Common use of OPTION CONSIDERATION Clause in Contracts

OPTION CONSIDERATION. (a) (i) Owner hereby grants to the Operating Partnership an option (the “Option”) to acquire Owner’s interest in the Operating Lease and all hereditaments thereto and all of Owner’s assets (other than Excluded Assets) as of the Valuation Date (collectively, the “Assets”) for the Consideration determined in accordance with Section 2(b), subject to closing adjustments as provided herein. (ii) Notwithstanding the foregoing, the parties expressly acknowledge and agree that all assets and properties of Owner set forth on Schedule 2(a)(ii) shall be deemed “Excluded Assets” and not be contributed, transferred, assigned, conveyed or delivered to the Operating Partnership pursuant to this Agreement, and the Operating Partnership shall not have any rights or obligations with respect thereto. On or prior to the Closing, Owner must distribute to its Participants all of its cash (excluding from distributable cash (a) any reserves on deposit with lenders for escrow accounts, (b) amounts attributable to prepayments of more than thirty-five (35) days of rent, management fees, other income streams or expense reimbursements, (c) amounts held by Owner as security deposits or amounts otherwise required to be reserved by Owner pursuant to existing agreements with third parties and (d) cash in addition to the foregoing, if any, required to maintain a normalized level (as determined in good faith by the Supervisor, or any successor thereto) of Net Working Capital of Owner (determined based on the most recent quarterly financial statement of Owner)) to its Participants in accordance with the provisions of the applicable organizational documents of Owner (such assets being deemed part of the definition of “Excluded Assets”); provided, however, that other than the distributions by Owner and actions taken in connection with the Consolidation Transaction, Owner has not since the date hereof taken, and shall not take, any action other than actions in the ordinary course consistent with past practice to increase current assets or reduce current liabilities, including by increasing long-term liabilities, decreasing long-term assets, changing reserves or otherwise. The Operating Partnership agrees and acknowledges that none of the Excluded Assets, nor any right, title or interest of Owner or any Participant therein, shall be deemed to constitute a part of the assets and liabilities contributed to the Operating Partnership, and that such assets and liabilities will be retained by Owner at the Closing. The Operating Partnership agrees and acknowledges that Owner must transfer or distribute the Excluded Assets to its Participants at any time and from time to time prior to or after the Closing and no such transfer or distribution shall be deemed to violate or breach any provision under this Agreement or any other documents contemplated hereby; provided, that to the extent such distributions occur after Closing and Helmsley is no longer a Participant in Owner, any distributions in respect of Participation Interests in Owner contributed, directly or indirectly, by any Helmsley entity to the Operating Partnership or its designee as contemplated hereby shall be assigned to such Helmsley entity or its designee. (iii) The Option may be exercised during a term (the “Option Term”) which shall commence on the date of Conclusion and expire on the later of (1) twelve months after the effective date of notice (as determined in accordance with Section 9 hereof) from Owner to the Operating Partnership that the Conclusion has occurred (the “Conclusion Notice”), which notice must be sent within 5 Business Days after the Conclusion, and (2) six months after completion of the Valuation, which completion shall be not later than six months after the date of such notice; provided, however, that the Option Term shall in no event continue past the earlier of the seventh anniversary of the closing of the IPO and the date on which the Consolidation Transaction is abandoned pursuant to a determination of the pricing committee as described in the Consent Solicitation. Exercise of the Option shall be effected by notice (the “Exercise Notice”) from the Operating Partnership to Owner provided in accordance with Section 9 hereof, provided such notice is given prior to the expiration of the Option Term, time being of the essence. Any such exercise must be approved by a majority of the Independent Directors. (iv) Except with respect to Sections 7, 15, 17, 18 and 19, which shall survive any termination of this Agreement, this Agreement shall terminate and be of no further effect, and the Option Term shall expire, if the Requisite Consent (as defined below) of the Participants in Owner to approve this Agreement has not been received on or prior to the closing of the IPO. (i) The dollar value of the consideration to be paid by the Operating Partnership for the Assets (“Consideration”) shall be determined as follows: (A) Promptly upon delivery of the Exercise Notice, Owner and the Operating Partnership shall commence the process for determining the value of the Consideration (the “Valuation”) in accordance with Exhibit A hereto and this Section 2(b), the provisions of which shall govern the Valuation to determine the Consideration; provided, however, that if the Option is exercised prior to the IPO, then (in lieu of the Valuation) the Consideration shall be Owner’s “Value” calculated in the manner set forth on Schedule 2(b)(i)(A) hereto in accordance with the appraisal of Duff & ▇▇▇▇▇▇ LLC as described in the Consent Solicitations. The Option hereunder shall remain in force, regardless of how high or low a Consideration is thereby determined. Contemporaneous with the commencement of the Valuation, Owner shall give the Operating Partnership a notice showing the names and allocable percentage interest in Owner held by each of its Non-Accredited Investors (the “Non-AI List”) and its Accredited Investors (the “AI List”). The AI List shall state the election made by each Participant of Owner that is an Accredited Investor in the applicable Consent Solicitation for the Consideration to be paid in OP Units or Common Stock; provided, however, that the form of Consideration payable to Owner and distributed to Participants in Owner shall be as provided in Section 3(a). (B) At any time when the Conclusion has occurred or is reasonably anticipated and subject to the first proviso in Section 2(b)(i)(A), Owner and the Operating Partnership may engage in negotiations to agree mutually on the Consideration, it being understood that such agreement shall be subject to the approval of both Malkin (as defined below) and Helmsley on behalf of Owner. If at any time Owner and the Operating Partnership shall agree upon the Consideration and other terms of sale of the Assets in a fully signed unconditional purchase agreement, they shall then jointly instruct the termination of any then pending Valuation process. (ii) The Appraiser designated by Owner pursuant to Exhibit A hereto (“Owner’s Appraiser”) shall be selected jointly by PLM and AEM or their survivor (“Malkin”) so long as such designee meets the qualifications described in Section (b) of Exhibit A hereto and receives the prior written approval of Helmsley, not to be unreasonably withheld or delayed; provided, however, that no Helmsley approval shall be required if the Appraiser selected by Malkin is one of the firms listed on Exhibit B hereto or any successor to such firms, it being understood that any Malkin designation of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ as Appraiser shall be effective only if permitting CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ to continue to serve as Helmsley’s adviser in respect of the Consolidation Transaction on terms acceptable to Helmsley. The Supervisor may provide information on behalf of Owner to Owner’s Appraiser, provided that such information shall be limited to (x) historical financial and operating information and reports, signed leases and contracts, and real estate tax records, and (y) subject to Helmsley’s prior written approval, third party reports relating to the Property which were generated prior to the Conclusion, the then current year’s operating and capital budgets for the Assets, any information provided to Duff & ▇▇▇▇▇▇, LLC in connection with its valuation and allocation report and its fairness opinion prepared for the Consent Solicitations and other information relating to the Property from the files of Owner, the Supervisor and its managing agent. All such information provided by the Supervisor to Owner’s Appraiser shall be shared contemporaneously with Helmsley; provided that any materials provided pursuant to clause (y) shall be provided first to Helmsley in connection with obtaining its approval. In any event, the Appraisers shall be given a copy of this Agreement. (iii) Each of Owner and the Operating Partnership shall refrain from communication with the involved professionals at the other’s Appraiser. AEM shall recuse himself from acting on behalf of the Operating Partnership or the Company in any negotiation and Valuation process.

OPTION CONSIDERATION. (a) (i) Owner hereby grants to the Operating Partnership an option (the “Option”) to acquire Owner’s interest in the Operating leasehold estate created by the Ground Lease and all hereditaments thereto and all of Owner’s assets (other than Excluded Assets) as of the Valuation Date (collectively, the “Assets”) for the Consideration determined in accordance with Section 2(b), subject to closing adjustments as provided herein. (ii) Notwithstanding the foregoing, the parties expressly acknowledge and agree that all assets and properties of Owner set forth on Schedule 2(a)(ii) shall be deemed “Excluded Assets” and not be contributed, transferred, assigned, conveyed or delivered to the Operating Partnership pursuant to this Agreement, and the Operating Partnership shall not have any rights or obligations with respect thereto. On or prior to the Closing, Owner must distribute to its Participants all of its cash (excluding from distributable cash (a) any reserves on deposit with lenders for escrow accounts, (b) amounts attributable to prepayments of more than thirty-five (35) days of rent, management fees, other income streams or expense reimbursements, (c) amounts held by Owner as security deposits or amounts otherwise required to be reserved by Owner pursuant to existing agreements with third parties and (d) cash in addition to the foregoing, if any, required to maintain a normalized level (as determined in good faith by the Supervisor, or any successor thereto) of Net Working Capital of Owner (determined based on the most recent quarterly financial statement of Owner)) to its Participants in accordance with the provisions of the applicable organizational documents of Owner (such assets being deemed part of the definition of “Excluded Assets”); provided, however, that other than the distributions by Owner and actions taken in connection with the Consolidation Transaction, Owner has not since the date hereof taken, and shall not take, any action other than actions in the ordinary course consistent with past practice to increase current assets or reduce current liabilities, including by increasing long-term liabilities, decreasing long-term assets, changing reserves or otherwise. The Operating Partnership agrees and acknowledges that none of the Excluded Assets, nor any right, title or interest of Owner or any Participant therein, shall be deemed to constitute a part of the assets and liabilities contributed to the Operating Partnership, and that such assets and liabilities will be retained by Owner at the Closing. The Operating Partnership agrees and acknowledges that Owner must transfer or distribute the Excluded Assets to its Participants at any time and from time to time prior to or after the Closing and no such transfer or distribution shall be deemed to violate or breach any provision under this Agreement or any other documents contemplated hereby; provided, that to the extent such distributions occur after Closing and Helmsley is no longer a Participant in Owner, any distributions in respect of Participation Interests in Owner contributed, directly or indirectly, by any Helmsley entity to the Operating Partnership or its designee as contemplated hereby shall be assigned to such Helmsley entity or its designee. (iii) The Option may be exercised during a term (the “Option Term”) which shall commence on the date of Conclusion and expire on the later of (1) twelve months after the effective date of notice (as determined in accordance with Section 9 hereof) from Owner to the Operating Partnership that the Conclusion has occurred (the “Conclusion Notice”), which notice must be sent within 5 Business Days after the Conclusion, and (2) six months after completion of the Valuation, which completion shall be not later than six months after the date of such notice; provided, however, that the Option Term shall in no event continue past the earlier of the seventh anniversary of the closing of the IPO and the date on which the Consolidation Transaction is abandoned pursuant to a determination of the pricing committee as described in the Consent Solicitation. Exercise of the Option shall be effected by notice (the “Exercise Notice”) from the Operating Partnership to Owner provided in accordance with Section 9 hereof, provided such notice is given prior to the expiration of the Option Term, time being of the essence. Any such exercise must be approved by a majority of the Independent Directors. (iv) Except with respect to Sections 7, 15, 17, 18 and 19, which shall survive any termination of this Agreement, this Agreement shall terminate and be of no further effect, and the Option Term shall expire, if the Requisite Consent (as defined below) of the Participants in Owner to approve this Agreement has not been received on or prior to the closing of the IPO. (i) The dollar value of the consideration to be paid by the Operating Partnership for the Assets (“Consideration”) shall be determined as follows: (A) Promptly upon delivery of the Exercise Notice, Owner and the Operating Partnership shall commence the process for determining the value of the Consideration (the “Valuation”) in accordance with Exhibit A hereto and this Section 2(b), the provisions of which shall govern the Valuation to determine the Consideration; provided, however, that if the Option is exercised prior to the IPO, then (in lieu of the Valuation) the Consideration shall be Owner’s “Value” calculated in the manner set forth on Schedule 2(b)(i)(A) hereto in accordance with the appraisal of Duff & ▇▇▇▇▇▇ LLC as described in the Consent Solicitations. The Option hereunder shall remain in force, regardless of how high or low a Consideration is thereby determined. Contemporaneous with the commencement of the Valuation, Owner shall give the Operating Partnership a notice showing the names and allocable percentage interest in Owner held by each of its Non-Accredited Investors (the “Non-AI List”) and its Accredited Investors (the “AI List”). The AI List shall state the election made by each Participant of Owner that is an Accredited Investor in the applicable Consent Solicitation for the Consideration to be paid in OP Units or Common Stock; provided, however, that the form of Consideration payable to Owner and distributed to Participants in Owner shall be as provided in Section 3(a). (B) At any time when the Conclusion has occurred or is reasonably anticipated and subject to the first proviso in Section 2(b)(i)(A), Owner and the Operating Partnership may engage in negotiations to agree mutually on the Consideration, it being understood that such agreement shall be subject to the approval of both Malkin (as defined below) and Helmsley on behalf of Owner. If at any time Owner and the Operating Partnership shall agree upon the Consideration and other terms of sale of the Assets in a fully signed unconditional purchase agreement, they shall then jointly instruct the termination of any then pending Valuation process. (ii) The Appraiser designated by Owner pursuant to Exhibit A hereto (“Owner’s Appraiser”) shall be selected jointly by PLM and AEM or their survivor (“Malkin”) so long as such designee meets the qualifications described in Section (b) of Exhibit A hereto and receives the prior written approval of Helmsley, not to be unreasonably withheld or delayed; provided, however, that no Helmsley approval shall be required if the Appraiser selected by Malkin is one of the firms listed on Exhibit B hereto or any successor to such firms, it being understood that any Malkin designation of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ as Appraiser shall be effective only if permitting CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ to continue to serve as Helmsley’s adviser in respect of the Consolidation Transaction on terms acceptable to Helmsley. The Supervisor may provide information on behalf of Owner to Owner’s Appraiser, provided that such information shall be limited to (x) historical financial and operating information and reports, signed leases and contracts, and real estate tax records, and (y) subject to Helmsley’s prior written approval, third party reports relating to the Property which were generated prior to the Conclusion, the then current year’s operating and capital budgets for the Assets, any information provided to Duff & ▇▇▇▇▇▇, LLC in connection with its valuation and allocation report and its fairness opinion prepared for the Consent Solicitations and other information relating to the Property from the files of Owner, the Supervisor and its managing agent. All such information provided by the Supervisor to Owner’s Appraiser shall be shared contemporaneously with Helmsley; provided that any materials provided pursuant to clause (y) shall be provided first to Helmsley in connection with obtaining its approval. In any event, the Appraisers shall be given a copy of this Agreement. (iii) Each of Owner and the Operating Partnership shall refrain from communication with the involved professionals at the other’s Appraiser. AEM shall recuse himself from acting on behalf of the Operating Partnership or the Company in any negotiation and Valuation process.

OPTION CONSIDERATION. (a) (i) Owner hereby grants As promptly as reasonably practicable following the Effective Time, and in any event not later than the second business day thereafter, Parent shall transfer, or cause to be transferred, to the Operating Partnership an account designated by the applicable Option Trustee, in cooperation with any plan administrator under the applicable stock option (the “Option”) to acquire Owner’s interest in the Operating Lease and all hereditaments thereto and all of Owner’s assets (other than Excluded Assets) as or stock appreciation rights plan of the Valuation Date (collectivelyCompany, the “Assets”aggregate Option Consideration that holders of Options or Stock Appreciation Rights (including vested and unvested In the Money Options that are Company 102 Securities) for the Consideration determined in accordance with Section 2(b), subject are entitled to closing adjustments as provided herein. (ii) Notwithstanding the foregoing, the parties expressly acknowledge and agree that all assets and properties of Owner set forth on Schedule 2(a)(ii) shall be deemed “Excluded Assets” and not be contributed, transferred, assigned, conveyed or delivered to the Operating Partnership receive pursuant to this Agreement, and the Operating Partnership shall not have any rights or obligations with respect thereto. On or prior to the Closing, Owner must distribute to its Participants all of its cash (excluding from distributable cash (a) any reserves on deposit with lenders for escrow accounts, (b) amounts attributable to prepayments of more than thirty-five (35) days of rent, management fees, other income streams or expense reimbursements, (c) amounts held by Owner as security deposits or amounts otherwise required to be reserved by Owner pursuant to existing agreements with third parties and (d) cash in addition to the foregoing, if any, required to maintain a normalized level (as determined in good faith by the Supervisor, or any successor thereto) of Net Working Capital of Owner (determined based on the most recent quarterly financial statement of Owner)) to its Participants in accordance with the provisions of the applicable organizational documents of Owner (such assets being deemed part of the definition of “Excluded Assets”Section 2.3(a); provided, howeverthat in lieu of making such deposit, that Parent may elect to pay such Option Consideration directly to such holders through the Surviving Corporation’s or its applicable Subsidiaries’ ordinary payroll mechanisms or through some other than the distributions by Owner and actions taken in connection with the Consolidation Transactionpayment procedure, Owner has not since the date hereof taken, and shall not take, any action other than actions unless such payment mechanism will result in the ordinary course consistent with past practice loss of a Tax benefit otherwise available to increase current assets the applicable Option or reduce current liabilities, including Stock Appreciation Right holder or is prohibited by increasing long-term liabilities, decreasing long-term assets, changing reserves or otherwise. The Operating Partnership agrees and acknowledges that none the terms of the Excluded Assets, nor any right, title applicable Company Stock Plan or interest of Owner or any Participant therein, shall be deemed to constitute a part of the assets applicable Law. As soon as reasonably practicable thereafter (and liabilities contributed to the Operating Partnership, and that such assets and liabilities will be retained by Owner at the Closing. The Operating Partnership agrees and acknowledges that Owner must transfer or distribute the Excluded Assets to its Participants at any time and from time to time prior to or after the Closing and no such transfer or distribution shall be deemed to violate or breach any provision under this Agreement or any other documents contemplated hereby; provided, that except to the extent Parent elects to make such distributions occur after Closing and Helmsley is no longer a Participant in Owner, any distributions in respect of Participation Interests in Owner contributed, payments directly or indirectly, by any Helmsley entity to the Operating Partnership or its designee as contemplated hereby by the preceding provision), the Option Trustee, in coordination with the applicable plan administrator, shall be assigned pay to such Helmsley entity each holder of Options or its designee. Stock Appreciation Rights (iiiother than holders of Company 102 Securities) The Option may be exercised during a term the amounts contemplated by Section 2.3(a), without interest and less applicable deductions and withholding for Tax. All payments with respect to Company 102 Securities, as set forth on Section 3.2(a) of the Company Disclosure Schedule (the “Option Term”) which shall commence on the date of Conclusion and expire on the later of (1) twelve months after the effective date of notice (as determined in accordance with Section 9 hereof) from Owner to the Operating Partnership that the Conclusion has occurred (the “Conclusion NoticeSchedule”), which notice must shall be sent within 5 Business Days delivered, or caused to be delivered, by Parent to the 102 Trustee, as soon as reasonably practicable after the Conclusion, and Effective Time (2) six months after completion of the Valuation, which completion shall be but not later than six months after the date of such notice; providedsecond business day thereafter), howeverto be held and distributed pursuant to the agreement with the 102 Trustee, that the Option Term shall in no event continue past the earlier terms of the seventh anniversary respective Company Stock Plan governing the applicable Option or Stock Appreciation Right and applicable Laws (including the provisions of Section 102 of the closing of the IPO Ordinance and the date on which the Consolidation Transaction is abandoned pursuant to a determination of the pricing committee as described in the Consent Solicitationrules and regulations promulgated thereunder). Exercise of the Option The 102 Trustee shall be effected by notice (the “Exercise Notice”) from the Operating Partnership to Owner provided in accordance comply with Section 9 hereof, provided such notice is given prior to the expiration of the Option Term, time being of the essence. Any such exercise must be approved by a majority of the Independent Directors. (iv) Except any applicable Israeli Tax withholding requirements with respect to Sections 7, 15, 17, 18 and 19, which shall survive any termination of this Agreement, this Agreement shall terminate and be of no further effect, and the Option Term shall expire, if the Requisite Consent (as defined below) of the Participants in Owner to approve this Agreement has not been received on or prior to the closing of the IPO. (i) The dollar value of the consideration to be paid by the Operating Partnership for the Assets (“Consideration”) shall be determined as follows: (A) Promptly upon delivery of the Exercise Notice, Owner and the Operating Partnership shall commence the process for determining the value of the Consideration (the “Valuation”) in accordance with Exhibit A hereto and this Section 2(b), the provisions of which shall govern the Valuation to determine the Consideration; provided, however, that if the Option is exercised prior to the IPO, then (in lieu of the Valuation) the Consideration shall be Owner’s “Value” calculated in the manner set forth on Schedule 2(b)(i)(A) hereto in accordance with the appraisal of Duff & ▇▇▇▇▇▇ LLC as described in the Consent Solicitations. The Option hereunder shall remain in force, regardless of how high or low a Consideration is thereby determined. Contemporaneous with the commencement of the Valuation, Owner shall give the Operating Partnership a notice showing the names and allocable percentage interest in Owner held by each of its Non-Accredited Investors (the “Non-AI List”) and its Accredited Investors (the “AI List”). The AI List shall state the election made by each Participant of Owner that is an Accredited Investor in the applicable Consent Solicitation for the Consideration to be paid in OP Units or Common Stock; provided, however, that the form of Consideration payable to Owner and distributed to Participants in Owner shall be as provided in Section 3(a). (B) At any time when the Conclusion has occurred or is reasonably anticipated and subject to the first proviso in Section 2(b)(i)(A), Owner and the Operating Partnership may engage in negotiations to agree mutually on the Consideration, it being understood that such agreement shall be subject to the approval of both Malkin (as defined below) and Helmsley on behalf of Owner. If at any time Owner and the Operating Partnership shall agree upon the Consideration and other terms of sale of the Assets in a fully signed unconditional purchase agreement, they shall then jointly instruct the termination of any then pending Valuation process. (ii) The Appraiser designated by Owner pursuant to Exhibit A hereto (“Owner’s Appraiser”) shall be selected jointly by PLM and AEM or their survivor (“Malkin”) so long as such designee meets the qualifications described in Section (b) of Exhibit A hereto and receives the prior written approval of Helmsley, not to be unreasonably withheld or delayed; provided, however, that no Helmsley approval shall be required if the Appraiser selected by Malkin is one of the firms listed on Exhibit B hereto or any successor to such firms, it being understood that any Malkin designation of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ as Appraiser shall be effective only if permitting CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ to continue to serve as Helmsley’s adviser payments in respect of Company 102 Securities and with any procedures required by the Consolidation Transaction on terms acceptable Options Tax Ruling, if obtained. Any amounts deposited with the 102 Trustee that are not needed for payment to Helmsley. The Supervisor may provide information on behalf holders of Owner to Owner’s Appraiser, provided that such information Options or Stock Appreciation Right or for Taxes shall be limited returned to (x) historical financial and operating information and reports, signed leases and contracts, and real estate tax records, and (y) subject to Helmsley’s prior written approval, third party reports relating to the Property which were generated prior to the Conclusion, the then current year’s operating and capital budgets for the Assets, any information provided to Duff & ▇▇▇▇▇▇, LLC in connection with its valuation and allocation report and its fairness opinion prepared for the Consent Solicitations and other information relating to the Property from the files of Owner, the Supervisor and its managing agent. All such information provided by the Supervisor to Owner’s Appraiser shall be shared contemporaneously with Helmsley; provided that any materials provided pursuant to clause (y) shall be provided first to Helmsley in connection with obtaining its approval. In any event, the Appraisers shall be given a copy of this Agreement. (iii) Each of Owner and the Operating Partnership shall refrain from communication with the involved professionals at the other’s Appraiser. AEM shall recuse himself from acting on behalf of the Operating Partnership Parent or the Company in any negotiation and Valuation processSurviving Corporation.

OPTION CONSIDERATION. Simultaneous with the execution of this Option to Purchase, Tenant/Buyer has paid the sum of Dollars (a$ ) (i) Owner hereby grants as a non-refundable option fee. In addition to this cash payment, the Tenant/▇▇▇▇▇ agrees to make, to the Operating Partnership an owner's reasonable satisfaction, any and all repairs or improvements to the property as part of the option (consideration. All labor and materials necessary to complete the “Option”) above repairs and improvements shall be at the expense of the Tenant/Buyer. Owner reserves the right to acquire Owner’s interest approve materials for inclusion in the Operating Lease and all hereditaments thereto and all property. Tenant/Buyer will pick-up or arrange for delivery of Owner’s assets (other than Excluded Assets) as said materials. All materials attached to the property shall become part of the Valuation Date (collectively, the “Assets”) for the Consideration determined in accordance with Section 2(b), subject to closing adjustments as provided herein. (ii) Notwithstanding the foregoing, the parties expressly acknowledge property and agree that all assets and properties of Owner set forth on Schedule 2(a)(ii) shall be deemed “Excluded Assets” and not be contributed, transferred, assigned, conveyed or delivered to the Operating Partnership pursuant to this Agreement, and the Operating Partnership shall not have any rights or obligations with respect thereto. On or prior to the Closing, Owner must distribute to its Participants all of its cash (excluding from distributable cash (a) any reserves on deposit with lenders for escrow accounts, (b) amounts attributable to prepayments of more than thirty-five (35) days of rent, management fees, other income streams or expense reimbursements, (c) amounts held by Owner as security deposits or amounts otherwise required to be reserved by Owner pursuant to existing agreements with third parties and (d) cash in addition to the foregoing, if any, required to maintain a normalized level (as determined in good faith removed by the SupervisorTenant/Buyer whether paid for by the Tenant/Buyer or by the Owner. This option consideration, or any successor theretowhen paid and completed, gives the Tenant/Buyer the right and option to purchase the property within the option period as outlined in clause (2) of Net Working Capital of Owner (determined based on the most recent quarterly financial statement of Owner)) to its Participants above, in accordance with the provisions of this agreement. When option fee is paid and the applicable organizational documents above-listed improvements are fully completed, an amount equal to dollars ($ ) shall be credited against the purchase price of Owner (such assets being deemed the property if the Tenant/Buyer elects to exercise the option and purchase the property; however, no part of the definition of “Excluded Assets”); provided, however, that other than the distributions by Owner and actions taken in connection with the Consolidation Transaction, Owner has not since the date hereof taken, and option fee nor Tenant/Buyer's expenses for materials or labor shall not take, any action other than actions be refundable in the ordinary course event that the Tenant/Buyer elects not to exercise the Option to Purchase. Work or repairs undertaken by the Tenant will be undertaken only if the Tenant is competent and qualified to perform said repairs. Tenant will be responsible to assure that all work is performed in a safe manner consistent with past practice to increase current assets or reduce current liabilitiesapplicable codes and ordinances, including by increasing long-term liabilities, decreasing long-term assets, changing reserves or otherwise. The Operating Partnership agrees and acknowledges that none of the Excluded Assets, nor any right, title or interest of Owner or any Participant therein, shall be deemed to constitute a part of the assets and liabilities contributed to the Operating Partnership, and that such assets and liabilities will be retained by Owner at the Closing. The Operating Partnership agrees and acknowledges that Owner must transfer or distribute the Excluded Assets to its Participants at any time and from time to time prior to or after the Closing and no such transfer or distribution shall be deemed to violate or breach any provision under this Agreement or any other documents contemplated hereby; provided, that to the extent such distributions occur after Closing and Helmsley is no longer a Participant in Owner, any distributions in respect of Participation Interests in Owner contributed, directly or indirectly, by any Helmsley entity to the Operating Partnership or its designee as contemplated hereby shall be assigned to such Helmsley entity or its designee. (iii) The Option may be exercised during a term (the “Option Term”) which shall commence on the date of Conclusion and expire on the later of (1) twelve months after the effective date of notice (as determined in accordance with Section 9 hereof) from Owner to the Operating Partnership that the Conclusion has occurred (the “Conclusion Notice”), which notice must be sent within 5 Business Days after the Conclusion, and (2) six months after completion of the Valuation, which completion shall be not later than six months after the date of such notice; provided, however, that the Option Term shall in no event continue past the earlier of the seventh anniversary of the closing of the IPO and the date on which the Consolidation Transaction is abandoned pursuant to a determination of the pricing committee as described in the Consent Solicitation. Exercise of the Option shall be effected by notice (the “Exercise Notice”) from the Operating Partnership to Owner provided in accordance with Section 9 hereof, provided such notice is given prior to the expiration of the Option Term, time being of the essence. Any such exercise must be approved by a majority of the Independent Directors. (iv) Except with respect to Sections 7, 15, 17, 18 and 19, which shall survive any termination of this Agreement, this Agreement shall terminate and be of no further effect, and the Option Term shall expire, if the Requisite Consent (as defined below) of the Participants in Owner to approve this Agreement has not been received on or prior to the closing of the IPO. (i) The dollar value of the consideration to be paid whether by the Operating Partnership for Tenant or by persons hired by or otherwise authorized by the Assets (“Consideration”) shall be determined as follows: (A) Promptly upon delivery of the Exercise Notice, Owner and the Operating Partnership shall commence the process for determining the value of the Consideration (the “Valuation”) in accordance with Exhibit A hereto and this Section 2(b), the provisions of which shall govern the Valuation to determine the Consideration; provided, however, that if the Option is exercised prior to the IPO, then (in lieu of the Valuation) the Consideration shall be Owner’s “Value” calculated in the manner set forth on Schedule 2(b)(i)(A) hereto in accordance with the appraisal of Duff & Tenant. ▇▇▇▇▇▇ LLC as described in further agrees that any person or persons performing work will be responsible for obtaining insurance. Tenant will hold the Consent Solicitations. The Option hereunder shall remain in force, regardless of how high or low a Consideration is thereby determined. Contemporaneous with the commencement of the Valuation, Owner shall give the Operating Partnership a notice showing the names and allocable percentage interest in Owner held by each of its Non-Accredited Investors (the “Non-AI List”) and its Accredited Investors (the “AI List”). The AI List shall state the election made by each Participant of Owner that is an Accredited Investor in the applicable Consent Solicitation for the Consideration to be paid in OP Units or Common Stock; provided, however, that the form of Consideration payable to Owner and distributed to Participants in Owner shall be as provided in Section 3(a). (B) At any time when the Conclusion has occurred or is reasonably anticipated and subject to the first proviso in Section 2(b)(i)(A), Owner and the Operating Partnership may engage in negotiations to agree mutually Owner's agents free from harm, litigation, and/or claims from any and all persons arising from work or repairs performed on the Consideration, it being understood that such agreement shall be subject premises. Tenant/buyer has been given the opportunity to have the approval of both Malkin (as defined below) property inspected and Helmsley on behalf of Owner. If at any time Owner and the Operating Partnership shall agree upon the Consideration and other terms of sale of the Assets in a fully signed unconditional purchase by signing this agreement, they shall then jointly instruct agrees to accept the termination of any then pending Valuation processproperty in “as-is” condition. (ii) The Appraiser designated by Owner pursuant to Exhibit A hereto (“Owner’s Appraiser”) shall be selected jointly by PLM and AEM or their survivor (“Malkin”) so long as such designee meets the qualifications described in Section (b) of Exhibit A hereto and receives the prior written approval of Helmsley, not to be unreasonably withheld or delayed; provided, however, that no Helmsley approval shall be required if the Appraiser selected by Malkin is one of the firms listed on Exhibit B hereto or any successor to such firms, it being understood that any Malkin designation of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ as Appraiser shall be effective only if permitting CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ to continue to serve as Helmsley’s adviser in respect of the Consolidation Transaction on terms acceptable to Helmsley. The Supervisor may provide information on behalf of Owner to Owner’s Appraiser, provided that such information shall be limited to (x) historical financial and operating information and reports, signed leases and contracts, and real estate tax records, and (y) subject to Helmsley’s prior written approval, third party reports relating to the Property which were generated prior to the Conclusion, the then current year’s operating and capital budgets for the Assets, any information provided to Duff & ▇▇▇▇▇▇, LLC in connection with its valuation and allocation report and its fairness opinion prepared for the Consent Solicitations and other information relating to the Property from the files of Owner, the Supervisor and its managing agent. All such information provided by the Supervisor to Owner’s Appraiser shall be shared contemporaneously with Helmsley; provided that any materials provided pursuant to clause (y) shall be provided first to Helmsley in connection with obtaining its approval. In any event, the Appraisers shall be given a copy of this Agreement. (iii) Each of Owner and the Operating Partnership shall refrain from communication with the involved professionals at the other’s Appraiser. AEM shall recuse himself from acting on behalf of the Operating Partnership or the Company in any negotiation and Valuation process.

OPTION CONSIDERATION. Optionee agrees to pay to Optionor option consideration (athe “Option Consideration”), as follows. No later than 5:00 p.m. Pacific Time on the day that is three (3) business days after the execution of this Agreement by Optionee and Optionor, Optionee shall deposit with Escrow Holder (as hereinafter defined) a sum equal to One Million Dollars ($1,000,000.00) in immediately available funds (the “Deposit”). A portion of the Deposit shall be immediately released to Optionor that is equal to the portion of verifiable expenses incurred by Optionor as described in Exhibit B-1 hereto (the “Initial Disbursement”), which the parties agree Optionee would have otherwise been required to spend in its due diligence. The balance of the Deposit shall be used, in whole or in part, to reimburse Optionor and Optionee for all costs (collectively, “Entitlement Costs”) related to the Entitlements (defined below) incurred after July 15, 2011 and prior to Closing or the earlier termination of this Agreement, as initially detailed in Exhibit B hereto, subject to modification or additions agreed to by Optionee and Optionor in writing after the date of this Agreement, which agreement shall not be unreasonably withheld or delayed by either party; provided, that notwithstanding the foregoing, Optionee may withhold its consent in its sole and absolute discretion with respect to any such subsequent modifications or additions requested by Optionor where such request would result in additional subsequent disbursements in excess of $50,000 for all such additional subsequent disbursements requested by and/or made to Optionor. Such subsequent reimbursement for Entitlement Costs (each a “Subsequent Disbursement” and collectively the “Subsequent Disbursements”), which shall be for vendors and amounts specifically identified in Exhibit B hereto or otherwise agreed to in writing by the parties under the approval standard provided in the immediately preceding sentence, shall occur no less frequently than monthly following the Effective Date, within 10 days of submission of invoices to Escrow Holder, provided that (i) Owner hereby grants contracts with each such vendor shall either be jointly entered into by Optionor and Optionee, or else, in case of any contract entered into solely by Optionee and any such vendor, shall provide that Optionor is an intended third party beneficiary of such contract, as a condition to any Subsequent Disbursement with respect to such contract; (ii) a copy of each such invoice, together with evidence of payment, shall be submitted by the Operating Partnership an option submitting party (the “OptionSubmitting Party”) to acquire Owner’s interest the other party hereto (the “Non-Submitting Party”), simultaneously with the submission of such invoice to Escrow Holder, and (iii) such invoice shall be deemed approved by the Non-Submitting Party and reimbursed to the Submitting Party within 10 days of submission unless, prior to the end of such 10-day period, the Non-Submitting Party notifies both the Submitting Party and Escrow Holder that said invoice is not to be reimbursed (an “Invoice Disapproval”). The parties agree that neither party may exercise an Invoice Disapproval unless the invoice in question is not entitled to be reimbursed under the terms of this Article 2, and in the Operating Lease and all hereditaments thereto and all event of Owner’s assets (other than Excluded Assets) as of the Valuation Date (collectively, the “Assets”) for the Consideration determined in accordance with Section 2(b), subject to closing adjustments as provided herein. (ii) Notwithstanding the foregoingany Invoice Disapproval, the parties expressly acknowledge agree to cooperate expeditiously and agree that all assets and properties of Owner set forth on Schedule 2(a)(ii) shall be deemed “Excluded Assets” and not be contributed, transferred, assigned, conveyed or delivered to the Operating Partnership pursuant to this Agreement, and the Operating Partnership shall not have any rights or obligations with respect thereto. On or prior to the Closing, Owner must distribute to its Participants all of its cash (excluding from distributable cash (a) any reserves on deposit with lenders for escrow accounts, (b) amounts attributable to prepayments of more than thirty-five (35) days of rent, management fees, other income streams or expense reimbursements, (c) amounts held by Owner as security deposits or amounts otherwise required to be reserved by Owner pursuant to existing agreements with third parties and (d) cash in addition to the foregoing, if any, required to maintain a normalized level (as determined in good faith by to determine whether such Invoice Disapproval was justified. If Optionee fails to make the SupervisorDeposit as and when required hereunder, or any successor thereto) of Net Working Capital of Owner (determined based on the most recent quarterly financial statement of Owner)) to its Participants in accordance with the provisions of the applicable organizational documents of Owner (such assets being deemed part of the definition of “Excluded Assets”); provided, however, that other than the distributions by Owner and actions taken in connection with the Consolidation Transaction, Owner has not since the date hereof takenthis Agreement shall automatically terminate without notice, and neither party shall not takehave any further rights, any action other than actions duties or obligations under this Agreement or with respect to the Property, except as otherwise specifically set forth in this Agreement. Optionor and Optionee hereby instruct Escrow Holder to place the ordinary course consistent Deposit in an interest bearing account, with past practice all interest thereon to increase current assets or reduce current liabilities, including by increasing long-term liabilities, decreasing long-term assets, changing reserves or otherwise. The Operating Partnership agrees and acknowledges that none of the Excluded Assets, nor any right, title or interest of Owner or any Participant therein, shall be deemed to constitute considered a part of the assets Deposit (other than the portion of the Deposit that is released as an Initial Disbursement or a Subsequent Disbursement, if any). Escrow Holder is hereby irrevocably authorized and liabilities contributed instructed by the parties as follows: (a) to release the entire amount of the Initial Disbursement to Optionor, immediately after receipt of the Deposit; and (b) to make each subsequent disbursement to Optionor and Optionee on a monthly basis within 10 days of submission of invoices to Escrow Holder, subject to the Operating Partnershiprequirements described above. Subject to Subsequent Disbursements to be made to Optionee from the Deposit as provided above, and that such assets and liabilities will be retained except where escrow fails to close due to a default by Owner at the Closing. The Operating Partnership agrees and acknowledges that Owner must transfer or distribute the Excluded Assets to its Participants at any time and from time to time prior to or after the Closing and no such transfer or distribution shall be deemed to violate or breach any provision Optionor under this Agreement or any other documents contemplated hereby; providedas otherwise specifically provided in this Agreement, that to both of the extent such distributions occur after Closing and Helmsley is no longer a Participant in Owner, any distributions in respect of Participation Interests in Owner contributed, directly or indirectly, by any Helmsley entity to the Operating Partnership or its designee as contemplated hereby following shall be assigned to such Helmsley entity or its designee. (iii) The Option may be exercised during a term (the “Option Term”) which shall commence on the date of Conclusion and expire on the later of apply: (1) twelve months after the effective date Initial Disbursement shall constitute Option Consideration and shall be deemed nonrefundable to Optionee as of notice (as determined in accordance with Section 9 hereof) from Owner to the Operating Partnership that the Conclusion has occurred (the “Conclusion Notice”), which notice must be sent within 5 Business Days after the ConclusionEffective Date, and (2) six months after completion the remainder of the Valuation, which completion Deposit shall constitute additional Option Consideration and shall be not later than six months after deemed nonrefundable to Optionee upon the date of such notice; provided, however, that the Option Term shall in no event continue past the earlier giving of the seventh anniversary of the closing of the IPO and the date on which the Consolidation Transaction is abandoned pursuant to a determination of the pricing committee as described in the Consent SolicitationApproval Notice. Exercise of the Option shall be effected by notice (the “Exercise Notice”) from the Operating Partnership to Owner provided in accordance with Section 9 hereof, provided such notice is given prior to the expiration of the Option Term, time being of the essence. Any such exercise must be approved by a majority of the Independent Directors. (iv) Except with respect to Sections 7, 15, 17, 18 and 19, which shall survive any termination of this Agreement, this Agreement shall terminate and be of no further effect, and the Option Term shall expire, if the Requisite Consent (as defined below) of the Participants in Owner to approve this Agreement has not been received on or prior to the closing of the IPO. (i) The dollar value of the consideration to be paid by the Operating Partnership for the Assets (“Consideration”) shall be determined as follows: (A) Promptly upon delivery of the Exercise Notice, Owner and the Operating Partnership shall commence the process for determining the value of the Consideration (the “Valuation”) in accordance with Exhibit A hereto and this Section 2(b), the provisions of which shall govern the Valuation to determine the Consideration; provided, however, that if Provided the Option is exercised prior to the IPO, then (in lieu of the Valuation) the Consideration shall be Owner’s “Value” calculated in the manner set forth on Schedule 2(b)(i)(A) hereto in accordance with the appraisal of Duff & ▇▇▇▇▇▇ LLC as described in the Consent Solicitations. The Option hereunder shall remain in forceArticle 1 above, regardless of how high or low a Consideration is thereby determined. Contemporaneous with the commencement any remaining portion of the Valuation, Owner shall give the Operating Partnership a notice showing the names Deposit and allocable percentage accrued interest in Owner held by each of its Non-Accredited Investors (the “Non-AI List”) and its Accredited Investors (the “AI List”). The AI List shall state the election made by each Participant of Owner that is an Accredited Investor in the applicable Consent Solicitation for the Consideration to be paid in OP Units or Common Stock; provided, however, that the form of Consideration payable to Owner and distributed to Participants in Owner shall be as provided applied toward the Purchase Price at the Closing (hereinafter defined in Section 3(a). (B) At any time when the Conclusion has occurred or is reasonably anticipated and subject to the first proviso in Section 2(b)(i)(A8.1), Owner and but in no event shall the Operating Partnership may engage in negotiations to agree mutually on the Consideration, it being understood that such agreement shall be subject to the approval of both Malkin (as defined below) and Helmsley on behalf of Owner. If at any time Owner and the Operating Partnership shall agree upon the Consideration and other terms of sale amount of the Assets in a fully signed unconditional purchase agreement, they shall then jointly instruct the termination of Initial Disbursement or any then pending Valuation process. (ii) The Appraiser designated by Owner pursuant to Exhibit A hereto (“Owner’s Appraiser”) shall be selected jointly by PLM and AEM or their survivor (“Malkin”) so long as such designee meets the qualifications described in Section (b) of Exhibit A hereto and receives the prior written approval of Helmsley, not to be unreasonably withheld or delayed; provided, however, that no Helmsley approval shall be required if the Appraiser selected by Malkin is one of the firms listed on Exhibit B hereto or any successor to such firms, it being understood that any Malkin designation of CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ as Appraiser shall Subsequent Disbursements be effective only if permitting CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ to continue to serve as Helmsley’s adviser in respect of so applied toward the Consolidation Transaction on terms acceptable to Helmsley. The Supervisor may provide information on behalf of Owner to Owner’s Appraiser, provided that such information shall be limited to (x) historical financial and operating information and reports, signed leases and contracts, and real estate tax records, and (y) subject to Helmsley’s prior written approval, third party reports relating to the Property which were generated prior to the Conclusion, the then current year’s operating and capital budgets for the Assets, any information provided to Duff & ▇▇▇▇▇▇, LLC in connection with its valuation and allocation report and its fairness opinion prepared for the Consent Solicitations and other information relating to the Property from the files of Owner, the Supervisor and its managing agent. All such information provided by the Supervisor to Owner’s Appraiser shall be shared contemporaneously with Helmsley; provided that any materials provided pursuant to clause (y) shall be provided first to Helmsley in connection with obtaining its approval. In any event, the Appraisers shall be given a copy of this AgreementPurchase Price. (iii) Each of Owner and the Operating Partnership shall refrain from communication with the involved professionals at the other’s Appraiser. AEM shall recuse himself from acting on behalf of the Operating Partnership or the Company in any negotiation and Valuation process.