Document:

exv10w1

Exhibit 10.1

ADVANCE AT MIDDLEBROOK CROSSROADS, LLC

as Seller,

and

TERRENO REALTY LLC

as Purchaser.

 

AGREEMENT OF SALE

 

Premises: Middlebrook Crossroads, Bridgewater, New Jersey

Date: May 17, 2010

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	BACKGROUND
	 	 	1	 
	1. AGREEMENT TO SELL AND PURCHASE
	 	 	1	 
	2. PURCHASE PRICE
	 	 	2	 
	3. DUE DILIGENCE; SALE AS IS; OPERATING AGREEMENTS
	 	 	3	 
	4. MORTGAGE ASSUMPTION
	 	 	6	 
	5. TITLE
	 	 	7	 
	6. CLOSING
	 	 	8	 
	7. CLOSING DOCUMENTS AND CERTAIN PAYMENTS
	 	 	8	 
	8. CLOSING ADJUSTMENTS; TRANSACTION COSTS
	 	 	10	 
	9. SELLER’S OBLIGATIONS PENDING CLOSING
	 	 	14	 
	10. REPRESENTATIONS
	 	 	15	 
	11. RISK OF LOSS; CONDEMNATION
	 	 	18	 
	12. ESCROW
	 	 	19	 
	13. DEFAULT BY PURCHASER
	 	 	21	 
	14. DEFAULT BY SELLER; LIMITATION ON DAMAGE CLAIMS
	 	 	21	 
	15. NO ASSIGNMENT BY PURCHASER
	 	 	22	 
	16. NOTICES
	 	 	22	 
	17. FURTHER ASSURANCES
	 	 	23	 
	18. TITLE TO PERSONAL PROPERTY
	 	 	24	 
	19. BROKERAGE
	 	 	24	 
	20. MISCELLANEOUS
	 	 	25	 

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LIST OF SCHEDULES

	 	 	 

	1(a)

	 	Metes and Bounds Description of the Land
	1(c)

	 	Personal Property
	3(f)

	 	Auditor’s Representation Letter
	4(a)

	 	Loan Documents
	5(a)

	 	Title Exceptions
	7(a)(1)

	 	Deed
	7(a)(2)

	 	Affidavit of Title
	7(a)(3)

	 	Assignment and Assumption of Leases and Security Deposits
	7(a)(4)

	 	Assignment and Assumption of Operating Agreements
	7(a)(5)

	 	Bill of Sale and General Assignment
	7(a)(6)

	 	Tenant Notice Form
	7(a)(7)

	 	FIRPTA Certificate
	7(a)(19)

	 	Permits and Licenses
	9(b)

	 	Pending Leases/Extensions
	9(g)(1)

	 	Estoppel Certificate
	9(g)(2)

	 	Major Tenants
	10(a)(8)

	 	Rent Roll
	10(a)(9)

	 	Operating Agreements
	10(a)(11)

	 	Hosposable Products ISRA Matter

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     THIS AGREEMENT OF SALE (“Agreement”) is made this 17th day of May, 2010, between
ADVANCE AT MIDDLEBROOK CROSSROADS, LLC (“Seller”), a New Jersey limited liability
company having an office at 1430 State Highway 206, Suite 100, Bedminster, New Jersey 07921, and
TERRENO REALTY LLC (“Purchaser”), a Delaware limited liability company, having an office at
16 Maiden Lane, Fifth Floor, San Francisco, CA 94108.

BACKGROUND

     Seller owns certain real property and improvements thereon located on Chimney Rock Road,
Bridgewater, New Jersey, commonly known as Middlebrook Crossroads (excluding Building 16E). Seller
and Purchaser desire to enter into this Agreement pursuant to which Seller agrees to sell and
Purchaser agrees to acquire, all of Seller’s right, title and interest in Middlebrook Crossroads,
as hereafter set forth.

     1. Agreement to Sell and Purchase.

     Purchaser agrees to purchase from Seller, and Seller agrees to sell to Purchaser, all of
Seller’s right, title and interest in and to the following, subject to the terms and conditions
hereafter set forth (collectively, the “Property”):

          (a) the land described by metes and bounds in Schedule 1(a) (the
“Land”);

          (b) all buildings and improvements on the Land, aggregating approximately 583,618 square feet
of space (“Improvements”);

          (c) the fixtures, furnishings, equipment and other personal property (excluding cash), if any,
owned by Seller, located in or on, and used exclusively in connection with the operation of, the
Improvements, and identified on Schedule 1(c) (“Personal Property”);

          (d) any and all of Seller’s right, title and interest, as lessor, in and to the leases,
licenses and occupancy agreements covering all or any portion of the Improvements (collectively the
“Leases”), to the extent they are in effect at “Closing” (hereafter defined) including any
Security Deposits (hereafter defined, whether in the form of cash or bonds) thereunder in Seller’s
possession at Closing; and

          (e) any and all of Seller’s right, title and interest in and to any of the following existing
at Closing:

               (1) all assignable contracts and agreements (collectively, the “Operating Agreements”)
relating to the leasing, operation, maintenance or repair of the Improvements or Personal Property,
excluding, however, the existing property management agreement with Advance Realty Management Inc.;

               (2) all assignable warranties and guaranties, if any remain in effect, issued to Seller in
connection with the Improvements or the Personal Property;

 

 

               (3) all assignable permits, licenses, approvals and authorizations issued by any governmental
authority in connection with the Improvements, and

               (4) the non-exclusive use of the name “Middlebrook Crossroads” (the property described in this
Section 1(e) being sometimes herein referred to collectively as the “Intangibles”).

     2. Purchase Price.

          The purchase price for the Property (the “Purchase Price”) is Twenty Eight Million Two
Hundred Thousand Dollars ($28,200,000.00). The Purchase Price shall consist of the principal
balance of the Loan (hereafter defined) as of Closing and the “Cash Portion” which is the
amount by which the Purchase Price exceeds the principal balance of the Loan as of Closing.
Purchaser shall pay the Purchase Price as follows:

          (a) Two Hundred Eighty Thousand Dollars ($280,000.00) (“Initial Deposit”) shall be
paid one (1) business day after the execution and delivery of this Agreement, by payment by
electronic wire transfer of immediately available funds to Escrow Agent (hereafter defined);

          (b) Two Hundred Twenty Thousand Dollars ($220,000.00; “Additional Deposit”; the
Initial Deposit and Additional Deposit together are the “Deposit”) shall be paid within one
(1) Business Day after the expiration of the Due Diligence Period, provided Purchaser has not
terminated this Agreement by Purchaser’s Due Diligence Notice (as hereafter defined and provided),
by payment by electronic wire transfer of immediately available funds to Escrow Agent. The Deposit
and the interest accrued thereon shall be credited against the Purchase Price at Closing;

          (c) Purchaser agrees to acquire the Property subject to the Loan Documents (hereafter
defined), and shall assume Seller’s obligations under the Loan Documents arising from and after the
Closing pursuant to, and subject to the requirements of, Section 4. The outstanding principal
balance of the Loan as of Closing shall be assumed by Purchaser and credited against the Purchase
Price. Purchaser shall receive a credit against the Cash Portion equal to: (i) accrued and unpaid
interest under the Loan Documents on the Closing, plus (ii) late charges and all other charges due
on the Loan Documents on the Closing. Seller shall receive a credit and the Cash Portion shall be
increased at Closing by the amount, if any, of interest paid for periods on and after the Closing
and all funds escrowed on account of the Loan Documents for taxes, insurance, repairs, maintenance
and for any other reason, if and to the extent such escrowed funds are assigned to Purchaser
(provided that treatment of any escrow or reserve account holding the Award (as defined in Section
11(c) shall be governed by Section 11(c)); and

          (d) Purchaser shall pay the balance of the Cash Portion of the Purchase Price (taking into
account a credit for the Deposit and the credits described in Subsection (c) above) in cash at
Closing (“Closing Payment”) (as adjusted pursuant to Section 8 below) to Seller by
electronic wire transfer to an escrow account designated by Escrow Agent.

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     3. Due Diligence; Sale As-Is; Operating Agreements.

          (a) Purchaser shall have until 5:00 p.m. (Eastern time) on June 30, 2010 (“Due Diligence
Period”) to make such inquiries and investigations as it desires, at its sole cost and expense,
regarding the Property, subject to the terms and conditions hereafter set forth:

               (1) During the Due Diligence Period, Seller shall permit Purchaser and its agents and
contractors access to the Property and Seller’s books and records regarding the Property, for the
purpose of conducting Purchaser’s inquiries and investigations as provided in this Section 3.
Purchaser shall also have the right to investigate all matters relating to the zoning, use and
compliance with other applicable laws which relate to the use and occupancy of the Property.
Seller shall reasonably cooperate with Purchaser at no material expense to Seller in completing
such inspections and investigations. Such inspection rights shall extend to all of the following,
if and to the extent in Seller’s possession or control: operating books of account, copies of all
Leases and Operating Agreements, tenant files, rent rolls, operating statements, budgets,
accounting support for bills, inventories of Personal Property, warranties, general ledgers,
journals, vendor files, bank statements, invoices, operating manuals, maintenance records, utility
bills, leasing floor plans, plans and specifications for each building, all Loan Documents (as
defined below) and any and all certificates delivered to Lender (as defined below) and other files,
reports, documents and correspondence pertaining to the Loan (including the items listed in Part II
of Schedule 4(a)), all orders, correspondence, filings, petitions or other documents
relating to the Chimney Rock Road Condemnation (as defined below), all contracts, files and
correspondence relating to the Restoration Work (as defined below), copies of any structural,
physical, geological, soils/geotechnical, environmental, traffic wetlands archaeological and
similar third party consultant or engineering reports, studies and investigations, and any
summaries of such items, and a copy of any existing surveys of the land and Improvements. Nothing
herein shall require Seller to provide draft or internal reports, memoranda or assessments intended
for internal purposes, confidential materials and materials protected by attorney-client privilege
or other privilege, and nothing herein shall permit Purchaser or its agents to undertake any soil
borings, water samplings or undertake any other intrusive physical investigations without Seller’s
prior written consent, which may be withheld in Seller’s sole discretion. Access to the Property
shall at all times be subject to the rights of tenants, undertaken with not less than 24 hours’
prior notice to Seller and with a representative of Seller present, if so requested by Seller.
Seller’s agreement to deliver or make available to Purchaser due diligence materials shall be a
continuing obligation but shall in no event extend the Due Diligence Period, and from and after the
date hereof, and following the initial delivery of the due diligence materials, Seller will provide
or make available to Purchaser copies of all material documents and information pertaining to the
Property as described in this Section 3(a)(1), including without limitation documents and
information pertaining to the Chimney Rock Road Condemnation and the Restoration Work, as and when
received or prepared by Seller;

               (2) Purchaser shall be responsible to repair promptly any damage to the Property caused by any
actions, investigations or inspections by Purchaser or any of its agents, and shall restore such
damaged portion of the Property to substantially the same condition as existed immediately prior to
such actions, investigations or inspections, at Purchaser’s sole cost and expense and without
subjecting the Property to any contractors lien, which obligation shall survive termination of this
Agreement;

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               (3) Prior to any entry onto the Property by Purchaser or its agents, Purchaser shall procure
and maintain, so long as this Agreement has not been terminated, at Purchaser’s sole cost and
expense, a commercial general liability policy of insurance issued by an insurer authorized to do
business in New Jersey reasonably approved by Seller with policy limits for Purchaser and its
affiliates of no less than Two Million Dollars ($2,000,000.00), and for third party agents and
consultants of no less than One Million Dollars ($1,000,000.00), combined single limit, insuring
(on an occurrence basis) against injuries and damages to persons and property related to
Purchaser’s and its agents’ activities on the Property, which policy must include a contractual
liability endorsement evidencing coverage of Purchaser’s obligation to indemnify Seller as
hereafter provided, with Seller named as an additional insured. Purchaser shall deliver to Seller
proof of such coverage reasonably acceptable to Seller, prior to entry onto the Property by
Purchaser or its agents. Purchaser shall indemnify, hold harmless and defend Seller, its
affiliates, and their officers, directors, employees and agents from and against all suits,
actions, proceedings, losses, damages, liens, expenses and costs, including without limitation,
reasonable counsel fees (collectively “Claims and Damages”), arising out of or in any way
related to Purchaser’s or any of its agent’s actions, investigations and inspections of the
Property, excluding, however, any Claims and Damages (other than those arising out of a breach by
Purchaser or anyone acting by, through or under Purchaser, of its obligations and covenants in
Section 20(q)) arising out of (A) the mere discovery of an existing condition on or affecting any
of the Property or (B) Purchaser’s discovery of any information potentially having a negative
impact on Seller or the Property (including any claims arising out of, resulting from or incurred
in connection with the discovery of any hazardous substances on or about the Property. Purchaser’s
obligation to indemnify Seller as herein provided shall survive termination of this Agreement or
Closing but shall terminate if a claim for indemnification has not been asserted against Purchaser
on or before six (6) months after Closing;

               (4) Purchaser, in its sole discretion, may terminate this Agreement on or prior to the
expiration of the Due Diligence Period, for any reason or for no reason, by notice to Seller
(“Purchaser’s Due Diligence Notice”) on or before the expiration of the Due Diligence
Period. Failure of Purchaser to deliver Purchaser’s Due Diligence Notice terminating the Agreement
by the expiration of the Due Diligence Period shall constitute Purchaser’s conclusive and
irrevocable election not to terminate this Agreement pursuant to this Section 3(a)(4) and waiver of
any further right to terminate this Agreement pursuant to this Section 3(a)(4); and

               (5) If this Agreement is terminated as provided in Section 3(a)(4) or pursuant to any other
provision of this Agreement, (i) Purchaser, at no cost or expense to Seller, shall deliver to
Seller true and complete copies of the title commitment, survey and property condition reports
prepared on behalf of Purchaser in relation to the Property during the Due Diligence Period all
without any representation or warranty as to their completeness or accuracy, and Purchaser shall
have no obligations to deliver to Seller any other reports, documents, memoranda or assessments
with respect to the Property, and (ii) provided the termination is not pursuant to Section 13 or
any other provision entitling Seller to retain the Deposit, the entire Deposit, with all accrued
interest, shall be returned to Purchaser and thereafter this Agreement shall be null and void and
of no further force and effect and neither party shall have any further liability to the other,
except for Purchaser’s obligation to indemnify, hold harmless and defend Seller as provided in
Section 3(a)(3) and any other obligation that expressly survives termination of this Agreement.

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          (b) Purchaser, its affiliates, lenders, investors, employees, attorneys, accountants and its
other professionals or agents have undertaken, and during the Due Diligence Period will undertake
and complete, such investigations of the Property as Purchaser deems necessary or desirable to
satisfy itself as to the condition of 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,
except as otherwise expressly provided herein or as expressly provided in any documents delivered
by Seller at Closing. Purchaser acknowledges and agrees:

               (1) Except as otherwise expressly provided in this Agreement or in the other documents
delivered by Seller at Closing, the Property is being acquired “AS IS, WITH ALL FAULTS, KNOWN OR
UNKNOWN” and in its present condition subject to reasonable wear and tear, casualty and
condemnation between the date hereof and the Closing;

               (2) Upon Closing, Purchaser shall assume the risk that adverse matters, including but not
limited to, construction defects and adverse physical and environmental conditions, may not have
been revealed by Purchaser’s investigations, and except in connection with any breach of Seller’s
representations and warranties (subject to the limitations set forth herein), Purchaser, upon
Closing, shall be deemed to have waived, relinquished and released Seller (and the members,
managers, officers, directors, shareholders, employees and agents of Seller and its affiliates)
from and against any and all Claims and Damages of any and every kind or character, known or
unknown, which Purchaser might assert or allege against Seller (and the members, managers,
officers, directors, shareholders, employees, agents and attorneys of Seller and its affiliates) at
any time by reason of or arising out of any latent or patent construction defects or physical
conditions, violations of any applicable laws (including without limitation, Uniform Federal
Accessibility Standards) and the presence of any hazardous or toxic substances, mold, fungi,
chemicals or wastes in, on or under any portion of the Property, whether or not revealed to
Purchaser by Seller or in the course of Purchaser’s inspections and investigations of the Property
in connection with its due diligence, which waiver and release shall survive the Closing hereunder.
Notwithstanding anything to the contrary contained in this Section 3(b)(2), Purchaser: (i) shall
have the right to bring a contribution claim against Seller only by joining Seller in any action,
including any administrative proceeding brought by a third party against Purchaser arising from the
environmental condition of the Property prior to the date of the Closing, and in such case,
Purchaser shall not be deemed to have released Seller from liability or waived its limited rights
to recover Seller’s fair share of the liability if any, of Seller and Purchaser to the third party
in connecting with Purchaser’s defense of such an action, and nothing herein shall be deemed a
waiver of any defense or claim otherwise available to Seller in such an action and (ii) does not
waive or release any of its rights to compel remediation or recover damages under ISRA (hereinafter
defined) based on a failure of Seller or any tenant to comply with the requirements of ISRA but
does waive and release any right to seek to void the sale or rescind the conveyance of title to the
Property;

               (3) except as otherwise expressly provided herein or expressly provided in any documents
delivered by Seller at Closing, Purchaser has not relied on any representations or warranties, and
Seller has not made and is unwilling to make any representations or warranties, in either case
express or implied as to the Property including, but not limited to (i) the real estate tax
liability, assessment or valuation of the Property; (ii) the

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compliance of the Property with applicable building codes, rent control laws or zoning
ordinances and the ability to obtain a variance in respect to any non compliance, if any, with said
zoning ordinances; (iii) the availability of any financing for the purchase, alteration,
rehabilitation or operation of the Property from any source; (iv) the use of the Property,
including but not limited to the conversion of the Property to cooperative or condominium form of
ownership; (v) the condition and operating state of the Property including without limitation, any
and all machinery, equipment or appliances on or in the Property, and the structural and physical
condition of any improvements on the Property or their suitability for rehabilitation or
renovation; (vi) the current or future income or expenses of the Property; (vii) the state of title
to the Property; (viii) the presence or absence of violations of any statutes or laws or any
federal, state, regional, county or municipal ordinances, regulations, orders or requirements; or
(ix) the presence or absence in, on or under the Property of any hazardous or toxic substance,
chemicals or wastes (including without limitation, mold, radon, asbestos or lead-based paint).
Seller has not made, does not make and is unwilling to make any representations or warranties as to
the condition, income, expenses, leases, tenants, use, operation, zoning or building code
compliance, rent control compliance, presence or absence of any hazardous or toxic substances,
chemicals or wastes (including asbestos, mold, radon and lead-based paint), or any other matter or
thing affecting or relating to the Property or title thereto or the transactions contemplated
hereby, except as otherwise expressly provided herein. Purchaser acknowledges and represents that
no such representations or warranties have been made except as otherwise expressly provided herein.
Purchaser is familiar with and experienced in the inspection, purchase and operation of
warehouse/flex and mixed-use properties. Notwithstanding anything to the contrary in this Section
3(b)(3) or elsewhere in this Agreement, nothing shall prohibit Purchaser from bringing claims
(subject to the limitations on such claims expressly set forth herein) against Seller for breach of
the representations, warranties and covenants of Seller set forth in this Agreement or in the other
documents delivered by Seller at Closing, which claims are hereby expressly reserved by Purchaser;
and

               (4) The acceptance of the Deed (hereinafter defined) by Purchaser shall be deemed full
compliance by Seller of all of Seller’s obligations under this Agreement except for those
obligations of Seller which are specifically stated to survive Closing and those obligations of
Seller set forth in Section 9.

          (c) Seller will terminate all Operating Agreements at Seller’s sole cost at or prior to
Closing and will endeavor to make the terminations effective as of the Closing Date and, if and to
the extent any Operating Agreement cannot be terminated as of the Closing Date, it will be
terminated as of the earliest date that termination is permitted by such Operating Agreement. All
Operating Agreements that cannot be terminated as of the Closing Date shall be assumed by Purchaser
at Closing.

          (d) During the Due Diligence Period, Seller and Purchaser shall negotiate in good faith all
terms and conditions of an easement to be reserved by Seller at Closing providing access between
the land locked parcel of land lying to the east of the Property that is owned by an affiliate of
Seller and an accessible public right of way adjoining the Property (“Reserved Access
Easement”). Seller can elect at any time not to enter into the Reserved Access Easement.

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          (e) Seller acknowledges and agrees that Purchaser will contact Seller’s managing agent to
obtain copies of and to discuss any management and financial reports prepared for the Property and
to discuss the operation of the Property. Seller also acknowledges and agrees that Purchaser will
contact tenants at the Property and any municipal or governmental officials and utility or service
providers concerning the Property. Purchaser agrees to give Seller reasonable prior notice of, and
allow Seller the opportunity to have a representative present during, any such contacts. Without
limiting the foregoing, Seller agrees that Purchaser may contact the real property assessor’s
office for purpose of pursuing a change in the Property’s classification to “4B Industrial,” and
Seller shall reasonably cooperate (at no cost to Seller) with Purchaser’s efforts in connection
therewith.

          (f) Seller acknowledges that Purchaser must comply with certain acquisition audit or
disclosure requirements pursuant to rules and regulations of the United States Security and
Exchange Commission (“SEC”). Prior to the expiration of the Due Diligence Period,
Purchaser shall, at its sole cost and expense, use commercially reasonable efforts to complete
audits of the Property. At no cost to Seller, Seller shall cooperate in good faith to assist
Purchaser in Purchaser ‘s obtaining (at Purchaser ‘s sole cost and expense) audited financial
statements for the Property (the “Audited Financial Statements”) and unaudited financial
statements for the interim period since the date of the Audited Financial Statements (the
“Interim Financial Statements”), which Audited Financial Statements and Interim Financial
Statements shall be prepared in compliance with Rule 3-14 of Regulation S-X under the Securities
Act of 1933, as amended (the “Securities Act”). Such cooperation by Seller shall include
the execution by Seller of a so-called “auditor’s representation letter” in the form attached
hereto as Schedule 3(f) for the benefit of the preparer of the Audited Financial Statements
and Interim Financial Statements; provided, however, in no event shall the delivery of any such
“auditor’s representation letter” be deemed to subject Seller or any of its affiliates or their
respective partners, members, managers, shareholders, officers, directors, trustees, beneficiaries,
employees or agents to any liability under the Securities Act as an “issuer,” “underwriter” or
“expert.” This provision will survive Closing.

     4. Mortgage Assumption.

          (a) Subject to the terms and conditions hereafter set forth, it is a condition to Seller’s and
Purchaser’s obligation to complete the Closing that (i) Thrivent Financial For Lutherans
(“Lender”) consents to the transfer of title to the Property to Purchaser and Purchaser’s
assumption of the loan from Seller to Lender, in the original principal amount of Seventeen Million
Three Hundred Fifty Thousand Dollars ($17,350,000.00) (the “Loan”), which Loan was evidenced by
that certain Promissory Note dated November 30, 2005 granted by Seller to Lender (the
“Promissory Note”), secured by that certain Mortgage and Security Agreement and Fixture
Financing Statement, dated November 30, 2005, recorded December 6, 2005 in Mortgage Book 5835, page
2330 (the “Mortgage”) and evidenced and secured by other collateral assignments and
security documents and other loan documents which are all described on Schedule 4(a) attached
hereto (the Promissory Note, Mortgage and other loan documents are hereinafter referred to as the
“Loan Documents”), and (ii) Lender agrees:

               (1) on terms reasonably acceptable to Seller, to release Seller and all guarantors, if any, of
the Loan Documents from all of its and their obligations with regard to the

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Loan Documents, including without limitation, liability under all environmental
indemnification agreements and other loan documents executed in connection with the Loan, which
obligations arise from and after the Closing Date;

               (2) to modify the Loan Documents so that the Loan is not cross defaulted or cross
collateralized with either or both of the loans (collectively, the “Maryland Loan”) from
Lender to Bedminster Capital Funding Professional Place, L.L.C. and from Lender to Bedminister
Capital Funding Professional Place, L.L.C. (collectively, “Maryland Borrower”), which
Maryland Loan is secured by mortgages or deeds of trust on properties in Landover, Maryland and
Lanham, Maryland;

               (3) not to require pay down of the Maryland Loan by more than $8 million or require Seller or
the Maryland Loan Borrower to cause additional collateral to be posted for payment of the Maryland
Loan;

               (4) not to require any modifications of the Maryland Loan (other than as set forth in clauses
(2) and (3) hereof) that are not acceptable to Seller or the Maryland Loan Borrower, in their sole
discretion, and

               (5) to allow the Loan to be assumed on terms reasonably acceptable to Purchaser to effectuate
the valid assignment of the Loan Documents to Purchaser and Purchaser’s valid and binding
assumption of the Loan and the Loan Documents. Terms for assumption of the Loan shall be
reasonably acceptable to Purchaser provided that (A) none of the economic or other material terms
of the Loan Documents (other than permitted transfer provisions and those relating to the Maryland
Loan) are materially adversely changed by Lender, unless such change is satisfactory to Purchaser
in Purchaser’s sole discretion, and (B) Lender agrees to modify the permitted transfer provisions
in the Loan Documents in a manner reasonably acceptable to Purchaser to reflect Purchaser’s
ownership structure.

The agreement of Lender to allow the Loan and the Loan Documents to be assumed on the terms and
conditions above set forth is referred to as the “Lender’s Consent”. Seller shall have the
right to waive all or any of the terms and conditions in Section 4(a)(ii)(1), (3) and (4), in its
sole discretion by notice to Purchaser not later than three (3) business days after receipt of a
Lender’s Rejection (as hereafter defined). Purchaser shall have the right to waive the terms and
conditions in Section 4(a)(ii)(5) in its sole discretion by notice to Seller not later than three
(3) business days after receipt of a Lender’s Rejection. If the waiver of the foregoing conditions
would cause a Lender’s Rejection to become a Lender’s Consent, and if the foregoing conditions are
waived by Seller and Purchaser, as the case may be, within the time herein provided, then the
Lender’s Rejection shall be deemed to be a Lender’s Consent. In no event shall the parties have
the right to waive the terms and conditions in Section 4(a)(ii)(2).

          (b) Seller shall use its best efforts to obtain the Lender’s Consent and to cause the
satisfaction of any conditions thereto that are within Seller’s reasonable control to satisfy,
including without limitation endeavoring to obtain estoppel certificates and/or subordination,
non-disturbance and attornment agreements from tenants in form reasonably satisfactory to Lender
(and in furtherance thereof shall submit to Lender for review and comment the forms of estoppel
certificates to be requested from tenants pursuant to Section 9(g)) and to cause the Title

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Company to issue any endorsements to Lender’s title policy required by Lender. Purchaser,
within five (5) days from the request of Seller, shall provide all requested information and/or
documentation to Seller (including, but not limited to, financial information) and, to the extent
requested by Seller, complete all forms and applications required by Lender (and/or its servicer
and/or special servicer) in connection with obtaining the Lender’s Consent. Seller agrees to
submit same and all other required information to Lender promptly upon receipt from Purchaser.
Upon request by Seller, Purchaser shall promptly deliver to Seller any documentation and/or
information thereafter required by the Lender, its servicer and/or special servicer in order to
process such request.

          (c) Purchaser shall use its best efforts to cooperate with Seller to diligently procure the
Lender’s Consent. Purchaser agrees: (i) if required by Lender, Purchaser shall form an appropriate
entity or entities to acquire the Property or ownership of the Purchaser, or both, to comply with
the terms of the Loan Documents, and the ownership structure of such entities shall be in
accordance with Lender’s requirements; (ii) to take all reasonable actions as shall be required by
Lender to effectuate the substitution of qualified and credit worth parties acceptable to Lender
(which shall in no event be officers or employees of Purchaser or other individual persons) to
assume certain recourse obligations (including, without limitation, obligations related to
non-recourse carve-out provisions and environmental indemnifications) under the Loan Documents
(“Substitute Guarantor”), provided that the scope of such recourse obligations and the
liability of the Substitute Guarantor therefor shall be no different from that which is provided
under the existing Loan Documents, and (iii) to execute, and to cause the Substitute Guarantor to
execute, such assignments, assumptions and other agreements and documents as may be required by
Lender in connection with the application for Lender’s Consent and, if such Consent is obtained,
assumption of the Loan Documents (“Loan Assumption Documents”), provided that (A) none of
the economic or other material terms of the Loan Documents (other than permitted transfer
provisions and those relating to the Maryland Loan) are changed by Lender, unless such change is
satisfactory to Purchaser in Purchaser’s sole discretion, and (B) Lender agrees to modifications of
the permitted transfer provision in the Loan Documents to reflect Purchaser’s ownership structure.

          (d) “Best efforts,” as used in this Section 4, shall not require a party to commence legal
proceedings or pay any moneys other than Lender’s ordinary and customary application fees and
ancillary fees, which shall be paid by Seller in accordance with Section 4(f).

          (e) At Seller’s option, in its sole discretion, and subject to any required consent of Lender,
all funds escrowed on account of the Loan for taxes, insurance, repairs, maintenance and for any
other reason, may be assigned to Purchaser, and if assigned shall be subject to Section 2(b); if
not assigned, Seller shall be entitled to receive and retain all such escrowed funds from the
Lender and Purchaser shall deposit with Lender all amounts required to be held in escrow in
connection with the Loan. Notwithstanding the foregoing, any escrow or reserve account holding the
Award shall be governed by Section 11(c).

          (f) Seller shall pay all application, administrative, transfer and other fees and charges
imposed by Lender or its legal counsel in connection with application for and granting of Lender’s
Consent and all other costs incurred by Lender and required to be reimbursed in connection with the
Loan assumption, including the costs of any endorsements to Lender’s title

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policy (all such fees and charges are hereinafter referred to as the “Lender’s Fees”).
Seller and Purchaser each shall pay their own legal fees and expenses.

          (g) Seller will keep Purchaser reasonably apprised of the status of its applications for
Lender’s Consent, and Seller agrees that Purchaser may negotiate those terms of the Loan Assumption
Documents solely affecting Purchaser directly with Lender. Notice from Lender to Seller that it
will not allow the Loan to be assumed or that it will allow the Loan to be assumed but in a manner
not constituting a Lender Consent as defined in this Agreement is referred to herein as a
“Lender’s Rejection”. Seller shall promptly notify Purchaser of a Lender’s Rejection.

          (h) If the Lender’s Consent is not received on or before the date which is five (5) days prior
to the initially scheduled Closing Date (“Lender Consent Deadline”), and provided a
Lender’s Rejection has not been received, then Seller and Purchaser shall each have the right, by
notice to the other party on or before the original Lender Consent Deadline, to extend the Lender
Consent Deadline (and the scheduled Closing Date) by thirty (30) days. Each party shall have the
further right to extend the scheduled Closing Date by up to thirty (30) days after receipt of
Lender’s Consent if needed in order to satisfy the conditions of the Lender’s Consent. Subject to
Section 4(i) below, if the Lender’s Consent is not obtained by the Lender Consent Deadline (as same
may be extended), unless otherwise agreed to in writing by Purchaser and Seller, this Agreement
shall terminate, in which event Purchaser shall be entitled to a refund of the Deposit, together
with any accrued interest thereon in accordance Section 3(a)(5). Upon receipt of a Lender’s
Rejection (and provided it has not become a Lender’s Consent by virtue of Seller’s or Purchaser’s,
or both Seller’s and Purchaser’s, waiver of certain terms and conditions as provided in Section
4(a)), subject to Section 4(i) below, this Agreement shall terminate in which event Purchaser shall
be entitled to a refund of the Deposit, together with any accrued interest thereon in accordance
Section 3(a)(5). If this Agreement is terminated because a Lender’s Consent was obtained in all
respects but for the Lender’s requirement that there be modifications of the Maryland Loan that are
not acceptable to Seller or the Maryland Loan Borrower, then Seller will reimburse Purchaser’s
actual, documented out-of-pocket fees and expenses incurred after execution of this Agreement for
Purchaser’s investigations and inspections under Section 3(a) of this Agreement during the Due
Diligence Period, not to exceed $50,000.00.

          (i) Should Lender issue a Lender’s Rejection or not issue a Lender’s Consent within the time
provided in this Agreement, the parties may but shall be under no obligation to negotiate terms and
conditions pursuant to which the Loan shall be paid and discharged as a lien against the Property
and Closing shall proceed, subject to all other terms and conditions in this Agreement.
Notwithstanding the immediately preceding sentence, if Purchaser, by notice not later than five (5)
business days after the Lender Consent Deadline or after Lender issues a Lender’s Rejection,
elects, in its sole discretion and without any obligation to do so, to acquire the Property without
assuming the Loan and agrees to pay any and all prepayment, yield maintenance, defeasance or other
similar charges directly related to the prepayment of the loan (i.e., excluding any amounts
attributable to causing the Maryland Loan and the Loan to no longer be cross-defaulted or
cross-collateralized) (collectively, “Defeasance Charges”), without credit against the
Purchase Price or claim against Seller and without utilizing any funds being held in escrow by
Lender (all such escrowed funds shall remain the property of and be remitted to

10

 

Seller), and provided neither Seller nor the Maryland Loan Borrower will be required to pay
the Maryland Loan in whole or in part or provide additional collateral for the Maryland Loan as a
result of Purchaser’s election to pay the Loan, and neither Seller’s nor the Maryland Loan
Borrower’s obligations and liabilities under the Maryland Loan will be affected by Purchaser’s
election to pay the Loan, in Seller’s reasonable judgment, then Seller and Purchaser shall proceed
with Closing on the tenth (10th) business day after Purchaser’s notice as provided in
this sentence (subject to extension as elsewhere provided in this Agreement and provided that all
other conditions precedent to Closing have been satisfied or waived), in which case the Cash
Portion shall be $28,200,000.00, Purchaser shall pay the Defeasance Charges without credit against
the Purchase Price, the Loan (excluding the Defeasance Charges) shall be paid utilizing the Cash
Portion, and the liens of the Mortgage and other Loan Documents shall be removed.

     5. Title.

          (a) Unless waived by Purchaser and subject to the terms and conditions in this Section 5, it
is a condition precedent to Purchaser’s obligation to complete Closing that, as of Closing, the
Title Company (hereafter defined) or if the Title Company will not do so, any other major title
insurer, insures Purchaser’s title to the Property pursuant to an ALTA 2006 Owner’s Title Policy
identifying Purchaser as the named insured, with coverage in the amount of the Purchase Price,
subject only to the Permitted Exceptions (hereafter defined) and containing such endorsements as
Purchaser may reasonably require, that can be issued in New Jersey and that Purchaser has requested
and that the Title Company has committed to issue during the Due Diligence Period (“Title
Policy”). Those exceptions noted on Schedule 5(a) annexed hereto and any matters
waived by Purchaser in accordance with this Section 5 are collectively, “Permitted
Exceptions”.

          (b) Within two (2) business days after the date of this Agreement, Purchaser shall order a
title commitment (the “Title Commitment”) from First American Title Insurance Company
(“Title Company”) through its agent, US Title Solutions, and may order a survey of the
Property at Purchaser’s sole cost. Purchaser shall notify Seller of Purchaser’s objections to
title including matters based on a survey of the Property, excluding any Permitted Exceptions
listed on Schedule 5(a) (“Title Objections”) not later than the expiration of the
Due Diligence Period (“Title Objection Deadline”). If Purchaser fails to notify Seller of
Title Objections by the Title Objection Deadline, Purchaser shall be deemed to have waived its
right to assert Title Objections. Notwithstanding anything to the contrary in the immediately
preceding sentence, if Purchaser obtains a supplement or update to its Title Commitment which
indicates any new defects in title and/or survey, Purchaser shall have the right to supplement the
Title Objections within five (5) days of receipt of such supplement or update and the provisions of
this Section 5(b) shall apply to any new defects or encumbrances of title.

          (c) Not later than three (3) business days after Purchaser’s notice of Title Objections,
Seller will notify Purchaser in writing whether or not Seller will remove the Title Objections. If
Seller notifies Purchaser that Seller will not or cannot remove Title Objections (nothing contained
herein shall obligate Seller to remove any Title Objections), then the Title Objections shall
become Permitted Exceptions, without abatement in the Purchase Price or claim against Seller,
unless Purchaser notifies Seller of its election to terminate this Agreement within

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five (5) days after Purchaser’s receipt of Seller’s notice that Seller will not or cannot
remove the Title Objection.

          (d) If Seller elects to remove Title Objections, then at Seller’s option the Closing Date will
be extended for the time reasonably required to enable Seller to remove Title Objections, provided,
that, in no event shall the Closing be extended pursuant to this Section 5(d) for more than thirty
(30) days.

          (e) Notwithstanding anything to the contrary herein, all Monetary Liens (hereafter defined)
shall be removed by Seller at or prior to Closing, excluding the lien for taxes and assessments not
due and payable as of the Closing, the Mortgage and other Loan Documents and any lien or
encumbrance caused by Purchaser or its agent. At Seller’s option, Monetary Liens, provided that
they do not exceed $100,000 in the aggregate, shall be deemed to have been removed if payment is
bonded or if the Title Company is willing to insure Purchaser against loss by reason thereof, based
on Seller’s bond, indemnity, escrow or other acceptable arrangement. “Monetary Liens” mean
all judgments, mortgages, UCC-1 financing statements, collateral assignments of rents and leases,
contractor’s liens, past due real estate taxes and other governmental assessments (except as
excluded above) and penalties and fines which constitute liens against the Property.

          (f) In no event shall Seller be liable to Purchaser for damages if Seller is unable or
unwilling to cure any title objections as provided herein, any right to claim such damages being
expressly waived by Purchaser, except if (i) the creation of any title objection is a default by
Seller pursuant to Section 9(d) hereof or (ii) Seller fails to cure a Title Objection that it has
agreed to cure pursuant to Section 5(c).

     6. Closing.

          (a) The closing of the transaction hereunder (the “Closing”) shall occur at the
offices of Seller’s counsel, Gibbons P.C., One Gateway Center, Newark, New Jersey 07102 at 10
o’clock a.m. (Eastern Time) ten (10) business days following (and excluding) the last day of the
Due Diligence Period but in no event until two (2) business days after delivery of all Seller’s
closing documents into escrow and satisfaction of all conditions precedent to Closing, unless the
Closing is adjourned as and when permitted in accordance with the express provisions of this
Agreement including without limitation, Section 4(h) (such date of the Closing, as the same may be
adjourned as provided above, being herein referred to as the “Closing Date”). In lieu of
an in-person Closing, Seller and Purchaser may agree to complete Closing by depositing all funds
and documents with Escrow Agent, pursuant to mutually acceptable escrow instructions.
Notwithstanding anything to the contrary contained in this Section 6(a), if as the scheduled date
of the Closing Seller has not obtained the required ISRA Approvals as required pursuant to Section
9(e) hereof or the Acceptable Estoppel Certificates from the Required Tenants as provided in
Section 9(g) hereof, then the Closing shall be adjourned for a period not to exceed forty five (45)
to allow Seller to obtain the necessary ISRA Approvals and the Acceptable Estoppel Certificates,
provided that in no event shall Seller have the right under this Section 6(a) to extend the Closing
beyond the date, if any on which the Lender’s Consent shall expire. If the Closing is adjourned
pursuant to the immediately preceding sentence, then the Closing shall

12

 

occur five (5) days after the date Seller has delivered to Purchaser all of the ISRA Approvals
and Acceptable Estoppel Certificates.

          (b) Seller’s obligation to consummate the transaction contemplated by this Agreement on the
Closing Date shall be subject to the satisfaction or performance of the following terms and
conditions, any one or more of which may be waived by Seller in its sole discretion, in whole in
part, on or as of the Closing Date as such may be extended in accordance herewith (except regarding
Subsection (3) below which must be satisfied or waived by Seller on or before the Lender Consent
Deadline):

               (1) Purchaser shall have paid the Closing Payment, delivered all of the documents and other
items required pursuant to Sections 7(b) and 7(c) and shall not be in default of any of its
material obligations hereunder beyond any applicable notice and grace period;

               (2) All of the representations and warranties of Purchaser set forth in this Agreement shall
be true and correct at and as of the Closing Date in all material respects as though such
representations and warranties were made at and as of the Closing Date; and

               (3) On or before the Lender Consent Deadline, the Lender’s Consent shall have been received.

          (c) Purchaser’s obligation to consummate the transaction contemplated by this Agreement on the
Closing Date shall be subject to the satisfaction or performance of the following terms and
conditions, any one or more of which may be waived by Purchaser in its sole discretion, in whole in
part, on or as of the Closing Date as such may be extended in accordance herewith (except regarding
Subsection 6(c)(3) below which must be satisfied or waived by Purchaser on or before the Lender
Consent Deadline):

               (1) Seller shall have delivered all of the documents and other items required pursuant to
Sections 7(a) and 7(c) and shall not be in default of any of its material obligations hereunder
beyond any applicable notice and grace period;

               (2) All of the representations and warranties of Seller set forth in this Agreement shall be
true and correct at and as of the Closing Date in all material respects as though such
representations and warranties were made at and as of the Closing Date;

               (3) On or before the Lender Consent Deadline, the Lender Consent shall have been received;

               (4) Seller shall have delivered to Purchaser Acceptable Estoppel Certificates from the
Required Tenants as provided in Section 9(g);

               (5) The Rent Roll (as hereinafter defined) as of the Closing Date shall be the same as the
Rent Roll attached hereto as Schedule 10(a)(8) except for changes permitted by the terms of this
Agreement, changes in rent as provided by the Leases, scheduled lease expirations and decreases in
rent receipts due to delayed tenant payments or non-payments, provided, that such delayed payments
(i) do not account for more than three percent (3%) of the total monthly rent receipts, and (ii)
are not in arrears for more than thirty (30) days; and

13

 

               (6 ) Subject to the provisions of Section 5, the Title Company shall be unconditionally and
irrevocably committed to issue the Title Policy, subject only to payment of its regularly scheduled
premium.

     7. Closing Documents and Certain Payments. Without limiting any other provisions of
this Agreement:

          (a) Seller shall deliver the following to Purchaser on or before Closing:

               (1) Bargain and Sale Deed with covenants against Grantor’s Acts (“Deed”), duly
executed and acknowledged, conveying title to the Property, in the form annexed as Schedule
7(a)(1);

               (2) Affidavit of Title, duly executed and acknowledged, in the form annexed as Schedule
7(a)(2);

               (3) Assignment and Assumption of Leases, Security Deposits and Bonds in lieu of Security
Deposits (“Lease Assignment and Assumption”), duly executed, in the form annexed as
Schedule 7(a)(3);

               (4) Assignment and Assumption of Operating Agreements, duly executed, in the form annexed as
Schedule 7(a)(4) regarding those Operating Agreement, if any, that are not terminated at or
before the Closing;

               (5) Bill of Sale and General Assignment, duly executed, in the form annexed as Schedule
7(a)(5);

               (6) A notice to the tenants substantially in the form annexed as Schedule 7(a)(6),
advising them of the sale of the Property, assignment of lease and Security Deposits, providing the
name and address of the Purchaser or its agent and the location to which rent shall be paid, and
such other information reasonably requested by Purchaser at least five (5) business days prior to
Closing;

               (7) A FIRPTA certificate duly executed in the form annexed as Schedule 7(a)(7);

               (8) Original executed copies (or, if no originals are available, duplicate copies) of all
Leases and Operating Agreements and all other records and files relating to the current leasing,
operation and maintenance of the Property;

               (9) As-built architectural and engineering drawings, utilities layout plans, topographical
plans and the like used in the construction of the buildings, structures and other improvements on
the Property in Seller’s or its agents’ or affiliates’ possession, without warranty or
representation.

14

 

               (10) The original of any letter of credit or bonds then held by Seller as security for the
performance of the obligations of any tenant under the Leases, together with any documents which
may be required pursuant to the applicable letter of credit or bond to effectuate a transfer of the
letter of credit or bond to Purchaser. If Seller is unable to transfer any such letter of credit
as provided in this Section 7(a)(10) at or prior to Closing, (A) Seller shall cooperate with
Purchaser in arranging for the assignment to Purchaser of the beneficiary’s interest under such
letter of credit or issuance of a new letter of credit to Purchaser promptly following the Closing,
and (b) if requested by Purchaser and to the extent Purchaser has not been made a beneficiary under
any such existing or new letter of credit, upon the default by a tenant under its Lease, Seller
shall present such letter of credit for payment and Purchaser shall indemnify Seller for, and hold
Seller harmless against, any and all loss, liability, costs or expenses (including reasonable
attorneys’ fees and disbursements) incurred in connection such presentment. The foregoing (other
than Purchaser’s indemnification obligations) shall be at no cost or expense to Purchaser. This
Section 7(a)(10) shall survive the Closing;

               (11) A schedule of all security deposits, bonds and Letters of Credit in lieu of cash security
deposits actually received by Seller pursuant to the Leases (collectively, the “Security
Deposits”);

               (12) An updated “Rent Roll” (as defined in Section 10(a)(8)) setting forth all arrears
in rents from current tenants and all prepayments of rents as of the Closing Date;

               (13) Evidence of the authority of Seller to enter into the transaction evidenced by this
Agreement and the due authorization of the persons executing and delivering the Closing documents
on behalf of Seller;

               (14) A settlement statement reflecting moneys disbursed and Closing prorations and adjustments
executed by Seller (the “Closing Statement”);

               (15) Any other document required to be delivered or payment required to be made at the Closing
hereunder pursuant to the provisions of this Agreement;

               (16) Such instruments, agreements or other documents as may be necessary (provided the same do
not, singly or in the aggregate, materially increase Seller’s liabilities or decrease Seller’
rights as a consequence of the transactions contemplated hereunder) or convenient in order to
effectuate any of the provisions of this Agreement, or as reasonably requested by Purchaser or the
Title Company to consummate the transaction contemplated herein, or to confirm any of the
provisions of this Agreement;

               (17) A certificate, dated as of the date of Closing and duly executed, stating that the
representations and warranties of Seller contained in this Agreement are true and correct in all
material respects as of the Closing;

               (18) All keys, master keys to all locks at the Property which are in the possession or control
of Seller;

15

 

               (19) All originals of certificates of occupancy, licenses, permits, authorizations, consents
and approvals with respect to the Property in the possession or control of Seller listed in
Schedule 7(a)(19);

               (20) The original tax bills for the Property;

               (21) If any tenant on the Property is an “industrial establishment” in accordance with New
Jersey Industrial Site Recovery Act, NJSA 13:1K-6 et seq. and the regulations promulgated pursuant
thereto (collectively “ISRA”), Seller shall cause each such tenant to deliver to Purchaser
an ISRA Approval as described in Section 9(e) and copies of all applications, documents and
correspondence submitted to NJDEP in connection therewith and all correspondence received by each
such tenant in connection therewith; and

               (22) The Reserved Access Easement.

          (b) Purchaser shall deliver the following to Seller on or before Closing:

               (1) The payment required under the provisions of Section 2 of this Agreement in order to
satisfy in full Purchaser’s obligation to pay the Purchase Price;

               (2) The Lease Assignment and Assumption, duly executed, in the form annexed as Schedule
7(a)(3);

               (3) Assignment and Assumption of Operating Agreements, duly executed, in the form annexed as
Schedule 7(a)(4);

               (4) The Closing Statement duly executed;

               (5) Evidence of the authority of Purchaser to enter into the transaction evidenced by this
Agreement, including the assumption of the Loan and the Loan Documents by Purchaser, and the due
authorization of the persons executing and delivering the Closing documents on behalf of Purchaser;

               (6) Any other document required to be delivered or payment required to be made at the Closing
hereunder pursuant to the provisions of this Agreement;

               (7) Such instruments, agreements or other documents as may be necessary or convenient in order
to effectuate any of the provisions of this Agreement, or requested by Seller or the Title Company
to consummate the transactions contemplated herein, or to confirm any of the provisions of this
Agreement;

               (8) A certificate dated as of the Closing Date, duly executed, stating that the
representations and warranties of Purchaser contained in this Agreement are true and correct in all
material respects as of the Closing; and

               (9) The Reserved Access Easement.

          (c) Subject to the provisions of Section 4, Purchaser and Seller each, as applicable, shall
execute and deliver (and, as necessary, shall cause any Substitute Guarantor and

16

 

any existing guarantor, respectively, to execute and deliver) the Loan Assumption Documents to
Lender at or before Closing, and Lender shall have executed and delivered the Loan Assumption
Documents, as applicable, to Purchaser and Seller, at or before Closing, and all conditions stated
therein to be satisfied on or prior to Closing as a requirement of Lender’s Consent, including
without limitation delivery of required estoppel certificates, if any, and/or subordination,
non-disturbance and attornment agreements, if any, from tenants and issuance of any required
endorsements to Lender’s title policy, shall be satisfied.

          (d) Purchaser shall be entitled to possession of the Property, subject to the Permitted
Exceptions and rights of all tenants, solely as tenants, upon completion of Closing.

          (e) All documents or other deliveries required to be made by Purchaser or Seller at or prior
to the Closing, and all transactions required to be consummated concurrently with the Closing,
shall be deemed to have been delivered and to have been consummated simultaneously with all other
transactions and all other deliveries, and no delivery shall be deemed to have been made, and no
transaction shall be deemed to have been consummated, until all deliveries required by Purchaser
and Seller shall have been made, and all concurrent or other transactions shall have been
consummated.

          8. Closing Adjustments; Transaction Costs.

          (a) Provided that Seller has physically received the Deposit and Closing Payment no
later than 5:00 p.m. (Eastern Time) on the Closing Date, the following items are to be
prorated or credited (as appropriate) as of 11:59 p.m. on the day immediately preceding the
Closing Date, it being understood that for purposes of prorations, Purchaser shall be
deemed the owner of the Property on the Closing Date and therefore entitled to all revenues
and responsible for all expenses for the entire date of Closing, provided that if Seller
has not received said funds as of the time described above, for purposes of prorations
Seller shall be deemed the owner of the Property on the Closing Date and Purchaser shall be
deemed the owner of the Property as of the date following the Closing Date:

               (1) Rents and other charges payable by tenants, subject to the provisions of Section 8(d);

               (2) Real estate taxes, disregarding any penalty and on the basis of the fiscal year for which
assessed; provided, however, that if the Closing shall occur before the tax rate is fixed, then the
apportionment of real estate taxes shall be upon the basis of the tax rate theretofore in effect
applied to the latest assessed valuation;

               (3) Water and sewer rents or charges disregarding any penalty and on the basis of the fiscal
year for which assessed, subject to the provisions of Section 8(c) below;

               (4) Utilities (such as fuel), if any, as estimated by Seller’s utility suppliers, valued at
Seller’s cost therefor, including any applicable taxes;

               (5) Supplies, if any, which Purchaser is willing to accept in unopened containers valued at
Seller’s cost therefor, including any applicable taxes;

17

 

               (6) Charges under and pursuant to the Operating Agreements not terminated as of Closing;

               (7) Interest and other charges payable under the Loan Documents shall be allocated as provided
in Section 2(c), and

               (8) Any other item of income and operating expense which is customarily the subject of
proration at closing in connection with the transfer of income producing properties similar to the
Property within the geographic area of the Property.

          (b) If there are any assessments against the Property on the Closing Date, Seller shall pay
same if the work giving rise to the assessment was commenced prior to the date first set forth in
this Agreement, but if the work giving rise to the assessment was commenced subsequent to the date
first set forth in this Agreement, such assessment shall be paid by Purchaser. Purchaser shall
assume in writing all obligations and liabilities with respect to any pending special assessments
for work that has been ordered by the local jurisdiction but has not yet been completed.

          (c) Seller shall furnish a reading of the water and electric meters on the Property to a date
not more than five (5) days prior to the Closing and, except as set forth below, the unfixed meter
charge and the unfixed sewer rent, if any, based thereon, for the intervening time shall be
apportioned on the basis of such last reading.

          (d) (1) Supplementing the provisions of Section 8(a)(1) above, rent, utility and all other
sums which are due and payable by any tenant but uncollected as of the Closing (collectively,
“Delinquent Amounts”) shall be prorated as provided in Section 8(a) but shall not be paid
or credited until such time, if any, as they are actually collected. At Closing, Seller shall
deliver to Purchaser a schedule of all such Delinquent Amounts. If any Delinquent Amounts are
inadvertently omitted from such schedule, Seller will not be deemed to have waived its rights to
collect such Delinquent Amounts as provided herein. Purchaser shall include such Delinquent
Amounts in the first bills thereafter submitted to the tenants in questions after the Closing, and
shall continue to do so thereafter unless the subject tenant, prior thereto, ceases to be a tenant
of the Property. Purchaser shall promptly remit to Seller any such Delinquent Amounts paid by
tenants to the extent attributable to the period prior to the Closing. Notwithstanding anything to
the contrary in this Agreement, all amounts received from tenants from and after the Closing Date
shall be first applied to any monthly rent and charges owed to Purchaser from and after the Closing
Date, and any balance shall then be applied to the most recent arrearage

               (2) Without limiting the provisions of Sections 8(a) and (d)(1) above, Seller hereby reserves
its right to any rents or other sums due from tenants under any of the Leases for any period prior
to the Closing and reserves the right to bring legal proceedings directly against tenants for
collection of any sums due Seller from such tenants (without seeking eviction of any tenant).

               (3) If Purchaser or its property manager receives any rents or other sums from any tenant to
which Seller shall be entitled under this Section 8 then Purchaser shall hold the same in trust for
the benefit of Seller and promptly remit the same to Seller. If Seller or

18

 

its property manager receives any rents or other sums following Closing to which Purchaser
shall be entitled under this Section 8 then Seller shall hold the same in trust for the benefit of
Purchaser and promptly remit the same to Purchaser.

               (4) Real estate tax payments, common area maintenance charges, operating cost pass throughs,
additional rentals and other retroactive rental escalations, sums or charges payable by tenants
(collectively, “Retroactive Charges”) shall be prorated and adjusted as hereafter provided.
If there are any Retroactive Charges which are calculated at the end of a calendar or fiscal year,
or at the end of some other measuring period (for example, percentage rentals), then the
Retroactive Charges due and payable for all measuring periods which expired before Closing shall be
and remain the property of Seller and if unpaid as of Closing shall be treated as Delinquent
Amounts as above provided in Section 8(d)(1). If there are any Retroactive Charges which are
calculated at the end of a calendar or fiscal year, or at the end of some other measuring period,
and if the termination of the relevant measuring period does not coincide with the Closing, then
Retroactive Charges for the measuring period which began before Closing and ends after Closing (the
“Current Measuring Period”) shall be adjusted as soon as reasonably practicable after the
Current Measuring Period ends, and in all events within 60 days after the end of the Current
Measuring Period. Seller shall be entitled to a percentage of Retroactive Charges (“Seller’s
Portion”) equal to the percentage of the Current Measuring Period that expired as of Closing
and Purchaser shall be entitled to the balance of the Retroactive Charges for the Current Measuring
Period (“Purchaser’s Portion”). If Purchaser receives payment after Closing which includes
Seller’s Portion of Retroactive Charges, in whole or in part, or should Seller receive payment
including Purchaser’s Portion, in whole or in part, such funds shall be deemed to be held in trust
for the other party and the recipient shall notify the other party as soon as possible upon receipt
of payment and shall remit such Portion to the other party within ten (10) days after it is
received. Seller shall remain liable for any amounts owed to tenants on account of reconciliation
of any Retroactive Charges with respect to any calendar year or fiscal year prior to Closing or for
Seller’s Portion of any such amounts owed to tenant’s in the Current Measuring Period, which
obligation shall survive the Closing. To the extent possible, Seller will be responsible for
administering, and in all cases will be given notice of and the right to participate in, any audit
by a tenant of Retroactive Charges.

          (e) Each party shall pay its own attorney’s fees, paraprofessional fees and any other costs,
expenses or charges associated with the transactions contemplated hereunder, except as expressly
set forth in this Agreement. Seller shall pay transfer tax, Lender’s charges for assumption of the
Loan and the Loan Documents as described in Section 4(f) and the costs of curing any Title
Objections that Seller elects to cure under Section 5(c), including the costs of any curative
endorsements to the Title Policy. Purchaser shall pay the cost of (1) any title commitment and the
Title Policy, (2) all costs and expenses related to any financing arranged by Purchaser with regard
to the Cash Portion (it being acknowledged by Purchaser that its obligations hereunder are not
contingent upon any such financing), (3) mansion tax, if applicable and (4) all recording costs
other than the cost of recording satisfactions, discharges and other similar documents Seller is
obligated to provide hereunder.

          (f) Seller shall be entitled to recover any and all deposits held by any utility company as of
the date of Closing. To the extent Purchaser fails to provide, where required, deposits to any
utility company as of the Closing so as to prevent the timely release of any

19

 

deposit by Seller to Seller as of the Closing, the amount of such deposit shall be credited to
Seller at Closing and the Purchase Price shall be adjusted accordingly. In such event, the
deposit(s) will be assigned to Purchaser who shall thereafter be entitled to have the deposit(s)
released to it upon satisfaction of any conditions imposed by the utility company.

          (g) At Closing, Seller shall afford Purchaser a credit in the amount of all cash Security
Deposits, including any interest thereon, held by the Seller or its agent as of the Closing Date
and shall deliver appropriate instruments of transfer or assignment with respect to any Security
Deposits that are other than cash as more particularly set forth in Section 7(a)(10). Purchaser
shall be entitled to a credit against the Purchase Price in an amount equal to any fees payable by
Purchaser to the issuer of any letter of credit in connection with the transfer of any such letter
of credit to Purchaser in connection with Closing, unless such fees are payable by the tenant on
whose behalf the letter of credit was issued.

          (h) Premiums on insurance polices will not be adjusted. As of the Closing Date, Purchaser
will effect its own insurance coverage.

          (i) Purchaser shall receive a $15,000.00 credit against the Purchase Price on account of the
brokerage commission due in 2012 in connection with the Bridgewater Basketball lease extension, and
Purchaser will pay the commission as and when due and indemnify and hold harmless Seller from
Claims and Damages due to non-payment, which indemnification shall survive Closing.

          (j) Except as otherwise expressly provided herein, adjustments shall be made in accordance
with the customs with respect to title closings where the Property is located. If any amounts
prorated hereunder are based on estimates, the parties agree to perform a post-Closing
reconciliation promptly after the actual information becomes available and in any event within 90
days after Closing.

          (k) If, after the Closing, the parties discover any errors in adjustments and apportionments,
same shall be corrected as soon after their discovery as possible. The provisions of this Section
8(k) shall survive the Closing, except that, subject to Section 8(d)(4), no adjustments shall be
made later than 90 days after the Closing Date unless prior to such date the party seeking the
adjustment shall have delivered a written notice to the other specifying the nature and basis for
such claim.

          (l) The provisions of this Section 8 shall survive the Closing.

	 	9.	 	Seller’s Obligations Pending Closing.

          (a) Prior to Closing, Seller shall also maintain its existing fire and extended coverage
insurance, to the extent currently maintained, with respect to the Property and shall continue to
manage and operate the Property in the manner managed and operated as of the date of this
Agreement. Without limiting the generality of the foregoing, between the date hereof and Closing
Seller shall continue to perform all obligations of landlord under the Leases and shall make all
debt service and other payments required under the Loan, and keep the Leases and Loan free from
defaults on the part of Seller.

          (b) Following the date of this Agreement and prior to Closing, Seller have the right to enter
into lease extensions, renewals and expansions required by the terms of any

20

 

tenant’s lease (an “Of Right” extension, renewal or expansion). Following the date of
this Agreement and prior to the end of the Due Diligence Period, Seller shall have the right to
enter into the leases and extensions identified on Schedule 9(b) annexed hereto
(“Pending Leases/Extensions”). If Closing occurs, Purchaser shall reimburse Seller at
Closing for Purchaser’s proportionate share of any brokerage commission, tenant improvement
contribution paid by Seller, as landlord, or for the cost of tenant improvements made by Seller, as
landlord, for Of Right extensions, renewals or expansions or Pending Leases/Extensions.
Purchaser’s proportionate share shall be based on the portion of the term of any Of Right
extension, renewal or expansion or any Pending Lease/Extension occurring after the Closing Date.
Following the date of this Agreement, until the Due Diligence Period has expired, Seller shall not
enter into any new lease other than the Pending Leases/Extensions, or any extension, renewal or
expansion that would not be considered an Of Right extension, renewal or expansion, without
obtaining Purchaser’s prior written consent, which consent Purchaser agrees shall not be
unreasonably withheld. After the Due Diligence Period has expired and provided this Agreement has
not been terminated as provided in Section 3(a)(4) or under any other termination provision herein,
Seller shall not enter into any new lease or any extension, renewal or expansion that would not be
considered an Of Right extension, renewal or expansion without obtaining Purchaser’s prior written
consent, which consent may be withheld by Purchaser in its sole and absolute discretion; provided,
however, if landlord’s consent cannot be unreasonably withheld with regard to any lease extension,
renewal or expansion occurring after the Due Diligence Period has expired, then Purchaser shall not
unreasonably withhold its consent thereto. Purchaser’s consent shall be deemed to have been given
if Purchaser has not notified Seller of its rejection of any proposed new lease or extension,
renewal or expansion, specifying in reasonable detail Purchaser’s reasons for such rejection,
within ten (10) days after notice from Seller specifying the proposed deal terms in reasonable
detail. At Closing, Purchaser shall reimburse Seller for the portion of the brokerage fees paid by
Seller that are attributable to the term of any new leases approved in accordance with the terms
hereof (other than Pending Leases/Extensions), Lease extensions, renewals and expansions occurring
after the Closing, and Purchaser shall assume and indemnify Seller with regard to all such future
brokerage commission obligations. In addition to the foregoing, after Lender’s Consent has been
received, Seller shall not terminate any of the Leases (except as noted in Schedule 9(b))
or remove any of the tenants under the Leases from possession of their space in the Improvements
unless actions for possession were begun before Lender’s Consent has been received. Seller shall
perform all of the obligations of landlord under the Leases that, under the terms of the Leases,
are required to be performed by the landlord prior to the Closing Date. Seller shall also be
permitted to enter into contracts and agreements relating to maintenance or repair of the Property,
provided such agreements are terminable by Seller at or before Closing without penalty,
cancellation fee or similar fee or compensation. Seller shall promptly provide to Purchaser copies
of any new, or the modification or termination of any existing, Lease, Operating Agreement or other
agreement entered into by Seller affecting the Property between the date hereof and Closing.

          (c) Seller does not undertake or guarantee that any Lease or Operating Agreement will be in
force or effect on the Closing, and Purchaser agrees that the existence or non existence of any
such Lease or Operating Agreement shall not give rise to any reduction or abatement of the Purchase
Price or other claim or remedy on the part of Purchaser against Seller. Seller shall not be
obligated to replace any Lease or Operating Agreement which shall cease to be in effect between the
date hereof and the Closing. Notwithstanding anything to the contrary

21

 

contained in this Section 9(c), any changes in the Rent Roll (other than those permitted
changes as described in Section 6(c)(5)) will result in the pre-condition to the Closing set forth
in Section 6(c)(5) not being satisfied. In such event, Purchaser shall have the right to terminate
this Agreement by delivering notice thereof to Seller and the Deposit and any accrued interest
thereon shall be returned to Purchaser in accordance with the provisions of Section 3(a)(5), which
right shall be deemed waived if not exercised by Purchaser by notice to Seller within seven (7)
business days after Purchaser has notice of a change to the Rent Roll permitting Purchaser to
terminate this Agreement as above provided. Nothing in this Section 9(c) constitutes a waiver of
Purchaser’s rights under and subject to Section 10 of this Agreement arising out of any
misrepresentation by Seller under Section 10(a)(8).

          (d) Seller shall not cause, suffer or permit the Property to be encumbered by any easement,
restriction, monetary or other lien or encumbrance, nor seek or obtain any change in zoning,
variance or permitted use, after the date of this Agreement so long as this Agreement has not been
properly terminated.

          (e) (i) If any tenant leasing space on the Property is an “industrial establishment” pursuant
to ISRA (an “Industrial Tenant”), then not later than five (5) days after the execution and
delivery of this Agreement, Seller shall use commercially reasonable efforts to cause each such
Industrial Tenant to deliver a General Information Notice to the New Jersey Department of
Environmental Protection (“NJDEP”) as required by ISRA. During the Due Diligence Period,
Seller shall engage Joseph Sorge as a Licensed Site Remediation Professional (an “LSRP”)
pursuant to the New Jersey Site Remediation Reform Act, and shall cause the LSRP to prepare a
Preliminary Assessment Report for each Industrial Tenant. Promptly following the expiration of the
Due Diligence Period, provided that this Agreement has not been terminated, Purchaser and Seller
shall, and Seller shall use its commercially reasonable efforts to cause any Industrial Tenant to,
take such actions as are necessary to obtain an ISRA Approval (as defined below). Seller shall
keep Purchaser reasonably apprised of all ISRA Approval application processes and shall promptly
provide to Purchaser each application and all documents and correspondence submitted to, or
received from, NJDEP or any LSRP, including all Preliminary Assessment Reports and amendments or
modifications thereto, in connection therewith, and all correspondence received in connection
therewith. Promptly after receipt of each ISRA Approval, Seller shall provide to Purchaser a copy
of such ISRA Approvals. If Seller or each Industrial Tenant has not obtained an ISRA Approval
prior to the then scheduled Closing Date (as the same may be extended pursuant to, but subject to
the limitations in, Section 6(a)), then either party shall have the right to terminate this
Agreement upon notice to the other party at any time prior to the date on which Seller delivers the
ISRA Approvals for all Industrial Tenants to Purchaser. If this Agreement is terminated pursuant
to this Section 9(e), the Deposit and any accrued interest thereon shall be returned to Purchaser
in accordance with the provisions of Section 3(a)(5). Thereafter this Agreement shall be null and
void and of no further force and effect and neither party shall have any further liability to the
other, except for any obligations that expressly survive termination of this Agreement.

               (ii) As used herein, “ISRA Approval” means : (1) a Remediation Agreement as defined at
N.J.S.A. 13:1K-9 or a Remediation Certification as defined in Section 34 of Chap. 60 of P.L 2009
has been entered into by any Industrial Tenant that is the “responsible party” under ISRA, and a
“Remediation Funding Source” has been posted in

22

 

accordance with ISRA and this Agreement (collectively “Remediation Agreement”), (2) a
No Further Action Letter as defined at N.J.S.A. 58:10B-1 (“NFA”), (3) a Remediation in
Progress Waiver as defined at N.J.S.A. 13:1K-11.5, (4) a de minimis quantity exemption, (5) an
expedited review approval pursuant to N.J.A.C. 7:26B-5.1 through 5.8, or (6) a Response Action
Outcome as that term is defined in Section 2 of Chap. 60 of P.L. 2009 (“RAO”). If the ISRA
Approval is in the form of a Remediation Agreement, Purchaser agrees that Seller shall have the
right to compel the subject Industrial Tenant’s compliance with ISRA after Closing, excluding any
right to terminate the tenant’s lease or evict the tenant, which right Seller will be entitled to
enforce in its own name or in the name of Purchaser, it being agreed that (A) Seller shall use
commercially reasonable efforts to compel such compliance, and (B) Purchaser shall have the right
upon notice to Seller to revoke Seller’s right to compel an Industrial Tenant’s compliance with
ISRA. If Purchaser elects to exercise its rights to compel an Industrial Tenant’s compliance with
ISRA, Seller shall have no further liability to Purchaser regarding ISRA and Purchaser agrees to
look solely and exclusively to any Industrial Tenant for ISRA compliance. If the ISRA Approval is
in the form of a Remediation Agreement, Seller shall cause the Industrial Tenant to post a
“Remediation Funding Source” either in the form of a “Remediation Trust Agreement” (as defined in
ISRA) or any alternative form of funding or guaranty which is acceptable to NJDEP; provided,
however, a Remediation Funding Source in the form of a guaranty acceptable to the NJDEP shall also
be subject to Purchaser’s approval, which approval shall not be unreasonably withheld. Provided
that Purchaser has not exercised its election to compel an Industrial Tenant’s compliance with
ISRA, and subject to the foregoing, Seller will diligently pursue compliance with ISRA and take all
steps necessary to cause each Industrial Tenant to complete ISRA compliance as quickly as
reasonably practicable and to obtain either: (x) an unconditional NFA from NJDEP; or (y) an RAO
applicable to the Industrial Tenant’s leasehold confirming complete performance of Seller’s and/or
any Industrial Tenant’s obligations under any ISRA Approval or ISRA. Seller, at its sole cost and
expense, shall have the option to utilize reasonable institutional or engineering controls. If
necessary following Closing, Purchaser shall execute in form fully acceptable to NJDEP and/or any
Licensed Site Remediation Professional, a letter sufficient to comply with N.J.A.C. 7:26E-8.2(b) or
otherwise necessary to demonstrate the property owner’s consent to a non-permanent remedy including
its consent to a recorded Deed Notice as well as its permission to the use a Classification
Exception Area for natural attenuation and shall thereafter cooperate with Seller by executing and
recording a Deed Notice.

               (iii) This Section 9(e) shall survive Closing.

          (f) Seller, prior to Closing, will promptly (a) comply with, and cure any violations of, all
legal requirements relating to the Property or, if a tenant or tenants are responsible for such
compliance, use reasonable efforts to compel compliance by the responsible tenant or tenants; and
(b) comply with all instruments of record affecting the Property in accordance with the provisions
thereof and within the time period permitted thereby, if and to the extent Seller is required to
comply therewith.

          (g) (i) During the Due Diligence Period (taking into account the anticipated timing for
Lender’s Consent and the need to obtain estoppel certificates that are not outdated), Seller shall
prepare and submit to each tenant under the Leases an estoppel certificate, in the form of
Schedule 9(g) attached hereto (with such changes thereto as Lender may request), with
respect to such tenant’s Lease, or in such other form as may be mandated by such tenant’s
lease.

23

 

Subject to the provisions hereof, Purchaser’s obligation to close title hereunder is
conditioned upon Seller delivering to Purchaser estoppel certificates which conform in all material
respects to the estoppel certificate set forth in Schedule 9(g)(1) or in such other form mandated
by a tenant’s lease (an “Acceptable Estoppel Certificate”) from tenants leasing, in the
aggregate, not less seventy five percent (75%) of the leased rental space in the Property including
at least nine (9) of the ten (10) tenants listed on Schedule 9(g)(2) (“Major Tenants”) (the
tenants required to deliver an Acceptable Estoppel Certificate are hereinafter collectively
referred to as “Required Tenants”). The failure of Seller to obtain Acceptable Estoppel
Certificates from the Required Tenants shall not be deemed a default by Seller so long as Seller
has used reasonable and good faith efforts to do so as required hereby, it being agreed that the
sole remedy of Purchaser for such failure shall be to terminate this Agreement in accordance with
the provisions hereof. In the event of any termination of this Agreement pursuant to this Section
9(g)(i), the Deposit and all accrued interest thereon shall be refunded to Purchaser, whereupon
this Agreement and all rights and obligations of the parties hereunder shall be null and void. An
estoppel certificate received from a tenant shall not be an Acceptable Estoppel Certificate if such
tenant discloses a default on the part of landlord or tenant under its Lease or discloses another
Material Matter (as hereinafter defined). As used herein, a “Material Matter” shall mean a default
or other matter relating to a Lease that, in each case, would subject the landlord thereunder to
any liability, or otherwise adversely affect the rent, additional rent or other revenue that
Purchaser will receive under a Lease after the Closing Date or contain a discrepancy materially
adverse to landlord with the information shown on the Rent Roll attached hereto as Schedule
10(a)(8). Seller agrees to use all reasonable and good faith efforts to obtain an Acceptable
Estoppel Certificate from all tenants under the Leases.

               (ii) If any estoppel certificate is dated more than thirty (30) days prior to the Closing Date
(as the same may be extended pursuant to, but subject to the limitations in, Section 6(a)), then
such estoppel certificate shall not be deemed to be an Acceptable Estoppel Certificate; provided,
however, any estoppel certificate that is dated forty five (45) days or less prior to the Closing
Date (as the same may be extended pursuant to, but subject to the limitations in, Section 6(a))
shall be deemed to be an Acceptable Estoppel Certificate if Seller certifies, to its knowledge,
that all information in such Certificate remains true and accurate as of the Closing Date. In
addition, with regard to any one or more tenants that fail to supply an estoppel certificate within
the time provided in this Agreement, Seller may, but shall be under no obligation to, supply an
estoppel certificate containing Seller’s certifications, to its knowledge, as to those matters as
to which such tenant would have been required to certify, and Seller’s certification shall count
toward meeting the requirement in Section 9(g)(i) for delivering estoppel certificates from
Required Tenants. Seller’s certifications delivered in accordance with this Section 9(g)(ii) shall
be deemed to be added to and part of Seller’s representations in Section 10(a) of this Agreement.

               (iii) Purchaser shall have the right, but not the obligation, to waive the requirements that
Seller furnish Acceptable Estoppel Certificates in accordance with the provisions of Section
9(g)(i).

          (h) (i) Seller acknowledges that Purchaser shall be entitled to file with the State of New
Jersey, the Division of Taxation (the “Division”), a notice of bulk transfer utilizing
form C-9600 (“Bulk Transfer Notice”) and an executed copy of this Agreement, enumerating

24

 

the purchase price and the terms and the conditions hereof, as required by law and as necessary to
obtain a letter of clearance from the Division (the “Letter of Clearance”). Purchaser shall
provide Seller with a copy of its filing with the Division and all correspondence sent or received
in connection therewith, as and when sent or received, as the case may be.

               (ii) Provided Purchaser has filed the Bulk Transfer Notice with the Division at least twenty
(20) days prior to Closing and the Division has issued a notice of required escrow within ten (10)
days of receiving the Bulk Transfer Notice, Purchaser shall have the right to hold back the portion
of the Purchase Price (if any) that is required by the Division in its notice, which amount
(excluding interest accrued thereon, if any, the “Division Escrow”; interest accrued on the
Division Escrow shall not be part of the Division Escrow and shall be paid to Seller from time to
time on demand) shall be held in escrow by the Escrow Agent hereunder as though the Division Escrow
were part of the Deposit hereunder. Purchaser and Seller agree to be bound by the escrow
requirements imposed by the Division. Upon demand by the Division, the Escrow Agent shall disburse
to the Division such amounts from the Division Escrow as the Division shall require. Any remaining
balance of funds in the Division Escrow shall be disbursed to Seller only after the Division has
authorized the release of such funds in writing by issuing a Letter of Clearance or other
authorization and upon Seller’s written request to the Escrow Agent and simultaneous notice to
Purchaser of such request.

               (iii) Seller agrees to indemnify Purchaser for any and all amounts of Seller’s and each of its
partners, members or managers outstanding tax obligations that the Purchaser is responsible for as
determined by the Division.

          (i) The obligations of Seller prior to the Closing pursuant to this Section 9 shall survive
the Closing for a period of six (6) months after the Closing (the “Covenant Survival
Period”) subject to the provisions of this Section 10(c). It is expressly understood and
agreed by and between the parties hereto that the recourse of Purchaser or its successors or
assigns against Seller after Closing with respect to the alleged breach by or on the part of Seller
of any of its obligations under this Section 9 shall (i) be deemed waived unless Purchaser has
filed suit with respect thereto after the Closing but prior to the expiration of the Covenant
Survival Period, and (ii) be limited to an amount not to exceed five percent (5%) of the Purchase
Price in the aggregate for all recourse of Purchaser under this Agreement. Seller shall have no
liability to Purchaser after Closing for a breach or default of any of Seller’s obligations under
this Section 9 unless the valid claims for all such breaches and defaults amount, in the aggregate,
to more than Fifty Thousand Dollars ($50,000.00), in which event the full amount of such valid
claims shall be actionable. Any Seller’s obligations under this Section 9 for which a specific
suit has not been commenced on or before the expiration of the Covenant Survival Period shall
terminate and cease to be of any force or effect, and neither party shall have any right, remedy,
obligation or liability thereunder.

     10. Representations.

          (a) Seller represents that:

               (1) Seller is a limited liability company and is duly organized and validly existing under the
laws of the State of New Jersey, and has the full power and authority

25

 

to enter into and comply with
the terms of this Agreement and has, or at Closing will have, obtained all necessary consents and
approvals to enter into and consummate the transactions contemplated by this Agreement;

               (2) This Agreement and all documents executed by Seller in connection with this Agreement
which are to be delivered to Purchaser at Closing, are or at the time of Closing will be, duly
authorized, executed and delivered by Seller, and are, or at Closing will be, legal, valid and
binding obligations of Seller and do not, and at the time of Closing will not, violate any
provisions of any agreement or judicial order to which Seller is a party or to which Seller is
subject;

               (3) All proceedings required to be taken by or on behalf of Seller to authorize it to make,
deliver and carry out the terms of this Agreement have been taken and this Agreement is the legal,
valid and binding obligation of Seller enforceable in accordance with its terms;

               (4) Except for the Chimney Rock Road Condemnation (hereafter defined), and as hereafter noted,
there are no proceedings at law or in equity before any court, grand jury, administrative agency or
other investigative agency, bureau or instrumentality of any kind pending or, to the best of
Seller’s knowledge, threatened, against or affecting Seller or the Property that (i) involve the
validity or enforceability of this Agreement or any other instrument or document to be delivered by
Seller pursuant hereto, (ii) enjoin or prevent or threaten to enjoin or prevent the performance of
Seller’s obligations hereunder or (iii) relate specifically to the Property (including, without
limitation, the environmental condition of the Property) or the title thereto. To Seller’s
knowledge, a proposal for a zoning change affecting the Property that would add permitted uses and
grandfather existing uses is under consideration by the municipal governing body;

               (5) Seller is not a “foreign person” within the meaning of Section 1445(e)(3) of the Internal
Revenue Code of 1986, as amended;

               (6) Seller is currently (i) in compliance with and shall at all times during the term of this
Agreement remain in compliance with the regulations of the Office of Foreign Assets Control
(“OFAC”) of the U.S. Department of Treasury and any statute, executive order (including
Executive Order 13224, dated September 24, 2001 and entitled “Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), or regulation
relating thereto, and (ii) not listed on, and shall not during the term of this Agreement be listed
on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any
other similar list maintained by OFAC or other governmental authority pursuant to any authorizing
statute, executive order, or regulation;

               (7) Schedule 10(a)(7) is a complete list of all Personal Property as of the date of
this Agreement. All Personal Property is owned by Seller free and clear of any leases, security
agreements or other liens or security interests of any kind;

               (8) Seller has not entered into any agreement (written or oral), other than the Leases and as
set forth in the Permitted Exceptions, granting any rights of possession to

26

 

any third party, and
Seller has not executed any other unterminated agreement of sale, option agreement or right of
first refusal with respect to the Property. Schedule 10(a)(8) (“Rent Roll”) is a
complete list of all Leases, rents, Security Deposits and leasing commissions in connection with
the Leases at the Property and all information on the Rent Roll is true and correct and not
misleading in any material respect. True and complete copies of the Leases have been or will be
made available to Purchaser. Except as noted on the Rent Roll, to Seller’s actual knowledge, (i)
each of the Leases is in full force and effect, unmodified and free from default; (ii) the tenant
under each Lease is in actual possession of the leased premises; (iii) all painting, repairs,
alterations and other work required to be performed by the landlord under each of the Leases has
been fully performed and paid for in full by Seller; (iv) all improvement allowances owed to any
tenant under the Lease have been paid in full by Landlord, (v) no tenant under any of the Leases
has prepaid any rents or other charges for more than the current month, and (vi) no guarantor of a
tenant’s obligations under the Leases has been discharged of its obligations by Seller. Seller has
delivered to Purchaser true and complete copies of all brokerage and commission agreements with
regard to the Leases and no moneys are now due and payable under any of such brokerage and
commission agreements;

               (9) Schedule 10(a)(9) is a complete list of all Operating Agreements affecting the
Property as of the date of this Agreement, true and complete copies of which have been provided or
made available to Purchaser, and Seller has received no written notice that there are any defaults
after notice, if any, and expiration of any applicable grace period, by Seller under any of the
Operating Agreements;

               (10) All sums payable by reason of any labor or materials heretofore furnished with respect to
the Property have been, or in the ordinary course of business prior to the Closing Date will be,
paid, and Seller knows of no material dispute in connection therewith;

               (11) Seller has not received written notice from any governmental agency having jurisdiction
over the Property that the Property or any part thereof is (as of the date hereof) in violation of
any law, ordinance, rule or regulation applicable to the Property, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. § 9061 et seq., Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., The
Resource Conservation and Recovery Act, 42 U.S.C. § 9601 et seq., the Toxic Substance Control Act
of 1976, as amended, 15 U.S.C. § 2601 et seq., ISRA or any other applicable environmental
law, which violation has not been corrected except as described on Schedule 10(a)(11) with respect
to a former tenant, Hosposable Products, ISRA Case No. 91014;

               (12) Seller has forwarded to Purchaser, or during the Due Diligence Period shall make
available to Purchaser, true and complete copies of all reports and investigations in its
possession or under its control relating to the environmental condition of the Property
(collectively, “Environmental Reports”);

               (13) Seller has not received written notice from any governmental agency having jurisdiction
over the Property that the Property or any part thereof is (or has ever
been) in violation of any law, ordinance, rule or regulation applicable to the Property, including,
without limitation, Section 504 of the Rehabilitation Act of 1973, or any other applicable law

27

 

related to physical accessibility; Notwithstanding anything to the contrary in this Agreement,
Seller makes no representation or warranty that the Property is in compliance with the Uniform
Federal Accessibility Standards;

               (14) Seller has not received written notice directed to Seller from any governmental agency
having jurisdiction over the Property that as of the date hereof any of the licenses or permits
held by Seller in connection with its ownership and operation of the Property are to be cancelled,
suspended or modified;

               (15) Seller does not employ any person at the Property, and all persons employed at the
Property (other than such persons as may be employees of any vendor under an Operating Agreement)
are employees of the property manager. Neither Seller nor, to Seller’s actual knowledge, the
property manager, is a party to any union or collective bargaining agreement with respect to the
Property. Seller is not a “governmental plan” within the meaning of section 3(32) of the Employee
Retirement Income Security Act of 1974, as amended, and the execution of this Agreement and the
sale of the Property by Seller is not subject to any state statutes regulating investments of, and
fiduciary obligations with respect to, “governmental plans.”;

               (16) With respect to the Loan Documents, (i) as of April 30, 2010, the outstanding principal
balance of the Promissory Note is $15,642,809, (ii) Lender is not holding any deposits, (iii)
Seller has not received any notices of default from the Lender that remain uncured, (iv) to
Seller’s actual knowledge, Seller is not in default under any of the terms or provisions of the
Loan Documents or any event which, with the passage of time or the giving of notice, or both, would
constitute a default under the Loan Documents, (v) the Loan Documents set forth on Schedule
4(a) are all of the Loan Documents evidencing and/or securing the Loan, and (vi) Seller has
provided to Purchaser or during the Due Diligence Period will provide or make available to
Purchaser, true and complete copies of all of the Loan Documents and documents related to the Loan
Documents, including all material correspondence with Lender in Seller’s possession or control, and
such Loan Documents have not been modified or amended nor has any terms, provisions or obligations
thereunder been waived;

               (17) Seller is not in the hands of a receiver nor is an application for the appointment of a
receiver pending; Seller has not made an assignment for the benefit of creditors, nor has Seller
filed, or had filed against it, any petition in bankruptcy;

               (18) All information and documents heretofore delivered by Seller to Purchaser or to be
delivered by Seller to Purchaser and relating to the Property are, to the knowledge of Seller,
true, complete and accurate in all material respects, and with respect to documents, are true,
correct and complete copies thereof; and

               (19) Seller represents that Kurt Padavano and Brian Banaszynski are the authorized
representatives of Seller that are most familiar with the operations of the Property; and

               (20) To Seller’s actual knowledge, there are no special assessments proposed or pending with
respect to the Property.

28

 

          (b) All references in this Agreement to “Seller’s actual knowledge” or words of similar import
shall refer only to the current actual knowledge of Kurt Padavano and Brian Banaszynski (without
inquiry by them) and shall not be construed to impute any knowledge to Seller or to refer to the
knowledge of any other officer, agent or employee of Seller or any affiliate or any broker or
consultant acting on behalf of Seller. As set forth in Section 3 and elsewhere herein, Purchaser
may not rely on any representations by any person or entity, except for those representations
expressly set forth herein.

          (c) (1) All representations and warranties of Seller set forth in Section 10(a) of this
Agreement shall be deemed to have been made as of the date of this Agreement and again as of the
Closing and shall survive Closing subject to the terms and conditions hereafter set forth.

               (2) Seller’s representations and warranties contained in this Agreement shall survive the
Closing for a period of six (6) months after the Closing (the “Survival Period”) subject to
the provisions of this Section 10(c). Notwithstanding anything to the contrary contained in this
Agreement or in any exhibits attached hereto or in any documents executed or to be executed in
connection herewith (collectively, including this Agreement, said exhibits and all such documents,
the “Purchase Documents”), it is expressly understood and agreed by and between the parties
hereto that the recourse of Purchaser or its successors or assigns against Seller after Closing
with respect to the alleged breach by or on the part of Seller of any representation or warranty
contained in this Agreement or any of the Purchase Documents (collectively, “Seller’s
Undertakings”) shall (i) be deemed waived unless Purchaser has filed suit with respect thereto
after the Closing but prior to the expiration of the Survival Period, and (ii) be limited to an
amount not to exceed five percent (5%) of the Purchase Price in the aggregate for all recourse of
Purchaser under this Agreement and the Purchase Documents. Seller shall have no liability to
Purchaser after Closing for a breach or default of any of Seller’s undertakings unless the valid
claims for all such breaches and defaults amount, in the aggregate, to more than Fifty Thousand
Dollars ($50,000.00), in which event the full amount of such, valid claims shall be actionable.
Any Seller’s Undertakings for which a specific suit has not been commenced on or before the
expiration of the Survival Period shall terminate and cease to be of any force or effect, and
neither party shall have any right, remedy, obligation or liability thereunder. Seller shall not be
liable to Purchaser if Purchaser’s claim is satisfied from Seller’s insurance policies, warranties,
guaranties or leases.

               (3) If, prior to Closing, Seller discovers that any of Seller’s Undertakings have materially
and adversely changed since the date of this Agreement or are inaccurate in any material respect,
Seller shall promptly give written notice thereof to Purchaser (“Seller’s Material and Adverse
Change Notice”). If, on or prior to Closing, Purchaser has or acquires actual knowledge that
any of Seller’s representations and warranties are inaccurate, untrue or incorrect in any material
respect, then promptly after Purchaser receives such actual knowledge thereof, Purchaser shall
notify Seller in writing thereof (“Purchaser’s Material and Adverse Change Notice”).
Within five (5) business days after a Seller’s Material and Adverse Change Notice or a Purchaser’s
Material and Adverse Change Notice, Seller shall notify Purchaser in writing of Seller’s election
(i) not to cure such breach; or (ii) to attempt to cure such
breach within thirty (30) days, and, if necessary, the Closing Date will be extended
accordingly, but not beyond the expiration date of any Lender’s Consent. If Seller elects not to
cure such breach, or if Seller fails to so cure all breaches by the Closing Date (as such may have
been

29

 

extended in accordance herewith), then Purchaser shall have the option by notice to Seller
within five (5) business days after Seller’s notice either to: (A) terminate this Agreement by
written notice to the Seller and the Deposit and all accrued interest thereon shall be returned to
Purchaser in accordance with Section 3(a)(5) and Purchaser shall have no claims against Seller
except as hereafter provided if any material and adverse changes to Seller’s Undertakings since the
date of this Agreement are caused by the negligent acts or omissions or willful misconduct of
Seller, or (B) elect to waive such breach and proceed with the Closing subject to such breach
without any adjustment to the Purchase Price or claim against Seller. Purchaser’s failure to give
timely written notice of such election to Seller shall constitute Purchaser’s irrevocable election
to accept and approve Seller’s Undertakings as so qualified and amended and to proceed with the
transactions contemplated by this Agreement without any right or remedy on account thereof. If any
material and adverse changes to Seller’s Undertakings since the date of this Agreement are caused
by the negligent acts or omissions or willful misconduct of Seller, and Purchaser has elected to
terminate this Agreement, then Purchaser shall be entitled to recover its expenses as provided and
limited in Section 14(a)(ii). If any of Seller’s representations and warranties is inaccurate,
untrue or incorrect in any material respect and is not caused by the negligent acts or omissions or
willful misconduct of Seller, then termination of this Agreement or the waiver of such breach as
provided above shall be Purchaser’s sole and exclusive remedies and all other rights and remedies
of Purchaser shall be deemed waived.

               (4) Anything contained herein to the contrary notwithstanding, if Purchaser has actual
knowledge of any inaccuracy in any of Seller’s Undertakings, whether as a result of notice from
Seller, Purchaser’s own investigations or inquiries or otherwise, and notwithstanding such
knowledge, Purchaser nonetheless proceeds with the Closing, then Seller’s Undertakings shall be
deemed qualified and amended or modified to the full extent of Purchaser’s knowledge of such
inconsistent information, Purchaser shall be deemed to have accepted and approved Seller’s
Undertakings as so qualified and amended or modified, and Purchaser shall have no right or remedy,
and Seller shall have no obligation or liability, on account thereof.

          (d) Purchaser represents:

               (1) Purchaser is corporation duly organized and validly existing under the laws of the State
of Maryland and has the full power and authority to enter into and comply with the terms of this
Agreement and has, or at Closing will have, obtained all necessary consents and approvals to enter
into and consummate the transactions contemplated by this Agreement, including assumption of the
Loan;

               (2) This Agreement and all documents executed by Purchaser in connection with this Agreement
which are to be delivered to Seller at Closing, are or at the time of Closing will be, duly
authorized, executed and delivered by Purchaser, and are, or at Closing will be, legal, valid and
binding obligations of Purchaser and do not, and at the time of Closing will not, violate any
provisions of any agreement or judicial order to which Purchaser is a party or to which Purchaser
is subject; and

               (3) There are no proceedings at law or in equity before any court, grand jury, administrative
agency or other investigative agency, bureau or instrumentality of any

30

 

kind pending or, to the best
of Purchaser’s knowledge, threatened, against or affecting Purchaser that (i) involve the validity
or enforceability of this Agreement or any other instrument or document to be delivered by
Purchaser pursuant hereto or (ii) enjoin or prevent or threaten to enjoin or prevent the
performance of Purchaser’s obligations hereunder;

               (4) Purchaser is currently (i) in compliance with and shall at all times during the term of
this Agreement remain in compliance with the OFAC regulations and any statute, executive order
(including Executive Order 13224, dated September 24, 2001 and entitled “Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), or
regulation relating thereto, and (ii) not listed on, and shall not during the term of this
Agreement be listed on, the Specially Designated Nationals and Blocked Persons List maintained by
OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant
to any authorizing statute, executive order, or regulation.

          (e) All representations and warranties of Purchaser set forth in Section 10(d) of this
Agreement shall be deemed to have been made as of the date of this Agreement and again as of the
Closing and shall survive Closing for a period of six (6) months.

     11. Risk of Loss; Condemnation.

          (a) If the Improvements are damaged or destroyed prior to Closing, then, by delivering
written notice to Seller within five (5) business days after Purchaser’s receipt of
Seller’s written notice of such damage or destruction and Seller’s reasonable estimate of
the costs of repair, which notice Seller shall provide as soon as possible after a fire or
other casualty and in event not later than ten (10) days thereafter, Purchaser may elect to
either (1) terminate this Agreement in accordance with Section 3(a)(5), or (2) elect to
continue this Agreement in full force and effect, in which case Seller shall (i) assign to
Purchaser at Closing any and all proceeds and claims under any applicable insurance
coverage, and (ii) afford Purchaser a credit at Closing for any applicable insurance
deductible, and Purchaser shall take title to the Property subject to such damage and
destruction; provided, however, that in the event the cost to repair any such damage or
destruction is reasonably estimated by Seller to be less than One Million Five Hundred
Dollars ($1,500,000.00), then so long as Seller is not otherwise in breach or default of
this Agreement, Purchaser shall have no right to terminate this Agreement, Seller shall
assign to Purchaser at Closing any and all proceeds and claims under any applicable
insurance coverage and afford Purchaser a credit at Closing for any applicable insurance
deductible, and Purchaser shall take title to the Property subject to such damage and
destruction. If Purchaser fails to deliver written notice to Seller of Purchaser’s
election within the time period specified in this Section, Purchaser shall be deemed to
have elected alternative (2) above.

          (b) If, at any time prior to the Closing, legal proceedings under power of eminent domain are
commenced with respect to all or any portion of the Property, then by delivery to Seller of written
notice of election within three (3) business days after Purchaser’s
receipt of Seller’s written notice of such pending condemnation, which notice Seller shall
provide as soon as possible after Seller receives such notice, Purchaser may elect to either

31

 

(1) terminate this Agreement in accordance with Section 3(a)(5), or (2) elect to continue this
Agreement in full force and effect and Seller shall assign to Purchaser at the Closing any and all
proceeds and claims on account of such condemnation proceedings, and Purchaser shall take title to
the Property subject to such condemnation proceedings; provided, however, if a material portion of
the Property is taken as determined by Purchaser in its reasonable discretion (in no event shall
the taking regarding the widening of Chimney Rock Road (“Chimney Rock Road Condemnation”) be deemed
to be a material taking for purposes of this Section 11(b)), then so long as Seller is not
otherwise in breach or default of this Agreement, Purchaser shall have no right to terminate this
Agreement, Seller shall assign to Purchaser any and all proceeds and claims on account of such
condemnation proceedings, and Purchaser shall take title to the Property subject to such
condemnation proceedings. If Purchaser fails to deliver written notice to Seller of Purchaser’s
election within the time period specified in this Section, Purchaser shall be deemed to have
elected alternative (2) above. Seller shall not consent to any condemnation or other taking, or
negotiate, settle or compromise any claim for the award as a result of any condemnation or taking,
without Purchaser’s prior written consent which shall not be unreasonably withheld.

          (c) Notwithstanding anything to the contrary in this Agreement: (i) Purchaser acknowledges
that it is aware of the Chimney Rock Road Condemnation and matters related thereto, and will have
the opportunity during the Due Diligence Period to make further inquiries and investigations with
regard thereto; (ii) Seller is preparing and will prepare plans for Restoration Work (hereafter
defined) and applications for all necessary municipal land use approvals, including site plan
waivers, construction permits and building permits necessary for the Restoration Work, and will
provide copies of same to Purchaser; (iii) Seller shall keep Purchaser reasonably informed as to
its progress with respect to the Restoration Work, and shall submit to Purchaser for its approval
(which shall not be unreasonably withheld or delayed) all plans and specifications, drawings, site
plans, development agreements, construction contracts and other documents pertaining to the
performance of the Restoration Work; (iv) subject to obtaining all governmental permits and
approvals required for the Restoration Work and the approval of the Lender, Seller shall perform
and complete the Restoration Work, which will be performed in a good and workmanlike manner and in
accordance with the requirements of this Agreement, the Loan Documents and applicable laws; (v)
upon completion of the Restoration Work, Seller shall provide to Purchaser a certificate of
Seller’s architect or engineer stating that the Restoration Work has been completed in accordance
with the plans approved by Purchaser, and shall deliver to Purchaser and the Title Company lien
waivers from all contractors and subcontractors performing any portion of the Restoration Work
(completion and delivery of such documents, “Completion”); (vi) subject to Lender’s consent and any
terms and conditions imposed by Lender, Seller shall be entitled to receive the monetary
compensation paid by the condemning authority for the Chimney Rock Road Condemnation , which
compensation the parties acknowledge and agree is in the aggregate amount of $1,725,000 (the
“Award”); (vii) Purchaser shall have no right, title or interest in or to the Award and
shall execute any and all documents reasonably required in confirmation thereof and to allow Seller
to receive the Award; and (viii) if Completion of the Restoration Work has not occurred as of
Closing, then at Closing Seller shall deposit into escrow a sum of money that equals 150% of the
cost reasonably estimated by Seller’s architect or engineer to achieve Completion, as approved by Purchaser
whose approval shall not be unreasonably withheld (the “Restoration Work Escrow”), which

32

 

shall be held in escrow by Escrow Agent on the same terms as set forth in this Agreement for
the Deposit to be held in escrow and released, except as hereafter set forth, and Seller shall be
permitted to direct that the Restoration Work Escrow be funded from the Purchase Price paid by
Purchaser. The Restoration Work Escrow shall be released to Seller upon Completion. The Cash
Portion of the Closing Payment shall be increased if and to the extent at or prior to Closing
Lender applies all or any portion of the Award in payment of the Loan. If, as of Closing, Lender
retains the right to apply all or any portion of the Award (“Reserved Award Amount”) in
payment of the Loan, and has not agreed to the future disposition of the Reserved Award Amount on
terms reasonably acceptable to Seller, then Purchaser shall deposit in escrow with Escrow Agent an
amount of money equal to the Reserved Award Amount (“Purchaser’s Escrow”), which escrowed
funds, together with interest accrued thereon, shall be released to Seller dollar for dollar, as
and when Lender applies the Reserved Award Amount in payment of the Loan, or released to Purchaser
dollar for dollar, as and when the Reserved Award Amount is received by Seller; in all other
respects the Escrow Agent shall hold the funds deposited by Purchaser on the same terms provided
herein for Escrow Agent to hold the Deposit. If, for any reason, Seller determines in good faith
that it is unable to procure all required governmental approvals required for the Restoration Work,
Seller shall promptly notify Purchaser and: (1) if such determination is made prior to Closing,
then, in lieu of depositing the Restoration Work Escrow with Escrow Agent, the Purchase Price shall
be reduced by an amount equal to the Restoration Work Escrow and Seller will retain all rights to
the Award, (2) if such determination is made subsequent to Closing, then the Restoration Work
Escrow and, if applicable, Purchaser’s Escrow, shall be released to Purchaser and Seller will
retain all rights to the Award, and (3) in either case, seller shall have no obligations or
liability to Purchaser, and Purchaser shall have no claims against Seller, due to the Chimney Rock
Road Condemnation. As used herein, “Restoration Work” means any and all improvements or
alterations at the Property arising from the Chimney Rock Road Condemnation, including without
limitation the replacement and/or relocation of parking spaces, as more particularly described in
the plans and other materials provided by Seller to Purchaser as above provided.

     12. Escrow. The Deposit shall be held in escrow by US Title Solutions (“Escrow
Agent”), together with any income earned thereon, in accordance with the terms and conditions
set forth below. Any fees or charges of Escrow Agent for escrow services shall be borne equally by
Seller and Purchaser.

          (a) Escrow Agent shall invest the Deposit in treasury bills, certificates of deposit
and/or in other money market instruments or in funds as instructed by Purchaser, utilizing
Purchaser’s taxpayer identification number.

          (b) The Deposit and income earned thereon shall be the property of and shall be paid to:

               (1) Seller, upon the Closing in accordance with the provisions of this Agreement or upon the
termination of this Agreement by reason of a default by Purchaser beyond any applicable notice and
grace period in any of its obligations under this Agreement. If the Closing occurs, the Deposit
and the income earned thereon shall be credited against the Purchase Price;

33

 

               (2) Purchaser, if, prior to payment to Seller as provided in clause (1) above, Purchaser shall
be entitled to return of the Deposit and any income thereon pursuant to the terms and conditions of
this Agreement; or

               (3) As may otherwise be provided below in Section 12(c).

          (c) Except in connection with the Closing, to obtain a payment of the Deposit and income
earned thereon as provided above, a party (the “Requesting Party”) shall deliver or mail to
Escrow Agent and to the other party at the address hereafter set forth a notice that the Requesting
Party is entitled to the payment of all or a stated portion of the Deposit as provided above. If
Escrow Agent does not receive a notice from the other party within five (5) business days of the
giving of such notice from the Requesting Party, then Escrow Agent shall pay over all or the
requested amount, if less than all, out of the Deposit to the Requesting Party. If, within five
(5) business days after the giving of such notice by the Requesting Party, Escrow Agent shall have
received a statement from the other party that the Requesting Party is not entitled to the
requested amount pursuant to the provisions of this Agreement and directing Escrow Agent not to
deliver to the Requesting Party the requested amount from the Deposit, then Escrow Agent shall at
its sole option either:

               (1) Deposit with a court of competent jurisdiction the balance of the Deposit, or

               (2) Retain the balance of the Deposit until one of the following shall have occurred:

                    (i) There shall have been served upon Escrow Agent an order or judgment duly entered in a
court of competent jurisdiction setting forth the manner in which the Deposit is to be paid out and
delivered, in which event Escrow Agent shall deliver all or the requested portion of the Deposit as
set forth in such order or judgment; or

                    (ii) The parties shall have delivered to the Escrow Agent a statement executed by both of the
parties setting forth the manner in which the Deposit is to be paid out and delivered, in which
event the Escrow Agent shall deliver all or the requested portion of the Deposit as set forth in
such statement.

          (d) Escrow Agent shall not be liable to either Seller or Purchaser in connection with its
performance as Escrow Agent hereunder other than for its negligence or willful misconduct. Seller
and Purchaser shall jointly and severally save, defend, indemnify and hold harmless Escrow Agent
from any and all Claims and Damages arising out of or in connection with the escrow (including,
without limitation, the collection of any amounts due or payable to Escrow Agent) and any actions
of Escrow Agent in connection therewith, other than Escrow Agent’s negligence or willful
misconduct.

          (e) Upon delivery of the balance of the Deposit as provided in subsections (b) and (c) above,
Escrow Agent shall be relieved of all liability, responsibility or obligation with respect to or
arising out of the Deposit.

34

 

          (f) Escrow Agent shall be entitled to rely upon the truth and accuracy of any statement from
Purchaser or Seller without any independent investigation or verification by Escrow Agent.

          (g) Purchaser shall provide to Escrow Agent a Form 1099 and such other documentation as may be
reasonably required by Escrow Agent in connection with the establishment of the escrow account. .

          (h) Escrow Agent agrees to be bound by the terms and conditions of Sections 20(a) (governing
law and venue) and 20(r) (waiver of jury trial) of this Agreement, and agrees that process may be
served upon Escrow Agent in any litigation arising hereunder in the same manner that notices may be
delivered to Escrow Agent as provided in Section 16 of this Agreement, or by any other legal means
of service of process.

     13. Default by Purchaser.

          If Purchaser is in default in any of its obligations under this Agreement which remains
uncured for ten (10) calendar days after Seller’s notice to Purchaser thereof, unless such default
cannot be cured by the payment of money and cannot with due diligence be wholly cured within such
ten (10) day period, in which case Purchaser shall have such longer period as shall be necessary to
cure such default not to exceed twenty (20) calendar days after Seller’s notice to Purchaser, so
long as Purchaser proceeds promptly to cure such default within such ten (10) day period,
prosecutes such cure to completion with due diligence and advises Seller of the actions which
Purchaser is taking and the progress being made, including without limitation its obligation to
close the acquisition of the Property hereunder in a timely manner and including any material
misrepresentation by Purchaser, Purchaser and Seller agree that it would be impractical and
extremely difficult to estimate the damages which Seller may suffer. Accordingly, Purchaser and
Seller further agree that a reasonable estimate of such damages is and shall be an amount equal to
the Deposit, which includes the accrued interest thereon, and such Deposit shall be disbursed to
Seller as the full, agreed and liquidated damages for Purchaser’s default under or breach of this
Agreement. Such disbursement of the Deposit, shall be Seller’s sole and exclusive remedy (whether
at law or equity) for Purchaser’s default under or breach of this Agreement, and Seller expressly
waives all other claims to damages or other remedies, including any punitive, consequential or
speculative damages.

     14. Default by Seller.

          If the sale of the Property is not consummated because of default under or breach of this
Agreement on the part of Seller which remains uncured for ten (10) calendar days after Purchaser’s
notice to Seller thereof, unless such default cannot be cured by the payment of money and cannot
with due diligence be wholly cured within such ten (10) day period, in which case Seller shall have
such longer period as shall be necessary to cure such default not to exceed twenty (20) calendar
days after Purchaser’s notice to Seller, so long as Seller proceeds promptly to cure such default
within such ten (10) day period, prosecutes such cure to completion with due diligence and advises
Purchaser of the actions which Seller is taking and the progress being made, and all other
conditions precedent to Closing have been satisfied or waived, Purchaser shall have the option, as
its sole and exclusive remedy at law or in equity, to either: (a) terminate

35

 

this Agreement by delivery of written notice of termination to Seller and, (i) in accordance
with Section 3(a)(5), the Deposit shall be returned to Purchaser, (ii) Purchaser shall be entitled
to recover from Seller all of its actual, out-of-pocket, third party professional fees incurred in
connection with Purchaser’s investigation of the Property, including without limitation legal fees
and environmental consultants’ and engineers’ fees and costs (and excluding fees or costs related
to any financing obtained by Purchaser with respect to the Cash Portion), up to but not in excess
of Fifty Thousand Dollars ($50,000.00), and (iii) thereafter, Purchaser and Seller shall each be
released from all liability hereunder (except for those provisions which recite that they survive
termination); or (b) continue this Agreement and seek the equitable remedy of specific performance.
The foregoing options are mutually exclusive and are the exclusive rights and remedies available
to Purchaser at law or in equity in the event the sale of the Property is not consummated because
of Seller’s default under or breach of this Agreement. Except as provided below, Purchaser hereby
waives any and all rights it may now or hereafter have to pursue any other remedy or recover any
other damages on account of any such breach or default by Seller, including, without limitation,
loss of bargain, special, punitive, compensatory or consequential damages. Purchaser shall be
deemed to have elected its remedy under clause (a) of this Section if Purchaser fails to file suit
for specific performance against Seller in a court having jurisdiction in Somerset County, New
Jersey, on or before ninety (90) days following the date upon which Closing was to have occurred.
Notwithstanding the foregoing provisions, if sale of the Property is not consummated because of
willful default of this Agreement on the part of Seller beyond the applicable notice and grace
period as provided above, and specific performance is not a legally available remedy (because, by
way of one example only, Seller has wrongfully conveyed the Property to a third party bona fide
purchaser for value without notice), or specific performance is not an adequate remedy because
Seller has materially diminished the value of the asset (including, by way of one example only,
entering into a long term lease in violation of its covenant not to do so as provided in Section
9(b)), Purchaser shall be entitled to pursue all remedies available to Purchaser at law or in
equity as a result of Seller’s breach or default for recovery of its direct damages excluding
consequential and punitive damages, limited as hereafter provided, provided suit for recovery is
commenced within ninety (90) days following the date upon which Closing was to have occurred
hereunder, failing which all claims by Purchaser for damages pursuant to this sentence shall be
waived and no longer enforceable. Any damages that Purchaser may be entitled to receive as
provided in the immediately preceding sentence shall not exceed $1,500,000.00 in the aggregate.

     15. No Assignment by Purchaser.

     Neither this Agreement nor any of the rights of Purchaser hereunder may be assigned by
Purchaser without the written consent of Seller, which consent may be denied for any reason
whatsoever or for no reason. Any change in a controlling interest in Purchaser shall be deemed to
be an assignment. Notwithstanding the foregoing, provided Closing will not be delayed and Lender’s
Consent will not be affected, upon not less than two (2) business days’ prior notice to Seller,
Purchaser may transfer and assign the rights and obligations of Purchaser under this Agreement to
an assignee in which Purchaser or any entity controlling, controlled by, or under common control
with Purchaser is, directly or indirectly, the managing member, general partner or manager of such
assignee, in which event, such assignee shall be entitled to the benefit of and may enforce
Seller’s covenants, representations and warranties hereunder. Upon any such assignment, the
assignor’s liabilities and obligations hereunder or under any instruments,

36

 

documents or agreements made pursuant thereto shall be binding upon such assignee, but the
assignor shall not be relieved of its liability hereunder.

     16. Notices.

          (a) Any notice or communication which may be given or is required to be given pursuant
to the terms of this Agreement shall be in writing and shall be personally delivered,
mailed by certified or registered mail, return receipt requested, delivered by a nationally
recognized overnight courier or sent by telecopy transmission (provided that the original
notice or demand is also delivered by next day overnight delivery service), to the other
party as follows:

	 	 	 

	In the case of Seller to:
	 	ADVANCE AT MIDDLEBROOK CROSSROADS, LLC
	 
	 	1430 State Highway 206, Suite 100
	 
	 	Bedminster, New Jersey 07921
	 
	 	Attention:  Kurt Padavano
	 
	 	Telecopy No.: (908) 719-9444
	 
	 	Email:  kurtp@advancerealtygroup.com
	 
	 	 
	with a copy to:
	 	Gibbons P.C.
	 
	 	One Gateway Center
	 
	 	Newark, NJ 07102
	 
	 	Attention:  Russell Bershad, Esq.
	 
	 	Telecopy No.: (973) 639-6345
	 
	 	Email:  rbershad@gibbonslaw.com
	 
	 	 
	In the case of Purchaser to:
	 	c/o Terreno Realty Corporation
	 
	 	16 Maiden Lane, Fifth Floor
	 
	 	San Francisco, CA 94108
	 
	 	Attention:  Andrew Burke
	 
	 	Telecopy No.: (415) 655 -4599
	 
	 	Email: andy@terreno.com
	 
	 	 
	with a copy to:
	 	Goodwin Procter LLP
	 
	 	The New York Times Building
	 
	 	620 Eighth Avenue
	 
	 	New York, NY  10018
	 
	 	Attn:  Christopher B. Price, Esq.
	 
	 	Telecopy No.:  (212) 355-3333
	 
	 	Email:  cbprice@goodwinprocter.com
	 
	 	 
	In the case of
	 	 
	Escrow Agent to:
	 	US Title Solutions
	 
	 	3 Werner Way
	 
	 	Lebanon, NJ 08833
	 
	 	Attn.: James Kudless
	 
	 	Telecopy No.:  (908) 849-7981
	 
	 	Email:  jkudless@ustitlesolutions.com

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     A notice or communication which is mailed or personally delivered shall be deemed to be given
on the actual date of receipt. A notice that is sent by telecopy shall be deemed to be given when
sent provided the transmitting telecopier provides a written report confirming successful
transmission. Notices required under this Agreement shall be delivered prior to 5 p.m. (local time
of the recipient) on the date such notice is due. Any notice that is received or deemed received
after 5 p.m. (local time of the recipient) on a business day or that is received or deemed received
on a weekend or holiday shall be deemed to have been received on the first business day thereafter.
Seller and Purchaser agree that information relevant to this Agreement and communications
regarding this Agreement may be exchanged via e-mail (including e-mail with attachments in
electronic imaging format) and acknowledge that neither Seller nor Purchaser has control over the
performance, reliability, availability, or security of e-mail. Communication via e-mail shall not
constitute notice under this Agreement unless the communication is also sent simultaneously by a
nationally recognized overnight courier service providing a receipt (such as Federal Express), by
hand, or by facsimile addressed as above provided.

          (b) Any party may designate a different address for the purpose of the service of notices
hereunder by giving notice thereof in accordance with the provisions of this Section.

          (c) Attorneys for a party shall be authorized to give notices on behalf of such party.
Written adjournments and extensions in time signed by an attorney for a party shall be binding upon
that party.

     17. Further Assurances.

     Each of the parties shall execute such other and further documents and do such further acts as
may be reasonably required to effectuate the intent of the parties and carry out the terms of this
Agreement, provided neither party’s rights are diminished or liabilities or obligations are
increased.

     18. Title to Personal Property.

          (a) All Personal Property is included in this sale subject, however, to any title
matters. Purchaser acknowledges and agrees that other than expressly provided herein,
Seller makes no representation in connection with such Personal Property and Seller
expressly disclaims any implied warranties of merchantability or fitness for a particular
purpose.

          (b) Although no part of the Purchase Price has been allocated to Personal Property and
therefore it is not anticipated that any sales or use taxes shall be due and payable, Purchaser
agrees to save, defend, indemnify and hold Seller harmless from and against any and all Claims and
Damages arising out of or in connection with any sales or use taxes which may now or hereafter be
imposed upon Seller or the Property with respect to the sale of such Personal Property. The
provisions of this Section shall survive Closing.

38

 

          (c) There is expressly excluded from the transactions contemplated by this Agreement (1) the
name “Advance” and any variation thereof, (2) all computers used in connection with the operation
of the Property and all computer software and (3) all existing management agreements with Advance
Realty Management Inc., and (4) all operating and marketing materials, records and reports which
are proprietary to the operation and management of the Property by Advance Realty Management Inc.

     19. Brokerage.

     The parties represent to each other that no broker or real estate salesperson or agent,
licensed or otherwise, brought about this transaction, brought the Property to the attention of
Purchaser or had any communication with Purchaser in regard to the same except for Leo Josephs &
Company, Inc. (“Broker”). Each party agrees (a) to give testimony to such effect in any
case, action or proceeding instituted by any other such real estate broker, salesperson or agent,
and (b) to save, defend, indemnify and hold the other harmless from and against any and all Claims
and Damages arising out of or in connection with any claim made by any person (other than Broker)
who has dealt with such indemnifying party for any fee or commission with respect to the sale of
the Property; provided, however, that Purchaser shall be obligated to compensate the Broker for its
services in connection with this transaction and shall save, defend, indemnify and hold Seller
harmless from and against any and all Claims and Damages arising out of or in connection with any
claim made by Broker. Purchaser shall deliver a commission release from Broker at Closing, in a
form reasonably acceptable to Seller. The provisions of this Section 19 shall survive Closing
hereunder or the termination of this Agreement for any cause.

     20. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance with the laws of
the State of New Jersey. Venue for all actions arising hereunder shall be exclusively in
the federal or state courts of the State of New Jersey.

          (b) Neither this Agreement nor any provision hereof may be waived, amended, discharged or
terminated except by instrument in writing signed by the party against which the enforcement of
such waiver, amendment, discharge or termination is sought and then only to the extent set forth in
such instrument.

          (c) It is understood and agreed that any and all understandings and agreements, written or
verbal, heretofore had between the parties hereto are merged in this Agreement which alone fully
and completely expresses their agreement.

          (d) Whenever the context shall require, the singular shall include the plural, the plural
shall include the singular and words of any gender shall be deemed to include words of any other
gender. As used herein, “Purchaser” shall mean the entity signing this Agreement as
Purchaser, or any assignee hereof in accordance with Section 15. If two or more persons or
entities constitute Purchaser hereunder, then they shall be jointly and severally liable for the
obligations of Purchaser hereunder, and Seller and Escrow Agent may rely on, and all of such
parties shall be bound by, any writing executed by any or all of them.

39

 

          (e) The terms “herein,” “hereof” or “hereunder” or similar terms used in this Agreement refer
to the entire Agreement and not to the particular provision in which the term is used unless the
context otherwise requires.

          (f) The captions in this Agreement are for convenience and reference only and in no way
define, limit or describe, the scope of this Agreement or the intent of any provision hereof.

          (g) This Agreement shall be interpreted without the aid of any presumption against the party
drafting or causing the drafting of the provision in question.

          (h) This Agreement shall be binding upon and inure to the benefit of the parties hereto, their
successors and their permitted assigns.

          (i) This Agreement shall not be binding upon Seller until executed and legally delivered by
Seller, nor shall this Agreement be binding upon Purchaser until executed and legally delivered by
Purchaser.

          (j) Purchaser shall not record this Agreement or any memorandum hereof without the prior
written consent of Seller. Purchaser shall indemnify, defend and hold harmless Seller from all
Claims and Damages arising out of or in any manner related to breach of the foregoing covenant,
which obligation shall survive termination of this Agreement.

          (k) Any payment made on account of the Purchase Price shall be made by wire transfer of
federal funds to Seller to a bank account designated by Seller. Any payment made by wire transfer
shall not be deemed to have been made until confirmed as received by Seller’s bank and credited to
Seller’s account or Escrow Agent’s Bank and credited to Escrow Agent’s account, as appropriate.

          (l) Purchaser represents and agrees that financing (other than assumption of the Loan) is not
a condition to Purchaser’s obligations under this Agreement, and that Seller has not offered or
agreed to provide any financing to Purchaser.

          (m) TIME IS OF THE ESSENCE of all terms and provisions of this Agreement including all dates
for notices to be provided hereunder, excluding (except as hereafter provided) the obligation to
complete Closing hereunder. Notwithstanding the foregoing, if the time period for notice or the
performance of any act called for under this Agreement expires on a Saturday, Sunday, or any other
day in which either banking institutions in the State of New Jersey or the New York Stock Exchange
are authorized or obligated by law or executive order to close, the deadline for notice or
performance of the act in question shall be the next succeeding day that is not a Saturday, Sunday
or holiday. If Closing is not completed on the Closing Date, subject to any extensions expressly
provided in this Agreement, either party can make time of the essence for Closing by notice
specifying a time of the essence Closing Date which notice shall be sent at least ten (10) business
days in advance of the date specified therein; if Seller and Purchaser both send notices
establishing a time of the essence Closing Date and the dates specified are not the same date, then
the date first occurring shall control. The parties agree that ten (10) business days’ notice
shall be sufficient advance notice in all circumstances.

40

 

          (n) This Agreement may be executed in any number of counterparts, each of which shall
constitute an original but all of which, taken together, shall constitute but one and the same
instrument and shall be binding upon each of Seller and Purchaser as fully and completely as if
both had signed but one instrument.

          (o) If any provision hereof is deemed to be invalid or unenforceable by a court of competent
jurisdiction, the rest and remainder of this Agreement shall continue in full force and effect.

          (p) No written waiver by any party at any time of any breach of any provision of this
Agreement shall be deemed a waiver of a breach of any other provision herein, or a consent to any
subsequent breach of the same or any other provision. If any action by any party shall require the
consent or approval of another party, such consent or approval of such action on any one occasion
shall not be deemed a consent to or approval of any such action on any subsequent occasion or a
consent to or approval of any other action on the same or any subsequent occasion.

          (q) Without the consent of the other, Seller and Purchaser shall not publicize the transaction
contemplated by this Agreement in any way nor permit any agent or broker to publicize the
transaction contemplated by this Agreement in any way and shall treat the same with
confidentiality, prior to Closing.

          Notwithstanding the foregoing, both parties acknowledge and agree that the foregoing shall not
preclude each of them from discussing the substance or any relevant details of the transactions
contemplated by this Agreement with any of its attorneys, accountants, professional consultants, or
employees of the Securities and Exchange Commission, analysts, underwriters, lenders or, in the
case of Purchaser, potential investors (and any attorneys, accountants, professional consultants or
employees of the same) in connection with any offering of securities of Purchaser, or prevent
either party from complying with any applicable laws, including, without limitation, governmental,
regulatory, disclosure, tax and securities reporting requirements, or disclosing any terms or
conditions of this transaction as may be necessary in connection with any legal proceedings.

          (r) To the maximum extent permitted by law, each of Purchaser and Seller knowingly,
voluntarily, intentionally and irrevocably waives all rights to trial by jury in respect of any
action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or
related to any of the provisions of this Agreement, or any course of conduct, course of dealing,
statements (whether oral or written), or actions of any party hereto or to any document pertaining
to this Agreement or the transaction contemplated hereby. This provision is a material inducement
of all parties entering into this Agreement. This subsection survives Closing and any termination
of this Agreement.

          (s) Seller or Purchaser may elect to have the sale of the Property contemplated by this
Agreement to be effected as a part of a tax-free exchange of like-kind property (“Exchange”),
provided that the Exchange does not result in any delay or postponement of the Closing. If the
Property are to be part of an Exchange, the party desiring to effect such Exchange shall notify the
other party of such fact at least ten (10) business days prior to the date

41

 

of Closing. If any such Exchange should fail to occur for whatever reason, the sale of the
Property by Seller shall nonetheless be consummated in accordance with the terms, covenants and
conditions of this Agreement (other than this Section 20(s)). Should either party (“Electing
Party”) elect to have the sale of the Property effected as a part of an Exchange, the other
party (“Cooperating Party”), subject to the Cooperating Party’s reasonable review and
comment, agrees to execute on a timely basis such documents reasonably necessary and appropriate to
assist in effecting the Exchange and to otherwise reasonably cooperate to effectuate such Exchange
provided, however, that (i) Cooperating Party shall assume no liability in connection with the
Exchange, (ii) if the Purchaser is the Cooperating Party it shall not be required to take title to
any real property, other than the Property, and (iii) the Electing Party shall indemnify and hold
the Cooperating Party harmless from any and all liability including, without limitation, reasonable
costs, expenses and attorneys’ fees, arising out of, resulting from, and/or relating to the
Exchange and Cooperating Party’s performing acts requested by Electing Party to effectuate such
Exchange, which indemnification shall survive the Closing.

Signatures appear on next page.

42

 

     INTENDING TO BE LEGALLY BOUND, the parties hereto have executed this Agreement as of the date
and year first above written.

	 	 	 	 	 	 	 

	WITNESS:	 	SELLER:
	 	 	ADVANCE AT MIDDLEBROOK CROSSROADS, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Advance Realty Investors, LLC, its Sole Member
	 
	 	 	 	 	 	 
	 	 	By:	 	Advance Realty Group, LLC, its

Managing Member
	 
	 	 	 	 	 	 
	/s/ Andrea D. Barba

	 	 	 	By:
	 	/s/ Kurt R. Padavano
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Kurt R. Padavano
	 

	 	 	 	 	 	Title: Authorized Representative

	 	 	 	 	 	 	 

	WITNESS:	 	PURCHASER:
	 	 	TERRENO REALTY LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	Terreno Realty Corporation, a Maryland

corporation, its Member
	 
	 	 	 	 	 	 
	/s/ Shirley Coke

	 	 	 	By:
	 	/s/ Michael A. Coke
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Michael A. Coke
	 

	 	 	 	 	 	Title: President and Chief Financial
Officer

Executed solely for the purpose of accepting

the Escrow on the terms and conditions set

forth in Section 12 above of the foregoing

Agreement.

First American Title Insurance Company

     By: US Title Solutions, its authorized agent

	 	 	 	 	 	 	 	 	 

	 	 	By:	 	/s/ James W Kudless	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	James W Kudless	 	 
	 

	 	 	 	Title:
	 	VP, Business Development and Process Excellence

Licensed Title Officerexv10w2

Exhibit 10.2

	 	 	 

	LSI Corporation

	 	1 800 372 2447
	1621 Barber Lane

	 	lsi.com
	Milpitas, CA 95035
	 	 

April 7, 2010

To: Andy Micallef

Re: Benefits Summary Pursuant to the LSI Corporation Severance Policy for Executive Officers

As a condition of the termination of your employment with LSI Corporation (“LSI”) on the
Termination Date set forth below, the following terms will apply:

	•	 	Separation Agreement. This Separation Agreement (“Agreement”) is intended to formalize and
set forth the terms of your separation under the LSI Corporation Severance Policy for
Executive Officers effective as of June 1, 2008. This Separation Agreement contains the
entire agreement between LSI and you regarding the termination of your employment and fully
supersedes and replaces in its entirety the provisions of the Agere Systems Inc. Officer
Severance Policy and any other agreement relating to your employment. All such other
agreements, written or oral, are hereby terminated and replaced with this Agreement.

	•	 	Status Change Date. February 28, 2010. You acknowledge and agree that, effective as of
February 28, 2010 (the “Status Change Date”), you hereby resign all of your positions with LSI
(it being agreed and understood that your status as Executive Vice President, Worldwide
Manufacturing Operations of LSI ended effective on February 10, 2010), and any other positions
(including directorships) with other entities that are affiliated with LSI, other than your
position as a Technical Consultant, as described below. You agree to execute any documents
that may be necessary or appropriate to effect or to memorialize any resignations from LSI or
its affiliates contemplated by this Agreement.
	 
	•	 	Position; Continuation Salary. From March 1, 2010 until July 31,
2010, you will remain an LSI employee, and your job title, as of the
Status Change Date, will be “Technical Consultant.” In this position,
you will be required to provide technical consulting to LSI on an
as-needed basis. Your position as Technical Consultant, and any other
position with LSI, will terminate as of the Termination Date. During
your tenure as a Technical Consultant from the Status Change Date
until the Termination Date, you shall be paid a monthly salary of
$26,500 paid in accordance with customary payroll practices and
intervals, less any and all statutory withholding and deductions as
may be required by law or as authorized by you.
	 
	•	 	Termination Date; Vacation Payment. July 31, 2010. Your position with
the Company as Technical Consultant, including all compensation and
eligibility for benefits (other than post-termination benefits
specifically described herein), shall terminate on July 31, 2010 (the
“Termination Date”). On or about the Termination Date, LSI will pay
you all accrued and unused vacation through the Termination Date, less
any and all statutory withholding and deductions as may be required by
law or as authorized by you.

Page 1 of 3

 

	•	 	Severance Payments. From August 1, 2010 until the earlier of (a)
February 28, 2011, and (b) such date that you secure full-time
employment, you shall continue to be paid a severance payment of
$26,500 per month paid in accordance with customary payroll
practices and intervals, less any and all statutory withholding and
deductions as may be required by law or as authorized by you. In
the event that you secure full-time employment prior to February
28, 2011, then LSI shall make a single lump-sum payment to you
equal to the difference between $185,000 and the amounts of
severance payments that have been paid to you up to such earlier
date.
	 
	•	 	Benefits. You and your eligible dependents shall continue to be
covered by LSI’s group benefit plans (e.g., medical, dental,
prescription, vision care, and life insurance), at LSI’s expense,
except for the employee-paid portion of such premiums, until the
last day of the month in which the Termination Date falls, to the
same extent that you and your dependents were covered by said plans
as of the date of this Agreement. If you desire to continue
coverage, pursuant to COBRA for medical, dental, prescription and
vision care, after the Termination Date, you may do so at your own
expense; provided, however, that LSI will pay for COBRA coverage at
the same level of coverage that was in effect for the you and you
eligible dependents immediately prior to the Termination Date (such
payments shall not include COBRA coverage with respect to the
Company’s health care spending account) for seven (7) months, at no
charge to you. Thereafter, you (and, if applicable, your eligible
dependents) may continue COBRA coverage at your own expense in
accordance with COBRA. You understand and agree that you must
complete a COBRA application in order to receive the extension of
health benefits beyond the Termination Date.
	 
	 	 	Your group basic life insurance and accidental death and dismemberment coverage will continue to
the same extent the you and the your dependents were covered by said plans as of the date of
this Agreement at the Company’s expense for a two (2) month period following the end of the
month in which the Termination Date falls. You will have the option to convert the basic life
insurance policy to an individual policy at your own expense at the rates supplied by the
underwriting company within 31 days following the paid-up benefits extension period by
submitting the conversion application provided by the insurance carrier. Your accidental death
and dismemberment coverage is not available for conversion to an individual policy.

	•	 	Stock Rights. You will not be eligible to receive any further stock option or restricted
stock unit grants after the Termination Date. However, existing stock option and restricted
stock unit grants will continue to vest, until the Termination Date. All of your rights under
existing stock options and restricted stock units will be governed pursuant the agreements and
plans under which they were granted.

	•	 	Expatriate; Relocation Benefits. Your expatriate and relocation benefits will continue as set
forth in LSI’s International Assignment Policy and the letter agreement dated August 1, 2008
between you and LSI, and you agree to use you reasonable best efforts to complete such
relocation, including shipment of household goods, return flights and air shipments, by such
date.

	•	 	Expense Reimbursement; Outplacement Services. You will submit your final reasonable and
customary travel and other expenses reports to LSI on or prior to the Termination Date. LSI
will pay you a lump sum of $7,000, less any and all statutory withholding and deductions as
may be required by law or as authorized by you, for outplacement services from a provider
selected by you.

Page 2 of 3

 

The above reflects the terms of the agreement between you and LSI regarding the termination of your
employment. There will be no other payments or benefits other than those specified above.

*      *      *

Andy, please sign below to indicate your concurrence with the terms and conditions set forth in
this Agreement.

	 	 	 	 	 	 	 

	 	 	 	 	LSI CORPORATION
	 
	 	 	 	 	 	 
	/s/ A. Micallef

	 	 	 	By:
	 	/s/ Gautam Srivastava
	 

	 	 	 	 	 	 
	Andy Micallef

	 	 	 	 	 	Name: Gautam Srivastava

Title: Senior Vice President, Human Resources
	 
	 	 	 	 	 	 
	Date: April 14, 2010

	 	 	 	Date: April 20, 2010

Page 3 of 3

 

GENERAL WAIVER AND RELEASE AGREEMENT

     1. I understand and agree that (a) my employment with LSI Corporation (together with its
predecessors and its successors and assigns, “LSI”) will end on July 31, 2010; (b) I will be paid
severance and other benefits as set forth in the attached Benefits Summary Pursuant to the LSI
Corporation Severance Policy for Executive Officers effective as of June 1, 2008 (“Summary”) only
if I sign and do not revoke this General Waiver and Release Agreement (“Agreement”); and (c) the
terms of the Summary are incorporated by reference in this Agreement and are intended to supersede
and extinguish any other obligation LSI may have to pay me severance or other payments or benefits
upon termination, including but not limited to any agreements or understandings, whether oral or
written, made at any time prior to the date of this Agreement.

     2. In consideration of the payments and benefits set forth in the Summary, I, on behalf of
myself and my heirs, executors, administrators, successors and assigns, knowingly and voluntarily
waive, release and forever discharge LSI, each of its subsidiaries or affiliated companies, their
respective current and former officers, employees, agents and directors, and any predecessor,
successor or assign of any of the foregoing, from any claim, charge, action or cause of action that
I or any of them may have against any such released person, whether known or unknown, from the
beginning of time through the date of this Agreement based upon any matter, cause or thing
whatsoever related to or arising out of my employment with LSI or my termination other than claims
arising out of a breach of this Agreement or any claim that cannot be waived by law. All such
claims are forever barred by this Agreement.

     This release and waiver includes, but is not limited to, any rights or claims under United
States federal, state or local law, for wrongful or abusive discharge, for breach of any contract,
or for discrimination based upon race, color, ethnicity, sex, age, national origin, religion,
disability, sexual orientation, or any unlawful criterion or circumstance, including, but not
limited to, rights or claims under the Family and Medical Leave Act, claims of discrimination under
the Employee Retirement Income Security Act, the Equal Pay Act, the Occupational Safety and Health
Act, the Workforce Adjustment Retraining Notification Act, Title VII of the Civil Rights Act of
1964, the Americans with Disabilities Act, Section 1981 through 1988 of the Civil Rights Act of
1866, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act, the Rehabilitation Act of 1973, Executive Order 11246 and any other
executive order, the Fair Labor Standards Act and its state and local counterparts, the Uniform
Services Employment and Reemployment Rights Act, and the Immigration Reform Control Act, all as
amended. I confirm that I have no claim or basis for a claim whatsoever against LSI with respect to
any such matters related to or arising out of my employment by LSI or my termination.

     3. I affirm that I have been given at least 21 days within which to consider this release and
its consequences, that I have seven days following my signing of this Agreement to revoke and
cancel the terms and conditions contained herein and the terms and conditions of this Agreement
shall not become effective or enforceable until the seven-day revocation and cancellation period
has expired, and that, prior to the execution of this Agreement, I have been advised by LSI to
consult with an attorney of my choice concerning the terms and conditions set forth herein. Any
revocation or cancellation of this Agreement by me pursuant to this paragraph shall be in writing
delivered to LSI.

Page 1 of 4

 

     4. (a) Until February 28, 2011, I shall not, without the prior written consent of LSI
Corporation’s Chief Executive Officer, (i) directly or indirectly solicit (or encourage any company
or business organization in which I am an officer, employee, partner, director, consultant or
member of a technical advisory board to solicit or employ) or (ii) refer to any employee search
firms, any person who was employed by LSI as of the date hereof.

          (b) Until February 28, 2011, I shall not, without the prior written consent of LSI
Corporation’s Chief Executive Officer, at any time or for any reason, anywhere in the world,
directly or indirectly (i) engage in any business or activity, whether as an employee, consultant,
partner, principal, agent, representative, stockholder (except as a holder of less than 5% of the
combined voting power of the outstanding stock of a publicly held company) or in any other
individual, corporate or representative capacity, or render any services or provide any advice to
any business, activity, person or entity, if I know or reasonably should know that such business,
activity, service, person or entity, directly or indirectly, competes in any material manner with
LSI’s business as constituted on the date hereof, or (ii) meaningfully assist, help or otherwise
support any person, business, corporation, partnership or other entity or activity, whether as an
employee, consultant, partner, principal, agent, representative, stockholder (other than in the
capacity as a stockholder of less than 5% of the combined voting power of the outstanding shares of
stock of a publicly held company) or in any other individual, corporate or representative capacity,
to create, commence or otherwise initiate, or to develop, enhance or otherwise further, any
business or activity if I know or reasonably should know that such business, activity, service,
person or entity, directly or indirectly, competes in any material manner with LSI’s business as
constituted on the date hereof. For the purposes of this Agreement, LSI’s competitors shall be
those companies listed in the “Competition” section of LSI’s Form 10-K for the fiscal year ended
December 31, 2009.

          (c) If at any time I violate the provisions of Sections 4(a) or 4(b) above, any amounts
remaining unpaid as set forth in the Summary as well as any benefits provided for in the Summary
(other than those from qualified retirement or welfare plans and my expatriate and relocation
benefits) and any continuing vesting of stock options or restricted stock units, if any, shall
immediately be forfeited and terminated, and any amounts already paid to me in accordance with the
Summary, except for the sum of One Thousand Dollars ($1,000) shall, at LSI’s sole discretion, be
required to be repaid by me to LSI within ten (10) business days of LSI’s request in writing
therefore. This provision shall not affect LSI’s right to otherwise specifically enforce any
provision relating to non-solicitation or non-competition that is in this Agreement or in any other
agreement, document or plan applicable to me.

          (d) I hereby agree that, from time to time upon LSI’s reasonable request, I shall assist LSI
in connection with any pending or future dispute, litigation, arbitration or similar proceeding or
investigation or any regulatory requests or filings involving LSI, any of its employees or
directors or the employees and directors of any subsidiary.

          (e) I agree to not (i) testify or otherwise provide testimony in any form at or for any legal
or administrative proceeding, including testimony related to any matter involving LSI, unless
legally compelled to do so or (ii) make statements to third parties, the public, the press or the
media or any administrative agency, in either case that would portray LSI in an adverse light or
disparage LSI, or cause injury to LSI with respect to events occurring prior to or after the date
hereof.

          
Page 2 of 4

 

     5. I agree to return to LSI any and all LSI property of any kind or description whatsoever,
including, but not limited to, any Confidential Information (as defined below), which has been
furnished to me or is held by me, at my residence or elsewhere, and shall not retain any copies,
duplicates, reproductions or excerpts thereof. I also agree and covenant, that I shall not divulge
to any other person or entity any proprietary or confidential information, whether written or oral,
received or gained by me in the course of my employment by LSI or of my duties with LSI
(“Confidential Information”), nor shall I make use of any such Confidential Information on my own
behalf or on behalf of any other person or entity, for so long as such Confidential Information is
not known to the general public.

     In addition, I agree to abide by the terms of any confidentiality and/or proprietary
information agreement that I have entered into with LSI, the terms of which shall continue in full
force and effect.

     6. If I am a California resident, I expressly waive Section 1542 of the California Civil Code,
which provides:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release which if known by
him must have materially affected his settlement with the debtor.”

If I am a resident of another state, I agree to waive the benefits of any statute similar in terms
and effect to this provision.

     7. This Agreement contains the entire agreement concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations, and undertakings,
whether written or oral, with respect thereto, except for the confidentiality and/or proprietary
information agreements referred to above. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall remain in full force
and effect to the fullest extent permitted by law.

     8. This Agreement may not be modified or amended except by a writing signed by me and LSI’s
Executive Vice President, General Counsel and Secretary.

     9. I understand that any taxes (other than the employer-mandated portion of FICA and FUTA)
which may become due as a result of any payment or transaction contemplated by this Agreement
including the attached Summary are my sole responsibility, and I further agree to hold LSI harmless
on account thereof.

     10. This Agreement shall be interpreted in accordance with the plain meaning of its terms and
not strictly for or against any person or entity. To the extent that federal law controls the
interpretation or enforceability of any provision of this Agreement, this Agreement shall be
construed and enforced in accordance with federal law. Otherwise, this Agreement shall be governed
by and construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania
without reference to the principles of conflicts of law.

Page 3 of 4

 

     BY SIGNING AND DELIVERING THIS AGREEMENT, I STATE THAT: I HAVE READ IT AND UNDERSTAND IT; I
AGREE WITH IT AND AM AWARE THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING RIGHTS PROVIDED BY THE
OLDER WORKERS BENEFIT PROTECTION ACT, FOR CONSIDERATION TO WHICH I WAS NOT ALREADY OTHERWISE
ENTITLED; I WAS ADVISED TO, AND AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING IT;
AND I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.

	 	 	 	 	 
	 	 	 
	 	                                                          /s/ A. Micallef
 	 
	 	Andy Micallef 	 
	 
	 	Date: April 14, 2010 	 
	 

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