specially Designated and Blocked Persons List) or under any
statute, executive order (including the September 24, 2001, Executive
Order Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is
not and will not engage in any dealings or transactions or be otherwise
associated with such persons or entities.

 

9.2.7                        Availability of Funds.  Subject to obtaining the financing
contemplated by either (x) the Term Financing Commitment, (y) the GE
Bridge Loan and the Mezzanine Loan or (z) the Bridge Loan and the
Mezzanine Loan as provided in Section 4.3.2,  Purchaser currently has available and will at the Closing
have available sufficient funds to pay the Purchase Price and to pay any and
all other amounts payable by Purchaser pursuant to this Agreement and to effect
the transactions contemplated hereby.

 

9.3                                 Survival of Representations and Warranties.  The representations and warranties set forth
in this ARTICLE 9 are made as of the Effective Date, are remade as of the
Closing Date (subject to update for Updated Property Information pursuant to Section 4.4
and, changes that are not the result of a breach by Seller or Purchaser or any
of their covenants in this Agreement), and shall not be deemed to be merged
into or waived by the instruments of Closing, but shall survive the Closing for
a period of nine (9) months (the “Survival Period”).  Terms such as “to Seller’s knowledge,” “to the
best of Seller’s knowledge” or like phrases mean the actual knowledge of the
following persons: Barclay Jones, Executive Vice President, Michael Dorsch,
Executive Vice President, Samantha Garbus, Senior Vice President, Nancy Zoeckler,
Senior Vice President, Mary-Beth Roselle, Senior Vice President, Scott Quigle,
Vice President, Carrie Crain, Vice President and persons whose names are set
forth on Schedule 9.3 (the foregoing persons are
referred to herein collectively as, the “Seller’s Representatives”),
without any duty of inquiry or investigation except in connection with such
persons’ review of the representations and warranties of Seller set forth in Section 9.1
hereof as provided in Section 9.1.13 hereof; provided that so qualifying
Seller’s knowledge shall in no event give rise to any

 

41

 

personal liability on the part of Seller’s
Representatives, or any of them, or any other officer or employee of Seller, on
account of any breach of any representation or warranty made by Seller
herein.  Said terms do not include
constructive knowledge, imputed knowledge or knowledge Seller or such persons
do not have but could have obtained through further investigation or
inquiry.  No financial advisor, broker,
agent, or party other than Seller is authorized to make any representation or
warranty for or on behalf of Seller. 
Subject to Section 9.4, each party shall have the right to bring an
action against the other on the breach of a representation or warranty or
covenant hereunder or in the documents delivered by Seller at the Closing, but
only on the following conditions: (1) the party bringing the action for
breach first learns of the breach after Closing and files such action within
the Survival Period, (2) Seller shall not have the right to bring a cause
of action for a breach of a representation or warranty or covenant unless the
damage to Seller on account of such breach (individually or when combined with
damages from other breaches including damages on account of breaches by
Purchaser under the Portfolio Purchase and Sale Agreement) equals or exceeds
$5,000,000, in which event Purchaser shall be liable to Seller for one-half of
all such damage up to $5,000,000 and for all damage above $5,000,000, and (3) Purchaser
shall not have the right to bring a cause of action for a breach of a
representation or warranty or covenant unless the damage to Purchaser on
account of such breach (individually or in the aggregate) equals or exceeds (i) $2,000,000
if such breach relates to the Real Property, the Improvements and the
Membership Interests, in which event Seller shall be liable to Purchaser for
one-half of all such damage up to $2,000,000 and for all such damage above
$2,000,000 with respect to the Real Property, the Improvements and the
Membership Interests or (ii) $5,000,000 for the Real Property, the
Improvements, the Membership Interests and the Portfolio Property, in which
event Seller shall be liable (without duplication of any claims made pursuant
to subclause (i) of this clause (3)) to Purchaser for one-half of all such
damage up to $5,000,000 and for all such damage above $5,000,000 with respect
to the Property, the Membership Interests and the Portfolio Property, subject
to the further provisions of this Section 9.3.  Neither party shall have any liability after
Closing for the breach of a representation or warranty or covenant hereunder of
which the other party hereto had actual knowledge as of Closing.  Notwithstanding any other provision of this
Agreement, any closing deliveries of Seller contemplated by this Agreement: (a) subject
to Section 9.4 and other than Leasing Costs, or any rights which Purchaser
might otherwise have at law, equity, or by statute, whether based on contract
or some other claim, Purchaser agrees that any liability of Seller to Purchaser
pursuant to this Section 9.3 and any liability of Portfolio Seller
pursuant to Section 9.3 of the Portfolio Purchase and Sale Agreement will
in the aggregate be limited to five percent (5%) of the aggregate Purchase
Price of the Membership Interests and the Portfolio Property and (b) there
shall be no threshold or limitation or limitation on survival on Seller’s
obligation to pay or credit Purchaser for Leasing Costs payable by Seller under
Section 8.5 (and the corresponding representation in Section 9.1.5
regarding Leasing Costs), whether or not the obligations to pay any Leasing
Costs first becomes known to Purchaser before, at or after the Closing; i.e.,
Seller shall pay or credit Purchaser for Leasing Costs payable by Seller under Section 8.5
(and the corresponding representation in Section 9.1.5 regarding Leasing
Costs) regardless of the amount thereof and regardless of when the Leasing Cost
becomes known to Purchaser.  In no event shall
either party be liable to the other party for incidental, consequential, or
punitive damages as a result of the breach of any or all representations or
warranties set forth in this Agreement. 
The provisions of this Section 9.3 shall survive the Closing.  Any breach of a representation or warranty or
covenant that occurs prior to Closing shall be governed by ARTICLE 10.

 

42

 

9.4                                 Company Representations.  Anything in
this Agreement to the contrary notwithstanding, including Section 9.3, (i) there
shall be no cap or floor on liability and Purchaser shall not share in such
liability pursuant to Section 9.3, for any misrepresentation or other
breach of any representation or warranty contained in the following subsections
of this Agreement and such subsections shall survive the Closing without
limitation: Sections 9.1.1, 9.1.2, 9.1.3, 9.1.4, 9.1.14, 9.1.17, 9.1.18,
9.1.20, 9.1.22 and 9.1.23, (ii) there shall be no cap or floor on
liability and the Survival Period shall be two (2) years from Closing and
Purchaser shall not share in such liability pursuant to Section 9.3, for
any misrepresentation or other breach of any representation or warranty
contained in the following subsections of this Agreement: Sections 9.1.15,
9.1.19, 9.1.21 and 9.1.24, and (iii) the Survival Period for Section 9.1.12
shall be two (2) years from Closing and remain subject to the caps,
floors, and sharing of liability as set forth in Section 9.3 (items (i), (ii) and
(iii) of this Section 9.4 are referred to herein collectively as, the
“Company Representations”), subject to
the applicable statues of limitation. 
Seller and iStar (“Indemnitor”)
shall each indemnify Purchaser and hold Purchaser harmless from and against,
any and all claims, liabilities, damages, losses, costs or expenses (including
reasonable attorneys’ fees) incurred by Purchaser arising from the Company
Representations. This Section 9.4 shall survive the Closing.

 

ARTICLE 10

DEFAULT AND REMEDIES

 

10.1                           Seller’s Remedies.  If Purchaser defaults on its obligations
hereunder or under the Portfolio Purchase and Sale Agreement at or prior to
Closing for any reason, or if prior to Closing any one or more of Purchaser’s
representations or warranties or covenants hereunder, or under the Portfolio
Purchase and Sale Agreement, are breached in any material respect that impairs
Purchaser’s ability to close under this Agreement or under the Portfolio
Purchase and Sale Agreement and such default or breach is not cured by the
earlier of the third (3rd) Business Day after written notice thereof from
Seller or the Closing Date (except no notice or cure period shall apply if
Purchaser fails to consummate the purchase of the Membership Interests
hereunder or the Portfolio Property pursuant to the Portfolio Purchase and Sale
Agreement), Seller shall be entitled, as its sole remedy hereunder (except as
provided in Sections 4.10, 8.8, 10.3 and 10.4 hereof), to terminate this
Agreement and recover the Earnest Money as liquidated damages and not as penalty,
in full satisfaction of claims against Purchaser hereunder.  Seller and Purchaser agree that Seller’s
damages resulting from Purchaser’s default are difficult, if not impossible, to
determine and the Earnest Money is a fair estimate of those damages which has
been agreed to in an effort to cause the amount of such damages to be
certain.  Notwithstanding anything in
this Section 10.1 to the contrary, in the event of Purchaser’s default or
a termination of this Agreement, Seller shall have all remedies available at
law or in equity in the event Purchaser or any party related to or affiliated
with Purchaser is asserting any claims or right to the Membership Interests,
the Real Property or the Improvements that would otherwise delay or prevent
Seller from having clear, indefeasible and marketable title to the Membership
Interests, the Real Property or the Improvements.  In all other events Seller’s remedies shall
be limited to those described in this Section 10.1 and Sections 4.10, 8.8,
10.3 and 10.4 hereof.  If Closing is
consummated, Seller shall have all remedies available at law or in equity in
the event Purchaser fails to perform any obligation of Purchaser under this
Agreement. IN NO EVENT SHALL PURCHASER’S DIRECT OR INDIRECT PARTNERS,
SHAREHOLDERS, MEMBERS, MANAGERS, OWNERS OR AFFILIATES, ANY OFFICER, MANAGER,
DIRECTOR,

 

43

 

EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE
OR CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION
OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MEMBERSHIP
INTERESTS, THE REAL PROPERTY OR THE IMPROVEMENTS, WHETHER BASED ON CONTRACT,
COMMON LAW, STATUTE, EQUITY OR OTHERWISE.

 

10.2                           Purchaser’s Remedies. If Seller
defaults on its obligations hereunder, or Portfolio Seller defaults in its
obligations under the Portfolio Purchase and Sale Agreement at or prior to
Closing for any reason, or if prior to Closing any one or more of Seller’s, or,
with respect to the Portfolio Purchase and Sale Agreement, Portfolio Sellers’,
representations or warranties or covenants are breached in any material respect
(subject to the provisions of Section 4.4 hereof and of the Portfolio
Purchase and Sale Agreement and the first Sentence of Section 9.3 hereof and
of the Portfolio Purchase and Sale Agreement), and such default or breach is
not cured by the earlier of the third (3rd) Business Day after written notice
thereof from Purchaser or the Closing Date (except no notice or cure period
shall apply if Seller fails to consummate the sale of the Membership Interests
hereunder or Portfolio Seller fails to consummate the sale of the Portfolio
Property under the Portfolio Purchase and Sale Agreement), Purchaser shall
elect, as its sole remedy hereunder, either to (a) terminate this
Agreement by giving Seller timely written notice of such election prior to or
at Closing and recover the Earnest Money, in which event Seller shall be liable
to Purchaser for its out of pocket expenses incurred in connection with the transaction
contemplated hereby, but not to exceed $300,000.00, (b) enforce specific
performance to consummate the sale of the Membership Interests hereunder, or (c) waive
said failure or breach and proceed to Closing without any reduction in the
Purchase Price.  Notwithstanding anything
herein to the contrary, Purchaser shall be deemed to have elected to terminate
this Agreement in its entirety if Purchaser fails to deliver to Seller written
notice of its intent to proceed otherwise on or before ten (10) Business
Days following the scheduled Closing Date or, having given notice that it
intends to seek specific performance, fails to file a lawsuit asserting such
claim or cause of action in New York County, New York within two months
following the scheduled Closing Date. 
EXCEPT FOR iSTAR’S POTENTIAL LIABILITY PURSUANT TO THE MEZZANINE LOAN
AND SECTION 9.4, IN NO EVENT SHALL SELLER’S DIRECT OR INDIRECT
PARTNERS, SHAREHOLDERS, MEMBERS, MANAGERS, OWNERS OR AFFILIATES, ANY OFFICER,
MANAGER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR
CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR
OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MEMBERSHIP
INTERESTS, THE REAL PROPERTY OR THE IMPROVEMENTS, WHETHER BASED ON CONTRACT,
COMMON LAW, STATUTE, EQUITY OR OTHERWISE.

 

10.3                           Attorneys’ Fees.  In the event either party hereto employs an
attorney in connection with claims by one party against the other arising from
the operation of this Agreement, the non-prevailing party shall pay the
prevailing party all reasonable fees and expenses, including attorneys’ fees,
incurred in connection with such claims.

 

10.4                           Other Expenses.  If this Agreement is terminated due to the
default of a party, then the defaulting party shall pay any fees or charges due
to Escrow Agent for holding the

 

44

 

Earnest Money as well as any escrow cancellation
fees or charges and any fees or charges due to the Title Company for
preparation and/or cancellation of the Title Commitment.

 

ARTICLE 11

DISCLAIMERS, RELEASE AND INDEMNITY

 

11.1                           Disclaimers By Seller.  Except as expressly set forth in this
Agreement and/or the Closing documents, it is understood and agreed that
Seller, AFE, PXR, PXURA and PXLA and Seller’s, AFE’s, PXR’s, PXURA’s and PXLA’s
agents or employees have not at any time made and are not now making, and they
specifically disclaim, any warranties, representations or guaranties of any
kind or character, express or implied, with respect to the Membership
Interests, the Real Property and Improvements, including, but not limited to,
warranties, representations or guaranties as to (a) matters of title, (b) environmental
matters relating to the Real Property, the Improvements or any portion thereof,
including, without limitation, the presence of Hazardous Materials in, on,
under or in the vicinity of the Real Property or Improvements, (c) geological
conditions, including, without limitation, subsidence, subsurface conditions,
water table, underground water reservoirs, limitations regarding the withdrawal
of water, and geologic faults and the resulting damage of past and/or future
faulting, (d) whether, and to the extent to which the Real Property, the
Improvements or any portion thereof is affected by any stream (surface or
underground), body of water, wetlands, flood prone area, flood plain, floodway
or special flood hazard, (e) drainage, (f) soil conditions, including
the existence of instability, past soil repairs, soil additions or conditions
of soil fill, or susceptibility to landslides, or the sufficiency of any
undershoring, (g) the presence of endangered species or any
environmentally sensitive or protected areas, (h) zoning or building
entitlements to which the Real Property, the Improvements or any portion
thereof may be subject, (i) the availability of any utilities to the Real
Property, the Improvements or any portion thereof, including, without
limitation, water, sewage, gas and electric, (j) usages of adjoining
property, (k) access to the Real Property, the Improvements or any portion
thereof, (l) the value, compliance with the plans and specifications,
size, location, age, use, design, quality, description, suitability, structural
integrity, operation, title to, or physical or financial condition of the Real
Property, the Improvements or any portion thereof, or any income, expenses,
charges, liens, encumbrances, rights or claims on or affecting or pertaining to
the Real Property, the Improvements or any part thereof, (m) the condition
or use of the Real Property, the Improvements or compliance of the Real
Property or the Improvements with any or all past, present or future federal,
state or local ordinances, rules, regulations or laws, building, fire or zoning
ordinances, codes or other similar laws, (n) the existence or
non-existence of underground storage tanks, surface impoundments, or landfills,
(o) any other matter affecting the stability and integrity of the Real
Property or the Improvements, (p) the potential for further development of
the Real Property or the Improvements, (q) the merchantability of the Real
Property or the Improvements or fitness of the Real Property or the
Improvements for any particular purpose, (r) the truth, accuracy or
completeness of the Property Documents or Updated Property Information, (s) tax
consequences, or (t) any other matter or thing with respect to the Real
Property or the Improvements.

 

11.2                           Sale “As Is, Where Is”.  Purchaser acknowledges and agrees that upon
Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept
the Membership Interests and all beneficial interests arising therefrom “AS IS, WHERE IS, WITH ALL FAULTS,” except to the
extent expressly provided otherwise in this Agreement and any document executed

 

45

 

by Seller and delivered to Purchaser at
Closing.  Except as expressly set forth
in this Agreement or such Closing documents, Purchaser has not relied and will
not rely on, and Seller has not made and is not liable for or bound by, any
express or implied warranties, guarantees, statements, representations or
information pertaining to the Membership Interests, the Property or relating
thereto (including specifically, without limitation, Property information
packages distributed with respect to the Property) made or furnished by Seller,
or any property manager, real estate broker, financial advisor, agent or third
party representing or purporting to represent Seller, to whomever made or
given, directly or indirectly, orally or in writing.  Purchaser represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and that,
except as expressly set forth in this Agreement, it is relying solely on its
own expertise and that of Purchaser’s consultants in purchasing the Membership
Interests and shall make an independent verification of the accuracy of any
documents and information provided by Seller. 
Purchaser will conduct such inspections and investigations of the
Membership Interests and the Property as Purchaser deems necessary, including,
but not limited to, the physical and environmental conditions of the Property,
and shall rely upon same.  By failing to
terminate this Agreement prior to the expiration of the Inspection Period,
Purchaser acknowledges that Seller has afforded Purchaser a full opportunity to
conduct such investigations of the Membership Interests and the Property as
Purchaser deemed necessary to satisfy itself as to the Membership Interests and
the condition of the Property and the existence or non-existence or curative
action to be taken with respect to any Hazardous Materials on or discharged
from the Property, and will rely solely upon same and not upon any information
provided by or on behalf of Seller or its agents or employees with respect
thereto, other than such representations, warranties and covenants of Seller as
are expressly set forth in this Agreement. 
Upon Closing, Purchaser shall assume the risk that adverse matters,
including, but not limited to, adverse physical or construction defects or
adverse environmental, health or safety conditions, may not have been revealed
by Purchaser’s inspections and investigations. Purchaser hereby represents and
warrants to Seller that: (a) Purchaser is represented by legal counsel in
connection with the transaction contemplated by this Agreement; and (b) Purchaser
is purchasing the Membership Interests for business, commercial, investment or
other similar purpose.  Purchaser waives
any and all rights or remedies it may have or be entitled to, deriving from
disparity in size or from any significant disparate bargaining position in
relation to Seller.

 

11.3                           Seller Released from Liability. Purchaser
acknowledges that it will have the opportunity to inspect the Real Property and
Improvements during the Inspection Period, and during such period, observe its
physical characteristics and existing conditions and the opportunity to conduct
such investigation and study on and of the Real Property, Improvements and
adjacent areas as Purchaser deems necessary, and, except as set forth herein or
in any Closing document, Purchaser hereby FOREVER RELEASES AND DISCHARGES
Seller from all responsibility and liability, including without limitation,
liabilities and responsibilities for the landlord’s obligations under the
Leases relating to the physical, environmental or legal compliance status of
the Real Property and Improvements, arising after the Effective Date, and
liabilities under the Comprehensive Environmental Response, Compensation and
Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as amended (“CERCLA”), regarding the condition, valuation, salability or
utility of the Real Property, the Improvements or their suitability for any
purpose whatsoever (including, but not limited to, with respect to the presence
in the soil, air, structures and surface and subsurface waters, of Hazardous
Materials or other materials or substances that have been or may in the future
be determined to be toxic, hazardous, undesirable

 

46

 

or subject to regulation and that may need to be
specially treated, handled and/or removed from the Real Property or
Improvements under current or future federal, state and local laws, regulations
or guidelines, and any structural and geologic conditions, subsurface soil and
water conditions and solid and hazardous waste and Hazardous Materials on,
under, adjacent to or otherwise affecting the Real Property or
Improvements).  Except as set forth herein
or in any closing documents, Purchaser further hereby WAIVES (and by Closing
this transaction will be deemed to have WAIVED) any and all objections and
complaints (including, but not limited to, federal, state and local statutory
and common law based actions, and any private right of action under any
federal, state or local laws, regulations or guidelines to which the Real
Property or Improvements are or may be subject, including, but not limited to,
CERCLA) concerning the physical characteristics and any existing conditions of
the Real Property or Improvements, including, without limitation, the landlord’s
obligations under the Leases relating to the physical, environmental or legal
compliance status of the Real Property or Improvements, arising after the
Effective Date.  Purchaser further hereby
assumes the risk of changes in applicable laws and regulations relating to
past, present and future environmental conditions on the Real Property and
Improvements and the risk that adverse physical characteristics and conditions,
including, without limitation, the presence of Hazardous Materials or other
contaminants, may not have been revealed by its investigation.

 

11.4                           “Hazardous
Materials” Defined.  For purposes hereof, “Hazardous
Materials” means “Hazardous Material,” “Hazardous Substance,” “Pollutant
or Contaminant,” and “Petroleum” and “Natural Gas Liquids,” as those terms are
defined or used in Section 101 of CERCLA, and any other substances
regulated because of their effect or potential effect on public health and the
environment, including, without limitation, PCBs, lead paint, asbestos, urea
formaldehyde, radioactive materials, putrescible materials, and infectious
materials.

 

11.5                           Intentionally Deleted.

 

11.6                           Survival.  The terms and conditions of this ARTICLE 11
shall expressly survive the Closing, and shall not merge with the provisions of
any closing documents.

 

Purchaser
acknowledges and agrees that the disclaimers and other agreements set forth
herein are an integral part of this Agreement and that Seller would not have
agreed to sell the Membership Interests to Purchaser for the Purchase Price
without the disclaimers and other agreements set forth above.

 

ARTICLE 12

MISCELLANEOUS

 

12.1                           Parties Bound; Assignment.  This Agreement, and the terms, covenants, and
conditions herein contained, shall inure to the benefit of and be binding upon
the heirs, personal representatives, successors, and assigns of each of the
parties hereto.  Purchaser may, at
Purchaser’s sole cost and expense and at no cost or expense to Seller, assign
its rights under this Agreement upon the following conditions: (a) the
assignee of Purchaser must be (i) an entity controlling, controlled by, or
under common control with Purchaser or (ii) an entity advised by an
affiliate of Purchaser’s advisor, Dividend Capital Total Advisors LLC, (b) all
of the Earnest Money must have been delivered in accordance herewith, (c) the
Inspection Period shall have (or

 

47

 

be deemed to have) ended, (d) the assignee of
Purchaser shall assume all obligations of Purchaser hereunder, but Purchaser
shall remain primarily liable for the performance of Purchaser’s obligations, (e) a
copy of the fully executed written assignment and assumption agreement shall be
delivered to Seller at least five (5) Business Days prior to Closing, (f) the
requirements in Section 12.17 are satisfied and (g) such assignment
shall in no event delay the Closing.

 

12.2                           Headings.  The article, section, subsection, paragraph
and/or other headings of this Agreement are for convenience only and in no way
limit or enlarge the scope or meaning of the language hereof.

 

12.3                           Invalidity and Waiver.  If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative.  The
failure by either party to enforce against the other any term or provision of
this Agreement shall not be deemed to be a waiver of such party’s right to
enforce against the other party the same or any other such term or provision in
the future.

 

12.4                           Governing Law.  This Agreement shall be governed in all
respects, including validity, construction, interpretation and effect, by the
laws of the State of New York, without giving effect to its principles or rules of
conflict of laws to the extent such principles or rules would require or
permit the application of the laws of another jurisdiction.  Each of Purchaser and Seller hereby (i) irrevocably
submits to the jurisdiction of the courts of the State of New York and the
Federal courts of the United States of America located in the State, City and
County of New York for the purpose of any action or proceeding arising out of
this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (iii) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a New York state court
or federal court located in the State, City and County of New York.  Each of Purchaser and Seller hereby consents
to and grants any such court jurisdiction over the person of such party and
over the subject matter of any such dispute and agrees that mailing of process
or other papers in connection with any such action or proceeding in the manner
provided in Section 12.10, or in such other manner as may be permitted by
law, shall be valid and sufficient service thereof on such party.

 

12.5                           Survival.  The provisions of this Agreement that
contemplate performance after the Closing and the obligations of the parties
not fully performed at the Closing (other than any unfulfilled closing
conditions which have been waived or deemed waived by the other party) shall
survive the Closing and shall not be deemed to be merged into or waived by the
instruments of Closing.

 

12.6                           Entirety and Amendments.  This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Membership Interests, the Real Property or the Improvements,
except that letter of intent dated April 2, 2010 between iStar, on behalf
of Seller, and Purchaser shall survive the execution of this

 

48

 

Agreement to the extent of the exclusivity
obligations and covenants under such letter. 
This Agreement may be amended or supplemented only by an instrument in
writing executed by the party against whom enforcement is sought.  All Schedules and Exhibits hereto are
incorporated herein by this reference for all purposes. All information
disclosed on any one Schedule and not disclosed on the other Schedules shall,
to the extent applicable, be deemed to be disclosed on such other Schedules.

 

12.7                           Time.  Time is of the essence in the performance of
this Agreement.

 

12.8                           Intentionally Omitted.

 

12.9                           No Electronic Transactions.  The parties hereby acknowledge and agree this
Agreement shall not be executed, entered into, altered, amended or modified by
electronic means.  Without limiting the
generality of the foregoing, the parties hereby agree the transactions
contemplated by this Agreement shall not be conducted by electronic means,
except as specifically set forth in the “Notices” section of this Agreement.

 

12.10                     Notices.  All notices required or permitted hereunder
shall be in writing and shall be served on the parties at the addresses set
forth in Section 1.3.  Any such
notices shall, unless otherwise provided herein, be given or served (a) by
depositing the same in the United States mail, postage paid, certified and
addressed to the party to be notified, with return receipt requested, (b) by
overnight delivery using a nationally recognized overnight courier, (c) by
personal delivery, or (d) by Portable Document Format (PDF) so long as a
copy thereof is also sent by one of the other delivery methods set forth in
Sections 12.10(a), (b) or (c). 
Notice given in accordance herewith for all permitted forms of notice
other than by electronic mail, shall be effective upon the earlier to occur of
actual delivery to the address of the addressee or refusal of receipt by the
addressee.  In no event shall this
Agreement be altered, amended or modified by electronic mail or electronic
record.  A party’s address may be changed
by written notice to the other party; provided, however, that no notice of a
change of address shall be effective until actual receipt of such notice.  Copies of notices are for informational
purposes only, and a failure to give or receive copies of any notice shall not
be deemed a failure to give notice. 
Notices given by counsel to the Purchaser shall be deemed given by
Purchaser and notices given by counsel to the Seller shall be deemed given by
Seller.

 

12.11                     Construction.  The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and agree that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any exhibits or amendments hereto.

 

12.12                     Calculation of Time Periods; Business Day.  Unless otherwise specified, in computing any
period of time described herein, the day of the act or event after which the
designated period of time begins to run is not to be included and the last day
of the period so computed is to be included, unless such last day is not a
Business Day, in which event the period shall run until the end of the next day
which is a Business Day.  The last day of
any period of time described herein shall be deemed to end at midnight local
time in New York, New York.  As used
herein, the term “Business Day”
means any day that is not a Saturday, Sunday or legal holiday for national
banks in the City of New York, New York or Colorado.

 

49

 

12.13                     Execution in Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one Agreement.

 

12.14                     Recordation.  Without the prior written consent of Seller,
there shall be no recordation of either this Agreement or any memorandum
hereof, or any affidavit pertaining hereto, and any such recordation of this
Agreement or memorandum or affidavit by Purchaser without the prior written
consent of Seller shall constitute a default hereunder by Purchaser, whereupon
Seller shall have the remedies set forth in Section 10.1 hereof.  In addition to any such remedies, Purchaser
shall be obligated to execute an instrument in recordable form releasing this
Agreement or memorandum or affidavit, and Purchaser’s obligations pursuant to
this Section 12.14 shall survive any termination of this Agreement as a
surviving obligation.

 

12.15                     Further Assurances.  In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, but
without any obligation to incur any additional liability or expense, on or
after the Closing any further deliveries and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby or to further
perfect the transfer of the Membership Interests to Purchaser.

 

12.16                     Discharge of Obligations.  The acceptance of the Assignment and
Assumption of Membership Interests by Purchaser shall be deemed to be a full
performance and discharge of every representation and warranty made by Seller
herein and every agreement and obligation on the part of Seller to be performed
pursuant to the provisions of this Agreement, except those which are herein
specifically stated to survive Closing.

 

12.17                     ERISA.  Under no circumstances shall Purchaser have
the right to assign this Agreement to any person or entity owned or controlled
by an “employee benefit plan” (as defined in Section 3(3) of ERISA)
if Seller’s sale of the Membership Interests to such person or entity would, in
the reasonable opinion of Seller’s ERISA advisors or consultants, create or
otherwise cause a “prohibited transaction” under ERISA or any other applicable
law with an effect similar to that of Section 406 of ERISA including, but
not limited to, Section 4975 of the Code (each such law, a “Similar Law”). In the event Purchaser
assigns this Agreement or transfers any ownership interest in Purchaser, and such
assignment or transfer would make the consummation of the transaction hereunder
a “prohibited transaction” under ERISA or any Similar Law and would therefore
either (a) necessitate the termination of this Agreement, or (b) cause
Seller to incur liability under ERISA or such Similar Law if the transaction
were consummated, then, in either case, notwithstanding any contrary provision
which may be contained herein, Seller shall have the right to terminate this
Agreement and Escrow Agent shall immediately direct any Earnest Money
previously deposited by Purchaser with Escrow Agent in accordance with Section 3.4
hereof and thereafter the parties hereto shall have no further rights or
obligations hereunder, except for rights and obligations which, by their terms,
survive the termination hereof.  Anything
in this Section 12.17 to the contrary notwithstanding, Seller shall have
no right to terminate this Agreement under this Section 12.17 if Purchaser’s
assignee expressly reaffirms in a writing addressed to Seller the
representation in Section 9.2.5.

 

50

 

12.18                     No Third Party Beneficiary.  The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered
at Closing, except that a tenant of the Real Property or Improvements may
enforce Purchaser’s indemnity obligation under Section 4.10 hereof.

 

12.19                     Reporting Person.  Purchaser and Seller hereby designate First
American as the “reporting person” pursuant to the provisions of Section 6045(e) of
the Internal Revenue Code of 1986, as amended.

 

12.20                     Post-Closing Access.  From and after the Closing, the Purchaser
will, at Seller’s sole cost and expense, permit Seller and Seller’s agents and
representatives access (and will permit copying of materials pertaining to the
period prior to the Closing), during business hours from time to time, to the
Lease Files and other Real Property-related information upon reasonable advance
notice to the Purchaser.  This Section 12.20
shall survive the Closing.

 

12.21                     Waiver of Jury Trial.  SELLER AND PURCHASER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN SELLER AND PURCHASER RELATING TO THE SUBJECT
MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN SELLER
AND PURCHASER.  THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS).  THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, ANY RELATED DOCUMENTS, OR ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY RELATED TRANSACTIONS.  IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.

 

12.22                     Information and Audit Cooperation. Within 75
days after the Closing Date, Seller, at Purchaser’s sole cost and expense and
at no cost or expense to Seller, shall allow Purchaser’s auditors access to the
books and records of Seller relating to the operation of the Real Property and
Improvements for the three (3) year period prior to the Closing Date to
enable Purchaser to comply with any financial reporting requirements applicable
to Purchaser, upon at least three (3) Business Days prior written notice
to Seller. In addition, Seller shall provide Purchaser’s designated independent
auditors a representation letter regarding the books and records of the Real
Property and Improvements in substantially the form attached hereto as Exhibit H.

 

51

 

12.23                     Bulk Sales Laws.

 

12.23.1                        Seller shall indemnify, defend and hold Purchaser harmless of and from
any and all liabilities, claims, demands and expenses of any kind or nature
that arise out of the failure of Seller to comply with the requirements of NJSA
54:50-38 et. seq.

 

12.23.2                        This Section 12.23 shall survive the Closing.

 

[SIGNATURE PAGES, SCHEDULES AND EXHIBITS TO FOLLOW]

 

52

 

SIGNATURE PAGE TO AGREEMENT OF

PURCHASE AND SALE

BY AND BETWEEN

iSTAR HARBORSIDE LLC,

AS SELLER

AND

TRT ACQUISITIONS LLC,

AS PURCHASER

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year written below.

 

	
  PURCHASER:

  	
   

  
	
   

  	
   

  
	
  TRT
  ACQUISITIONS LLC, a Delaware limited liability company 

  	
   

  
	
   

  	
   

  
	
  By:

  	
  DCTRT
  Real Estate Holdco LLC, Its Sole Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Dividend
  Capital Total Realty Operating Partnership LP, Its Sole Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Dividend
  Capital Total Realty Trust Inc., Its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Greg Moran

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Greg
  Moran

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  SVP

  	
   

  
	
   

  	
   

  	
   

  	
  Date:
  May 3, 2010

  	
   

  
	
   

  	
   

  
	
  SELLER:

  	
   

  
	
   

  	
   

  
	
  iSTAR
  HARBORSIDE LLC, a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  iStar
  Harborside Member LLC, a Delaware limited liability company, its Managing
  Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samantha K. Garbus

  	
   

  
	
   

  	
  Name:

  	
  Samantha
  K. Garbus

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
   

  	
  Date:
  May 3, 2010

  	
   

  
							

 

 

AGREED TO FOR PURPOSES OF SECTION 4.3.2 AND 9.4:

 

	
  iSTAR
  FINANCIAL INC., a Maryland corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Samantha K. Garbus

  	
   

  
	
  Name:

  	
  Samantha
  K. Garbus

  	
   

  
	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
  Date:
  May 3, 2010

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]