Document:

KBS SOR Q4 2013 Exhibit 10.18

LIMITED LIABILITY COMPANY AGREEMENT 
OF KBS SOR SREF III 110 WILLIAM, LLC
This LIMITED LIABILITY COMPANY AGREEMENT OF KBS SOR SREF III 110 WILLIAM, LLC (this “Agreement”), is entered into effective as of December 23, 2013, by and between SREF III 110 William JV , LLC, a Delaware limited liability company (“JV Member”), and KBS SOR 110 William JV, LLC, a Delaware limited liability company (“KBS” or “Co-Managing Member”).  JV Member and KBS may hereinafter be referred to herein collectively, as the “Members” or individually as a “Member”.
ARTICLE I
FORMATION
1.01    Formation.  The limited liability company created pursuant to this Agreement and the filing of that certain Certificate of Organization dated November 26, 2013 (the “Company”) was formed under and pursuant to the Act.  The term “Act” means the Delaware: 6 Delaware Code §§18-101, et. seq., Delaware Limited Liability Code, as hereafter amended from time-to-time.
1.02    Names and Addresses.  The name of the Company is KBS SOR SREF III 110 William, LLC.  The principal office of the Company in the State of Delaware, and the name and address of the registered agent of the Company in the State of Delaware, shall Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, until changed by Managing Member with written notice to all of the Members.  The names, addresses, Percentage Interests (as defined in Section 3.03) and initial capital contributions of the Members are set forth on Exhibit A attached hereto.  Managing Member shall update Exhibit A as necessary to reflect any changes to the information reflected therein, including as a result of changes in a Member’s address, additional capital contributions by the Members in accordance with Article III and Transfers of Interests by the Members in accordance with Article VI.
1.03    Nature of Business.  The express, limited and only purposes of the Company shall be (i) to directly or indirectly acquire, own, lease, hold for long-term investment, sell, exchange, dispose of and otherwise realize the economic benefit from that certain real property commonly known as 110 William Street, Manhattan, New York, and described more particularly on Exhibit B attached hereto (the “Property”), including the improvements currently and as from time to time may be located on the Property (collectively, the “Improvements”) (the Property and the Improvements shall sometimes be collectively referred to as, the “Project”), and (ii) to conduct such other activities with respect to the Project as are appropriate to carrying out the foregoing purposes and to do all things incidental to or in furtherance of the above-enumerated purposes.
110 William Holdings III, LLC, an affiliate of Managing Member (“Contract Purchaser”), has entered into that certain Agreement of Purchase and Sale dated as December 4, 2013 (the “Purchase Agreement”), with 110 William, LLC, as seller (“Seller”). Concurrent with the full execution of this Agreement and KBS’s contribution of the sum of nine million dollars ($9,000,000) to the Company in accordance with Section 3.01(b), Managing Member shall (i) cause the Contract Purchaser to assign to the Company all right, title and interest of the 

Contract Purchaser under the Purchase Agreement, including the $15,000,000 earnest money deposit previously delivered into escrow pursuant to the Purchase Agreement (the “Deposit”), and (ii) notify Seller of the assignment of the Purchase Agreement in accordance with Section 10.9 of the Purchase Agreement promptly thereafter.  Prior to or simultaneously with the closing of the purchase and sale of the Property pursuant to the Purchase Agreement, Managing Member shall (i) cause the Company to form a single purpose Delaware limited liability company with the Company as the sole member (the “Mezzanine Borrower Subsidiary”), (ii) cause the Mezzanine Borrower Subsidiary to form a single purpose Delaware limited liability company with the Mezzanine Borrower Subsidiary as the sole member (the “Property Owner Subsidiary” together with the Mezzanine Borrower Subsidiary, each a “Subsidiary” and collectively, the “Subsidiaries”), (iii) cause the Company to assign to the Property Owner Subsidiary all right, title and interest of the Company under the Purchase Agreement, including the Deposit, and (iv) notify Seller of the assignment of the Purchase Agreement in accordance with Section 10.9 of the Purchase Agreement promptly thereafter.  Subject to Sections 2.02(d) and 2.02(e), the Company shall cause the Property Owner Subsidiary to acquire the Property and assume the Mortgage Loan (defined below) and the Mezzanine Borrower Subsidiary to assume the Mezzanine Loan (defined below) at the closing thereunder (the “Property Closing”) pursuant to the terms and conditions of the Purchase Agreement.  The Members contemplate that the name of the Property Owner Subsidiary will be 110 William Property Investors III, LLC and the name of the Mezzanine Borrower Subsidiary will be 110 William Mezz III, LLC.
As used in this Agreement, the term the “Mortgage Loan” means that certain mortgage loan in the original principal amount of $141,500,000 to be assumed by the Property Owner Subsidiary at the Property Closing and secured by the Project and the term “Mezzanine Loan” means that certain mezzanine loan in the original principal amount of $20,000,000. The term “Loan” shall mean the Mortgage Loan and the Mezzanine Loan and any refinance, modification, extension or substitution of the Mortgage Loan or the Mezzanine Loan, or any new mortgage or mezzanine loan affecting or pertaining to the Project.
1.04    Term of Company.  The term of the Company shall commence on the date the Certificate of Formation for the Company is filed with the Office of the Delaware Division of Corporations and shall continue until dissolved pursuant to Article VIII.  The existence of the Company as a separate legal entity shall continue until the cancellation of the Company’s Certificate of Formation. 
ARTICLE II
MANAGEMENT OF THE COMPANY
2.01    Management of the Company.
(a)    General.  JV Member is hereby designated as the managing member (the “Managing Member”) of the Company and shall serve as Managing Member of the Company unless and until it resigns or is removed pursuant to Section 2.06.  Subject to the restrictions set forth in this Agreement, Managing Member shall manage and administer the day-to-day business and affairs of the Company.  Managing Member shall at all times faithfully perform its duties and responsibilities in compliance with all applicable laws, the Business Plan, the Annual Budget, the Leasing Guidelines (as each such term is defined below), and this Agreement, and in 

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an efficient, thorough, businesslike manner, devoting such time, efforts and managerial resources to the business of the Company as is reasonably necessary for the operation of the day-to-day business and affairs of the Company.  In the performance of its duties in this Agreement, Managing Member shall regularly consult with the Members.  Managing Member may engage in business efforts and affairs which are not related to the Company, and will not be precluded from owning and operating other businesses and/or real estate projects and neither the Company nor the other Members shall have any right to participate in such businesses or real estate projects.
(b)    Specific Day to Day Duties.  Without limiting the generality of the foregoing, Managing Member shall perform the following duties with respect to the Project, all to be carried out in accordance with this Agreement, the Annual Budget, the Business Plan and the Leasing Guidelines:
(i)    Use reasonable commercial efforts to obtain and cause to be maintained all governmental and agency approvals, permits and other entitlements necessary for ownership, operation, management and leasing of the Project.
(ii)    Coordinate the services of all employees, supervisors, architects, engineers, accountants, attorneys, real estate brokers, advertising personnel and other persons necessary or appropriate for the ownership, operation, management and leasing of the Project.
(iii)    Supervise the performance of all work in connection with the ownership, operation, management and leasing of the Project.
(iv)    Use reasonable efforts to enforce all of the Company’s rights and cause performance of all of the Company’s obligations arising in connection with any contract or agreement entered into in connection with the Project, excluding de minimis obligations where the cost to pursue the obligation exceeds the benefit to be gained.
(v)    Deliver to the Members copies of any material written notices or material document received by Managing Member in connection with any material dispute or material claims relating to the Project.
(vi)    Otherwise diligently perform those duties and services that are reasonably necessary in order to acquire, own, operate, manage and lease the Project in accordance with the Business Plan, the Annual Budget, the Leasing Guidelines and this Agreement, except to the extent that the Company or a Subsidiary has entered into an agreement with any other person to provide such services in accordance with the terms of this Agreement, including without limitation any Management Agreement or Leasing Agreement.
(c)    Additional Duties.  Without limiting the generality of the foregoing, Managing Member shall have the following additional duties with respect to the overall operation of the Company and the ownership by the Company of the Project, all to be carried out in accordance with this Agreement:

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(i)    Provide operating reports and financial statements in accordance with Article IX.
(ii)    Notify the Members of such matters and render such reports to the Members from time-to-time as any Member may reasonably request in writing, including, without limitation, at all times and no less frequently than monthly keeping the Members informed of material information relating to the Project by notifying the Member in advance of public hearings and other proceedings relating to any existing or proposed entitlements, mapping, subdivision or material permits for the Project.
(iii)    Notify the Members of any bona fide offer to purchase the Project or any term sheet or letter of intent relating thereto.
(iv)    Complying with, or causing the Company to comply with, the Leasing Guidelines, as they may be modified pursuant to Section 2.12.
(v)    Complying with, or causing the Company to comply with, the Annual Budget, as it may be modified pursuant to Section 2.10; provided, however, that Managing Member shall be entitled to incur expenditures not provided in the Annual Budget which (A) do not exceed (1) the sum of $100,000 as to any single expenditure, and (2) the sum of $250,000 as to any such expenditures in the aggregate for any calendar year (such expenditures may hereinafter be referred to as the “De Minimis Expenditures”), or (B) constitute Emergency Expenditures pursuant to Section 2.10(c).
(d)    Affiliate Agreements; Special Powers of KBS Regarding Affiliate Agreements.
(i)    JV Member may not cause the Company to enter into any Affiliate Agreement or amend, modify or terminate any such Affiliate Agreement after the entry by the Company into such Affiliate Agreement without the prior consent of Co-Managing Member.
(ii)    Notwithstanding anything to the contrary contained herein but subject to Section 2.06(d) below, Co-Managing Member shall have the right, in its sole but reasonable discretion upon prior written notice to JV Member, to take all actions on behalf of the Company with respect to:  (A) the determination of the existence of any default by any Affiliate of JV Member under any Affiliate Agreements made between the Company and any Affiliate of JV Member, (B) the enforcement of all rights and remedies of the Company under any Affiliate Agreements made between the Company and any Affiliate of any JV Member, and (C) termination of any Affiliate Agreements made between the Company and any Affiliate of any JV Member (subject to the terms and conditions set forth therein for notice of defaults and applicable cure periods).  JV Member will cooperate in good faith with Co-Managing Member in the exercise by Co-Managing Member of the foregoing rights and actions hereunder.
(iii)    As used in this Agreement, the term “Affiliate” means any person or entity which, directly or indirectly through one (1) or more intermediaries, controls or 

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is controlled by or is under common control with another person or entity.  The term control as used herein (including the terms “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power (i) to vote fifty-one percent (51%) or more of the outstanding voting securities of such person or entity, or (ii) to otherwise direct management policies of such person by contract (at commercially reasonable rates) or otherwise.  The term “Affiliate Agreement” means any agreement for the provision of goods and/or services between the Company and any Affiliate of any Member or any other person or entity in which such Member (or any person or entity having a direct or indirect interest therein) owns a direct or indirect interest therein.
2.02    Major Decisions.  Notwithstanding anything contained in this Agreement to the contrary, Managing Member shall not take, or cause or permit the Company to enter into any agreement to take, any of the following actions on behalf of the Company or with respect to the Project (in each case the taking of which hereinafter shall be referred to as a “Major Decision”) without the prior written consent of the other Member(s) (except as otherwise expressly provided below in Section 2.06(d)), which may be given or withheld in each such Member’s sole and absolute discretion. Nothing in this Agreement shall prevent Co-Managing Member from proposing a Major Decision.
(a)    Annual Budget; Business Plan.  Subject to Sections 2.01(c)(v) and 2.10, deviate from, amend or replace the Business Plan or deviate from, amend or replace the Annual Budget, after the Business Plan and the Annual Budget has been approved pursuant to this Section 2.02(a).
(b)    Sale of the Company or the Project.  Subject to Articles VI and VII, sell, convey, exchange, hypothecate, pledge, encumber or otherwise transfer any portion of or any interest in the Company or the Project, or enter into any agreement to sell, convey, exchange, hypothecate, pledge, encumber or otherwise transfer any portion or any interest in the Company or the Project.
(c)    Management and Leasing Agreements.  Enter into, amend, modify, terminate, or waive any rights under, any Management Agreement or any Leasing Agreement (as such terms are defined below), or enter into any replacement management agreement or leasing agreement.
(d)    Acquire Real Property.  Purchase or otherwise acquire any interest in real property other than the Company’s interest in the Project pursuant to the Purchase Agreement.  
(i)    Prior to the date hereof, Managing Member has delivered to Co-Managing Member all of the “Buyer’s 3-14 Audit Documents” (as defined in the Purchase Agreement) with respect to calendar year 2013 through and including the month of November, and Co-Managing Member acknowledges receipt of the same.  Co-Managing Member has notified Managing Member that Co-Managing Member will need the Buyer’s 3-14 Audit Documents for the month of December 2013 in a form and content substantially similar to the Buyer’s 3-14 Audit Documents previously delivered to Co-Managing Member and may need additional supporting audit documentation with 

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respect to the Project.  Managing Member (unless it is otherwise able to obtain such supporting information) will use commercially reasonable efforts to enforce the provisions of Section 9.7 of the Purchase Agreement (which requires, among other things, Seller to reasonably cooperate with Contract Purchaser in connection with any additional information or documentation Contract Purchaser may require with respect to “Buyer’s 3-14 Audit” (as defined in the Purchase Agreement)) to cause Seller to deliver such additional supporting documentation to Co-Managing Member.  Co-Managing Member shall promptly notify Managing Member in writing after completion of the Buyer’s 3-14 Audit (the “3-14 Audit Completion Notice”).  If Co-Managing Member has not delivered a 3-14 Audit Completion Notice on or before the earlier of (x) the second day following the date that Managing Member notifies Co-Managing Member in writing that the Seller has notified Contract Purchaser in writing that Seller will not deliver any additional Buyer’s 3-14 Audit Documents or supporting audit documentation with respect to the Project or (y) January 15, 2014, Managing Member shall have the right to elect to have Co-Managing Member withdraw from the Company by delivering written notice to Co-Managing Member (a “Withdrawal Notice”) at any time thereafter so long as Co-Managing Member has not delivered a 3-14 Audit Completion Notice.  If Co-Managing Member is unable to complete the Buyer’s 3-14 Audit, Co-Managing Member shall have the right to withdraw from the Company by delivering a Withdrawal Notice to Managing Member.  
(ii)    Notwithstanding anything to the contrary in this Agreement, if a Withdrawal Notice is delivered pursuant to Section 2.02(d)(i), then the following shall apply: (A) within five (5) days after the delivery of a Withdrawal Notice, Managing Member shall contribute nine million dollars ($9,000,000) to the Company and shall cause the Company to return to Co-Managing Member its initial capital contribution in the amount of nine million dollars ($9,000,000); (B) upon or concurrent with the funding described in clause (A), the Members shall execute such documentation as may be necessary to evidence Co-Managing Member’s withdrawal from the Company and release of Co-Managing Member from all liabilities and obligations of the Company; (C) after Co-Managing Member’s receipt of its initial capital contribution and withdrawal from the Company pursuant to clauses (A) and (B), (1) Co-Managing Member shall have no further right, title or interest in the Company, (2) Managing Member shall dissolve the Company pursuant to Article VIII hereof, and (3) Managing Member and/or its affiliates shall be free, in its/their sole and absolute discretion, to pursue the acquisition of the Project and the assumption of the Mortgage Loan and the Mezzanine Loan to the exclusion of Co-Managing Member.  Managing Member’s obligation to contribute nine million dollars ($9,000,000) to the Company pursuant to clause (A) above shall be guaranteed by the Savanna Credit Party (defined below).
(e)    Loan Assumption; Required Changes in Loan Documents.  Determine whether the loan assumption contingency set forth in Section 9.6 of the Purchase Agreement has been satisfied; provided that neither Co-Managing Member nor Managing Member shall have the right to determine that such loan assumption contingency has not been satisfied unless such Member has determined, in its sole but reasonable discretion, that there has been a Material Adverse Loan Modification.  “Material Adverse Loan Modification” shall mean (x) a failure 

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of the Loan Assumptions and/or the Assumption Agreement(s) (as such terms are defined in the Purchase Agreement) to satisfy the loan assumption contingency set forth in Section 9.6 of the Purchase Agreement, (y) a conditioning of the Loan Approval on one or more modifications to the loan documents that are reasonably expected to have an adverse economic impact to such Member or any Affiliate of such Member or a requirement that Co-Managing Member or any Affiliate of Co-Managing Member execute a guaranty or an indemnity in favor or either lender, or (z) the failure of the loan documents to permit transfers and actions on terms set forth on Exhibit H attached hereto.  If there has been a determination of a Material Adverse Loan Modification, and:
(i)    If both Members have elected in writing not to effect the Loan Assumptions, Managing Member shall deliver to Seller a termination notice under Section 9.6 of the Purchase Agreement and seek a return of the Deposit (as such term is defined under the Purchase Agreement) and thereafter cause the Company to be dissolved pursuant to Article VIII.
(ii)    If Managing Member has notified Co-Managing Member in writing that it desires to effect the Loan Assumptions, but Co-Managing Member has notified Managing Member in writing of its disapproval of the same and its desire to terminate the Purchase Agreement, then Managing Member shall have the right, in its sole and absolute discretion to elect to (A) deliver to Seller a termination notice under Section 9.6 of the Purchase Agreement and seek a return of the Deposit, or (B) deliver written notice to Co-Managing Member requiring Co-Managing Member to withdraw from the Company.  If Managing Member elects to deliver a notice pursuant to clause (B), then the provisions of Section 2.02(d)(ii) shall apply as if such notice were a Withdrawal Notice delivered pursuant to Section 2.02(d)(i).
(iii)    If Managing Member has notified Co-Managing Member in writing that it desires not to effect the Loan Assumptions and to terminate the Purchase Agreement, but Co-Managing Member has notified Managing Member in writing of its approval of the same, then Co-Managing Member shall have the right, in its sole and absolute discretion to elect to (x) have Managing Member deliver to Seller a termination notice under Section 9.6 of the Purchase Agreement and seek a return of the Deposit, or (y) elect to have Managing Member withdraw from the Company and pursue the acquisition of the Project (the “Takeover Notice”).  If Co-Managing Member elects to deliver a Takeover Notice pursuant to clause (y), then then the following shall apply: (A) within five (5) days after the delivery of a Takeover Notice, Co-Managing Member shall contribute six million dollars ($6,000,000) to the Company and Managing Member shall cause the Company to return to Managing Member its initial capital contribution in the amount of six million dollars ($6,000,000); (B) upon or concurrent with the funding described in clause (A), the Members shall execute such documentation as may be necessary to evidence Managing Member’s withdrawal from the Company and release of Managing Member from all liabilities and obligations of the Company; (C) after Managing Member’s receipt of its initial capital contribution and withdrawal from the Company pursuant to clauses (A) and (B), (1) Managing Member shall have no further right, title or interest in the Company, (2) if the Company or a Subsidiary of the Company is not the contract purchaser under the Purchase Agreement, Managing Member shall 

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assign all the right, title and interest of the Contract Purchaser to such entity as Co-Managing Member may direct, (3) Co-Managing Member shall dissolve the Company pursuant to Article VIII hereof, and (4) Co-Managing Member and/or its affiliates shall be free, in its/their sole and absolute discretion, to pursue the acquisition of the Project and the assumption of the Mortgage Loan and the Mezzanine Loan to the exclusion of Managing Member.  Co-Managing Member’s obligation to contribute six million dollars ($6,000,000) to the Company pursuant to clause (A) above shall be guaranteed by the KBS Credit Party (defined below). 
(f)    Financing.  Cause the Company to finance or refinance the operations of the Company and/or any of the Company’s assets or retain any mortgage bankers or brokers on behalf of the Company in connection therewith or enter into any modifications, amendments, extensions, substitutions or other agreements regarding the Loan or to refinance the Loan.  Co-Managing Member’s underwriting of the Project assumes that the Loan will not be refinanced more than 90 days before its maturity date.  Accordingly, unless Co-Managing Member expressly approves an earlier refinance of the Loan as a Major Decision, Managing Member will not seek an early refinance of the Mortgage Loan but may present potential refinancing options of the Mezzanine Loan to Co-Managing Member provided that any such potential refinancing shall, however, remain a Major Decision.  
(g)    Indemnity.  Make, execute or deliver on behalf of the Company any indemnity bond or surety bond or obligate the Company or any other Member as a surety, guaranty, guarantor or accommodation party to any obligation or grant any lien or encumbrance on any of the assets of the Company, including the Project, except for the Mortgage Loan and Mezzanine Loan assumed by the Subsidiaries, as applicable, at the Property Closing pursuant to the terms of this Agreement.
(h)    Loans.  Lend funds belonging to the Company to any Member or its Affiliate or to any third party, or extend any person, firm or corporation credit on behalf of the Company, in each case, except as expressly permitted by this Agreement, or cause any Member Loan to be made to the Company as provided in Section 3.03.
(i)    Distributions.  Based on cash flow projections and analysis prepared by Managing Member, determine whether or not there is sufficient Net Cash so that distributions may be made to the Members in accordance with this Agreement, and make any distribution to the Members.  As used in this Agreement, the term “Net Cash” means the gross cash receipts of the Company from all sources as of any applicable date of determination, less the portion thereof used to pay:  (i) all cash disbursements (inclusive of any guaranteed payment within the meaning of Section 707(c) of the Code paid to any Member, including, without limitation, any reimbursements made to any Member and any amounts applied to repay any Member Loans or Default Loans, of the Company prior to that date); and (ii) all reserves, established by the Annual Budget, a lender or otherwise approved by the Members for anticipated cash disbursements, including for payment of debt service, escrows, capital improvements and other anticipated contingencies and expenses of the Company.
(j)    Expenditures.  Except for De Minimis Expenditures or Emergency Expenditures permitted under this Agreement, take any action or make any expenditure or incur 

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any obligation by or on behalf of the Company which is not included in the Annual Budget (including, without limitation, obligating the Company to pay for any goods or services in excess of the foregoing).  In the event that the Loan is within ninety (90) days of its stated maturity, or after its term has expired, or is in default, Managing Member may not reallocate any excess funds among line items or make any expenditures from any reserves without the consent of the Members.
(k)    Duties.  Delegate any of the duties of Managing Member set forth herein except as set forth in the Management Agreement, any Leasing Agreement or any other approved Affiliate Agreement under the terms of this Agreement or to the officers and employees of Managing Member.
(l)    Assignment Benefiting Creditors.  Make, execute or deliver on behalf of the Company an assignment for the benefit of creditors; file, consent to or cause the Company, a Member’s Interest, or the Project, or any part thereof or interest therein, to be subject to the authority of any trustee, custodian or receiver or be subject to any proceeding for bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, relief of debtors, dissolution or liquidation or similar proceedings.
(m)    Partition of Company Assets.  Partition all or any portion of the assets of the Company, or file any complaint or institute any proceeding at law or in equity seeking such partition.
(n)    Governmental Proposals.  Make application to, or enter into any agreements with, any government officials relating to mapping, development, zoning, subdivision, environmental or other land use or entitlement matters which may affect the Project.
(o)    Purchase Assets.  Except as may be provided in the then-applicable Annual Budget, purchase any automobiles or vehicular equipment on behalf of or in the name of the Company or purchase any fixed assets on behalf of or in the name of the Company.
(p)    Confess Judgments; Legal Actions.  Confess a judgment against the Company, settle or adjust any claims against the Company, or commence, negotiate and/or settle any legal actions or proceedings brought by the Company against unaffiliated third parties; provided, however, that Managing Member may settle or adjust any claim which is not the subject of a legal action or proceeding of $100,000 or less.
(q)    Dissolve the Company.  Except as provided in this Agreement, dissolve, terminate or liquidate the Company prior to the expiration of the term.
(r)    Acts Making Business Impossible.  Do any act that would make it impossible to carry on the business of the Company.
(s)    Material Agreements.  Except as provided in the Annual Budget or in the express terms of this Agreement, cause the Company to enter into any agreement obligating the Company to pay an amount of more than $100,000 and any amendment, modification or termination of any such agreement, including, without limitation, any agreement providing for 

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the payment of any commission, fee or other compensation payable in connection with the sale of all or any portion of the Project.
(t)    Leases.  Deviate from, amend or replace the Leasing Guidelines.  Cause or permit the Company to enter into any new lease affecting the Project unless such lease is on the standard form of lease approved by the Members with economic terms consistent with the then-current Leasing Guidelines approved by the Members, or amend, modify, terminate, or waive rights under any existing leases except in the ordinary course of business consistent with the Leasing Guidelines.
(u)    Insurance; Accounting.  Change the insurance program for the Company or the Project in a manner inconsistent with the Business Plan or inconsistent with the insurance requirements set forth in Section 2.05 or alter or change the reporting, accounting and/or auditing systems and/or procedures for the Company or the Project.
(v)    Employees.  Employ any individuals as an employee of the Company or of any Subsidiary.
(w)    Awards and Proceeds.  Except as required by the Loan, apply or dispose of any casualty insurance proceeds or any condemnation award, or settle with any insurance company or any condemning authority, as applicable.
(x)    No REIT Prohibited Transactions.  Take, or permit to be taken, any action that is or results in a REIT Prohibited Transaction.
(y)    Pledge and Assignment.  Subject to the provisions of Article VI, sell, transfer or pledge any Member’s interests in the Company.
(z)    Consultants.  Retain or dismiss on behalf of the Company any accountants, auditors, property managers or leasing agents; provided, however, that the Members hereby approve Swig Equities as property manager; Savanna Project Management as project manager; and Savanna Commercial Services, CB Richard Ellis, Jones Lang LaSalle, Newmark Grubb Knight Frank, and Cushman Wakefield, as potential leasing agents.
(aa)    Additional Capital Contributions.  Except as expressly set forth in Section 3.01 or otherwise approved by the Members in writing, require any additional capital contributions of the Members.
(bb)    Member Loans.  Except as expressly set forth in Section 3.03 or otherwise approved by the Members in writing, require or request any Member Loan.
(cc)    Subsidiaries.  Allow or cause any Subsidiary to take any of the actions that constitute Major Decisions hereunder.
The Members agree that the Major Decisions set forth in this Section 2.02 require the prior written consent of each Member in its sole and absolute discretion (except as otherwise expressly provided in Section 2.02(e) and 2.06(d)).  Subject to Section 2.06(d) and excepted as provided in Sections 2.02(d) and (e), failure by any Member to approve any Major Decision in 

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writing within ten (10) days after such Member’s receipt of a request therefor from Managing Member shall be deemed a disapproval of such Major Decision.  
2.03    Company Funds.  No Company funds, assets, credit or other resources of any kind or description shall be paid to, or used for, the benefit of any Member, except as specifically provided in this Agreement or the Annual Budget or after the written approval of all the Members has been obtained.  All funds of the Company shall be deposited only in such federally insured checking and savings accounts of the Company in the Company name with banks and other financial institutions having not less than $1,000,000,000 in assets as the Members shall approve in writing, shall not be commingled with funds of any other person or entity, and shall be withdrawn only upon such signature or signatures as may be designated in writing from time to time by Managing Member after receiving approval of the Members.  
2.04    Employees.  Neither the Company, nor the Subsidiaries shall have employees. Each Member shall be solely responsible for all wages, benefits, insurance and payroll taxes with respect to any of its respective employees.  Each Member agrees to perform its duties under this Agreement as an independent contractor and not as the agent, employee or servant of the Company.  Each Member shall be solely responsible for its own acts and those of its subordinates, employees and agents during the term of this Agreement and, subject to, and without the waiver of the benefits of, the provisions of Section 2.09, each Member hereby indemnifies and holds harmless the Company and each other Member from any liabilities, damages, costs and expenses (including, without limitation, reasonable attorneys’ fees) arising from the acts of any such subordinates, employees and agents of such Member.
2.05    Insurance.
(a)    Company Policies.  Managing Member shall purchase and maintain, or shall cause to be purchased and maintained, for and at the expense of the Company, policies of insurance (i) for the Company’s operations, (ii) for the protection of the Company’s assets (including the Project), and (iii) as may be reasonably required to comply with third-party requirements in accordance with guidelines approved by the Members, and shall provide the Members upon request with the certificates or other evidence of insurance coverage as provided therein.  All such insurance shall be maintained in such amounts, in forms and with such insurance companies as shall be reasonably satisfactory to each of the Members, but in limits no less than as set forth herein.  The Company’s insurance terms and limits shall include the following: (A) all risk property and builders risk insurance in amounts at least equal one hundred percent (100%) of the full replacement costs of the work, including, but not limited to, all improvements to the Property without any co-insurance requirements or penalties; (B) general liability and umbrella insurance with a per occurrence and annual aggregate limit of no less than $10,000,000 per location / project; and (C) if applicable, worker’s compensation insurance in compliance with statutory requirements of the state(s) in which the employee resides, is hired and in which the services are being performed, and employer’s liability insurance in the amount of $500,000 each accident for bodily injury by accident, $500,000 each employee for bodily injury by disease, and $500,000 policy limit for bodily injury by disease, or such other amount as may be required by umbrella policy to effect umbrella coverage.

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(b)    Contractor’s Insurance Obligations.  Managing Member shall require the Project’s general contractors and all subcontractors to obtain and maintain at all times during performance of work for the Company an occurrence form commercial general liability policy on a primary and non-contributing basis with a minimum of $1,000,000 per occurrence/$2,000,000 annual aggregate per location / project and an umbrella / excess liability in the minimum amount of $5,000,000 per location / project, or in such other amounts as may be approved by the Members, on which the Company is named as an additional insured.  In addition, Managing Member shall require that the Project’s general contractors and all subcontractors carry worker’s compensation coverage as required by law, including a waiver of subrogation in favor of the Company.
(c)    D&O Insurance.  Managing Member may purchase and maintain insurance on behalf of the executive officers of Managing Member (and if requested by any Member, executive officers of such Member) against liability asserted against such Person and incurred by such Person arising out of such Persons’ actions on behalf of Managing Member (or any other Member, as applicable) under this Agreement; provided that the cost of such insurance is included in the approved Annual Budget for the applicable year and such coverage is available at commercially reasonable rates.
(d)    Other.  The insurance required herein may be issued as blanket insurance, provided the required coverages are not diminished by such blanket policies.  All policies shall be written on such terms, in such form and for such periods and amounts as the Company shall from time to time reasonably designate or approve, shall be primary and without right of contribution from other insurance which may be available, shall waive any right of set off, counterclaim or subrogation, shall provide that the insurance shall not be invalidated by any action or inaction by the Managing Member, and shall provide that they shall not be canceled or amended without at least thirty (30) days’ prior written notice to the Company.
2.06    Election, Removal, Resignation.
(a)    Number, Term and Qualifications.  The Company shall have one Managing Member, which shall initially be JV Member.  Other than in circumstances in which Managing Member is removed pursuant to Section 2.06(b) or resigns pursuant to Section 2.06(c), as applicable, a new Managing Member may not be appointed except as set forth in Section 2.06(d).  Managing Member shall be a Member, but need not be an individual, a resident of the state in which the Property is located, or a citizen of the United States.
(b)    Removal.  Subject to this Section 2.06(b), JV Member may be removed as Managing Member (but not as a Member) solely as a result of the occurrence of a Just Cause Event at any time after KBS delivers written notice (a “Removal Notice”) to JV Member after the occurrence of a Just Cause Event (subject to applicable notice and cure periods set forth below) (the date of any such removal, the “Removal Date”).
For purposes of this Section 2.06(b), “Just Cause Event” shall mean:
(i)    JV Member or any principal, officer, executive or employee of JV Member or Savanna Investment Management LLC, has committed fraud related to the 

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Company or the Project, or has embezzled Company funds or funds related to the Project, provided that, in the case of embezzlement or fraud, if within ten (10) Business Days after such embezzlement or fraud is discovered, (a) such funds are replaced, and, (b) if such embezzlement or fraud is committed by an individual other than Christopher Schlank or Nicholas Bienstock, such individual is terminated, then such occurrence shall not be a Just Cause Event.
(ii)    JV Member or any principal, officer, executive or employee of JV Member or Savanna Investment Management LLC has committed an act of gross negligence or willful misconduct (other than an act or conduct described in clause (i) above) in connection with the performance by JV Member of its obligations under this Agreement that has had a material adverse effect on the Company and its Subsidiaries taken as a whole.
(iii)    JV Member has breached its material obligations as Managing Member under this Agreement and such breach was not timely cured within thirty (30) days of JV Member’s receipt of written notice from Co-Managing Member; provided, however, that in no event shall JV Member be determined to have materially breached its obligations as Managing Member under this Agreement if Co-Managing Member shall have consented in writing to such action or inaction.
(iv)    The filing a petition for relief under the United States Bankruptcy Code, as amended, by JV Member, making an assignment for the benefit of creditors, applying for the appointment of a custodian, receiver or trustee for JV Member or any of its respective assets, consenting to any other bankruptcy or similar proceeding, or consenting to the filing of such proceeding; provided, however, that in no event shall JV Member be determined to have violated this provision if Co-Managing Member shall have consented in writing to such filing.
(v)    The failure of JV Member to fund any capital contributions as and when required pursuant to Section 3.01(a) and such failure is not cured within ten (10) days of written notice from Co-Managing Member; provided that no cure period shall be required for JV Member’s failure to fund its required capital contribution on or before the Property Closing.
(vi)    An event of default occurs under the Loan (other than an act or conduct described in clause (vii) below), after all applicable notice and cure rights have expired, that results from a failure, violation or breach of the Company or any guarantor or indemnitor of the Loan to perform and observe any covenant, condition, representation or warranty under any document evidencing or securing the Loan; provided, however, that it shall not be a Just Cause Event if (A) the event of default in question is a result of the Company having insufficient funds or revenues due to the performance of the Property or (B) the Members have consented in writing to any such conduct, action or inaction or failure, violation or breach.
(vii)    An event of default occurs under the Loan, after all applicable notice and cure rights have expired, that results from any conduct or action taken by JV 

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Member as Managing Member, any JV Member Principal or an Affiliate of JV Member that is in violation of a Required Guaranty (defined below); provided, however, that it shall not be a Just Cause Event if (A) the event of default in question is a result of the Company having insufficient funds or revenues due to the performance of the Property or (B) the Members have consented in writing to any such conduct, action or inaction or failure, violation or breach.
(c)    Resignation.  Managing Member may resign as Managing Member (but not as a Member) upon ten (10) days prior notice to the other Member.
(d)    Effect of Removal or Resignation.  Upon the removal or resignation of JV Member as Managing Member in accordance with Section 2.06(b) or Section 2.06(c), as applicable, Co-Managing Member (or its designee) may:
(i)    terminate any Affiliate Agreement with an Affiliate of JV Member; and
(ii)    replace JV Member as Managing Member with itself (or its designee) which successor Managing Member shall have all of the duties and obligations of Managing Member under this Agreement.
In addition, upon the removal of JV Member as Managing Member in accordance with Section 2.06(b), the prior written consent of JV Member shall not be required for: (1) Major Decisions, (2) the right to approve the Annual Budget or Business Plan pursuant to Section 2.10, (3) the right to approve the agreements described in Section 2.11 if such agreements are not with an Affiliate of KBS, and (4) the right to approve changes to the Leasing Guidelines pursuant to Section 2.12; provided, however, that the JV Member’s prior written consent shall be required for Major Decisions under (1) Section 2.02(b) [Sale of Company or the Project] and (d) [Acquire Real Property], (2) Section 2.02(f) [Financing] if and only if the financing or refinance would either (A) require additional capital contributions from JV Member or a guaranty from JV Member, (3) Section 2.02(l) [Assignment Benefitting Creditors], (4) Section 2.02(m) [Partition of Company Assets], (5) Section 2.02(q) [Dissolve the Company], (6) Section 2.02(r) [Acts Making Business Impossible], (7) Section 2.02(s) [Material Agreements] if and only if such agreements are with an Affiliate of KBS, (8) Section 2.02(aa) [Additional Capital Contributions] and (9) Section 2.02(cc) [Subsidiaries] with respect to the Major Decisions enumerated in the preceding clauses (1) through (8).
(e)    Effect of Just Cause Event.  Irrespective of whether Co-Managing Member elects to replace JV Member as Managing Member, JV Member shall be responsible for all claims, damages, losses, costs and expenses (“Claims”) incurred by the Company as a result of the occurrence of (i) a Just Cause Event or (ii) an act of gross negligence or willful misconduct described in Section 2.06(b)(ii) even if such act does not constitute a Just Cause Event (i.e., such act does not have a material adverse effect), and shall reimburse the Company for such Claims within ten (10) days of the Company’s written request therefor, which request shall reasonably substantiate the Claims incurred.   The Savanna Credit Party (defined below) shall guaranty JV Member’s payment of the Claims under this Section 2.06(e).

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2.07    Members Have No Managerial Authority.  The Members shall have no power to participate in the management of the Company, except as expressly authorized by this Agreement.
2.08    Meetings.  The Company shall not be required to hold regular meetings of Members.  Any Member may call a meeting of Members for the purpose of discussing Company business.  Unless otherwise approved by the Members, any meeting of Members shall be held during normal business hours either telephonically or in person at the Company’s principal office on such day and at such time as are reasonably convenient for the Members.
2.09    Liability and Indemnity.  No Member, Managing Member or Tax Matters Partner (nor any officer, director, member, manager, constituent partner, agent or employee of the Company or a Member, Managing Member or Tax Matters Partner) shall be liable or accountable in damages or otherwise to the Company or to any other Member, Managing Member or Tax Matters Partner for any good faith error of judgment or any good faith mistake of fact or law in connection with this Agreement, or the services provided to the Company except in the case of willful misconduct or gross negligence.  To the maximum extent permitted by law, the Company does hereby indemnify, defend and agree to hold each Member , Managing Member or Tax Matters Partner (and each such officer, director, member, manager, constituent partner, agent or employee of a Member, Managing Member or Tax Matters Partner) wholly harmless from and against any loss, expense or damage (including, without limitation, reasonable attorneys’ fees and costs) suffered by such Member, Managing Member or Tax Matters Partner (and/or such officer, director, member, manager, constituent partner, agent or employee of a Member, Managing Member or Tax Matters Partner) by reason of anything which such Member (and/or such officer, director, member, manager, constituent partner, agent or employee of a Member, Managing Member or Tax Matters Partner) may do or refrain from doing hereafter for and on behalf of the Company and in furtherance of its interest; except in the case of willful misconduct or gross negligence in performing or failing to perform its duties hereunder.  To the maximum extent permitted by law, each Member, Managing Member or Tax Matters Partner does hereby indemnify, defend and agree to hold the Company and each other Member, Managing Member or Tax Matters Partner wholly harmless from and against any loss, expense or damage (including, without limitation, reasonable attorneys’ fees and costs) suffered by the Company or such other Member, Managing Member or Tax Matters Partner as a result of such indemnifying person’s willful misconduct or gross negligence in performing or failing to perform such indemnifying person’s duties hereunder.
2.10    Business Plan and Budget.  Prior to the Property Closing, the Members shall have approved a plan prepared by Managing Member setting forth the general description of the overall business plan of the Company with respect to the Project (the “Business Plan”).  The initial Business Plan shall cover the first two (2) year period of the Company’s existence.  Notwithstanding the approval of such Business Plan by the Members, in the event of any conflict or inconsistency between any provision of the Business Plan and any provision of this Agreement, the provisions of this Agreement shall control and supersede the provisions of the Business Plan. On or before the Update Date (defined below) in any year, Managing Member shall prepare an update and any other necessary modifications to the Business Plan for the review and approval of the Members.

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(a)    Annual Budget.  Attached hereto as Exhibit D is the annual budget existence in connection with the ownership, operation, and leasing of the Project (the “Annual Budget”) prepared by Managing Member and approved by Co-Managing Member for the first two (2) year period of the Company’s.  On or before November 15, 2015, and on or before the first business day of November of each year thereafter (each an “Update Date”), Managing Member shall prepare a new Annual Budget which shall be required to be approved by the Members, which shall set forth, by individual category, the costs and expenses projected to be incurred by the Company for the ensuing fiscal year.Interim Annual Report.  If any Annual Budget, or any category thereof, is not approved by the Members for any fiscal year as of the commencement of such fiscal year (or other period), then the approved categories of the proposed Annual Budget shall be in effect, but as to the categories which were disapproved, one hundred five percent (105%) of the last approved Annual Budget line items, shall be in effect until the Members approve the new Annual Budget as to such categories.  Adjustments to the last approved Annual Budget shall automatically be made to reflect actual increases in real property taxes, insurance premiums, utility charges and payments required under contracts to which the Company is a party at the time of the expiration of the Annual Budget, and shall not require the consent of any Member.
(b)    Reallocation.  Managing Member shall be permitted to reallocate amounts set forth in particular line items on the Annual Budget to the extent that the Managing Member reasonably determines that savings are expected with respect to any such line item.
2.11    Management and Leasing Agreements.
(a)    Management Agreement.  At or before the Property Closing, the Company shall cause the Property Owner Subsidiary to enter into a property management agreement (the “Management Agreement”) in form and substance acceptable to the Members with a property manager (the “Property Manager”) approved by Members.  The Management Agreement shall be substantially on Co-Managing Member’s form and shall provide, among other things, for a right to terminate Property Manager without cause upon thirty (30) days written notice (it being understood that such termination may result in the payment of a fee to Property Manager if and to the extent provided in the Management Agreement) and  that a Sarbanes-Oxley qualified entity acceptable to Co-Managing Member shall provide accounting services for the Project (which may be provided pursuant to a separate agreement or a sub-management agreement in each case in form and substance acceptable to Co-Managing Member).  Swig Equities, LLC, an Affiliate of JV Member, is approved as the initial Property Manager so long as Swig Equities, LLC subcontracts certain accounting services with a Sarbanes-Oxley qualified accounting firm 

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acceptable to Co-Managing Member pursuant to an accounting services agreement acceptable to Co-Managing Member.  The fee payable to Property Manager shall be as set forth in the Management Agreement.
(b)    Leasing Agreement.  At or before to the Property Closing, Company shall cause the Property Owner Subsidiary to enter into a leasing agreement (the “Leasing Agreement”) in form and substance acceptable to the Members with a leasing agent approved by the Members.  The Leasing Agreement shall be substantially in the form attached hereto as Exhibit E.  Savanna Commercial Services LLC, an Affiliate of JV Member, is approved as the leasing agent.
(c)    Renewal Leasing Agreement.  At or before to the Property Closing, Company shall cause the Property Owner Subsidiary to enter into a renewal leasing agreement (the “Renewal Leasing Agreement”) in form and substance acceptable to the Members with a leasing agent approved by the Members.  The Leasing Agreement shall be substantially in the form attached hereto as Exhibit F.  Savanna Commercial Services LLC, an Affiliate of JV Member, is approved as the initial renewal leasing agent.
(d)    Construction Management Agreement.  At or before to the Property Closing, Company shall cause the Property Owner Subsidiary to enter into a construction management agreement (the “Construction Management Agreement”) in form and substance acceptable to the Members with a construction management agent approved by the Members.  The Construction Management Agreement shall be substantially in the form attached hereto as Exhibit G.  Savanna Project Management LLC, an Affiliate of JV Member, is approved as the initial construction management agent.
2.12    Leasing Guidelines. Prior to the Property Closing, the Members shall have approved leasing guidelines for the Project (the “Leasing Guidelines”) setting forth the minimum approved rents, minimum required security and other deposits, and the maximum free rent periods, concessions and finder’s fees that are to be used for the leasing of the Project.  If necessitated by market changes, Managing Member shall prepare new Leasing Guidelines which shall be required to be approved by the Members.
2.13    Reimbursements and Fees. Except as otherwise provided by this Agreement or the management and leasing agreements described in Section 2.11, none of the Members (or their respective Affiliates and/or other representatives) shall be paid any compensation for rendering services to the Company.  Each Member shall be reimbursed for any costs and/or expenses incurred by such Member on behalf of the Company that relate to the business and affairs of the Company to the extent such Member had authority to act on behalf of the  Company (without reduction to such Member’s capital account in the Company maintained in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) (each a “Capital Account”)); provided, however, that except as otherwise provided in this Agreement or in the Annual Budget no Member shall be reimbursed for any such costs and/or expenses that exceed an aggregate amount of $2,000 during any calendar year without Member Approval.  As used in this Agreement, the term: “Treasury Regulation” means any proposed, temporary, and/or final federal income tax regulation promulgated by the United States Department of the Treasury as heretofore and 

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hereafter amended from time to time (and/or any corresponding provisions of any superseding revenue law and/or regulation).
2.14    Reimbursement for Pre-Formation Costs.  At or within five (5) business days after the acquisition of the Project by the Company, the Company shall reimburse KBS and JV Member for any and all legal and accounting fees, organizational costs and any other formation and due diligence costs incurred by KBS and JV Member (and/or any Affiliate or representative thereof) in connection with the formation of the Company, the negotiation and documentation of this Agreement and the acquisition of the Project.  The foregoing reimbursements shall not be debited to or otherwise reduce any Member’s Capital Account.  KBS and JV Member shall use good faith commercially reasonable efforts to cause all such amounts to be reimbursed hereunder to be included in the Company’s final escrow closing statement for the acquisition of the Project.
2.15    Limited Liability.  Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company.
ARTICLE III
MEMBERS’ CONTRIBUTIONS TO COMPANY
3.01    Initial Capital Commitments.
(a)    JV Member.  JV Member shall commit to contribute to the capital of the Company, in cash, an aggregate amount equal to forty percent (40%) of the initial equity necessary to acquire the Project and capitalize the Company, which amount shall be contributed as follows:  (i) upon the full execution of this Agreement and subject to the full execution of the Purchase Agreement, JV Member will contribute the sum of six million dollars ($6,000,000), which shall be used as 40% of sum of the Deposit; and (ii) at the closing of the acquisition of the Project, JV Member will contribute the balance of its capital contribution in an amount equal to thirty-two million six hundred thirty-three thousand five hundred eighty-four dollars ($32,633,584).  JV Member’s initial capital contribution is based on the sources and uses schedule attached hereto as Exhibit C.
(b)    KBS.  KBS shall commit to contribute to the capital of the Company, in cash, an aggregate amount equal to sixty percent (60%) of the initial equity necessary to acquire the Project and capitalize the Company which shall be which shall be payable as follows: (i) upon the full execution of this Agreement and subject to the full execution of the Purchase Agreement, KBS will contribute the sum of nine million dollars ($9,000,000), which shall be used as 60% of the sum of the Deposit; and (ii) at the closing of the acquisition of the Project, KBS will contribute the balance of its capital contribution in an amount equal to forty-eight million nine hundred fifty thousand three hundred seventy-six dollars ($48,950,376).  Co-Managing Member’s initial capital contribution is based on the sources and uses schedule attached hereto as Exhibit C.  

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For avoidance of doubt, KBS and JV Member acknowledge that the Contract Purchaser funded the entire amount of the Deposit under the Purchase Agreement and that the Members initial capital contributions described in Sections 3.01(a)(i) and Section 3.01(b)(i) will be used to reimburse the Contract Purchaser for such amounts as part of the assignment of the Purchase Agreement from the Contract Purchaser to the Property Owner Subsidiary pursuant to Section 1.03.
(c)    Failure to Close Property Closing.  The Members acknowledge that upon execution of this Agreement, (i) the Property Owner Subsidiary will be required to fund the Deposit under the Purchase Agreement, (ii) the Deposit under the Purchase Agreement will be non-refundable subject to the express conditions to the Property Closing set forth in the Purchase Agreement, including the failure of the holders of the Mortgage Loan and Mezzanine Loan to approve the Subsidiaries’ assumption of the Loan, (iii) the Members shall be obligated to fund their respective initial capital contributions in accordance with this Section 3.01.  If a Member fails to fund the full amount of its initial capital contribution in accordance with this Section 3.01 or otherwise refuses to allow the Subsidiaries to close the Property Closing and assumption of the Loan under the Purchase Agreement in violation of this Agreement or the Purchase Agreement and such failure to fund or close results in or would result in a default under the Purchase Agreement, then in additional to any other remedy set forth in this Agreement, the non-defaulting Member shall have the unilateral authority and without the consent of the defaulting Member to cause the Subsidiaries to close the Property Closing and assumption of the Loan pursuant to the Purchase Agreement, in which event the defaulting Member shall be no longer be a Member of the Company and shall receive no return of its capital to the extent such defaulting Member had previously funded any part of its capital under this Section 3.01.  In the event a Member fails to fund the full amount of its initial capital contribution in this Section 3.01 or otherwise refuses to allow the Subsidiaries to close the Property Closing or the assumption of the Loan under the Purchase Agreement in violation of this Agreement or the Purchase Agreement and such failure to fund or close results in or would result in a default under the Purchase Agreement and the non-defaulting member elects not to close the Property Closing, the defaulting Member shall be liable for the non-defaulting Member’s share of the Deposit that is not returned to the non-defaulting Member and for all costs and expenses incurred by such non-defaulting Member incurred in connection with this Agreement and the Property, including all costs to negotiate this Agreement, to the extent such costs and expenses have not previously been reimbursed to such non-defaulting Member (the lost Deposit and such costs and expenses, collectively, the “Reimbursable Expenses”).  The defaulting Member shall pay to the non-defaulting Member such reimbursement within ten (10) days of the non-defaulting Member’s written request therefor, which request shall reasonably substantiate the Reimbursable Expenses incurred. If the defaulting Member is (i) KBS then KBS SOR Properties, LLC (the “KBS Credit Party”) shall guaranty the Reimbursable Expenses incurred by JV Member, or (ii) JV Member then Savanna Real Estate Fund III, L.P. (the “Savanna Credit Party”) shall guaranty the Reimbursable Expenses incurred by KBS.  If the Property Closing does not otherwise occur and the Deposit is returned to the Property Owner Subsidiary, then the Company shall be dissolved pursuant to Article VIII.
3.02    Default in Capital Commitment.  If JV Member or KBS (as applicable, the “Defaulting Member”) shall fail to contribute its share of any amounts required to be 

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contributed pursuant to Section 3.01 or any approved additional capital contributions pursuant to Section 3.06 (the “Defaulted Amount”) and such failure shall continue for at least five (5) business days following notice to the Defaulting Member (provided that no notice or cure period shall apply to a Member’s failure to fund its share of the required capital to the Company for the Property Closing pursuant to the Purchase Agreement), KBS or JV Member, as applicable, (the “Non-Defaulting Member(s)”) may, but shall not be obligated to, contribute some or all of the Defaulted Amount as a capital contribution to the Company or as a loan to the Defaulting Member (a “Default Loan”).  If the Non-Defaulting Member elects to contribute some or all of the Defaulted amount as a capital contribution to the Company, then the Percentage Interests of KBS and the JV Member on Exhibit A shall be adjusted as if the Non-Defaulting Member contributed 150% of the amount of capital actually contributed by the Non-Defaulting Member following the failure of the Defaulting Member to contribute its share of required capital to the Company.  If the Non-Defaulting Member elects to provide the Default Loan, then it shall pay the proceeds directly to the Company.  A Default Loan shall not be considered a capital contribution by the Non-Defaulting Member and shall not increase the Capital Account balance or the Percentage Interest of the Non-Defaulting Member, but instead shall be treated as a non-recourse loan by the Non-Defaulting Member to the Defaulting Member (and a capital contribution by the Defaulting Member) and shall bear interest at the lesser of (x) the Default Loan Rate (hereinafter defined) or (y) the maximum amount permitted by law.  To the extent not repaid directly by the Defaulting Member, a Default Loan, together with any accrued and unpaid interest thereon, shall be repaid out of any subsequent distributions of Net Cash or any other payment from the Company to which the Defaulting Member would otherwise be entitled (but such distributions actually paid to the lending Members shall nonetheless constitute a distribution to the Defaulting Member for purposes of this Agreement), and such payments shall be applied first to the payment of accrued but unpaid interest on each such obligation and then to the payment of the outstanding principal until the Default Loan is paid in full.  “Default Loan Rate” is defined as a cumulative annual rate equal to twenty percent (20%), compounded quarterly (pro-rated for periods of less than one year), on the daily average outstanding balance during each fiscal year of the Member’s aggregate unreturned Default Loan.
3.03    Member Loans.  In the event Managing Member determines, in its reasonable discretion, that funds in addition to those otherwise obtained pursuant to Section 3.01 are necessary for the Company to meet the Annual Budget, Business Plan and Managing Member has elected not to request such additional funds in the form of additional capital pursuant to Section 3.06, then Managing Member shall deliver written notice of such actual or projected cash deficit to KBS and JV Member requesting that they agree that a loan (a “Member Loan”) should be made to the Company, which notice shall specify the term and interest rate of the requested Member Loan.  All such Member Loans shall be structured to qualify as “real estate assets” within the meaning of Section 856(c)(5) of the Code.  Within ten (10) business days following the effective date of such notice, each such Member shall notify Managing Member (a) whether or not such Member agrees that Member Loan(s) to the Company should be made in the amount specified in Managing Member’s notice, and (b) whether such Member elects, in its sole and absolute discretion, to make such Member Loan.  If KBS and JV Member (y) agree that a Member Loan in the amount specified in Managing Member’s notice should be made, and (z) elect to advance such funds by the Company, such funds shall be advanced by Members in proportion to their respective percentage set forth opposite such Member’s name under the 

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column labeled “Percentage Interest” on Exhibit A attached hereto (the “Percentage Interests”) (or as such Members otherwise agree).  Any and all advances made by any Member to the Company pursuant to this Section 3.03 shall be treated as a Member Loan with recourse only to the assets of the Company (and not to the assets of any Member), and shall bear annual interest as set forth in Managing Member’s notice.  If, from any circumstances whatsoever, the Members ever receive as interest under a Member Loan in an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due under such Member Loan and not to the payment of interest.  Any and all Member Loans shall be due and payable from the first available funds of the Company and in any event upon the liquidation of the Company.  The repayment of any Member Loan shall be made prior to any distributions of Net Cash or other cash proceeds to the Members, but shall be subordinate to any fees or reimbursements required to be made to the Members and/or their Affiliates pursuant to Section 2.13 and/or the agreements described in Section 2.11.  Accordingly, notwithstanding the provisions of Articles V and VIII, until any and all Member Loans are repaid in full, the Members shall draw no further distributions from the Company and all cash or property otherwise distributable with respect to the Interests of the Members shall be paid to the Member(s) making Member Loan(s) in proportion to, and as a reduction of, the outstanding balance(s) of such Member Loan(s), with such funds being applied first to reduce any interest accrued thereon, and then to reduce the principal amount thereof.
3.04    Determination of IRR Returns and Equity Multiple.
(a)    IRR Return.  The IRR Return described in Section 5.01 shall be determined based upon internal rate of return of KBS and JV Member.  As used in this Agreement, the term “IRR Return” means for each of KBS and JV Member the effective annual discount rate that results in a net present value equal to zero when the discount rate is applied to all capital contributions by each such Member and all distributions made by the Company to each such Member pursuant to this Agreement based on the actual date of capital contributions and distributions.  The IRR Return shall be calculated using the XIRR function provided in Microsoft Office Excel to compute internal rate of return. It is understood by the Members that the achievement of a particular IRR Return requires both a return of all capital contributions plus a cumulative return on such capital contributions at the applicable percentage IRR Return.
(b)    Equity Multiple.  The “Equity Multiple” described in Section 5.01 shall equal all actual distributions made by the Company to KBS pursuant to this Agreement divided by all of KBS’s capital contributions to the Company.  The Equity Multiple shall be agreed upon by JV Member and KBS, in their reasonable good faith judgment.
3.05    Capital Contributions in General.  Except as otherwise expressly provided in this Agreement or as otherwise agreed to by all Members in writing (i) no Member may withdraw all or any portion of any contribution that such Member may have made to the capital of the Company without each other Member’s consent, (ii) no Member shall be entitled to receive interest on such Member’s contributions to the capital of the Company, and (iii) no Member shall be required or entitled to contribute additional capital to the Company
3.06    Additional Capital Contributions.  Following the contribution of all the amounts described in Section 3.01 Managing Member shall have the right to make a capital call by 

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delivering written notice to KBS and JV Member under this Section 3.06 if and only to the extent consistent with the approved Annual Budget or otherwise approved by the Members. Each Member shall contribute its share of the additional capital contributions called for under this Section 3.06 (in accordance with its Percentage Interest) in cash on or before the due date specified in the written notice, which due date shall be no less than ten (10) business days from the date of this written notice.  If a Member fails to make its share of the additional capital contributions called for on or before the due date specified in Managing Member’s written notice, the Non-Defaulting Member shall have the right (but not the obligation and without waiving any remedies hereunder as a result of such failure) to make a Default Loan pursuant to Section 3.02.
3.07    Guaranties.
(a)    Required Guaranties.  If in connection with any financing of the Property, including any mezzanine financing pertaining to the Property and the assumption of the Loan, a lender requires a guaranty of (i) standard non-recourse carve outs, (ii) certain environmental conditions and (iii) other funding obligations related to certain tenant improvement or leasing costs or exculpated expense costs (each a “Required Guaranty” and collectively, the “Required Guaranties”), such Required Guaranties shall be from the Company and/or the JV Member (individually and collectively, the “Guarantor”).  Except as provided in Section 3.07(f), KBS and its Affiliates shall have no obligation to enter into any Required Guaranties.  The Guarantor shall not receive any fees or other compensation for making a Required Guaranty.
(b)    Proportionate Guaranty Obligations of the Members.  Except to the extent Section 3.07(c) provides otherwise, if a Guarantor shall deliver a Required Guaranty and if such Guarantor shall make any payment under any such Required Guaranty, each Member hereby covenants and agrees to satisfy, or cause to be satisfied, its Proportionate Guaranty Obligation (as defined below) with respect to any and all of the Required Guaranties (whether or not such Member actually guaranteed the subject loan and regardless of the amount of the subject loan guaranteed by such Member) and each Member’s payment or its Proportionate Guaranty Obligation shall be treated as an additional capital contribution to the Company by each Member for all purposes of this Agreement.  If and to the extent a Member (or its Affiliate) has failed to fully satisfy its Proportionate Guaranty Obligation within thirty (30) Business Days following the date such Member is notified that such Guarantor has made such payment under the applicable Required Guaranty, the other Member may exercise its rights under Section 3.07(d) below.  “Proportionate Guaranty Obligation” means with respect to any Required Guaranty which any Guarantor shall provide to a lender, the obligation of each Member pursuant to this Section 3.07(b) to make payments (to a third party lender, the Company, to any other Member or the Guarantor) in an amount equal to the product of (x) the aggregate amount paid and/or due and payable under any and all such Required Guaranties multiplied by (y) the Percentage Interest of such Member.
(c)    Exceptions to Proportionate Guaranty Obligations.  Notwithstanding anything to the contrary in Section 3.07(b):
(i)    Conduct By KBS.  Any and all amounts paid by the Guarantor with respect to any of the foregoing Required Guaranties as a result of any conduct or 

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action that the Co-Managing Member (or its Affiliates) shall have taken in violation of this Agreement or which is a result of any gross negligence, fraud or intentional misconduct of the Co-Managing Member (and/or its Affiliates) shall be funded solely by the Co-Managing Member (subject to the rights of indemnification set forth in Section 3.07(e)), JV Member (or its Affiliate) shall have no Proportionate Guaranty Obligation with respect to such payments, such amounts funded by the Co-Managing Member (or its Affiliates) shall not be considered a capital contribution by the Co-Managing Member, and the Co-Managing Member (or its Affiliate) shall reimburse the Guarantor for such amount within thirty (30) Business Days of written demand. If the Co-Managing Member (or its Affiliate) fails to make such payment, JV Member shall, as its sole remedy, be entitled to exercise its rights set forth in Section 3.07(d) hereof; and
(ii)    Conduct by JV Member. Any and all amounts paid by the Guarantor with respect to any of the foregoing Required Guaranties as a result of any conduct or action that the JV Member (or its Affiliates) shall have taken in violation of this Agreement or which is a result of any gross negligence, fraud or intentional misconduct of JV Member (or its Affiliates) shall be funded solely by the JV Member (subject to the rights of indemnification set forth in Section 3.07(e)), KBS (or its Affiliate) shall have no Proportionate Guaranty Obligation with respect to such payments, such amounts funded by the JV Member (or its Affiliates) shall not be considered a capital contribution by the JV Member, the JV Member (or its Affiliate) shall reimburse the Guarantor for such amount within thirty (30) Business Days of written demand. If the JV Member (or its Affiliate) fails to make such payment, KBS shall, as its sole remedy, be entitled to exercise its rights set forth in Section 3.07(d) hereof.
(d)    Failure to Pay Portion of Guaranty Payment by a Member.   If any Member fails to pay its Proportionate Guaranty Obligation in accordance with Section 3.07(b) or the amounts such Member is required to pay under  Section 3.07(c), the other Member may elect to fund all or any portion of the defaulting Member’s payment as a in which case such payment shall be treated as a Default Loan made by the defaulting Member.  If KBS is the defaulting Member under Section 3.07(b) or (c), then the KBS Credit Party shall guaranty KBS’s payment obligation under said sections.  If the JV Member is the defaulting Member under Section 3.07(b) or (c), then the Savanna Credit Party shall guaranty JV Member’s payment obligation under said sections.  
(e)    Indemnification.  The Company shall indemnify, defend and hold harmless each Guarantor for any and all losses suffered under any Required Guaranty, provided that no such indemnification shall be made (and a Guarantor shall reimburse any funds advanced to them in connection with a defense of a claim and indemnify the Company and the other Member) to the extent a court of competent jurisdiction determines that the Member affiliated with such Guarantor is solely liable for the losses suffered under any Required Guaranty pursuant to Section 3.07(c).  The KBS Credit Party shall guaranty KBS’s indemnification obligations under this Section 3.07(e). The Savanna Credit Party shall guaranty JV Member’s indemnification obligations under this Section 3.07(e). 
(f)    Effect of Removal of JV Member as Managing Member.  If JV Member is removed as Managing Member in accordance with Section 2.06(b), (i) Co-Managing Member 

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shall use commercially reasonable efforts to have any Guarantor that is an Affiliate of JV Member replaced as a guarantor(s) under any Required Guaranties for liabilities arising from conduct, actions, inactions or events first occurring or arising after the date upon which a successor Managing Member replaces JV Member as Managing Member (but such Guarantor(s) shall not be replaced with respect to conduct, actions, inactions, or events first occurring or arising on or before the date of such replacement) and (ii) to the extent that the Guarantor any Guarantor that is an Affiliate of JV Member is not replaced as a guarantor under the Required Guaranties as provided in clause (i), Co-Managing Member shall indemnify, defend and hold harmless such Guarantor(c) for any liabilities arising from conduct, actions, inactions or events first occurring or arising after the date upon which successor Managing Member replaces JV Member as Managing Member, except for any liabilities arising from the conduct, actions or inactions of JV Member, its Affiliates, or the Guarantor whether or not first arising after the date upon which successor Managing Member replaces JV Member as Managing Member.  The KBS Credit Party shall guaranty KBS’s indemnification obligations under this Section 3.07(f).
ARTICLE IV
ALLOCATION OF PROFITS AND LOSSES
4.01    In General.
(a)    Net Profits and Net Losses shall be allocated among the Members in such a manner so as, to the maximum extent possible, to make each Member’s Capital Account as of the close of each year (increased by the Member’s share of “partnership minimum gain” as defined in Treasury Regulation Section 1.704-2(b)(2) and “partner nonrecourse debt minimum gain” as defined in Treasury Regulation Section 1.704-2(i)(5)) equal the amount that the Member would receive if, as of the close of such year, all the assets of the Company were sold for their Book Values (as determined immediately before such deemed sale), the proceeds were applied to pay all Company liabilities and the remaining net proceeds were distributed to the Members in accordance with Sections 5.01, as then applicable at the time of such allocations. As used in this Agreement, the term “Interest” means in respect to any Member, all of such Member’s right, title and interest in and to the Net Profits, Net Losses, Net Cash, and capital of the Company, and any and all other interests therein in accordance with the provisions of this Agreement and the Act.  As used in this Agreement, the terms “Net Profits” and “Net Losses” mean, for each fiscal year or other period, an amount equal to the Company’s taxable income or loss, as the case may be, for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss and deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss) with the following adjustments:; (a) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profits or Net Losses shall be added to such taxable income or loss; (b) any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as 705(a)(2)(B) expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Profits or Net Losses shall be subtracted from such taxable income or loss; (c) in the event the Book Value of any Company asset is adjusted in accordance with clauses (b) or (d) of the definition of “Book Value”, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profits or Net Losses; (d) gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax 

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purposes shall be computed by reference to the Book Value of the property disposed of notwithstanding that the adjusted tax basis of such property differs from its book value; (e) in lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, whenever the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of a Fiscal Year, depreciation, amortization or other cost recovery deductions allowable with respect to an asset shall be an amount which bears the same ratio to such beginning Book Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income taxes of an asset at the beginning of a year is zero, depreciation, amortization or other cost recovery deductions shall be determined by reference to the beginning Book Value of such asset using any reasonable method selected by the Members; and (f) any items which are specially allocated pursuant to Section 4.02 shall not be taken into account in computing Net Profits or Net Losses.
(b)    As used in this Agreement, the term “Book Value” means , with respect to any asset, the adjusted basis of that asset for federal income tax purposes, except as follows: (a) the initial Book Value of any asset contributed by a Member to the Company will be the fair market value of the asset on the date of the contribution, as reasonably determined by the Members; (b) the Book Values of all assets will be adjusted to equal the respective fair market values of the assets, as reasonably determined by the Members, as of (1) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis capital contribution, (2) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company if an adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company, (3) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), (4) the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company, and (5) the issuance by the Company of a non-compensatory option to acquire an interest in the Company; (c) the Book Value of any asset distributed to any Member will be the gross fair market value of the asset on the date of distribution as reasonably determined by the Members; (d) the Book Values of assets will be increased or decreased to reflect any adjustment to the adjusted basis of the assets under Code Section 734(b) or 743(b), but only to the extent that the adjustment is taken into account in determining Capital Accounts under Treasury Regulations Section 1.704-1(b)(2)(iv)(m), provided that Book Values will not be adjusted under this clause (d) to the extent that the Members determine that an adjustment under clause (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment under this clause (d); and (e) after the Book Value of any asset has been determined or adjusted under clauses (a), (b) or (d) above, Book Value will be adjusted by the depreciation, amortization or other cost recovery deductions taken into account with respect to the asset for purposes of computing Net Profits or Net Losses.
(c)    The Company shall maintain “Capital Accounts” for each Member in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv).  The Company shall make all adjustments required under Treasury Regulation Section 1.704-1(b)(2)(iv), including the adjustments contained in Section 1.704-1(b)(2)(iv)(g), relating to Section 704(c) property as set forth in Section 4.03.

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4.02    Special Allocations.
(a)    Minimum Gain Chargeback.  Notwithstanding any other provision of this Agreement, if there is a net decrease in partnership minimum gain  (as defined in Treasury Regulation Section 1.704-2(b)(2)) for a Company taxable year, each Member shall be allocated, before any other allocation of Company items for the taxable year, items of gross income and gain for the year (and, if necessary, for subsequent years) in proportion to, and to the extent of, the amount of the Member’s share of the net decrease in minimum gain during the year.  The income allocated under this Section 4.02(a) in any taxable year shall consist first of gains recognized from the disposition of property subject to one or more nonrecourse liabilities of the Company, and any remainder shall consist of a pro rata portion of other items of income or gain of the Company.  The allocation otherwise required by this Section 4.02(a) shall not apply to a Member to the extent not required, as provided in Treasury Regulation Section 1.704-2(f)(2) through (5).
(b)    Qualified Income Offset.  Notwithstanding any other provision of this Agreement, if a Member unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes or increases an Adjusted Capital Account Deficit with respect to the Member, items of Company gross income and gain shall be specially allocated to the Member in an amount and manner sufficient to eliminate such Adjusted Capital Account Deficit as quickly as possible.
(c)    Gross Income Allocation.  If at the end of any Company taxable year, a Member has an Adjusted Capital Account Deficit, the Member shall be specially allocated items of Company income or gain in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly as possible.
(d)    Nonrecourse Deductions.  Any “nonrecourse deductions” (as defined in Treasury Regulation Section 1.704-2(b)(1)) shall be allocated among the Members in accordance with their Percentage Interests.
(e)    Partner Nonrecourse Debt.  Notwithstanding any other provision of this Agreement, any “partner nonrecourse deductions” (as defined in Treasury Regulation Section 1.704-2(i)(2)) shall be allocated to those Members that bear the economic risk of loss for the applicable partner nonrecourse debt, and among those Members in accordance with the ratios in which they share the economic risk, determined in accordance with Treasury Regulation Section 1.704-2(i).  If there is a net decrease for a Company taxable year in any partner nonrecourse debt minimum gain (as defined in Treasury Regulation Section 1.704-2(i)(5)), each Member with a share of such partner nonrecourse debt minimum gain as of the beginning of such year shall be allocated items of gross income and gain in the manner and to the extent provided in Treasury Regulation Section 1.704-2(i)(4).
(f)    Adjusted Capital Account Deficit.  As used in this Agreement, “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in the Member’s Capital Account as of the end of the relevant taxable year, after giving effect to the following adjustments:  (i) crediting thereto (A) the amount of the Member’s shares of partnership minimum gain and partner nonrecourse debt minimum gain, and (B) the amount of 

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Company liabilities allocated to the Member under Section 752 of the Code with respect to which the Member bears the economic risk of loss (as defined in Treasury Regulation Section 1.752-2(a)), to the extent such liabilities do not constitute partner nonrecourse debt under Treasury Regulation Section 1.752-2 and (ii) reduced by all reasonably expected adjustments, allocations and distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
(g)    Interpretation.  The foregoing provisions of this Section 4.02 are intended to comply with Treasury Regulation Sections 1.704-1(b) and 1.704-2 and shall be interpreted consistently with this intention.  Any terms used in such provisions that are not specifically defined in this Agreement shall have the meaning, if any, given such terms in the Treasury Regulations cited above.
4.03    Differing Tax Basis; Tax Allocation.
(g)    Except as otherwise provided in this Section 4.03, items of income, gain, loss and deduction of the Company to be allocated for income tax purposes shall be allocated among the Members on the same basis as the corresponding book items are allocated under Sections 4.01 and 4.02.
(h)    Depreciation and/or cost recovery deductions and gain or loss with respect to each item of property treated as contributed to the capital of the Company or revalued under Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall be allocated among the Members for federal income tax purposes in accordance with the principles of Section 704(c) of the Code and the Treasury Regulations promulgated thereunder so as to take into account the variation, if any, between the adjusted tax basis of such property and its book value (as determined for purposes of the maintenance of Capital Accounts in accordance with this Agreement and Treasury Regulation Section 1.704-1(b)(2)(iv)(g)).  For purposes of this Agreement, the term “Code” means the Internal Revenue Code of 1986, as heretofore and hereafter amended form time to time (and/or any corresponding provision of any superseding revenue laws).
ARTICLE V
DISTRIBUTION OF CASH FLOW
5.01    Distribution of Net Cash.  Net Cash shall be distributed at such times as are reasonably determined by Managing Member in the following order of priority:
(a)    First, 100% to KBS and JV Member, pari passu in proportion to their Percentage Interests (“Pari Passu”), until KBS has received an IRR Return of fourteen percent (14%) and KBS has received an Equity Multiple of 1.3;
(b)    Second, (i) eighty-five percent (85%) to each of KBS and JV Member Pari Passu, and (ii) fifteen percent (15%) to JV Member until KBS has received an IRR Return of sixteen percent (16%); provided that Net Cash that would otherwise be distributed to KBS pursuant to clause (i) of this Section 5.01(b) shall be distributed instead to JV Member until JV Member has received an amount of such Net Cash, as reasonably determined by the Members, equal to the Net Cash that JV Member would have received pursuant to clause (ii) of this Section 

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5.01(b) had JV Member’s fifteen percent (15%) promote described in clause (ii) of this Section 5.01(b) commenced after KBS’s receipt of an IRR Return of twelve percent (12%) and an Equity Multiple of 1.3 instead of commencing after KBS’s receipt of an IRR Return of fourteen percent (14%) and an Equity Multiple of 1.3; and
(c)    Third, (i) seventy-five percent (75%) to each of KBS and JV Member Pari Passu, and (ii) twenty-five percent (25%) to JV Member.
5.02    Limitation on Distributions.  Notwithstanding any other provision contained in this Agreement, the Company shall not make any distributions of Net Cash (or other proceeds) to any Member if such distribution would violate the Act or other applicable law.
5.03    In-Kind Distribution.  Assets of the Company (other than cash) shall not be distributed in kind to the Members without the prior approval of the Members.  In the event of any distribution of real property in kind, each Member hereby waives any right of partition in respect thereof.
ARTICLE VI
RESTRICTIONS ON TRANSFERS OF COMPANY INTERESTS
6.01    Limitations on Transfer.  Except as set forth in Section 6.02, no Member shall be entitled to sell, exchange, assign, transfer or otherwise dispose of, pledge, hypothecate, encumber or otherwise grant a security interest in, directly or indirectly (collectively, a “Transfer”), all or any part of such Member’s Interest, without the prior written consent of the non-transferring Members (which consent may be withheld in such Member’s sole and absolute discretion).  Any attempted Transfer in violation of the restrictions set forth in this Article VI shall be null and void ab initio and of no force or effect.  Each Member shall indemnify, defend and hold the other Members and the Company harmless from and against any and all costs, expenses and losses associated with any Transfer in violation of the restrictions set forth in this Article VI, including without limitation any transfer taxes and any increase in real estate or other taxes incurred as a result of such transfer.
6.02    Permitted Transfers.  Any Member and/or any direct or indirect constituent owner of any Member may transfer all or any portion of such Member’s Interest and/or such constituent owner’s direct or indirect ownership interest in such Member as follows (each a “Permitted Transfer”) to a person or entity described below (a “Permitted Transferee”) without complying with the provisions of Section 6.01:
(a)    Transfer Between Members.  Notwithstanding anything stated to the contrary in this Agreement, any Member may sell, assign or otherwise transfer all or any part of its Interest to any other Member on such terms as are agreed to by both Members.
(b)    KBS Indirect Transfers.  Notwithstanding anything stated to the contrary in this Article VI or elsewhere in the Agreement, any Transfer of equity interests or other interests in KBS, or in any of the direct or indirect owners of KBS (including, without limitation, KBS SOR Acquisition XXV, LLC, KBS SOR Properties, LLC, KBS Strategic Opportunity Limited Partnership or KBS Strategic Opportunity REIT, Inc.) shall not be 

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prohibited (and shall be expressly permitted) provided that KBS Strategic Opportunity REIT, Inc. continues to own, either directly or indirectly, at least fifty-one percent (51%) of the ownership interests in KBS.
(c)    KBS Direct Transfers.  KBS shall have the right to Transfer all or any portion of its Interest to (a) a KBS Affiliate (defined below) without Managing Member’s approval and (b) another entity that is not a KBS Affiliate with Managing Member’s approval, which approval may be withheld in Managing Member’s reasonable discretion.  A “KBS Affiliate” is any entity in which at least fifty-one percent (51%) of the ownership interests is owned, directly or indirectly, through one or more intermediaries, by KBS Strategic Opportunity REIT, Inc.
(d)    JV Member Indirect Transfers.  Notwithstanding anything stated to the contrary in this Article VI or elsewhere in the Agreement, any Transfer of equity interests or other interests in JV Member, or in any of the direct or indirect owners of JV Member (including, without limitation, Savanna Real Estate Fund III, L.P.) shall not be prohibited (and shall be expressly permitted) provided that Savanna Real Estate Fund III, L.P. continues to own, either directly or indirectly, at least fifty-one percent (51%) of the ownership interests in JV Member.
(e)    JV Member Direct Transfers.  JV Member shall have the right to Transfer all or any portion its Interest to (a) a JV Member Affiliate (defined below) without Co-Managing Member’s approval and (b) another entity that is not a JV Member Affiliate with Co-Managing Member’s approval, which approval may be withheld in Co-Managing Member’s reasonable discretion.  A “JV Member Affiliate” is any entity in which at least fifty-one percent (51%) of the ownership interests is owned, directly or indirectly, through one or more intermediaries, by Savanna Real Estate Fund III, L.P.
In the event of any Permitted Transfer, any such Permitted Transferee shall receive and hold such Interest, such ownership interest or portion thereof subject to the terms of this Agreement and to the obligations hereunder of the transferor and there shall be no further transfer of such Interest, such ownership interest or portion thereof except to a person or entity to whom such Permitted Transferee could have transferred such Interest, such ownership interest or portion thereof in accordance with this Section 6.02 had such Permitted Transferee originally been a Member or a constituent owner of a Member as of the date hereof or otherwise in accordance with the terms of this Agreement.  Notwithstanding any provision of this Agreement to the contrary, no Member and/or any direct or indirect constituent owner of any Member shall transfer all or any portion of such Member’s Interest or permit the transfer of any direct or indirect ownership interest in such Member if such transfer would (i) be a default under the Loan or any Refinance, (ii) cause a tax termination of the Company under Section 708 of the Code that has any adverse effect on any Member or (iii) adversely affect the Company’s status as a partnership for income tax purposes.  Any real property transfer tax associated with the Project that is incurred as a result of one or more Transfers by a Member shall be borne by KBS, on the one hand, and JV Member, on the other hand, in proportion to the relative amounts, if any, by which aggregate Transfers by each of KBS and JV Member between the date hereof and the date on which the real property transfer tax is incurred exceed 49% of the Interests held by each of KBS and JV Member, respectively, as of the date hereof.  For example, if, at the time a real 

29

property transfer tax is incurred: (A) KBS has Transferred 54% of its Interests and JV Member has Transferred 59% of its Interests, then the real property transfer tax would be borne one-third by KBS and two-thirds by JV Member; (B) KBS has Transferred 49% or fewer of its Interests and JV Member has Transferred more than 49% of its Interests, then the real property transfer tax would be borne solely by JV Member; and (C) KBS has Transferred more than 49% of its Interests and JV Member has Transferred 49% or fewer of its Interests, then the real property transfer tax would be borne solely by KBS.
6.03    Admission of Substituted Members.  If any Member transfers such Member’s Interest to a transferee in accordance with Sections 6.01 or 6.02, then such transferee shall only be entitled to be admitted into the Company as a substituted Member if (i) the Members approve such admission in writing and this Agreement is amended to reflect such admission; (ii) the non-transferring Member approves the form and content of the instrument of transfer; (iii) the transferor and transferee named therein execute and acknowledge such other instruments as the non-transferring Member may deem reasonably necessary to effectuate such admission; (iv) the transferee in writing accepts and adopts all of the terms and conditions of this Agreement, as the same may have been amended; (v) the transferor pays, as the non-transferring Member may reasonably determine, all reasonable expenses incurred in connection with such admission, including, without limitation, legal fees and costs; and (vi) to the extent required the lender under the Loan or any Refinance has consented to such transfer.  To the maximum extent permitted by applicable law, any transferee of an Interest who does not become a substituted Member shall have no right to require any information or account of the Company’s transactions, to inspect the Company books, or to vote on any of the matters as to which a Member would be entitled to vote under this Agreement.  Any such transferee shall only be entitled to share in such Net Profits and Net Losses, to receive such distributions, and to receive such allocations of income, gain, loss, deduction or credit or similar items to which the transferor was entitled, to the extent transferred.  A Member that transfers such Member’s Interest pursuant to Section 6.02 shall not cease to be a Member of the Company until the admission of the transferee as a substituted Member in accordance with this Agreement and, except as provided in the preceding sentence, shall continue to be entitled to exercise, and shall continue to be subject to, all of the other rights, duties and obligations of such Member under this Agreement.
6.04    Election; Allocations Between Transferor and Transferee.  Upon the transfer of the Interest of any Member or the distribution of any property of the Company to a Member, the Company shall file, in the reasonable discretion of the Members, an election in accordance with applicable Treasury Regulations, to cause the basis of the Company property to be adjusted for federal income tax purposes as provided by Sections 734 and 743 of the Code.  Upon the transfer of all or any part of the Interest of a Member as hereinabove provided, Net Profits and Net Losses shall be allocated between the transferor and transferee on the basis of a computation method that is in conformity with the methods prescribed by Section 706 of the Code and Treasury Regulation Section 1.706-1(c)(2) and approved by the Members affected by the method.
6.05    Waiver of Withdrawal and Purchase Rights.  In accordance with the Act, each Member acknowledges and agrees that such Member may not voluntarily withdraw, resign or retire from the Company without the prior written consent of each other Member, which consent may be withheld in each such other Member’s sole and absolute discretion.  Each Member 

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further acknowledges and agrees that such Member shall not be entitled to receive the fair market value of such Member’s Interest in the Company pursuant to the Act.
ARTICLE VII
ELECTIVE SALE
7.01    Elective Sale of  the Project.
(a)    Except as set forth in Section 7.01(d), at any time after the second (2nd) anniversary of the date of this Agreement, either Member (the “Electing Sale Member”) shall have the continuing right upon notice to the other Member (the “Non-Electing Sale Member”) to solicit offers from third parties to sell the Project; provided that, except as set forth in Section 7.01(d), prior to soliciting any such offers or upon receipt of an unsolicited offer that the Electing Sale Member desires the Company accept, the Electing Sale Member shall provide written notice to the Non-Electing Sale Member (a “Sale Notice”) of its intent to solicit offers for the Project.  The Sale Notice shall set forth the proposed sales price of the Project (the “Proposed Project Value”).  For twenty (20) days following receipt of a Sale Notice, the Non-Electing Member may elect to buy the Electing Sale Member’s Interest in the Company (a “Purchase Election”) in lieu of selling the Project by delivery of written notice thereof to Electing Sale Member (the “Purchase Election Notice”).  If a Purchase Election is made the purchase price (the “Purchase Price”) for the Electing Sale Member’s Interest shall be the amount the Electing Sale Member would receive (net of reasonable and customary closing costs) if the Project were to be sold for the Proposed Project Value and the proceeds of such deemed sale were distributed upon a liquidation of the Company pursuant to Section 8.02.  The closing of the purchase and sale of the Electing Sale Member’s Interest in the Company shall take place on a date agreed upon by the Electing Sale Member and the purchaser of such interest, which date may not be later than ninety (90) days following the date of the Purchase Election (the “Purchase Closing Date”).  To be effective, the Purchase Election Notice must be accompanied by the deposit, in escrow with Commonwealth Land Title Insurance Company or Chicago Title Insurance Company (“Escrow Agent”), of a non-refundable (but applicable to the purchase price) cash deposit (the “Member Deposit”) equal to five percent (5%) of the Proposed Project Value.  The closing of the purchase and sale of the Electing Sale Member’s Interest pursuant to the terms of this Section 7.01(a) shall be held on the Purchase Closing Date, at the office of the Company, or at such other location as the parties shall find mutually agreeable.  At the closing:  (A) the Electing Sale Member shall receive, by wire transfer of immediately available federal funds to an account designated by the Electing Sale Member, an amount equal to the Purchase Price; (B) the Electing Sale Member shall deliver to the Non-Electing Sale Member a duly executed and acknowledged instrument assigning to the Non-Electing Sale Member the Electing Sale Member’s Interest, which assignment shall be accompanied by such other documents and instruments, including, without limitation, corporate resolutions, as may be reasonably requested by the Non-Electing Sale Member or the Company in the exercise of their reasonable judgment or other documents requested by any title company; (C) the Non-Electing Sale Member shall deliver to the Electing Sale Member a duly executed and acknowledged instrument assuming the Electing Sale Member’s Interest in the Company and releasing Electing Sale Member from all claims pertaining to the Interests or the Company other than claims for breach of the representations and warranties of the Electing Sale Member described in the following sentence or a breach of any of the assignment documents executed by 

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the Electing Sale Member and delivered to the Non-Electing Sale Member in connection with the transfer contemplated in this Section; (D) on the effective date of such assignment, the Company shall deliver a release to the Electing Sale Member releasing the Electing Sale Member from all liabilities and obligations of the Company arising from and after the date of such assignment; and (E) the Company shall use good faith commercially reasonable efforts to cause the Electing Sale Member or its Affiliates to be released from any liabilities under any guaranties for the benefit of the Company executed by the Electing Sale Member or its Affiliates, and if the beneficiaries of any such guaranty will not agree to such a release, the Non-Electing Sale Member shall indemnify and hold harmless the Electing Sale Member or its Affiliates who are guarantors of such liabilities in a form reasonably acceptable to Electing Sale Member.  If the Non-Electing Sale Party is (i) KBS then the KBS Credit Party shall guaranty the indemnification obligation in the prior sentence or (ii) JV Member then the Savanna Credit Party shall guaranty the indemnification obligation in the prior sentence.  Such assignment shall be free and clear of all liens and encumbrances, and the Electing Sale Member shall deliver a written representation and warranty to such effect at the closing, which representation and warranty shall survive for a period of six (6) months following the closing.  Each Member shall pay its legal fees in connection with the conveyance of the Interest pursuant to this Section, and all other costs and expenses (including, without limitation, transfer taxes) shall be shared by the Members in accordance with their Interests.  In the event that the Non-Electing Sale Member defaults in its obligation to purchase the Electing Sale Member’s Interests pursuant to this Section 7.01 (a “Purchase Default Event”), the Deposit shall be forfeited by the Non-Electing Sale Member, and the Electing Sale Member shall be thereafter be entitled to sell the Project without further restriction.
(b)    If a Purchase Election is not timely made or a Purchase Default Event has occurred, the Electing Sale Member shall have the right to retain brokers on behalf of the Company and to advertise the Project for sale and to cause the Company to sell the Project so long as such sale is consummated within twelve (12) months of the end of the twenty (20) day period for the Purchase Election.  Electing Sale Member shall keep the Non-Electing Sale Member informed of the progress of the sale of the Project.  The Non-Electing Sale Member shall cooperate with the Electing Sale Member in connection with the sale of the Project and shall execute such documents (in its capacity as a Member in the Company, and/or as the Managing Member or Co-Managing Member, as applicable) as may be reasonably required to effectuate the sale of the Project; provided that the Non-Electing Sale Member shall not be exposed to any personal liability.  Managing Member hereby irrevocably constitutes and appoints the Electing Sale Member (if the Electing Sale Member is not the Managing Member) as its agent and attorney-in-fact, coupled with an interest, for the purpose of executing and delivering any documents required to be executed and delivered by the Electing Sale Member pursuant to this Section 7.01 in the event Managing Member fails or refuses to execute the same upon the request of Electing Sale Member.
(c)    Notwithstanding the foregoing and provided that a Purchase Default Event has not occurred, if as a result of the Electing Sale Member’s marketing efforts, the Electing Sale Member receives a bona fide offer from a third party purchaser and desires to sell the Project in a sale that will result in (i) a purchase price that is less than ninety percent (98%) of the Proposed Project Value, or (ii) the Non-Electing Sale Member receiving less than it would have received 

32

(net of reasonable and customary closing costs) under this Agreement upon a liquidation of the Company pursuant to Section 8.02 had the Project been sold for ninety percent (98%) of the Proposed Project Value, the Electing Sale Member shall deliver a revised Sale Notice to the Non-Electing Sale Member, which shall set forth the new proposed sales price for the Project, and the Non-Electing Sale Member shall have ten (10) days following receipt of the revised Sale Notice to make a Purchase Election in the manner described in Section 7.01(a) above in lieu of having the Project sold.  If a Purchase Election with respect to the revised Sale Notice is not timely made, the Electing Sale Member shall have the right to cause the Company to sell the Project pursuant to Section 7.01(b).  If a Purchase Election is timely made with respect to the revised Sale Notice, the Members shall follow the procedures set forth in Section 7.01(a) above; provided, however, that references to Proposed Project Value shall instead refer to the Proposed Project Value set forth in the revised Sale Notice.  If a Purchase Election is timely made and a Purchase Default Event occurs, the Electing Sale Member shall be entitled to retain the Member Deposit, and Electing Sale Member shall be thereafter be entitled to sell the Project without further restriction.
(d)    Notwithstanding anything to the contrary in this Section 7.01, if the JV Member has been removed as the Managing Member as a result of a Just Cause Event, JV Member shall have the right to be an Electing Sale Member at any time after the third (3rd) anniversary of the date of this Agreement (but not before), but JV Member shall no longer have the right to receive a Sale Notice (and no Sale Notice need be delivered to JV Member) and JV Member shall no longer have a Purchase Election under this Section 7.01.
ARTICLE VIII
DISSOLUTION AND WINDING UP OF THE COMPANY
8.01    Events Causing Dissolution of the Company.  Upon any Member’s bankruptcy, retirement, resignation, expulsion or other cessation to serve or the admission of any new member into the Company, the Company shall not dissolve, but the business of the Company shall continue without interruption and without any break in continuity.  The Company shall be dissolved and its affairs wound up upon the first to occur of:  (i) the expiration of the term of the Company unless such term has been extended by the Members; (ii) the sale, transfer or other disposition by the Company of all or substantially all of its assets and the collection by the Company of any and all Net Cash derived therefrom; (iii) the agreement of the Members to dissolve the Company; (iv) the entry of a decree of judicial dissolution pursuant to the Act; or (v)  if the Property Closing does not occur.
8.02    Winding Up of the Company.  Upon the Liquidation of the Company caused by other than the termination of the Company under Code Section 708(b)(1)(B) (in which latter case the Company shall remain in existence in accordance with the provisions of such Section of the Code), the Members shall proceed to the winding up of the affairs of the Company.  During such winding up process, the Net Profits, Net Losses and Net Cash distributions shall continue to be shared by the Members in accordance with this Agreement.  The assets shall be liquidated as promptly as consistent with obtaining a fair value therefor, and the proceeds therefrom, to the extent available, shall be applied and distributed by the Company on or before the end of the taxable year of such Liquidation or, if later, within ninety (90) days after such Liquidation, in the following order:  (i) first, to creditors of the Company (including Members who are creditors in 

33

the order of priority as provided by law including, without limitation, any Members that have made Member Loans and Default Loans); (ii) second, to the setting up of any reserves which the Members determine, in their reasonable discretion, are necessary for any contingent, conditional or unmatured liabilities or obligations of the Company (which shall be distributed at such time as is determined in the reasonable discretion of the Members); and (iii) the balance, if any, to the Members in accordance with the distribution schedule of Section 5.01.  Such distribution shall be made by the date specified in Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2).  As used in this Agreement, the term “Liquidation” means (i) in respect to the Company the earlier of the date upon which the Company is terminated under Code Section 708(b)(1) or the date upon which the Company ceases to be a going concern (even though it may continue in existence for the purpose of winding up its affairs, paying its debts and distributing any remaining balance to its Members), and (ii) in respect to a Member wherein the Company is not in Liquidation, means the liquidation of a Member’s interest in the Company under Treasury Regulation Section 1.761-1(d).
8.03    Negative Capital Account Restoration.  No Member shall have any obligation whatsoever upon the Liquidation of such Member’s Interest, the Liquidation of the Company or in any other event, to contribute all or any portion of any negative balance standing in such Member’s Capital Account to the Company, to each other Member or to any other person or entity.
ARTICLE IX
BOOKS AND RECORDS
9.01    Books of Account and Bank Accounts.  The fiscal year and taxable year of the Company shall be the year ending December 31.  Managing Member shall or shall cause the Property Manager to:  (x) maintain all of the books and records of the Company, in all material respects, in accordance with the standards of the industry using the income tax basis, consistently applied (provided that monthly reporting shall be on an accrual basis and balance sheets shall be on a cost basis) and (y) provide operating reports and financial statements to each other Member not less frequently than once each month summarizing the operating activities of the Company during the immediately preceding calendar month, any material deviations from the Business Plan or the Annual Budget during such preceding calendar month, and such other information as is reasonably requested by any Member, all within twenty (20) days after the end of such preceding calendar month.  During normal business hours at the Project or the offices of Managing Member, on not less than three (3) business days prior notice, all of the following shall be made available for inspection and copying by all of the Members at their own expense for any purpose reasonably related to each such Member’s Interest in the Company:  (i) all books and records relating to the business and financial condition of the Company, (ii) a current list of the name and last known business, residence or mailing address of each Member, (iii) a copy of this Agreement, the Certificate of Formation and all amendments thereto, together with executed copies of any written powers-of-attorney pursuant to which this Agreement, the Certificate of Formation and all amendments thereto have been executed, (iv) the amount of cash and a description and statement of the agreed value of any other property or services contributed by each Member to the capital of the Company and which each Member has agreed to contribute in the future, and (v) the date upon which each Member became a Member of the Company.  Upon not less than three (3) business days prior notice, Managing Member shall cooperate with any 

34

Member that requests, at such Member’s sole cost and expense, and not more than one (1) time in each calendar year, to conduct an independent audit of the Company.
9.02    Tax Returns.  Managing Member shall cause to be prepared and timely filed and distributed to each Member, at the expense of the Company (and prepared by an accounting firm approved by the Members), all required federal and state Company tax returns, which shall be delivered to the Members by no later than March 31 each year; provided however, in the event that it is not possible for Managing Member to have such materials by said date using best efforts to meet the deadline, Managing Member shall: (i) notify the other Members by March 15 that such materials will not be available, (ii) deliver estimated drafts of such information to the other Members by March 31, and (iii) deliver all such information to the other Members by June 30 of said year. Managing Member shall not file any tax return on behalf of the Company without the prior written approval of the Members; provided that if any Member shall not respond to a written request to approve a tax return within fifteen (15) days such Member shall be deemed to have approved such tax return. Managing Member is hereby designated as the “tax matters partner” of the Company as determined in accordance with the provisions of Section 6231(a)(7) of the Code and the Treasury Regulations promulgated thereunder.
The tax matters partner shall cause each other Member to be a “notice partner” within the meaning of Code Section 6223.  The tax matters partner shall inform each other Member of all significant matters that come to its attention in its capacity as tax matters partner by giving notice thereof within five days after becoming aware thereof and, within that time, shall forward to each other Member copies of all material written communications it may receive in that capacity.  The tax matters partner shall not enter into any settlement or other agreement with any tax authority that purports to bind any Member other than the tax matters partner without the other Member’s prior written consent.
ARTICLE X
MISCELLANEOUS
10.01    Notices.  All notices or other communications required or permitted hereunder shall be in writing, and shall be delivered or sent, as the case may be, by any of the following methods:  (i) personal delivery, (ii) overnight commercial carrier, (iii) certified mail, postage prepaid, return receipt requested, or (iv) email.  Any such notice or other communication shall be deemed received and effective upon the date of acceptance or rejection of delivery.  Any notice or other communication sent by email must be confirmed within two (2) days by letter mailed or delivered in accordance with the foregoing.  Any reference herein to the date of receipt, delivery, or giving, or effective date, as the case may be, of any notice or communication shall refer to the date such communication becomes effective under the terms of this Section 10.01.  Any such notice or other communication so delivered shall be addressed to the party to be served at the address for such party set forth on Exhibit A attached hereto.  Such addresses may be changed by giving written notice to the other parties in the manner set forth in this Section 10.01.  Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of notice or other communication sent.
10.02    Construction of Agreement.  This Agreement contains the entire understanding between the parties hereto and supersedes any prior or contemporaneous understanding, 

35

correspondence, negotiations or agreements between them respecting the within subject matter.  No alteration, modification or interpretation hereof shall be binding unless in writing signed by all of the Members (and the Savanna Credit Party and the KBS Credit Party if such modification would affect such credit party’s obligations under this Agreement).  The Article and Section headings of this Agreement are used herein for reference purposes only and shall not govern, limit, or be used in construing this Agreement or any provision hereof.  Any Exhibit attached hereto is incorporated herein by this reference and expressly made a part of this Agreement for all purposes.  Time is of the essence of this Agreement.  The provisions of this Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, and all rights, duties, obligations and remedies shall be governed by the Act without regard to principles of conflict of laws.  If any arbitration, action or suit is brought by any Member against any other Member that arises out of this Agreement, then the prevailing Member in such arbitration, action or suit shall be entitled to recover reasonable attorneys’ fees and costs from the non-prevailing Member.  Subject to the restrictions set forth in Articles VI and VII, and Section 10.04, this Agreement shall inure to the benefit of and shall bind the parties hereto and their respective personal representatives, successors, and assigns.  Any agreement to pay any amount and any assumption of liability herein contained, express or implied, shall be only for the benefit of the Members and their respective successors and assigns, and such agreements and assumptions shall not inure to the benefit of the obligees of any indebtedness or any other party, whomsoever, deemed to be a third-party beneficiary of this Agreement.  Each of the Exhibits attached hereto is incorporated herein by this reference and expressly made a part of this Agreement for all purposes.  References to any Exhibit made in this Agreement shall be deemed to include this reference and incorporation.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original Agreement, but all of which shall constitute a single Agreement, binding on the parties hereto.  Where the context so requires, the use of the neuter gender shall include the masculine and feminine genders, the masculine gender shall include the feminine and neuter genders, and the singular number shall include the plural and vice versa.  The signature of any party hereto to any counterpart hereof shall be deemed a signature to, and may be appended to, any other counterpart.  Every provision of this Agreement is intended to be severable.  Each Member acknowledges that (i) each Member is of equal bargaining strength; and (ii) each Member has actively participated in the drafting, preparation and negotiation of this Agreement.
10.03    Partnership Intended Solely for Tax Purposes.  The Members have formed the Company as a Delaware limited liability company under the Act, and do not intend to form a corporation or a general or limited partnership under Delaware or any other state law.  The Members do not intend to be shareholders and/or partners to one another or to any third party.  The Members intend the Company to be classified and treated as a partnership solely for federal and state income taxation purposes.  Each Member agrees to act consistently with the foregoing provisions of this Section 10.03 for all purposes, including, without limitation, for purposes of reporting the transactions contemplated herein to the Internal Revenue Service and all state and local taxing authorities.
10.04    Investment Representations.  Each Member agrees as follows with respect to investment representations:
(a)    Each Member understands:

36

(i)    That the Interests in the Company evidenced by this Agreement have not been registered under the Securities Act of 1933, 15 U.S.C. § 15b et seq., or any state securities laws (collectively, the “Securities Acts”) because the Company is issuing Interests in the Company in reliance upon the exemptions from the registration requirements of the Securities Acts providing for issuance of securities not involving a public offering;
(ii)    That the Company has relied upon the representation made by each Member that such Member’s Interest in the Company is to be held by such Member for investment; and
(iii)    That exemption from registration under the Securities Acts would not be available if any Interest in the Company was acquired by a Member with a view to distribution.  Each Member agrees that the Company is under no obligation to register the Interests in the Company or to assist the Members in complying with any exemption from registration under the Securities Acts if the Member should at a later date wish to dispose of such Member’s Interest in the Company.
(b)    Each Member hereby represents to the Company that such Member is acquiring such Member’s Interest in the Company for such Member’s own account, for investment and not with a view to the resale or distribution of such Interest (except for any transfers made in accordance with the provisions of Article VI).Each Member recognizes that no public market exists with respect to the Interests and no representation has been made that such a public market will exist at a future date.
(c)    Each Member recognizes that no public market exists with respect to the Interests and no representation has been made that such a public market will exist at a future date.
(d)    Each Member hereby represents that such Member has not received any advertisement or general solicitation with respect to the sale of the Interests.
(e)    Each Member acknowledges that such Member has a preexisting personal or business relationship with the Company or its officers or principal Interest holders, or, by reason of such Member’s business or financial experience or the business or financial experience of such Member’s financial advisors (who are not affiliated with the Company), could be reasonably assumed to have the capacity to protect such Member’s own interest in connection with the purchase of such Member’s Interest. Each Member further acknowledges that such Member is familiar with the financial condition and prospects of the Company’s business, and has discussed with each other Member the current activities of the Company. Each Member believes that the Interests are securities of the kind such Member wishes to purchase and hold for investment, and that the nature and amount of the Interests to be acquired by such Member is consistent with such Member’s investment program.
(f)    Before acquiring any Interest in the Company, each Member has investigated the Company and its business and the Company has made available to each Member and his/her/its attorney, accountant, purchaser representative and/or tax adviser, if any (collectively, the “Advisers”), this Agreement and all information necessary for the Member to make an informed decision to acquire an Interest in the Company. Each Member, together with

37

its Advisers, if any, considers itself to be a person possessing experience and sophistication as an investor adequate for the evaluation of the merits and risks of the Member’s investment in the Company. In making an investment decision, each Member, together with its Advisors, if any, has made an independent evaluation of the prospective investment in the Company, is relying on its own examination of the Company, this Agreement and the terms thereof, including the merits and risks involved, and is not relying on any advice, guidance or investigation by or from the Company, the Managing Member or any Affiliate of the Company or the Managing Member.
(g)    In evaluating the suitability of an investment in the Company, each Member has not relied upon any representation or information (oral or written) other than as stated in this Agreement.
(h)    Each Member understands the meaning and consequences of the representations, warranties and covenants made by such Member set forth herein and that the Company has relied upon such representations, warranties and covenants. Each Member hereby indemnifies, defends, protects and holds wholly free and harmless the Company and each other Member from and against any and all losses, damages, expenses or liabilities arising out of the breach and/or inaccuracy of any such representation, warranty and/or covenant. All representations, warranties and covenants contained herein and the indemnification contained in this Section 10.04(g) shall survive the execution of this Agreement, the formation of the Company, and the liquidation of the Company.
10.05    Waiver of Conflict of Interest. The Company is not represented by separate counsel; provided, however, in connection with the formation of the Company and the drafting and negotiation of this Agreement, JV Member and the Company (and not KBS) have been represented by Hunton & Williams LLP, 200 Park Avenue, New York, New York 10166, Attention, Carl F. Schwartz, and KBS (and not JV Member or the Company) has been represented by Greenberg Traurig, LLP, 1750 Tysons Boulevard, McLean, Virginia 22102, Attention, Scott Morehouse. To the extent that the foregoing representation constitutes a conflict of interest, the Company and each Member hereby expressly waive any such conflict of interest. Upon creation of the Company, the Company shall only be represented by counsel in accordance with Section 2.02(i).
10.06    Outside Activities.  No Member shall not have any obligations (fiduciary or otherwise) with respect to the Company or the other Members insofar as making other investment opportunities available to the Company or to the other Members.  The Members may, notwithstanding the existence of this Agreement, engage in whatever activities they may choose, whether the same are competitive with the Company or otherwise, without having or incurring any obligation to offer any interest in such activities to the Company or to the other Members.  Neither this Agreement nor any activities undertaken pursuant hereto shall prevent a Member from engaging in such activities.
10.07    Confidentiality.  Each Member and its Affiliates shall keep confidential and shall not disclose, or permit the disclosure of, any information or materials relating to the Company and its investments and activities that are not generally known to the public or which the Members believe should remain confidential or are required by law or agreement to remain confidential; provided that a Member may disclose such confidential information to the extent  

38

(i) the disclosure of such information or materials is expressly required by court order, law or in any litigation or arbitration proceedings; (ii) the information or materials become publicly known other than through the actions or inactions of such Member or its Affiliates, employees, financial sources, representatives, agent, actual or potential permitted investors, permitted transferees or attorneys or violations of this Agreement or any other obligations of confidentiality of such Member; (iii) the disclosure of such information and materials by such Member is to its Affiliates, employees, financial sources, representatives, agents, actual or potential permitted investors, permitted transferees, accountants, financial advisors or attorneys; (iv) such other Member consents in writing to such disclosure; or (v) as may be necessary for such Member to satisfy its or any Affiliate’s REIT or SEC filing, disclosure, broker-dealer or reporting requirements.  No Member shall have any liability under this Section 10.07 by reason of any confidential information becoming available by means beyond the reasonable control of such Member.  Notwithstanding the foregoing, this Section 10.07 shall not prohibit Managing Member from disclosing information, in press releases or otherwise, related to the Company and its investments and activities as is reasonably required in connection with the performance by Managing Member of its duties (including marketing and leasing).
10.08    Waiver of Fiduciary Duties.  To the extent that any fiduciary duties that may exist as a result of the relationship of the parties hereto (whether arising as a result of any such party’s capacity as a Member, Managing Member or a Tax Matters Partner) are inconsistent with, or would have the effect of expanding or modifying any of the terms of this Agreement, (A) the express terms of this Agreement shall control, (B) this Agreement shall be interpreted in accordance with general principles of contract interpretation without regard to the common law principles of agency and/or fiduciary duties, and (C) any liability of the parties shall be based solely on principles of contract law and the express terms of this Agreement.  Each of the parties hereto further acknowledges and agrees that for the purposes of determining the nature and scope of the duties of a Member, Managing Member or a Tax Matters Partner under this Agreement, the terms of this Agreement, and the duties and obligations set forth herein, are intended to satisfy all fiduciary duties that may exist as a result of the relationship between the parties (other than the duty of good faith and fair dealing implied under general contract principles, independent of the common law principles of agency and/or fiduciary duties).  Accordingly, to the fullest extent permitted under applicable law, each of the parties hereby unconditionally and irrevocable waives and disclaims any fiduciary duties or other similar common law rights that are not expressly identified, described and set forth in this Agreement and thus unconditionally and irrevocable waives and disclaims any right to recover or obtain any monetary, equitable or other relief or remedies for any alleged breach or violation of all alleged fiduciary duties or other similar common law rights.
ARTICLE XI
REIT PROTECTION
11.01    Certain Definitions.  For the purposes of this Article XI, the following terms shall have the following meanings:
(a)    “KBS” shall mean KBS as defined in the recitals hereto and KBS Strategic Opportunity REIT, Inc., a Maryland corporation that has elected to be taxable for federal income 

39

tax purposes as a real estate investment trust under the Code (herein, a “REIT”); and/or any subsidiary or affiliate of KBS.
(b)    “REIT Prohibited Transactions” shall mean any action specified in Section 11.02.
11.02    REIT Prohibited Transactions.  Notwithstanding anything to the contrary contained in this Agreement, during the time KBS is a Member of the Company, neither the Company nor Managing Member nor any other Member of the Company, shall take any of the following actions without the prior written consent of KBS:
(a)    Entering into any lease or permitting any sublease that provides for rent based in whole or in part on the income or profits of any person, excluding for this purpose a lease that provides for rent based in whole or in part on a fixed percentage or percentages of gross receipts or gross sales of any person without reduction for any sublessor costs;
(b)    Leasing personal property, excluding for this purpose a lease of personal property that is entered into in connection with a lease of real property where the rent attributable to the personal property is less than fifteen percent (15%) of the total rent provided for under the lease, determined as set forth in Section 856(d)(1) of the Code;
(c)    Acquiring or holding debt (other than Member Loans and Default Loans) unless (a) the amount of interest income received or accrued by the Company under such loan does not, directly or indirectly, depend in whole or in part on the income or profits of any person, and (b) the debt is fully secured by mortgages on real property or on interests in real property;
(d)    Acquiring or holding more than ten percent (10%) of the outstanding voting securities of any one issuer other than a corporation that has properly elected to be a “taxable REIT subsidiary” of KBS;
(e)    Acquiring or holding more than ten percent (10%) of the total value of the outstanding securities (debt or equity) of any one issuer;
(f)    Making an election or taking any action that would cause the Company to be treated as (i) an entity that is not classified as a partnership for federal income tax purposes or (ii) a publicly traded partnership as defined in Section 7704 of the Code;
(g)    Entering into any agreement where the Company receives amounts, directly or indirectly, for rendering services to the tenants of the properties that are owned, directly or indirectly, by the Company other than (i) amounts received for services that are customarily furnished or rendered in connection with the rental of real property of a similar class in the geographic areas in which the properties are located where such services are either provided by (a) an Independent Contractor (as defined in Section 856(d)(3) of the Code) who is adequately compensated for such services and from which the Company does not, directly or indirectly, derive revenue or (b) a taxable REIT subsidiary of KBS (as defined in Section 856(l) of the Code) who is adequately compensated for such services or (ii) amounts received for services that are customarily furnished or rendered in connection with the rental of space for

40

occupancy only (as opposed to being rendered primarily for the convenience of the Company’s tenants);
(h)    Holding cash of the Company for operations or distribution in any manner other than a traditional bank checking or savings account or a money market account in accordance with IRS Rev. Rul. 2012-17; or
(i)    Entering into any agreement where income or gain, as applicable, received or accrued by the Company under such agreement, directly or indirectly, (a) does not qualify as “rents from real property” within the meaning of Section 856 of the Code, (b) does not qualify as “interest on obligations secured by mortgages on real property or on interests in real property” within the meaning of Section 856 of the Code or (c) constitutes income from a sale of “inventory” or “stock in trade” of the Company within the meaning of Section 1221(a)(1) of the Code other than a sale that would qualify under the Section 857(b)(6)(C) “safe harbor” with respect to KBS.
[Remainder of page intentionally blank; signature page follows.]

41

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

	 
	 

	SREF 110 WILLIAM JV III, LLC,

	a Delaware limited liability company

	 
	 

	By:
	/s/ Nicholas Bienstock

	Name:
	Nicholas Bienstock

	Title:
	Authorized Signatory

	 
	 

	 
	 

	 
	 

	Solely as to its express agreement Sections

	2.2(d)(ii),2.06(e),3.01,3.07, 7.01(a) and 10.02:

	 
	 

	"SAVANNA REAL ESTATE FUND III, L.P.,

	 

	SAVANNA REAL ESTATE FUND III, L.P.,

	a Delaware limited partnership

	 
	 

	By:
	/s/ Nicholas Bienstock

	Name:
	Nicholas Bienstock

	Title:
	Authorized Signatory

	 
	 

	 
	 

 

“KBS”

KBS SOR 110 WILLIAM JV, LLC,
a Delaware limited liability company

By:    KBS SOR ACQUISITION XXV, LLC,
a Delaware limited liability company,
its sole member

By:    KBS SOR PROPERTIES, LLC,
a Delaware limited liability company,
its sole member

By:    KBS STRATEGIC OPPORTUNITY  LIMITED PARTNERSHIP, 
a Delaware limited partnership, 
its sole member

By:    KBS STRATEGIC OPPORTUNITY REIT, INC.,
a Maryland corporation,
its sole general partner

By:     /s/ David E. Snyder          
David E. Snyder
Chief Financial Officer

Solely as to its express agreement Sections 2.02(e)(iii), 3.01, 3.07, 7.01(a), and 10.02:

KBS SOR PROPERTIES, LLC, 
a Delaware limited liability company, its sole member

By:    KBS STRATEGIC OPPORTUNITY  LIMITED PARTNERSHIP, 
a Delaware limited partnership, 
its sole member

By:    KBS STRATEGIC OPPORTUNITY REIT, INC., 
a Maryland corporation, 
its sole general partner

By:     /s/ David E. Snyder                 
David E. Snyder
Chief Financial Officer

EXHIBIT A
NAMES, ADDRESSES, PERCENTAGE INTERESTS 
AND CAPITAL CONTRIBUTIONS OF THE MEMBERS
	
			
	Names and Addresses of the Members:
	Percentage Interest
	Capital Contribution

	KBS 110 William Street JV, LLC
620 Newport Center Drive, Suite 1300
Newport Beach, California  92660
Attention:  Brian Ragsdale
Facsimile:  (949) 417-6518
Email:  bragsdale@kbs-ca.com

	60%
	$9,000,000

	

SREF III 110 William JV, LLC
10 East 53rd Street, 37th Floor
New York, NY 10022
Attn:  Chris Schlank
Facsimile:  (212) 229-1113
Email: CSchlank@savannafund.com

	40%
	$6,000,000

EXHIBIT B
LEGAL DESCRIPTION OF THE PROPERTY
See Attached:

EXHIBIT B

DESCRIPTION OF REAL PROPERTY

All that certain real property situated in New York County, New York, described as follows:

ALL that certain plot piece or parcel of land, situate, lying and being in the Borough of Manhattan, County and State of New York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the easterly side of William Street and the northerly side of John Street;
RUNNING THENCE northerly along the easterly side of William Street, 188 feet 3 inches to a point in said easterly side of William Street, distant 154 feet 10 1 /4 inches southerly from the corner formed by the intersection of the southerly side of Fulton Street and the said easterly side of William Street;
THENCE easterly on a line forming an angle of 86 degrees 52 minutes 30 seconds on its northerly side with the easterly side of William Street, 159 feet 4 1 /4 inches;
THENCE southwesterly on a line forming an angle of 82 degrees 44 minutes 30 seconds on its westerly side with the last mentioned course, 49 feet 5 inches;
THENCE continuing southwesterly on a line forming an angle of 180 degrees 49 minutes 30 seconds on its easterly side with the last mentioned course, 25 feet 7 1/2 inches;
THENCE continuing southwesterly along a line making an angle of 179 degrees 48 minutes on its easterly side with the last mentioned course, 23 feet 2 1/2 inches;
THENCE southeasterly and along a line forming an angle of 93 degrees 51 minutes 50 seconds on its northerly side with the last mentioned course, 24 feet 10 1 /4 inches;
THENCE southerly along a line forming an angle of 96 degrees 20 minutes 30 seconds on its westerly side with the last mentioned course, 104 feet 3 1 /4 inches to the northerly side of John Street;
THENCE westerly along the northerly side of John Street, 173 feet 4 1/4 inches to the corner formed by the intersection of the northerly side of John Street with the easterly side of William Street at the point or place of BEGINNING.

FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the party of the first part, of
in and to the land lying in the street in front of and adjoining said premise

Exhibit A-1

EXHIBIT C
SCHEDULE OF SOURCES AND USES OF FUNDS

See Attached:

EXHIBIT D
INITIAL APPROVED ANNUAL BUDGET

See Attached:

EXHIBIT E
FORM OF LEASING AGREEMENT

RENTAL AGENCY AGREEMENT
ARTICLE 1This Rental Agency Agreement (this “Agreement”) is made as of the [__] day of [_______], 2013 by and between [______], a Delaware limited liability company, having an office at c/o Savanna Real Estate Funds, 10 East 53rd Street, 37th Floor, New York, NY 10022 (“Owner” or “Landlord”) and Savanna Commercial Services, LLC, a Delaware limited liability company, having an office at c/o Savanna Real Estate Funds, 10 East 53rd Street, 37th Floor, New York, NY 10022 (“Agent”).
STATEMENT OF FACTS
ARTICLE 2Owner owns the fee simple interest in certain premises known as [______________] located at [________] (the “Building”) and the land upon which it is located (the “Land”).
ATRICLE 3Owner desires to employ Agent as the sole and exclusive renting agent for certain rentable office space (the “Space” or “space”) in the Building, on the terms and conditions hereinafter set forth.
ARTICLE4NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, Owner and Agent agree as follows:
ARTICLE 1
Term And Scope
Section 1.1    During the term of this Agreement, Agent is hereby appointed as the sole and exclusive renting agent having the exclusive right to negotiate lease extensions, lease expansions, relocations, renewals and other lease related agreements in the Building by existing tenants in the Building, subject to the provisions of this Agreement. Agent acknowledges and agrees that Brian Reiver (the “Representative”) shall personally supervise such renting activities in the Building.  Agent shall have the right, from time to time, to replace the Representative with any other agent or employee of Agent designated by Agent.  Everything done by Agent under the provisions of this Section 1 shall be done solely as agent of Owner and not for its own account, and all obligations or expenses incurred thereunder shall be for the account, on behalf and at the expense of Owner, not Agent.
Section 1.2    The term of this Agreement shall be on a month to month basis, commencing on the date hereof (the “Commencement Date”) and continuing thereafter until the date (the “Expiration Date”) this Agreement shall be terminated pursuant to the provisions of this Agreement. This Agreement may be terminated: (x) at any time by Owner sending a written notice of termination to Agent, in which event the term of this Agreement shall terminate effective upon the receipt by Agent of such notice of termination; and (y) at any time by Agent sending a written notice of termination to Owner in which event the term of this Agreement shall terminate ninety (90) days after the sending of such notice of termination.

Section 1.3    This Agreement shall terminate automatically if:
(a)    all or substantially all of the Building is condemned or acquired by eminent domain;
(b)    Owner or Agent files a petition for bankruptcy, reorganization or arrangement under any federal or state statute, or makes an assignment for the benefit of creditors, or takes advantage of any insolvency statute;
(c)    an involuntary petition of bankruptcy or insolvency under the laws of the federal government or of any state is filed against Owner or Agent and Owner or Agent, as the case may be, shall fail to dismiss the same within sixty (60) days; or
(d)    Agent’s New York State real estate broker’s license is suspended or revoked.
Section 1.4    Upon the termination or expiration of this Agreement, Agent shall deliver to Owner, within ten (10) business days after such termination or expiration, all records, contracts, leases, receipts for deposits, unpaid bills and other papers or documents and all other items relating to the Building which are the property of Owner which are in Agent’s possession.
Section 1.5    Agent acknowledges that this Agreement is subject and subordinate to any mortgages now or hereafter in effect covering the Building or the Land and to all renewals, replacements, modifications or extensions thereof (the “Superior Mortgages”) and to each and every term and condition thereof.
Section 1.6    Owner acknowledges, however, that Agent is not an expert in and is not responsible for any legal, regulatory, tax, accounting, engineering, environmental or other technical matters, all of which shall be solely Owner's responsibility.
ARTICLE 2
Renting
Section 2.1    Agent shall use commercially reasonable efforts to extend, renew or secure leases of space in the Building, or to cause an existing tenant to enter into a new lease of space in the Building, at the highest possible rental rates and otherwise on terms most advantageous to Owner.  Agent agrees to participate in project meetings (at a location in Manhattan to be designated by Owner) and telephone conferences regarding the status of the leasing activity at the Building.
Section 2.2    Agent may solicit the cooperation of other real estate brokers in the renting of space (herein referred to as “Outside Broker(s)”).  Agent shall cooperate with Outside Brokers and shall encourage their participation in the renting of space.  Unless otherwise directed by Owner in writing, Agent shall, prior to delivery by Agent of any lease or extension or renewal of any lease to an Outside Broker or tenant, request Outside Broker to execute a brokerage agreement with Owner (a “Brokerage Agreement”) prepared by Owner’s counsel, which shall provide for compensation to be paid to Outside Broker directly by Owner, which compensation shall not exceed one full commission payable hereunder.  If directed by Owner in writing, until such Outside Broker shall have executed a Brokerage Agreement with Owner, Agent shall cease further negotiations with such Outside Broker or tenant.  Agent agrees to send 

a written notice terminating negotiations if requested by Owner to do so.
Section 2.3    Owner agrees to refer to Agent all offerings and inquiries received by Owner from existing tenants of space in the Building, and Agent agrees to diligently investigate and develop such offerings or inquiries and to canvass, solicit and otherwise employ its services to endeavor at all times to fully rent the applicable space.
ARTICLE 3 
Compensation
Section 3.1    Subject to the provisions of this Agreement, with respect to every renewal, extension, relocation or new lease with an existing tenant of space in the Building entered into after the date hereof with respect to any existing tenant (each, a “Lease Renewal or Modification”), Agent shall be compensated by Owner in accordance with the provisions of this Article 3.
Section 3.2    Notwithstanding any provision of this Agreement to the contrary and regardless of the extent to which negotiations may progress, in the event that either: (a) such Lease Renewal or Modification fails to be consummated and/or received and accepted by Landlord for any reason whatsoever, including, but not limited to, any lack of any approval or consent that may be required pursuant to the provisions of the applicable existing lease or such Lease Renewal or Modification or required pursuant to the provisions of the Superior Mortgages, or the refusal by Landlord to continue negotiations for any reason or no reason; or (b) if tenant fails to pay the first regular rental payment, if any, due upon execution and delivery of the Lease Renewal or Modification, or if any of the Conditions (as hereinafter defined) are not satisfied, then, and in such event, Agent shall not be entitled to any commission whatsoever in connection with such Lease Renewal or Modification and all negotiations prior thereto, and Agent hereby waives any claims or demands therefor.
Section 3.3    
(a)    In the event that (i) a Lease Renewal or Modification is actually executed,  delivered, received and accepted by Landlord and a tenant, (ii) all conditions required to make such Lease Renewal or Modification become effective have been satisfied including, but not limited to, delivery of any lease guarantees, or consents by or agreements with the holders of any Superior Mortgages, and (iii) the first monthly installment of rent and the security deposit (if any) pursuant to the Lease Renewal or Modification have been paid (collectively, the “Conditions”), then, provided that the outside third-party brokerage firm acting as the exclusive broker for the Building (the “Exclusive Broker”) is not entitled commission, Owner shall pay to Agent, as full compensation for its services rendered in connection with such Lease Renewal or Modification, 95% of one commission computed upon the initial term of the Lease Renewal or Modification only, in accordance with the rates set forth in Schedule A annexed hereto and the payment schedule set forth on Schedule B annexed hereto; provided, that in the event that an Outside Broker (as hereinafter defined) is entitled to a full commission in connection with such transaction under this Section 3.3(a), Owner shall pay to Agent, for Agent’s own account, an amount equal to 47.5% of one commission on the fixed rental to be received by Owner during such Lease Renewal or 

Modification.
(b)    In the event that the initial term of the Lease Renewal or Modification is renewed or extended, regardless of whether as a result of the exercise by tenant of an option or right contained in the original lease or Lease Renewal or Modification on the terms and conditions for such renewal or extension contained in the original lease or Lease Renewal or Modification, and regardless of whether this Agreement has expired or terminated, then, provided that the Exclusive Broker (as hereinafter defined) is entitled to a commission, Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 15% of one commission on the fixed rental to be received by Owner during the renewal or extension period, in accordance with the rates set forth in Schedule A, computed as if such renewal or extension term were part of the initial term of the Lease Renewal or Modification; provided, that in the event that an Outside Broker is entitled to a full commission in connection with such transaction under this Section 3.3(b), Owner shall pay to Agent, for Agent’s own account, an amount equal to 7.5% of one commission on the fixed rental to be received by Owner during such Lease Renewal or Modification.  
(c)    In the event of a new lease in the Building with any unaffiliated tenant which is not a tenant of the Building or a tenant within Agent’s portfolio (each, a “New Lease”), provided that this Agreement has not expired or terminated, then Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 20% of one full commission on the fixed rental to be received by Owner during such New Lease, in accordance with the rates set forth in Schedule A; provided, that in the event an Outside Broker is entitled to a full commission in connection with such transaction under this Section 3.3(c), Owner shall pay to Agent, for Agent’s own account, 10% of one commission on the fixed rental to be received by Owner during such New Lease.
(d)    In the event of a relocation or new lease with any tenant within Agent’s portfolio (which shall be defined as any building owned or controlled by an affiliate of Agent) (each, a “Portfolio Lease”), and regardless of whether this Agreement has expired or terminated, then, regardless of whether Agent was entitled to a commission on the original Portfolio Lease, Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 95% of the difference between (i) then then-market commission on the fixed rental to be received by Owner during such Portfolio Lease and (ii) any commission payable to the Exclusive Broker and/or any Outside Broker.
(e)    In the event of an expansion of leased space with an existing tenant of space in the Building (each, an “Expansion Lease”), and this Agreement has not expired or been terminated, then, regardless of whether Agent was entitled to a commission on the original Expansion Lease, Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 95% of the difference between (i) then then-market commission on the fixed rental to be received by Owner during such Expansion Lease and (ii) any commission payable to the Exclusive Broker and/or any Outside Broker.
(f)    Owner shall not be obligated to pay any compensation whatsoever to Agent under the provisions of this Agreement in connection with any lease transaction consummated between Owner and any affiliate or subsidiary thereof.

Section 3.4    All commissions payable under this Agreement shall be subject to the following provisions of this Section 3.4:
(a)    The commission shall be based upon the aggregate fixed rent or base rent (the “Annual Fixed Rent”) payable by the tenant during the initial term of the Lease Renewal or Modification only, limited as hereinafter provided. In the event a Lease Renewal or Modification is consummated on a so-called “net” basis so that real property taxes and costs of maintaining or operating the property are included in Annual Fixed Rent, the amount of such items for the year in which the Lease Renewal or Modification is executed, on a per square foot basis, shall not be included in the Annual Fixed Rent per square foot in determining the commission due hereunder.
(b)    If the Lease Renewal or Modification shall expressly provide for an option by the Tenant to cancel the Lease Renewal or Modification prior to the commencement of the term, then the first payment of such commission shall not be payable until the time for the exercise of such option to cancel shall have expired or shall have been waived in writing and, if the Lease Renewal or Modification shall be cancelled pursuant to such option, no commissions shall be due or payable therefor. If the Lease Renewal or Modification shall expressly provide the tenant with an unilateral option to cancel subsequent to the commencement of the term, then such commission shall be payable only for the term of the Lease Renewal or Modification unaffected by the option to cancel; if the option is waived in writing or not exercised within the time limit permitted, then a commission shall be payable for the then balance of the term, as if no such option to cancel had existed. Notwithstanding the above, if the cancellation option expressly requires that the tenant make a payment representing unamortized commission amounts, then, in such event only, following such payment by tenant to Owner, Agent shall be paid its commission as provided herein as if no such right to cancel existed; provided, however, that if the cancellation payment made by tenant does not equal, in the aggregate, the amount of such commission otherwise payable to Agent and all of Owner’s reasonable expenses with respect to such lease, then the amount of the commission to be paid to Agent shall be determined on a pro rata basis.
(c)    In determining the Annual Fixed Rent for the purpose of computing commissions due hereunder, items (i), (ii), (iii), (iv) and (v) below (whether or not referred to in the Lease Renewal or Modification as rent or additional rent and whether or not included in the Annual Fixed Rent) shall be excluded and items (vi) and (vii) shall be deducted:
(i)    Charges, if any, payable by tenant for utilities or utility services to be supplied to tenant, including, without limitation, electricity charges;
(ii)    Any payment to be made by tenant (A) pursuant to any cost of living (Price Index) formulae, or (B) on account of increases in real estate taxes, wages or labor costs of maintaining and operating the Building in which the demised premises are located (other than fixed increases in base rent), or (C) pursuant to any other escalation formulae which increases the Annual Fixed Rent other than a percentage increase to Annual Fixed Rent;
(iii)    Any payments to be made by tenant on account of work, labor or materials furnished by Landlord in excess of Owner’s standard landlord work letter;

(iv)    Any payments to be made based upon tenant’s gross receipts, (commonly referred to as Percentage Rental), provided, however, that if there is no Annual Fixed Rent payable under the terms of the Lease Renewal or Modification, and in lieu thereof, tenant’s rent is based upon a percentage of tenant’s gross receipts, then, and only in such event, shall the commission be payable on such Percentage Rental when determined and pursuant to all of the other terms of this Agreement;
(v)    Any payments to be made by tenant in addition to Annual Fixed Rent;
(vi)    All costs and expenses actually assumed or incurred by Landlord, if any, (A) in connection with tenant’s lease obligations for space rented by tenant from others outside the Building including, without limitation, expenses incurred in reletting such space or (B) in connection with any take-back of Space in the Building in connection with any Lease Renewal or Modification, including, without limitation, expenses incurred in reletting such space; and
(vii)    Rent concessions granted by Landlord amortized on a straight-line basis over the term of the Lease Renewal or Modification, other than rent concessions granted in lieu of, and not in excess of, Landlord’s standard work letter or standard allowance for tenant improvements for that particular space in the Building.
(d)    Subject to the provisions of subdivision (a) of this Section 3.4 above, all commissions (except for any payments made directly to Outside Brokers pursuant to any Brokerage Agreements between Owner and such Outside Brokers), including overriding commissions, shall be payable to Agent in accordance with the provisions of Schedule B annexed hereto and made a part hereof.
Section 3.5    Notwithstanding anything in this Agreement to the contrary, the relocation of a tenant within the Building upon substantially the same terms and conditions as set forth in such tenant’s existing Lease Renewal or Modification shall not result in any additional commission being payable to Agent unless the term of the subject Lease Renewal or Modification is extended or additional space is taken and, in such event, the provisions of Section 3.3 shall control with respect to such additional space or extended term. Should a tenant relocate within the Building and the terms and conditions of such tenant’s Lease Renewal or Modification be modified in connection with the relocation so as to result in an increase in total fixed rental payable, Owner shall pay Agent a commission on any increase in fixed rental to be received as a result of the relocation in accordance with the provisions of Section 3.3. In the event a Lease Renewal or Modification is entered into with an existing tenant for space then under lease to another existing tenant whose lease will thereby terminate prior to the stated expiration date, Owner shall pay to Agent a commission with respect to such new Lease Renewal or Modification in accordance with the provisions of Section 3.3.  However, in the event such a situation should arise, Owner shall be entitled to credit against any commission due Agent an amount equal to the pro rata portion of the commission theretofore paid to Agent with respect to the unexpired portion of the term of the existing lease, provided Owner had initially paid the commission pertaining to the unexpired portion of the term, and Owner and Agent shall use reasonable efforts to secure a fee directly from the then existing tenant of the applicable space in consideration for the termination 

of such existing tenant’s lease and any fee or consideration so received by Agent shall be offset, penny for penny, against the commission due and payable by Owner resulting from the new Lease Renewal or Modification.
Section 3.6    Notwithstanding anything in this Agreement to the contrary, for the purposes of the calculation of any commissions under Section 3.3 above, “Outside Broker” shall include any broker, representative or affiliate of Agent and any other division of Agent, the employees of which are not working directly with the Representative on this assignment, provided that if Agent or any affiliate of Agent is also the Outside Broker in a lease transaction, Owner shall not be obligated to pay more than 95% of one commission in the aggregate, determined in accordance with the provisions of this Agreement, in connection with such transaction.
Section 3.7    Agent acknowledges that, if a rental agency, brokerage or other agreement between Owner and another leasing agent with respect to the Building is in effect as of the date hereof (an “Existing Agreement”), then such leasing agent may be entitled to a commission with respect to any Lease Renewal or Modification pursuant to the terms of such Existing Agreement.  Agent further acknowledges that a former leasing agent for the Building may claim that it is entitled to be paid a commission with respect to any Lease Renewal or Modification entered into with the entities listed on Schedule C annexed hereto for the space so indicated on Schedule C.  Accordingly, notwithstanding anything in this Agreement to the contrary, if Owner enters into a Lease Renewal or Modification with any entity set forth on the attached Schedule C for the space so indicated on said Schedule C within six (6) months after the Commencement Date, and the former leasing agent for the Building is entitled to be paid a commission with respect to such Lease Renewal or Modification, then Agent shall neither seek nor accept a commission hereunder in connection with such Lease Renewal or Modification.
Section 3.8    The following provisions shall apply to any Lease Renewal or Modification executed and delivered after the expiration or termination of this Agreement:
(a)    Within thirty (30) days after the Expiration Date of this Agreement, Agent shall deliver to Owner a complete list (the “Pending List”) of any potential Lease Renewal or Modification with respect to which, at the request of Owner, a term sheet or letter of intent has been delivered to the applicable tenant, and such tenant has provided written comments on, or otherwise responded in writing to such term sheet or letter of intent as of the Expiration Date of this Agreement. If, within twelve (12) months after the Expiration Date of this Agreement (the “Tail Period”), (i) Owner and the applicable tenant execute and deliver a Lease Renewal or Modification with respect to any transaction identified on the Pending List, (ii) such Lease Renewal or Modification is on terms substantially similar to those contained in the last draft of the term sheet or letter of intent that was delivered to the applicable tenant as of the Expiration Date of this Agreement, and (iii) the Conditions are satisfied with respect to such Lease Renewal or Modification, then Owner shall pay to Agent a commission in accordance with the terms, covenants and conditions of this Agreement.  Notwithstanding the aforesaid, Agent shall not be entitled to any compensation pursuant to this Agreement and the same is hereby waived if the potential Lease Renewal or Modification is not actually executed and delivered by Owner and the applicable tenant within the Tail Period; provided that Owner shall use good faith reasonable efforts to negotiate and execute such Lease Renewal or 

Modification within the Tail Period.
(b)    Owner’s obligation to pay any leasing commissions to Agent that have been earned by Agent pursuant to the provisions hereof, but not yet payable, including any Lease Renewal or Modification entered into prior to the expiration or termination of this Ageeement, shall survive the expiration or termination of this Agreement.
Section 3.9    Agent’s acceptance of compensation with respect to any Lease Renewal or Modification shall be deemed a representation that Agent is entitled to a commission in accordance with the terms hereof.  Notwithstanding the termination of this Agreement, Agent agrees at all times, with respect to any Lease Renewal or Modification, to hold Owner, and its direct and indirect partners, principals, members, officers, directors, employees and affiliates harmless against any and all liability, loss, damage and expense (including reasonable attorneys’ fees and disbursements) arising out of or otherwise relating to claims for commissions on such Lease Renewal or Modification by any other broker including but not limited to any Outside Broker, alleging to have dealt with or through Agent arising out of alleged negotiations or conversations had by Agent or Agent and Owner jointly (but not by Owner without the participation of Agent), with the claimant broker.  Agent’s liability under the foregoing indemnity shall be limited to the money received by it from Owner on the particular Lease Renewal or Modification transaction upon which a claim is being made; provided, however, if Owner elects to pay an Outside Broker directly pursuant to the terms of a separate Brokerage Agreement, then, subject to the provisions of this Agreement, Owner shall be responsible for the commission to which such Outside Broker is entitled pursuant to such Brokerage Agreement between Owner and such Outside Broker.  Owner agrees to use reasonable efforts to have any commission agreement executed by an Outside Broker contain a provision whereby such Outside Broker (i) represents, if correct, that such Outside Broker and Agent were the sole brokers instrumental in consummating a Lease Renewal or Modification with the tenant dealing with such Outside Broker; and (ii) indemnifies and holds Owner and Agent harmless from and against any liability arising from the incorrectness (actual or alleged) of such representation.
ARTICLE 4
 Miscellaneous
Section 4.1    Agent will make available to Owner the advice and consultation of its staff throughout the term of this Agreement for any reason reasonably related to this Agreement and which would customarily be provided by a first-class leasing agent in New York City, including, but not limited to, the occupancy of the tenants within the Building. Nothing herein, however, shall be construed to provide that Agent shall perform or provide professional legal services. Within fifteen (15) days after the date hereof Agent shall submit to Owner Agent’s initial marketing and leasing plan, on a floor by floor basis, for the Building and Agent’s estimate of Owner’s future lease up costs. Agent shall periodically, and no less than monthly, update such marketing and leasing plan and shall include therein the Representative’s advice as to market trend rates and comparative rents for leases being signed in the market in which the Building is competing.
Section 4.2    The Representative shall conduct meetings with Owner to discuss the activities to be conducted by Agent hereunder at such times as Owner may reasonably request. Additionally, at any such meeting or upon Owner’s request, Agent will provide to 

Owner a written report as to any telephone inquiries and the status of any negotiations with respect to any space in the Building for the prior week.
Section 4.3    This Agreement may be assigned by Owner to its grantee upon the sale of the Building and upon the assignee’s unconditional assumption in writing of this Agreement. Owner shall thereupon be relieved of any liability hereunder except to the extent such liability accrued prior to the date of assignment.
Section 4.4    Any disagreement between Owner and Agent with respect to the interpretation or construction of this Agreement or the obligations of the parties hereunder shall be determined by arbitration.  Such arbitration shall be conducted, upon request of either Owner or Agent, before three (3) arbitrators (unless Owner and Agent agree to one (1) arbitrator) designated by the American Arbitration Association and in accordance with the rules of such Association. The arbitrators designated and acting under this Agreement shall make an award in strict conformity with such rules and shall have no power to depart from or change any of the provisions hereof.  The expense of arbitration proceedings conducted hereunder shall be borne by the non-prevailing party.  All arbitration proceedings conducted hereunder shall be conducted in the City of New York.
Section 4.5    This Agreement contains the entire understanding of the parties. Agent may not assign this Agreement nor may Agent assign its rights, duties or obligations under this Agreement. This Agreement may not be changed or modified orally but only by written instrument signed by the parties. This Agreement shall be binding upon and inure to the benefit of the successors and, except as may expressly otherwise be provided herein, the assigns of the respective parties hereto.
Section 4.6    This Agreement shall be construed and interpreted in accordance with the laws of the State of New York.
Section 4.7    All notices sent pursuant to the terms of this Agreement, in order for same to be effective, must be sent by certified or registered mail, return receipt requested, or by nationally recognized overnight carrier providing for receipted delivery as follows:
Any required notices to Agent shall be directed to:
Savanna Commercial Services, LLC 
c/o Savanna Real Estate Funds
10 East 53rd Street, 37th Floor 
New York, New York 10022
Attention: Brian Reiver
E-mail:     breiver@savannafund.com 
Telephone: 212-600-2517

with a copy to:
McDermott Will & Emery LLP
340 Madison Avenue
New York, New York 10173

Attention: William E. Stempel, Esq.
E-mail:     wstempel@mwe.com
Telephone: 212-547-5623

Any required notices to Owner shall be directed to:
[____________]
c/o Savanna Real Estate Fund II
10 East 53rd Street, 37th Floor
New York, New York 10022
Attention: Nicholas C. Bienstock
E-mail:     nbienstock@savannafund.com 
Telephone: 212-229-0101
with a copy to:
Savanna Real Estate Fund II
10 East 53rd Street, 37th Floor
New York, New York 10022
Attention: Christopher Schlank
E-mail:     cschlank@savannafund.com 
Telephone: 212-229-0101
Section 4.8    The term “Agent” as used in this Agreement shall include any corporate subsidiaries or affiliates of Agent who perform services on behalf of Owner in, on or about the Building in connection with this Agreement.
Section 4.9    Owner shall indemnify, defend (or reimburse Agent’s reasonable defense costs) and hold Agent, its affiliates assisting Agent in providing services to Owner under this Agreement, their members, shareholders, directors, officers and employees (collectively, the “Indemnified Parties”) harmless for any and all loss, claims, demands, penalties, damages, liabilities, costs and expenses, statutory or otherwise, including reasonable attorney’s fees and expenses, arising from this Agreement, whether paid, incurred by, or asserted against an Indemnified Party, hereinafter collectively called “claims”, for injury to any persons or property in, about and in connection with the Building, and from any cause whatsoever or which may arise after the termination of this Agreement by reason of actions of persons or entities other than Agent, unless caused by Agent’s willful misconduct in performance of its duties hereunder.  The foregoing indemnity shall not apply to the extent any loss, claims, demands, penalties, damages, liabilities, costs and expenses result from the gross negligence or willful acts of any of the Indemnified Parties.  Agent agrees to indemnify and hold Principal harmless from and against any and all “claims” (as such term is defined in this Section 4.9), resulting from the acts, or failure to act, of Agent, its agents or employees which acts or failure to act constitute gross negligence or willful misconduct.  It is expressly understood and agreed that this Sections 4.9 shall survive the termination of this Agreement.
Section 4.10    Agent shall not be entitled to any compensation from Owner of any nature whatsoever except as may be expressly and specifically provided in this Agreement. The term “compensation” as used herein, shall be deemed to include any and all types of fees, 

commissions, reimbursements, etc.
Section 4.11    Notwithstanding anything to the contrary in this Agreement, Agent shall look only to Owner’s estate in the Building and the land on which the same is situated (or the rental income or sales and insurance proceeds thereof) for the satisfaction of Agent’s remedies for the collection of any judgment (or other judicial process) requiring the payment of money by Owner in the event of any material breach of this Agreement by Owner, and no other property or assets of Owner or its partners or principals, disclosed or undisclosed, shall be subject to levy, execution or other enforcement procedure for the satisfaction of Agent’s remedies under or with respect to this Agreement, the relationship of Owner and Agent hereunder or under law or any other liability of Owner to Agent.
Section 4.12    Agent may, at its sole cost and expense, furnish, install and maintain during the term hereof, a sign identifying it as the leasing agent for the Building, subject to the prior written consent of Owner as to size, type, material, manner of installation and location not to be unreasonably withheld.  Such sign shall be removed, at Agent’s sole cost and expense, upon the expiration or termination of this Agreement and Agent, at its sole cost and expense, shall repair any damage caused by such removal, wear and tear excepted.
Section 4.13    Notwithstanding anything in this Agreement to the contrary, Agent is not authorized, and shall have no right, to execute any Lease Renewal or Modification, amendments of lease, letters of intent or other instruments or documents on behalf of Owner.  Any term sheet prepared by Agent shall not be sent or delivered to any prospective tenant or Outside Broker without the prior written approval of Owner and such term sheet shall state that it is subject to the execution and delivery of lease documents satisfactory to Owner in its sole discretion. Additionally, Agent is not authorized, and shall have no right, to make any representations or warranties with respect to the Building on behalf of Owner.
[Signature page follows.]

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of the day and year first above written.

OWNER:    [__________________]
a Delaware limited liability company

By:    ________________________
Name: Nicholas Bienstock
Title: Manager

AGENT:    Savanna Commercial Services, LLC,
a Delaware limited liability company
By:    _________________________
Name: Brian Reiver
Title: Director of Leasing

SCHEDULE A
Based Upon Annual Fixed Rent

On the first year or any fraction thereof    5%
On the second year or any fraction thereof    4%
On the third year up to and including the fifth year    31⁄2%
On the sixth year up to and including the tenth year    21⁄2%
On the eleventh year up to and including the twentieth year    2%
On the twenty-first year and thereafter    1%

SCHEDULE B

Payout Terms

100% of such commission upon the unconditional execution and delivery of the Lease Renewal or Modification by Owner and the tenant and the obtaining of all required consents and approvals necessary for the Lease Renewal or Modification to become effective.S

SCHEDULE C

Exclusion List

N/A

EXHIBIT F
FORM OF RENEWAL LEASING AGREEMENT
RENTAL AGENCY AGREEMENT
This Rental Agency Agreement (this “Agreement”) is made as of the [__] day of [_______], 2013 by and between [______], a Delaware limited liability company, having an office at c/o Savanna Real Estate Funds, 10 East 53rd Street, 37th Floor, New York, NY 10022 (“Owner” or “Landlord”) and Savanna Commercial Services, LLC, a Delaware limited liability company, having an office at c/o Savanna Real Estate Funds, 10 East 53rd Street, 37th Floor, New York, NY 10022 (“Agent”).
STATEMENT OF FACTS
Owner owns the fee simple interest in certain premises known as [______________] located at [________] (the “Building”) and the land upon which it is located (the “Land”).
Owner desires to employ Agent as the sole and exclusive renting agent for certain rentable office space (the “Space” or “space”) in the Building, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, Owner and Agent agree as follows:
ARTILE 1 
Term And Scope
Section 1.1    During the term of this Agreement, Agent is hereby appointed as the sole and exclusive renting agent having the exclusive right to negotiate lease extensions, lease expansions, relocations, renewals and other lease related agreements in the Building by existing tenants in the Building, subject to the provisions of this Agreement. Agent acknowledges and agrees that Brian Reiver (the “Representative”) shall personally supervise such renting activities in the Building.  Agent shall have the right, from time to time, to replace the Representative with any other agent or employee of Agent designated by Agent.  Everything done by Agent under the provisions of this Section 1 shall be done solely as agent of Owner and not for its own account, and all obligations or expenses incurred thereunder shall be for the account, on behalf and at the expense of Owner, not Agent.
Section 1.2    The term of this Agreement shall be on a month to month basis, commencing on the date hereof (the “Commencement Date”) and continuing thereafter until the date (the “Expiration Date”) this Agreement shall be terminated pursuant to the provisions of this Agreement. This Agreement may be terminated: (x) at any time by Owner sending a written notice of termination to Agent, in which event the term of this Agreement shall terminate effective upon the receipt by Agent of such notice of termination; and (y) at any time by Agent sending a written notice of termination to Owner in which event the term of this Agreement shall terminate ninety (90) days after the sending of such notice of termination.
Section 1.3    This Agreement shall terminate automatically if:
(a)    all or substantially all of the Building is condemned or acquired by eminent domain;

(b)    Owner or Agent files a petition for bankruptcy, reorganization or arrangement under any federal or state statute, or makes an assignment for the benefit of creditors, or takes advantage of any insolvency statute;
(c)    an involuntary petition of bankruptcy or insolvency under the laws of the federal government or of any state is filed against Owner or Agent and Owner or Agent, as the case may be, shall fail to dismiss the same within sixty (60) days; or
(d)    Agent’s New York State real estate broker’s license is suspended or revoked.
Section 1.4    Upon the termination or expiration of this Agreement, Agent shall deliver to Owner, within ten (10) business days after such termination or expiration, all records, contracts, leases, receipts for deposits, unpaid bills and other papers or documents and all other items relating to the Building which are the property of Owner which are in Agent’s possession.
Section 1.5    Agent acknowledges that this Agreement is subject and subordinate to any mortgages now or hereafter in effect covering the Building or the Land and to all renewals, replacements, modifications or extensions thereof (the “Superior Mortgages”) and to each and every term and condition thereof.
Section 1.6    Owner acknowledges, however, that Agent is not an expert in and is not responsible for any legal, regulatory, tax, accounting, engineering, environmental or other technical matters, all of which shall be solely Owner's responsibility.
ARTICLE 2
Renting
Section 2.1    Agent shall use commercially reasonable efforts to extend, renew or secure leases of space in the Building, or to cause an existing tenant to enter into a new lease of space in the Building, at the highest possible rental rates and otherwise on terms most advantageous to Owner.  Agent agrees to participate in project meetings (at a location in Manhattan to be designated by Owner) and telephone conferences regarding the status of the leasing activity at the Building.
Section 2.2    Agent may solicit the cooperation of other real estate brokers in the renting of space (herein referred to as “Outside Broker(s)”).  Agent shall cooperate with Outside Brokers and shall encourage their participation in the renting of space.  Unless otherwise directed by Owner in writing, Agent shall, prior to delivery by Agent of any lease or extension or renewal of any lease to an Outside Broker or tenant, request Outside Broker to execute a brokerage agreement with Owner (a “Brokerage Agreement”) prepared by Owner’s counsel, which shall provide for compensation to be paid to Outside Broker directly by Owner, which compensation shall not exceed one full commission payable hereunder.  If directed by Owner in writing, until such Outside Broker shall have executed a Brokerage Agreement with Owner, Agent shall cease further negotiations with such Outside Broker or tenant.  Agent agrees to send a written notice terminating negotiations if requested by Owner to do so.
Section 2.3    Owner agrees to refer to Agent all offerings and inquiries received by Owner from existing tenants of space in the Building, and Agent agrees to diligently 

investigate and develop such offerings or inquiries and to canvass, solicit and otherwise employ its services to endeavor at all times to fully rent the applicable space.
ARTICLE 3
Compensation
Section 3.1    Subject to the provisions of this Agreement, with respect to every renewal, extension, relocation or new lease with an existing tenant of space in the Building entered into after the date hereof with respect to any existing tenant (each, a “Lease Renewal or Modification”), Agent shall be compensated by Owner in accordance with the provisions of this Article 3.
Section 3.2    Notwithstanding any provision of this Agreement to the contrary and regardless of the extent to which negotiations may progress, in the event that either: (a) such Lease Renewal or Modification fails to be consummated and/or received and accepted by Landlord for any reason whatsoever, including, but not limited to, any lack of any approval or consent that may be required pursuant to the provisions of the applicable existing lease or such Lease Renewal or Modification or required pursuant to the provisions of the Superior Mortgages, or the refusal by Landlord to continue negotiations for any reason or no reason; or (b) if tenant fails to pay the first regular rental payment, if any, due upon execution and delivery of the Lease Renewal or Modification, or if any of the Conditions (as hereinafter defined) are not satisfied, then, and in such event, Agent shall not be entitled to any commission whatsoever in connection with such Lease Renewal or Modification and all negotiations prior thereto, and Agent hereby waives any claims or demands therefor.
Section 3.3    
(a)    In the event that (i) a Lease Renewal or Modification is actually executed,  delivered, received and accepted by Landlord and a tenant, (ii) all conditions required to make such Lease Renewal or Modification become effective have been satisfied including, but not limited to, delivery of any lease guarantees, or consents by or agreements with the holders of any Superior Mortgages, and (iii) the first monthly installment of rent and the security deposit (if any) pursuant to the Lease Renewal or Modification have been paid (collectively, the “Conditions”), then, provided that the outside third-party brokerage firm acting as the exclusive broker for the Building (the “Exclusive Broker”) is not entitled commission, Owner shall pay to Agent, as full compensation for its services rendered in connection with such Lease Renewal or Modification, 95% of one commission computed upon the initial term of the Lease Renewal or Modification only, in accordance with the rates set forth in Schedule A annexed hereto and the payment schedule set forth on Schedule B annexed hereto; provided, that in the event that an Outside Broker (as hereinafter defined) is entitled to a full commission in connection with such transaction under this Section 3.3(a), Owner shall pay to Agent, for Agent’s own account, an amount equal to 47.5% of one commission on the fixed rental to be received by Owner during such Lease Renewal or Modification.
(b)    In the event that the initial term of the Lease Renewal or Modification is renewed or extended, regardless of whether as a result of the exercise by 

tenant of an option or right contained in the original lease or Lease Renewal or Modification on the terms and conditions for such renewal or extension contained in the original lease or Lease Renewal or Modification, and regardless of whether this Agreement has expired or terminated, then, provided that the Exclusive Broker (as hereinafter defined) is entitled to a commission, Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 15% of one commission on the fixed rental to be received by Owner during the renewal or extension period, in accordance with the rates set forth in Schedule A, computed as if such renewal or extension term were part of the initial term of the Lease Renewal or Modification; provided, that in the event that an Outside Broker is entitled to a full commission in connection with such transaction under this Section 3.3(b), Owner shall pay to Agent, for Agent’s own account, an amount equal to 7.5% of one commission on the fixed rental to be received by Owner during such Lease Renewal or Modification.  
(c)    In the event of a new lease in the Building with any unaffiliated tenant which is not a tenant of the Building or a tenant within Agent’s portfolio (each, a “New Lease”), provided that this Agreement has not expired or terminated, then Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 20% of one full commission on the fixed rental to be received by Owner during such New Lease, in accordance with the rates set forth in Schedule A; provided, that in the event an Outside Broker is entitled to a full commission in connection with such transaction under this Section 3.3(c), Owner shall pay to Agent, for Agent’s own account, 10% of one commission on the fixed rental to be received by Owner during such New Lease.
(d)    In the event of a relocation or new lease with any tenant within Agent’s portfolio (which shall be defined as any building owned or controlled by an affiliate of Agent) (each, a “Portfolio Lease”), and regardless of whether this Agreement has expired or terminated, then, regardless of whether Agent was entitled to a commission on the original Portfolio Lease, Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 95% of the difference between (i) then then-market commission on the fixed rental to be received by Owner during such Portfolio Lease and (ii) any commission payable to the Exclusive Broker and/or any Outside Broker.
(e)    In the event of an expansion of leased space with an existing tenant of space in the Building (each, an “Expansion Lease”), and this Agreement has not expired or been terminated, then, regardless of whether Agent was entitled to a commission on the original Expansion Lease, Owner shall pay to Agent, subject to the provisions of Section 3.4 hereof, 95% of the difference between (i) then then-market commission on the fixed rental to be received by Owner during such Expansion Lease and (ii) any commission payable to the Exclusive Broker and/or any Outside Broker.
(f)    Owner shall not be obligated to pay any compensation whatsoever to Agent under the provisions of this Agreement in connection with any lease transaction consummated between Owner and any affiliate or subsidiary thereof.
Section 3.4    All commissions payable under this Agreement shall be subject to the following provisions of this Section 3.4:
(a)    The commission shall be based upon the aggregate fixed rent or base rent (the “Annual Fixed Rent”) payable by the tenant during the initial term of the Lease Renewal or Modification only, limited as hereinafter provided. In the event a Lease 

Renewal or Modification is consummated on a so-called “net” basis so that real property taxes and costs of maintaining or operating the property are included in Annual Fixed Rent, the amount of such items for the year in which the Lease Renewal or Modification is executed, on a per square foot basis, shall not be included in the Annual Fixed Rent per square foot in determining the commission due hereunder.
(b)    If the Lease Renewal or Modification shall expressly provide for an option by the Tenant to cancel the Lease Renewal or Modification prior to the commencement of the term, then the first payment of such commission shall not be payable until the time for the exercise of such option to cancel shall have expired or shall have been waived in writing and, if the Lease Renewal or Modification shall be cancelled pursuant to such option, no commissions shall be due or payable therefor. If the Lease Renewal or Modification shall expressly provide the tenant with an unilateral option to cancel subsequent to the commencement of the term, then such commission shall be payable only for the term of the Lease Renewal or Modification unaffected by the option to cancel; if the option is waived in writing or not exercised within the time limit permitted, then a commission shall be payable for the then balance of the term, as if no such option to cancel had existed. Notwithstanding the above, if the cancellation option expressly requires that the tenant make a payment representing unamortized commission amounts, then, in such event only, following such payment by tenant to Owner, Agent shall be paid its commission as provided herein as if no such right to cancel existed; provided, however, that if the cancellation payment made by tenant does not equal, in the aggregate, the amount of such commission otherwise payable to Agent and all of Owner’s reasonable expenses with respect to such lease, then the amount of the commission to be paid to Agent shall be determined on a pro rata basis.
(c)    In determining the Annual Fixed Rent for the purpose of computing commissions due hereunder, items (i), (ii), (iii), (iv) and (v) below (whether or not referred to in the Lease Renewal or Modification as rent or additional rent and whether or not included in the Annual Fixed Rent) shall be excluded and items (vi) and (vii) shall be deducted:
(i)    Charges, if any, payable by tenant for utilities or utility services to be supplied to tenant, including, without limitation, electricity charges;
(ii)    Any payment to be made by tenant (A) pursuant to any cost of living (Price Index) formulae, or (B) on account of increases in real estate taxes, wages or labor costs of maintaining and operating the Building in which the demised premises are located (other than fixed increases in base rent), or (C) pursuant to any other escalation formulae which increases the Annual Fixed Rent other than a percentage increase to Annual Fixed Rent;
(iii)    Any payments to be made by tenant on account of work, labor or materials furnished by Landlord in excess of Owner’s standard landlord work letter;
(iv)    Any payments to be made based upon tenant’s gross receipts, (commonly referred to as Percentage Rental), provided, however, that if there is no Annual Fixed Rent payable under the terms of the Lease Renewal or Modification, and in lieu thereof, tenant’s rent is based upon a percentage of tenant’s gross receipts, then, and only in such event, shall the commission be payable on such Percentage Rental when determined and pursuant to all of the 

other terms of this Agreement;
(v)    Any payments to be made by tenant in addition to Annual Fixed Rent;
(vi)    All costs and expenses actually assumed or incurred by Landlord, if any, (A) in connection with tenant’s lease obligations for space rented by tenant from others outside the Building including, without limitation, expenses incurred in reletting such space or (B) in connection with any take-back of Space in the Building in connection with any Lease Renewal or Modification, including, without limitation, expenses incurred in reletting such space; and
(vii)    Rent concessions granted by Landlord amortized on a straight-line basis over the term of the Lease Renewal or Modification, other than rent concessions granted in lieu of, and not in excess of, Landlord’s standard work letter or standard allowance for tenant improvements for that particular space in the Building.
(d)    Subject to the provisions of subdivision (a) of this Section 3.4 above, all commissions (except for any payments made directly to Outside Brokers pursuant to any Brokerage Agreements between Owner and such Outside Brokers), including overriding commissions, shall be payable to Agent in accordance with the provisions of Schedule B annexed hereto and made a part hereof.
Section 3.5    Notwithstanding anything in this Agreement to the contrary, the relocation of a tenant within the Building upon substantially the same terms and conditions as set forth in such tenant’s existing Lease Renewal or Modification shall not result in any additional commission being payable to Agent unless the term of the subject Lease Renewal or Modification is extended or additional space is taken and, in such event, the provisions of Section 3.3 shall control with respect to such additional space or extended term. Should a tenant relocate within the Building and the terms and conditions of such tenant’s Lease Renewal or Modification be modified in connection with the relocation so as to result in an increase in total fixed rental payable, Owner shall pay Agent a commission on any increase in fixed rental to be received as a result of the relocation in accordance with the provisions of Section 3.3. In the event a Lease Renewal or Modification is entered into with an existing tenant for space then under lease to another existing tenant whose lease will thereby terminate prior to the stated expiration date, Owner shall pay to Agent a commission with respect to such new Lease Renewal or Modification in accordance with the provisions of Section 3.3.  However, in the event such a situation should arise, Owner shall be entitled to credit against any commission due Agent an amount equal to the pro rata portion of the commission theretofore paid to Agent with respect to the unexpired portion of the term of the existing lease, provided Owner had initially paid the commission pertaining to the unexpired portion of the term, and Owner and Agent shall use reasonable efforts to secure a fee directly from the then existing tenant of the applicable space in consideration for the termination of such existing tenant’s lease and any fee or consideration so received by Agent shall be offset, penny for penny, against the commission due and payable by Owner resulting from the new Lease Renewal or Modification.
Section 3.6    Notwithstanding anything in this Agreement to the contrary, for the purposes of the calculation of any commissions under Section 3.3 above, “Outside Broker” shall include any broker, representative or affiliate of Agent and any 

other division of Agent, the employees of which are not working directly with the Representative on this assignment, provided that if Agent or any affiliate of Agent is also the Outside Broker in a lease transaction, Owner shall not be obligated to pay more than 95% of one commission in the aggregate, determined in accordance with the provisions of this Agreement, in connection with such transaction.
Section 3.7    Agent acknowledges that, if a rental agency, brokerage or other agreement between Owner and another leasing agent with respect to the Building is in effect as of the date hereof (an “Existing Agreement”), then such leasing agent may be entitled to a commission with respect to any Lease Renewal or Modification pursuant to the terms of such Existing Agreement.  Agent further acknowledges that a former leasing agent for the Building may claim that it is entitled to be paid a commission with respect to any Lease Renewal or Modification entered into with the entities listed on Schedule C annexed hereto for the space so indicated on Schedule C.  Accordingly, notwithstanding anything in this Agreement to the contrary, if Owner enters into a Lease Renewal or Modification with any entity set forth on the attached Schedule C for the space so indicated on said Schedule C within six (6) months after the Commencement Date, and the former leasing agent for the Building is entitled to be paid a commission with respect to such Lease Renewal or Modification, then Agent shall neither seek nor accept a commission hereunder in connection with such Lease Renewal or Modification.
Section 3.8    The following provisions shall apply to any Lease Renewal or Modification executed and delivered after the expiration or termination of this Agreement:
(a)    Within thirty (30) days after the Expiration Date of this Agreement, Agent shall deliver to Owner a complete list (the “Pending List”) of any potential Lease Renewal or Modification with respect to which, at the request of Owner, a term sheet or letter of intent has been delivered to the applicable tenant, and such tenant has provided written comments on, or otherwise responded in writing to such term sheet or letter of intent as of the Expiration Date of this Agreement. If, within twelve (12) months after the Expiration Date of this Agreement (the “Tail Period”), (i) Owner and the applicable tenant execute and deliver a Lease Renewal or Modification with respect to any transaction identified on the Pending List, (ii) such Lease Renewal or Modification is on terms substantially similar to those contained in the last draft of the term sheet or letter of intent that was delivered to the applicable tenant as of the Expiration Date of this Agreement, and (iii) the Conditions are satisfied with respect to such Lease Renewal or Modification, then Owner shall pay to Agent a commission in accordance with the terms, covenants and conditions of this Agreement.  Notwithstanding the aforesaid, Agent shall not be entitled to any compensation pursuant to this Agreement and the same is hereby waived if the potential Lease Renewal or Modification is not actually executed and delivered by Owner and the applicable tenant within the Tail Period; provided that Owner shall use good faith reasonable efforts to negotiate and execute such Lease Renewal or Modification within the Tail Period.
(b)    Owner’s obligation to pay any leasing commissions to Agent that have been earned by Agent pursuant to the provisions hereof, but not yet payable, including any Lease Renewal or Modification entered into prior to the expiration or termination of this Agreement, shall survive the expiration or termination of this Agreement.

Section 3.9    Agent’s acceptance of compensation with respect to any Lease Renewal or Modification shall be deemed a representation that Agent is entitled to a commission in accordance with the terms hereof.  Notwithstanding the termination of this Agreement, Agent agrees at all times, with respect to any Lease Renewal or Modification, to hold Owner, and its direct and indirect partners, principals, members, officers, directors, employees and affiliates harmless against any and all liability, loss, damage and expense (including reasonable attorneys’ fees and disbursements) arising out of or otherwise relating to claims for commissions on such Lease Renewal or Modification by any other broker including but not limited to any Outside Broker, alleging to have dealt with or through Agent arising out of alleged negotiations or conversations had by Agent or Agent and Owner jointly (but not by Owner without the participation of Agent), with the claimant broker.  Agent’s liability under the foregoing indemnity shall be limited to the money received by it from Owner on the particular Lease Renewal or Modification transaction upon which a claim is being made; provided, however, if Owner elects to pay an Outside Broker directly pursuant to the terms of a separate Brokerage Agreement, then, subject to the provisions of this Agreement, Owner shall be responsible for the commission to which such Outside Broker is entitled pursuant to such Brokerage Agreement between Owner and such Outside Broker.  Owner agrees to use reasonable efforts to have any commission agreement executed by an Outside Broker contain a provision whereby such Outside Broker (i) represents, if correct, that such Outside Broker and Agent were the sole brokers instrumental in consummating a Lease Renewal or Modification with the tenant dealing with such Outside Broker; and (ii) indemnifies and holds Owner and Agent harmless from and against any liability arising from the incorrectness (actual or alleged) of such representation.
ARTICLE 4
Miscellaneous
Section 4.1    Agent will make available to Owner the advice and consultation of its staff throughout the term of this Agreement for any reason reasonably related to this Agreement and which would customarily be provided by a first-class leasing agent in New York City, including, but not limited to, the occupancy of the tenants within the Building. Nothing herein, however, shall be construed to provide that Agent shall perform or provide professional legal services. Within fifteen (15) days after the date hereof Agent shall submit to Owner Agent’s initial marketing and leasing plan, on a floor by floor basis, for the Building and Agent’s estimate of Owner’s future lease up costs. Agent shall periodically, and no less than monthly, update such marketing and leasing plan and shall include therein the Representative’s advice as to market trend rates and comparative rents for leases being signed in the market in which the Building is competing.
Section 4.2    The Representative shall conduct meetings with Owner to discuss the activities to be conducted by Agent hereunder at such times as Owner may reasonably request. Additionally, at any such meeting or upon Owner’s request, Agent will provide to Owner a written report as to any telephone inquiries and the status of any negotiations with respect to any space in the Building for the prior week.
Section 4.3    This Agreement may be assigned by Owner to its grantee upon the sale of the Building and upon the assignee’s unconditional assumption in writing of this Agreement. Owner shall thereupon be relieved of any liability hereunder except to the extent 

such liability accrued prior to the date of assignment.
Section 4.4    Any disagreement between Owner and Agent with respect to the interpretation or construction of this Agreement or the obligations of the parties hereunder shall be determined by arbitration.  Such arbitration shall be conducted, upon request of either Owner or Agent, before three (3) arbitrators (unless Owner and Agent agree to one (1) arbitrator) designated by the American Arbitration Association and in accordance with the rules of such Association. The arbitrators designated and acting under this Agreement shall make an award in strict conformity with such rules and shall have no power to depart from or change any of the provisions hereof.  The expense of arbitration proceedings conducted hereunder shall be borne by the non-prevailing party.  All arbitration proceedings conducted hereunder shall be conducted in the City of New York.
Section 4.5    This Agreement contains the entire understanding of the parties. Agent may not assign this Agreement nor may Agent assign its rights, duties or obligations under this Agreement. This Agreement may not be changed or modified orally but only by written instrument signed by the parties. This Agreement shall be binding upon and inure to the benefit of the successors and, except as may expressly otherwise be provided herein, the assigns of the respective parties hereto.
Section 4.6    This Agreement shall be construed and interpreted in accordance with the laws of the State of New York.
Section 4.7    All notices sent pursuant to the terms of this Agreement, in order for same to be effective, must be sent by certified or registered mail, return receipt requested, or by nationally recognized overnight carrier providing for receipted delivery as follows:
Any required notices to Agent shall be directed to:
Savanna Commercial Services, LLC 
c/o Savanna Real Estate Funds
10 East 53rd Street, 37th Floor 
New York, New York 10022
Attention: Brian Reiver
E-mail:     breiver@savannafund.com 
Telephone: 212-600-2517

with a copy to:
McDermott Will & Emery LLP
340 Madison Avenue
New York, New York 10173
Attention: William E. Stempel, Esq.
E-mail:     wstempel@mwe.com
Telephone: 212-547-5623

Any required notices to Owner shall be directed to:
[____________]

c/o Savanna Real Estate Fund II
10 East 53rd Street, 37th Floor
New York, New York 10022
Attention: Nicholas C. Bienstock
E-mail:     nbienstock@savannafund.com 
Telephone: 212-229-0101
with a copy to:
Savanna Real Estate Fund II
10 East 53rd Street, 37th Floor
New York, New York 10022
Attention: Christopher Schlank
E-mail:     cschlank@savannafund.com 
Telephone: 212-229-0101
Section 4.8    The term “Agent” as used in this Agreement shall include any corporate subsidiaries or affiliates of Agent who perform services on behalf of Owner in, on or about the Building in connection with this Agreement.
Section 4.9    Owner shall indemnify, defend (or reimburse Agent’s reasonable defense costs) and hold Agent, its affiliates assisting Agent in providing services to Owner under this Agreement, their members, shareholders, directors, officers and employees (collectively, the “Indemnified Parties”) harmless for any and all loss, claims, demands, penalties, damages, liabilities, costs and expenses, statutory or otherwise, including reasonable attorney’s fees and expenses, arising from this Agreement, whether paid, incurred by, or asserted against an Indemnified Party, hereinafter collectively called “claims”, for injury to any persons or property in, about and in connection with the Building, and from any cause whatsoever or which may arise after the termination of this Agreement by reason of actions of persons or entities other than Agent, unless caused by Agent’s willful misconduct in performance of its duties hereunder.  The foregoing indemnity shall not apply to the extent any loss, claims, demands, penalties, damages, liabilities, costs and expenses result from the gross negligence or willful acts of any of the Indemnified Parties.  Agent agrees to indemnify and hold Principal harmless from and against any and all “claims” (as such term is defined in this Section 4.9), resulting from the acts, or failure to act, of Agent, its agents or employees which acts or failure to act constitute gross negligence or willful misconduct.  It is expressly understood and agreed that this Sections 4.9 shall survive the termination of this Agreement.
Section 4.10    Agent shall not be entitled to any compensation from Owner of any nature whatsoever except as may be expressly and specifically provided in this Agreement. The term “compensation” as used herein, shall be deemed to include any and all types of fees, commissions, reimbursements, etc.
Section 4.11    Notwithstanding anything to the contrary in this Agreement, Agent shall look only to Owner’s estate in the Building and the land on which the same is situated (or the rental income or sales and insurance proceeds thereof) for the satisfaction of Agent’s remedies for the collection of any judgment (or other judicial process) requiring the payment of money by Owner in the event of any material breach of this Agreement by Owner, 

and no other property or assets of Owner or its partners or principals, disclosed or undisclosed, shall be subject to levy, execution or other enforcement procedure for the satisfaction of Agent’s remedies under or with respect to this Agreement, the relationship of Owner and Agent hereunder or under law or any other liability of Owner to Agent.
Section 4.12    Agent may, at its sole cost and expense, furnish, install and maintain during the term hereof, a sign identifying it as the leasing agent for the Building, subject to the prior written consent of Owner as to size, type, material, manner of installation and location not to be unreasonably withheld.  Such sign shall be removed, at Agent’s sole cost and expense, upon the expiration or termination of this Agreement and Agent, at its sole cost and expense, shall repair any damage caused by such removal, wear and tear excepted.
Section 4.13    Notwithstanding anything in this Agreement to the contrary, Agent is not authorized, and shall have no right, to execute any Lease Renewal or Modification, amendments of lease, letters of intent or other instruments or documents on behalf of Owner.  Any term sheet prepared by Agent shall not be sent or delivered to any prospective tenant or Outside Broker without the prior written approval of Owner and such term sheet shall state that it is subject to the execution and delivery of lease documents satisfactory to Owner in its sole discretion. Additionally, Agent is not authorized, and shall have no right, to make any representations or warranties with respect to the Building on behalf of Owner.
[Signature page follows.]

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as of the day and year first above written.

OWNER:    [__________________]
a Delaware limited liability company

By:    ________________________
Name: Nicholas Bienstock
Title: Manager

AGENT:    Savanna Commercial Services, LLC,
a Delaware limited liability company
By:    _________________________
Name: Brian Reiver
Title: Director of Leasing

SCHEDULE A
Based Upon Annual Fixed Rent

On the first year or any fraction thereof    5%
On the second year or any fraction thereof    4%
On the third year up to and including the fifth year    31⁄2%
On the sixth year up to and including the tenth year    21⁄2%
On the eleventh year up to and including the twentieth year    2%
On the twenty-first year and thereafter    1%

SCHEDULE B

Payout Terms

100% of such commission upon the unconditional execution and delivery of the Lease Renewal or Modification by Owner and the tenant and the obtaining of all required consents and approvals necessary for the Lease Renewal or Modification to become effective.

SCHEDULE C

Exclusion List

N/A

EXHIBIT G
FORM OF CONSTRUCTION MANAGEMENT AGREEMENT
 
PROJECT MANAGEMENT AGREEMENT

THIS PROJECT MANAGEMENT AGREEMENT (the “Agreement”) is made as of the ____ day of __________________, 20______ by and between Savanna Project Management, LLC, (“Savanna Project Management”) and ______________ (“Principal”).

W I T N E S S E T H:

WHEREAS, Principal wishes to retain Savanna Project Management to provide project management services with respect to one or more construction projects on the following terms and conditions; and

WHEREAS, Savanna Project Management wishes to provide such services on the following terms and conditions.

NOW THEREFORE, in consideration of the payment hereinafter specified to be made by Principal, and in consideration of the agreements and mutual covenants of the parties herein contained, the parties hereto hereby agree as follows:

SECTION I.    SCOPE OF SERVICES

1.1    Basic Services.  From time to time upon the request of Principal evidenced by the issuance of a project authorization in the form attached hereto as Exhibit A (a “Project Authorization”), Savanna Project Management shall perform the project management services described in Exhibit B (“Services”) with respect to one or more of Principal’s construction projects (a “Project”) on the terms and conditions set forth herein.  Upon execution by Principal and Savanna Project Management, each Project Authorization shall be deemed incorporated into and made a part of this Agreement.  Savanna Project Management shall use good faith efforts to perform the Services for each Project in accordance with the schedule set forth in the Project Authorization for such Project.  The execution by Principal and Savanna Project Management of a Project Authorization shall constitute Savanna Project Management’s authority to proceed to provide Services with respect to the applicable Project, and Savanna Project Management shall not be obligated or authorized to perform any Services with respect to any Project until a Project Authorization for such Project has been signed by both Principal and Savanna Project Management.

1.2    Additional Service Providers.  Principal and Savanna Project Management acknowledge and agree that Principal may require the services of architects, space planners, engineers, general contractors, interior decorators and /or other consultants and contractors in connection with one or more Projects (“Additional Service Providers”).  Savanna Project Management shall cooperate with and coordinate such Additional Service Providers in order to achieve Principal’s objectives for such Projects.  At the request of Principal, Savanna Project Management shall advise Principal with respect to the use of Additional Service Providers; but it is expressly agreed and understood that Savanna Project Management shall not be responsible for the engagement of any Additional Service Providers, and all Additional Service Providers shall be engaged directly by Principal and shall be compensated by Principal. 

SECTION 2.    SAVANNA PROJECT MANAGEMENT’S DUTIES AND STATUS

2.1    Service Standards.  Savanna Project Management shall perform the Services with care, skill, and diligence, in accordance with the standards applicable generally to professionals performing similar services.  Savanna Project Management agrees to use good faith efforts to expedite the performance of all services and obligations required under this Agreement and any other agreements entered into by Principal which are managed or administered by Savanna Project Management so that each Project is completed within the time schedule set forth in the Project Authorization for such Project.  

2.2    Independent Contractor.  Except as set forth below, Savanna Project Management shall assume all duties under this Agreement as an independent contractor; and in no event shall this be considered an agreement of employment, partnership or agency.  Principal shall have no control or supervision over the particular manner or method by which Savanna Project Management accomplishes the performance of the Services, such matters being in the exclusive charge and control of Savanna Project Management.  Savanna Project Management shall comply with all laws and all legal requirements of any governmental bodies having jurisdiction over Savanna Project Management with respect to the Services to be performed hereunder.  Savanna Project Management shall be solely responsible for all wages and benefits owed to its employees, and Principal shall have no obligation with respect thereto.

2.3    Project Manager.  Savanna Project Management shall assign a Project Manager, and additional personnel if necessary, to perform the Services for each Project.  The Project Manager shall provide and coordinate all Services through completion of the Project.  The initial Project Manager for each Project shall be set forth in the Project Authorization for such Project; provided, however, Savanna Project Management may replace the Project Manager at any time if the Project Manager is unable for any reason to perform such duties.

2.4    Force Majeure.   Savanna Project Management’s obligations hereunder shall be suspended to the extent and for so long as the performance of such obligations are prevented or hindered in whole or in part by reason of strikes, acts of God, federal, state, county, or municipal laws, rules, orders, or regulations, or for any other cause which are beyond the reasonable control of Savanna Project Management.  When such a suspension occurs, Savanna Project Management shall inform Principal; and Savanna Project Management shall resume the performance of its obligations hereunder as soon as is reasonably practicable.  

SECTION 3.    COMPENSATION

3.1    Savanna Project Management’s Fee.  Savanna Project Management shall be paid a fee for performing Services (the “Project Fee”) for each Project as set forth in the Project Authorization for such Project which, unless the parties agree otherwise in the Project Authorization, shall be based upon Exhibit C attached hereto.  Unless otherwise set forth in the Project Authorization for a Project, the Project Fee for each Project shall be earned and payable in monthly installments according to the terms set forth in Exhibit C. 

3.2    Expenses.  In addition to the Project Fee, Principal shall reimburse Savanna Project Management for any out-of-pocket expenses incurred by Savanna Project Management in connection with each Project.  Such expenses are described in Exhibit C.  

3.3    Terms of Payment.  Savanna Project Management shall issue invoices to Principal at the end of each month stating, in reasonable detail, the portion of each Project Fee earned and payable for such month and the reimbursable expenses incurred for such month.  Such fees and expenses shall be due and payable by Principal to Savanna Project Management within thirty (30) days of receipt by Principal of Savanna Project Management's invoice.  All other payments due from one party to the other under this Agreement shall be due and payable thirty (30) days following demand therefore.  Delinquent payments hereunder shall earn interest from the date due until paid at the lesser of: (i) the rate of one and one-half percent (1 and 1/2%) per month or (ii) the maximum rate permitted by law.

3.4    Adjustments to Project Fee.  If the scope of a Project increases beyond that contemplated in Exhibit A or B or should the completion of a Project be delayed through no fault of Savanna Project Management or should a change be made in a Project which does not increase the scope or duration of the Project but which requires an increase in Savanna Project Management’s personnel committed to the Project, then the Project Fee for such Project will be increased as is reasonably agreed between the parties.  

3.5    Additional Services.  Intentionally Omitted.

		
	SECTION 4.
	INDEMNIFICATION

4.1    Savanna Project Management’s Indemnity.  To the maximum extent permitted by law, Savanna Project Management shall indemnify, defend and hold Principal, its subsidiaries and affiliates and the employees, partners, officers, directors, members, shareholders and agents of each harmless from any and all losses, liabilities, costs and expenses, including reasonable attorney’s fees and court costs arising out of claims by third parties and sustained or incurred by or asserted against Principal by reasons of or arising out of Savanna Project Management’s gross negligence, intentional misconduct or fraud in connection with this Agreement, any Project or the Services.

4.2    Principal’s Indemnity.  To the maximum extent permitted by law, Principal shall defend (with counsel reasonably acceptable to Savanna Project Management), indemnify and hold harmless Savanna Project Management, its subsidiaries and affiliates and the employees, partners, officers, directors, members, shareholders and agents of each from and against all losses, liabilities, costs and expenses (including, without limitation, reimbursement of actual attorney’s fees, expert witness fees and court costs) incurred either as a defendant or witness and arising out of claims by third parties in connection with this Agreement, any Project or the Services, except to the extent such claims arise out of Savanna Project Management’s gross negligence, intentional misconduct or fraud.  

SECTION 5.    INSURANCE

5.1    Savanna Project Management’s Insurance.  Savanna Project Management shall carry the following insurance, at its own expense:

(i)    Workers’ compensation insurance, to the extent of the statutory limits required by applicable law, and employer’s liability insurance in the minimum amount of $1,000,000.

(ii)    Commercial General Liability Insurance with limits of:
		
	1.
	General Aggregate $2,000,000; Each Occurrence $1,000,000

		
	2.
	Personal and Advertising $1,000,000

		
	3.
	Products and Completed Operations $1,000,000

		
	4.
	Medical Expense $5,000,000

		
	5.
	Employee Benefits $1,000,000

		
	6.
	Hired and Non-Owned Automobile $1,000,000

Coverages must include the following: blanket contractual liability, products and completed operations and independent contractors.  Principal shall be named as an additional insured under such insurance.  Limits should apply on a per project basis.

(iii)    Umbrella/Excess Liability with limits of $10,000,000 per occurrence and $10,000,000 aggregate.  Principal shall be named as an additional insured under such insurance.  Limits should apply on a per project basis.

(iv)    Professional liability (errors and omissions) insurance in the amount of not less than $1,000,000.   Such insurance coverage shall be on a claims made basis and shall remain in force for the term of this Agreement and for two (2) years following termination of this Agreement.

The foregoing policies are collectively referred to as “Savanna Project Management’s Policies.”  Savanna Project Management’s Policies must be maintained with companies having an A.M. Best’s rating of A- VII or better. Savanna Project Management shall provide Principal with certificates of insurance evidencing Savanna Project Management’s Policies within ten (10) days of the execution of this Agreement.  

5.2    Principal’s Insurance.  Principal shall carry the following insurance, at its own expense:

(i)    All-risk property insurance, covering the full replacement cost of the property at which the Projects are performed.  

(ii)      For Project work, Principal will provide (or will cause its general contractor to provide) at its expense builders risk insurance for construction that covers special risk perils including earthquake, flood, fire, and theft of materials stored at or within 1,000 feet of each Project site.  Loss of Savanna Project Management’s tools and equipment are not covered by such insurance, and Principal shall have no liability for their loss.

(iii)    Commercial General Liability Insurance with limits of:
		
	1.
	General Aggregate $2,000,000; Each Occurrence $1,000,000

		
	2.
	Personal and Advertising $1,000,000

		
	3.
	Products and Completed Operations $1,000,000

		
	4.
	Medical Expense $5,000,000

		
	5.
	Employee Benefits $1,000,000

		
	6.
	Hired and Non-Owned Automobile $1,000,000

Coverages must include the following: blanket contractual liability, products and completed operations and independent contractors.  Limits should apply on a per location basis.

(iv)    Umbrella/Excess Liability with limits of $10,000,000 per occurrence and $10,000,000 aggregate.  Limits should apply on a per location basis.

The foregoing policies are collectively referred to herein as the “Principal’s Policies.”  Savanna Project Management shall be named as an additional insured under Principal’s Commercial General Liability Insurance in its capacity as project manager of each Project.  Principal’s Commercial General Liability policy shall be primary and any commercial general liability insurance policy carried by Savanna Project Management shall be non-contributory thereto with respect to any claims arising out of the performance or non-performance of the Services or the condition of the real property which is the site of each Project.  Principal shall furnish to Savanna Project Management a certificate of insurance evidencing such coverage within ten (10) days of the execution of this Agreement.  Companies with which the insurance is placed shall have received an A.M. Best’s rating of A- VII or better.  

5.3      Mutual Waiver.  All property damage insurance policies required of each of the parties hereunder shall contain appropriate clauses pursuant to which the respective insurance carriers shall waive all rights of subrogation with respect to losses payable under such policies; and each party waives any claims against the other party for any damage to its property.

SECTION 6.  LIMITATION OF SAVANNA PROJECT MANAGEMENT'S SERVICES

6.1    Technical Matters.  Savanna Project Management shall assist Principal in the evaluation of regulatory requirements related to each Project including zoning ordinances, public facilities requirements and other 

requirements of the jurisdiction in which each Project is located (“Technical Matters”).  In addition, Savanna Project Management shall advise Principal as to experts to use for Technical Matters and shall coordinate the work of such experts with that of the other consultants, contractors, suppliers and service providers working on each Project in accordance with Section 1.2 above.  Notwithstanding the foregoing, Principal acknowledges that Savanna Project Management is not an expert in and is not responsible for Technical Matters, and Principal shall rely solely on the judgments of the experts Principal hires with respect to such Technical Matters.

6.2    Time.  Savanna Project Management acknowledges and agrees that time is of the essence with respect to the performance of the Services, including, with respect to each Project, the performance of the Services within the time periods set forth in the Project Schedule for such Project.  Payment may be withheld for failure to timely carry out the Services in accordance with this Agreement.  Notwithstanding the foregoing, Savanna Project Management shall have no liability for delays caused by Principal, or by other circumstances beyond the control of Savanna Project Management.

		
	SECTION 7.
	TERMINATION

7.1    Right to Terminate.  Either party may terminate this Agreement upon prior notice to the other party; provided, however, such termination shall not affect any outstanding Project Authorizations, and this Agreement shall remain in full force and effect until completion of the Projects covered by such Project Authorizations.  In addition, Principal may terminate any Project Authorizations upon thirty (30) days prior notice to Savanna Project Management; and either party may terminate a Project Authorization immediately in the event of a material default hereunder by the other party with respect to such Project Authorization if such default has not been cured within ten (10) days after written notice to the other party. 

7.2    Payment Upon Termination.  If a Project Authorization is terminated, Savanna Project Management shall receive the portion of the Project Fee earned to the date of termination in accordance with the payment schedule as set forth in Exhibit C.  Savanna Project Management shall also receive payment for reimbursable expenses and other reasonable costs incurred due to termination.  Savanna Project Management shall receive payment of all such fees and expenses within ten (10) days following the termination of the Project Authorization.

SECTION 8.     NOTICES

8.1    Address for Notices.  The addresses of Principal and Savanna Project Management for service of any notices and reports hereunder shall be respectively as follows:

	
		
	Principal:
______________________________
C/O Savanna
10 East 53rd Street
New York, NY 10022
Attention: Nicholas Bienstock
	Savanna Project Management:

Savanna Project Management, LLC
10 East 53rd Street, 37th Floor
New York, NY 10022
Attention: Christopher Schlank

8.2    Delivery of Notices.  Any notice required or permitted to be given hereunder shall be hand delivered, sent by nationally recognized delivery service, or sent by registered mail, return receipt requested, to Principal or Savanna Project Management at its respective address shown above.  Any such notice shall be deemed to have been received by the party to whom it is addressed on the date and at the time it is so delivered.

SECTON 9.  MISCELLANEOUS

9.1    Confidentiality.  Except as may be required by any governmental entity having jurisdiction over Savanna Project Management and except as may be necessary to perform its services hereunder, Savanna Project Management shall not disclose to any third party any confidential information that Principal makes available to Savanna Project Management.  Savanna Project Management agrees to limit access to such information to those employees reasonably requiring such access for purposes of providing the Services and shall request that its employees maintain the confidentiality of such information in accordance with the terms hereof.

9.2    Complete Agreement; Amendments.  This Agreement and all Exhibits attached hereto, which are incorporated herein by this reference, contain the entire agreement between Principal and Savanna Project Management and supersedes and replaces all previous agreements, whether written or oral, with respect to the subject matter of this Agreement.  This Agreement may not be changed, modified, amended, or discharged, except by an agreement in writing.

9.3    Advertising.  Principal agrees that Savanna Project Management may identify in its corporate promotional literature and advertising that it is the project manager for each Project and that Savanna Project Management may use photographs and renderings of each completed Project in such advertising and promotional records.
 
9.4    Intentionally Omitted

9.5    Applicable Law.  This Agreement shall be construed under and interpreted in accordance with the internal laws of the State of New York.

9.6    Survival.  The provisions of Sections 3, 4, 5, 6, 7, 8 and 9 of this Agreement shall survive the expiration or termination of this Agreement.

9.7    Successors and Assigns.  Neither party may assign its rights or obligations hereunder except to an affiliate or to any entity which acquires all or substantially all of the assets and business of either party.  Except as set forth in the immediately preceding sentence, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.

9.8    Limitation on Liability.  Notwithstanding anything else contained herein to the contrary, each party shall look solely to the assets of the other party for satisfaction of any liabilities or obligations relating to this engagement, and no officer, director, employee, partner, affiliate, shareholder or agent of either party shall be personally responsible for any such liabilities or obligations.  In addition, each party waives any claims for punitive, consequential, speculative or exemplary damages, including, without limitation, lost revenue or profit, even if a party has knowledge of the possibility of such damages; and, except for Savanna Project Management’s liability to third parties for bodily injury, death or property damage, in no event shall Savanna Project Management’s liability to Principal with respect to each Project exceed an amount equal to the lesser of annual fees paid or One Million Dollars ($1,000,000).

9.9    Litigation Expenses.  If there is any litigation between the parties with respect to this Agreement or the subject matter hereof, the prevailing party in such litigation shall be entitled to collect all of its costs and expenses in such litigation, including reasonable attorneys’ fees and court costs, from the other party.

9.10    Rules of Interpretation.  The headings set forth herein are for the convenience of the parties only and shall not be used to interpret the meaning of this Agreement.  Each party agrees that it has been represented by counsel and has participated in the negotiation of this Agreement, and this Agreement shall not be construed against either party on the theory that such party drafted this Agreement.  In the event any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected thereby.  

9.11    Counterparts.  This Agreement may be executed and delivered in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.  The delivery of an executed counterpart of this Agreement by facsimile or as a PDF or similar attachment to an e-mail shall constitute effective delivery of such counterpart for all purposes with the same force and effect as the delivery of an original, executed counterpart. 

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

	
						
	§    PRINCIPAL
_________________
	SAVANNA PROJECT MANAGEMENT
Savanna Project Management, LLC

	

By:
	 
	 
	

By:
	 
	 

	

Name:
	 
	 
	

Name:
	 
	 

	

Its:
	 
	 
	

Its:
	 
	 

EXHIBIT G
FORM OF CONSTRUCTION MANAGEMENT AGREEMENT
PROJECT MANAGEMENT AGREEMENT
THIS PROJECT MANAGEMENT AGREEMENT (the “Agreement”) is made as of the ____ day of __________________, 20______ by and between Savanna Project Management, LLC, (“Savanna Project Management”) and ______________ (“Principal”).
W I T N E S S E T H:
WHEREAS, Principal wishes to retain Savanna Project Management to provide project management services with respect to one or more construction projects on the following terms and conditions; and
WHEREAS, Savanna Project Management wishes to provide such services on the following terms and conditions.
NOW THEREFORE, in consideration of the payment hereinafter specified to be made by Principal, and in consideration of the agreements and mutual covenants of the parties herein contained, the parties hereto hereby agree as follows:
SECTION I.    SCOPE OF SERVICES
1.1    Basic Services. From time to time upon the request of Principal evidenced by the issuance of a project authorization in the form attached hereto as Exhibit A (a “Project Authorization”), Savanna Project Management shall perform the project management services described in Exhibit B (“Services”) with respect to one or more of Principal’s construction projects (a “Project”) on the terms and conditions set forth herein. Upon execution by Principal and Savanna Project Management, each Project Authorization shall be deemed incorporated into and made a part of this Agreement. Savanna Project Management shall use good faith efforts to perform the Services for each Project in accordance with the schedule set forth in the Project Authorization for such Project. The execution by Principal and Savanna Project Management of a Project Authorization shall constitute Savanna Project Management’s authority to proceed to provide Services with respect to the applicable Project, and Savanna Project Management shall not be obligated or authorized to perform any Services with respect to any Project until a Project Authorization for such Project has been signed by both Principal and Savanna Project Management.
1.2    Additional Service Providers. Principal and Savanna Project Management acknowledge and agree that Principal may require the services of architects, space planners, engineers, general contractors, interior decorators and /or other consultants and contractors in connection with one or more Projects (“Additional Service Providers”). Savanna Project Management shall cooperate with and coordinate such Additional Service Providers in order to achieve Principal’s objectives for such Projects. At the request of Principal, Savanna Project Management shall advise Principal with respect to the use of Additional Service Providers; but it is expressly agreed and understood that Savanna Project Management shall not be responsible for the engagement of any Additional Service Providers, and all Additional Service Providers shall be engaged directly by Principal and shall be compensated by Principal.

SECTION 2.    SAVANNA PROJECT MANAGEMENT’S DUTIES AND STATUS
2.1    Service Standards. Savanna Project Management shall perform the Services with care, skill, and diligence, in accordance with the standards applicable generally to professionals performing similar services. Savanna Project Management agrees to use good faith efforts to expedite the performance of all services and obligations required under this Agreement and any other agreements entered into by Principal which are managed or administered by Savanna Project Management so that each Project is completed within the time schedule set forth in the Project Authorization for such Project.
2.2    Independent Contractor. Except as set forth below, Savanna Project Management shall assume all duties under this Agreement as an independent contractor; and in no event shall this be considered an agreement of employment, partnership or agency. Principal shall have no control or supervision over the particular manner or method by which Savanna Project Management accomplishes the performance of the Services, such matters being in the exclusive charge and control of Savanna Project Management. Savanna Project Management shall comply with all laws and all legal requirements of any governmental bodies having jurisdiction over Savanna Project Management with respect to the Services to be performed hereunder. Savanna Project Management shall be solely responsible for all wages and benefits owed to its employees, and Principal shall have no obligation with respect thereto.
2.3    Project Manager. Savanna Project Management shall assign a Project Manager, and additional personnel if necessary, to perform the Services for each Project. The Project Manager shall provide and coordinate all Services through completion of the Project. The initial Project Manager for each Project shall be set forth in the Project Authorization for such Project; provided, however, Savanna Project Management may replace the Project Manager at any time if the Project Manager is unable for any reason to perform such duties.
2.4    Force Majeure. Savanna Project Management’s obligations hereunder shall be suspended to the extent and for so long as the performance of such obligations are prevented or hindered in whole or in part by reason of strikes, acts of God, federal, state, county, or municipal laws, rules, orders, or regulations, or for any other cause which are beyond the reasonable control of Savanna Project Management. When such a suspension occurs, Savanna Project Management shall inform Principal; and Savanna Project Management shall resume the performance of its obligations hereunder as soon as is reasonably practicable.
SECTION 3.    COMPENSATION
3.1    Savanna Project Management’s Fee. Savanna Project Management shall be paid a fee for performing Services (the “Project Fee”) for each Project as set forth in the Project Authorization for such Project which, unless the parties agree otherwise in the Project Authorization, shall be based upon Exhibit C attached hereto. Unless otherwise set forth in the Project Authorization for a Project, the Project Fee for each Project shall be earned and payable in monthly installments according to the terms set forth in Exhibit C.
3.2    Expenses. In addition to the Project Fee, Principal shall reimburse Savanna Project Management for any out-of-pocket expenses incurred by Savanna Project Management in connection with each Project. Such expenses are described in Exhibit C.
3.3    Terms of Payment. Savanna Project Management shall issue invoices to Principal at the end of each month stating, in reasonable detail, the portion of each Project Fee earned and payable for such month and the reimbursable expenses incurred for such month. Such fees and expenses shall be due and payable by Principal to Savanna Project Management within thirty (30) days of receipt by Principal of Savanna Project Management's invoice. All other payments due from one party to the other under this Agreement shall be due and payable thirty (30) days following demand therefore. Delinquent payments hereunder shall earn interest from the date due until paid at the lesser of: (i) the rate of one and one-half percent (1 and 1/2%) per month or
(ii) the maximum rate permitted by law.

3.4    Adjustments to Project Fee. If the scope of a Project increases beyond that contemplated in Exhibit A or B or should the completion of a Project be delayed through no fault of Savanna Project Management or should a change be made in a Project which does not increase the scope or duration of the Project but which requires an increase in Savanna Project Management’s personnel committed to the Project, then the Project Fee for such Project will be increased as is reasonably agreed between the parties.
3.5    Additional Services. Intentionally Omitted.
SECTION 4.    INDEMNIFICATION
4.1    Savanna Project Management’s Indemnity. To the maximum extent permitted by law, Savanna Project Management shall indemnify, defend and hold Principal, its subsidiaries and affiliates and the employees, partners, officers, directors, members, shareholders and agents of each harmless from any and all losses, liabilities, costs and expenses, including reasonable attorney’s fees and court costs arising out of claims by third parties and sustained or incurred by or asserted against Principal by reasons of or arising out of Savanna Project Management’s gross negligence, intentional misconduct or fraud in connection with this Agreement, any Project or the Services.
4.2     Principal’s Indemnity. To the maximum extent permitted by law, Principal shall defend (with counsel reasonably acceptable to Savanna Project Management), indemnify and hold harmless Savanna Project Management, its subsidiaries and affiliates and the employees, partners, officers, directors, members, shareholders and agents of each from and against all losses, liabilities, costs and expenses (including, without limitation, reimbursement of actual attorney’s fees, expert witness fees and court costs) incurred either as a defendant or witness and arising out of claims by third parties in connection with this Agreement, any Project or the Services, except to the extent such claims arise out of Savanna Project Management’s gross negligence, intentional misconduct or fraud.
SECTION 5.    INSURANCE
5.1    Savanna Project Management’s Insurance. Savanna Project Management shall carry the following insurance, at its own expense:
(i)     Workers’ compensation insurance, to the extent of the statutory limits required by applicable law, and employer’s liability insurance in the minimum amount of $1,000,000.
(ii)     Commercial General Liability Insurance with limits of:
1. General Aggregate $2,000,000; Each Occurrence $1,000,000
2. Personal and Advertising $1,000,000
3. Products and Completed Operations $1,000,000
4. Medical Expense $5,000,000
5. Employee Benefits $1,000,000
6. Hired and Non-Owned Automobile $1,000,000
Coverages must include the following: blanket contractual liability, products and completed operations and independent contractors. Principal shall be named as an additional insured under such insurance. Limits should apply on a per project basis.
(iii)    Umbrella/Excess Liability with limits of $10,000,000 per occurrence and $10,000,000 aggregate. Principal shall be named as an additional insured under such insurance. Limits should apply on a per project basis.

(iv)    Professional liability (errors and omissions) insurance in the amount of not less than $1,000,000. Such insurance coverage shall be on a claims made basis and shall remain in force for the term of this Agreement and for two (2) years following termination of this Agreement. The foregoing policies are collectively referred to as “Savanna Project Management’s Policies.” Savanna Project Management’s Policies must be maintained with companies having an A.M. Best’s rating of A- VII or better. Savanna Project Management shall provide Principal with certificates of insurance evidencing Savanna Project Management’s Policies within ten (10) days of the execution of this Agreement.
5.2    Principal’s Insurance. Principal shall carry the following insurance, at its own expense:
(i)    All-risk property insurance, covering the full replacement cost of the property at which the Projects are performed.
(ii)    For Project work, Principal will provide (or will cause its general contractor to provide) at its expense builders risk insurance for construction that covers special risk perils including earthquake, flood, fire, and theft of materials stored at or within 1,000 feet of each Project site. Loss of Savanna Project Management’s tools and equipment are not covered by such insurance, and Principal shall have no liability for their loss.
(iii)    Commercial General Liability Insurance with limits of:
1. General Aggregate $2,000,000; Each Occurrence $1,000,000
2. Personal and Advertising $1,000,000
3. Products and Completed Operations $1,000,000
4. Medical Expense $5,000,000
5. Employee Benefits $1,000,000
6. Hired and Non-Owned Automobile $1,000,000
Coverages must include the following: blanket contractual liability, products and completed operations and independent contractors. Limits should apply on a per location basis.
(iv)    Umbrella/Excess Liability with limits of $10,000,000 per occurrence and $10,000,000 aggregate. Limits should apply on a per location basis.
The foregoing policies are collectively referred to herein as the “Principal’s Policies.” Savanna Project Management shall be named as an additional insured under Principal’s Commercial General Liability Insurance in its capacity as project manager of each Project. Principal’s Commercial General Liability policy shall be primary and any commercial general liability insurance policy carried by Savanna Project Management shall be non-contributory thereto with respect to any claims arising out of the performance or non-performance of the Services or the condition of the real property which is the site of each Project. Principal shall furnish to Savanna Project Management a certificate of insurance evidencing such coverage within ten (10) days of the execution of this Agreement. Companies with which the insurance is placed shall have received an A.M. Best’s rating of AVII or better.
5.3    Mutual Waiver. All property damage insurance policies required of each of the parties hereunder shall contain appropriate clauses pursuant to which the respective insurance carriers shall waive all rights of subrogation with respect to losses payable under such policies; and each party waives any claims against the other party for any damage to its property.
SECTION 6. LIMITATION OF SAVANNA PROJECT MANAGEMENT'S SERVICES
6.1    Technical Matters. Savanna Project Management shall assist Principal in the evaluation of regulatory requirements related to each Project including zoning ordinances, public facilities requirements and other

requirements of the jurisdiction in which each Project is located (“Technical Matters”). In addition, Savanna Project Management shall advise Principal as to experts to use for Technical Matters and shall coordinate the work of such experts with that of the other consultants, contractors, suppliers and service providers working on each Project in accordance with Section 1.2 above. Notwithstanding the foregoing, Principal acknowledges that Savanna Project Management is not an expert in and is not responsible for Technical Matters, and Principal shall rely solely on the judgments of the experts Principal hires with respect to such Technical Matters.
6.2    Time. Savanna Project Management acknowledges and agrees that time is of the essence with respect to the performance of the Services, including, with respect to each Project, the performance of the Services within the time periods set forth in the Project Schedule for such Project. Payment may be withheld for failure to timely carry out the Services in accordance with this Agreement. Notwithstanding the foregoing, Savanna Project Management shall have no liability for delays caused by Principal, or by other circumstances beyond the control of Savanna Project Management.
SECTION 7. TERMINATION
7.1    Right to Terminate. Either party may terminate this Agreement upon prior notice to the other party; provided, however, such termination shall not affect any outstanding Project Authorizations, and this Agreement shall remain in full force and effect until completion of the Projects covered by such Project Authorizations. In addition, Principal may terminate any Project Authorizations upon thirty (30) days prior notice to Savanna Project Management; and either party may terminate a Project Authorization immediately in the event of a material default hereunder by the other party with respect to such Project Authorization if such default has not been cured within ten (10) days after written notice to the other party.
7.2    Payment Upon Termination. If a Project Authorization is terminated, Savanna Project Management shall receive the portion of the Project Fee earned to the date of termination in accordance with the payment schedule as set forth in Exhibit C. Savanna Project Management shall also receive payment for reimbursable expenses and other reasonable costs incurred due to termination. Savanna Project Management shall receive payment of all such fees and expenses within ten (10) days following the termination of the Project Authorization.
SECTION 8. NOTICES
8.1    Address for Notices. The addresses of Principal and Savanna Project Management for service of any notices and reports hereunder shall be respectively as follows: 
Principal:     Savanna Project Management:
______________________________
C/O Savanna     Savanna Project Management, LLC
10 East 53rd Street     10 East 53rd Street, 37th Floor
New York, NY 10022     New York, NY 10022
Attention: Nicholas Bienstock     Attention: Christopher Schlank
8.2    Delivery of Notices. Any notice required or permitted to be given hereunder shall be hand delivered, sent by nationally recognized delivery service, or sent by registered mail, return receipt requested, to Principal or Savanna Project Management at its respective address shown above. Any such notice shall be deemed to have been received by the party to whom it is addressed on the date and at the time it is so delivered.
SECTON 9. MISCELLANEOUS

9.1     Confidentiality. Except as may be required by any governmental entity having jurisdiction over Savanna Project Management and except as may be necessary to perform its services hereunder, Savanna Project Management shall not disclose to any third party any confidential information that Principal makes available to Savanna Project Management. Savanna Project Management agrees to limit access to such information to those employees reasonably requiring such access for purposes of providing the Services and shall request that its employees maintain the confidentiality of such information in accordance with the terms hereof.
9.2     Complete Agreement; Amendments. This Agreement and all Exhibits attached hereto, which are incorporated herein by this reference, contain the entire agreement between Principal and Savanna Project Management and supersedes and replaces all previous agreements, whether written or oral, with respect to the subject matter of this Agreement. This Agreement may not be changed, modified, amended, or discharged, except by an agreement in writing.
9.3     Advertising. Principal agrees that Savanna Project Management may identify in its corporate promotional literature and advertising that it is the project manager for each Project and that Savanna Project Management may use photographs and renderings of each completed Project in such advertising and promotional records.
9.4     Intentionally Omitted
9.5     Applicable Law. This Agreement shall be construed under and interpreted in accordance with the internal laws of the State of New York.
9.6     Survival. The provisions of Sections 3, 4, 5, 6, 7, 8 and 9 of this Agreement shall survive the expiration or termination of this Agreement.
9.7     Successors and Assigns. Neither party may assign its rights or obligations hereunder except to an affiliate or to any entity which acquires all or substantially all of the assets and business of either party. Except as set forth in the immediately preceding sentence, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.
9.8     Limitation on Liability. Notwithstanding anything else contained herein to the contrary, each party shall look solely to the assets of the other party for satisfaction of any liabilities or obligations relating to this engagement, and no officer, director, employee, partner, affiliate, shareholder or agent of either party shall be personally responsible for any such liabilities or obligations. In addition, each party waives any claims for punitive, consequential, speculative or exemplary damages, including, without limitation, lost revenue or profit, even if a party has knowledge of the possibility of such damages; and, except for Savanna Project Management’s liability to third parties for bodily injury, death or property damage, in no event shall Savanna Project Management’s liability to Principal with respect to each Project exceed an amount equal to the lesser of annual fees paid or One Million Dollars ($1,000,000).
9.9     Litigation Expenses. If there is any litigation between the parties with respect to this Agreement or the subject matter hereof, the prevailing party in such litigation shall be entitled to collect all of its costs and expenses in such litigation, including reasonable attorneys’ fees and court costs, from the other party.
9.10     Rules of Interpretation. The headings set forth herein are for the convenience of the parties only and shall not be used to interpret the meaning of this Agreement. Each party agrees that it has been represented by counsel and has participated in the negotiation of this Agreement, and this Agreement shall not be construed against either party on the theory that such party drafted this Agreement. In the event any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected thereby.

9.11     Counterparts. This Agreement may be executed and delivered in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document. The delivery of an executed counterpart of this Agreement by facsimile or as a PDF or similar attachment to an e-mail shall constitute effective delivery of such counterpart for all purposes with the same force and effect as the delivery of an original, executed counterpart.

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

		
	▪
	PRINCIPAL     SAVANNA PROJECT MANAGEMENT

_________________     Savanna Project Management, LLC

By: _______________________________    By: _______________________________
Name:  ____________________________    Name:  ____________________________
Its:   ______________________________    Its:   ______________________________

Exhibit A

Project Description

	
					
	1.0
	PROJECT DESCRIPTION:
	Savanna Project Management will manage the design and construction of multiple projects located at ______________, including: ______________ and other building improvement projects as specified by Principal.

	 
	 
	 

	 
	 
	 

	2.0
	LOCATION:
	 

	 
	 
	 
	 
	 

	 
	 
	 

	3.0
	ESTIMATED RSF:
	 

	 
	 
	 

	 
	 
	 

	4.0
	ESTIMATED PROJECT SCHEDULE:
	 

	 
	§    The parties expect the Project will commence on ______________ and be completed by ______________ (the “Estimated Project Schedule”).

	 
	 
	 

	 
	 
	 

	5.0
	PROJECT MANAGER:
	 

	 
	§    The Project Manager for the Project shall be Eric DeSimone, or such other individual as designated by Savanna Project Management from time to time.

Exhibit B

Scopes of Services - Project Management

Scope of Services
Project Planning
		
	▪
	Define project goals in term of cost, schedule and physical requirements

		
	▪
	Determine necessary design team members, i.e. licensed architect to work with design group, mep engineer, and other consulting engineers, etc. 

		
	▪
	Oversee test fit process

		
	▪
	Determine project phasing and establish programming requirements

		
	▪
	Prepare project master schedule

		
	▪
	Prepare preliminary project budget

		
	▪
	Manage architectural and engineering program process

		
	▪
	Review architectural and engineering program and obtain user approval

		
	▪
	Review project financial assumptions as they relate to the project

		
	▪
	Present findings – set project performance criteria

Design Management
		
	▪
	Represent Principal during design process

		
	▪
	Kick off design process – set goals and objectives

		
	▪
	Manage schematic design - architectural and engineering

		
	▪
	Manage team in preparation of project budget based upon schematic design

		
	▪
	Manage value engineering of alternate methods and systems

		
	▪
	Review schematic design and obtain approval

		
	▪
	Manage design development

		
	▪
	Manage process for local, state and federal governing agencies and assist the architect, engineer, construction manager in securing all necessary permits and required approvals

		
	▪
	Develop project time schedules for the Design Phase and coordinate the activities of the Client, architect, engineer, interior designer and other consultants

		
	▪
	Develop a preliminary project time schedule for the Construction Phase showing the major construction activities, occupancy schedules and final completion dates

		
	▪
	Recommend to Principal for approval, the purchase of long lead items to meet project schedule requirements

Exhibit B

Scopes of Services - Project Management

		
	▪
	Coordinate information between Principal and team members

		
	▪
	Manage budget based upon design development

		
	▪
	Review design development with and obtain Principal approval

		
	▪
	Update project schedule

		
	▪
	Manage construction document production

		
	▪
	Manage input to constructability, methods and materials

		
	▪
	Review of all documents prior to bid.

Pre - Construction and Construction Services Phase 
		
	▪
	Define project goals in terms of cost, schedule and physical requirements

		
	▪
	Determine any additional design team members, which may be required

		
	▪
	Review existing design documents and make recommendations as required

		
	▪
	Represent Principal during the finalization of the construction documents

		
	▪
	Manage process for local, governing agencies and assist the architect, engineer, and construction manager in securing all necessary permits and required approvals

		
	▪
	Represent Principal during construction phase

		
	▪
	Identify municipal permitting process

		
	▪
	Manage building permit application (if required by project timing)

		
	▪
	Pre-qualify appropriate general contractor/construction managers

		
	▪
	Solicit input from Principal and agree upon final bid list

		
	▪
	Prepare detailed construction RFP coordinating requirements of the building and lease

		
	▪
	Solicit proposals from pre-qualified general contractors/construction managers

		
	▪
	Assist in the selection of necessary testing agencies and negotiate their contracts

		
	▪
	Advise Principal and general contractor/construction manager regarding any insurance, which should be purchased and maintained during construction of the project

		
	▪
	Receive, review and qualify proposals - prepare detailed bid analysis

		
	▪
	Interview general contractor/construction manager candidates

		
	▪
	Prepare final recommendation and terms of award

		
	▪
	Negotiate general contractor/construction manager contract

Exhibit B

Scopes of Services - Project Management

		
	▪
	Conduct construction kick off meeting

		
	▪
	Chair regular project meetings including architect, engineer, building management contractors, etc.

		
	▪
	Coordinate vendors and contractors with Principal requirements

		
	▪
	Issue monthly project progress reports

		
	▪
	Review and process general contractor/construction manager and vendor payments

		
	▪
	Monitor and report on construction costs, issue monthly project anticipated cost reports

		
	▪
	Review request for change in cost and/or time.  Negotiate on behalf of Principal as required.

		
	▪
	Monitor and report schedule status

		
	▪
	Consult as to avoid construction conflicts

		
	▪
	Mediate construction conflicts that do occur

		
	▪
	Overseeing the handling and removal of hazardous materials

Project Close-Out
		
	▪
	Establish vendor procedure for punchlist, systems preoccupancy testing and client training on new equipment and systems.

		
	▪
	Monitor vendor submission to client of as-built drawings, warranties, operating and maintenance manuals, system testing documentation, attic stock, completed punchlist and governmental and regulatory sign-offs.

		
	▪
	Review all final invoices for conformance to contract terms, including final lien waivers and releases.

		
	▪
	Produce final cost report that summarizes, per budget line item, all base contract costs and approved change orders in comparison to approved budget.

Deliverables
Budgets
Savanna Project Management will work with the project team to prepare a preliminary budget for review. This budget will include all hard and soft costs, potential exposures and appropriate contingencies. Savanna Project Management would expect Principal to approve budgets in a formal session during the course of the project.
		
	•
	Master Project Budgets for all projects

Agenda and Minutes
Savanna Project Management will prepare detailed agendas and accurate, timely minutes for our project meetings and work sessions.
		
	•
	Project Meeting Agenda and Minutes

Schedules

Exhibit B

Scopes of Services - Project Management

Savanna Project Management will develop a master project completion schedule. Schedules will be monitored regularly in conjunction with the project team.
		
	•
	Master Project Schedule with critical tasks and milestones.

Compensation
The resource that we provide to you is the collective experience, proven processes and efforts of our project managers. Our fees for services are based upon on a sliding scale percentage on a cumulative project basis as set forth below and billed on a monthly basis

	
																
	Sliding Fee Scale

	Max Cost
	 
	$
	1,249,999
	

	$
	2,499,999
	

	$
	3,749,999
	

	$
	4,999,999
	

	n/a
	

	Min Cost
	 
	-
	

	1,250,000
	

	2,500,000
	

	3,750,000
	

	5,000,000
	

	Fee %
	 
	4.25
	%
	4.00
	%
	3.75
	%
	3.50
	%
	3.25
	%

Additional Fees
Based on the described scope of services and team and approved by Principal Savanna Project Management shall be compensated by Principal in accordance with the following Hourly Rate Schedule for any additional services that are not part of any particular billable project.  

	
		
	Staff/level of support
	Hourly rate

	Vice President
	$175.00

	Project Manager
	$150.00

	Assistant Project Manager
	$125.00

	Project Coordinator/Admin
	$75.00

* Modification of team and or other ‘consultant’ arrangement may require hourly fee to be amended.

Expenses
Expenses for reproduction of documents, messenger and courier services, travel and accommodations will
be reimbursed at cost without mark-ups.

Exclusions
The following expense items are excluded from this proposal:
•Savanna Project Management serving as an Expert Witness
•Lease negotiations

§    

EXHIBIT H
KBS TRANSFER LANGUAGE

Notwithstanding anything stated to the contrary herein, any transfers (or the pledge or encumbrance) of equity interests or other interests in KBS SOR Properties, LLC, or in any of the direct or indirect owners of KBS SOR Properties, LLC (including, without limitation, KBS Strategic Opportunity Limited Partnership, KBS Strategic Opportunity Holdings, LLC, or KBS Strategic Opportunity REIT, Inc.) shall not be prohibited (and shall be expressly permitted), provided that KBS Strategic Opportunity REIT, Inc., continues to own, either directly or indirectly, not less than 51% of the ownership interests in Borrower.
Notwithstanding the foregoing or anything stated to the contrary herein, the following transactions will not be prohibited and shall be expressly permitted:
(a)  KBS SOR Properties, LLC, KBS Strategic Opportunity Limited Partnership, KBS Strategic Opportunity REIT, Inc., and KBS Strategic Opportunity Holdings, LLC, shall each be permitted to execute guaranties and/or indemnity agreements for their respective subsidiaries; and 
(b)  KBS Strategic Opportunity Limited Partnership, KBS Strategic Opportunity REIT, Inc., and any of the other parties owning interests in KBS Strategic Opportunity Limited Partnership, direct or indirect, shall be permitted to obtain loans from, or incur indebtedness to, any third-party lender (each a “Secondary Loan”) and pledge their respective interests (direct or indirect) in KBS Strategic Opportunity Limited Partnership and KBS SOR Properties, LLC, as security for any such Secondary Loan so long as (A) neither Borrower nor Borrower’s sole member’s membership interest are pledged to secure such Secondary Loan, and (B) any default under a Secondary Loan resulting in a foreclosure of the pledged interests and a transfer of such interest to the lender of the Secondary Loan shall not be deemed an event of default under the Loan documents.

LIMITED LIABILITY COMPANY AGREEMENT 
OF KBS SOR SREF III 110 WILLIAM, LLC
THIS AGREEMENT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, 15 U.S.C. § 15b ET SEQ., AS AMENDED (THE “FEDERAL ACT”), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL ACT.  IN ADDITION, THE ISSUANCE OF THIS SECURITY HAS NOT BEEN QUALIFIED UNDER THE DELAWARE SECURITIES ACT OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY, THE “STATE ACTS”), IN RELIANCE UPON ONE (1) OR MORE EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF THE STATE ACTS.  IT IS UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN TO, OR TO RECEIVE ANY CONSIDERATION THEREFOR FROM, ANY PERSON OR ENTITY WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED SALE OR OTHER TRANSFER OF THIS SECURITY DOES NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH PROPOSED SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES LAWS.  THE TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED UNDER THE TERMS OF THE LIMITED LIABILITY COMPANY AGREEMENT GOVERNING THE COMPANY, A COPY OF WHICH IS ON FILE WITH THE COMPANY.KBS SOR Q4 2013 Exhibit 10.19

AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) dated as of December 4, 2013, is by and between 110 WILLIAM, LLC, a Delaware limited liability company (“Seller”), and 110 WILLIAM HOLDINGS III, LLC, a Delaware limited liability company (“Buyer”).
ARTICLE I
PURCHASE AND SALE OF PROPERTY
Section 1.1    Sale.  Seller hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms and conditions set forth herein, the following:
(a)    that certain real property located in the State, County and City of New York, Borough of Manhattan, and being more particularly described in Exhibit A attached hereto (the “Real Property”);
(b)    all of Seller’s right, title and interest in and to all rights, privileges and easements appurtenant to the Real Property, including, without limitation, all minerals, oil, gas and other hydrocarbon substances on and under the Real Property, as well as all development rights, air rights, water, water rights, riparian rights and water stock relating to the Real Property and any rights-of-way or other appurtenances used in connection with the beneficial use and enjoyment of the Real Property and all of Seller’s right, title and interest in and to all roads and alleys adjoining or servicing the Real Property (collectively, the “Appurtenances”);
(c)    all of Seller’s right, title and interest in and to all improvements and fixtures located on the Real Property, including, without limitation, all apparatus, equipment and appliances used in connection with the operation or occupancy of the Real Property, such as heating and air conditioning systems and facilities used to provide any utility, refrigeration, ventilation, garbage disposal, snow removal equipment, or other services on the Real Property (collectively, the “Improvements”);
(d)    the personal property owned by Seller, if any, located on the Real Property and used exclusively in the operation or maintenance of the Real Property, as described on Schedule 1 attached hereto (the “Personal Property”); and
(e)    any intangible personal property now or hereafter owned by Seller and used in the ownership, use or operation of the Real Property, Improvements and Personal Property, including, without limitation, any Leases (defined below), and Seller’s interest in all security deposits and prepaid rent, if any, under the Leases and any and all guaranties of the Leases, utility contracts, any contracts or other agreements or rights relating to the ownership, use and operation of the Property (collectively, the “Intangible Property”).
All of the items referred to in subsections (a), (b), (c), (d) and (e) above are collectively referred to as the “Property.”
Section 1.2    Purchase Price.

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(a)    The purchase price of the Property is Two Hundred Sixty One Million One Hundred Thousand and 00/100 Dollars ($261,100,000.00) (the “Purchase Price”).
(b)    The Purchase Price shall be paid as follows:
(i)    Upon execution and delivery of this Agreement by Seller and Buyer, Buyer shall deposit in escrow with Stewart Title Insurance Company (“Escrow Agent”) an all cash deposit in the amount of Fifteen Million and 00/100 Dollars ($15,000,000) (such deposit, together with any interest thereof, collectively, the “Deposit”).  Except as otherwise provided in this Agreement, the Deposit shall not be refundable to Buyer.  The Deposit shall be held in an interest bearing account and all interest thereon shall be deemed a part of the Deposit.  At the Closing, as defined in Section 1.2(b)(iii) below, the Deposit shall be paid to Seller and credited against the Purchase Price.
(ii)    Subject to Section 9.6, a portion of the Purchase Price equal to the aggregate outstanding principal balance of the Mortgage Loan and the Mezzanine Loan (as such terms are hereinafter defined) as of the Closing Date shall be deemed to be paid to Seller by virtue of Buyer’s assumption of the Mortgage Loan and the assumption by Buyer’s affiliate of the Mezzanine Loan in accordance with Section 9.6.
(iii)    The balance of the Purchase Price, subject to prorations as provided in Section 9.5, shall be paid to Seller in immediately available funds via wire transfer at the consummation of the purchase and sale contemplated hereunder (the “Closing”). If for any reason the Closing does not occur, either party may make a written demand upon Escrow Agent for payment of the Deposit, and the demanding party must also concurrently give notice of such demand to the non-demanding party.  If Escrow Agent does not receive a written objection from the other party to the proposed payment within ten (10) days after the giving of such notice, Escrow Agent is hereby authorized to make such payment.  If Escrow Agent does receive such written objection within such ten (10) day period or if for any other reason Escrow Agent in good faith shall elect not to make such payment, Escrow Agent shall continue to hold such amount until otherwise directed by written instructions from the parties to this Agreement or a final judgment of a court.  However, Escrow Agent shall have the right at any time to deposit the escrowed proceeds and interest thereon, if any, with the clerk of the Supreme Court of the county in which the Real Property is located.  Escrow Agent shall give written notice of such deposit to Seller and Buyer.  Upon such deposit Escrow Agent shall be relieved and discharged of all further obligations and responsibilities hereunder.
(A) The parties acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that Escrow Agent shall not be deemed to be the agent of either of the parties, and that Escrow Agent shall not be liable to either of the parties for any act or omission on its part unless taken or suffered in bad faith, in willful disregard of this Agreement or involving gross negligence.  Seller and Buyer shall jointly and severally indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses, including reasonable attorneys’ fees, incurred in connection with the performance of Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or suffered by Escrow Agent in bad faith, in willful disregard of this Agreement or involving gross negligence on the part of Escrow Agent.
(B) Escrow Agent has acknowledged agreement to these provisions by signing in the place indicated on the signature page of this Agreement.
(C) Escrow Agent may act or refrain from acting in respect of any matter referred to in this Section 1.2(b)(iii) in full reliance upon and with the advice of counsel which 

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may be selected by it and shall be fully protected in so acting or refraining from action upon the advice of such counsel.
(D) By executing this Agreement, Buyer and Seller consent to the stability of the depositary bank designated by the Escrow Agent and agree to hold the Escrow Agent harmless for all loss, costs, or damages incurred by reason of any bank failure. 
(c)    IF THE PURCHASE OF THE PROPERTY IS NOT CONSUMMATED DUE TO THE FAILURE OF ANY OF THE CONDITIONS PRECEDENT SET FORTH IN SECTIONS 2.1(c), (d) OR (f) BELOW, AND THE BUYER IS NOT THEN IN DEFAULT, THEN BUYER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AND, IN SUCH EVENT, THE ESCROW AGENT SHALL RETURN THE DEPOSIT TO BUYER (PURSUANT TO THE PROVISIONS OF SECTION 1.2(b)(iii)) AND NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER (EXCEPT FOR THOSE THAT ARE EXPRESSLY STATED TO SURVIVE TERMINATION OF THIS AGREEMENT).  
(d)    IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED SOLELY DUE TO SELLER’S DEFAULT HEREUNDER OR AS A RESULT OF A FAILURE OF ANY OF THE CONDITIONS PRECEDENT SET FORTH IN SECTIONS 2.1(a), (b) OR (e) BELOW, THEN, AS BUYER’S SOLE AND EXCLUSIVE REMEDY, BUYER MAY EITHER:  (1) TERMINATE THIS AGREEMENT AND RECEIVE A REFUND OF THE DEPOSIT  (PURSUANT TO THE PROVISIONS OF SECTION 1.2(b)(iii)), AND IN SUCH EVENT, SELLER SHALL REIMBURSE BUYER FOR ALL OF BUYER’S EXPENSES INCURRED UP TO $250,000 FOR (X) TITLE EXAMINATION, SURVEY AND MUNICIPAL SEARCHES, INCLUDING THE ISSUANCE OF THE TITLE COMMITMENT AND ANY CONTINUATION THERETO, AND (Y) ANY THIRD PARTY COSTS, INCLUDING WITHOUT LIMITATION, REASONABLE ATTORNEY’S FEES, INCURRED BY BUYER IN CONNECTION THE NEGOTIATION OF THIS AGREEMENT AND SEEKING TO OBTAIN THE LOAN APPROVAL OF THE ASSUMPTION OF THE MORTGAGE LOAN AND MEZZANINE LOAN PURSUANT TO SECTION 9.6 (COLLECTIVELY, “BUYER’S TRANSACTION COSTS”), WHICH REIMBURSEMENT OBLIGATION OF SELLER SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT, AND THEREAFTER, NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER (EXCEPT FOR THOSE THAT ARE EXPRESSLY STATED TO SURVIVE TERMINATION OF THIS AGREEMENT), OR (2) ENFORCE SPECIFIC PERFORMANCE OF THIS AGREEMENT.  
(e)    THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A FAILURE BY BUYER TO CONSUMMATE THE PURCHASE OF THE PROPERTY DUE TO BUYER’S DEFAULT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.  AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN THE EVENT OF BUYER’S DEFAULT.  IN THE EVENT BUYER DEFAULTS IN THE PAYMENT OF THE PURCHASE PRICE ON THE CLOSING DATE AND SELLER IS OTHERWISE READY, WILLING AND ABLE TO PERFORM ITS OBLIGATIONS TO BE PERFORMED, THE DEPOSIT MADE BY BUYER SHALL BE FORFEITED TO SELLER AS THE SOLE AND EXCLUSIVE REMEDY AVAILABLE TO SELLER FOR SUCH DEFAULT.  THIS SECTION 1.2(c) IS NOT INTENDED TO LIMIT SELLER’S RIGHTS TO INDEMNIFICATION UNDER SECTIONS 7.1 AND 10.3 OF THIS AGREEMENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, 

3

AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS SECTION 1.2(c), INCLUDING THIS LIGUIDATED DAMAGES PROVISION. THIS SECTION 1.2(c) IS NOT INTENDED TO LIMIT SELLER'S RIGHTS UNDER SECTION 7.1 AND 10.3 OF THIS AGREEMENT.
	
				
	INITIALS:
	/s/ Authorized Signatory
	 
	/s/ Authorized Signatory

	 
	Seller
	 
	Buyer

ARTICLE II
CONDITIONS
Section 2.1    Conditions Precedent.  Buyer’s obligation to purchase the Property is conditioned upon the following:
(a)    Seller materially performing and complying with all of the terms of this Agreement to be performed and complied with by Seller prior to or at the Closing.
(b)    All of the representations and warranties of Seller set forth in this Agreement shall be true, accurate and complete in all material respects as of the Closing Date, except for those representations and warranties expressly made only as of the date hereof (which shall nonetheless be true as of such date).  
(c)    Seller shall have delivered to Buyer title to the Property as required in this Agreement, subject only to the Permitted Exceptions (as defined in Article IV hereof).
(d)    The Loan Approval with respect to the assumption of the Mortgage Loan and the assumption of the Mezzanine Loan has been obtained pursuant to Section 9.6 and the assumption thereof shall have closed simultaneously with the Closing hereunder. 
(e)    Seller shall have delivered all of the closing documents as described in Section 9.3(a) of this Agreement.
(h)    Buyer shall have received the tenant estoppel certificates and/or Seller’s estoppel certificates in accordance with Section 9.4.

ARTICLE III
BUYER’S EXAMINATION
Section 3.1    Buyer’s Independent Investigation.
(a)    Buyer acknowledges and agrees that it has been given a full opportunity to inspect and investigate each and every aspect of the Property, either independently or through agents of Buyer’s choosing, including, without limitation:
(i)    All matters relating to title, together with all governmental and other legal requirements such as taxes, assessments, zoning, use permit requirements and building codes.

4

(ii)    The physical condition of the Property, including, without limitation, the interior, the exterior, the structure, the paving, the utilities, and all other physical and functional aspects of the Property.  Such examination of the physical condition of the Property shall include an examination for the presence or absence of Hazardous Materials (as defined below), which shall be performed or arranged by Buyer, at Buyer’s sole expense.
(iii)    Any easements and/or access rights affecting the Property.
(iv)    The tenant leases and any other occupancy agreements (each individually referred to herein as a “Lease”, and collectively referred to herein as the “Leases”) and all matters in connection therewith, including, without limitation, the ability of the tenants to pay the rent.
(v)    The service contracts and other contracts or agreements of significance to the Property (the “Contracts”).
(vi)    All other matters of material significance affecting the Property.
(b)    EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY DILIGENCE MATERIALS OR ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO BUYER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY.  EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, BUYER WAIVES, AND SELLER IS RELIEVED FROM, ANY OBLIGATION OR DUTY THAT SELLER MIGHT OTHERWISE HAVE TO DISCLOSE ANY CONDITION, INCLUDING AN ENVIRONMENTAL CONDITION, RELATING TO THE PROPERTY.  EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT, UPON CLOSING, SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS, WITH ALL FAULTS.”  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY (INCLUDING SPECIFICALLY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY OR ON BEHALF OF SELLER, ANY DIRECT OR INDIRECT OWNER OF SELLER, ANY PROPERTY MANAGER, ANY FRANCHISOR OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS EXPRESSLY SET FORTH IN THIS AGREEMENT.  BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO THE CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE, OR REMEDIAL ACTION TO BE TAKEN WITH RESPECT TO, ANY HAZARDOUS MATERIALS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON 

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BUYER’S OWN INVESTIGATIONS AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT.  SUBJECT TO ARTICLE V HEREOF, UPON THE OCCURRENCE OF THE CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER’S INVESTIGATIONS.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER, UPON THE OCCURRENCE OF THE CLOSING, (I) SHALL BE DEEMED TO HAVE RELEASED, ACQUITTED AND DISCHARGED SELLER (AND SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, EMPLOYEES AND AGENTS) FROM AND AGAINST, AND (II) SHALL BE DEEMED TO HAVE WAIVED AND RELINQUISHED, ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, THAT BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND ANY OF SELLER’S RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, EMPLOYEES AND AGENTS) 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 ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.  BUYER AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS MATERIALS OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED AFTER THE CLOSING DATE, SUCH CLEANUP, REMOVAL OR REMEDIATION SHALL BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF BUYER.
(c)    BUYER ACKNOWLEDGES THAT SELLER HAS NOT HELD ITSELF OUT AS ENGAGED IN THE PRACTICE OF LAW OR ACCOUNTING, AND BUYER HAS NOT ESTABLISHED, DIRECTLY OR INDIRECTLY, AN ATTORNEY-CLIENT OR ACCOUNTANT-CLIENT RELATIONSHIP WITH SELLER OR ANY SELLER PARTIES. IT IS UNDERSTOOD AND AGREED THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, ANY REPRESENTATIONS OR STATEMENTS MADE BY SELLER OR ANY OF THE SELLER PARTIES REGARDING LEGAL OR TAX CONSEQUENCES OF ANY OF THE TRANSACTIONS DESCRIBED IN THIS AGREEMENT MAY NOT BE USED OR RELIED UPON BY BUYER.  BUYER REPRESENTS THAT IT HAS EITHER OBTAINED LEGAL COUNSEL AND TAX ADVICE PRIOR TO ENTERING INTO THIS AGREEMENT OR IT HAS DEEMED IT UNNECESSARY TO SEEK SUCH ADVICE.  SELLER SHALL NOT BE HELD RESPONSIBLE FOR ANY FAILURE OF BUYER TO SEEK AND OBTAIN LEGAL AND TAX ADVICE
(d)    In addition, Buyer expressly acknowledges that it is not relying upon the information contained in the 110 William Street - Confidential Offering Memorandum dated October 2013, furnished by Eastdil Secured on behalf of Seller, or in any supplemental materials thereto.
Section 3.2    Release.
(a)    Without limiting the above, except with respect to a breach by Seller of any of the representations and warranties contained in this Agreement or in any of the Closing documents or Seller’s fraud, Buyer on behalf of itself and its successors and assigns waives its right to recover from, and forever releases and discharges, Seller, Seller’s affiliates, Seller’s investment manager, the partners, trustees, shareholders, directors, officers, employees and agents of each of them, and their respective 

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heirs, successors, personal representatives and assigns, from any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the physical condition of the Property or any law or regulation applicable thereto, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. Section 300f et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.), and the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.).
(b)    In connection with subsection (a) above, Buyer expressly waives the benefits of any applicable law that generally provides as follows:  “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
(c)    The provisions of this Article III shall survive the Closing.
ARTICLE IV
TITLE
Section 4.1    Conditions of Title.
(a)    At the Closing, Seller shall convey title to the Real Property to Buyer by good and sufficient bargain and sale deed without covenants in the form of Exhibit B attached hereto (the “Deed”).
(b)    At the Closing, Seller shall transfer title to the Personal Property by a bill of sale in the form attached hereto as Exhibit C (the “Bill of Sale”).
(c)    At the Closing, Seller shall transfer title to the Leases by an assignment and assumption of leases in the form attached hereto as Exhibit D (the “Assignment and Assumption of Leases”), and to the Contracts and Intangible Property by an assignment and assumption of Contracts, Warranties and Guaranties and other intangible property in the form attached hereto as Exhibit E (the “Assignment and Assumption of Contracts”).  
Section 4.2    Title Commitment; Title Objections
(a)    Title insurance for the acquisition will be provided by Stewart Title Insurance Company.  The order for title will be placed jointly through First Nationwide Title Agency and National Land Tenure Company LLC.
(b)    Attached as Schedule 11 is a copy of that certain commitment for title insurance from Stewart Title (the “Title Commitment”).  Seller has also provided to Buyer prior to or concurrently herewith a survey for the Real Property prepared by Fehringer Surveying, P.C., dated May 19, 2012 (the “Survey”).  Attached as Schedule 13 is a mark-up of Schedule B of the Title Commitment, identifying Buyer’s Title Objections (defined below) and Seller shall cure such Title Objections on or prior to the Closing.  

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(c)    If the Title Company raises or the Title Commitment contains any objectionable or supplemental title exceptions (other than the Permitted Exceptions), whether on a continuance, by endorsement or otherwise, Buyer shall have the right to send a statement (a “Title Objection Statement”) to Seller within five (5) days of Buyer’s receipt thereof (but in no event after the Closing Date) objecting to such title exceptions, encumbrances, liens or other title matters (other than Permitted Exceptions) (such objections, the “Title Objections”), and Seller will have a reasonable period of time from receipt of such statement(s) to respond thereto pursuant to clause (c) below.  Notwithstanding the foregoing, any additional or supplemental exceptions, encumbrances, liens or other title matters not specifically identified in a Title Objection Statement within such five (5) day period shall also be deemed to be “Permitted Exceptions”; provided, however, that all Mandatory Seller Removal Items (as hereinafter defined) shall automatically be deemed Title Objections without the need for any notice by Buyer to Seller as provided herein.  
(d)    In the event Buyer shall deliver a Title Objection Statement within the applicable time periods referred to in Section 4.2(b), Seller shall have the right, but not the obligation, to attempt to cure any such Title Objections.  Within ten (10) days after receipt of a Title Objection Statement, Seller shall notify Buyer in writing whether Seller elects to attempt to cure any such Title Objections.  If Seller shall fail to notify Buyer in writing whether Seller elects to attempt to cure any such Title Objections within such 10-day period, Seller shall be deemed to have elected to attempt to cure any such Title Objections.  If Seller elects or is deemed to have elected to attempt to cure any such Title Objections, Seller shall have until the Scheduled Closing Date (as hereinafter defined) to attempt to remove, satisfy or cure the same, provided that is Seller is unable to cure any such Title Objections by the Scheduled Closing Date, Seller shall be entitled to a reasonable adjournment of the Closing, but in no event shall the adjournment exceed sixty (60) days in the aggregate.  If Seller elects not to cure any Title Objections, or if Seller is unable to effect a cure of such Title Objections prior to the Scheduled Closing Date (or such adjourned Closing Date, as applicable), Buyer shall elect, within five (5) business days after receipt of written notice from Seller that Seller has elected not to cure any such Title Objections or that Seller is unable to effect a cure of such Title Objections, as the case may be, one of the following options:  (i) to accept a conveyance of the Property subject to the Permitted Exceptions and any Title Objection that such Seller is unwilling or unable to cure, and without reduction of the Purchase Price, in which case, such Title Objection shall be deemed to be a “Permitted Exception”; or (ii) to terminate this Agreement by sending written notice thereof to Seller, and upon delivery of such termination notice: (x) this Agreement shall terminate (y) the Deposit shall be returned to Buyer and (z) thereafter neither Buyer nor Seller shall have any further rights, obligations or liabilities hereunder except to the extent that any obligation or liability set forth herein expressly survives termination of this Agreement.  If Buyer shall fail to notify Seller in writing of Buyer’s election of the options in clauses (i) or (ii) referred to above in this Section 4.2(c) within such five (5) business day period, Buyer shall be deemed to have elected to accept the conveyance of the Property under clause (i) above.  Notwithstanding anything to the contrary contained herein, (A)  Seller shall be required to remove (1) all monetary encumbrances and liens (other than the lien of the Mortgage Loan documents which shall remain in connection with the assumption by Buyer at the Closing in accordance with Section 9.6), and (2) any Title Objections which have been voluntarily placed or consented to by Seller against the Property on or following the date hereof (the items in subclauses (1) and (2), collectively, the “Mandatory Seller Removal Items”), and (B)  except as provided in the foregoing subclause (A), other than Mandatory Seller Removal Items, Seller shall not have any obligation to cure any Title Objection that is not a monetary Encumbrance (and Seller’s failure to cure any Title Objection that is not a monetary encumbrance (other than Mandatory Seller Removal Items) shall in no event constitute a breach by Seller of its obligations under this Agreement.
(e)    If on the Closing Date any of the Property continues to be encumbered by any Mandatory Seller Removal Items or any other Title Objections which Seller has elected or is deemed to have elected to cure, pay or discharge, the Seller may, in addition to any other methods available to it 

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under this Agreement, use any portion of the Deposit and the Purchase Price to satisfy the same, provided that Seller so acting shall simultaneously either deliver to Buyer on the Closing Date instruments in recordable form, sufficient to satisfy such Title Objections of record, together with the cost of recording or filing said instruments, or arrange with Title Company for the issuance of the Title Policy to Buyer free of any such Mandatory Seller Removal Items or Title Objections which Seller has elected or is deemed to have elected to cure without additional cost or premium to Buyer.    
(f)    In addition to the matters deemed “Permitted Exceptions” under Sections 4.2(b) and (c) hereof, each of the following shall constitute a “Permitted Exception”, and, notwithstanding anything to the contrary contained herein, shall not be a “Title Objection”):
(i)    any state of facts disclosed on the Survey;
(ii)    any state of facts that a personal inspection of the Property might disclose;
(iii)    all covenants, easements, reservations, encumbrances, restrictions, agreements and other title matters which are set forth on Schedule 13 annexed hereto (and not noted as a Title Objection); 
(iv)    any defects in or objections to title or Survey matters, including any title exceptions, encumbrances or liens, which become a Permitted Exception pursuant to Section 4.2(b) or (c) hereof;
(v)    real estate taxes or installments thereof, water charges, sewer rents and assessments, special assessments and governmental charges, business improvement district charges and any liens relating to any of the foregoing, and tax liens for unpaid inspection fees and permit fees, in each case, a lien not yet due and payable, and subject to proration as provided in Section 9.5;
(vi)    any and all violations of law or municipal ordinances, orders or requirements issued by the departments of buildings, fire, labor, health or other Federal, State, County, Municipal or other departments and governmental agencies having jurisdiction against or affecting the Property, provided that Seller shall give Buyer a credit against the Purchase Price in the aggregate amount of any Environmental Control Board liens that are shown in the Title Commitment;
(vii)    any and all present and future laws, regulations, restrictions, requirements, ordinances, resolutions and orders (including any of the foregoing relating to zoning, building and environmental protection) as to the use, occupancy, subdivision or improvement of the Property adopted or imposed by any governmental authority;  
(viii)    any lien or encumbrance encumbering the Property as to which Seller shall deliver to Buyer, or Title Company, at or prior to the Closing Date, proper instruments, in recordable form, cancelling such lien or encumbrance, together with any other instruments necessary thereto and the cost of recording and cancelling the same;
(ix)    all rights or easements, if any, of the City of New York or New York County or any public or private utility company, to maintain telephone wires, pipes, conduits or other facilities which enter or cross the Property;
(x)    variations between tax lot lines and record lines and variations between tax maps and record descriptions;

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(xi)    any lien or encumbrance as to which Title Company will insure, or commit to insure, Buyer against loss or forfeiture of title to, or collection from, the Property without additional cost to Buyer, whether by payment, bonding, indemnity of Seller or otherwise;
(xii)    Uniform Commercial Code filings which are more than five (5) years old on the day prior to the Closing Date; 
(xiii)    Any and all Leases, licenses or other occupancy agreements as set forth on Schedule 2 and any other Leases entered into after the date hereof which have been approved by Buyer in connection with Section 8.1 hereof; and
(xiv)    any other matter which constitutes a Permitted Exception under the terms of this Agreement.
Section 4.3    Evidence of Title.  Delivery of title in accordance with the foregoing shall be evidenced by the willingness of the Title Company to issue, at Closing, its standard Owner’s American Land Title Association Policy of Title Insurance in the amount of the Purchase Price showing title to the Real Property vested in Buyer, subject to no exceptions other Permitted Exceptions (the “Title Policy”). 
ARTICLE V
SELLER’S REPRESENTATIONS AND WARRANTIES
Section 5.1    Representations and Warranties of Seller.  Seller represents and warrants to Buyer as of the date hereof and as of the Closing Date, that:
(a)    Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware.  This Agreement (i) is and at the time of Closing will be duly authorized, executed and delivered by Seller, (ii) is and at the time of Closing will be legal, valid and binding obligations of Seller, and (iii) does not and at the time of Closing will not violate any provision of any agreement or judicial order to which Seller is a party or to which Seller or the Property is subject.  All documents executed by Seller which are to be delivered to Buyer at Closing (i) are or at the time of Closing will be duly authorized, executed and delivered by Seller, (ii) are or at the time of Closing will be legal, valid and binding obligations of Seller, and (iii) do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Seller is a party or to which Seller or the Property is subject.  
(b)    Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the United States Internal Revenue Code of 1986, as amended (the “Federal Code”).
(c)    To Seller’s knowledge, the list of Leases in Schedule 2 attached hereto is a true, correct and complete list of all of the Leases covering the Property as of the Effective Date.  To Seller’s knowledge, Seller has delivered to Buyer, or made available to Buyer for review, true and complete copies of all Leases set forth on Schedule 2.  To Seller’s knowledge, the Leases are in full force and effect and none of the Leases have been modified, amended, terminated,  renewed or extended, except as set forth on Schedule 2.  As of the Effective Date, to Seller’s knowledge, no written notice of default has been given or received by Seller under any of the Leases, except as listed on Schedule 2.  To the best of Seller’s knowledge, the list of service contracts in Schedule 3 attached hereto is a complete list of all of the service contracts affecting the Property as of the Effective Date (“Service Contracts”).  

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(d)    To Seller’s knowledge, Seller has not received written notice from any applicable governmental authority that the Property is in violation of any laws, ordinances or regulations of any applicable governmental authority having jurisdiction thereover or control thereof.
(e)    To Seller’s knowledge, Seller has not received written notice from any applicable governmental authority of any pending or threatened special assessments or condemnation actions with respect to the Property.
(f)    To Seller’s knowledge, Seller has received no written notice, that the Property is in material violation of any federal, state, local or administrative agency ordinance, law, rule, regulation, order or requirement relating to environmental conditions or Hazardous Material (“Environmental Laws”).  For the purposes hereof, “Hazardous Material” shall mean any substance, chemical, waste or other material which is listed, defined or otherwise identified as “hazardous” or “toxic” under any federal, state, local or administrative agency ordinance or law, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq. and the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., or any regulation, order, rule or requirement adopted thereunder, as well as any formaldehyde, urea, polychlorinated biphenyls, petroleum, petroleum product or by product, crude oil, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture thereof, radon, asbestos, and “source,” “special nuclear” and “by product” material as defined in the Atomic Energy Act of 1985, 42 U.S.C. §§ 3011 et seq.
(g)    Seller has not been the subject of any filing of a petition under the Federal Bankruptcy Law or any federal or state insolvency laws or laws for composition of indebtedness or for the reorganization of debtors.
(h)    Except as disclosed in Schedule 4 attached hereto, there is no litigation filed against Seller or, to Seller’s knowledge, the Property, that would adversely affect the current use or operation of the Property or the ability of Seller to perform its obligations under this Agreement.
(i)    To Seller’s knowledge, Schedule 5 is a true, correct and complete rent roll for the Property and the security deposits currently held by Seller under the Leases (and specifying whether such security deposits are held as cash or letters of credit).
(j)    To Seller’s knowledge, there are no “free rent” or abatements outstanding under any of the Leases other than as set forth on Schedule 6 attached hereto.
(k)    To Seller’s knowledge, except as set forth on Schedule 7, there are no Tenant Inducement Costs or Leasing Commissions (as hereinafter defined) due or to become due in connection with any Lease in effect as of the date hereof.
(l)    Attached as Schedule 8 is a schedule of all of the material documents and agreements evidencing and/or securing the Mortgage Loan (collectively, the “Mortgage Loan Documents”).  The Mortgage Loan Documents have not been modified, terminated, amended or waived except as provided on Schedule 8.  As of the Effective Date, Seller has made all payments of principal, interest and any other sums that became due and payable under the Mortgage Loan Documents and Seller has not received any written notice alleging that Seller is in default in the performance or observance of any of the material covenants and obligations required to be kept, observed or performed by Seller under the Mortgage Loan Documents.  To Seller's knowledge, there is no other matter which, with the giving of notice, the passage of time, or both, would constitute an event of default under any of the Mortgage Loan Documents.

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(m)    Attached as Schedule 9 is a schedule of all of the material documents and agreements evidencing and/or securing the Mezzanine Loan (collectively, the “Mezzanine Loan Documents”).  The Mezzanine Loan Documents have not been modified, terminated, amended or waived except as provided on Schedule 9.  As of the Effective Date, the Mezzanine Borrower has made all payments of principal, interest and any other sums that became due and payable under the Mezzanine Loan Documents and neither Seller nor the Mezzanine Borrower has not received any written notice alleging that Seller or the Mezzanine Borrower is in default in the performance or observance of any of the material covenants and obligations required to be kept, observed or performed by the Mezzanine Borrower under the Mezzanine Loan Documents.  To Seller's knowledge, there is no other matter which, with the giving of notice, the passage of time, or both, would constitute an event of default under any of the Mezzanine Loan Documents.
(n)    Neither Seller nor its beneficial owners have sold or contracted to sell the Property or entered into a ground lease or contracted to enter into a ground lease with respect the Property or granted any right of first refusal or first offer with respect to the Property.  Seller has not sold or contracted to sell any air rights, development rights or zoning rights. 
Section 5.2    Certain Limitations on Seller’s Representations and Warranties.  Notwithstanding anything to the contrary contained in this Agreement, no claim for a breach of a representation or warranty by Seller shall be actionable if the breach in question results from or is based on a condition, state of facts or other matter with respect to which Buyer has knowledge on or prior to the Closing (such conditions, state of facts or other matters are herein referred to as “Exception Matters”).  If Buyer obtains knowledge of any Exception Matters after the Effective Date and prior to Closing, then:
(a)    if Buyer’s damages for all such breaches collectively aggregate $100,000 or less, then Buyer shall proceed to Closing without credit or offset against the Purchase Price;
(b)    if Buyer’s damages for all such breaches collectively aggregate more than $100,000, and less than one percent (1%) of the Purchase Price, then Seller shall grant to Buyer a credit against the Purchase Price in the amount of such aggregate damages, in which case Buyer shall be obligated to proceed to Closing with such credit. 
(c)    if Buyer’s damages for all such breaches collectively aggregate one percent (1%) of the Purchase Price or more, then Buyer shall have the election of getting a credit against the Purchase Price in the amount of such aggregate damages, in which case Buyer shall be obligated to proceed to Closing with such credit.  If Buyer elects not to get any such credit against the Purchase Price, then Buyer’s sole remedy shall be to terminate this Agreement and receive a refund of its Deposit and reimbursement of Buyer’s Transaction Costs.
Upon a termination of this Agreement pursuant to this Section 5.2, neither party shall have any further rights or obligations hereunder except those rights or obligations which are expressly stated herein to survive the termination of this Agreement. 
Section 5.3    Survival; Limitation of Liability.  All representations and warranties of Seller contained in this Agreement shall survive the Closing, provided that Buyer must give Seller written notice of any claim it may have against Seller for a breach of any such representation or warranty, or for breach of any covenants of Seller contained in this Agreement within 6 months following the Closing Date (the “Survival Period”).  Any claim which Buyer may have at any time, whether known or unknown, which is not asserted prior to expiration of the Survival Period shall not be valid or effective, and Seller shall have no liability with respect thereto.  Without limiting the foregoing, Buyer may not bring any action against Seller for a breach of any representation, warranty, indemnity or covenant of Seller contained in

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this Agreement or in any agreement delivered by Seller to Buyer at Closing unless and until the aggregate amount of all liability and losses arising out of any such breach exceeds One Hundred Thousand Dollars ($100,000), it being Seller’s desire to curtail any frivolous lawsuits.  In addition, in no event will Seller’s liability for all such breaches exceed, in the aggregate, $5,000,000.  The provisions of this Section 5.3 shall survive the Closing.  As security for any breach by Seller for any representation, warranty, indemnity or covenant of Seller contained in this Agreement or in any agreement delivered by Seller to Buyer at Closing, Seller shall deposit with Escrow Agent at the Closing an amount equal to the $5,000,000 (the "Escrow Funds"), to be held in escrow pending a resolution of the claim of Buyer against Seller  pursuant to this Section 5.3 in accordance with the terms set forth in an escrow agreement to be entered into by the parties at the Closing (the “Escrow Agreement”).  Provided that Buyer has not received any notice of any breach of any representation, warranty, indemnity or covenant of Seller contained in this Agreement, such Escrow Funds shall be released six (6) months after the Closing Date.  If Buyer notifies Seller in writing of a breach of a representation, warranty, indemnity or covenant of Seller contained in this Agreement within six (6) months after the Closing Date, such Escrow Funds shall remain with the Escrow Agent until the earlier to occur of (a) written agreement of Seller and Buyer with respect to the disposition of such Escrow Funds, or (b) a final, non-appealable order issued by a court of competent jurisdiction determining a resolution of the claim.  Seller may direct that a portion of the Purchase Price to be paid at Closing be paid to Escrow Agent to serve as the Escrow Funds.
Section 5.4    Seller’s Knowledge.  Buyer expressly understands and agrees that the phrase “to Seller’s knowledge” as used in Section 5.1 means the actual knowledge only and not any implied, imputed or constructive knowledge of Kent Swig, Ron Shaver, Tony Zografos or Jonathan Dean, without any independent investigation having been made.
ARTICLE VI
RISK OF LOSS AND INSURANCE PROCEEDS
Section 6.1    Loss.  Seller shall give Buyer notice of the occurrence of damage or destruction of, or the commencement of condemnation proceedings affecting, any portion of the Property.  In the event that all or any material portion of the Property is condemned, or destroyed or damaged by fire or other casualty prior to the Closing and the cost to repair or restore any loss or damage caused thereby is greater than five percent (5%) of the Purchase Price, then Buyer may, at its option to be exercised within ten (10) days of Seller’s notice of the occurrence of the damage or destruction or the commencement of condemnation proceedings, either terminate this Agreement or consummate the purchase for the full Purchase Price as required by the terms hereof.  If Buyer elects to terminate this Agreement or fails to give Seller notice within such ten (10) day period that Buyer will proceed with the purchase, then this Agreement shall terminate at the end of such ten (10) day period and the Deposit shall be returned to Buyer and neither party shall have any further rights or obligations hereunder except as provided in Sections 7.1, 10.3 and 10.12 and other sections herein expressly stated to survive termination.  If (a) a portion of the Property is condemned or destroyed or damaged by fire or other casualty prior to the Closing and the cost to repair or restore any loss or damage caused thereby is equal to or less than five percent (5%) of the Purchase Price, or (b) Buyer elects within the aforesaid ten (10) day period to proceed with the purchase, then this Agreement shall not terminate and upon the Closing, there shall be a credit against the Purchase Price due hereunder equal to the amount of any insurance proceeds or condemnation awards collected by Seller as a result of any such damage or destruction or condemnation, plus the amount of any insurance deductible, less any sums expended by Seller toward the restoration or repair of the Property (but in no event shall the amount of such credit exceed the Purchase Price).  If the proceeds or awards have not been collected as of the Closing, then such proceeds or awards shall be assigned to Buyer, except to the extent needed to reimburse Seller for sums expended to collect such proceeds or repair or restore the Property, and Buyer shall not receive any credit against the Purchase Price with 

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respect to such proceeds or awards; provided, that if the amount of proceeds or awards subsequently received by Buyer exceeds the Purchase Price, then Buyer shall pay to Seller any such excess within ten (10) days after Buyer’s receipt of such proceeds or awards.  The provisions of this Section 6.1 shall (a) survive the Closing, and (b) supersede the provisions of Section 5-1311 of the General Obligations Law of the State of New York.
ARTICLE VII
BROKERS AND EXPENSES
Section 7.1    Brokers.  The parties represent and warrant to each other that except for Eastdil Secured, whose commission shall be paid by Seller upon Closing in accordance with the provisions of a separate written agreement between Seller and such broker, no broker or finder was instrumental in arranging or bringing about this transaction and that there are no claims or rights for brokerage commissions or finder’s fees in connection with the transactions contemplated by this Agreement.  If any person brings a claim for a commission or finder’s fee based upon any contact, dealings or communication with Buyer or Seller, then the party through whom such person makes his claim shall defend the other party (the “Indemnified Party”) from such claim, and shall indemnify the Indemnified Party and hold the Indemnified Party harmless from any and all costs, damages, claims, liabilities or expenses (including, without limitation, reasonable attorneys’ fees and disbursements) incurred by the Indemnified Party in defending against the claim.  The provisions of this Section 7.1 shall survive the Closing or, if the purchase and sale is not consummated, any termination of this Agreement.
Section 7.2    Closing Costs.  Buyer, on the one hand, and Seller, on the other hand, shall each pay their own legal fees related to the negotiation and preparation of this Agreement and all documents required to consummate the transaction contemplated hereby.  Seller shall pay the costs to remove, discharge or insure over any encumbrances or liens and all recording fees associated with such encumbrances or liens. Buyer shall pay (i) all costs associated with its due diligence, including, without limitation, the cost of appraisals, architectural, engineering, credit and environmental reports, (ii) all mortgage taxes, if any, (iii) all recording fees (other than to discharge encumbrances or liens, (iv) all sales and use taxes applicable to the sale of the Personal Property, (v) the premium for any title insurance including the Title Policy, (vi) all new survey or update costs, (vii) the costs of title search and examination with respect to the Property ordered by Buyer and (viii) in the event Buyer assumes the existing financing on the Property, the applicable loan assumption fee as set forth in the Mortgage Loan Documents or the Mezzanine Loan Documents.  Seller shall pay all city, state and county transfer taxes and similar amounts relating to the conveyance of the Real Property from Seller to Buyer.  Buyer, on the one hand, and Seller, on the other hand, shall each pay fifty percent (50%) of any escrow charges of Escrow Agent related to the Deposit and the Closing.  All other customary purchase and sale closing costs shall be paid by Seller or Buyer in accordance with the custom in the jurisdiction of New York.
ARTICLE VIII
LEASES AND OTHER AGREEMENTS
Section 8.1    Buyer’s Approval of New Leases and Agreements Affecting the Property.  Between the Effective Date and the Closing Date (as defined in Section 9.2 below), Seller shall not enter into any new Lease or other agreement, affecting the Property, or modify or terminate any existing Lease or other agreement affecting the Property, without first obtaining Buyer’s approval, which approval will not be unreasonably withheld or delayed.  Seller shall submit an actual copy of such new Lease or other agreement, Lease or agreement modification, or Lease or agreement termination at the time that Seller seeks Buyer’s approval.  If Buyer fails to give Seller notice of its approval or disapproval of any such 

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proposed action within five  (5) days after Seller notifies Buyer of Seller’s desire to take such action, then Buyer shall be deemed to have given its approval.  Notwithstanding anything to the contrary contained in this Section 8.1, prior to the Closing Date, Seller may enter into any Service Contract affecting the Property, or modify or terminate any existing Service Contracts affecting the Property, without obtaining Buyer’s approval; provided, however, that such Service Contracts shall be terminated by Seller as of the Closing and Seller shall promptly deliver to Buyer true, correct and complete copies thereof.
Section 8.2    Tenant Improvement Costs, Leasing Commissions and Free Rent.  With respect to any new Lease or Lease modification entered into by Seller between the Effective Date and the Closing Date which has been approved or deemed approved by Buyer pursuant to Section 8.1 above and which requires that (i) Seller, as landlord, perform or pay or contract for any tenant improvement work (including hard and soft costs) (collectively, “Tenant Inducement Costs”); provided, however, that “Tenant Inducement Costs” shall not include loss of income resulting from any free rental period (it being agreed that Seller shall bear such loss resulting from any free rental period with respect to the period prior to the Closing Date and that Buyer shall bear such loss with respect to the period from and after the Closing Date, or (ii) pay or contract for any leasing commissions (collectively, the “Leasing Commissions”, and together with the Tenant Inducement Costs, collectively, “Leasing Costs”), Buyer shall be responsible for such Leasing Costs.  If, as of the Closing Date, Seller shall have paid any Leasing Costs for which Buyer is responsible pursuant to the foregoing provisions, Buyer shall reimburse Seller therefor at Closing; provided, however, that Seller shall supply invoices and statements for all paid Leasing Costs to Buyer prior to the Closing Date.  On and after the Closing, except as provided in this Agreement, including Section 9.5(a)(viii), Seller shall have no further obligations with respect to any Leases or other agreements affecting the Property, including, without limitation, tenant improvement work, leasing commissions and free rent and Buyer shall assume all such obligations.  
Section 8.3    Tenant Notices.  At the Closing, Seller shall furnish Buyer with one (1) original signed notice in the form attached hereto as Exhibit F, disclosing that the Property has been sold to Buyer and that, after the Closing, all rents should be paid to Buyer (the “Tenant Notice Letter”).  After the Closing, Buyer shall distribute copies of the Tenant Notice Letter to each tenant of the Property.
Section 8.4    Local 94 Union Employees.  Seller employs several Local 94 union employees who work at the Property.  It is understood and agreed that at the Closing, Buyer will assume Seller’s employment obligations with respect to such employees or enter into separate employment agreements with such employees.
Section 8.5    Notices.  From and after the date hereof, and promptly after the delivery or receipt thereof, Seller shall deliver to Buyer copies of all material notices sent or received by Seller concerning Seller or the Property, which relate to the Mortgage Loan, the Mezzanine Loan, Contracts, the Leases, notices of releases of Hazardous Materials affecting the Property or any actual or threatened condemnation of the Property or any portion thereof given by or on behalf of any Federal, state or local governmental authority, and copies of all other material  correspondence sent, filed, served on or received by Seller from any federal, state or local governmental authority affecting the Property.
Section 8.6    Loans.  Seller shall, and shall cause the Mortgage Borrower and Mezzanine Borrower (as such terms are hereinafter defined) to, pay any and all amounts due and owing under the Mortgage Loan Documents and the Mezzanine Loan Documents, as applicable, and perform or cause to be performed all of their respective obligations thereunder.  Seller shall not, nor permit Mortgage Borrower or Mezzanine Borrower, without Buyer’s prior approval, which may be withheld in Buyer’s sole and absolute discretion, to: (i) make any payments of principal due under the Mortgage Loan Documents or the Mezzanine Loan Documents, except to the extent, if any, required 

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by the terms thereof, (ii) deplete or use any reserves and escrows held by Mortgage Lender or Mezzanine Lender in respect of the Mortgage Loan or the Mezzanine Loan, as applicable, except to the extent provided for by the Mortgage Loan Documents and the Mezzanine Loan Documents, or (iii) enter into any new agreements with respect to the Loans or modify or terminate any Mortgage Loan Documents or any Mezzanine Loan Documents.
ARTICLE IX
CLOSING AND ESCROW
Section 9.1    Escrow Instructions.  Upon execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with the Title Company, and this instrument shall serve as the instructions to the Title Company as the escrow holder for consummation of the purchase and sale contemplated hereby.  Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control.
Section 9.2    Closing.  The location of the Closing shall be held in person either at an office in New York City as designated by Lenders’ counsel in connection with the Loan Assumptions or at the offices of Seller’s attorney, Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, NY 10104-0050 or as the parties may otherwise agree (which may be in escrow).  The Closing shall occur (i) no later than the date that is ten (10) business days after the date that both Lenders (as defined in Section 9.6) shall have designated as the Loan Assumption Closing Date (as hereinafter defined) in connection with the Loan Assumptions, or (ii) such other earlier date and time as Buyer and Seller may mutually agree upon in writing (either date in clause (i) or (ii), the “Scheduled Closing Date”).  Notwithstanding anything herein to the contrary, Buyer may elect to adjourn the Scheduled Closing Date from time to time, for a period not to exceed thirty (30) days in the aggregate, provided that (i) both Lenders agree to such adjournment and (ii) Buyer deposits an additional deposit with Escrow Agent in the amount of $5,000,000 (the “Additional Deposit”) no later than the Scheduled Closing Date and by written notice from Buyer to Seller no later than two (2) business days prior to then Scheduled Closing Date (the Scheduled Closing Date, as the same may be adjourned as provided in this Agreement, the “Closing Date”), time being of the essence.  Upon depositing the Additional Deposit with Escrow Agent, the Additional Deposit shall be deemed a part of the Deposit.  Closing shall be consummated and Buyer’s funds shall be received on or before 5:00 P.M. Eastern Time on the Closing Date.
Section 9.3    Deposit of Documents.
(a)    At or before the Closing, Seller shall deposit into escrow the following items:
(i)    the duly executed and acknowledged Deed conveying the Real Property to Buyer, subject to the Permitted Exceptions;
(ii)    two (2) duly executed counterparts of the Bill of Sale;
(iii)    two (2) duly executed counterparts of the Assignment and Assumption of Leases;
(iv)    two (2) duly executed counterparts of the Assignment and Assumption of Contracts with respect to the Service Contracts that Buyer does not request that Seller terminate as of the Closing Date (the “Assumed Contracts”);

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(v)    a certified rent roll;
(vi)    an affidavit pursuant to Section 1445(b)(2) of the Federal Code in the form attached hereto as Exhibit G, and on which Buyer is entitled to rely, that Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Federal Code;
(vii)    an authorizing resolution and an incumbency certificate and such other documents as may be reasonably necessary to evidence the authority and capacity of Seller and the authority of the signatory for Seller;
(viii)    one (1) duly executed Tenant Notice Letter; 
(ix)    one (1) duly executed customary affidavit, in lieu of registration required under Chapter 664-Laws of 1978 (as to the Property not being a multiple dwelling);
(x)    one (1) duly executed original of (i) the New York State Combined Real Estate Transfer Tax Return and Credit Line Mortgage Certificate (TP 584) (the “State Transfer Tax Certificate”), (ii) the New York City Real Property Transfer Tax Return, and (iii) the New York City Real Property Transfer Tax Report (NYC-5217), and any other transfer tax forms and all other forms in connection with the Real Property required to be filed with the City of New York, County of New York, or New York State (which shall be prepared online using the Automated City Register Information System (ACRIS);
(xi)    one (1) duly executed Closing Statement prepared in accordance with this Agreement; 
(xii)    a certificate dated as of Closing Date, certifying that all of the representations and warranties made by Seller in this Agreement are true and correct as of the Closing and, to the extent necessary, reflecting any changed facts or circumstances between the date hereof and the Closing Date (provided such changes shall remain subject to the provisions of Section 2.1(b);
(xiii)    a customary title affidavit from Seller; 
(xiv)    copies of the existing Mortgage Loan Documents and the Mezzanine Loan Documents;
(xv)    evidence that that certain management agreement with an affiliate of Swig Equities relating to the Property has been terminated as of the Closing Date;
(xvi)    originals (or to the extent originals are not available, copies) of the tenant estoppel certificates or Seller’s estoppel certificates obtained pursuant to Section 9.4; 
(xvii)    the cash security deposits (together with interest accrued thereon less any permitted administrative fee) and originals of all letters of credit held by Seller, together with any transfer forms transferring the same to Buyer, as security under the Leases, but only to the extent the same have not been applied in accordance with the Leases, as and to the extent permitted pursuant to this Agreement, or returned to tenants as and when required by such Leases, and relate to tenants occupying space in the Building on the Closing Date pursuant to Leases then in effect; 
(xviii)    two (2) duly executed counterparts of the Escrow Agreement; and

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(xix)    duly executed counterparts of the Assumption Agreement and such other documents, if any, as may be required to be executed by Seller and Mezzanine Borrower to effect the Loan Assumptions in accordance with Section 9.6.  
(b)    At the Closing, Buyer shall deposit into escrow the following items:
(i)    The balance of the Purchase Price, subject to proration in accordance with Section 9.5;
(ii)    two (2) duly executed counterparts of the Bill of Sale;
(iii)    two (2) duly executed counterparts of the Assignment and Assumption of Leases;
(iv)    two (2) duly executed counterparts of the Assignment and Assumption of Contracts with respect to the Assumed Contracts; 
(v)    an authorizing resolution and an incumbency certificate and such other documents as may be reasonably necessary to evidence the authority and capacity of Buyer and the authority of the signatory for Buyer;
(vi)    one (1) duly executed original of (i) the State Transfer Tax Certificate, (ii) the New York City Real Property Transfer Tax Return, and (iii) the New York City Real Property Transfer Tax Report (NYC-5217), and any other transfer tax forms and all other forms in connection with the Real Property required to be filed with the City of New York, County of New York, or New York State (which shall be prepared online using the Automated City Register Information System (ACRIS); 
(vii)    one (1) duly executed Closing Statement prepared in accordance with this Agreement; 
(viii)    two (2) duly executed counterparts of the Escrow Agreement; and
(ix)    duly executed counterparts of the Assumption Agreement and such other documents, if any, as may be required to be executed by Buyer to effect the Loan Assumptions in accordance with Section 9.6.  
(c)    Buyer and Seller shall each deposit such other instruments as are reasonably required by the Title Company or otherwise required to close and consummate the purchase and sale of the Property in accordance with the terms hereof.  Buyer and Seller hereby designate Title Company as the “Reporting Person” for the transaction pursuant to Section 6045(e) of the Federal Code and the regulations promulgated thereunder.
(d)    Seller shall deliver to Buyer originals (or to the extent originals are not available, certified copies) of the Leases (together with the tenant files) and Contracts then in effect and all correspondence related thereto, and originals (or to the extent originals are not available, copies) of all books and records relating to the operation of the Property, within two (2) business days after the Closing Date.  Seller shall deliver to Buyer a set of keys to the Property on the Closing Date.  The obligations of Seller in this subparagraph (d) shall survive the Closing. 
Section 9.4    Estoppel Certificates.

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(a)    It shall be a condition precedent to Buyer’s obligations to close hereunder that Seller shall have obtained estoppel certificates in substantially the form attached hereto as Exhibit H from tenants of the Property collectively occupying a minimum of seventy percent (70%) of the gross leased area of the Property, which shall include tenant estoppel certificates from the following tenants (collectively, the “Required Tenants”): NYS Superintendent of Insurance, NYC Department of Juvenile Justice, NYC Housing Development Corp. and NYC EDC.  Buyer shall accept an estoppel certificate in lieu of that attached as Exhibit H, if such certificate shall be in the form of an estoppel which the applicable tenant is entitled to deliver under the terms of its Lease.  
(b)    Notwithstanding anything to the contrary contained in Section 9.4(a), in the event Seller obtains estoppel certificates from tenants of the Property collectively occupying at least fifty-five percent (55%) of the gross leased area of the Property, but less than the requisite seventy percent (70%), Seller may deliver to Buyer and warrant and represent to Buyer, with respect to such missing estoppel certificates that as of the date represented and warranted:  (A) to the best of Seller’s knowledge, the Leases for those tenants are in full force and effect and have not been modified or amended (except as forth on the attached schedules to this Agreement); (B) the amount of the tenants’ security deposits; (C) the term of the Lease, (D) such tenant’s annual rent, (E) the dates through which rent has been paid; and (F) to the best of Seller’s knowledge, neither any of those tenants nor Seller is in default thereunder; provided, however, that notwithstanding anything to the contrary set forth in this Agreement, Seller shall be obligated to make such representations and warranties only to the extent they are accurate but all such representations and warranties shall be consistent with the representations and warranties given by Seller pursuant to this Agreement (and the Schedules hereto).  Notwithstanding anything to the contrary set forth in this Agreement, in no event shall Seller be allowed to give any Seller’s estoppel certificates with respect to any Required Tenant.  Buyer shall be obligated to accept Seller’s certification in lieu of any missing estoppel certificates.  Seller’s certification shall be of no further force and effect upon Buyer’s receipt of an estoppel certificate from the applicable tenant pursuant to Section 9.4(a) above.  Seller’s representations and warranties in the certificate shall survive the Closing, provided that (i) such representations and warranties shall be subject to the limitations on liability set forth in Section 5.3 above, and (ii) Buyer must give Seller written notice of any claim it may have against Seller for a breach of any such representation and warranty within six (6) months after the Closing Date. Any claim which Buyer may have which is not so asserted within such six (6) month period shall not be valid or effective and Seller shall have no liability with respect thereto.  The Escrow Funds shall serve as security for Seller’s certifications as well and the Escrow Agreement shall provide for same at the Closing.
Section 9.5    Prorations.
(a)    With respect to the Property, Seller shall be entitled to all income produced from the operation of the Property which is allocable to the period prior to Closing and shall be responsible for all expenses allocable to that period; and Buyer shall be entitled to all income and, except as otherwise expressly provided in this Agreement, responsible for all expenses allocable to the period beginning at 12:01 A.M. on the day Closing occurs.  At the Closing, all items of income and expense with respect to the Property listed below shall be prorated in accordance with the foregoing principles and the rules for the specific items set forth hereafter; provided, that Seller shall cause the existing management contract for the Property to be terminated as of the Closing Date:
(i)    Seller shall arrange for a billing under all those Service Contracts for which fees are based on usage and with utility companies for a billing for utilities, to include all utilities or service used up to the day Closing occurs, and Seller shall pay the resultant bills.  In the event any of the Service Contracts set forth in Schedule 3 extend over periods beyond the Closing the same shall be prorated on a per diem basis.

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(ii)    All real estate taxes together with installments of special assessments payable therewith attributable to the Property due and payable in the fiscal year in which the Closing occurs shall be prorated as of the Closing Date.  Any real estate taxes together with installments of special assessments payable therewith due and payable in any calendar year which is (A) prior to the fiscal year in which Closing occurs shall be the obligation of Seller, and (B) subsequent to the fiscal year in which the Closing occurs shall be the obligation of Buyer.  In the event that as of the date Closing occurs the actual tax bills for the tax year or years in question are not available and the amount of tax to be prorated as aforesaid cannot be ascertained, then rates, millages and assessed valuation of the previous year, with known changes, shall be used; and after the Closing occurs and when the actual amount of taxes of the year or years in question shall be determinable, such taxes will be re-prorated between the parties to reflect the actual amount of such taxes.  With respect to any assessments which can be paid in installments, Seller shall only be responsible for installments which are payable on or before the Closing Date.  Seller shall receive credit for any previously paid or prepaid taxes attributable to periods from and after the date of Closing.
(iii)    Gas, water, electricity, heat, fuel, sewer and other utilities charges, and annual fees for governmental licenses, permits and inspections relating to the Property, shall be prorated on a per diem basis.
(iv)    Rent under the Leases shall be apportioned as of the Closing Date to the extent such rent has actually been collected as of such date.  Subject to Subsection (vi) below, with respect to any rent arrearages arising under the Leases for the period prior to the month in which the Closing occurs, after Closing Buyer shall pay to Seller any rent actually collected which is applicable to the period preceding the Closing Date; provided, however, that all rent collected by Buyer shall be applied first to all unpaid rent accruing after the Closing Date, and then to unpaid rent accruing prior to the Closing Date.
(v)    Where the Leases contain tenant obligations for taxes, common area expenses, operating expenses or additional charges of any other nature (“Expense Reimbursements”), and where Seller shall have collected any portion thereof in excess of amounts owed by Seller for such items for the period prior to the Closing Date, then there shall be an adjustment and credit given to Buyer on the Closing Date for such excess amounts collected.  Buyer shall apply all such excess amounts to the charges owed by Buyer for such items for the period after the Closing Date and, if required by the Leases, shall rebate or credit the tenants with any remainder and shall indemnify, defend and hold Seller harmless with respect to such obligation of Buyer.  If it is determined that the amount collected during Seller’s ownership period exceeded expenses incurred during the same period by less than the amount previously credited to Buyer, then Buyer shall promptly pay to Seller the difference.  If it is determined that the amount collected during Seller’s ownership period was less than the expenses incurred by Seller during the same period, then Buyer shall promptly pay to Seller the amount of such deficiency upon collection of same from the tenants.  Seller shall not receive at Closing any credit for Expense Reimbursements which have not actually been incurred by Seller and collected from tenants.  Subject to Subsection (vi) below, to the extent Buyer collects any Expense Reimbursements after the Closing, such amounts shall be applied by Buyer in the same order as rent is to be applied pursuant to Subsection (iv) above.
(vi)    Notwithstanding anything to the contrary provided in Subsections (iv) and (v) above, if a tenant directs that a particular payment be applied to a particular payment obligation, then such payment shall be so applied.  For example, if Seller receives a payment after Closing and the tenant indicates that the payment is for an Expense Reimbursement attributable to a month after the Closing, then Seller shall promptly pay such amount to Buyer, and if Buyer receives a payment after Closing and the tenant indicates that the payment is for an Expense Reimbursement attributable to a month prior to Closing, then Buyer shall promptly pay such amount to Seller.  Seller shall not be entitled 

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to sue a tenant or take any other actions to collect any delinquent rent or Expense Reimbursements due to Seller (and not previously paid to Seller), provided that Buyer shall use good faith efforts to collect the same on Seller’s behalf.
(vii)    All prepaid rentals and other prepaid payments attributable to Buyer’s period of ownership, security deposits not applied against tenant’s obligations under tenant Leases, electric, gas, sewer and water deposits deposited with Seller by tenants (including all accrued interest on all of the foregoing, unless Seller is entitled to retain the benefit thereof) under any Leases, license agreements or concession agreements relating to the Property, shall all belong to Buyer and all shall be assigned and delivered to Buyer at the Closing.  Seller shall be entitled to receive the amount of any utility deposits paid by Seller with respect to the Property. Notwithstanding the foregoing, the amount of any security deposits received by Seller and not applied against tenant’s obligations under tenant Leases (in accordance with Section 9.5(d)) shall be credited against the Purchase Price and Seller shall be entitled to retain such deposits.  Buyer shall indemnify, defend and hold Seller harmless with respect to any prepaid amounts or security deposits delivered or credited to Buyer at Closing.
(viii)    Seller shall pay at or prior to the Closing all (i) Leasing Commissions to brokers or finders upon the creation, extension or renewal of a Lease in effect on the date hereof, (ii) Tenant Inducement Costs under a Lease in effect on the date hereof, and (iii) any other financial inducements provided to or for the benefit of any one or more tenants under a Lease in effect on the date hereof in connection with such tenant’s agreement to lease premises at the Real Property which require any payment to be made by Seller (including such things as payment of a tenant’s moving or relocation costs, payments to a tenant’s prior landlord on account of obligations owing under a lease previously entered into between the tenant and such landlord, and other payments of funds by Seller which, pursuant to the provisions of the Lease, are made by Seller for the purpose of inducing the tenant to lease its premises at the Real Property or to renew or extend a pre-existing lease at the Real Property); provided that any such Leasing Costs must either be set forth or referenced in the applicable Lease.  Buyer shall receive a credit at closing of $3,758,917.28 (per Schedule 7) related to potential future Tenant Inducement Costs for the NYC Economic Development and NYC Housing Development Leases.  All actual tenant improvement costs to be incurred in connection with the NYC Economic Development and NYC Housing Development Leases will be the responsibility of the Buyer.  
(ix)    Notwithstanding anything to the contrary contained in this Agreement, Seller shall be responsible for performing and paying for, and shall receive a credit at the Closing in the amount of $250,000 for, all tenant improvements relating to the installation of cooling units prior to Closing with respect to the Pacific College of Oriental Medicine Lease, which costs are considered a “Tenant Reimbursement” (as defined by such Lease) and will become a note receivable from such tenant.  In the event such work is not completed and paid in full by Seller by the Closing Date, Buyer shall receive a credit covering the remaining costs to be expended to complete such work. 
(x)    Seller shall be responsible for completing and paying for certain Local Law 11 work and true, correct and complete copies of the contracts relating to such work have been delivered to Buyer by Seller.  In the event such work is not completed and paid in full by Seller by the Closing Date, Buyer will receive a credit covering the remaining costs to be expended to complete such work and this credit will not exceed $250,000. It is also anticipated that Local Law 11 work will need to be performed on the rear façade of the Property in the spring of 2014; such rear façade work shall be the responsibility of Buyer. 
(b)    [intentionally omitted]

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(c)    Buyer shall receive a credit at the Closing for interest under the Loans (defined below) computed from the last monthly payment due prior to the Closing Date through the Closing Date.  Seller shall receive a credit at the Closing for the amounts on deposit with Lenders, representing reserves for taxes, insurance, reserves for tenant improvements, capital improvements, or for any other reserve, escrow, lockbox or cash collateral account (subject to the prorations required under Section 9.5) held by Lender, directly or indirectly, as of the Closing Date so long as the Lenders have either transferred to, or continue to hold such amounts for the benefit of, the Buyer at the Closing.  During the Loan Contingency Period (defined below), Seller shall notify Buyer as to the amounts held, as of the date of such notice, by the Lender, with respect to any reserves or escrows.   
(d)    Seller shall determine the aforesaid prorations and deliver a closing statement reflecting such prorations to Buyer on or before the date that is five (5) business days before the Closing Date.  Upon approval by Buyer, the parties shall deliver the approved prorations closing statement to the Title Company; provided that (i) if any of the aforesaid prorations cannot be calculated accurately as of the date that is three (3) business days prior to the Closing Date or, (ii) if any of the aforesaid prorations were calculated inaccurately, then the same shall be calculated by Seller and delivered to Buyer as soon as reasonably practicable after the Closing Date and either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party, pursuant to the terms of this Section 9.5.  To the extent that revenues and expenses to be prorated are not known as of the date of Closing, Seller and Buyer shall reconcile such amounts on the date that is ninety (90) days after the date of Closing or such longer period of time as may be necessary in the exercise diligence by both parties to adequately finalize such prorations.
(e)    Buyer shall pay for (i) the cost to update, recertify or otherwise revise the Survey, (ii) the premium for the Title Policy, the cost of any endorsements to the Title Policy, the cost of any related title examination charges, and the cost of any chain-of-title search, (iii) any personal property taxes applicable to the sale of the Property, (iv) one-half of all escrow fees and expenses, (v) any recording charges, and (vi) all costs relating to any financing obtained by Buyer (including, without limitation, mortgage recording taxes, if applicable).  Seller shall pay for (i) any and all city, county and state transfer taxes or documentary stamp taxes applicable to the sale of the Property, and (ii) one-half of any escrow fees and expenses.  Seller and Buyer shall pay their respective attorneys’ fees.  All other fees and expenses applicable to the sale shall be prorated between Buyer and Seller in accordance with customary practice for the State, County and City of New York, Borough of Manhattan.
(f)    Prior to the Closing, Seller shall have the right (i) to apply any security deposits held under Leases in respect of defaults by any tenant which has vacated its entire premises, and (ii) to return the security deposit of any tenant thereunder who in the good faith judgment of Seller is entitled to the return of such deposit pursuant to the terms of its Lease or otherwise by law.  At the Closing, Seller shall transfer or cause to be transferred to Buyer any security deposits which are held in the form of letters of credit (the “SD Letters of Credit”) if the same are transferable at Closing; if any of the SD Letters of Credit are not transferable by their terms, Seller shall request the tenants obligated under such SD Letters of Credit to cause new letters of credit to be issued in favor of Buyer in replacement thereof.  For any non-transferable letters of credit for which Seller was unable to cause the tenants thereunder to issue new letters of credit in favor of Buyer, Buyer shall diligently pursue transfer or replacement, as applicable, of any non-transferable SD Letters of Credit, after Closing, and until such transfer or issuance, Seller shall take all reasonable action, as directed by Buyer and at Buyer’s expense, to (i) cause the applicable tenant(s) to transfer or replace such SD Letter of Credit, and (ii) cooperate with Buyer to draw down on any such SD Letter of Credit before the same has been transferred or replaced, as applicable.  At the Closing, Seller shall deliver possession of all original SD Letters of Credit, together with completed transfer forms transferring same to Buyer to the extent such SD Letters of Credit are transferable.  In connection with the presentment of 

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such SD Letters of Credit for payment as permitted under the terms of the applicable tenant Lease, and in consideration of Seller’s agreement as aforesaid, Buyer shall indemnify, defend and hold Seller harmless from any liability, damage, loss, cost or expense arising out of Buyer’s draw down of the SD Letters of Credit after the Closing.
(g)    The provisions of this Section 9.5 shall survive the Closing.
Section 9.6    Assumption of Existing Financing
(a)    Seller is the borrower (“Mortgage Borrower”) under a first priority mortgage loan in the original principal amount of $141,500,000 secured by a mortgage and security agreement on the Property (the “Mortgage Loan”) and for the benefit of UBS Real Estate Securities Inc. (the “Mortgage Lender”) and evidenced by certain loan documents listed on Schedule 8 attached hereto.  Seller’s affiliate is the borrower under a mezzanine loan (“Mezzanine Borrower”) in the original principal amount of $20,000,000 (the “Mezzanine Loan”, and together with the Mortgage Loan, the “Loans”) for the benefit of Pearlmark Mezzanine Realty Partners III, L.L.C. and TMRP III Co-Investment, L.L.C. (the “Mezzanine Lenders” and, together with the Mortgage Lender, the “Lenders”), and evidenced by certain loan documents listed on Schedule 9.  
(b)    Buyer’s obligations to effect the Closing under this Agreement are conditioned upon (A) (i) obtaining the written consent of the Mortgage Lender to the assumption by Buyer of the Mortgage Loan (the “Mortgage Assumption”), (ii) obtaining the written consent of the Mezzanine Lenders to the assumption by an affiliate of Buyer of the Mezzanine Loan (“Mezzanine Assumption”), and (iii) the substitution of one or more proposed substitute guarantors that satisfy the net worth and other financial criteria set forth in the Mortgage Loan Documents and the Mezzanine Loan Documents or are otherwise acceptable to the Lenders in place of any and all existing guarantor(s) and indemnitor(s) under all Mortgage Loan Documents or the Mezzanine Loan Documents, (the conditions described in subclauses (A)(i) through (iii), collectively, the “Loan Approval”), and (B) the closing of the Mortgage Assumption and the Mezzanine Assumption (collectively, the “Loan Assumptions”).  The Loan Approval may be conditioned on compliance with Lenders’ requirements regarding the consummation of the Loan Assumptions expressly set forth in Section 8.1 of the Mortgage Loan and Mezzanine Loan agreements.  The parties agree that Loan Approval with respect to a Loan shall be deemed given if the assumption contemplated hereby is approved by the applicable Lender, even if such approval is conditioned upon or subject to the execution and delivery of the documents and deliveries contemplated by Section 8.1 of the Mortgage Loan and Mezzanine Loan agreements, provided, however, the Loan Approval shall not be deemed to be given if (A) such approval is conditioned upon or subject to the execution and delivery of any other material documents, deliveries conditions or requirements that not expressly contemplated in Section 8.1 of the Mortgage Loan and Mezzanine Loan agreements or (B) such approval is conditioned upon Buyer agreeing to material modifications to the Mortgage Loan Documents or the Mezzanine Loan Documents other than modifications to reflect the borrowers’ identities, organizational structure and required transfer provisions, unless otherwise approved by Buyer in its sole and absolute discretion.
(c)    No later than three (3) business days after the Effective Date, Seller shall deliver to the servicers of the Loans and/or the Lenders under the Loans a written request (in accordance with Section 8.1 of the Mortgage Loan and the Mezzanine Loan agreements) requesting that the Lenders agree to the Loan Assumptions.  Seller shall deliver a copy of such written request to Buyer and shall deliver to Buyer any response received by Seller from such servicers or Lenders with respect to such written request.  Buyer shall, from and after receipt of such written response from such servicers or Lenders with respect to the Loan Assumption until the date that is 120 days thereafter (the “Loan Contingency Period”), use commercially reasonable efforts to obtain the Loan Approval. If the Loan Approval is 

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obtained during the Loan Contingency Period, including without limitation, the agreement of the Lenders to approve the modifications set forth in Schedule 12, Buyer shall close the Loan Assumptions on the Scheduled Closing Date. Buyer shall use commercially reasonable efforts to obtain the Loan Approval during the Loan Contingency Period and the closing of the Loan Assumptions on the Scheduled Closing Date and the instrument or instruments that evidence the assumption of the Loans by Buyer or its affiliate, which shall be in form and substance satisfactory to Buyer (collectively, the “Assumption Agreement”), and Seller shall use commercially reasonable efforts to cooperate with Buyer and the servicers and Lenders in connection with the Loan Approval during the Loan Contingency Period and the closing of the Loan Assumptions on the Scheduled Closing Date.  If the Loan Approval is obtained, Buyer shall request that the servicers or the Lenders designate in writing a date by which the servicers and the Lenders shall be ready, willing and able to close on the Loan Assumptions in accordance with this Section 9.6 and the documents relating to the Mortgage Loan and Mezzanine Loan and such designated date shall be the “Loan Assumption Closing Date” and Buyer shall inform Seller of such designated date.  With respect to the Assumption Agreement or a separate agreement with the Lenders, Seller shall also be satisfied that any Seller-affiliated guarantors guaranteeing the Loans shall be released from liability under any guaranties with respect to the Loans from and after the Closing Date hereunder or, if not released from and after the Closing Date hereunder, Buyer or an affiliate of Buyer shall agree, pursuant to a written agreement in a form satisfactory to Seller, to indemnify and defend Seller and such Seller guarantors with respect to any costs, damages, liabilities, losses, expenses, liens or claims (including reasonable attorneys’ fees) (collectively, “Losses”) arising under any such guaranties with respect to the Loans; it being understood that if the Lenders require Buyer’s substitute guarantors to be responsible for the period of time prior to the Closing Date hereunder, the Escrow Funds shall serve as security for Buyer and such substitute guarantors to the extent that the Lenders pursue such substitute guarantors for any Losses that relate to the period of time prior to the Closing Date hereunder.  If Loan Approval is not given during the Loan Contingency Period, the Assumption Agreement is not agreed to by the Lenders or the closing of the Loan Assumptions shall not occur during the Loan Contingency Period, but the parties reasonably believe that Loan Approval and the closing of the Loan Assumptions is forthcoming, both Buyer and Seller agree to consult with one another and if they reasonably believe in good faith that the Lenders may still provide the Loan Approval they will agree to extend the Loan Contingency Period for a 30-day period by the last date of the Loan Contingency Period (such date, the “Extended Loan Contingency Period”).  If, by the end of the Loan Contingency Period (as may be extended herein), the Loan Approval is not given or the Assumption Agreement is not agreed to among the parties, and the closing of the Loan Assumptions shall not have occurred, Seller and Buyer shall each have the right to terminate this Agreement by delivery of written notice to the other party within three (3) business days following the end of the Loan Contingency Period (as may be extended herein).  If this Agreement is terminated as provided in the prior sentence and the Loan Approval was not obtained for any reason or no reason (other than solely as a result of Buyer’s breach of this Section 9.6(c)), including, without limitation, Seller’s failure to comply with this Section 9.6(c), then the Deposit shall promptly be returned to Buyer and neither party shall have any further liability to the other under this Agreement except for those provisions of this Agreement which expressly survive the termination hereof.  If this Agreement is terminated as provided in the prior sentence and the Loan Approval was not obtained solely by reason of Buyer’s breach of this Section 9.6(c) (and Seller has complied with this Section 9.6(c)), then the Deposit shall promptly be delivered to Seller and neither party shall have any further liability to the other under this Agreement except for those provisions of this Agreement which expressly survive the termination thereof.
(d)    Buyer and Seller shall reasonably cooperate with each Lender and each other, and act diligently and in good faith, to expeditiously procure the Loan Approval, the Assumption Agreement and the closing of the Loan Assumptions, and such cooperation shall include, but is not limited to, Buyer’s compliance with the assumption requirements contained in Section 8.1 of the Mortgage Loan and Mezzanine Loan agreements.  Buyer’s counsel, at the sole cost and expense of Buyer, shall prepare the documentation for such assumption that relate to Buyer or Buyer’s affiliate, except to the 

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extent that the Lenders require that their counsel prepare such documentation (in which event Buyer shall reimburse such Lender upon request the cost of such preparation).  Buyer shall be responsible for any actual expense, including reasonable third party expenses, which any Lender incurs, and seeks to recover from Seller, solely arising from the preparation or review of the assumption documentation (including, but not limited to, any applicable loan assumption fee). For purposes of clarification, Buyer shall be responsible for any actual costs incurred by any Lender with respect to the assumption process even in the event this Agreement is terminated due to the failure to obtain a Loan Approval, except to the extent such failure is the result of a default by Seller under this Agreement.  In the event Loan Approval is not obtained and Buyer fails to reimburse the Lenders for the aforementioned costs and expenses, such costs and expenses shall be deducted from the Deposit prior to returning same to Buyer.
(e)    The provisions of this Section 9.6 shall survive the Closing or earlier termination of this Agreement.
Section 9.7    Buyer’s 3-14 Audit.  Buyer has informed Seller that Buyer is required by law to complete with respect to certain matters relating to the Property an audit commonly known as a “3-14” Audit (“Buyer’s 3-14 Audit”).  In connection with the performance of Buyer’s 3-14 Audit, Seller has delivered to Buyer, the documents which are described on Schedule 10 attached hereto, to the extent in existence and in Seller’s possession (collectively, “Buyer’s 3-14 Audit Documents”) and Buyer acknowledges receipt of same.  The originals (and where originals are not available or in Seller’s possession or control, copies) of all Buyer 3-14 Audit Documents shall become the property of Buyer upon Closing; provided that Seller may retain copies of any of such documents.  Seller agrees to reasonably cooperate with Buyer in connection with any additional information or documentation Buyer may require with respect to Buyer’s 3-14 Audit.

ARTICLE X
MISCELLANEOUS
Section 10.1    Notices.  Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered (a) in person, (b) by certified mail, postage prepaid, return receipt requested, or (c) by a commercial overnight courier that guarantees next day delivery and provides a receipt, and such notices shall be addressed as follows:
	
		
	If to Buyer:
	c/o Savanna
10 East 53rd Street, 37th Floor
New York, NY 10022
Attention: Nicholas Bienstock
Telephone: (212) 229.0101
Telecopy: (212) 229.1113
Email: NBienstock@savannafund.com

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	With a copy to:
	c/o Savanna
10 East 53rd Street, 37th Floor
New York, NY 10022
Attention:  110 William Street Asset Manager
Telephone:  (212) 229.0101 
Telecopy: (212) 229.1113 

	With a copy to:
	Hunton & Williams LLP
200 Park Avenue 
New York, New York 10166 
Attention:  Laurie Grasso, Esq.
Telephone:  (212) 309-1060 
Telecopy:  (212) 309-1846
Email:  lgrasso@hunton.com

	If to Seller:
	c/o Silverpeak Real Estate Partners
1330 Avenue of the Americas, Suite 1200 
New York, New York 10019
Attention:  Anthony Juliano
Telephone:  (212) 716-2064
Telecopy:  (212) 716-2065
Email:  ajuliano@silverpeakre.com
And:
Swig Equities
110 William Street, 1st Floor
New York, New York 10038
Attention:  Kent Swig
Telephone:  (212) 964-0100
Telecopy:  (212) 508-7610
Email: kswig@swigequities.com

	With a copy to:
	Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Attention:  Jeffrey J. Temple, Esq.
Telephone:  (212) 468-8031
Telecopy:  (212) 468-7900
Email:  jtemple@mofo.com

or to such other address as either party may from time to time specify in writing to the other party.  Any notice shall be deemed delivered when actually delivered, if such delivery is in person, upon deposit with the U.S. Postal Service, if such delivery is by certified mail, upon deposit with the overnight courier service, if such delivery is by an overnight courier service.  Any notice may be given by such party’s attorney.

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Section 10.2    Entire Agreement.  This Agreement, together with the Exhibits and Schedules attached hereto, contain all representations, warranties and covenants made by Buyer and Seller and constitute the entire understanding between the parties hereto with respect to the subject matter hereof.  Any prior correspondence, memoranda or agreements are replaced in total by this Agreement together with the Exhibits and Schedules hereto.
Section 10.3    Entry and Indemnity.  .  In connection with any entry by Buyer, or its agents, employees or contractors onto the Property, Buyer shall give Seller reasonable advance notice of such entry and shall conduct such entry and any inspections in connection therewith so as to minimize, to the greatest extent possible, interference with Seller’s business and the business of Seller’s tenants and otherwise in a manner reasonably acceptable to Seller.  Without limiting the foregoing, prior to any entry to perform any on-site testing, Buyer shall give Seller notice thereof, including the identity of the company or persons who will perform such testing and the proposed scope of the testing.  In the event that Buyer proposes to perform any destructive or invasive testing, Seller shall approve or disapprove, in Seller’s sole and absolute discretion, the proposed destructive or invasive testing within three (3) business days after receipt of such notice.  Seller’s failure to provide such notice shall be deemed disapproval.  If Buyer or its agents, employees or contractors take any sample from the Property in connection with any such approved testing, at Seller’s request, Buyer shall provide to Seller a portion of such sample being tested to allow Seller, if it so chooses, to perform its own testing.  Seller or its representative may be present to observe any testing or other inspection performed on the Property.  Upon Seller’s request, Buyer shall promptly deliver to Seller copies of any reports relating to any testing or other inspection of the Property performed by Buyer or its agents, employees or contractors.  Prior to conducting any inspection of the Property, Buyer will obtain (or ensure that its agents, consultants and contractors, as applicable, will obtain) and provide to Seller a certificate of insurance evidencing Buyer’s or Buyer’s agents’, consultants’ and contractors’, as applicable, procurement of:  (a) commercial general liability insurance from an insurer reasonably acceptable to Seller in an amount not less than One Million Dollars ($1,000,000) per occurrence and not less than Two Million Dollars ($2,000,000) on a general aggregate basis for bodily injury, death and property damage, and excess (umbrella) liability insurance with liability insurance with limits of not less than Five Million Dollars ($5,000,000) per occurrence, insuring against any liability arising out of any entry, test or investigation of the Property pursuant to the provisions hereof, and (b) workers’ compensation insurance having limits no less than those required by applicable state and federal statutes.  Buyer’s commercial general liability insurance shall name Seller as an additional insured, and shall be primary and non-contributing with any other insurance of Seller.  Buyer shall indemnify, defend and hold Seller harmless from and against any costs, damages, liabilities, losses, expenses, liens or claims (including, without limitation, reasonable attorneys’ fees) arising out of or relating to any entry on the Property by Buyer, its agents, employees or contractors in the course of performing the inspections, testing or inquiries provided for in this Agreement.  The foregoing indemnity shall survive beyond the Closing, or, if the sale is not consummated, beyond the termination of this Agreement. 
Section 10.4    Time.  Time is of the essence in the performance of Buyer’s obligations on the Closing Date.    
Section 10.5    1031 Exchange.  The parties acknowledge and agree that either party may elect to assign their interest in this Agreement to an exchange facilitator by means of one or more escrows for the purpose of completing an exchange of such Property in a transaction which will qualify for treatment as a tax deferred exchange pursuant to the provisions of Section 1031 of the Internal Revenue Code of 1986 and applicable state revenue and taxation code sections (a “1031 Exchange”).  Each party agrees to reasonably cooperate with any party so electing in implementing any such assignment and 1031 Exchange, provided that such cooperation shall not entail any additional expense to the non-electing party, cause such party to take title to any other property or cause such party exposure to any liability or 

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loss of rights or benefits contemplated by this Agreement, and the electing party shall indemnify, defend and hold the non-electing party harmless from any liability, damage, loss, cost or other expense including, without limitation, reasonable attorneys’ fees and costs, resulting or arising from the implementation of any such assignment and 1031 Exchange.  No such assignment by any party shall relieve such party from any of its obligations hereunder, nor shall such party’s ability to consummate a tax deferred exchange be a condition to the performance of such party’s obligations under this Agreement.  
Section 10.6    Attorneys’ Fees.  If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys’ fees and disbursements.  Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys’ fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment.  The provisions of this Section 10.6 shall survive the Closing or the termination of this Agreement.  
Section 10.7    Jury Trial Waiver.  The parties hereby agree to waive any right to trial by jury with respect to any action or proceeding (i) brought by either party or any other party, relating to (A) this Agreement and/or any understandings or prior dealings between the parties hereto, or (B) the Property or any part thereof, or (ii) to which Seller or Buyer is a party.  The parties hereby acknowledge and agree that this Agreement constitutes a written consent to waiver of trial by jury pursuant to any applicable state statutes.  The provisions of this Section 10.7 shall survive the Closing or the termination of this Agreement.  
Section 10.8    No Merger.  The obligations contained herein that expressly survive the Closing shall not merge with the transfer of title to the Property but shall remain in effect until fulfilled. 
Section 10.9    Assignment.  Buyer’s rights and obligations hereunder shall not be assignable without the prior written consent of Seller, to be granted or withheld in its sole discretion; provided, however, that Buyer shall have the right, upon notice but without the prior consent of Seller, to assign or otherwise transfer this Agreement and all of its rights or obligations hereunder to any entity so long as (i) Savanna Fund III REIT, LLC retains a direct or indirect ownership interest in such entity, and (ii) control of such entity is shared with, or solely held by, Savanna Fund III REIT, LLC.  In no event shall Buyer be released from any of its obligations or liabilities hereunder if Seller approves of any assignment of this Agreement.  Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.
Section 10.10    Counterparts and Electronic Transmissions.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.  The parties contemplate that they may be executing counterparts of this Agreement transmitted by facsimile or email in PDF format and agree and intend that a signature by either facsimile machine or email in PDF format shall bind the party so signing with the same effect as though the signature were an original signature.
Section 10.11    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflicts of laws.

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Section 10.12    Confidentiality.  Until the Closing, Buyer and Seller shall each maintain as confidential any and all material obtained about the other and, in the case of Buyer, about the Property, and shall not disclose such information to any third party, except for disclosures required by law, regulatory or judicial process, court order or subpoena, and disclosures to its partners, members, managers, accountants, investors, current employees, consultants, attorneys, and potential lenders who have a need to know such information in connection with the transaction contemplated herein.  Buyer and Seller shall be permitted to issue any press release or other public announcement regarding this transaction, provided that neither party shall disclose any information regarding the economic terms of this transaction.  This provision shall survive the Closing or any termination of this Agreement.  A breach by either party of its obligations under this Section 10.12 shall not entitle either party to terminate this Agreement or refuse to close or otherwise comply with its obligations hereunder.   Notwithstanding the foregoing and anything to the contrary in this Agreement, nothing contained herein shall impair Buyer’s (or its permitted assignee’s) right to disclose information relating to this Agreement or the Property or the Mortgage Loan and the Mezzanine Loan (a) to any due diligence representatives and/or consultants that are engaged by, work for or are acting on behalf of, any securities dealers and/or broker dealers evaluating Buyer or its permitted assignees, (b) in connection with any filings (including any amendment or supplement to any S-11 filing) with governmental agencies (including the SEC) by any REIT holding, or that is considering holding, an interest (direct or indirect) in any permitted assignee of Buyer, and (c) to any broker/dealers in the Buyer’s or any REIT's broker/dealer network and any of the REIT’s or Buyer’s investors.
Section 10.13    Maintenance of the Property, Insurance.  Between Seller’s execution of this Agreement and the Closing, Seller shall maintain the Property in substantially the same manner as before the making of this Agreement, as if Seller were retaining the Property; provided that Seller shall not be obligated to make any extraordinary repairs or make any capital improvements to the Property.  Through the Closing Date, Seller shall maintain or cause to be maintained, at Seller’s sole cost and expense, Seller’s existing policy or policies of insurance insuring the Property.
Section 10.14    Interpretation of Agreement.  The article, section and other headings of this Agreement are for convenience of reference only and shall not be construed to affect the meaning of any provision contained herein.  Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter.  The term “person” shall include any individual, partnership, joint venture, corporation, trust, unincorporated association, any other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.  All references to time are to Eastern Time Zone time (“Eastern Time”) unless expressly stated otherwise.
Section 10.15    General Rules of Construction.  The parties acknowledge that this Agreement has been freely negotiated by both parties, that each party has had the opportunity to review and revise this Agreement, that each party has had the opportunity to consult with counsel with regard to this Agreement, and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendments, schedules or exhibits to this Agreement.
Section 10.16    Authority of Buyer.  Buyer represents and warrants to Seller that Buyer is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. Buyer further represents and warrants to Seller that this Agreement and all documents executed by Buyer which are to be delivered to Seller at Closing (a) are or at the time of Closing will be duly authorized, executed and delivered by Buyer, (b) are or at the time of Closing will be legal, valid and binding obligations of Buyer, and (c) do not and at the time of Closing will not violate any provision of any agreement or judicial order to which Buyer is a party or to which Buyer is subject.  Buyer represents 

29

and warrants to Seller that Buyer is not subject to sanctions of the United States government or in violation of any federal, state, municipal or local laws, statutes, codes, ordinances, orders, decrees, rules or regulations relating to terrorism or money laundering, including, without limitation, Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) (the “Terrorism Executive Order”) or is similarly designated under any related enabling legislation or any other similar Executive Orders (collectively with the Terrorism Executive Order, the “Executive Orders”), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107‐56, the “Patriot Act”), any sanctions and regulations promulgated under authority granted by the Trading with the Enemy Act, 50 U.S.C. App. 1‐44, as amended from time to time, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701‐06, as amended from time to time, the Iraqi Sanctions Act, Publ. L. No. 101‐513; United Nations Participation Act, 22 U.S.C. § 287c, as amended from time to time, the International Security and Development Cooperation Act, 22 U.S.C. § 2349 aa‐9, as amended from time to time, The Cuban Democracy Act, 22 U.S.C. §§ 6001‐10, as amended from time to time, The Cuban Liberty and Democratic Solidarity Act, 18 U.S.C. §§ 2332d and 2339b, as amended from time to time, and The Foreign Narcotics Kingpin Designation Act, Publ. L. No. 106‐120, as amended from time to time.  The Buyer’s representations and warranties set forth in this Section 10.16 shall survive the Closing until expiration of the Survival Period or any termination of this Agreement. 
Section 10.17    Limited Liability.  Subject to the limits of Section 5.3, the obligations of Seller are intended to be binding only on the Seller’s interest in the Property (in the event this Agreement is terminated) or Seller’s net proceeds from the sale of the Property (if the Closing occurs) and the obligations of Seller shall not be personally binding upon, nor shall any resort be had to, the private properties of any of its trustees, officers, directors or shareholders, the general partners, officers, directors or shareholders thereof, or any employees or agents of Seller.
Section 10.18    Signage.  Seller reserves the right to remove or paint over any and all signs and brands on the exterior of the building or on the Property that identify Seller, at Seller’s sole cost, within forty-five (45) days after the Closing.  The provisions of this Section 10.18 shall survive the Closing.
Section 10.19    Amendments.  This Agreement may be amended or modified only by a written instrument signed by Buyer and Seller.
Section 10.20    No Recording.  Neither this Agreement or any memorandum or short form thereof may be recorded by Buyer.
Section 10.21    Effective Date.  As used herein, the term “Effective Date” shall mean the first date on which both Seller and Buyer shall have executed this Agreement.
Section 10.22    Deadlines on Non-Business Days.  In the event any deadline specified herein falls on a day which is not a regular business day (including, without limitation, any day where the banks in New York, NY or the offices of the Escrow Agent in New York, NY, are closed), then the deadline shall be extended to the end of the next following regular business day.
Section 10.23    Joint and Several Obligations.  If two (2) or more individuals, corporations, or other entities constitute Buyer (even though the defined term for Buyer is used in the singular), all agreements, covenants, representations and warranties of Buyer herein are the joint and several obligations of the individuals or entities constituting Buyer.  If the individuals constituting Buyer are husband and wife, their joint and several obligations hereunder shall be binding upon both their community property and the sole and separate property and all other assets of each. If two (2) or more individuals, corporations, or other entities constitute Buyer, Seller shall have the right to join one or all of them in any proceeding or to proceed against them in any order.

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Section 10.24    Further Assurances. 
Seller and Buyer will do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, assignments, notices, transfers and assurances as may be reasonably required by the other party for carrying out the intentions or facilitating the consummation of this Agreement.  The provisions of this Section 10.24 shall survive the Closing.

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The parties hereto have executed this Agreement as of the date and year first written above.

SELLER:
110 WILLIAM, LLC,
A Delaware limited liability company

By:    110 William Mezz, LLC,
a Delaware limited liability company,
its sole equity member

By:    110 William Mezz Parent, LLC,
a Delaware limited liability company,
its sole equity member

By:    SE 110 William Management, LLC
a New York Limited liability company,
its managing member

By:    __/s/ Kent M. Swig______________
Name: Kent M. Swig
Title: Managing Member

[signatures continue on following page]

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BUYER:

110 WILLIAM HOLDINGS III, LLC,
A Delaware limited liability company

	
		
	By:
	/s/ Nicholas C. Bienstock

	Name:
	Nicholas C. Bienstock

	Title:
	Authorized Signatory

The Escrow Agent agrees to act as escrow holder in accordance with the terms of this Agreement, and to
act as the Reporting Person (as such term is defined in this Agreement).

STEWART TITLE INSURANCE COMPANY

	
		
	By:
	/s/ Authorized Signatory

	Name:
	Authorized Signatory

	Title:
	VP & Sr Underwriting Counsel

32

Schedule 1
LIST OF PERSONAL PROPERTY
Miscellaneous tools used by building staff which are stored in the Building.

Schedule 2
LIST OF LEASES AND NOTICES OF DEFAULT UNDER SUCH LEASES
Abovenet Communications, Inc.
License Agreement dated 07/01/2000
Letter Agreement to Extend dated 09/14/2010

Access Intelligence (Chemical Week)
Agreement of Lease dated 03/13/2000
Letter Agreement dated 06/07/2006
Consent to Sublease dated 11/17/2011

BRAC USA
Agreement of Lease dated 08/01/2012

Campbell Solberg Associates, Inc.
Agreement of Lease dated 04/06/2010

Captivate Network
License Agreement dated 05/17/2000
Media Services Agreement dated 11/17/2010
Media Services Agreement dated 05/02/2013

Cogent Communications
License Agreement dated 01/01/2002
License Agreement dated 01/01/2008
First Amendment to License Agreement dated 01/01/2013

Con Edison Communications
Telecommunications Services License Agreement dated 10/26/2001
First Amendment to License Agreement dated 05/20/2003

CP at William Street, Inc. (d.b.a. Chickpea)
Agreement of Lease dated 08/10/2010

Derive Technologies
Agreement of Lease dated 04/21/2011

DNJ Newsstand Inc.
License Agreement dated 06/24/2013

Don Congdon Associates
Agreement of Lease dated 10/14/2011

EFG Asset Mgmt, Inc.
Agreement of Lease dated 12/29/2011

EP Engineering, LLC
Agreement of Lease dated 06/06/2013

Tombar International, Inc. (d.b.a. Gateway Newsstands)
Agreement of Lease dated 10/31/1999
First Amendment of Lease dated 01/27/2010

Guideposts A Church Corp.
Agreement of Lease dated 05/03/2013

Hardin, Kundla, McKeon
Agreement of Lease dated 12/30/2003
First Amendment of Lease dated 08/19/2008
Second Amendment of Lease dated 11/30/2010

Schedule 2
LIST OF LEASES AND NOTICES OF DEFAULT UNDER SUCH LEASES
Hart Energy Publishing, LLLP
Agreement of Lease dated 07/21/2009

Helbraun Levey & O'Donoghue
Agreement of Lease dated 05/24/2013

HSBC Bank USA
Agreement of Lease dated 03/21/2001
First Amendment of Lease dated 05/20/2010

Insurance Information Institute, Inc.
Agreement of Lease dated 02/11/1987
First Amendment of Lease dated 04/1/1989
Second Amendment of Lease dated 03/27/1996
Third Amendment of Lease dated 10/24/1997
Fourth Amendment of Lease dated 10/11/1999
Letter Agreement dated 02/22/2006
Letter Agreement dated 03/31/2009

Kinko's, Inc
Agreement of Lease dated 05/19/2000
First Amendment of Lease dated 04/19/2010

Knowledge Delivery Systems, Inc.
Agreement of Lease dated 09/16/2006
First Amendment of Lease dated 08/22/2007
Second Amendment of Lease dated 10/1/2011
Third Amendment of Lease dated 10/24/2012

Lovell Safety Management
Agreement of Lease dated 11/01/2006

Metropolitan Fiber (Verizon)
Telecommunications Services License Agreement dated 11/28/1990
Telecommunications Services License Agreement dated 07/26/2004
Telecommunications Services License Agreement dated 01/05/2009

MRT Trading
License Agreement dated 06/20/2013

New York City Economic Development Corporation
Agreement of Lease dated 01/22/1992
First Amendment of Lease dated 11/22/1999
Second Amendment of Lease dated 04/20/2000
Third Amendment of Lease dated 12/23/2003
Fourth Amendment of Lease dated 12/02/2005
Storage Space Agreement dated 07/26/2007

The City of New York Department of Citywide Administrative Services (Association of Children's Services)
License Agreement dated 09/28/2006
Agreement of Lease dated 10/17/2007
Letter Agreement dated 07/26/2012

The City of New York Department of Citywide Administrative Services (Independent Budget Office)
Agreement of Leased dated 08/11/2011

Schedule 2
LIST OF LEASES AND NOTICES OF DEFAULT UNDER SUCH LEASES
The City of New York Department of Citywide Administrative Services (NYC Dept. of Juvenile Justice)
Agreement of Leased dated 12/26/2006

New York City Housing Development Corporation
Agreement of Lease dated 04/14/1999.
First Amendment to Lease dated 01/29/2007
Second Amendment to Lease dated 06/10/2011

Superintendent of Insurance of the State of New York, As Reciever
Agreement of Lease dated 03/31/2010

PACO Group, Inc.
Agreement of Lease dated 09/28/2006
First Amendment to Lease dated 12/11/2009
Second Amendment to Lease dated 09/10/2013

Pacific College of Oriental Medicine, LLC
Agreement of Lease dated 07/29/2013

Sharedbook, Inc
Agreement of Lease dated 06/17/2011

SQN Capital Partners, LLC
Agreement of Lease dated 05/03/2011

Stack Exchange, Inc.
Agreement of Lease dated 06/11/2012

T.Y. Lin International (f.k.a. Medina Consultants, P.C.)
Agreement of Lease dated 06/06/2007
First Amendment to Lease dated 09/07/2010

The Heffner Agency, Inc.
Agreement of Lease dated 10/19/1999
First Modification of Lease dated 09/30/2002
Second Modification of Lease dated 03/13/2007

WB Engineering & Consulting, P.L.L.C.
Agreement of Lease dated 07/11/2000
First Modification of Lease dated 01/11/2002
Second Modification of Lease dated 02/12/2003
Third Modification of Lease dated 04/30/2003
Fourth Modification of Lease dated 09/12/2007
Fifth Modification of Lease dated 4/11/2011

Wilentz, Goldman & Spitzer
Agreement of Lease dated 03/24/2006
First Amendment to Leased dated 06/16/2009
Letter Agreement dated 8/11/2011
Second Amendment to Lease dated 11/04/2013

There are no Defualt Notices under any of the above leases

Schedule 3
LIST OF SERVICE CONTRACTS
	
		
	VENDOR
	EXPIRATION DATE

	AFA
	2/22/2010

	Ashokan Services
	Auto Renewal

	Atlantic Detroit Diesel-Allison
	12/31/2013

	Bright Star Couriers
	12/31/2009

	Chambers Paper Fibres Corp.
	7/31/2014

	Classic Security
	12/31/2009

	Diaz Architects
	1/25/2013

	DTM
	2/1/2018

	Energy Options, INC.
	12/31/2013

	Energy Spectrum
	Auto Renewal

	Fresh Meadow Chiller Services
	12/31/2011

	Hess
	12/1/2013

	Hillmann Environmental Group, LLC
	12/31/2011

	iES Corporation
	11/1/2012

	Kastle
	Auto Renewal

	Lawrence Exterior Restoration Corp.
	7/10/2013

	Nouveau Elevator
	5/31/2018

	Perfect Building Maintenance
	12/31/2009

	Perfect Building Maintenance
	12/31/2014

	Quality Fire Protection
	12/31/2012

	Sartron
	12/31/2007

	ShortPath
	12/31/2010

	Sirina Protextion Systems
	7/31/2018

	Source One, INC.
	12/31/2011

	The Asbestos Contractor, Inc.
	11/4/2013

	Total Fire Protection
	Month to Month

	VDA (Van Deusen Assoctiates).
	N/A

	W.H. Chrstian & Sons
	5/2/2014

	Wesco Technologies, Inc.
	12/31/2008

Schedule 4
LITIGATION LIST
None

Schedule 4-1 
ny-1116319 

Schedule 5A
RENT ROLL

Schedule 6-1 
ny-1116319 

Schedule 7
TENANT INDUCEMENT COSTS AND LEASING COMMISSIONS
TENANT INDUCEMENT COSTS
	
							
	TENANT NAME
	SUITE
	EFFECTIVE DATE
	END DATE
	LANDLORD'S CONTRIBUTION

	 
	 
	 
	 
	 

	NYC ECONOMIC DEVELOPMENT
	0200-0800
	1-Sep-2014
	1-Sep-2018
	$
	3,430,927
	

	 
	 
	 
	 
	 

	NYC HOUSING DEVELOPMENT
	900/905/910a
	1-Jan-2015
	1-Jul-2017
	$
	327,990
	

	 
	 
	 
	 
	 

	TOTAL TENANT INDUCEMENT COSTS
	 
	 
	$
	3,758,917
	

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	LEASING COMMISSIONS
	 
	 
	 
	 

	 
	 
	 
	 
	 

	NONE
	 
	 
	 
	$
	—
	

	 
	 
	 
	 
	 

	TOTAL LEASING COMMISSIONS
	 
	 
	 
	$
	—
	

Schedule 8
LIST OF MORTGAGE LOAN DOCUMENTS
1    Loan Agreement between Mortgage Borrower and Mortgage Lender

2     Amended and Restated Promissory Note in the original principal amount of
$141,500,000 made by Mortgage Borrower in favor of Mortgage Lender

3    Consolidated, Amended and Restated Mortgage and Security Agreement
made by Mortgage Borrower to Mortgage Lender

4    Affidavit Under Section 255 of the Tax Law (Consolidated, Amended and
Restated Mortgage and Security Agreement) made by Mortgage Borrower

5    Assignment of Leases and Rents made by Mortgage Borrower to Mortgage
Lender

6    Affidavit Under Section 255 of the Tax Law (Assignment of Leases and Rents)
made by Mortgage Borrower

7    Guaranty of Recourse Obligations made by Guarantor for the benefit of
Mortgage Lender

8    Guaranty of Recourse Obligations made by Longwing for the benefit of
Mortgage Lender

9    Environmental Indemnity Agreement made by Mortgage Borrower and
Guarantor in favor of Mortgage Lender

10    Assignment of Management Agreement and Subordination of Management
Fees made by Mortgage Borrower to Mortgage Lender and consented and
agreed to by Manager

11    Operations and Maintenance Agreement between Mortgage Borrower and
Mortgage Lender

12    Clearing Account Agreement by and among Wells Fargo, as clearing bank,
Mortgage Borrower, Manager and Mortgage Lender

13    Cash Management Agreement among Mortgage Borrower, Mortgage Lender,
Wells Fargo, as cash management bank, and Manager

14    Borrower’s Certification made by Mortgage Borrower

15    UCC-1Financing Statements:
(a) to be filed with the Delaware Secretary of State
(b) to be filed with the Office of the City Register of the City of New York

16    Post-Closing Obligations Agreement between Lender and Borrower

17    Joint Escrow Instructions Letter from Dechert LLP, counsel to Mortgage
Lender, and accepted and agreed to by Kensington, Royal Abstract, Fidelity
Financial, Fidelity, Mortgage Borrower and Mezzanine Borrower

18    Mortgage Lender Closing Statement agreed and accepted by Mortgage
Borrower

19    Kensington and Fidelity Disbursement Statement executed by Mortgage
Borrower and Mezzanine Borrower, together with email from Kensington
containing all wire confirmations

Schedule 9
LIST OF MEZZANINE LOAN DOCUMENTS
1    Mezzanine Loan Agreement between Mezzanine Borrower and
Mezzanine Lender

2    Promissory Note (Mezzanine Loan) in the original principal amount of
$20,000,000 made by Mezzanine Borrower in favor of Mezzanine Lender

3    Pledge and Security Agreement (Mezzanine Loan) made by Mezzanine
Borrower in favor of Mezzanine Lender

4    Acknowledgement and Consent made by Mortgage Borrower

5    Certificate No. 1 Evidencing Limited Liability Company Interests in
Mortgage Borrower, together with the Limited Liability Company Interest
Power in blank, executed by Mezzanine Borrower

6    Affidavit of Lost Certificate made by Mortgage Borrower

7    Guaranty of Recourse Obligations (Mezzanine Loan) made by Guarantor
for the benefit of Mezzanine Lender

8    Guaranty of Recourse Obligations (Mezzanine Loan) made by Longwing
for the benefit of Mezzanine Lender

9    Environmental Indemnity Agreement (Mezzanine Loan) made by
Mezzanine Borrower and Guarantor in favor of Mezzanine Lender

10    Subordination of Management Agreement and Management Fees
(Mezzanine Loan) made by Mezzanine Borrower and Mortgage Borrower
to Mezzanine Lender and consented and agreed to by Manager

11    UCC-1 Financing Statement, to be filed with the Delaware Secretary of
State

12    Joint Escrow Instructions Letter from DLA Piper LLP, counsel to
Mezzanine Lender, and accepted and agreed to by Fidelity

Schedule 9-1 
ny-1116319 

SCHEDULE 10
BUYER’S 3-14 AUDIT DOCUMENTS

DOCUMENTS REQUIRED FOR 3-14 AUDIT 

Financial Statements
		
	•
	Detailed property operating statements and general ledger for the year ended 12/31/13 and YTD 2014.    

Revenues
Access to the following for all revenues for the most recent full calendar year and for the current year to date:    
		
	•
	Lease agreements including any leases which have expired or were terminated in 2013 and 2014. 

		
	•
	Rent rolls for January 2013 and December 2013

		
	•
	Access to billing invoices and tenant cash receipts

Schedule of parking revenues and related support (agreements, copy of receipts, etc.), if applicable. 
Expenses  
 
Access to the following for all expenses for the most recent full calendar year and for the current year to date:
		
	•
	Invoices and service contracts

		
	•
	Check copies

		
	•
	Check register

		
	•
	Bank reconciliations as of 12/31/13

Reimbursable Expenses
Access to the following for the most recent full calendar year and for the current year to date:
		
	•
	CAM calculation to support monthly billings.

		
	•
	Year-end CAM reconciliation.

Please note that additional documentation may be required based on the findings of the 3-14 audit.

Schedule 10-1

SCHEDULE 11
TITLE COMMITMENT

Title V of the Gramm-Leach-Bliley Act (GLBA) generally prohibits any financial institution,
directly or through its affiliates, from sharing nonpublic personal information about you with
a nonaffiliated third party unless the institution provides YOU with a notice of its privacy
policies and practices, such as the type of information that it collects about you and the
categories of persons or entities to whom it may be disclosed. In compliance with the
GLBA, we are providing you with this document, which notifies you of the privacy policies
and practices of First Nationwide Title Insurance Agency, LLC.

We may collect nonpublic personal information about you from the following sources:
		
	•
	Information we receive from you such as on applications or other forms.

		
	•
	Information about your transactions we secure from our files, or from our affiliates or

others.
		
	•
	Information we receive from a consumer reporting agency.

		
	•
	Information that we receive from others involved in your transaction, such as the

real estate agent or lender.

Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional
nonpublic personal information will be collected about you.

We may disclose any of the above information that we collect about our customers or
former customers to our affiliates or to nonaffiliated third parties as permitted by law.

We also may disclose this information about our customers or former customers to the
following types of nonaffiliated companies that perform marketing services on our behalf or
with whom we have Joint Marketing Agreements:
		
	•
	Financial service providers such as companies engaged in banking, consumer

finance, securities and insurance.
		
	•
	Non-financial companies such as envelope stuffers and other fulfillment service

providers.

WE DO NOT DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT YOU
WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMITTED BY
LAW.

We restrict access to non-public personal information about you to those employees who
need to know that information in order to provide products or services to you. We maintain
physical, electronic, and procedural safeguards that comply with federal regulations to guard
your nonpublic personal information.

Stewart Title Insurance Company

Title Number: FN-10500-NY
Page 1
Schedule A
Title Number: FN-10500-NY     Effective Date: 10/22/2013

Premises:     110 Williams Street, New York, NY 10038
County:    New York
City:     New York
Tax ID:    Block 77 Lot 8

ALTA Owner's Policy 2006 (with N.Y. Endorsement Modifications)
Proposed Insured:

ALTA Loan Policy 2006 (with Endorsement Modifications)
Proposed Insured: , its successors and/or assigns

The estate or interest in the land described or referred to in this Certificate and covered herein is:
Fee Simple

Title to said estate or interest in said land at the effective date hereof is vested in:

110 William, LLC, a Delaware limited liability company

Source of Title: Deed made by Trizec Realty, Inc. dated 12/16/2004 recorded 01/19/2005 in
CRFN 2005000035805 at New York County Recording Office, and by Correction Deed made
by Trizec Realty, Inc., dated 12/16/2004 recorded 11/22/2013 in CRFN 2013000483392.

Recertified Date: ___/___/______    Title Recertified In:

The land referred to in this Certificate is described as follows:

SCHEDULE "A" DESCRIPTION TO FOLLOW

For any title/clearance questions on this report, please call
Allison Luskoff, Esq., Vice President & Senior Underwriting Counsel at: (516) 686-9851

Stewart Title Insurance Company

Title Number: FN-10500-NY
Page 1

SCHEDULE A DESCRIPTION

ALL that certain plot piece or parcel of land, situate, lying and being in the Borough of Manhattan,
County and State of New York, bounded and described as follows:

BEGINNING at the corner formed by the intersection of the easterly side of William Street and the
northerly side of John Street;

RUNNING THENCE northerly along the easterly side of William Street, 188 feet 3 inches to a point
in said easterly side of William Street, distant 154 feet 10 1/4 inches southerly from the corner
formed by the intersection of the southerly side of Fulton Street and the said easterly side of
William Street;

THENCE easterly on a line forming an angle of 86 degrees 52 minutes 30 seconds on its northerly
side with the easterly side of William Street, 159 feet 4 1/4 inches;

THENCE southwesterly on a line forming an angle of 82 degrees 44 minutes 30 seconds on its
westerly side with the last mentioned course, 49 feet 5 inches;

THENCE continuing southwesterly on a line forming an angle of 180 degrees 49 minutes 30
seconds on its easterly side with the last mentioned course, 25 feet 7 1/2 inches;

THENCE continuing southwesterly along a line making an angle of 179 degrees 48 minutes on its
easterly side with the last mentioned course, 23 feet 2 1/2 inches;

THENCE southeasterly and along a line forming an angle of 93 degrees 51 minutes 50 seconds
on its northerly side with the last mentioned course, 24 feet 10 1/4 inches;

THENCE southerly along a line forming an angle of 96 degrees 20 minutes 30 seconds on its
westerly side with the last mentioned course, 104 feet 3 1/4 inches to the northerly side of John
Street;

THENCE westerly along the northerly side of John Street, 173 feet 4 1/4 inches to the corner
formed by the intersection of the northerly side of John Street with the easterly side of William
Street at the point or place of BEGINNING.

The policy to be issued under this report will insure title to such buildings and improvements erected on the premises,
which by law constitute real property.

FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the party of the first part, of in
and to the land lying in the street in front of and adjoining said premises.

Stewart Title Insurance Company
Schedule B-I
(Requirements)
Title Number FN-10500-NY

The following are requirements to be complied with for a title policy to issue:

DISPOSITION

		
	1.
	Searches, including judgments, federal tax liens and bankruptcies have been run against 110 William, LLC, a Delaware limited liability company, the certified owner(s) herein and the following must be disposed of: 2 ECBs (see herein)

2.    Re: 110 William, LLC

(a)    Proof is required of its formation and that it has not been dissolved. Proof is also required that there has been no change in the composition of the Limited Liability Company.

(b)    A copy of its Articles of Organization, and any amendments thereto, must be
delivered to the Company for review in advance of closing.

(c)    A copy of its Operating Agreement and any amendments thereto, must be
delivered to the Company for review in advance of closing.

(d)    Proof is required that the transaction to be insured has been duly authorized.

(e)    The name(s) of the managing member(s) must be furnished to this Company in advance of the closing so that federal tax lien and bankruptcy searches can be run. If the limited liability company does not have managing members, please contact Company Counsel to identify the names of the members as to whom said searches are to be run.

NOTE: At least two-thirds in interest of the members at a duly called and noticed meeting are required to vote for or consent in writing to a sale, lease or mortgage, pursuant to Sections 402, 403, 405 and 407 of the Limited Liability Company Law. Counsel must be advised in advance of the closing if less than two-thirds have voted for or consented in writing to the proposed transaction (or that such a vote or consent is anticipated) to determine if there is or will be due authority to convey. Conveyances by a Limited Liability Company formed on and after August 31, 1999, and a previously formed Limited Liability Company having amended its Operating Agreement to so provide, may proceed on the vote of a majority in interest of its members.

		
	3.
	Mechanic's Lien filed (docketed) 11/20/2013 by Construction 1st Class Inc., as lienor, in the unpaid amount of $63,945.04, Index No. 181, naming 110 William LLC as owner of the premises identified as Block 77 Lot 8.

		
	4.
	The name of the proposed mortgagor must be disclosed to the Company in advance of closing so that the appropriate bankruptcy and lien searches can be run.

Stewart Title Insurance Company
		
	5.
	FOR INFORMATION ONLY: Final Certificate of Eligibility dated 12/27/2005, between The New York City Department of Finance and TrizecHahn Regional Pooling LLC, its

successors and/or assigns, and recorded on 03/31/2005 in CRFN 2005000185183, which grants an exemption to the party of the second part.

6.     A copy of the Contract of Sale must be submitted for consideration prior to closing.
NOTE: When applicable, a copy of the Contract of Sale must be submitted with the New York City Real Property Transfer Tax Return (RPT) when the consideration is $400,000.00 or more.

		
	7.
	Affidavit of title with indemnity to be signed at closing using the annexed form, or additional exceptions may be raised.

8.    Proof is required that the person(s) executing the closing instruments is (are) the same
person(s) as the grantee(s) in the deed recorded in CRFN 2005000035805 and correction
deed recorded in CRFN 2013000483392.

9.    Closing mortgage/deed must contain the following recital: Being the same premises
conveyed to the parties of the first part herein by deed recorded on 01/19/2005 in (as)
CRFN 2005000035805 and by correction deed recorded on 11/22/2013 in CRFN
2013000483392.

Stewart Title Insurance Company
Schedule B-II
(Exceptions)
Title Number FN-10500-NY

The policy will include as exceptions to title the following matters unless they are disposed of to the satisfaction of the company:

DISPOSITION

1.    Rights of tenants or persons in possession, if any.

		
	2. 
	Taxes, tax liens, tax sales, water rates, sewer rates, sewer rents and assessments set

forth herein.

3.    Mortgages returned herein. ( four ).
a.    Mortgage 1 appears to be assigned to the mortgagor (see assignment 1a).
Council should be contacted to discuss whether or not this mortgage can be further assigned or consolidated.

4.     Any state of facts which a guaranteed survey of current date would disclose.
NOTE: We are attempting to locate a survey. If a satisfactory survey is received, this
exception will be amended.

5.     Covenants, conditions, easements, leases, agreements of record, etc., more fully set forth
herein:

6.    Unrecorded Space Lease dated 03/21/2001.

		
	7.
	Sewer Agreement dated 03/30/1959, between 110 William Street Corporation and The City of New York, and recorded in Liber 5082 page 23.

8.    Subway Agreement dated 10/17/1958, between 110 William Street Corporation and the
New York City Transit Authority, and recorded in Liber 5056 page 411.

9.    Modification of Subway Agreement dated 09/22/1992, between 110 William Street
Company and the New York City Transit Authority, and recorded in Reel 1908 page 1679.

10.    Subordination, Non-Disturbance and Attornment Agreement dated 05/17/2001, between
Secore Financial Corporation (lender), HSBC Bank USA (tenant), and HSD/Horton
Associates (landlord), and recorded on 07/02/2001 in Reel 3314 page 2408.

Stewart Title Insurance Company
11.     Subordination, Non-Disturbance and Attornment Agreement dated 03/31/201, between the
Superintendent of Insurance of the State of New York, as Receiver (tenant), 110 William,
LLC (landlord or borrower), and Bank of America, National Association, successor by
merger to LaSalle Bank National Association, as Trustee for the Registered Holders of LB
Commercial Mortgage Trust 2007-C3, Commercial Mortgage Pass-Through Certificates,
Series 2007-C3, and recorded on 06/18/2010 in CRFN 2010000204059.

12.    Subordination, Non-Disturbance and Attornment Agreement dated 06/17/2011, between
U.S. Bank National Association, as National Bank Association, organized and existing
under the Laws of the United States of America, no in its individual capacity but solely in its capacity as Trustee for the Registered Holders of LB Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 2007-C3, and recorded on
09/16/2011 in CRFN 2011000329448.

13.    Assignment of Leases and Rents dated 06/11/2012, made by 110 William, LLC, a
Delaware limited liability company to UBS Real Estate Securities Inc., a Delaware
corporation and recorded on 06/25/2012 in CRFN 2012000249539.

With regard thereto:
a.    Assignment of Assignment of Leases and Rents, dated 06/04/2012,
made by Bank of America, N.A., a national banking association (successor by merger
to LaSalle Bank National Association, a national banking association), as Trustee for
the Registered Holders of LB Commercial Mortgage Trust 2007-C3, Commercial
Mortgage Pass-Through Certificates, Series 2007-C3 to U.S. Bank National
Association, a national banking association organized and existing under the laws of
the United States of America, not in its individual capacity but solely in its capacity as
trustee for the registered holders of LB Commercial Mortgage Trust 2007-C3,
Commercial Mortgage Pass-Through Certificates, Series 2007-C3 and recorded on
06/25/2012 in CRFN 2012000249541.
b.    Assignment of Assignment of Leases and Rents, dated 06/04/2012,
made by UBS Real Estate Securities Inc., a Delaware corporation, to U.S. Bank
National Association, as trustee for the registered holders of UBS-Barclays
Commercial Mortgage Trust 2012-C2, Commercial Mortgage Pass-Through
Certificates Series 2012-C2, and recorded on 08/29/2012 in CRFN 2012000342468.

14.     Memorandum of Lease dated 05/01/1979, between Unite States Fire Insurance Company,
The North River Insurance Company, Westchester Fire Insurance Company, and
International Insurance Company (landlord) and Marine Midland Bank (tenant), and
recorded on 08/05/1980 in Reel 532 page 1942. Proof is required that same has been not
been amended or further extended.

15. The condemnation proceeding commenced under Index # 402332-2005 by Metropolitan
Transportation versus Fulton Street Transit appears to affect a portion of the premises with
regard to the subway entrance. The abstract is being reviewed and further exceptions
may be raised.

Stewart Title Insurance Company
16.    The following Financing Statement (UCC-1) must be disposed of:
Debtor:     110 William, LLC
Secured Party:    UBS Real Estate Securities Inc.
File No.:     CRFN 2012000249540
Filed:     06/25/2012
Land (Block & Lot):     Block 77 Lot 8
NOTE: Assignment of UCC to U.S. Bank National Association, as Trustee for the
Registered Holders of UBS-Barclays Commercial Mortgage Trust 2012-C2, Commercial
Mortgage Pass-Through Certificates, Series 2012-C2 by UCC3 filed on 08/29/2012 in
CRFN 2012000342469.

17.     The tax search reveals that there is an abatement or exemption. If such abatement or
exemption is pursuant to the J-51 program, such abatement or exempt is subject to review
and audit by the City of New York and may be revised, reduced or terminated in the future.
This may result in the reimposition of taxes and accrued interest for prior tax periods.
Information as to the basis and status of the abatement or exemption may be obtained
from the Department of Housing, Preservation and Development, 100 Gold Street, New
York, New York, or through the Department of Finance of the City of New York, 345
Adams St., Brooklyn, New York 11201, (Administrative Code Section 11-243, formerly
Section J51-2.5, Real Property Tax Law Section 489).

18.    Meter #’s 1318 & 1308: Tax search discloses a water/sewer meter that has been read to
09/04/2013. Policy excepts subsequent meter charges covering the period from said
reading including but not limited to subsequent adjustments to “actual” reading amounts
that have been reported herein even where such amounts cover the service period prior to
closing.
NOTE: To omit this exception, a special meter reading is necessary to bring charges up to
date. Seller is advised to obtain a special meter reading and present bill reflecting same,
at or prior to closing to avoid having to deposit an escrow. You may contact our escrow
department for further information.

19.    Fire Meter # 4024: Tax search discloses a water/sewer meter that has been read to
03/03/2011. Policy excepts subsequent meter charges covering the period from said
reading including but not limited to subsequent adjustments to “actual” reading amounts
that have been reported herein even where such amounts cover the service period prior to
closing.
NOTE: To omit this exception, a special meter reading is necessary to bring charges up to
date. Seller is advised to obtain a special meter reading and present bill reflecting same,
at or prior to closing to avoid having to deposit an escrow. You may contact our escrow
department for further information.

20.    Fire Meter # 4025: Tax search discloses a water/sewer meter that has been read to
03/04/2010. Policy excepts subsequent meter charges covering the period from said
reading including but not limited to subsequent adjustments to “actual” reading amounts
that have been reported herein even where such amounts cover the service period prior to closing.
NOTE: To omit this exception, a special meter reading is necessary to bring charges up to date. Seller is advised to obtain a special meter reading and present bill reflecting same, at or prior to closing to avoid having to deposit an escrow. You may contact our escrow department for further information.

Stewart Title Insurance Company
21.    Steam Meter # 195: Tax search discloses a water/sewer meter that has been read to
09/12/2013. Policy excepts subsequent meter charges covering the period from said
reading including but not limited to subsequent adjustments to “actual” reading amounts
that have been reported herein even where such amounts cover the service period prior to
closing.
NOTE: To omit this exception, a special meter reading is necessary to bring charges up to
date. Seller is advised to obtain a special meter reading and present bill reflecting same,
at or prior to closing to avoid having to deposit an escrow. You may contact our escrow
department for further information.

Stewart Title Insurance Company
Title Number: FN-10500-NY
Page 1

MORTGAGE SCHEDULE

DISPOSITION

Mortgage 1:
Mortgage dated 09/25/1984 made by 110 William Street Company to United
States Fire Insurance Company, The North River Insurance Company,
Westchester Fire Insurance Company and International Insurance Company,
in the original principal amount of $55,708,186.28, and recorded on
9/29/1981 in Reel 585 Page 677. (Mortgage Tax Paid: $835,623.00).

Assignment 1a:
Assignment of Mortgage 1 dated 02/05/1982, from United States Fire
Insurance Company, The North River Insurance Company, Westchester Fire
Insurance Company and International Insurance Company to 110 William
Street Company, and recorded on 02/10/1982 in Reel 606 page 987.
NOTE: Assignment contains non-merger language.

Mortgage 2:
Mortgage dated 12/09/1988, made by HSD/Horton Associates to The
Equitable Life Assurance Society of the United States, in the original principal
amount of $57,200,000.00, and recorded on 12/18/1998 in Reel 2777 Page
2412. (Mortgage Tax Paid: $1,573,000.00).

Assignment 2a:
Assignment of Mortgage 2 dated 05/17/2001, from The Equitable Life
Assurance Society of the United States to Secore Financial Corporation, and
recorded on 08/24/2001 in Reel 3347 Page 680.

Mortgage 3:
Amended and Restated Mortgage and Mortgage Modification and
Consolidation Agreement, Security Agreement, Assignment of Leases, Rents
and Revenues, and Fixture Filing and Consolidation dated 05/17/2001, made
by TrizecHahn Regional Pooling LLC to Secore Financial Corporation, in the
original principal amount of $49,050,000.00, and recorded on 08/24/2001 in
Reel 3347 Page 688. (Mortgage Tax Paid: 1,348,875.00).
NOTE: Mortgages 2 and 3 are consolidated by the terms of Mortgage 3 to
form a single lien of $106,250,000.00.

1

Title Company will require a written payoff statement prior to closing

These mortgage returns, unless the mortgage is to be insured, will appear as exceptions from coverage. The
information set forth herein is obtained from the recorded instrument. Sometimes the provisions of a mortgage may
be modified by agreements which are not recorded. We suggest that you communicate with the mortgagee if you
desire any additional information. If there has been a change in the owners and holders of the mortgage, such
information should be furnished to us promptly to enable further searches to be made.

Stewart Title Insurance Company
Title Number: FN-10500-NY
Page 2
Assignment 3a:
Assignment of Mortgages 2 and 3, as consolidated, dated 05/17/2001, from
Secore Financial Corporation to LaSalle Bank National Association, as
Trustee for the Holders of TrizecHahn Office Properties Trust Commercial
Mortgage Pass-Through Certificates, Series 2001-TZH, and recorded on
03/22/2005 in CRFN 2005000165202.

Assignment 3b:
Assignment of Mortgages 2 and 3, as consolidated, dated 07/08/2004, from
LaSalle Bank National Association, as Trustee for the Holders of TrizecHahn
Office Properties Trust Commercial Mortgage Pass-Through Certificates,
Series 2001-TZH to Riverside Lending Company, LLC, and recorded on
03/22/2005 in CRFN 2005000165203.

Agreement 3c:
Mortgage Loan Assumption Agreement, dated 07/08/2001, between Trizec
Realty, Inc. and Riverside Lending Company, LLC, and recorded on
03/22/2005 in CRFN 2005000165204.
NOTE: New borrower assumes all obligations under Mortgages 2 and 3, as
consolidated.

Agreement 3d:
Amended and Restated Mortgage dated 07/08/2004, made by Trizec Realty,
Inc. to Riverside Lending Company, LLC, in the original principal sum of
$106,250,000.00, and recorded on 03/22/2005 in CRFN 2005000165205.
NOTE: Amends and restates Mortgages 2 and 3, as consolidated.

Assignment 4e:
Assignment of Mortgages 2 and 3, as consolidated, dated 12/13/2004 from
Riverside Lending Company, LLC to Lehman Brothers Holdings Inc., and
recorded on 04/26/2005 in CRFN 2005000241446.

Agreement 4f:
Mortgage Consolidation and Modification Agreement dated 12/16/2004,
between 110 William, LLC and Lehman Brothers Holdings Inc. d/b/a Lehman
Capital, a division of Lehman Brothers Holdings Inc., and recorded on
04/26/2005 in CRFN 2005000241447, which modifies terms of Mortgages 2
and 3, as consolidated, now securing the sum of $106,250,000.00.

2

Title Company will require a written payoff statement prior to closing

These mortgage returns, unless the mortgage is to be insured, will appear as exceptions from coverage. The
information set forth herein is obtained from the recorded instrument. Sometimes the provisions of a mortgage may
be modified by agreements which are not recorded. We suggest that you communicate with the mortgagee if you
desire any additional information. If there has been a change in the owners and holders of the mortgage, such
information should be furnished to us promptly to enable further searches to be made.

Stewart Title Insurance Company
Title Number: FN-10500-NY
Page 3

Assignment 4g:
Assignment of Mortgages 2 and 3, as consolidated, dated 06/08/2007, from
Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a division of Lehman
Brothers Holdings Inc. to LaSalle Bank National Association, as Trustee for
The Lehman Brothers Floating Rate Commercial Mortgage Trust 2005-
LLFC4 Mortgage Pass-Through Certificates, Series 2005-LLFC4, and
recorded on 06/28/2007 in CRFN 2007000335218.

Assignment 4h:
Assignment of Mortgages 2 and 3, as consolidated, dated 06/08/2007, from
LaSalle Bank National Association, as Trustee for The Lehman Brothers
Floating Rate Commercial Mortgage Trust 2005-LLFC4 Mortgage Pass-
Through Certificates, Series 2005-LLFC4 to Lehman Brothers Bank, FSB,
and recorded on 06/28/2007 in CRFN 2007000335220.

Mortgage 4:
Mortgage dated 06/08/2007, made by 110 William, LLC to Lehman Brothers
Bank, FSB, in the original principal amount of $66,600,000.00, and recorded
on 06/28/2007 in CRFN 2007000335222. (Mortgage Tax Paid:
$1,864,800.00).

Agreement 4a:
Mortgage Consolidation and Modification Agreement dated 06/08/2007,
between 110 William LLC and Lehman Brothers Bank, FSB and recorded on
06/28/2007 in CRFN 2007000335223, which modifies terms of Mortgages 2,
3 and 4 to form a single lien in the amount of $156,600,000.00.

Agreement 4b:
Amended and Restate Mortgage, Assignment of Leases and Rents and
Security Agreement dated 06/08/2007, made by 110 William, LLC to Lehman
Brothers Bank, FSB, and recorded on 06/28/2007 in CRFN 2007000335224.
NOTE: Amends and restates Mortgages 2, 3 and 4, as consolidated.

Assignment 4c:
Assignment of Mortgages 2, 3 and 4, as consolidated, dated 02/19/2008,
from Lehman Brothers Bank, FSB to LaSalle Bank National Association, in its
capacity as Trustee for the registered holders of LB Commercial Mortgage
Trust 2007-C3, Commercial Mortgage Pass-Through Certificates, Series
2007-C3, and recorded on 03/18/2008 in CRFN 2008000110420.

3

Title Company will require a written payoff statement prior to closing

These mortgage returns, unless the mortgage is to be insured, will appear as exceptions from coverage. The
information set forth herein is obtained from the recorded instrument. Sometimes the provisions of a mortgage may
be modified by agreements which are not recorded. We suggest that you communicate with the mortgagee if you
desire any additional information. If there has been a change in the owners and holders of the mortgage, such
information should be furnished to us promptly to enable further searches to be made.

Stewart Title Insurance Company
Title Number: FN-10500-NY
Page 4

Assignment 4d:
Assignment of Mortgages 2, 3 and 4, as consolidated, dated 06/04/2012,
Bank of America, N.A., National Banking Association (successor by merger
to LaSalle National Association, a National Banking Association), as Trustee
for the Registered Holders of LB Commercial Mortgage Trust 2007-C3,
Commercial Mortgage Pass-Through Certificates, Series 2007-C3, to U.S.
Bank National Association, a National Banking Association Organized and
Existing under the Laws of the United States of America, not in its individual
capacity but solely in its capacity as Trustee for the Registered Holders of LB
Commercial Mortgage Trust 2007-C3, Commercial Mortgage Pass-Through
Certificates, Series 2007-C3, and recorded on 06/25/2012 in CRFN
2012000249536.

Assignment 4e:
Assignment of Mortgages 2, 3 and 4, as consolidated, dated 06/11/2012,
U.S. Bank National Association, a national banking association organized
and existing under the laws of the United States of America, not in its
individual capacity but solely in its capacity as trustee for the registered
holders of LB Commercial Mortgage Trust 2007-C3, Commercial Mortgage
Pass-Through Certificates, Series 2007-C3 to UBS Real Estate Securities
Inc., a Delaware corporation, and recorded on 06/25/2012 in CRFN
2012000249537.

Agreement 4f:
Consolidated, Amended and Restated Mortgage and Security Agreement
dated 06/11/2012, made by 110 William, LLC, a Delaware limited liability
company to UBS Real Estate Securities Inc., a Delaware corporation, and
recorded on 06/25/2012 in CRFN 2012000249538.
NOTE: Amends and Restates Mortgages 2, 3 and 4, as consolidated.

Assignment 4g:
Assignment of Mortgages 2, 3 and 4, as consolidated, dated 07/17/2012,
from UBS Real Estate Securities Inc., a Delaware corporation, to U.S. Bank
National Association, as trustee for the registered holders of UBS-Barclays
Commercial Mortgage Trust 2012-C2, Commercial Mortgage Pass-Through
Certificates Series 2012-C2, and recorded on 08/29/2012 in CRFN
2012000342467.

4

Title Company will require a written payoff statement prior to closing

These mortgage returns, unless the mortgage is to be insured, will appear as exceptions from coverage. The
information set forth herein is obtained from the recorded instrument. Sometimes the provisions of a mortgage may
be modified by agreements which are not recorded. We suggest that you communicate with the mortgagee if you
desire any additional information. If there has been a change in the owners and holders of the mortgage, such
information should be furnished to us promptly to enable further searches to be made.

SCHEDULE 12
List of Required Changes to Mortgage and Mezzanine Loan Documents

Mortgage Loan Agreement and Mezzanine Loan Agreement
		
	1.
	Definitions (§1.1): Various definitions contained in the Loan Agreement will need to be revised or deleted to reflect the new parties to the transaction, including: (a) Borrower, (b) Guarantor, (c) Guaranty, (d) JV Agreement, (e) Longwing Guarantor, (f) Longwing Guaranty, (h) Management Agreement, (i) Manager, (j) Mezzanine Borrower, (k) Permitted Transfer, (l) Qualified Manager, (m) Sole Member, (n) Swig Family Entity, (o) Swig Guaranty, (p) Insolvency Opinion, and (q) Sponsor.  All references to Kent Swig throughout the Loan Agreement will need to be deleted.

		
	2.
	Representations and Warranties (Article III): 

		
	a.
	Organization (§3.1.1(b)): This representation will need to be revised to reflect the new Borrower’s state and federal tax ID numbers.

		
	b.
	Compliance (§3.1.9): The reference to the Zoning Analysis Report dated June 1, 2012 may need to be revised if a new report is obtained.

		
	c.
	Leases (§3.1.22): The rent roll attached as Schedule I will need to be updated, and the disclosures set forth in Schedule VIII may potentially need to be revised.

		
	d.
	Purchase Options (§3.1.44): The cross-references to provisions of the JV Agreement that contain purchase options, rights of first refusal, and similar options with respect to the Borrower, will need to be revised to reflect the new JV Agreement.

		
	3.
	Organizational Chart (§3.1.28): The organizational chart of Borrower attached as Schedule III will need to be revised to reflect the new structure. 

		
	4.
	Material Agreements (§3.1.47):  Schedule VI listing the Material Agreements may need to be updated. 

		
	5.
	Property Management (Article VII): Need lender approval of new property management agreement with Swig Equities, LLC.  

		
	6.
	Transfer Restrictions (Article VIII): 

		
	a.
	Sections 8.1 and 8.2 will need to be revised to allow new transfer provisions.  

		
	7.
	Notices (all documents): All notice provisions will need to be updated with the new Borrower’s notice address information.

		
	8.
	Agent for Service of Process (§11.3(B):  Borrower’s agent for service of process will need to be updated.  

Deposit Account Control Agreement
		
	1.
	Section 1 of the Agreement references the account number of the Restricted Account, the name of the Restricted Account, and the Borrower’s federal tax ID number.  All three items will need to be updated with the new Borrower’s information.  Section 5 also 

Schedule 12-1

references the Borrower’s name and Borrower’s account information, which will need to be revised.
		
	2.
	The Tenant Direction Letter attached as Exhibit B will need to be revised with the new Borrower’s information.

Cash Management Agreement
		
	1.
	Section 2.1 identifies the account number of the Cash Management Account.  This will need to be updated with the new Borrower’s information.

		
	2.
	Section 2.3 identifies the account name of the Cash Management Account.  This will need to be updated with the new Borrower’s information.

		
	3.
	Exhibit B identifies the Borrower’s operating account information (bank, account name, routing number, and account number).  This will need to be updated with the new Borrower’s information.

Schedule 12-2

Schedule 12-3

SCHEDULE 13
TITLE OBJECTIONS

Schedule 13-1

PRIVACY POLICY NOTICE
Title V of the Gramm-Leach-Bliley Act (GLBA) generally prohibits any financial institution,
directly or through its affiliates, from sharing nonpublic personal information about you with
a nonaffiliated third party unless the institution provides YOU with a notice of its privacy
policies and practices, such as the type of information that it collects about you and the
categories of persons or entities to whom it may be disclosed. In compliance with the
GLBA, we are providing you with this document, which notifies you of the privacy policies
and practices of First Nationwide Title Insurance Agency, LLC.

We may collect nonpublic personal information about you from the following sources:
•    Information we receive from you such as on applications or other forms.
•    Information about your transactions we secure from our files, or from our affiliates or 
others.
•    Information we receive from a consumer reporting agency.
•    Information that we receive from others involved in your transaction, such as the
real estate agent or lender.

Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional
nonpublic personal information will be collected about you.

We may disclose any of the above information that we collect about our customers or
former customers to our affiliates or to nonaffiliated third parties as permitted by law.

We also may disclose this information about our customers or former customers to the
following types of nonaffiliated companies that perform marketing services on our behalf or
with whom we have Joint Marketing Agreements:
•    Financial service providers such as companies engaged in banking, consumer
finance, securities and insurance.
•    Non-financial companies such as envelope stutters and other fulfillment service
providers.

WE DO NOT DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT YOU
WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMITTED BY
LAW.

We restrict access to non-public personal information about you to those employees who
need to know that information in order to provide products or services to you. We maintain
physical, electronic, and procedural safeguards that comply with federal regulations to guard
your nonpublic personal information.

Stewart Title Insurance Company
Title Number: FN-10500-NY
Page 1

Title Number: FN-10500-NY     Effective Date: 10/22/2013

Premises:    110 Williams Street, New York, NY 10038
County:     New York
City:     New York
Tax ID:    Block 77 Lot 8

ALTA Owner's Policy 2006 (with N.Y. Endorsement Modifications)
Proposed Insured:

AL TA Loan Policy 2006 (with Endorsement Modifications)
Proposed Insured: , its successors and/or assigns

The estate or interest in the land described or referred to in this Certificate and covered herein is:
Fee Simple

Title to said estate or interest in said land at the effective date hereof is vested in:

110 William, LLC, a Delaware limited liability company

Source of Title: Deed made by Trizec Realty, Inc. dated 12/16/2004 recorded 01/19/2005 in
CRFN 2005000035805 at New York County Recording Office, and by Correction Deed made
by Trizec Realty, Inc., dated 12116/2004 recorded 11/22/2013 in CRFN 2013000483392.

Recertified Date: ___/___/_______    Title Recertified In:

The land referred to in this Certificate is described as follows:

SCHEDULE "A" DESCRIPTION TO FOLLOW

For any title/clearance questions on this report, please call
Allison Luskoff, Esq., Vice President & Senior Underwriting Counsel at: (516) 686-9851

1

Stewart Title Insurance Company
Title Number: FN-10500-NY
Page 1

SCHEDULE A DESCRIPTION

ALL that certain plot piece or parcel of land, situate, lying and being in the Borough of Manhattan,
County and State of New York, bounded and described as follows:

BEGINNING at the corner formed by the intersection of the easterly side of William Street and the
northerly side of John Street;

RUNNING THENCE northerly along the easterly side of William Street, 188 feet 3 inches to a point
in said easterly side of William Street, distant 154 feet 10 1/4 inches southerly from the corner
formed by the intersection of the southerly side of Fulton Street and the said easterly side of
William Street;

THENCE easterly on a line forming an angle of 86 degrees 52 minutes 30 seconds on its northerly
side with the easterly side of William Street, 159 feet 4 1/4 inches;

THENCE southwesterly on a line forming an angle of 82 degrees 44 minutes 30 seconds on its
westerly side with the last mentioned course, 49 feet 5 inches;

THENCE continuing southwesterly on a line forming an angle of 180 degrees 49 minutes 30
seconds on its easterly side with the last mentioned course, 25 feet 7 1/2 inches;

THENCE continuing southwesterly along a line making an angle of 179 degrees 48 minutes on its
easterly side with the last mentioned course, 23 feet 2 1 /2 inches;

THENCE southeasterly and along a line forming an angle of 93 degrees 51 minutes 50 seconds
on its northerly side with the last mentioned course, 24 feet 10 1/4 inches;

THENCE southerly along a line forming an angle of 96 degrees 20 minutes 30 seconds on its
westerly side with the last mentioned course, 104 feet 3 1 /4 inches to the northerly side of John
Street;

THENCE westerly along the northerly side of John Street, 173 feet 4 1/4 inches to the corner
formed by the intersection of the northerly side of John Street with the easterly side of William
Street at the point or place of BEGINNING.

The policy to be issued under this report will insure title to such buildings and improvements erected on the premises,
which by law constitute real property.

FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the party of the first part, of in
and to the land lying in the street in front of and adjoining said premises.

1

1

1

1

1

1

1

EXHIBIT A
DESCRIPTION OF REAL PROPERTY
All that certain real property situated in New York County, New York, described as follows:
ALL that certain plot piece or parcel of land, situate, lying and being in the Borough of Manhattan, County and State of New York, bounded and described as follows: 
BEGINNING at the corner formed by the intersection of the easterly side of William Street and the northerly side of John Street; 
RUNNING THENCE northerly along the easterly side of William Street, 188 feet 3 inches to a point in said easterly side of William Street, distant 154 feet 10 1/4 inches southerly from the corner formed by the intersection of the southerly side of Fulton Street and the said easterly side of William Street; 
THENCE easterly on a line forming an angle of 86 degrees 52 minutes 30 seconds on its northerly side with the easterly side of William Street, 159 feet 4 1/4 inches; 
THENCE southwesterly on a line forming an angle of 82 degrees 44 minutes 30 seconds on its westerly side with the last mentioned course, 49 feet 5 inches; 
THENCE continuing southwesterly on a line forming an angle of 180 degrees 49 minutes 30 seconds on its easterly side with the last mentioned course, 25 feet 7 1/2 inches; 
THENCE continuing southwesterly along a line making an angle of 179 degrees 48 minutes on its easterly side with the last mentioned course, 23 feet 2 1/2 inches; 
THENCE southeasterly and along a line forming an angle of 93 degrees 51 minutes 50 seconds on its northerly side with the last mentioned course, 24 feet 10 1/4 inches; 
THENCE southerly along a line forming an angle of 96 degrees 20 minutes 30 seconds on its westerly side with the last mentioned course, 104 feet 3 1/4 inches to the northerly side of John Street; 
THENCE westerly along the northerly side of John Street, 173 feet 4 1/4 inches to the corner formed by the intersection of the northerly side of John Street with the easterly side of William Street at the point or place of BEGINNING.
FOR CONVEYANCING ONLY: TOGETHER with all the right, title and interest of the party of the first part, of in and to the land lying in the street in front of and adjoining said premises.

Exhibit A-1

EXHIBIT B
	
					
	 
	Bargain and Sale Deed without Covenant against Grantor’s Acts--Individual or Corporation (single sheet)

	 
	 
	 
	 
	 

	 
	CONSULT YOUR LAWYER BEFORE SIGNING THIS INSTRUMENT - THIS

	 
	INSTRUMENT SHOULD BE USED BY LAWYERS ONLY.

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	This INDENTURE, made the day of , two thousand and thirteen

	 
	 
	 
	 
	 

	 
	BETWEEN
	 
	 
	 

	 
	 
	 
	 
	 

	 
	[__________], a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	party of the first part, and
	 

	 
	 
	 
	 
	 

	 
	[__________], a ________ ________
	 

	 
	 
	 
	 
	 

	 
	party of the second part,
	 

	 
	 
	 
	 
	 

	 
	WITNESSETH, that the party of the first part, in consideration of Ten Dollars and

	 
	other valuable consideration paid by the party of the second part, does hereby grant and

	 
	release unto the party of the second part, the heirs or successors and assigns of the party

	 
	of the second part forever:
	 

	 
	 
	 
	 
	 

	 
	ALL that certain plot, piece or parcel of land with the buildings and improvements

	 
	thereon erected, situate, lying and being in the Borough of Manhattan, City and State of

	 
	New York, and more particularly described on Exhibit A hereto and made a part hereof.

	 
	 
	 
	 
	 

	 
	TOGETHER with all right, title and interest, if any, of the party of the first part in and

	 
	to any streets and roads abutting the above described premises to the center lines

	 
	thereof,

	 
	 
	 
	 
	 

	 
	TOGETHER with the appurtenances and all the estate and rights of the party of the

	 
	first part in and to said premises,

	 
	 
	 
	 
	 

	 
	TO HAVE AND TO HOLD the premises herein granted unto the party of the second

	 
	part, the heirs or successors and assigns of the party of the second part forever.

	 
	 
	 
	 
	 

	TAX MAP
	AND the party of the first part, in compliance with Section 13 of the Lien Law,
covenants that the party of the first part will receive the consideration for this
conveyance and will hold the right to receive such consideration as a trust fund to be
applied first for the purpose of paying the cost of the improvements and will apply the
same first to the payment of the cost of the improvement before using any part of the
total of the same for any other purpose.
The word “party” shall be construed as if it read “parties” whenever the sense of this
indenture so requires.

	DESIGNATION

	 

	Dist: Manhattan

	Sec:

	Blk:

	Lot:

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	IN WITNESS WHEREOF, the party of the first part has duly executed this deed the

Exhibit B-1

	
				
	 
	day and year first above written.
	 

	 
	 
	 
	 

	 
	[____________], a Delaware limited liability company

	 
	 
	 
	 

	 
	By:
	 
	 

	 
	 
	Name:
	 

	 
	 
	Title:
	 

	 
	 
	 
	 

Exhibit B-2

	
				
	STATE OF NEW YORK, COUNTY OF

On the day of in the year 2013,
before me, the undersigned, personally
appeared personally
to me known to me or proved to me on the basis
of satisfactory evidence to be the person whose
name is subscribed to the within instrument and
acknowledged to me that he/she executed the
same in his/her capacity, and that by his/her
signature on the instrument, the person, or the
entity upon behalf of which the person acted,
executed the instrument.
	STATE OF NEW YORK, COUNTY OF

On the day of in the year 2013, before
me, the undersigned, personally
appeared personally
to me known to me or proved to me on the basis
of satisfactory evidence to be the person whose
name is subscribed to the within instrument and
acknowledged to me that he/she executed the
same in his/her capacity, and that by his/her
signature on the instrument, the person, or the
entity upon behalf of which the person acted,
executed the instrument.

	OUTSIDE NEW YORK STATE:
	OUTSIDE NEW YORK STATE:

	 
	 

	STATE OF , COUNTY OF
On the day of in the year 2013, before
me, the undersigned, personally
appeared personally
to me known to me or proved to me on the basis
of satisfactory evidence to be the person whose
name is subscribed to the within instrument and
acknowledged to me that he/she executed the
same in his/her capacity, and that by his/her
signature on the instrument, the person, or the
entity upon behalf of which the person acted,
executed the instrument.
	STATE OF , COUNTY OF

On the day of in the year 2013, before
me, the undersigned, personally
appeared personally
to me known to me or proved to me on the basis
of satisfactory evidence to be the person whose
name is subscribed to the within instrument and
acknowledged to me that he/she executed the
same in his/her capacity, and that by his/her
signature on the instrument, the person, or the
entity upon behalf of which the person acted,
executed the instrument.

	 
	(insert
	 
	(insert city

	city or political subdivision and state or county
or other place acknowledgment taken).
	or political subdivision and state or county or
other place acknowledgment taken).

Exhibit B-3

	
							
	BARGAIN AND SALE DEED
WITHOUT COVENANT AGAINST GRANTOR'S ACT
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	TITLE NO.
	 
	 
	SECTION:
	 
	 
	 

	 
	 
	 
	BLOCK:
	 
	 
	 

	 
	 
	 
	LOT:
	 
	 
	 

	 
	 
	 
	COUNTY OR TOWN: NEW YORK
	 
	 

	TO
	 
	 
	TAX BILLING ADDRESS: [_________], NEW YORK, NEW
	 

	 
	 
	 
	YORK
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	a
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	RECORD AND RETURN BY MAIL TO:
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	Hunton & Williams LLP
	 
	 

	 
	 
	 
	200 Park Avenue
	 
	 

	 
	 
	 
	New York, New York 10166
	 
	 

	 
	 
	 
	Attn: Laurie Grasso, Esq.
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

Exhibit B-4

EXHIBIT A TO DEED
LEGAL DESCRIPTION

Exhibit B-5

EXHIBIT C
BILL OF SALE
For good and valuable consideration, the receipt of which is hereby acknowledged, 110 WILLIAM, LLC, a Delaware limited liability company (“Seller”), does hereby sell, transfer, and convey to ____________________, a _______________ (“Buyer”), any and all personal property owned by Seller and located on and used in connection with the operation of that certain real property located in the State, County and City of New York, Borough of Manhattan, described on Exhibit A attached hereto and made a part hereof, as such personal property is more particularly described in the attached Schedule 1.
BUYER ACKNOWLEDGES THAT SELLER IS SELLING AND BUYER IS PURCHASING SUCH PERSONAL PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING SUCH PERSONAL PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES AS TO TITLE OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
This Bill of Sale may be executed in two or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument.
Dated this _____ day of __________, 2013.
	
							
	SELLER:
	 
	110 WILLIAM, LLC, a Delaware limited liability
	 

	 
	 
	company
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 
	 

	 
	 
	Name:
	 
	 
	 

	 
	 
	Title:
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	BUYER:
	 
	 
	 
	 
	 
	,

	 
	 
	a
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

Exhibit C-1

SCHEDULE 1 TO BILL OF SALE
LIST OF PERSONAL PROPERTY

Exhibit C-2

EXHIBIT A TO BILL OF SALE
REAL PROPERTY DESCRIPTION

Exhibit C-3

 

EXHIBIT D
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) dated as of __________________, 2013, is between____________________, a _______________ (“Assignor”), and ____________________, a _______________ (“Assignee”).
Assignor is the lessor under certain leases, license agreements and other occupancy agreements  (collectively, the “Leases”) in effect with respect to that certain real property and improvements thereon located in the State, County and City of New York, Borough of Manhattan, and more particularly described in Exhibit A attached hereto (the “Property”), which Leases are described in Schedule 1 attached hereto.
Assignor and Assignee have entered into an Agreement of Purchase and Sale dated as of __________, 2013 (the “Agreement”), pursuant to which Assignee agreed to purchase the Property from Assignor and Assignor agreed to sell the Property to Assignee, on the terms and conditions contained therein.
Assignor desires to assign all of its right, title and interest in and to the Leases to Assignee, and Assignee desires to accept the assignment thereof, on the terms and conditions below.
ACCORDINGLY, the parties hereby agree as follows:
1.As of the date of this Agreement, (the “Conveyance Date”), Assignor hereby assigns to Assignee all of its right, title and interest in and to the Leases, including, without limitation, any and all security deposits under the Leases.  
2.    Assignor hereby agrees to indemnify Assignee against and hold Assignee harmless from any and all liabilities, losses, claims, damages, costs or expenses, including, without limitation, reasonable attorneys’ fees and costs (collectively, “Claims”), originating prior to the Conveyance Date and arising out of the landlord’s obligations under the Leases.
3.    As of the Conveyance Date, Assignee hereby assumes all of Assignor’s rights and obligations under the Leases and agrees to indemnify Assignor against and hold Assignor harmless from any and all Claims originating on or subsequent to the Conveyance Date and arising out of the landlord’s obligations under the Leases.
4.    In the event of any dispute between Assignor and Assignee arising out of the obligations of the parties under this Assignment or concerning the meaning or interpretation of any provision contained herein, the losing party shall pay the prevailing party’s costs and expenses of such dispute, including, without limitation, reasonable attorneys’ fees and costs.
5.    This Assignment shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.
6.    This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
7.    The obligations of Assignor and Assignee are intended to be binding only on the property of the Assignor and Assignee and shall not be personally binding upon, nor shall any resort be had to, the private property of any of their respective trustees, officers, directors or shareholders, investment 

Exhibit D-1

 

manager, partners, officers, directors or shareholders thereof, or any employees or agents of the Assignor or its investment manager or of the Assignee.  The obligations of Assignor are subject to the limitations on liability contained in Section 5.3 of the Agreement.
Assignor and Assignee have executed this Assignment the day and year first above written.
	
								
	ASSIGNOR:
	 
	 
	 
	,

	 
	 
	a
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	 
	 
	 

	 
	 
	 
	Name:
	 
	 
	 

	 
	 
	 
	Title:
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	ASSIGNEE:
	 
	 
	 
	 
	 
	 
	,

	 
	 
	a
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 
	 
	 
	 

	 
	 
	Name:
	 
	 
	 
	 

	 
	 
	Title:
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

Exhibit D-2

 

EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF LEASES
REAL PROPERTY DESCRIPTION

Exhibit D-3

 

SCHEDULE 1 TO ASSIGNMENT AND ASSUMPTION OF LEASES
LIST OF LEASES

Exhibit D-4

 

EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF CONTRACTS, 
WARRANTIES AND GUARANTIES AND OTHER INTANGIBLE PROPERTY
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS, WARRANTIES AND GUARANTIES AND OTHER INTANGIBLE PROPERTY (this “Assignment”) dated as of __________, 2013, is between ____________________, a _______________, a Delaware limited partnership (“Assignor”), and ____________________, a _______________ (“Assignee”).
A.Assignor owns certain real property and certain improvements thereon located in the State, County and City of New York, Borough of Manhattan, and more particularly described in attached Exhibit A (the “Property”).
B.    Assignor has entered into certain contracts which affect the Property, which contracts are described on Exhibit B attached hereto (the “Contracts”).
C.    Assignor and Assignee have entered into an Agreement of Purchase and Sale dated as of __________, 2013 (the “Agreement”), pursuant to which Assignee agreed to purchase the Property from Assignor and Assignor agreed to sell the Property to Assignee, on the terms and conditions contained therein.
D.    Assignor desires to assign to Assignee its interest in the Contracts and in certain permits, warranties, guaranties, and intangible personal property with respect to the Property and Assignee desires to accept the assignment thereof, on the terms and conditions below.
ACCORDINGLY, the parties hereby agree as follows:
1.As of the date of this Assignment (the “Conveyance Date”), Assignor hereby assigns, without recourse or warranty of enforceability except to the extent expressly provided in the Agreement, all of its right, title and interest in and to the following:
(a)    all of the Contracts listed on Exhibit B;
(b)    any warranties and guaranties (“Warranties and Guaranties”) made by or received from any third party with respect to any improvements owned by Assignor on the Property; and
(c)    any intangible property now owned by Assignor in connection with the Property excluding claims by Assignor, if any, arising out of matters occurring before the Conveyance Date.
2.    Assignor hereby agrees to indemnify Assignee against and hold Assignee harmless from any and all liabilities, losses, damages, claims, costs or expenses, including, without limitation, reasonable attorneys’ fees and costs (collectively, “Claims”), originating prior to the Conveyance Date and arising out of Assignor’s obligations under the Contracts.
3.    As of the Conveyance Date, Assignee hereby assumes all of Assignor’s rights and obligations under the Contracts and agrees to indemnify Assignor against and hold Assignor harmless from any and all Claims originating on or subsequent to the Conveyance Date and arising out of Assignee’s obligations under the Contracts.

Exhibit E-1

 

4.    In the event of any dispute between Assignor and Assignee arising out of the obligations of Assignor under this Assignment or concerning the meaning or interpretation of any provision contained herein, the losing party shall pay the prevailing party’s costs and expenses of such dispute, including, without limitation, reasonable attorneys’ fees and costs.
5.    This Assignment shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.
6.    This Assignment may be executed in any number of counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument.
7.    The obligations of Assignor and Assignee are intended to be binding only on the property of the Assignor and Assignee and shall not be personally binding upon, nor shall any resort be had to, the private property of any of their respective trustees, officers, directors or shareholders, investment manager, partners, officers, directors or shareholders thereof, or any employees or agents of the Assignor or its investment manager or of the Assignee.  The obligations of Assignor are subject to the limitations on liability contained in Section 5.3 of the Agreement.
Assignor and Assignee have executed this Assignment the day and year first above written.
	
								
	ASSIGNOR:
	 
	 
	 
	,

	 
	 
	a
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	By:
	 
	 
	 

	 
	 
	 
	Name:
	 
	 
	 

	 
	 
	 
	Title:
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	ASSIGNEE:
	 
	 
	 
	 
	 
	 
	,

	 
	 
	a
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 
	 
	 
	 

	 
	 
	Name:
	 
	 
	 
	 

	 
	 
	Title:
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 

Exhibit E-2

 

EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF CONTRACTS
REAL PROPERTY DESCRIPTION

Exhibit E-3

 

EXHIBIT B TO ASSIGNMENT AND ASSUMPTION OF CONTRACTS
LIST OF APPROVED CONTRACTS

[Will include construction contracts entered into by Seller with respect to work to be performed in the building unless Buyer expressly requests that Seller terminate such contracts by the Closing Date]    

Exhibit E-4

 

EXHIBIT F
TENANT NOTICE LETTER
__________, 2013
		
	To:
	Tenant Occupying Space at ___________________________________ (the “Premises”).

		
	RE:
	Assignment of Lease between ____________________, a _______________ (“Lessor”), and Tenant for the Premises.

This is to notify you that the Premises have been acquired by, and the Lessor’s interest in the Leases has been assigned to, [INSERT BUYER NAME] (“Buyer”).
From and after the [insert Closing Date], you are hereby authorized and directed to make all rental payments under your Lease to [___________], at the following address: [________________].  
Any future inquiries regarding your lease should be directed to [_________________] at the following address: [______________].
	
					
	 
	 
	 
	 
	 

	 
	Very truly yours,
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	,

	 
	a
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	By:
	 
	 
	 

	 
	Name:
	 
	 

	 
	Title:
	 
	 

Exhibit F-1

 

EXHIBIT G
CERTIFICATE OF TRANSFEROR OTHER THAN AN INDIVIDUAL 
(FIRPTA AFFIDAVIT)
Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person.  For U.S. tax purposes (including section 1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity.  To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by ____________________, a _______________ [ENTER NAME OF TRANSFEROR] (“Transferor”), the undersigned hereby certifies the following on behalf of Seller:
1.Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);
2.    Transferor is not a disregarded entity as defined in §1.1445‐2(b)(2)(iii);
3.    Transferor’s U.S. employer identification number is:  __________; and
4.    Transferor’s office address is ___________________________________.
Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment or both.
Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor.
Dated: __________, _____
	
					
	 
	 
	 
	 
	 

	 
	 
	 
	 
	,

	 
	a
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	By:
	 
	 
	 

	 
	Name:
	 
	 

	 
	Title:
	 
	 

NOTICE TO TRANSFEREE (BUYER):  You are required by law to retain this Certificate until the end of the fifth tax year following the tax year in which the transfer takes place and make the Certificate available to the Internal Revenue Service if requested to do so during that period.

Exhibit G-1

 

EXHIBIT H
TENANT ESTOPPEL CERTIFICATE
	
						
	Re:
	Property Address:
	 
	"Property")

	 
	Lease Date:
	 
	 
	 

	 
	Between:
	 
	 
	 
	and

	 
	 
	 
	 
	 
	("Tenant")

	 
	Amended:
	 
	 
	 
	 

	 
	D/B/A Name:
	 
	 
	 

	 
	Square Footage Leased:
	 
	 

	 
	Suite No./Floor:
	 
	 
	("Premises")

	 
	 
	 
	 
	 
	 

The undersigned is the “Tenant” under the above-referenced Lease (“Lease”) covering the above-referenced Premises.  We understand that the existing landlord, _____________ (“Landlord”) intends to transfer the Property to Buyer and that Buyer requires the undersigned to execute and deliver this certificate.  Accordingly, we hereby certify to Landlord, Buyer and Buyer’s lender (if any) as follows: 
1.    The Lease consists of the documents listed on Exhibit A and constitutes the entire agreement between landlord under the Lease (“Landlord”) and Tenant with respect to the Premises and the Lease has not been modified, supplemented or amended in any respect except as set forth above.
2.    The term of the Lease commenced on ____________, ____, and, including any presently exercised option or renewal term, will expire on ________________, 20__.    Tenant has accepted possession of the Premises and is the actual occupant in possession.  All improvements to be constructed on the Premises by Landlord have been completed and accepted by Tenant and any tenant improvement allowances have been paid in full.
3.    As of this date, there exists no default, nor state of facts which, with notice, the passage of time, or both, would result in a default on the part of either Tenant or Landlord.  Tenant has no offset, defense, deduction or claim against Landlord.
4.    Tenant is currently obligated to pay annual rental in monthly installments of $____________ per month and monthly installments of annual rental have been paid through ______________, 20__.  In addition, the Lease requires additional rent based on increases in operating costs and taxes.  All additional charges, including, but not limited to, Tenant’s contribution toward operating expenses, utilities, real estate taxes and other building services presently payable under the terms of the Leases is $__________, and have been paid through ___________, 20__.  No other rent has been paid in advance and Tenant has no claim or defense against Landlord under the Lease and is asserting no offsets or credits against either the rent or Landlord.  
5.    Tenant has delivered to Landlord a security deposit of $___________ [in cash] [in the form of a Letter of Credit] pursuant to the Lease, and has no claim against Landlord for any security or other deposits except the amount stated in this paragraph 5.
6.    Tenant has no option or preferential right to lease or occupy additional space within the property of which the Premises are a part except _____________.  Tenant has no option or preferential right to 

Exhibit H-1

 

purchase all or any part of the Premises.  Tenant has no right to renew or extend the terms of the Lease except ________________.
7.    Tenant has made no agreements with Landlord or its agent or employees concerning free rent, partial rent, rebate of rental payments or any other type of rental or other concession except as expressly set forth in the Lease.
8.    There has not been filed by or against Tenant a petition in bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors, any petition seeking reorganization or arrangement under the bankruptcy laws of the United States, or any state thereof, or any other action brought under said bankruptcy laws with respect to Tenant.
9.    The undersigned has not assigned the Lease or sublet all or any portion of the Premises; the undersigned does not hold the Premises under assignment or sublease, nor does anyone except the undersigned and its employees occupy the Premises. 
This Certificate is made to ____________________ in connection with the prospective purchase by __________________ or its nominee of the property of which the Premises are a part.  This Certificate may be relied on by _________________________ and any other party who acquires an interest in the property of which the Premises are a part in connection with such purchase.
Dated this ____ day of _________________, 201_.

	
			
	 
	 
	 

	By:
	 
	 

	 
	Its:
	 

	 
	 
	"TENANT"

Exhibit H-2

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