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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
______________
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 19, 1997
SL GREEN REALTY CORP.
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-13199 13-3956775
(Commission File Number) (IRS Employer Id. Number)
70 West 36th Street 10018
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 594-2700
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As discussed in the prospectus dated August 14, 1997 of SL Green Realty
Corp. (the "Company") contained in the Company's registration statement on
Form S-11 (333-29329) relating to the Company's initial public offering of
common stock (the "IPO"), on June 27, 1997, Green 17 Battery LLC ("17
Battery LLC"), a limited liability company owned by Stephen L. Green,
Chairman, President and Chief Executive Officer of the Company, contracted to
acquire from an unaffiliated seller an interest in 17 Battery Place, New
York, New York (the "Property") for an aggregate purchase price of $59.0
million pursuant to an agreement of sale (the "Initial Agreement"). On July
25, 1997, SL Green Operating Partnership, L.P. (the "Operating Partnership"),
of which the Company is the sole general partner, was granted an option by 17
Battery LLC, exercisable over a 10 year period, to acquire from 17 Battery
LLC its interest in 17 Battery Place at a price equal to the aggregate of (i)
sums paid by 17 Battery LLC for such interest, (ii) all financing and other
costs and expenses incurred in connection with the acquisition of ownership
by 17 Battery LLC of such interest and (iii) interest on all such sums from
the date of incurrence.
On September 3, 1997, the Board of Directors of the Company, including
all of the Independent Directors (i.e., the Directors of the Company who are
neither officers of the Company nor affiliated with the Company), acting in
its capacity as sole general partner of the Operating Partnership, authorized
the Operating Partnership to exercise the option on the terms described above
and the Initial Agreement was assigned to the Operating Partnership.
The Property contains 1.2 million rentable square feet and is comprised
of two Class B office buildings, 17 Battery Place North, a 22-story building
encompassing approximately 410,000 rentable square feet (the "North
Building"), and 17 Battery Place South, a 31-story building encompassing
approximately 800,000 rentable square feet (the "South Building") located at
the intersection of Battery Place and West Street in the financial district
of downtown Manhattan.
On November 5, 1997, the Board of Directors of the Company, including
all of the Independent Directors, acting in its capacity as sole general
partner of the Operating Partnership, authorized the modification of the
Initial Agreement to provide for the acquisition of the entire Property by
the Operating Partnership and a cotenant for a total purchase price of $75.0
million, $59.0 million of which would be paid by the Operating Partnership.
In addition, the Board of Directors approved the loan by the Operating
Partnership of up to $18.0 million to the cotenant (secured by a first
mortgage on the cotenant's interest in the Property) on specified terms for a
period expiring on the earlier of the formation of a condominium or September
30, 1998. The amended and restated agreement of sale dated December 19, 1997
(the "Amended Agreement") preserved for the Operating Partnership the
economic terms of the Initial Agreement while faciliting the timely
acquisition of an interest in the Property.
The Initial Agreement provided for, during the contract period, the
conversion of the South Building into two condominium units. One unit was to
be comprised of portions of the basement and the ground floor and floors 2
through 13 and would continue to function as office space (the "Office
Unit"). The second unit was to be comprised of portions of the ground lease
and basement and floors 14 through 31 and would be redeveloped by the seller
into a residential/hotel facility (the "Hotel Unit"). The Amended Agreement
provides for, as approved by the Board of Directors, the creation of a three
unit condominium consisting of the Hotel Unit, the Office Unit and the North
Building (the "North Building Unit"). The cotenancy agreement entered into
in connection with the Amended Agreement provides that, pending creation of
the condominium, the income from the floors constituting the Office Unit and
the North Building will be the property of the Operating Partnership and the
income from the floors constituting the Hotel Unit will be the property of
the cotenant, thus preserving the economic aspects of the Initial Agreement.
Pursuant to the Amended Agreement, upon creation of the condominium and
dissolution of the cotenancy, the Operating Partnership will receive a
distribution consisting of the Office Unit and the North Building Unit, while
the cotenant will receive a distribution of the Hotel Unit.
The Operating Partnership acquired its interest in 17 Battery Place on
December 19, 1997 for an aggregate purchase price of approximately $57.8
million in cash. The purchase price was funded with proceeds from a
borrowing under the Company's $140 million senior unsecured revolving credit
facility (the "Credit Facility"). The Company based its determination of the
price to be paid on the expected cash flow, physical condition, location,
competitive advantages, existing tenancy and opportunities to retain and
attract additional tenants. The Company did not obtain an independent
appraisal on the Property. In addition, the Operating Partnership loaned to
the cotenant $15.5 million on the terms referred to above. The loan amount
was funded with proceeds from a borrowing under the Credit Facility.
ITEM 5. OTHER EVENTS
On December 18, 1997, the Company entered into a $140 million senior
unsecured revolving credit facility with Lehman Brothers Holdings Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) and (b) Financial Statements of Property Acquired and Pro Forma
Financial Information
The financial statements and pro forma financial information required by
Item 7(a) and 7(b) are currently being prepared and it is therefor
impractical to provide this information on the date hereof. The Company will
file the required financial statements and information under cover of Form 8-
K/A as soon as practicable but in no event later than 60 days after the date
on which this Form 8-K was required to be filed.
(c) Exhibits
2.1 Option to Purchase 17 Battery Place dated as of July 25, 1997*
2.2 Amended and Restated Agreement of Sale between 17 Battery
Associates LLC ("17 Battery") and 17 Battery LLC dated as of June
27, 1997
2.3 Assignment and Assumption of Contract, dated as of September 3,
1997, between 17 Battery LLC and the Operating Partnership
2.4 Assignment and Assumption of Agreement, dated as of December 19,
1997, between 17 Battery and 17 Battery Upper Partners LLC
("Upper")
2.5 Assignment and Assumption of Agreement, dated as of December 19,
1997, between 17 Battery LLC and SLG 17 Battery LLC ("SLG 17")
2.6 Tenancy in Common Agreement between Upper and SLG 17 dated as of
December 19, 1997
2.7 Amended and Restated Substitute Mortgage Note No. 1 between Upper
and the Operating Partnership, dated as of December 19, 1997
5.1 Senior Unsecured Revolving Credit Facility between the Company, the
Operating Partnership and Lehman Brothers Holdings Inc. dated as of
December 18, 1997
_____________________
* Incorporated by reference to Exhibit 10.15 of the Company's Registration
Statement on Form S-11 (333-29329).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SL GREEN REALTY CORP.
By: /s/ David J. Nettina
---------------------------
David J. Nettina
Executive Vice President, Chief Operating
Officer and Chief Financial Officer
Date: January 2, 1998
EXHIBIT 2.2
AMENDED AND RESTATED AGREEMENT OF SALE
--------------------------------------
AMENDED AND RESTATED AGREEMENT OF SALE (the "Agreement") made as of this
27th day of June, 1997 between 17 BATTERY ASSOCIATES LLC, a New York limited
liability company, having an address at c/o Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel, 153 East 53rd Street, New York, New York 10022
(hereinafter called "Seller") and GREEN 17 BATTERY LLC, a New York limited
liability company, having an office at c/o SL Green Realty Corp., 70 West
36th Street, New York, New York 10018 (hereinafter called "Purchaser").
Seller and Purchaser entered into an Agreement of Sale (the "Initial
Agreement"), dated as of June 27, 1997, regarding the sale by Seller to
Purchaser of a portion of the Property (as hereinafter defined). Seller and
Purchaser desire to fully restate and amend the Initial Agreement as follows:
RECITALS
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A. Seller, as purchaser, has entered into a Purchase and Sale
Agreement, dated as of March 31, 1997, with Downtown Acquisition Partners,
L.P. ("DAP"), as seller (as amended by Letter Agreement, dated April 3, 1997,
First Amendment to Purchase and Sale Agreement, dated as of May 23, 1997, and
Second Amendment to Purchase and Sale Agreement, dated as of August 14, 1997,
collectively, the "DAP Contract"), to purchase from DAP all of DAP's right,
title and interest in and to that certain lot, piece or parcel of land (the
"Land"), located in the City, County and State of New York, as more
particularly bounded and described in Exhibit A attached hereto made a part
hereof, together with the building(s) erected thereon (collectively, the
"Buildings") and any and all other fixtures and improvements erected thereon
(the Buildings and such other fixtures and improvements being hereinafter
collectively referred to as the "Improvements");
TOGETHER with all right, title and interest of DAP, if any, in and to
(a) the land lying in the bed of any street, highway, road or avenue, opened
or proposed, public or private, in front of or adjoining the Land, to the
center line thereof, (b) any rights of way, appendages, appurtenances,
easements, sidewalks, alleys, gores or strips of land adjoining or
appurtenant to the Land and used in conjunction therewith and (c) any award
or payment made or to be made in lieu of any of the foregoing for a taking of
the Property (as hereinbelow defined) or any portion thereof and any unpaid
award for damage to the Land or the Improvements by reason of change of grade
or closing of any street, road or avenue;
TOGETHER ALSO with all right, title and interest of DAP, if any, in and
to all fixtures, machinery, and equipment and other personal property
(excluding furniture, furnishings, equipment and other personal property of
space lessees of the Property) used in connection with or attached or
appurtenant to or at or upon the Land and the Improvements at the date
hereof, including, without limitation, such fire protection, heating,
plumbing, electrical and air conditioning systems as now exist thereat. All
of the above property, rights and interests to be sold pursuant to the DAP
Contract (including, without limitation, the Land and the Improvements) are
hereinafter sometimes collectively referred to as the "Property."
B. Seller intends to convert the Property into a three (3) unit
condominium to be known as "The 17 Battery Place Condominium" (the
"Condominium") pursuant to that certain Declaration of the Condominium (the
"Declaration"), a copy of which is annexed to the TIC Agreement (as
hereinafter defined).
C. Upon the establishment of the Condominium, Purchaser, through its
assignee SLG 17 Battery LLC ("SLG"), desires to acquire Unit 2 and Unit 3 of
the Condominium and Seller, through its assignee 17 Battery Upper Partner LLC
("Upper"), desires to acquire Unit 1 of the Condominium.
D. In order to permit the closing under the DAP Contract and the
closing hereunder to occur simultaneously prior to the establishment of the
Condominium, Seller desires Upper, and Purchaser desires SLG, to own the
Property, as tenants in common, subject to and in accordance with that
certain Tenancy In Common Agreement (the "TIC Agreement"), a copy of which is
annexed hereto and made a part hereof as Exhibit M. All capitalized terms
used herein and not defined herein shall have the meaning ascribed
respectively thereto in the TIC Agreement.
NOW, THEREFORE for and in consideration of the mutual covenants and
agreements herein contained and intending to be legally bound hereby, and for
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Seller agrees to cause to be sold and conveyed to
Purchaser, and Purchaser agrees to purchase, upon the terms and conditions
hereinafter contained, a Tenancy Interest in the Property (the "Premises").
1. Purchase Price
--------------
1.1 The purchase price (the "Purchase Price") for the Premises shall be
the sum of FIFTY-SEVEN MILLION SEVEN HUNDRED EIGHTEEN THOUSAND EIGHT HUNDRED
AND 00/100 DOLLARS ($57,718,800.00), subject to apportionment in accordance
with Article 5 below, payable as follows:
1.1.1 THREE MILLION FIVE HUNDRED THOUSAND AND 00/100
DOLLARS ($3,500,000.00), on the signing of this Agreement, by wire transfer
of immediately available federal funds pursuant to the instructions set forth
on Exhibit A-4 annexed hereto and made a part hereof (the "First
Downpayment"; $3,000,000 of the First Downpayment is hereinafter called the
"Refundable First Downpayment"). Seller hereby acknowledges receipt of the
First Downpayment;
1.1.2 FIFTY-FOUR MILLION TWO HUNDRED EIGHTEEN THOUSAND
EIGHT HUNDRED AND 00/100 DOLLARS ($54,218,800.00), on the Closing Date by
wire transfer of immediately available funds to an account or accounts
designated by Seller (the "Cash Payment").
2. Matters To Which The Sale Is Subject
------------------------------------
2.1 The Premises shall be sold and conveyed subject to the
Permitted Exceptions, as such term is defined in the DAP Contract, and all
other terms and conditions of Sections 2.1.1 through 2.1.14, 2.2, 2.5, 2.6
and 2.7 of Article 2 of the DAP Contract including, without limitation, all
defined terms as set forth therein, are hereby incorporated herein by this
reference as if the DAP Contract was a direct contract between DAP, as
seller, and the Tenancy, as buyer, of the respective interests in the
Property as set forth in this Agreement. The Permitted Exceptions shall also
include the following:
2.1.1 The Declaration, By-Laws and rules and regulations
of the Condominium all as may be amended from time to time (collectively,
together with all other documents and instruments in connection with the
creation of the Condominium hereinafter collectively referred to as the
"Condominium Creation Documents"; the Condominium Creation Documents together
with all other documents and instruments in connection with the governing of
the Condominium are collectively referred to as the "Condominium Governing
Documents").
2.1.2 The TIC Agreement.
2.2 Deleted Prior to Execution.
2.3 If, on the Closing Date (as hereinafter defined), Seller is
unable to cause DAP to perform under the DAP Contract, Purchaser may
terminate this Agreement by written notice delivered on or promptly after the
date scheduled for the Closing, in which event Seller shall repay to
Purchaser the Refundable First Downpayment within sixty (60) days from the
effective date of such termination but no earlier than by December 1, 1997
and no later than by December 31, 1997. This Agreement shall thereupon be
deemed canceled and become void and of no further effect, and neither party
shall have any obligations of any nature to the other hereunder or by reason
hereof, except that the provisions of Sections 4.2, 4.3, 30.3.4.1 and
Articles 11, 18, and 26 hereof shall survive such termination. Seller shall
not be required to take or bring any action or proceeding or any other steps
to remove any defect in or objection to title or to fulfill any condition or
to expend any moneys therefor, nor shall Purchaser have any right of action
against Seller therefor, at law or in equity. Notwithstanding the foregoing,
Seller shall be required to cause to be paid, discharged or removed or
released of record against the Premises at Seller's sole cost and expense all
of the following items (collectively, "Seller's Liens"): (a) Voluntary Liens
and (b) other liens and encumbrances encumbering the Premises which other
liens and encumbrances (i) are in liquidated amounts and which may be
satisfied solely by the payment of money (including the preparation or filing
of appropriate satisfaction instruments in connection therewith) and (ii) do
not exceed in the aggregate Two Hundred Fifty Thousand Dollars ($250,000.00).
The term "Voluntary Liens" as used herein shall mean (i) liens and other
encumbrances (other than Permitted Exceptions) which Seller has knowingly
suffered or allowed to be placed on the Premises, including, without
limitation, mechanics' liens which arise solely by reason of Seller's failure
to pay amounts due, (ii) judgments and federal, state or municipal tax liens
against Seller and (iii) mortgages other than any mortgages being assigned to
Purchaser's lender.
2.4 Notwithstanding anything in Section 2.3 above to the contrary,
Purchaser may at any time accept such title as Seller can convey, without
reduction of the Purchase Price or any credit or allowance on account thereof
or any claim against Seller. The acceptance of the TIC Deed (as defined in
the DAP Contract) and TIC Agreement by Purchaser shall be deemed to be full
performance of, and discharge of, every agreement and obligation on Seller's
part to be performed under this Agreement, except for such obligations,
representations and warranties which are (i) expressly stated in this
Agreement to survive the Closing, to the limit of such survival or (ii)
expressly stated in a delivery made hereunder to survive the Closing, to the
limit of such survival.
3. Closing.
--------
The Closing of the transaction contemplated hereby ("Closing") shall
occur on the date of the occurrence of the closing under the DAP Contract
(the "DAP Closing Date"). Seller shall not set the DAP Closing Date without
Purchaser's prior written consent; provided, however, that Purchaser may not
require the DAP Closing Date be set other than in accordance with the DAP
Contract. Time shall be of the essence with respect to Purchaser's obligation
to close on the DAP Closing Date. The date on which the Closing actually
occurs is referred to herein as the "Closing Date." The Closing shall be held
at the time and place as provided for the closing under the DAP Contract. The
parties agree to use best efforts to finalize and submit to each other all
documents necessary for the Closing at least two (2) business days prior to
the date scheduled for Closing.
4. As Is; Access to Property During The Pre-Closing Period.
--------------------------------------------------------
4.1 Except as may be otherwise expressly set forth to the contrary in
this Agreement:
4.1.1 Purchaser acknowledges that S.L. Green Management Corp.
(the "Managing Agent") and S.L. Green Realty, Inc. (the "Leasing Agent"),
each entities related to Purchaser and each controlled by Stephen L. Green,
are currently and have been continuously since January 2, 1996 the managing
agent and leasing agent, respectively, for the Property and, thus, Purchaser
is fully familiar with the physical and financial condition of the Property,
including, without limitation, the Premises, and has fully inspected same
including, without limitation, the roof, all structural conditions, heating,
air conditioning, ventilation and other mechanical systems, fire protection
systems, electrical systems and plumbing systems and Purchaser is expressly
purchasing the Premises in its existing condition "AS IS, WHERE IS, AND WITH
ALL FAULTS" with respect to all facts, circumstances, conditions and defects.
Seller has no obligation to determine or correct any such facts,
circumstances, conditions or defects or to compensate Purchaser for same.
Seller has specifically bargained for the assumption by Purchaser of all
responsibility to investigate the Premises, Laws and Regulations, Rights,
Facts, Space Leases, Service Contracts and Violations and of all risk of
adverse conditions and has structured the Purchase Price and other terms of
this Agreement in consideration thereof. Purchaser has undertaken all such
investigations of the Premises, Laws and Regulations, Rights, Facts, Space
Leases, Service Contracts and Violations as Purchaser deems necessary or
appropriate under the circumstances as to the status of the Premises and
based upon same Purchaser is and will be relying strictly and solely upon
such inspections and examinations and the advice and counsel of its own
consultants, agents, legal counsel and officers and Purchaser is and will be
fully satisfied that the Purchase Price is fair and adequate consideration
for the Premises and, by reason of all the foregoing, Purchaser assumes the
full risk of any loss or damage occasioned by any fact, circumstance,
condition or defect pertaining to the Premises, except as set forth in
Article 10.
4.1.2 Seller hereby disclaims all warranties of any kind or
nature whatsoever (including warranties of habitability and fitness for
particular purposes), whether expressed or implied, including, without
limitation, warranties with respect to the Premises except as expressly set
forth in this Agreement. Purchaser further acknowledges that, except as
otherwise expressly set forth in this Agreement, Purchaser is not relying
upon any representation of any kind or nature made by Seller, or any of its
employees or agents with respect to the Premises and that, in fact, no such
representations were made except as expressly set forth in this Agreement.
4.1.3 Seller makes no warranty with respect to the presence of
Hazardous Materials (as hereinafter defined) on, above or beneath the Land
(or any parcel in proximity thereto) or in any water on or under the
Property. Purchaser's closing hereunder shall be deemed to constitute an
express waiver of Purchaser's right to cause Seller to be joined in any
action brought under any Environmental Laws (as hereinafter defined). The
term "Hazardous Materials" shall mean (a) those substances included within
the definitions of any one or more of the terms "hazardous materials",
"hazardous wastes", "hazardous substances", "industrial wastes", and "toxic
pollutants," as such terms are defined under the Environmental Laws, or any
of them, (b) petroleum and petroleum products, including, without limitation,
crude oil and any fractions thereof, (c) natural gas, synthetic gas and any
mixtures thereof, (d) asbestos and/or any material which contains any
hydrated mineral silicate, including, without limitation, chrysotile,
amosite, crocidolite, tremolite, anthophylite and/or actinolite, whether
friable or non-friable, (e) polychlorinated biphenyl ("PCBs") or
PCB-containing materials or fluids, (f) radon, (g) any other hazardous or
radioactive substance, material, pollutant, contaminant or waste, and (h) any
other substance with respect to which any Environmental Law or governmental
authority requires environmental investigation, monitoring or remediation.
The term "Environmental Laws" shall mean all federal, state and local laws,
statutes, ordinances and regulations, now or hereafter in effect, in each
case as amended or supplemented from time to time, including, without
limitation, all applicable judicial or administrative orders, applicable
consent decrees and binding judgments relating to the regulation and
protection of human health, safety, the environment and natural resources
(including, without limitation, ambient air, surface, water, groundwater,
wetlands, land surface or subsurface strata, wildlife, aquatic species and
vegetation), including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Material Transportation Act, as
amended (49 U.S.C. Sections 1801, et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act, as amended (7 U.S.C. Sections 136, et
seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.
Sections 6901, et seq.) ("RCRA"), the Toxic Substance Control Act, as
amended (42 U.S.C. Sections 7401, et seq.), the Clean Air Act, as
amended (42 U.S.C. Sections 7401, et seq.), the Federal Water Pollution
Control Act, as amended (33 U.S.C. Sections 1251, et seq.), the
Occupational Safety and Health Act, as amended (29 U.S.C. Sections 651,
et seq.), the Safe Drinking Water Act, as amended (42 U.S.C. Sections
300f, et seq.), any state or local counterpart or equivalent of any of the
foregoing, and any Federal, state or local transfer of ownership notification
or approval statutes.
4.2 Purchaser shall not, and shall not permit its employees,
consultants, engineers and agents to, conduct any soil tests or sampling or
any boring, digging, drilling or other physical intrusion of the Premises
(collectively, "Testing"), without the prior consent of Seller, which consent
Seller shall not unreasonably withhold or delay, and without DAP's consent
until the DAP Closing Date, which consent DAP may withhold in accordance with
the DAP Contract. If Seller consents thereto, Purchaser shall (a) furnish to
Seller and DAP (to the extent DAP then has an ownership interest in the
Property) property damage and liability insurance policies in form and
amounts reasonably acceptable to Seller prior to commencing any such Testing
and shall, upon completion thereof, restore promptly, at Purchaser's cost and
expense, the Premises, or any portion thereof, to its condition existing
prior to such Testing, and (b) (i) at all times be accompanied by a
representative of Seller and DAP (to the extent DAP then has an ownership
interest in the Property) when at the Premises (and, in connection therewith,
shall give Seller reasonable prior notice of Purchaser's request to enter the
Premises and (ii) not interfere with the operation of the Premises or disturb
the occupancy of any Space Lessee. Purchaser hereby indemnifies and holds
harmless Seller and DAP (to the extent DAP then has an ownership interest in
the Property) from any and all claims, damage, liability, loss, cost and
expense that may arise in connection with all claims arising out of the acts
of Purchaser, its partners, agents, employees, licensees, invitees,
contractors and consultants in violation of the provisions of this Section
4.2.
4.3 Purchaser and its authorized representatives, partners, agents,
employees, licensees, contractors and consultants, upon giving Seller
reasonable prior notice of Purchaser's request but, until the DAP Closing
Date, subject to the provisions of the DAP Contract and, if applicable, DAP's
approval, shall, from time to time for the period commencing on the date
hereof until the DAP Closing Date (the "Pre-Closing Period") have access to
the Premises provided Purchaser shall (a) at all times be accompanied by a
representative of Seller (and a representative of DAP) when at the Premises
and (b) not materially interfere with the operation of the Property or
materially disturb the occupancy of any Space Lessee. Purchaser hereby
indemnifies and holds harmless Seller and DAP from any and all claims,
damage, liability, loss, cost and expense that may arise in connection with
all claims arising out of the acts of Purchaser, its authorized
representatives, partners, agents, employees, licensees, invitees,
contractors and consultants in violation of provisions of this Section 4.3.
5. Apportionments.
---------------
All terms and conditions of Article 6 and Section 7.1.10(f) of the DAP
Contract including, without limitation, all defined terms as set forth
therein, are incorporated herein by this reference as if the DAP Contract was
a direct contract between DAP, as seller, and the Tenancy, as buyer, of the
respective interests in the Property as set forth in this Agreement and,
accordingly, all apportionments as between the parties hereto shall be
allocated on the same basis that income from, and responsibility for expenses
of, the Property are governed under the TIC Agreement.
6. Representations and Warranties of the Parties.
----------------------------------------------
6.1 Seller warrants, represents and covenants to and with Purchaser
that the following are true and correct on the date hereof:
6.1.1 Seller is a limited liability company duly formed and in
good standing under the laws of the State of New York and has the requisite
power and authority to enter into and to perform the terms of this Agreement.
Seller is not subject to any law, order, decree, restriction or agreement
which prohibits or would be violated by this Agreement or the consummation of
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite action of Seller.
6.1.2 Seller is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code 1986, as amended, or any
regulations promulgated thereunder (collectively, the "Code").
6.1.3 Seller makes no representation or warranty with regard to
any leases or other occupancy agreements of all or any portion of the
Premises (such leases or occupancy agreements, together with all renewals,
replacements and amendments thereof entered into after the date hereof (in
accordance with Article 25 of the DAP Agreement) being herein referred to as
the "Space Leases") that on the Closing Date all or any of such Space Lessees
under such Space Leases will be in occupancy or paying rent. Purchaser
acknowledges that it has reviewed and is familiar with each of the Space
Leases affecting the Premises as of the date hereof as more fully described
on Exhibit B annexed hereto and made a part hereof.
6.1.4 Nothing herein contained shall be deemed to be a
guaranty, warranty or assurance that the Service Contracts, or any of them,
will be in effect at the Closing, and the termination of any Service Contract
prior to Closing shall not affect Purchaser's obligations hereunder.
6.1.5 DAP has represented to Seller, under the DAP Contract,
that, fixed rent and additional rent are being billed to the Space Lessees,
as of the date of the DAP Contract, in accordance with the schedule set forth
on Exhibit F attached hereto and made a part hereof (the "Rent Roll").
6.1.6 Deleted Prior to Execution.
6.1.7 There are no other contracts presently in effect to which
Seller is a party with respect to the purchase of all or any portion of the
Property other than the DAP Contract. The DAP Contract is in full force and
effect.
6.2 Purchaser warrants, represents and covenants to and with Seller
that the following are true and correct on the date hereof:
6.2.1 Purchaser is a limited liability company organized and in
good standing under the laws of the State of New York and has the requisite
power and authority to enter into and to perform the terms of this Agreement.
Purchaser is not subject to any law, order, decree, restriction, or agreement
which prohibits or would be violated by this Agreement or the consummation of
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite action of Purchaser.
6.3 Purchaser agrees and acknowledges that, except as specifically set
forth in this Agreement, neither Seller nor any agent or representative or
purported agent or representative of Seller has made, and Seller is not
liable for or bound in any manner by, any express or implied warranties,
guaranties, promises, statements, inducements, representations or information
pertaining to the Property, the Premises, or any part thereof. Without
limiting the generality of the foregoing, Purchaser has not relied on any
representations or warranties, and Seller has not made any representations or
warranties other than as expressly set forth herein, in either case express
or implied, as to (a) the current or future real estate tax liability,
assessment or valuation of the Premises, (b) the potential qualification of
the Premises for any and all benefits conferred by Federal, state or
municipal laws, whether for subsidies, special real estate tax treatment,
insurance, mortgages, or any other benefits, whether similar or dissimilar to
those enumerated, (c) the compliance of the Premises, in its current or any
future state, with applicable zoning ordinances and the ability to obtain a
change in the zoning or a variance with respect to the Premises non-
compliance, if any, with said zoning ordinances, (d) the availability of any
financing for the purchase, alteration, rehabilitation or operation of the
Premises from any source, including, but not limited to, any state, city or
Federal government or any institutional lender, (e) the current or future use
of the Premises, (f) the present and future condition and operating state of
any and all machinery or equipment on the Premises and the present or future
structural and physical condition of any building or its suitability for
rehabilitation or renovation, (g) the ownership or state of title of any
personal property on the Premises, (h) the presence or absence of any Laws
and Regulations or any Violations, (i) the compliance of the Premises or the
Space Leases (or the rentals thereunder) with any rent control or similar law
or regulation, (j) the ability to relocate any Space Lessee or to terminate
any Space Lease and (k) the layout, leases, rents, income, expenses,
operation, agreements, licenses, easements, instruments, documents or service
contracts of or in any way affecting the Premises. Further, Purchaser
acknowledges and agrees that Seller is not liable for or bound by (and
Purchaser has not relied upon) any verbal or written statements,
representations or any other information respecting the Premises furnished by
Seller or any broker, employee, agent, consultant or other person
representing or purportedly representing Seller. The provisions of this
Section 6.3 shall survive the Closing.
6.4 Subject to Purchaser's compliance with the requirements of this
Section 6.4, Seller's representations and warranties contained in Section 6.1
shall survive the Closing, provided that any action based thereon must be
commenced within one hundred eighty (180) days after the Closing (the "Action
Survival Period"). Any claim by Purchaser that Seller breached the aforesaid
representations or warranties must be made by Purchaser in all events prior
to the expiration of the Action Survival Period by Purchaser delivering to
Seller written notice (a "Claim Notice") setting forth (a) a description in
reasonable detail of the claimed breach or breaches, as applicable, (b) a
statement that the claimed breach has, or claimed breaches in the aggregate
have, a material adverse effect ("MA Effect") (as hereinbelow defined), (c)
the Section and subsection of this Agreement under which such claimed breach
or breaches is asserted, (d) Purchaser's good faith calculation of the
damages suffered by Purchaser by reason of such claimed breach or breaches
and (e) all relevant and material documents and written material, if any,
upon which Purchaser asserts such claimed breach or breaches. TIME SHALL BE
OF THE ESSENCE in respect of Purchaser's obligation to deliver to Seller any
Claim Notice in the manner herein provided within the Action Survival Period.
Purchaser shall not be entitled to deliver a Claim Notice, and Seller shall
have no liability for, any claimed breach of the aforesaid representations
and warranties unless Purchaser timely complies with subdivisions (a), (b),
(c), (d) and (e) of this Section 6.4. Seller shall have no liability in
respect of any Claim Notice unless and until there shall be found to have
existed, pursuant to a nonappealable order of a court of competent
jurisdiction (a "Breach Finding"), one or more breaches by Seller of such
representations or warranties which, individually or in the aggregate, have a
MA Effect. The term "MA Effect" as used in this Agreement shall mean the
occurrence of a Breach Finding for which the cost or payment of money
necessary to cure or make true such Breach Finding, or the actual damages to
Purchaser occasioned by such Breach Finding (including Purchaser's legal fees
and expenses incurred in legal proceedings against Seller in connection with
such Breach Finding, provided Purchaser shall be the prevailing party),
exceed an amount equal to or greater than Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00). Notwithstanding anything contained herein to
the contrary, Purchaser shall use all reasonable efforts to give Seller a
Claim Notice reasonably promptly after Purchaser has learned of any
applicable breach of any of Seller's representation or warranties.
7. Closing Deliveries.
-------------------
7.1 At or prior to the Closing, Seller shall direct DAP to make or
cause to be made, as the case may be, the following deliveries to the Tenancy
and/or to Purchaser, as the case may be:
7.1.1 Seller shall direct DAP to deliver the TIC Deed to the
Tenancy in accordance with the applicable provisions of the DAP Contract.
7.1.2 Seller shall direct DAP to deliver to the Tenancy an
assignment of all of DAP's right, title and interest as landlord or otherwise
under each of the Space Leases affecting the Property in accordance with the
applicable provisions of the DAP Contract, and shall direct DAP to deliver to
the Tenancy executed originals or copies certified to DAP's knowledge to be
true, correct and complete copies (if DAP does not have originals in its
possession) of each of such Space Leases and all correspondence and other
records, if any, pertaining to such Space Leases, in each case to the extent
in DAP's possession. Seller shall direct that all Space Lessees' security
deposits in the amount as set forth in Exhibit B-1 attached hereto and made a
part hereof or in the amount required to have been deposited with the
landlord under such Space Leases as set forth in Exhibit B-2 except to the
extent applied by DAP in accordance with the DAP Contract (together with
accrued interest thereon, if any, less DAP's proportionate share of
administrative fees, if any, together with DAP's calculation of such fees),
subject to subsection 6.1.6 hereof, be turned over by DAP to the Tenancy at
the Closing, at DAP's option, by (a) payment of the amount thereof to the
Tenancy or (b) a credit to the Tenancy against the Purchase Price. Seller
shall, in addition, instruct DAP in connection with any such securities in
form other than cash to transfer same to the Tenancy by way of appropriate
instruments of transfer or assignment.
7.1.3 Seller shall direct DAP to execute and deliver to the
Tenancy (x) notices to the Space Lessees under the Space Leases advising
them of the sale of the Property and (y) notices to the vendors under the
Service Contracts advising them of the sale of the Property; each in a form
and in accordance with the applicable provisions of the DAP Contract.
7.1.4 Seller shall direct DAP to assign to the Tenancy all of
DAP's right, title and interest in and to the Service Contracts set forth on
Exhibit C and Exhibit C-1 and all other Service Contracts entered into after
- --------- -----------
the date hereof pursuant to this Agreement in accordance with the applicable
provisions of the DAP Contract.
7.1.5 Seller shall direct DAP to deliver to the Tenancy a bill
of sale, conveying and transferring to the Tenancy all right, title and
interest of DAP in and to all fixtures, machinery, equipment, articles of
personal property and improvements in the nature of personal property
attached or appurtenant to, or located on, or used in connection with the use
or operation of, or used or adapted for use in connection with the enjoyment
or occupancy of the Property, specifically excluding, however, any personal
property of Space Lessees (the "Personal Property"), in accordance with the
applicable provisions of the DAP Contract. No portion of the Purchase Price
shall be deemed allocated to payment for the Personal Property.
7.1.6 Seller shall direct DAP to deliver to the Tenancy all
keys to any portion of the Property to the extent in DAP's possession or
control in accordance with the applicable provisions of the DAP Contract.
7.1.7 Seller shall direct DAP to deliver to the Tenancy a
certificate, duly executed and acknowledged by DAP, in accordance with
Section 1445 of the Code.
7.1.8 Seller shall deliver to Purchaser resolutions of Seller,
in form reasonably satisfactory to Purchaser and the Title Company,
authorizing the transaction contemplated herein and the execution and
delivery of the documents required to be executed and delivered hereunder.
7.1.9 Seller shall deliver to Purchaser a certificate of
Seller, dated as of the Closing, certifying to the fulfillment of the
condition set forth in subsection 8.2.2 hereof.
7.1.10 Seller shall direct DAP to deliver to the Tenancy an
assignment and adoption agreement pursuant to which the Union Agreements are
assigned to the Tenancy and duly adopted and assumed by the Tenancy in
accordance with the applicable provisions of the DAP Contract provided
--------
however that if the Green Entity (as defined in the DAP Contract) delivers
- -------
the Employment Indemnities (as defined in the DAP Contract) in favor of DAP
and Seller, then the Tenancy, at Purchaser's election, may, but shall not be
obligated to, assume the obligations under the Union Agreements, and further,
at Purchaser's election, may, but shall not be obligated to, offer employment
to and hire any or all Employees covered by the Union Agreements.
7.2 At or prior to the Closing, Purchaser and/or Seller, as the case
may be, shall make, have made or caused to be made, the following deliveries:
7.2.1 Purchaser shall pay the Cash Payment required pursuant to
subsection 1.1.2 hereof.
7.2.2 Purchaser and Seller each shall execute, acknowledge and
deliver, on behalf of the Tenancy, to DAP, a counterpart of all documents to
be delivered to DAP by the Tenancy pursuant to the DAP Contract.
7.3 Seller and Purchaser, at the Closing, shall prepare, execute and
deliver to each other, subject to all the terms and provisions of this
Agreement, the TIC Agreement, a closing statement and any other documents
reasonably required by the Title Company or otherwise reasonably required in
order to consummate the transactions contemplated hereby.
8. Conditions to Closing Obligations.
----------------------------------
8.1 Notwithstanding anything to the contrary contained herein, the
obligation of Seller to close title in accordance with this Agreement is
expressly conditioned upon the fulfillment by and as of the time of Closing
of each of the conditions listed below; provided that Seller, at its
election, evidenced by written notice delivered to Purchaser at or prior to
the Closing, may waive any of the conditions set forth in subsections 8.1.1
and 8.1.2:
8.1.1 Purchaser shall have executed and delivered to Seller all
of the documents, shall have paid all sums of money and shall have taken or
caused to be taken all of the other actions required of Purchaser in this
Agreement.
8.1.2 All representations and warranties made by Purchaser in
this Agreement shall be true and correct in all material respects as of the
Closing Date.
8.1.3 The DAP Closing shall have occurred.
8.2 Notwithstanding anything to the contrary contained herein, the
obligation of Purchaser to close title in accordance with this Agreement is
expressly conditioned upon the fulfillment by and as of the time of the
Closing of each of the conditions listed below, provided that Purchaser, at
its election, evidenced by written notice delivered to Seller at or prior to
the Closing, may waive all or any of such conditions except the condition set
forth in subsections 8.2.3:
8.2.1 Seller shall have executed and delivered to Purchaser all
of the documents, and shall have taken or caused to be taken all of the other
actions, required of Seller under this Agreement.
8.2.2 The representations and warranties made by Seller in this
Agreement shall be true and correct in all material respects as of the
Closing Date, except that to the extent the facts underlying such
representations may have changed as of the Closing, then Seller shall
represent in the certificate delivered pursuant to subsection 7.1.9 such
changed facts and circumstances.
8.2.3 The DAP Closing shall have occurred.
8.2.4 Deleted Prior to Execution.
8.2.5 There shall be no actions, suits or proceedings pending
or threatened against the Premises, at law or in equity, before any
governmental authority which would in any way affect title to the Premises.
8.2.6 There shall be no pending or written notice of any
condemnation or eminent domain proceedings that would affect any portion of
the Premises.
8.2.7 Seller shall not have caused or consented to the
introduction of Hazardous Material on, above or beneath the Land underlying
the Premises provided, however, that this condition shall have been deemed to
have been waived by Purchaser if Purchaser, Managing Agent or Leasing Agent,
or any related entities thereto, have caused or consented to the introduction
of Hazardous Materials on, above or beneath the Land underlying the Premises.
9. Limitation on Liability of Parties.
-----------------------------------
9.1 In the event Purchaser shall default in the performance of
Purchaser's obligations under this Agreement and the Closing does not occur
as a result thereof, Seller's sole and exclusive remedy shall be, and Seller
shall be entitled, to retain the First Downpayment as and for full and
complete liquidated and agreed damages for Purchaser's default, and Purchaser
shall be released from any further liability to Seller hereunder, except that
the provisions of Sections 4.2, 4.3, 30.3.4.1 and Articles 11, 18, and 26
hereof shall survive.
9.2 Subject to the provisions of Section 2.3 hereof, in the event that
either (A) Seller shall default in the performance of Seller's obligations
under this Agreement or (B) the changes, if any, set forth in the certificate
delivered pursuant to subsection 7.1.9 (the "Certificate Changes")
individually or in the aggregate have an MA Effect (unless such
representations have changed by reason of facts and circumstances which
pursuant to the terms of this Agreement are permitted to have occurred),
Seller shall be entitled upon Closing, in its sole discretion, to credit
against the Purchase Price such amount on account of such default or changes
as will cause such default or changes to result in actual damages to
Purchaser not to exceed $50,000.00, failing which, if the Closing does not
occur as a result of such default or changes, Purchaser's sole and exclusive
remedy shall be, and Purchaser shall be entitled, to either (1) terminate
this Agreement and have Seller repay to Purchaser the Refundable First
Downpayment, the repayment of such Refundable First Downpayment to be made
within sixty (60) days from the effective date of such termination but no
earlier than by December 1, 1997 and no later than by December 31, 1997 with
such repayment of the Refundable First Downpayment being guaranteed by Gross
pursuant to the Guaranty, upon which neither party shall have any further
obligations or liabilities to the other hereunder or by reason hereof, except
that the provisions of Sections 4.2, 4.3, 30.3.4.1 and Articles 11, 18 and 26
hereof shall survive or (2) close title to the Premises and receive a credit
against the Purchase Price in the amount of $200,000.00 or (3) solely, if
Seller's default was willful and intentional, to exercise such remedies at
law to which Purchaser may be entitled. Seller and Purchaser hereby agree,
notwithstanding anything to the contrary contained in this Agreement, that
(I) nothing herein contained shall diminish Seller's obligations under
Section 2.3 to pay upon Closing the full amount of any Seller's Liens and
(II) the provisions of subdivisions (1), (2) and (3) above shall not apply in
the event that the Certificate Changes do not, individually or in the
aggregate, have an MA Effect and Purchaser shall not be relieved of its
obligations under this Agreement as a result thereof.
10. Fire or Other Casualty; Condemnation.
-------------------------------------
10.1 Seller agrees to give Purchaser reasonably prompt notice of any
fire or other casualty occurring at the Premises of which Seller obtains
knowledge, between the date hereof and the date of the Closing, or of any
actual or threatened condemnation of all or any part of the Premises of which
Seller obtains knowledge.
10.2 If, prior to the Closing, there shall occur (a) damage to the
Premises caused by fire or other casualty which would cost $1,750,000.00 or
more to repair as determined by Seller's engineer (such engineer subject to
Purchaser's reasonable approval) which determination shall be conclusive as
between Seller and Purchaser, or if the damage to the Premises is less than
$1,750,000.00 but damage to the portions of the Property other than the
Premises would materially adversely affect Purchaser's ability to operate the
Premises for office use, or (b) a taking by condemnation of any portion of
the Property which materially adversely affects Purchaser's ability to
operate the Premises for office use, then, and in either such event,
Purchaser may elect to terminate this Agreement by written notice given to
Seller within ten (10) business days after Seller has given Purchaser the
notice referred to in Section 10.1 hereof, or Purchaser has received the
written estimate of the engineer as to the cost of restoration, as the case
may be, in which event Seller shall repay to Purchaser the Refundable First
Downpayment, the repayment of such Refundable First Downpayment to be made
within sixty (60) days from the effective date of such termination but no
earlier than by December 1, 1997 and no later than by December 31, 1997 and
this Agreement shall thereupon be null and void and neither party hereto
shall thereupon have any further obligation to the other, except that the
provisions of Sections 4.2, 4.3, 30.3.4.1 and Articles 11, 18, and 26 hereof
shall survive such termination. If Purchaser does not elect to terminate
this Agreement, then the Closing shall take place as herein provided, without
abatement of the Purchase Price, and Seller shall cause DAP to assign to the
Tenancy all of DAP's interest in any insurance proceeds or condemnation
awards applicable to the Property and to deliver to the Tenancy any such
proceeds or awards theretofore paid to DAP. The parties agree that the
provisions of Article 10 and Article 11 of the TIC Agreement shall govern the
parties as if the casualty and/or condemnation had occurred during the term
of the Tenancy.
10.3 If, prior to the Closing, there shall occur (a) damage to the
Premises caused by fire or other casualty which would cost less than
$1,750,000.00 to repair, as determined by Seller's engineer (such engineer
subject to Purchaser's reasonable approval), which determination shall be
conclusive as between Seller and Purchaser, or damage to the Property which
does not materially adversely affect Purchaser's ability to operate the
Premises for office use or (b) a taking by condemnation of any part of the
Property which does not materially affect Purchaser's ability to operate the
Premises for office use, then, and in either such event, neither party shall
have the right to terminate its obligations under this Agreement by reason
thereof and Seller shall cause DAP to assign to the Tenancy all of DAP's
interest in any insurance proceeds or condemnation awards applicable to the
Property and to deliver to the Tenancy any such proceeds or awards
theretofore paid to DAP. The parties agree that the provisions of Article 10
and Article 11 of the TIC Agreement shall govern the parties as if the
casualty and/or condemnation had occurred during the term of the Tenancy.
10.4 Deleted Prior to Execution.
10.5 The provisions of this Article 10 are intended to supersede the
provisions of the New York General Obligation Law 5-1311.
10.6 Notwithstanding anything contained herein to the contrary, Seller
shall not exercise any rights under Article 11 of the DAP Contract without
Purchaser's consent, such consent not to be unreasonably withheld or delayed.
11. Brokerage.
---------
Purchaser and Seller each represent and warrant to the other that it has
not dealt with any broker, consultant, finder or like agent who might be
entitled to a commission or compensation on account of introducing the
parties hereto, the negotiation or execution of this Agreement or the closing
of the transactions contemplated hereby other than Nechie Realty Corp. (the
"Broker"). Seller shall pay the commission due to Broker pursuant to
separate agreement. Purchaser and Seller each further agree to indemnify and
hold the other, their respective successors and assigns, harmless from and
against all claims, losses, liabilities and expenses (including, without
limitation, reasonable attorneys fees and disbursements) which may be
asserted against, imposed upon or incurred by such party by reason of any
claim made by any other broker, consultant, finder or like agent (claiming to
have dealt with the indemnifying party) for commissions or other compensation
for bringing about this transaction or claiming to have introduced the
Premises to Purchaser. The provisions of this Article 11 shall survive the
Closing or other termination of this Agreement.
12. Closings Costs; Fees and Disbursements of Counsel. etc.
-------------------------------------------------------
Seller shall, at the Closing, cause DAP to pay the New York State Real
Estate Transfer Tax as imposed pursuant to Article 31 and Section 1402 of the
New York Tax law (the "State Transfer Tax") and the New York City Real
Property Transfer Tax as imposed pursuant to Title 11, Chapter 21 of the New
York Administrative Code (the "City Transfer Tax") if any, imposed upon or
payable in connection with the transfer of title to the Property to the
Tenancy and the recordation of the TIC Deed. Seller and Purchaser shall each
execute and/or swear on behalf of the Tenancy to the returns or statements
required in connection with the aforesaid taxes. Seller shall pay twenty
(20%) percent of, and Purchaser shall pay eighty (80%) percent of,
respectively, all charges for recording and/or filing the TIC Deed, the
memorandum of TIC Agreement and the costs of the examination of title and all
title insurance policy premiums for title insurance purchased by the Tenancy
with respect to the Property. Each of the parties hereto shall bear and pay
the fees and disbursements of its own counsel, accountants and other advisors
in connection with the negotiation and preparation of this Agreement and the
Closing. Notwithstanding anything contained herein to the contrary, Purchaser
shall receive a tax adjustment credit against the Purchase Price at Closing
in the amount of $82,000. Seller hereby indemnifies and holds Purchaser
harmless from and against any loss, cost, claim, liability, damage or expense
(including reasonable attorneys fees) which may arise in connection with the
liability of Purchaser (as determined pursuant to a final nonappealable
judgment of a court of competent jurisdiction), if any, for the payment
(including interest and penalties, if any) of the State Transfer Tax and the
City Transfer Tax payable, if any, in connection with the recording of any
confirmatory deeds for Unit 1, Unit 2 and Unit 3 upon the establishment of
the Condominium. The provisions of this Article 12 shall survive the
Closing.
13. Notices.
--------
Except as otherwise provided in this Agreement, all notices, demands,
requests, consents, approvals or other communications (for the purposes of
this Article collectively referred to as "Notices") required or permitted to
be given hereunder or which are given with respect to this Agreement, in
order to constitute effective notice to the other party, shall be in writing
and shall be deemed to have been given when (a) personally delivered with
signed delivery receipt obtained, (b) when transmitted by facsimile machine,
if followed by giving of, pursuant to one of the other means set forth in
this Article 13 before the end of the first business day thereafter, printed
confirmation of successful transmission to the appropriate facsimile number
of the address listed below as obtained by the sender from the sender's
facsimile machine, (c) upon receipt, when sent by prepaid reputable overnight
courier or if sent postage prepaid by registered or certified mail, return
receipt requested, in each case addressed as follows:
If to Purchaser to:
Green 17 Battery LLC
c/o SL Green Realty Corp.
70 West 36th Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Telecopier: (212) 594-2262
With a copy to:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Jonathan S. Margolis, Esq.
Telecopier: (212) 541-1355
If to Seller, to:
17 Battery Associates LLC
c/o Greenberg, Traurig, Hoffman, Lipoff,
Rosen and Quentel
153 East 53rd Street
New York, New York 10022
Attention: Robert J. Ivanhoe, Esq.
Telecopier: (212) 223-7161
Notices shall be valid only if served in the manner provided above. An
attorney for a party may give any Notices on behalf of such party.
14. Survival; Governing Law.
------------------------
Except as otherwise expressly set forth in this Agreement, the
provisions of this Agreement shall not survive the Closing provided for
herein. This Agreement shall be governed by, interpreted under, and construed
and enforced in accordance with, the laws of the State of New York.
15. Counterparts: Captions.
-----------------------
This Agreement may be executed in counterparts, each of which shall be
deemed an original. The captions are for convenience of reference only and
shall not affect the construction to be given any of the provisions hereof.
16. Entire Agreement: No Third Party Beneficiaries.
-----------------------------------------------
This Agreement (including all exhibits annexed hereto), contains the
entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior understandings, if any, with respect thereto.
This Agreement may not be modified, changed, supplemented or terminated, nor
may any obligations hereunder be waived, except by written instrument signed
by the party to be charged or by its agent duly authorized in writing or as
otherwise expressly permitted herein. The parties do not intend to confer any
benefit hereunder on any person, firm or corporation other than the parties
hereto. The provisions of this Article shall survive the Closing.
17. Waivers; Extensions.
--------------------
No waiver of any breach of any agreement or provision herein contained
shall be deemed a waiver of any preceding or succeeding breach thereof or of
any other agreement or provision herein contained. No extension of time for
performance of any obligations or acts shall be deemed an extension of the
time for performance of any other obligations or acts.
18. No Recording.
-------------
The parties hereto agree that neither this Agreement nor any memorandum
or notice hereof shall be recorded.
19. Assignments.
------------
Neither Purchaser's interest under this Agreement nor any part
thereof may be assigned or transferred by Purchaser or any successor-in-
interest to Purchaser. Notwithstanding the foregoing, Purchaser may (x)
assign its interest under this Agreement to SL Green Realty Corp. (the
"REIT") or to the operating partnership in which such REIT is the general
partner, or to any subsidiary of the REIT or to any entity that the REIT has
majority control of, or collaterally assign its interest under this Agreement
to Lehman Brothers Holdings Inc. ("Lehman") as collateral for a loan between
Lehman and affiliate(s) of Purchaser or, upon Closing, collaterally assign
its interest under this Agreement to any entity providing purchase money
financing to Purchaser with respect to the Premises or (y) direct Seller to
cause the TIC Deed to be delivered to any such entity as co-tenant with
Seller provided such entity assumes in writing, in form acceptable to Seller,
all of Purchaser's obligations hereunder, including, without limitation, the
obligation to execute such applicable Closing documents and make all Closing
deliveries required of Purchaser hereunder. An assignment made in violation
of this Article 19, shall, unless in each instance the prior written consent
of Seller has been obtained, constitute a default under the Agreement and
shall entitle Seller to exercise all rights and remedies provided for herein
in the case of default.
20. Pronouns; Joint and Several Liability.
--------------------------------------
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the
parties may require. If Purchaser consists of two or more parties, the
liability of such parties shall be joint and several.
21. Successors and Assigns.
-----------------------
This Agreement shall bind and inure to the benefit of Seller, Purchaser
and their respective permitted successors and assigns.
22. Deleted Prior to Execution.
--------------------------
23. Deleted Prior to Execution.
--------------------------
24. Deleted Prior to Execution.
--------------------------
25. Union Agreements.
-----------------
25.1 Subject to the provisions of Section 7.10 hereof, Purchaser
acknowledges that DAP is (and the Tenancy upon its acquisition of the
Property from DAP shall be) a party to those certain collective bargaining
agreements more particularly described on Exhibit K attached hereto and made
a part hereof (the "Union Agreements") with respect to the employees
described on Exhibit G attached hereto and made a part hereof (the
"Employees"). In the event Purchaser elects not to cause the Green Entity to
provide the Employment Indemnities to DAP and Seller then the Tenancy shall
adopt the Union Agreements and assume the obligations of an employer
thereunder and offer employment to all Employees covered by the Union
Agreements.
25.2 The obligations and undertakings of Purchaser under this Article 25
are a special inducement to Seller to enter into this Agreement without which
Seller would not enter into this Agreement.
25.3 The provisions of this Article 25 shall survive the Closing.
26. Confidentiality.
----------------
Seller and Purchaser covenant and agree not to communicate the terms or
any aspect of this transaction, or the transaction contemplated by the DAP
Contract, to any person or entity prior to the Closing except for their
respective advisors, attorneys, accountants, actual and prospective lenders
including, without limitation, the REIT (the "Transaction Parties") provided,
however, that the Transaction Parties shall also agree to keep all such
information confidential in accordance with the terms hereof. Without
limiting the generality of the foregoing, Seller and Purchaser covenant and
agree to hold, in the strictest confidence, the content of any and all
information in respect of the Property which is supplied by Seller to
Purchaser or by Purchaser to Seller. The foregoing confidentiality
obligations shall not apply to the extent that such (a) information (i) is a
matter of public record or is provided in other sources readily available to
the real estate industry other than as a result of disclosure by Purchaser or
Seller, as applicable, or the Transaction Parties, (ii) was available to
Seller or Purchaser or the Transaction Parties on a non-confidential basis
prior to its disclosure to Seller or Purchaser, as applicable, or the
Transaction Parties, (iii) becomes available to Seller or Purchaser, as
applicable, or the Transaction Parties from a source known to Seller or
Purchaser, as applicable, or the Transaction Parties not to have a duty of
confidentiality with regard to the information or (iv) was or is
independently developed by Seller or Purchaser or the Transaction Parties
from non-confidential sources or (b) disclosure is compelled by law or by
regulatory or judicial process or (c) disclosure is reasonably required in
connection with the initial public offering of the REIT. Notwithstanding
anything contained herein to the contrary, in the event Seller or Purchaser
is required by law or by regulatory or judicial process to disclose any
confidential documents or information, prior to disclosing same, Seller or
Purchaser, as applicable, shall notify the other in writing of such required
disclosure, shall exercise all commercially reasonable efforts to preserve
the confidentiality of the confidential documents or information, as the case
may be, including, without limitation, reasonably cooperating with the other
party to obtain an appropriate order or other reliable assurance that
confidential treatment will be accorded such confidential documents or
information, as the case may be, by such tribunal and shall disclose only
that portion of the confidential documents or information which it is legally
required to disclose. If this Agreement is terminated such confidentiality
shall be maintained and Seller and Purchaser and the Transaction Parties will
destroy or deliver to Seller or Purchaser, as applicable, upon request, all
documents and other materials, and all copies thereof, obtained thereby in
connection with this Agreement that are subject to such confidence, with any
such destruction confirmed to the other party in writing. The provisions of
this Article 26 shall survive Closing. Purchaser hereby indemnifies and holds
Seller harmless from any and all claims, losses, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' fees) arising
in connection with the violation of any of Purchaser's obligations under this
Article 26. Seller hereby indemnifies and holds Purchaser harmless from any
and all claims, losses, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees) arising in connection with the
violation of any of Seller's obligations under this Article 26.
27. Further Assurances.
-------------------
The parties each agree to do such other and further acts and things, and
to execute and deliver such instruments and documents (not creating any
obligations additional to those otherwise imposed by this Agreement) as
either may reasonably request from time to time, whether at, before or after
the Closing, to confirm or effectuate the provisions of this Agreement.
28. Deleted Prior to Execution.
--------------------------
29. DAP Contract
------------
Purchaser acknowledges and agrees that its rights hereunder are subject
to the rights of DAP under the DAP Contract and to Seller's obligations
thereunder until the DAP Closing Date and, thereafter, subject to the rights
of DAP under the DAP Contract and to Seller's obligations thereunder that
survive the DAP Closing Date. True and correct copies of the DAP Contract
have been delivered to Purchaser the receipt of which is hereby acknowledged.
Seller covenants that it will not (x) grant any option to purchase, or enter
into any other agreement to sell or net lease the Premises or convey all, or
any portion of, the Premises during such time as this Agreement is in full
force and effect or (y) modify the DAP Contract, waive any rights thereunder,
grant any consents thereunder or enter into any agreement with respect to any
portion of the Property which in any way would have a material adverse effect
upon the rights of Purchaser hereunder or (z) enter into any agreement with
respect to any portion of the Property which would preclude Seller from
performing its obligations hereunder, without, in each case, Purchaser's
prior written consent, which consent may be withheld in Purchaser's sole
discretion. Except as expressly set forth in this Agreement, neither party
has any obligation to sell or purchase the Premises. To the extent DAP has
made any representations or indemnifications with respect to the Premises in
the DAP Contract which survive the DAP Closing Date and which are assignable
(collectively the "Surviving Reps"), Seller shall assign such Surviving Reps
to the Tenancy and/or to Purchaser at Closing, without any representation or
warranty by, or recourse against, Seller whatsoever. If such Surviving Reps
are not assignable Purchaser and/or the Tenancy shall be entitled, at
Purchaser's expense, to make such claims in Seller's name, as Purchaser
and/or the Tenancy may elect in connection with such Surviving Reps.
30. Additional Covenants
--------------------
30.1 During the period from the date hereof until the occurrence of the
DAP Closing Date and provided this Agreement is in full force and effect,
Seller shall:
30.1.1 use reasonable efforts to cause DAP to perform its
obligations under the DAP Contract to the extent reasonably necessary for
Seller to comply with its obligations hereunder;
30.1.2 in accordance with Section 7.1.4 of the DAP Contract
request that DAP effectuate Phase 1 and Phase 2 of the Local Law 10 work (the
"Facade Work") under the Capital Improvement Contracts, as such term is
defined in the DAP Contract.
30.1.3 use reasonable efforts to obtain the consent of DAP to
such matters as Purchaser may reasonably request.
30.1.4 not assign the DAP Contract to an unaffiliated entity.
30.1.5 not extend the scheduled DAP Closing Date past December
31, 1997, without Purchaser's consent, which consent may be withheld in
Purchaser's sole discretion.
30.2 Deleted Prior to Execution.
30.3 Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel as escrow
agent ("Escrow Agent") acknowledges receipt of ONE HUNDRED THOUSAND AND
00/100 DOLLARS ($100,000.00) from Seller and ONE HUNDRED THOUSAND AND 00/100
DOLLARS ($100,000.00) from Purchaser (collectively, the "Condominium
Diligence Deposit"). The Condominium Diligence Deposit shall be held by
Escrow Agent in an interest bearing escrow at Citibank, N.A. Escrow Agent
shall have no liability for any fluctuations in the interest rate paid by
Citibank, N.A. on the Condominium Diligence Deposit and is not a guarantor
thereof. The Condominium Diligence Deposit shall be disbursed in accordance
with the terms and conditions of this Agreement. Any interest earned on the
Condominium Diligence Deposit shall be deemed added to and shall be deemed
part of the Condominium Diligence Deposit.
30.3.1 Purchaser and Seller each agree to promptly and jointly
engage the consultants referenced below (collectively, the "Consultants")
which Consultants shall use their best efforts and engage such other
professionals as they may reasonably require (the "Professionals") in order
to (x) prepare plans and specifications required for creation of the
Condominium and completion of the Condominium Governing Documents and to
resolve all matters as specified on Schedule A attached hereto and made a
part hereof (collectively, the "Condominium Engineering Issues") on or before
the DAP Closing Date (the "Initial Completion Date") and (y) prepare a budget
for the Condominium regarding capital expenses and costs in connection with
the Common Elements (the "Condominium Common Budget") on or before the DAP
Closing Date (the "Initial Budget Completion Date"). If Purchaser and Seller
cannot, in good faith, agree on the resolution of any of the disputed
Condominium Engineering Issues by the Initial Completion Date, then, within
five (5) days after the Initial Completion Date, Purchaser and Seller shall,
in good faith, select a consultant to serve as a dispute resolution
consultant (the "Dispute Resolution Consultant"). If Purchaser and Seller
cannot agree on the selection of a Dispute Resolution Consultant, than
Purchaser and Seller each shall select and notify the other party within two
(2) business days thereafter of the identity of a consultant (respectively,
the "Purchaser's Engineering Selection Consultant" and "the "Seller's
Engineering Selection Consultant") who shall use their best efforts to agree
upon the selection of the Dispute Resolution Consultant. If Purchaser's
Engineering Selection Consultant and Seller's Engineering Selection
Consultant fail to agree upon the designation of the Dispute Resolution
Consultant within three (3) business days thereafter, the Dispute Resolution
Consultant shall be appointed by a Justice of the Supreme Court of the State
of New York within ten (10) days thereafter. Upon the final designation of
the Dispute Resolution Consultant, such disputed Condominium Engineering
Issues and all documentation, plans, drawings and any other relevant
materials in connection therewith together with proposals for the resolution
thereof, one proposal as prepared by Purchaser and one proposal as prepared
by Seller, shall be submitted the Dispute Resolution Consultant. The Dispute
Resolution Consultant shall use best efforts to, no later than within thirty
(30) days from the Initial Completion Date but in no event later than sixty
(60) days from the Initial Completion Date, resolve the disputed Condominium
Engineering Issues by choosing from the proposal submitted by Purchaser and
the proposal submitted by Seller (the "Resolution Determination") and such
Resolution Determination shall be binding upon Purchaser and Seller.
30.3.2 If Purchaser and Seller cannot, in good faith, agree on
the Condominium Common Budget by the Initial Budget Completion Date, then,
within five (5) days after the Initial Budget Completion Date, Purchaser and
Seller shall in good faith select a consultant to serve as a budget dispute
resolution consultant (the "Budget Dispute Resolution Consultant"). If
Purchaser and Seller cannot agree on the selection of a Budget Dispute
Resolution Consultant, than Purchaser and Seller each shall select and notify
the other party within two (2) business days thereafter of the identity of a
consultant (respectively, the "Purchaser's Budget Selection Consultant" and
"the "Seller's Budget Selection Consultant") who shall use their best efforts
to agree upon the selection of the Budget Dispute Resolution Consultant. If
Purchaser's Budget Selection Consultant and Seller's Budget Selection
Consultant fail to agree upon the designation of the Budget Dispute
Resolution Consultant within three (3) business days thereafter, the Dispute
Resolution Consultant shall be appointed by a Justice of the Supreme Court of
the State of New York within ten (10) days thereafter. Upon the final
designation of the Budget Dispute Resolution Consultant, the Condominium
Common Budget and all documentation, plans, drawings and any other relevant
materials in connection therewith, together with proposals for the resolution
of the dispute regarding the Condominium Common Budget, one proposal as
prepared by Purchaser and one proposal as prepared by Seller, shall be
submitted to the Budget Dispute Resolution Consultant. The Budget Dispute
Resolution Consultant shall use best efforts to no later than with thirty
(30) days from the Initial Budget Completion Date, but in no event later than
sixty (60) days from the Initial Budget Completion Date, resolve any disputes
in connection with the Condominium Common Budget by choosing from the
proposal submitted by Purchaser and the proposal submitted by Seller (the
"Budget Resolution Determination") and such Budget Resolution Determination
shall be binding upon Purchaser and Seller.
30.3.3 Seller and Purchaser agree that the following entities
shall be the Consultants for the following purposes in connection with the
Condominium Engineering Issues and Condominium Common Budget: Robert
Derector Associates shall be engaged for purposes of providing engineering
consulting; Fifield Piaker & Associates Architects PC shall be engaged for
purposes of providing architectural consulting; Solomon Engineering shall be
engaged for purposes of providing structural and mechanical consulting; and
Bone and Levine shall be engaged for purposes of providing Phase 3 Facade
Work consulting, all such Consultants to be engaged in accordance with joint
engagement letters which shall be subject to Seller's and Purchaser's mutual
approval such approval not to be unreasonably withheld or delayed.
30.3.4 Escrow Agent shall promptly pay from the Condominium
Diligence Deposit from time to time upon submission of invoices by the
Consultants and Professionals and the joint written approval of such invoices
by Seller and Purchaser, the fees incurred by the Consultants and the
Professionals in connection with the work performed as specified in
subsections 30.3.1, 30.3.2 and 30.3.3 above (the "Condominium Diligence
Fees"). In the event the Condominium Diligence Deposit is insufficient to
pay the Condominium Diligence Fees in full, Purchaser and Seller shall each
deposit an additional $50,000.00 (the "Additional Diligence Deposit") with
Escrow Agent within five (5) days after receipt of a notice from Escrow Agent
of such insufficiency. Notwithstanding the foregoing, Purchaser and Seller
shall be jointly responsible to pay any outstanding fees of the Consultants
and Professionals in excess of the Additional Diligence Deposit except Seller
and Purchaser acknowledge and agree that Seller shall bear and pay the fees
and disbursements of Escrow Agent in connection with Escrow Agent's
preparation and negotiation of the Condominium Governing Documents on behalf
of Seller and Purchaser shall bear and pay the fees and disbursements of its
own counsel in connection with its counsel's review and negotiation of the
Condominium Governing Documents. In the event there are any funds remaining
from the Condominium Diligence Deposit and/or the Additional Diligence
Deposit after payment in full of the Condominium Diligence Fees, such
remainder shall be paid by Escrow Agent one-half to Purchaser and one-half to
Seller. Notwithstanding anything contained herein to the contrary, in the
event of the termination of this Agreement, Seller shall be deemed the owner
of all materials prepared by the Consultants and Professionals in connection
herewith (collectively, the "Consulting Materials") and Purchaser shall
deliver to Seller, upon the termination of this Agreement, all Consulting
Materials in Purchaser's possession and shall direct any of the Consultants
and Professionals to deliver any Consulting Materials, in such respective
Consultants' or Professionals' possession, to Seller.
30.3.4.1 Notwithstanding anything contained herein to the
contrary, if Escrow Agent shall have received at any time before actual
disbursement of the Condominium Diligence Deposit, in whole or in part, a
written notice signed by either Seller or Purchaser disputing entitlement to
the Condominium Diligence Deposit, or shall otherwise believe in good faith
at any time that a disagreement or dispute has arisen between the parties
hereto over entitlement to the Condominium Diligence Deposit (whether or not
litigation has been instituted), Escrow Agent shall have the right, upon
written notice to both Seller and Purchaser, (a) to deposit the Condominium
Diligence Deposit with the Clerk of the Court in which any litigation is
pending and/or (b) to take such reasonable affirmative steps as it may, at
its option, elect in order to terminate its duties as Escrow Agent,
including, without limitation, the depositing of the Condominium Diligence
Deposit with a court of competent jurisdiction and the commencement of an
action for interpleader, the costs thereof to be borne by whichever of Seller
or Purchaser is the losing party, and thereupon Escrow Agent shall be
released of and from all liability hereunder except for any previous gross
negligence or willful misconduct. Escrow Agent is acting hereunder without
charge as an accommodation to Purchaser and Seller, it being understood and
agreed that Escrow Agent shall not be liable for any error in judgment or any
act done or omitted by it in good faith or pursuant to court order, or for
any mistake of fact or law. Escrow Agent shall not incur any liability in
acting upon any document or instrument believed thereby to be genuine. Escrow
Agent is hereby released and exculpated from all liability hereunder, except
only for its willful misconduct or gross negligence. Escrow Agent may assume
that any person purporting to give it any notice on behalf of any party has
been authorized to do so. Escrow Agent shall not be liable for, and Purchaser
and Seller hereby jointly and severally agree to indemnify Escrow Agent
against, any loss, liability or expense, including reasonable attorney's fees
(either paid to retained attorneys or representing the fair value of legal
services rendered by Escrow Agent to itself), arising out of any dispute
under this Agreement, including the cost and expense of defending itself
against any claim arising hereunder. The provisions of the foregoing
sentence shall survive the Closing. Notwithstanding anything to the contrary
herein contained, Purchaser agrees that Escrow Agent may represent Seller as
Seller's counsel in any action, suit or other proceeding between Seller and
Purchaser or in which Seller and Purchaser may be involved.
30.3.5 Purchaser and Seller agree to consult from time to time
with any prospective purchaser, lessee, manager, partner and/or investor of
Unit 1 regarding the Condominium, including, without limitation, the terms of
the Condominium Governing Documents and the Condominium Engineering Issues.
30.4 Purchaser agrees to make and/or to cause a related entity
(collectively, the "Lender") to make to Seller an acquisition financing loan
(the "Loan") in the amount of $15,500,000.00 which Loan shall be upon such
terms and conditions as are mutually acceptable to Purchaser and Seller.
31. Amendment and Restatement.
-------------------------
This Agreement fully restates, amends and supersedes the Initial
Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
PURCHASER:
GREEN 17 BATTERY LLC
A NEW YORK LIMITED LIABILITY COMPANY
BY: /s/ Stephen L. Green
______________________________
NAME: STEPHEN L. GREEN
TITLE: MEMBER
SELLER:
17 BATTERY ASSOCIATES LLC,
A NEW YORK LIMITED LIABILITY COMPANY,
BY: 17 DIAMOND CORP.,
A NEW YORK CORPORATION,
MANAGER
BY: /s/ Allen Gross
______________________________
NAME: ALLEN GROSS
TITLE: PRESIDENT
LIST OF EXHIBITS/SCHEDULES
--------------------------
EXHIBITS
- --------
Exhibit A Description of Land
Exhibit A-1 Seller's Wire Instructions
Exhibit A-2 Escrow Agent's Wire Instructions
Exhibit B Space Leases
Exhibit B-1 Security Deposits
Exhibit B-2 Security Deposit Deficiencies
Exhibit C Service Contracts
Exhibit C-1 Capital Improvement Contracts
Exhibit D Title Exceptions
Exhibit E Deleted Prior to Execution
Exhibit F Rent Roll
Exhibit G Employees
Exhibit H Deleted Prior to Execution
Exhibit I Deleted Prior to Execution
Exhibit I-1 Assignment of Space Leases and Security Deposits
Exhibit J Notice to Tenants
Exhibit J-1 Assignment of Service Contracts
Exhibit J-2 Bill of Sale
Exhibit J-3 Deleted Prior to Execution
Exhibit J-4 Assignment and Assumption of Union Agreements
Exhibit K Union Agreements
Exhibit L Deleted Prior to Execution
Exhibit M TIC Agreement
SCHEDULES
- ---------
Schedule A Condominium Engineering Issues
EXHIBIT 2.3
ASSIGNMENT AND ASSUMPTION OF CONTRACT
-------------------------------------
Agreement made as of this 3rd day of September, 1997, by and between
Green 17 Battery LLC, a New York limited liability company having an address
at 70 West 36th Street, New York, New York ("Assignor") and SL Green
--------
Operating Partnership, L.P., a Delaware limited partnership having an address
at 70 West 36th Street, New York, New York ("Assignee").
--------
RECITALS
--------
Assignor is the contract vendee under that certain agreement of sale
between Assignor, as purchaser, and 17 Battery Associates LLC, as seller,
dated as of June 27, 1997, covering the property and interests more
particularly therein (the "Contract").
--------
Pursuant to the Option to Purchase dated as of July 25, 1997 (the
"Option"), Assignor agreed, inter alia, to assign the Contract, to Assignee
------ ----------
and Assignee agreed to assume Assignor's obligations thereunder and with
respect thereof.
AGREEMENTS
----------
In consideration of the promises and conditions contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Assignor hereby assigns to Assignee, without warranty,
representation or recourse, all of its right, title and interest in, to and
under the Contract and to the Earnest Money Deposit (as defined therein).
2. Assignee hereby assumes the Contract and all of Assignor's
obligations under the Contract and Assignee agrees to indemnify Assignor
against and hold Assignor harmless from any and all costs, damages,
liabilities and expenses, including, without limitation, reasonable
attorney's fees, imposed upon or incurred by Assignor by reason of Assignee's
failure to perform the purchaser's obligations under the Contract arising
from and after the date of this Agreement.
3. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto, their successors in interest and assigns.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
ASSIGNOR:
GREEN 17 BATTERY LLC, Seller
By: /s/ Stephen L. Green
-------------------------
Stephen L. Green
Member
ASSIGNEE:
SL GREEN OPERATING PARTNERSHIP, L.P.,
Purchaser
By: SL Green Realty Corp.,
its general partner
By: /s/ Stephen L. Green
------------------------
Stephen L. Green
President
EXHIBIT 2.4
ASSIGNMENT AND ASSUMPTION OF AGREEMENT
--------------------------------------
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
is hereby acknowledged, 17 Battery Associates LLC ("Assignor") hereby assigns
to 17 Battery Upper Partners LLC ("Assignee") all of Assignor's right, title
and interest in and to that certain Amended and Restated Agreement of Sale
(the "Agreement"), dated as of June 27, 1997, between Assignor and Green 17
Battery LLC, and Assignee hereby assumes all of Assignor's obligations and
liabilities under the Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have duly executed this
Assignment as of December 19, 1997.
17 BATTERY ASSOCIATES LLC,
a New York limited liability company
By: 17 Diamond Corp., its manager
By: /s/ Allen I. Gross
____________________
Allen I. Gross
President
17 BATTERY UPPER PARTNERS LLC,
a New York limited liability company
By: 17 Battery Associates LLC,
its manager
By: 17 Diamond Corp., its manager
By: /s/ Allen I. Gross
____________________
Allen I. Gross
President
EXHIBIT 2.5
ASSIGNMENT AND ASSUMPTION OF AGREEMENT
--------------------------------------
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
is hereby acknowledged, Green 17 Battery LLC ("Assignor") hereby assigns to
SLG 17 Battery LLC ("Assignee") all of Assignor's right, title and interest
in and to that certain Amended and Restated Agreement of Sale (the
"Agreement"), dated as of June 27, 1997, between Assignor and 17 Battery
Associates LLC, and Assignee hereby assumes all of Assignor's obligations and
liabilities under the Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have duly executed this
Assignment as of December 19, 1997.
GREEN 17 BATTERY LLC,
a New York limited liability company
By: /s/Benjamin P. Feldman
__________________________________
Name: Benjamin P. Feldman
SLG 17 BATTERY LLC,
a New York limited liability company
By: SL Green Operating Partnership, L.P.,
its sole member
By: SL Green Realty Corp.,
its general partner
By: /s/ Benjamin P. Feldman
_____________________________
Benjamin P. Feldman
Executive Vice President
EXHIBIT 2.6
TENANCY IN COMMON AGREEMENT
---------------------------
THIS TENANCY IN COMMON AGREEMENT (the "Agreement") made as of this 19th
day of December, 1997 between 17 BATTERY UPPER PARTNERS LLC, a New York
limited liability company, having an address at c/o GFI Realty Services,
Inc., 50 Broadway, New York, New York 10004 (hereinafter called "Upper") and
SLG 17 BATTERY LLC, a New York limited liability company, having an office at
c/o SL Green Realty, Inc., 70 West 36th Street, New York, New York 10018
(hereinafter called "Green") (Upper and Green are collectively hereinafter
referred to as "Owners" and individually as an "Owner").
RECITALS
--------
A. Upper and Green have, as of the date hereof, acquired pursuant to
the Green Contract (as such term is hereinafter defined) as tenants in common
from Downtown Acquisition Partners, L.P. ("DAP") an undivided interest (each,
a "Tenancy Interest") in that certain lot, piece or parcel of land (the
"Land"), located in the City, County and State of New York, as more
particularly bounded and described in Exhibit A attached hereto made a part
hereof, together with the Buildings erected thereon and any and all other
fixtures and improvements erected thereon (the Buildings and such other
fixtures and improvements being hereinafter collectively referred to as the
"Improvements");
TOGETHER with all right, title and interest of DAP, if any, in and to
(a) the land lying in the bed of any street, highway, road or avenue, opened
or proposed, public or private, in front of or adjoining the Land, to the
center line thereof, (b) any rights of way, appendages, appurtenances,
easements, sidewalks, alleys, gores or strips of land adjoining or
appurtenant to the Land and used in conjunction therewith and (c) any award
or payment made or to be made in lieu of any of the foregoing for a taking of
the Property (as hereinbelow defined) or any portion thereof and any unpaid
award for damage to the Land or the Improvements by reason of change of grade
or closing of any street, road or avenue;
TOGETHER ALSO with all right, title and interest of DAP, if any, in and
to all fixtures, machinery, and equipment and other personal property
(excluding furniture, furnishings, equipment and other personal property of
space lessees of the Property) used in connection with or attached or
appurtenant to or at or upon the Land and the Improvements at the date
hereof, including, without limitation, such fire protection, heating,
plumbing, electrical and air conditioning systems as now exist thereat. All
of the above property, rights and interests to be sold pursuant to the DAP
Contract (including, without limitation, the Land and the Improvements) are
hereinafter sometimes collectively referred to as the "Property."
B. Pursuant to that certain Amended and Restated Agreement of Sale,
dated as of June 27, 1997, (the "Green Contract"), between 17 Battery
Associates LLC ("Associates"), predecessor in interest to Upper, and Green 17
Battery LLC ("Green Battery"), predecessor in interest to Green, the parties
intend to convert the Property to condominium ownership pursuant to the
provisions of Article 9-B of the Real Property Law of the State of New York
in accordance with
the "Condominium Documents" (as such term is hereinafter defined) and upon
such conversion Green would own Units 2 and 3 and Upper would own Unit 1 (all
such Units as described and defined in the Condominium Documents). The
condominium would be known as "The 17 Battery Place Condominium" (the
"Condominium").
C. In order to permit the closing with DAP and the closing under the
Green Contract to occur contemporaneously therewith and prior to the
conversion of the Property to condominium ownership, Upper and Green desire
to enter into this Agreement to provide for, among other things, the
continuous and orderly operation and maintenance of the Property prior to the
conversion of the Property to condominium ownership and to set forth certain
other terms and conditions with respect to their respective ownership of
their Tenancy Interests in the Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby covenant
and agree as follows:
1. Definitions.
-----------
1. "BY-LAWS" shall mean the by-laws of the Condominium in the
form annexed to the Declaration as Schedule F, as amended from
time to time pursuant to the terms thereof and including the
Rules and Regulations, subject to the modifications required
or permitted under Section 22 of this Agreement.
2. "CONDOMINIUM DOCUMENTS" shall mean the Declaration, By-Laws,
Rules and Regulations and Floor Plans of the Condominium,
including the Exhibits thereto, as each may be amended from
time to time in accordance with the terms of the Declaration.
3. "CONVERSION" shall mean the conversion of the Property to
condominium ownership pursuant to Article 9-A of the New York
State Real Property Law by Green and Upper in accordance with
the terms of the No Action Application, the No Action Letter,
this Agreement and the Green Contract.
4. "DECLARATION" shall mean the declaration to be executed by
Upper and Green as the Declarant for the purposes of
submitting the Property to the provisions of the Condominium
Act and establishing a regime for the condominium ownership
thereof and shall include any amendments duly adopted in
accordance with Articles IX, XII, XIV and XIX of the
Declaration, which shall be substantially in the form annexed
hereto as Exhibit B, subject to the modifications required or
permitted under Section 22 of this Agreement.
5. "EFFECTIVE DATE" shall mean the date upon which the following
have occurred: the Condominium Documents have been filed with
the applicable Governmental Authorities in accordance with the
requirements of the Condominium Act and the No Action Letter
has been issued by the New York State Department of Law in
accordance with the No Action Application.
6. "FLOOR PLANS" shall mean the floor plans of the Building
prepared by Fifield Piaker, Registered Architects and filed in
the Office of the Register of the City of New York in New York
County contemporaneously with the recording of the
Declaration, as the same may be amended from time to time
pursuant to the Declaration, which shall be substantially in
the form annexed hereto as Exhibit C, subject to the
modifications required or permitted under Section 22 of this
Agreement.
7. "NO ACTION APPLICATION" shall mean all documents, schedules,
exhibits and other instruments to be filed in connection with
the application by Green and Upper to the New York State
Department of Law requesting the issuance of a No Action
Letter in connection with the Conversion.
8. "NO ACTION LETTER" shall mean a letter issued by the New York
State Department of Law permitting the Conversion in
accordance with the No Action Application without a formal
offering plan under Article 23-A of the New York State General
Business Law and the rules and regulations of the New York
State Department of Law promulgated in connection therewith.
9. "OFFERING PLAN" shall mean any plan by Upper or its successors
in interest to offer Subdivided One Units for sale pursuant to
Article 23-A of the New York State General Business Law and
the rules and regulations of the New York State Department of
Law promulgated in connection therewith.
10. "RULES AND REGULATIONS" shall mean the rules and regulations
of the Condominium annexed to the By-Laws as Schedule 1, as
any of the same may be amended from time to time pursuant to
the terms of the By-Laws, subject to the modifications
permitted or required under Section 22 of this Agreement.
All other capitalized terms used herein and not defined herein
shall have the meaning ascribed respectively thereto in the Declaration.
2. Formation.
---------
(a) The parties hereby form a tenancy in common (the "Tenancy").
Upper shall have the exclusive right of use and enjoyment of Unit 1, subject
to the easements and rights set forth in the Declaration, and Green shall
have the exclusive right of use and enjoyment of Units 2 and 3, subject to
the easements and rights set forth in the Declaration.
(b) The Tenancy shall be deemed to have commenced as of the date
hereof and shall continue in full force and effect until the Effective Date.
3. Office.
------
The Tenancy shall have its principal office at c/o S.L. Green
Management Corp., 70 West 36/th/ Street, New York, New York 10019.
4. Purpose.
-------
The purpose and business of the Tenancy shall be to hold the
Property for business and/or investment, to cause the creation of the
Condominium, and to conduct such other activities as may be necessary or
appropriate in connection with the foregoing.
5. Partition.
---------
Notwithstanding any default under this Agreement, and except as
otherwise provided in Section 10 and Section 11 herein, neither Owner shall
be entitled under any circumstances to seek partition of the Property and, on
behalf of themselves, their legal representatives, heirs, successors and
assigns, each Owner hereby expressly renounces, waives and forfeits all
rights whether arising under contract, statute or by operation of law, to
seek, bring or maintain any action for partition pertaining to the Property.
6. Managing Agent/Leasing Agent.
----------------------------
(a) The Tenancy shall retain S.L. Green Management Corp. (the
"Managing Agent") and S.L. Green Leasing, Inc. (the "Leasing Agent") (or such
affiliates thereof as may be designated by the Managing Agent and/or the
Leasing Agent) to manage and lease the Property pursuant to an agreement
dated as of the date hereof (the "Management Agreement"). All references in
the Management Agreement to Owner shall be deemed references only to the
affected Owner(s) (i.e. Green with respect to Units 2 & 3 and Upper with
respect to Unit 1). All employees at the Property during the term hereof
shall be the employees of the Tenancy. All leases entered into by the
Tenancy from and after the date hereof until the Effective Date (the "Tenancy
Leases") shall contain the provisions set forth in Exhibit D-1 annexed hereto
and made a part hereof. No Tenancy Lease shall be entered into demising
premises which include space in Unit 1 without Upper's consent, in its sole
discretion. No Tenancy Lease shall be entered into demising premises which
include space in Unit 2 and/or Unit 3 without Green's consent in its sole
discretion. Upper, in its sole discretion, may enter into any Tenancy Lease
demising premises for space exclusively located within Unit 1 without Green's
consent provided, in each case, such Tenancy Lease contains the provisions
set forth in Exhibit D-1 and otherwise complies with the terms of this
Agreement. Green, in its sole discretion, may enter into any Tenancy Lease
demising premises for space exclusively located within Unit 2 and/or Unit 3
without Upper's consent provided, in each case, such Tenancy Lease contains
the provisions set forth in Exhibit D-1 and otherwise complies with the terms
of this Agreement. Notwithstanding the foregoing, if requested, Upper shall
consent in writing to any Tenancy Lease demising space solely within Unit 2
and/or Unit 3 which Green desires to enter into, and Green shall consent in
writing to any Tenancy Lease demising space solely within Unit 1 which Upper
desires to enter into, provided, in each case, such Tenancy Lease contains
the provisions set forth in Exhibit D-1 and otherwise complies with the terms
of this Agreement. Green shall indemnify and hold Upper harmless from and
against any and all Claims with respect to any Tenancy Leases demising
premises in the areas of the Property which shall constitute Units 2 and 3
upon Conversion. Upper shall indemnify and hold Green harmless from and
against any and all Claims with respect to any Tenancy Leases demising
premises in the areas of the Property which shall constitute Unit 1 upon
Conversion. Without limiting the generality of the definition of Claims set
forth in the Declaration, the foregoing indemnifications of Green and Upper
shall include any Claims arising out of a breach of the provisions of this
subsection 6(a). The provisions of Article XXV of the Declaration shall
apply to the indemnities given by the parties pursuant to this subsection
6(a), and the indemnification provisions of this subsection 6(a) shall
survive the termination of the Tenancy and shall constitute an agreement
between Green and Upper as Unit Owners from and after the Effective Date.
(b) On the Effective Date, Upper and Green shall execute and
deliver: (i) a Confirmatory Assignment and Assumption of Tenant Leases
substantially in the form annexed hereto as Exhibit E (an "Assignment")
confirming the assignment to Upper of all of Green's right, title and
interest as landlord with Upper in the Tenancy Leases affecting Unit 1 and
the assumption by Upper of all obligations of landlord thereunder and (ii) an
Assignment confirming the assignment to Green of all of Upper's right, title
and interest as landlord with Green in the Tenancy Leases affecting Units 2
and 3 or any parts thereof and the assumption of all obligations of landlord
thereunder by Green.
(c) With respect to any Tenancy Lease (or amendment of existing
lease) with a Relocated Tenant, Upper shall have no obligation to contribute
toward the brokerage commission, if any, payable to Leasing Agent.
7. Allocation of Property Income.
-----------------------------
Associates acknowledges and agrees that, as a consequence of owning
its Tenancy Interest, it is entitled to all of the rents, issues and profits
of Unit 1 and none of the rents, issues and profits of Units 2 or 3. Green
acknowledges and agrees that, as a consequence of owning its Tenancy
Interest, it is entitled to all of the rents, issues and profits of Units 2
and 3, and none of the rents, issues and profits of Unit 1. Each Owner
agrees that, to the extent it (the "Excess Owner") receives a portion of such
rents, issues and profits in excess of the amount it is entitled to receive
(the "Excess") and the other Owner (the "Deficiency Owner") has received less
than the portion of such rents, issues and profits that it is entitled to
receive, then, unless otherwise required by this Agreement, the Excess Owner
shall hold the Excess in trust for the Deficiency Owner and shall pay or
cause to be paid such amount to the Deficiency Owner within five (5) business
days of receipt thereof.
8. Responsibility for Property Expenses.
------------------------------------
(a) Each Owner agrees to pay or cause to be paid, unless otherwise
expressly provided for herein, its share of all real estate taxes due with
respect to the Property, (ii) all utilities, insurance and maintenance due
with respect to the Property, and all other charges, assessments and expenses
of the Property, in each case in accordance with the budget for the Property
attached hereto and made a part hereof as Exhibit H (the "Initial TIC
Budget"). The Initial TIC Budget shall be in effect for the twelve (12)
month period commencing on the date hereof (the "Initial TIC Budget Year").
In the event the Condominium is not created and the Budget, as defined in the
Declaration, is not effective prior to the end of the Initial TIC Budget
Year, the provisions of Article V, Section 1 of Schedule G of the Declaration
shall govern the Tenancy regarding the establishment of budgets for the
Property subsequent to the Initial TIC Budget as if the Declaration was in
full force and effect and the Owners owned the Units as contemplated in the
Green Contract and Declaration.
(b) If an Owner (the "Non-Paying Owner") shall fail for any reason
to make any payment required pursuant to Section 8(a) above on the date due
and such amount remains unpaid for ten (10) days after written notice of such
failure, the other Owner (the "Paying Owner") may make all or part of such
payment on behalf of the Non-Paying Owner which payment shall be deemed to be
a loan by such Paying Owner to the Non-Paying Owner (the unpaid principal
amount of such loan plus any and all unpaid interest accrued thereon and any
other amounts deemed to be included in the term Shortfall Loan (as
hereinafter defined) pursuant to the terms of this Agreement are hereinafter
collectively referred to as the "Shortfall Loan").
(c) The Shortfall Loan shall bear interest at a rate equal to five
percent (5%) per annum above the Prime Rate (as hereinafter defined) from
time to time in effect or, if lower, the maximum rate permitted by applicable
law, and shall be payable as provided in this Section 8(c) and Section 8(d)
below and if not prepaid sooner shall be paid upon the termination of this
Agreement. Such Shortfall Loan shall be payable on demand of the Paying
Owner. The term "Prime Rate" shall mean the rate of interest announced
publicly by Citibank N.A. (or its successor) in New York City, from time to
time as its prime or base rate, which may not be its lowest rate of interest
charged.
At the request of the Paying Owner, the Non-Paying Owner shall in
confirmation of a Shortfall Loan, deliver to the Paying Owner (1) a duly
executed note evidencing its obligations under the Shortfall Loan, (2) a duly
executed and acknowledged mortgage securing the aforesaid note in form
reasonable satisfactory to the Paying Owner, and which upon recordation shall
be lien upon the Non-Paying Owner's interest in the Property, (3) such other
documents and instruments necessary to record such mortgage and (4) such
amounts as may be necessary to effect such recordation, including all
mortgage recording taxes; provided that in the event the Non-Paying Owner
fails to pay any or all of such amount, the Paying Owner may, in its sole
discretion, pay such amount and such amount shall be deemed to be added to
such Shortfall Loan from the Paying Owner to the Non-Paying Owner; and
provided further that the failure by the Non-Paying Owner to execute and/or
deliver any such documents shall not diminish the Paying Owner's rights or
the Non-Paying Owner's obligations hereunder. In addition to and not in
limitation of the foregoing, (A) the Non-Paying Owner shall take all actions
and deliver all such further documents as shall be necessary to enable the
Paying Owner to record such mortgage and to exercise all its rights hereunder
and (B) the Non-Paying Owner shall pay all expenses incurred in relation to
the establishment, preservation and enforcement of the Paying Owner's rights
hereunder (including reasonable attorneys' fees) and the amount of such
expenses shall be deemed to be an additional Shortfall Loan from the Paying
Owner to the Non-Paying Owner.
Each Owner hereby appoints the other Owner, with full powers of
substitution, as its true and lawful attorney-in-fact with full, irrevocable
power and authority in such Owner's name, from time to time and at any time
until the payment in full of all Shortfall Loans made to such Owner to make,
execute, acknowledge, deliver, file and record such note, mortgage and other
documents and instruments referred to above and to take any other or further
action which the attorney-in-fact shall consider necessary or desirable in
connection therewith. This power-of-attorney is coupled with an interest and
shall be irrevocable and shall be binding upon all successors and assigns of
such Owner until all such Shortfall Loans have been paid in full by such
Owner.
Any lien arising hereunder or pursuant hereto in favor of a Paying
Owner shall be superior to any other lien hereafter arising on any interest
of the Non-Paying Owner in the Property. Each Owner agrees that any mortgage
or other security document hereafter entered into by such Owner with respect
to any of its interests in the Property shall expressly provide that the lien
thereunder is subordinate to any lien arising hereunder or pursuant hereto in
favor of the Paying Owner.
The Paying Owner making a Shortfall Loan shall look only to the
Non-Paying Owner's interest in the Property for satisfaction of the
obligations of the Non-Paying Owner with respect to any and all Shortfall
Loans made to it in the event of any default by the Non-Paying Owner in the
payment thereof and no other property or assets of the Non-Paying Owner or
its members, shareholders or partners, as the case may be, or its affiliates,
disclosed or undisclosed, shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the Non-Paying Owner's
obligations with respect to any Shortfall Loans.
(d) Until the Shortfall Loan shall be paid in full, any and all
payments that otherwise would be payable to the Non-Paying Owner with respect
to its Tenancy Interest shall be made to the Paying Owner to be applied to
the payment of the Shortfall Loan, first to accrued and unpaid interest
thereon and second to the payment of the outstanding principal amount of the
Shortfall Loan until the Shortfall Loan and interest thereon has been paid in
full.
9. Insurance.
---------
The Owners shall jointly keep or cause to be kept the Property
insured substantially in accordance with the insurance guidelines set forth
on Exhibit O attached hereto and made a part hereof. The policies required
to be furnished pursuant to this Section 9 may be maintained by the Managing
Agent upon the Owners' behalf under a blanket policy or policies; provided,
however, that the minimum amount of the total insurance afforded by such
blanket policy which shall be allocable to the Property and any Work to be
performed thereon and any sublimits of such policy allocable to the Property
shall be in amounts which shall not be less than the amounts of the insurance
required in Exhibit O and the protection afforded under such policy shall be
not less than which would have been afforded under a separate policy or
policies, and the certificate evidencing such insurance shall contain
provisions confirming the foregoing.
10. Repairs After Fire or Other Casualty.
------------------------------------
(a) In the event of damage to or destruction of the Property as a
result of fire or other casualty (a "Casualty"), except as provided to the
contrary in subsection 10(b), the Tenancy shall arrange for Repairs to be
made promptly to the Property. All proceeds of the applicable insurance
policies payable to the Tenancy shall be paid to the Insurance Trustee (as
such term is defined in the Declaration) and shall be disbursed by the
Insurance Trustee in accordance with the provisions of this Section 10. If
the Casualty affects only that part of the Property which would be contained
wholly within a Unit upon Conversion (a "Future Unit"), then (i) the
adjustment of the proceeds shall be determined by the Owner who will be the
Unit Owner of such Unit upon Conversion (the "Future Unit Owner"); (ii) the
proceeds shall be disbursed by the Insurance Trustee to the contractors
engaged in making such Repairs to pay for the cost thereof as directed by the
Future Unit Owner of the affected Future Unit in appropriate progress
payments; and (iii) the cost of such Repairs in excess of such proceeds shall
be paid by the Future Unit Owner of the affected Future Unit. If the
Casualty affects only the North Building, then (A) the adjustment of the
proceeds shall be determined by Green; (B) the proceeds shall be disbursed by
the Insurance Trustee to the contractors engaged in making such Repairs to
pay for the cost thereof as directed by Green in appropriate progress
payments; and (C) the cost of such Repairs in excess of such proceeds shall
be paid by Green. If the Casualty affects both Buildings or those parts of
the Property which would be General Common Elements or South Building Limited
Common Elements upon Conversion, then: (w) the proceeds shall be adjusted by
mutual agreement of Upper and Green and allocated between the Buildings pro
rata in proportion to the cost of Repairs to each Building; (x) the proceeds
shall be disbursed by the Insurance Trustee to the contractors engaged in
making such Repairs to pay for the cost thereof as directed by the Owners in
appropriate progress payments; (y) the cost of Repairs to each Building in
excess of such proceeds allocated to such Building shall be paid by the
Owners as follows: (1) with respect to Repairs to a Future Unit, by the
Future Unit Owner of such Future Unit; (2) with respect to Repairs to those
portions of the Property which will be South Building Limited Common Elements
upon Conversion, by the Owners in equal shares; and (3) with respect to those
portions of the Property which will be General Common Elements upon
Conversion, pro rata in the same proportion as the Common Interests
appurtenant to their respective Future Units as set forth on Schedule B of
the Declaration bears to 100%. Any proceeds exceeding the costs of Repairs
shall be divided between the Owners in the same proportion as the Common
Interests appurtenant to their respective Future Units bears to 100%, and the
portions of such net proceeds as so divided shall be paid to each Owner after
first paying to any mortgagees of the Property and any other holders of liens
against the Property out of each Owner's share, the amount of any unpaid
liens for which such Owner is responsible, in the order of their priority.
(b) If seventy-five (75%) percent or more of the Property is
destroyed or substantially damaged and, within sixty (60) days after the date
of such Casualty, the Owners do not jointly agree to proceed to make the
Repairs described in subsection 10(a), then the Property shall be subject to
an action for partition at the suit of either Owner, in which event the net
proceeds of sale, together with the net proceeds of insurance policies, shall
be divided between the Owners in proportion to the respective Common
Interests of their Future Units and the portions of such proceeds as so
divided shall be paid to each of the Owners after first paying to any
mortgagees of the Property and any other holders of liens against the
Property out of each Owner's share, the amount of any unpaid liens for which
such Owner is responsible, in the order of priority of such liens.
11. Eminent Domain.
--------------
(a) In the event of a taking in condemnation or by eminent domain
of part or all of the Property (the "TAKING"), then, except as provided to
the contrary in subsection 11(b), the Tenancy shall arrange for Repairs to be
made promptly to the affected parts of the Property. The proceeds of any
award payable to the Tenancy in connection with a Taking shall be paid to the
Insurance Trustee and shall be disbursed by the Insurance Trustee in
accordance with the provisions of this Section 11. If the Taking affects
only a Future Unit, then (i) any settlement or adjustment of the award shall
be determined by the Future Unit Owner of the affected Future Unit; (ii) the
net award shall be disbursed by the Insurance Trustee to the contractors
engaged in making such Repairs to pay for the cost thereof as directed by the
Future Unit Owner of the affected Future Unit in appropriate progress
payments; and (iii) the cost of such Repairs in excess of such net award
shall be paid by the Future Unit Owner of the affected Future Unit. If the
Taking affects only the North Building, then (A) the adjustment of the award
shall be determined by Green; (B) the net award shall be disbursed by the
Insurance Trustee to the contractors engaged in making such Repairs to pay
for the cost thereof as directed by Green in appropriate progress payments;
and (C) the cost of such Repairs in excess of such net award shall be paid by
Green. If the Taking affects both Buildings or those parts of the Property
which would be General Common Elements or South Building Limited Common
Elements upon Conversion, then: (w) the award shall be adjusted by mutual
agreement of Upper and Green and allocated between the Buildings pro rata in
proportion to the cost of Repairs to each Building; (x) the net award shall
be disbursed by the Insurance Trustee to the contractors engaged in making
such Repairs to pay for the cost thereof as directed by the Owners in
appropriate progress payments; (y) the cost of Repairs to each Building in
excess of such net award allocated to such Building shall be paid by the
Owners as follows: (1) with respect to Repairs to a Future Unit, by the
Future Unit Owner of such Future Units; (2) with respect to Repairs to those
portions of the Property which will be South Building Limited Common Elements
upon Conversion, by the Owners in equal shares; and (3) with respect to those
portions of the Property which will be General Common Elements upon
Conversion, pro rata in the same proportion as the Common Interests
appurtenant to their respective Future Units as set forth on Schedule B of
the Declaration bears to 100%. Any proceeds exceeding the cost of such
Repairs shall be divided between the Owners in accordance with the Common
Interests appurtenant to their respective Future Units basis to 100% and the
portions of such net award as so divided shall be paid to each of the Owners
after first paying any mortgagees of the Property and any other holders of
liens against the Property out of each Owner's share, the amount of any
unpaid liens for which such Owner is responsible, in the order of their
priority.
(b) If the Taking affects seventy-five (75%) percent or more of
the Property and, within sixty (60) days after the date of such Taking the
Owners do not jointly agree to proceed to make the Repairs described in
subsection 11(a), then the Property shall be subject to an action for
partition at the suit of either Owner, in which event the net proceeds of
sale, together with the net proceeds of any awards, shall be divided between
the Owners in proportion to the respective Common Interests of their Future
Units and the portions of such proceeds as so divided shall be paid to each
of the Owners after first paying to any mortgagees of the Property and any
other holders of liens against the Property out of each Owner's share, the
amount of any unpaid liens for which such Owner is responsible, in the order
of priority of such liens.
(c) In the event of a Taking in which there is a disproportionate
taking of the space of each Future Unit so that any one Future Unit is left
with proportionately less space compared to the other Units than was the case
prior to any taking, then the Common Interests of the Unit Owners pursuant to
the Declaration shall be reallocated by the Tenancy based on the floor space
of each Unit after such taking, the location of such floor space, and the
additional factors listed in Article VI of the Declaration as applied based
on conditions after such Taking.
12. Decisions.
---------
Except as specifically delegated to the Managing Agent or as
otherwise set forth in the Budget or herein, all decisions regarding the
Property shall be made jointly by the Owners. Notwithstanding the foregoing,
each Owner shall have the sole right to make decisions with respect to its
Tenancy Interest, including a sale and/or financing thereof (subject to the
terms hereof), and with respect to the Units as if the Declaration was in
full force and effect and the Owners owned the Units as contemplated in the
Green Contract and Declaration. Any dispute, controversy or decision that
the Owners are unable to resolve or make may be submitted to arbitration at
the election of either Owner provided such dispute, controversy or decision
is of the nature that would permit a Unit Owner under the Declaration to
submit such dispute, controversy or decision to arbitration in accordance
with the Declaration and, upon such election, Article XII of Schedule G to
the Declaration shall govern the dispute and/or decision resolution process
in that instance.
13. Service Entrances.
-----------------
Notwithstanding anything contained herein or in the Declaration to
the contrary, Upper shall use diligent and reasonable commercial efforts to
obtain governmental approval ("Governmental Approval") for, and cause the
construction of, at its sole cost and expense, a new service entrance for
Units 2 and 3 (the "New Service Entrance") intended to be located at the
existing abandoned service entrance on the West Street side of the Building
as shown on the Floor Plans. The plans and specifications for the New
Service Entrance shall be subject to Green's approval which approval shall
not be unreasonably withheld or delayed. In the event that Upper is unable
to obtain Governmental Approval for the New Service Entrance in the location
as described above, Upper shall have the right to relocate the New Service
Entrance to another location, subject to Green's approval which approval
shall not be unreasonably withheld or delayed. In the event Upper is unable
to obtain Government Approval for the creation of a New Service Entrance at
the Property and at all times prior to the obtaining of same, the parties
shall, in good faith, make arrangements for the continued and mutual use of
the existing service entrance located in the North Building as shown on the
Floor Plans (the "Existing Service Entrance"). Upon completion of the New
Service Entrance and the receipt of all applicable governmental approvals, if
any, the use of and obligations in connection with the New Service Entrance
and the Existing Service Entrance shall be governed by the applicable
provisions of the Declaration. The provisions of this Article 13 shall
survive the termination of the Tenancy and shall constitute an agreement
between the parties hereto as Unit Owners from and after the Effective Date.
14. Certificate of Occupancy
------------------------
During the Tenancy, Upper may, but shall not be obligated to, apply
for an amendment to the existing Certificate of Occupancy (the "CO
Amendment"), for the Buildings for a change in use for the portion of the
Building intended to be Unit 1 of the Condominium but such issuance of the CO
Amendment shall be conditioned upon, and shall not be effective until, the
Building Systems Equipment has been separated and/or replacement equipment is
operative such that Unit 1 is no longer serviced by, or reliant upon, the
Building Systems Equipment servicing Unit 2 and/or Unit 3 except as otherwise
may be required by Applicable Law. Notwithstanding the foregoing in the
event any Work is performed by or on behalf of Upper or Green, as the case
may be, requiring Upgrade Work, then the provisions of Article XII,
Section C(3) of the Declaration shall govern the Tenancy as if the
Declaration was in full force and effect and the Owners owned the Units as
contemplated in the Green Contract and Declaration.
15. Relocation Space; Sandwich Lease Space; Lobby Mezzanine Space.
-------------------------------------------------------------
(a) Until December 31, 1998, Green shall cause 153,000 square feet
of the leaseable space contained within Units 2 and 3 (the "Relocation
Space") to remain vacant and free and clear of any leases, tenancies or other
occupancies for the purposes of making such Relocation Space available to any
tenants of Unit 1 (collectively, the "Relocated Tenant") wishing to relocate
within Unit 2 and/or Unit 3, upon such terms and conditions which are not
less favorable to the landlord than the terms set forth in the leasing
guidelines annexed hereto and made a part hereof as Exhibit F (the
"Guidelines"). Upon request by either of the parties hereto, the parties
shall, in good faith, designate the exact location of the Relocation Space.
Notwithstanding the foregoing, in the event the Guidelines are not met for
any proposed Relocated Tenant but Upper nevertheless desires to have such
proposed Relocated Tenant relocate to Unit 2 and/or Unit 3, such Guidelines
shall be deemed to have been met for such proposed Relocated Tenant if Upper
shall pay to Green, upon the actual relocation from Unit 1 to Unit 2 or Unit
3 of such Relocated Tenant, a sum equal to the present value (using an
interest rate of eight (8%) percent per annum) of the amount required so that
when such amount is considered in the aggregate with the other economic terms
applicable to the relocation agreement with such Relocated Tenant, the
Guidelines shall have been met. Notwithstanding anything contained herein to
the contrary, the Relocation Space shall be reduced by the respective
leaseable square footage amounts of the Relocated Tenant's leased space in
Unit 1 upon the relocation and/or vacation by any such Relocated Tenant of
its leased space in Unit 1.
(b) Reference is made to the lease described in item 49 of Exhibit
B to the Green Contract (the "Marine Lease"). Notwithstanding anything
contained herein to the contrary, during the Tenancy all rental income from
the Marine Lease shall belong exclusively to Green. Green shall have the
right, on behalf of the Tenancy, to amend the Marine Lease to provide for the
relocation of the tenant thereunder from the ground floor portion of Unit 1
(the "Current Marine Space") to the ground floor or any other portion of Unit
2 (the "Marine Relocation") at Green's sole cost and expense and upon such
terms that are acceptable to Green in its sole discretion. Notwithstanding
the foregoing, Upper may terminate the Marine Lease at any time prior to the
Marine Relocation provided the rental due for the remaining term thereof is
paid to Green. In the event the Marine Relocation has not been effectuated
at the time of the creation of the Condominium, Upper shall cause the Initial
Unit 1 Owner to lease to the Initial Unit 2 Owner (the "Interim Marine
Lease") the Current Marine Space for a rental of $1.00 per annum and for a
term that shall be coterminous with the date that the tenant under the Marine
Lease shall surrender the Current Marine Space and/or with the date that the
Marine Lease is terminated, whichever is earlier, and upon such other terms
and conditions as are agreed to by the Initial Unit 1 Owner and the Initial
Unit 2 Owner, it being the intention that the Initial Unit 2 Owner shall
receive all the income from and be responsible for all the expenses related
to the Current Marine Space for the term of the Interim Marine Lease.
(c) Reference is made to the second lease described in item 16 of
Exhibit B to the Green Contract (the "DOP Space Lease") which DOP Space Lease
demises, in part, a portion of the basement in Unit 1 to the tenant ("DOP")
thereunder (the "DOP Basement Space"). Notwithstanding anything contained
herein to the contrary, during the Tenancy and prior to DOP's vacancy of the
DOP Basement Space all rental income from the DOP Space Lease as applicable
to the DOP Basement Space shall belong exclusively to Green. Green shall use
best efforts to promptly cause DOP to vacate the DOP Basement Space (the date
that DOP vacates the DOP Basement Space is hereinafter referred to as the
"DOP Vacate Date") and to deliver such vacant DOP Basement Space to Upper or
its designee upon such vacancy (the DOP Vacancy"); provided, however, that
Green shall have no obligation to pay any money to any party in connection
therewith or to enter into a lease with DOP for any Relocation Space that
does not meet the Guidelines. In the event the DOP Vacate Date has not
occurred on or prior to January 1, 1999, Green covenants and agrees that any
lease with DOP at the Property shall not be amended or modified without
Upper's consent, which consent may be withheld for any reason or no reason in
Upper's sole discretion, unless such amendment or modification is conditioned
upon the contemporaneous occurrence of the DOP Vacancy and delivery of the
vacant DOP Basement Space to Upper or its designee. Notwithstanding anything
contained herein to the contrary all fees and expenses in connection with the
DOP Vacancy shall be borne by Upper. In the event the DOP Vacancy has not
been effectuated at the time of the creation of the Condominium, Upper shall
cause the Initial Unit 1 Owner to lease to the Initial Unit 2 Owner (the
"Interim DOP Lease") the DOP Basement Space for a rental of $1.00 per annum
and for a term that will be coterminous with the date that DOP shall
surrender the DOP Basement Space and/or with the date that the DOP Basement
Lease is terminated, whichever is earlier, and upon such other terms and
conditions as are agreed to by the Initial Unit 1 Owner and the Initial Unit
2 Owner it being the intention that the Initial Unit 2 Owner shall receive
all the income from and pay all the expenses related to the DOP Basement
Space for the term of the Interim DOP Lease.
(d) Reference is made to the lease described in item 80 of Exhibit
B to the Green Contract (the "STC Space Lease") which STC Space Lease
demises, in part, the entire mezzanine level of the South Building to the
tenant ("STC") thereunder (the "STC Mezzanine Space"). Green shall use best
efforts to promptly cause STC to vacate the STC Mezzanine Space; provided,
however, that Green shall have no obligation to pay any money to any party in
connection therewith or to enter into a lease with STC for any Relocation
Space that does not meet the Guidelines.
(e) The provisions of Article 15 shall survive the termination of
the Tenancy and shall constitute an agreement between the parties hereto as
Unit Owners from and after the Effective Date.
16. Events of Default and Remedies.
------------------------------
(a) Each of the following shall constitute an Event of Default
under this Agreement:
(i) if an Owner shall Transfer any portion of its Tenancy
Interest other than in accordance with the terms of this Agreement;
(ii) if a Non-Paying Owner shall fail to pay when due any
principal of or interest on any Shortfall Loan or any other amounts owed with
respect thereto or shall fail to deliver any note, mortgage or other document
or instrument set forth in Section 8(c) above, and such failure shall have
continued for five (5) days after written notice from the Paying Owner
setting forth in sufficient detail the terms of such failure; and
(iii) if an Owner shall breach any other covenant or
agreement of such Owner set forth in this Agreement, provided such breach was
--------
not caused by any act or omission of the other Owner and such breach shall
have continued for thirty (30) days after written notice from the other Owner
setting forth in sufficient detail the terms of such breach.
(b) If any Event of Default shall occur and be continuing, the
Owner not in default under Section 16(a) above (the "Non-Breaching Owner")
may send written notice to the Owner in default under Section 16(a) (the
"Breaching Owner"), which notice shall state that effective upon the receipt
of such notice the terms of this Section 16(b) shall be applicable. Upon the
receipt of such notice, and while such default is continuing, the Breaching
Owner shall no longer be entitled to participate in any decisions with
respect to the management and control of the Common Elements of the Property.
(c) If any Event of Default shall occur and be continuing, the
Non-Breaching Owner may enforce its rights by suit in equity, by action at
law, or by any other appropriate proceedings, whether for damages, specific
performance of any covenant or agreement contained in this Agreement or in
the aid of the exercise of any power granted in this Agreement.
(d) No right or remedy conferred upon or reserved to any Owner
under this Agreement is intended to be exclusive (except as specifically set
forth in this Agreement) of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing under applicable law. In the
event of a breach or threatened breach by any Owner of its obligations
hereunder, the other Owner shall also have the right of injunction. Every
right and remedy given by this Agreement or by applicable law to an Owner may
be exercised from time to time and as often as may be deemed expedient by
such Owner.
17. Memorandum of Agreement.
-----------------------
The Owners shall promptly execute, acknowledge and deliver to the
other a memorandum of agreement in respect of this Agreement and a memorandum
of amendment to agreement, in respect to any amendment, modification or
supplement of this Agreement, in each case sufficient for recording and (b)
any other instrument(s) necessary to the effective recordation of such
memorandum of agreement or memorandum of amendment to agreement, as the case
may be. Upper shall pay twenty (20%) percent and Green shall pay eighty
(80%) percent of all costs, taxes and/or other expenses necessary for the
effective recordation of such memorandum (exclusive of the other Owner's
legal fees and disbursements). Upon the termination of this Agreement, each
Owner agrees promptly to execute, acknowledge and deliver to the other Owner
all necessary instruments in recordable form evidencing a termination of this
Agreement and sufficient to discharge any memorandum hereof of record and
Upper shall pay twenty (20%) percent and Green shall pay eighty (80%) percent
of all costs, taxes and/or expenses necessary to the effective recordation of
such instruments (exclusive of the legal fees and disbursements of the other
Owner).
18. Nature of Relationship.
----------------------
Neither this Agreement nor the co-tenancy with respect to the
Property shall constitute the Owners partners or joint venturers with respect
to their respective Tenancy Interests or the Property and the Owners confirm
that they will treat themselves as tenants in common with respect to their
collective ownership of the Property for federal, state and local tax
purposes. This Agreement shall not constitute any Owner the agent of the
other Owner except as herein expressly provided, nor in any manner limit the
Owners in carrying on their respective separate businesses or activities, nor
impose upon any Owner any fiduciary duty by reason of its carrying on its
separate business or activity, nor impose upon any Owner any liability or
obligation except as herein expressly provided. No Owner shall be liable for
any of the debts of the other Owner.
19. Transfer of Interest.
---------------------
(a) Except for a transfer by Upper to The Ritz-Carlton Hotel
Company, L.L.C. or to a hotel operator of comparable quality, each Owner
agrees not to sell or otherwise dispose of its Tenancy Interest in the
Property, or any part thereof, either directly or indirectly (a "Transfer"),
unless such transfer is to an affiliated entity. For purposes hereof an
affiliated entity (x) of Green shall mean any entity that would constitute a
permitted assignee of Green Battery under the Green Contract and (y) of Upper
shall mean any entity that Allen Gross has majority control of.
(b) A collateral assignment or mortgaging of a Tenancy Interest
and/or the exercise of any remedies thereunder shall not be deemed a
Transfer.
20. Notices.
-------
All notices, demands, requests, consents, approvals or other
communications (collectively referred to as "Notices") required or permitted
to be given hereunder or which are given with respect to this Agreement, in
order to constitute effective notice to the other party, shall be in writing
and shall be deemed to have been given when (a) personally delivered with
signed delivery receipt obtained, (b) when transmitted by facsimile machine,
if followed by giving of, pursuant to one of the other means set forth in
this Section 20 before the end of the first business day thereafter, printed
confirmation of successful transmission to the appropriate facsimile number
of the address listed below as obtained by the sender from the sender's
facsimile machine, (c) upon receipt, when sent by prepaid reputable overnight
courier or if sent postage prepaid by registered or certified mail, return
receipt requested, in each case addressed as follows:
If to Green, to:
SLG 17 Battery LLC
c/o SL Green Realty Corp.
70 West 36/th/ Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Telecopier: (212) 594-2262
With a copy to:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Jonathan S. Margolis, Esq.
Telecopier: (212) 541-1355
If to Upper, to:
17 Battery Upper Partners LLC
c/o GFI Realty Services, Inc.
50 Broadway
New York, New York 10004
Attention: Allen I. Gross
Telecopier: (212) 668-1655
With copies to:
Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel
200 Park Avenue
New York, New York 10166
Attention: Robert J. Ivanhoe, Esq.
Telecopier: (212) 223-7161
and
SL Green Operating Partnership, L.P.
70 West 36th Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Notices shall be valid only if served in the manner provided above. An
attorney for a party may give any Notices on behalf of such party.
21. Tax Proceedings.
---------------
Subject to DAP's rights under the DAP Contract, the Owners shall
hire Apcon Company as the Property's tax certiorari consultant to obtain a
reduction in the assessed valuation of the Property, the expenses for which
shall be paid in accordance with the payment of real estate taxes as set
forth in the Initial TIC Budget. During the Tenancy, Green shall control the
prosecution of any tax appeal, subject to Upper's approval which approval
shall not be unreasonably withheld or delayed. Upon the creation of the
Condominium, the applicable provisions of the Declaration shall govern the
Unit Owners' rights with regard to the pursuit of any tax appeals affecting
the Units. The Owners agree to cooperate in good faith in order to obtain
any available tax benefits applicable to the Property including, without
limitation, qualifying Unit 1 for benefits under the Industrial and
Commercial Incentive Program, City of New York Administrative Code, Title II,
------------------------------------
Chapter 2, Part 4 and/or for any applicable federal historic tax credits.
The provisions of this Section 21 shall survive the termination of the
tenancy and shall constitute an agreement between Green and Upper as Unit
Owners from and after the Effective Date.
22. Condominium Conversion and Termination of Tenancy.
-------------------------------------------------
(a) The Owners shall cooperate in good faith and diligently and
continuously pursue and use reasonable efforts to promptly cause the Property
to be converted to condominium ownership, including without limitation: (i)
the filing of the No Action Application with the New York State Department of
Law and issuance of the No Action Letter; (ii) applying for and obtaining
from applicable Governmental Authorities separate tax lots for each
condominium unit; (iii) the filing of the Condominium Documents with the
applicable Governmental Authorities promptly after same have been finalized
as set forth in the next succeeding sentence; and (iv) the taking of such
other actions as may be required by Applicable Law. The Owners acknowledge
and agree that certain items in the Condominium Documents remain to be agreed
upon as set forth in Exhibit P annexed hereto and made a part hereof. The
Owners shall negotiate diligently and in good faith and on a reasonably
continuous basis to resolve these issues and expeditiously as possible. Green
acknowledges and agrees that Upper may, in its sole discretion and at Upper's
sole expense, reserve the right in the No Action Application to subdivide
Unit 1 and offer the Subdivided One Units for sale pursuant to an Offering
Plan. The foregoing right shall be in addition to and not in limitation of
any other rights of Upper to subdivide, transfer or convey all or any part of
its Unit pursuant to the Condominium Documents or law. Each Owner agrees
that it shall not unreasonably withhold its consent to any changes to the No
Action Application or the Condominium Documents which may be required or
requested by any Governmental Authority in connection with the Conversion.
(b) On the Effective Date, upon request of Upper and/or Green, as
the case may be, the Tenancy as the Declarant under the Declaration, shall
cause a confirmatory Unit Deed to Unit 1 to be delivered to Upper, or its
designee, and confirmatory Unit Deeds to Unit 2 and Unit 3, respectively, to
be delivered to Green, or its designee(s), together with such other documents
and instruments necessary to record such confirmatory Unit Deeds and to
minimize any New York City and New York State transfer taxes in connection
therewith. Such confirmatory Unit Deeds shall inter alia reflect the grant,
effective as of the date hereof, of Development Rights under the Declaration
in accordance with Article XXVI of the Declaration. Upper hereby indemnifies
and holds Green harmless from and against any loss, cost, claim, liability,
damage or expense (including reasonable attorneys fees) which may arise in
connection with the liability of Green (as determined pursuant to a final
nonappealable judgment of a court of competent jurisdiction), if any, for the
payment (including interest and penalties, if any) of the State Transfer Tax
and the City Transfer Tax (as defined in the Green Contract) payable, if any,
in connection with the recording of the confirmatory Unit Deeds. Upon the
Effective Date and execution and delivery of the Unit Owners Agreement (as
hereinafter defined), the Tenancy and this Agreement shall be deemed
terminated and of no further force and effect.
(c) On or promptly following the Effective Date, the Owners shall
hold a Unit Owners' meeting and make their respective appointments to the
Condominium Board and the Lower Boards. The Board Members so appointed shall
meet immediately following such Unit Owners' meeting and shall adopt (i)
Budgets for the first year of condominium operation, (ii) the North Building
Standards, and (iii) the South Building Standards, and shall conduct such
other business as may be necessary to commence condominium operation of the
Property all in accordance with the requirements of the Condominium Documents
or as otherwise permitted under the Condominium Documents. The provisions of
this Section 22 shall survive the termination of the Tenancy and shall
constitute an agreement between Green and Upper as Unit Owners from and after
the Effective Date.
23. Governing Law.
-------------
This Agreement shall be governed by, interpreted under, and
construed and enforced in accordance with, the laws of the State of New York.
24. Counterparts: Captions.
-----------------------
This Agreement may be executed in counterparts, each of which shall
be deemed an original. The captions are for convenience of reference only
and shall not affect the construction to be given any of the provisions
hereof.
25. Entire Agreement: No Third Party Beneficiaries.
-----------------------------------------------
This Agreement (including all exhibits and schedules annexed
hereto), contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior understandings, if any,
with respect thereto. This Agreement may not be modified, changed,
supplemented or terminated, nor may any obligations hereunder be waived,
except by written instrument singed by the party to be charged or by its
agent duly authorized in writing or as otherwise expressly permitted herein.
The parties do not intent to confer any benefit hereunder on any person, firm
or corporation other than the parties hereto.
26. Further Assurances.
------------------
The parties each agree to do such other and further acts and
things, and to execute and deliver such instruments and documents (not
creating any obligations additional to those otherwise imposed by this
Agreement) as either may reasonably request from time to time, to confirm or
effectuate the provisions of this Agreement.
27. Inspection.
----------
Each Owner or its authorized representative may examine any of the
books, records and assets of the Tenancy during normal business hours upon
reasonable notice.
28. Severability.
------------
If any provisions of this Agreement or the application thereof to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of
this Agreement or the application of such provisions to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall
be valid and shall be enforced to the fullest extent permitted by law.
29. Exculpation.
-----------
Notwithstanding anything contained herein to the contrary, it is
specifically understood and agreed that there shall be no personal liability
on either Owner in respect to any of the terms, covenants, conditions or
provisions of this Agreement, and in the event of a breach or default by
either Owner of any of its liabilities and obligations under this Agreement,
the Non-Breaching Owner and any persons claiming by, through or under the
Non-Breaching Owner shall look solely to the equity of the Breaching Owner in
the Property for the satisfaction of the Non-Breaching Owner's and/or such
persons' remedies and claims for damages.
30. Bank Accounts.
-------------
All funds and income of the Tenancy shall be deposited in the name
of the Tenancy in accounts in such banks as mutually agreed to by the Owners.
Withdrawals for such accounts shall be made upon the signatures of the Owners
subject to the right of the Managing Agent to make withdrawals as set forth
in Exhibit D. There shall be no commingling of the funds of the Tenancy with
funds of any other entity or person.
31. Cleaning Contract/Indemnifications.
----------------------------------
(a) The Tenancy shall acquire the Property subject to the Cleaning
Contract, as such term is defined in Exhibit C of the Green Contract, and the
Owners hereby approve the amended Cleaning Contract in the form annexed
hereto as Exhibit I (the "Amended Cleaning Contract"). Notwithstanding the
foregoing, upon the delivery of the WSI Relocation Agreement, as such term is
defined in the Amended Cleaning Contract, and upon the delivery of the WSI
Relocation Agreement, to the Tenancy, Upper shall pay to Green the sum of TWO
HUNDRED THOUSAND ($200,000.00) DOLLARS and upon such payment (i) Green, on
behalf of the Tenancy, may modify and/or terminate the Cleaning Contract or
the Amended Cleaning Contract, whichever is then in effect, provided that in
the event of any modification to the Cleaning Contract or the Amended
Cleaning Contract, as the case may be, such modification shall not materially
adversely affect the owner of Unit 1 and (ii) Green shall be solely
responsible for all obligations and liabilities of "Owner" under the Cleaning
Contract and "Associates" under the Amended Cleaning Contract except for
payment for the applicable cleaning and consulting services performed
thereunder in Unit 1 in accordance with the Cleaning Contract and/or the
Amended Cleaning Contract, as the case may be, which shall be the obligation
of Upper. Green shall use best efforts to promptly cause the WSI Relocation
Agreement to be delivered to the Tenancy; provided, however, that Green shall
have no obligation to pay any money to or at the direction of the tenant
thereunder ("WSI") or to enter into a lease with WSI that does not meet the
Guidelines.
(b) Upper shall indemnify, defend and hold Green free and harmless
from and against any and all liability, claims, actions, damages, judgments,
penalties, costs and expenses, including reasonable attorneys' fees, arising
out of Upper's own acts or failure to act in connection with (x) any of
Upper's obligations hereunder, or (y) any ERISA Liability or Union Liability,
as such terms are hereinafter defined, caused by Upper and arising in
connection with events occurring from and after the Effective Date.
(c) Green shall indemnify, defend and hold Upper free and harmless
from and against any and all liability claims, actions, damages, judgments,
penalties, costs and expenses, including reasonable attorneys' fees, arising
out of Green's own acts or failure to act in connection with (x) any of
Green's obligations hereunder, or (y) any ERISA Liability or Union Liability
caused by Green and arising in connection with events occurring from and
after the Effective Date.
(d) In the event that the Tenancy incurs any multiemployer
withdrawal liability under the Employee Retirement Income Security Act of
1974, as amended ("ERISA Liability") or SL Green Operating Partnership, L.P.
incurs any ERISA Liability under the Employment Indemnities (as defined in
the DAP Contract), for events occurring prior to the Effective Date, Upper
shall be responsible for the lesser to occur of (x) twenty-five (25%) percent
of such ERISA Liability and (y) the ERISA Liability directly attributable to
the number of Service Employees, as such term is defined in the Amended
Cleaning Contract, that are terminated prior to the Transition Date, as such
term is defined in the Amended Cleaning Contract, and Green shall be
responsible for the balance of such ERISA Liability.
(e) In the event that the Tenancy incurs any liability under the
Union Agreements, as such term is defined in the Green Contract, including
without limitation, any liability for termination pay (collectively, "Union
Liability") or SL Green Operating Partnership, L.P. incurs any Union
Liability under the Employment Indemnities, for events occurring prior to the
Effective Date, Upper shall be responsible for the lesser to occur of (x)
twenty-five (25%) percent of such Union Liability and (y) the Union Liability
directly attributable to the number of Service Employees that are terminated
prior to the Transition Date, and Green shall be responsible for the balance
of such Union Liability.
(f) Without limiting the generality of the definition of Claims
set forth in the Declaration, the foregoing indemnifications of Green and
Upper shall include any Claims arising out of a breach of the provisions of
this Section 31. The provisions of Article XXV of the Declaration shall
apply to the indemnities given by the parties pursuant to this Section 31 and
the provisions of this Section 31 shall survive the termination of the
Tenancy and shall constitute an agreement between Green and Upper as Unit
Owners from and after the Effective Date.
32. Work During The Tenancy.
-----------------------
The following work (the "Tenancy Work") shall be promptly commenced
during the Tenancy and shall be performed in compliance with the General Work
Conditions set forth in Article XII Section B of the Declaration and with the
following additional conditions until the creation of the New Service
Entrance: (x) the labor employed by Upper for the performance of Upper's
Tenancy Work and all equipment and materials necessary to perform such work
shall be transported to the various work sites in Unit 1 via a sidewalk
hoistway located on the exterior of the South Building facing the West Street
side of the South Building; and (y) Upper shall erect temporary partitions
and shall arrange for the lock off of any Unit 1 Elevators necessary to
prevent the labor employed by Upper for the performance of Upper's Tenancy
Work from having direct ingress and egress to Unit 2 from Unit 1:
(i) Green shall be responsible, at its sole cost and expense, for
all work in connection with the alterations and/or installations to the lobby
in Unit 2 up to the entrance utilized for access to Unit 2 except for the
installation of the handicap lift as set forth in subsection (ii) below;
(ii) Upper shall be responsible, at its sole cost and expense,
subject to Green's contribution described in the last sentence of this
subsection (ii), for all work in connection with the following: creation of
common corridor in the South Building basement; separation of tank rooms in
accordance with Applicable Law; demolition of boiler and asbestos abatement
in boiler rooms; installation of a handicap lift in front of the entrance to
Unit 2; the alterations and/or installations required to create the new
entrances to be utilized for access to Unit 1 and Unit 2; elevator
modifications as described in Exhibit K attached hereto and made a part
hereof; installation of new electrical distribution panels in basement of the
South Building; alterations and/or installations required to create new fire
stairs and new plumbing lines as described in Exhibit L attached hereto and
made a part hereof; and any other alterations necessary in connection with
altering the South Building in order to create Unit 1 (collectively "Upper
Initial Work"). Green has contributed $350,000 toward the costs of the Upper
Initial Work on the date hereof;
(iii) Upper and Green shall each be responsible for one-half of
the costs and expenses in connection with the Facade Work as such term is
defined in the Green Contract and any additional work in connection therewith
as described in Exhibit M attached hereto and made a part hereof (the
"Additional Facade Work") which Additional Facade Work is hereby consented to
and approved by the Owners; and
(iv) Reference is made to the work intended to be performed by
Upper regarding certain plumbing lines now or hereafter located in the
ceiling of the 13/th/ Floor of the South Building (the "13/th/ Floor
Ceiling") for the benefit of Unit 1 (the "13/th/ Floor Ceiling Work") Upper
shall have access, subject to rights of existing tenants under such existing
tenants' existing leases, to the 13/th/ Floor Ceiling at any time between the
hours of 6:00 p.m. to 8:00 a.m. on any Business Day and at any time on any
day that is not a Business Day in order to perform or cause the performance
of the 13/th/ Floor Ceiling Work. In no event shall the height of the 13/th/
Floor Ceiling be less than it now is by reason of the 13/th/ Floor Ceiling
Work. Notwithstanding anything contained herein to the contrary Upper shall
compensate Green for any rental losses incurred by Green in the event any
tenant obtains a final non-appealable order that it has been constructively
evicted or that it is entitled to a rent abatement or rent setoff pursuant to
any action brought by such tenant due to the 13/th/ Floor Ceiling Work. The
term "Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday for commercial banks under the laws of the State of New York.
33. North Building Removal.
----------------------
Notwithstanding anything to the contrary contained in the
Condominium Documents, the Green Contract or herein, if Upper so elects, in
its sole discretion, Upper may, by written notice to Green: (a) at any time
prior to the Effective Date, obtain a separate tax lot and Certificate of
Occupancy for the North Building and cause the Tenancy to deliver a deed
therefor to Green in accordance with the Green Contract, in which event, the
North Building will not be included in the Condominium and the Condominium
Documents will be revised prior to filing to reflect the removal of the North
Building as a Unit and to provide any necessary easements and restrictions as
set forth in Section B of Article XXI of the Declaration or (b) at any time
after the Effective Date, require Green (or its successor in interest) to
remove the North Building from the Condominium pursuant to Section B of
Article XXI of the Declaration (in either case, the "North Building
Removal"). Upon receipt of such notice, Green shall cooperate with Upper to
effectuate the North Building Removal and shall perform all acts and execute
and deliver all documents and other instruments necessary to effectuate the
North Building Removal; provided however, all costs and expense thereof shall
be borne by Upper. The provisions of this paragraph shall survive the
termination of the Tenancy and shall constitute an agreement between Green
and Upper as Unit Owners from and after the Effective Date.
34. Rights of Existing Tenants.
--------------------------
To the extent required by Applicable Law and the terms of the
existing tenants' existing leases, all rights of the Owners are subject to
the rights of all existing tenants at the Property so long as such existing
tenants' existing leases shall remain in effect.
35. Intent of Owners Regarding Operation of Property
------------------------------------------------
During the Tenancy and Unit Owners Agreement.
--------------------------------------------
Except as otherwise expressly set forth herein to the contrary, the
Owners intend to, and shall, operate the Property during the Tenancy as if
the Declaration was in full force and effect and the Owners owned the Units
as contemplated in the Green Contract and Declaration. Notwithstanding
anything contained herein to the contrary upon termination of the Tenancy the
Owners agree to simultaneously enter into a Unit Owners agreement (the "Unit
Owners Agreement") incorporating therein all provisions of this Agreement
expressly set forth herein to survive the termination of the Tenancy.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
GREEN:
SLG 17 BATTERY LLC
a New York limited liability company
By: SL GREEN OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, managing member
By: SL GREEN REALTY CORP., a Maryland
corporation, general partner
By: /s/ Benjamin P. Feldman
------------------------------------
Name: Benjamin P. Feldman
Title: Executive Vice President
UPPER:
17 BATTERY UPPER PARTNERS LLC,
a New York limited liability company
By: 17 BATTERY ASSOCIATES LLC, a New York limited
liability company, its manager
By: 17 DIAMOND CORP., a New York corporation,
its manager
By: /s/ Allen Gross
------------------------------------
Name: Allen Gross
Title: President
EXHIBIT A
---------
DESCRIPTION OF LAND
-------------------
(Follows immediately hereafter)
EXHIBIT B
---------
DECLARATION OF THE CONDOMINIUM
------------------------------
(Follows immediately hereafter)
EXHIBIT C
---------
FLOOR PLANS
-----------
(Follows immediately hereafter)
EXHIBIT D
---------
Deleted Prior to Execution
EXHIBIT D-1
-----------
LEASE PROVISIONS PROVIDING FOR CONVERSION OF PROPERTY
TO A CONDOMINIUM
1. CONVERSION TO CONDOMINIUM
-------------------------
1.1 Right To Convert Property.
-------------------------
Landlord shall have the unfettered right, in its sole
discretion, at any time, to convert the Property, including the Demised
Premises, to a condominium (the "Condominium") by submitting the Property to
the provisions of Article 9-B of the Real Property Law of the State of New
York (as same may be amended from time to time, the Condominium Act") and to
offer units therein, including any unit of which the Demised Premises forms a
part, for sale.
1.2 Subordination To Condominium Regime.
-----------------------------------
1.2.1 This Lease and all rights of Tenant hereunder shall be
subject and subordinate in all respects to the constitutive documents of the
Condominium, including the declaration of condominium, the by-laws, the rules
and regulations and the floor plans, as all of the foregoing may be amended
from time to time (the "Condominium Documents") and to all matters to which
Landlord's interest in the units forming the Condominium, including each
unit's appurtenant interests in the common elements (collectively, the
"Units") may thereafter become subject and subordinate provided, however,
-------- -------
that Landlord shall cause the Condominium to deliver to Tenant for its
signature a subordination, attornment and non-disturbance agreement ("SNDA")
in form as provided in the Condominium Documents. From and after the
establishment of the Condominium, all references to Landlord's rights in the
Lease with respect to the Property and the Building of which the Demised
Premises forms a part shall be deemed to mean and include the Unit of which
the Demised Premises then forms a part (the "DP Unit").
1.3 Conflicts With Condominium Documents.
------------------------------------
If any of the express provisions of this Lease shall conflict
with any of the provisions of the Condominium Documents, such conflict shall
be resolved in every instance in favor of the Condominium Documents; provided
however, in no event shall Tenant have any rights in respect of the Demised
Premises greater than Tenant's rights under this Lease.
EXHIBIT E
---------
FORM OF ASSIGNMENT AND ASSUMPTION OF LEASE RE: TENANCY LEASE
------------------------------------------------------------
To be agreed upon
EXHIBIT F
GUIDELINES
----------
(Follows immediately hereafter)
EXHIBIT G
---------
(Deleted Prior to Execution)
EXHIBIT H
---------
INITIAL TIC BUDGET
------------------
(Follows immediately hereafter)
EXHIBIT I
---------
AMENDED CLEANING CONTRACT
-------------------------
(Follows immediately hereafter)
EXHIBIT J
---------
Deleted Prior to Execution
EXHIBIT K
---------
Deleted Prior to Execution
EXHIBIT L
---------
Deleted Prior to Execution
EXHIBIT M
---------
ADDITIONAL FACADE WORK
----------------------
Work described in the Battery Place Exterior Inspection Report,
dated September 11, 1997, prepared by Bone/Levine Architects
EXHIBIT N
---------
Deleted Prior to Execution
EXHIBIT O
---------
INSURANCE GUIDELINES
--------------------
(Follows immediately hereafter)
EXHIBIT P
---------
OPEN CONDOMINIUM DOCUMENT ITEMS
-------------------------------
I. Missing Information to be Supplied.
----------------------------------
a) Class of fire proof construction in each of the Buildings.
b) Exact square footage measurement of each Unit in accordance with
the Floor Plans.
c) Changes to conform the Floor Plans to terms and provisions
contained in the Declaration and By-Laws.
d) Any other open items indicated in either the footnotes to, or in
the body of, the Condominium Documents.
II. Issues Remaining to be Agreed Upon
----------------------------------
a) Exact dimensions and layout of each Unit on the ground floor of the
South Building immediately in the area adjacent to the Battery
Place entrance.
b) Designation of Unit 1 CSE shaft and Unit 2 CSE shaft on Floor
Plans.
c) Any other open items indicated in either the footnotes to, or in
the body of, the Condominium Documents.
EXHIBIT 2.7
AMENDED AND RESTATED SUBSTITUTE MORTGAGE NOTE NO. 1
---------------------------------------------------
December 19, 1997
$15,500,000.00
FOR VALUE RECEIVED, and at the times hereinafter specified, 17
BATTERY UPPER PARTNERS LLC, a New York limited liability company ("MAKER"),
having an address at c/o GFI Realty Services, 50 Broadway, 5th Floor, New
York, New York 10004, Attn: Allen I. Gross, hereby promises to pay to the
order of SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership, having an address at 70 West 36th Street, New York, New York
10018 (collectively, hereinafter referred to, together with each subsequent
holder(s) hereof, as "HOLDER"), or at such other address as may be designated
from time to time hereafter by any Holder, the principal sum of FIFTEEN
MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($15,500,000.00), together
with interest on the principal balance outstanding from time to time, as
hereinafter provided, in lawful money of the United States of America. The
balance (the "PRINCIPAL AMOUNT") of principal outstanding from time to time
under this mortgage note (this "NOTE") shall bear interest at a rate per
annum equal to twelve (12%) percent (the "INTEREST RATE"), calculated for the
actual number of days elapsed based on a 360-day year.
1. Payments. Maker shall pay the following sums as follows:
________
(a) Interest. (i) Interest only at the Interest Rate on the
________
Principal Amount shall be payable on the date hereof for the period from
and including the date hereof through and including December 31, 1997;
and
(ii) Interest only at the Interest Rate on the Principal
Amount shall be payable in arrears commencing on February 1, 1998, and
on the first day of each and every month thereafter up to and including
the Maturity Date (as defined herein); and
(b) Principal. The entire Principal Amount then remaining unpaid,
_________
with accrued and unpaid interest thereon, shall be due and payable on the
Maturity Date.
Each payment made by Maker under this Note shall be made before
2:00 p.m., New York City time, on the date when such payment or prepayment is
required to be made and shall be made without setoff, counterclaim, deduction
or defense of any kind by wire transfer of immediately available funds in
lawful money of the United States of America to such account or accounts as
shall be designated by Holder, from time to time. Any payment received and
accepted by Holder after 2:00 p.m., New York City time on any day shall be
deemed for all purposes (including the calculation of interest, to the extent
permitted by law) as having been made on the next succeeding Business Day.
If the date for any payment hereunder falls on a day which is not a Business
Day, then for all purposes hereof the same shall be deemed to have fallen on
the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of interest hereunder. The term
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or legal
holiday for commercial banks under the laws of the State of New York.
2. Maturity. The Loan shall mature on the earlier of (i) September
________
30, 1998 or (ii) such date as the Loan shall become due by reason of
acceleration, operation of law or as otherwise set forth in the Mortgage
(as hereinafter defined). The date on which the Loan shall mature as
provided in the preceding sentence is referred to as the "MATURITY DATE."
3. Prepayment. This Note may be prepaid, in whole or in part, at any
__________
time and from time to time, without premium or penalty.
4. Default Rate/Late Charge. From and after the occurrence of an
________________________
Event of Default, the entire Principal Amount, all accrued and unpaid interest
and all other sums then due or payable pursuant to this Note or any of the
other Loan Documents, shall bear interest from the date of such Event of
Default until paid at a per annum rate (the "DEFAULT RATE") equal to the lesser
of (i) five percent (5%) over the Interest Rate, or (ii) the Maximum Rate,
as herein defined. In addition to interest as set forth herein, Maker shall
pay Holder a late charge equal to five percent (5%) of any amounts due under
this Note in the event any such amount is not paid within five (5) days
after such payment becomes due.
5. Application of Payments.
---------------------
(a) All payments received by Holder under this Note shall be
applied as follows: first, to accrued and unpaid interest then due
hereunder; second, to all other sums then due or payable pursuant to this
Note or any of the other Loan Documents, in such order as shall be determined
by the Holder in its sole discretion from time to time; and third, to the
reduction of the Principal Amount.
(b) Notwithstanding anything to the contrary herein contained,
during the continuance of an Event of Default, Holder may apply any payment
received by Holder under this Note to such amounts and in such order as
Holder may elect from time to time in its sole discretion.
6. The Mortgage. This Note, and all sums due or agreed to be paid
_____________
hereunder are secured by, inter alia, a certain Amended and Restated
Substitute Mortgage, Assignment of Leases and Rents and Security Agreement No.
1 of even date herewith granted by Maker for the benefit of the named
Holder hereof (the "MORTGAGE"), encumbering certain property as more
particularly described in such Mortgage. Capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Mortgage.
7. Event of Default. The occurrence of an Event of Default shall
_________________
constitute an "EVENT OF DEFAULT" hereunder. Upon the occurrence and
continuance of an Event of Default, Holder may, at its option, declare all
or any portion of the Principal Amount, together with all accrued and
unpaid interest hereon, and all other amounts payable hereunder or under the
Mortgage or any of the Loan Documents, to be immediately due and payable
and thereby accelerate the maturity hereof, and Holder may proceed to
exercise any rights or remedies that it may have under this Note, the
Mortgage, or any other Loan Document or such other rights and remedies which
Holder may have at law, equity or otherwise.
8. Enforceable Obligation. Maker hereby certifies and declares that
______________________
all acts, conditions and things required to be done and performed and to have
happened precedent to the creation and issuance of this Note, and to
constitute this Note the legal, valid and binding obligation of Maker,
enforceable in accordance with the terms hereof, have been done and performed
and happened in due and strict compliance with all Legal Requirements.
9. Affirmative Waivers. Maker and all parties now or hereafter liable
___________________
for the payment hereof, primarily or secondarily, directly or indirectly, and
whether as endorser, guarantor, surety, or otherwise, hereby severally
(a) waive presentment, demand, protest, notice of protest and/or dishonor,
and all other demands or notices of any sort whatsoever with respect to this
Note, (b) consent to impairment or release of collateral, extensions of time
for payment, and acceptance of partial payments before, at, or after
maturity, (c) waive any right to require Holder to proceed against any
security for this Note before proceeding hereunder, (d) waive diligence to the
collection of this Note or in filing suit on this Note and (e) agree to pay
all costs and expenses, including reasonable attorneys' fees, which may be
incurred in the collection of this Note, or any part thereof or in
preserving, securing possession of, and realizing upon any security for this
Note.
10. Usury. The provisions of this Note and of all agreements between
_____
Maker and Holder are, whether now existing or hereinafter made, hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of the maturity hereof, prepayment, demand for
payment or otherwise, shall the amount paid, or agreed to be paid, to
Holder for the use, forbearance, or detention of the principal hereof or
interest hereon, which remains unpaid from time to time, exceed the
maximum interest rate permissible under applicable law (the "MAXIMUM
RATE"). If from any circumstance whatsoever, the performance or
fulfillment of any provision hereof or of any other agreement between
Maker and Holder shall, at the time performance or fulfillment of such
provision is due, involve or purport to require any payment in excess of
the limits prescribed by law, then the obligation to be performed or
fulfilled is hereby reduced to the limit of such validity, and if from any
circumstance whatsoever Holder should ever receive as interest an amount
which would exceed the highest lawful rate, the amount which would be excessive
interest shall be applied to the reduction of the Principal Amount (or, at
Holder's option, be paid over to Maker) and shall not be counted as
interest. To the extent permitted by applicable law, determination of the
legal maximum amount of interest shall at all times be made by amortizing,
prorating, allocating and spreading in equal parts during the period of the
full stated term of this Note, all interest at any time contracted for,
charges, or received from Maker in connection with this Note and all other
agreements between Maker and Holder, so that the actual rate of interest on
account of the indebtedness represented by this Note is uniform throughout
the term hereof.
11. Non-Recourse Obligations. Notwithstanding anything in this Note,
_________________________
the Mortgage or the other Loan Documents, no personal liability shall be
asserted or enforceable against (i) Maker, (ii) any Affiliate (as
defined in the Mortgage) of Maker, (iii) any Person (as defined in the
Mortgage) owning directly or indirectly, any legal or beneficial interest
in Maker or any Affiliate of Maker, or (iv) any partner, principal,
officer, controlling person, beneficiary, trustee, advisor, shareholder,
employee, agent, Affiliate or director of any Persons described in clauses
(i) through (iii) above (individually, an "EXCULPATED PARTY" and,
collectively, the "EXCULPATED PARTIES") by Holder in respect of the Secured
Obligations, this Note, the Mortgage, or any other Loan Document, or the
making, issuance or transfer thereof, all such liability, if any, being
expressly waived by Holder and each successive holder of this Note and the
Mortgage shall accept this Note and the Mortgage upon the express condition
of this provision and limitation that in the case of the occurrence and
continuance of an Event of Default, Holder's remedies in its sole discretion
shall be any or all of:
(a) Foreclosure of the lien of the Mortgage in accordance with the
terms and provisions set forth in the Mortgage;
(b) Action against any other security at any time given to secure
the payment of this Note and under the other Loan Documents; and
(c) Exercise of any other remedy set forth in the Mortgage or any
other Loan Document.
The lien of any judgment against Maker and any proceeding
instituted on, under or in connection with this Note or the Mortgage, or
both, shall not extend to any property now or hereafter owned by Maker or any
Exculpated Party other than the Rents from, and the ownership interest of
Maker in, the Property and the other security for the payment of this Note or
the Mortgage.
Notwithstanding anything to the contrary in this Note or any of the
Loan Documents, Holder shall not be deemed to have waived any right which
Holder may have under Section 506(a), 506(b), 1111(b) or any other provisions
of the Bankruptcy Code to file a claim for the full amount of the Secured
Obligations or to require that all collateral shall continue to secure all of
such Secured Obligations owing to Holder in accordance with the Loan
Documents.
Notwithstanding anything in this Note or the Mortgage to the
contrary: (A) no provision of this Note or the Mortgage shall be construed or
be deemed to limit or impair the enforcement of or liability of Maker and/or
the Guarantors under the Environmental Indemnity Agreement or the liability
of Maker and/or the Guarantors under the Guaranty, as the case may be; and
(B) there shall at no time be any limitation on Maker's or the Guarantors'
liability for the payment to Holder of any and all actual losses, damages,
costs and/or expenses incurred by Holder and arising from: (1)
misappropriation by Maker or any Affiliate of Maker of any condemnation
proceeds or insurance proceeds which Maker or any Affiliate of Maker has
received and to which Holder is entitled pursuant to the terms of the
Mortgage or any of the Loan Documents to the extent the same have not been
applied toward payment of sums due under this Note or under the Mortgage, or
used for the repair or replacement of the Property pursuant to the Mortgage,
or (2) any fraud, or intentional misrepresentation of Maker or any Affiliate
of Maker, or (3) any misappropriation of Rents or security deposits by Maker
or any Affiliate of Maker, or (4) any intentional physical waste in
connection with Maker's or any Affiliate of Maker's operation of the
Property, or (5) Maker's failure to maintain in full force and effect any of
the insurance policies required to be maintained under the Mortgage, or (6)
Maker's failure to pay any taxes required to be paid under the Mortgage.
12. Amendment and Restatement of Existing Note(s). This Note con-
-----------------------------------------
solidates, amends and restates in their entirety the terms and provisions
of those certain promissory notes as more fully described on Exhibit A attached
--------
hereto (said mortgage notes being hereinafter collectively called the
"EXISTING NOTES") so that this Note shall hereafter constitute evidence
of but one debt in the principal amount of Fifteen Million Five
Hundred Thousand and 00/100 ($15,500,000.00) Dollars. The conditions
contained in this Note shall supersede and control the terms, covenants,
agreements, rights, obligations and conditions of the Existing Notes (it
being agreed that the modification of the Existing Notes shall not impair
the debt evidenced by each of the Existing Notes). This Note does not
create any new or additional indebtedness but evidences the same
indebtedness evidenced by the Existing Notes and secured by the Mortgage.
13. Miscellaneous.
_____________
(a) Expenses. Maker shall pay all costs and expenses of collection
________
incurred by Holder in connection with this Note, in addition to the entire
Principal Amount, all accrued and unpaid interest at the Default Rate and all
other sums then due or payable pursuant to this Note or any of the other Loan
Documents, including, without limitation, reasonable attorneys' fees and
disbursements and all other costs and expenses incurred in connection with
the pursuit by Holder of any of its right or remedies referred to herein or
the protection of or realization of collateral or in connection with any of
Holder's collection efforts, whether or not suit on this Note, on any of the
other Loan Documents or any foreclosure proceeding is filed, and all such
costs and expenses shall be payable within ten (10) days after Maker's
receipt of a statement therefor from Holder and also shall be secured by the
Mortgage and the other Loan Documents.
(b) Partial Invalidity. If any provision hereof or of any other Loan
__________________
Document is, for any reason and to any extent, determined to be invalid or
unenforceable with respect to any person, entity or circumstance, then
neither the remainder of the document in which such provision is contained,
nor the application of the provision to other persons, entities, or
circumstances, nor any other document referred to herein, shall be affected
thereby, but instead shall be enforceable to the maximum extent permitted by
law.
(c) Continuing Effect. Each provision of this Note shall be and
_________________
remain in full force and effect notwithstanding any negotiation or transfer
hereof or any interest herein to any other Holder or participant.
(d) Governing Law; Consent to Jurisdiction. This Note shall be
________________________________________
governed and construed in accordance with the laws of the State of New York,
without regard to the principles of conflict of laws. To the fullest
extent permitted by law, Maker hereby unconditionally and irrevocably waives
any claim to assert that the law of any other jurisdiction governs this
Note. Any legal suit, action or proceeding against Maker or Holder arising
out of or relating to this Note may be instituted in any federal or state
court in New York, New York, pursuant to Section5-1402 of the New York
General Obligations Law, and Maker waives any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
and Maker hereby irrevocably submits to the jurisdiction of any such court in
any suit, action or proceeding. By execution and delivery of this Note, Maker
accepts, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Note or the Mortgage from which no
appeal has been taken or is available. Maker irrevocably agrees that all
process in any proceeding or any court arising out of or in connection with
this Note, the Mortgage or any other Loan Document may be effected by mailing
a copy thereof by registered or certified mail or any substantially similar
form of mail, postage prepaid, to Maker at its address referred to in the
"Notices" Section of the Mortgage or such other address of which Holder
shall have been notified pursuant to said subsection. Such service shall
be effective five days after such mailing. Maker hereby acknowledges that
such service will be effective and binding service in every respect. Maker
shall not assert that such service did not constitute effective and
binding service within the meaning of any applicable state or federal law,
rule, regulation or the like. Maker hereby irrevocably waives any objections,
including without limitation any objection to the laying of venue or based on
the grounds of forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such jurisdiction.
Nothing herein shall affect the right of Holder to serve process in any
other manner permitted by law or limit the right of Holder to bring any
action, suit or proceeding against Maker in the court of any jurisdiction.
Maker acknowledges that final judgment against it in any action, suit or
proceeding referred to in this paragraph shall be conclusive and may be
enforced in any other jurisdiction, by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the fact and of
the amount of Maker's indebtedness.
(e) Waiver of Jury Trial. MAKER AND HOLDER KNOWINGLY, IRREVOCABLY,
____________________
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS NOTE,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE MORTGAGE, OR
ANY OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO
ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER TO
ENTER INTO THE LOAN TRANSACTION EVIDENCED BY THIS NOTE.
(f) No Waiver. Any forbearance by Holder in exercising any right or
_________
remedy hereunder or under any of the Loan Documents or otherwise afforded by
applicable law, shall not be a waiver or preclude the exercise of any right
or remedy by Holder. No failure to accelerate the indebtedness evidenced
hereby by reason of an Event of Default, or acceptance of a past due
installment, or indulgence granted from time to time shall be construed to be
a waiver of the right to insist upon prompt payment, nor shall it be deemed
to be a novation of this Note or a reinstatement of the indebtedness
evidenced hereby or as a waiver of such right of acceleration or any other
right, nor be construed so as to preclude the exercise of any right that
Holder may have, at law or in equity, and Maker hereby expressly waives the
benefit of any statute or rule of law or equity which would produce a result
contrary to or in conflict with the foregoing.
(g) Modification in Writing. This Note may not be modified,
---------------------
amended, waived, extended, changed, discharged or terminated orally or by
any act or failure to act on the part of Maker or Holder, but only by an
agreement in writing signed by the party against whom enforcement of
any modification, amendment, waiver, extension, change, discharge or
termination is sought.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKER:
17 BATTERY UPPER PARTNERS LLC
By: 17 BATTERY ASSOCIATES LLC, its manager
By: 17 Diamond Corp., its manager
By: /s/ Allen I. Gross
-----------------------------
Name: Allen I. Gross
Title: President
CONSENTED AND AGREED TO BY:
SL GREEN OPERATING PARTNERSHIP, L.P.
By: SL Green Realty Corp., its general partner
By: /s/ Benjamin P. Feldman
----------------------------------
Name: Benjamin P. Feldman
Title: Executive Vice President
EXHIBIT A
---------
Schedule of Existing Notes
--------------------------
1. Note, dated the 9th day of June, 1986, made by 17 Battery Place North
Associates II to Connecticut Mutual Life Insurance Company in the principal
of $6,500,000.00; said Note being assigned by Assignment of Mortgage from
Massachusetts Mutual Life Insurance Company, successor by merger to
Connecticut Mutual Life Insurance Company, -to- CS First Boston Mortgage
Capital Corp., dated as of 3/21/96 and recorded in the Office of the City
Register, County of New York (the "CITY REGISTER'S OFFICE") on 3/27/96 in
Reel 2307 Page 1103.
2. Gap Note, dated the 22nd day of March, 1996, made by Downtown Acquisition
Partners, L.P. to CS First Boston Mortgage Capital Corp. in the principal sum
of $18,500,000.00.
3. Consolidated and Restated Mortgage Note, dated the 22nd day of March,
1996, made by Downtown Acquisition Partners, L.P. to CS First Boston Mortgage
Capital Corp. in the principal sum of $25,000,000.00. Consolidates Note Nos.
1 and 2.
Consolidated Note Nos. 1 and 2 were assigned pursuant to Assignment of
Mortgage from Credit Suisse First Boston Mortgage Capital LLC (successor by
merger to CS First Boston Mortgage Capital Corp.) ("CSFBMC") -to- The Chase
Manhattan Bank ("CMB"), as trustee under that certain Pool 1 Pooling and
Servicing Agreement dated as of 4/25/97 by and among Credit Suisse First
Boston Mortgage Securities Corp., CMB, SunAmerica Life Insurance Company,
Anchor National Life Insurance Company, CSFBMC and the servicer named therein
(the "POOL 1 POOLING AND SERVICING AGREEMENT"), which Assignment of Mortgage
was dated as of 4/25/97 and recorded in the City Register's Office on 6/6/97
in Reel 2463 Page 793.
Consolidated Note Nos. 1 and 2 were further assigned pursuant to
Assignment of Mortgage, dated as of December 19, 1997, from The Chase
Manhattan Bank, as trustee under the Pool 1 Pooling and Servicing Agreement,
to SL Green Operating Partnership, L.P. and intended to be recorded in the
City Register's Office prior to the recordation of the Modification and
Splitter Agreement (as defined below).
As modified by that certain Release of Mortgagor, dated as of December 19,
1997 from SL Green Operating Partnership, L.P. to SLG 17 Battery LLC, whereby
SLG 17 Battery LLC was released from all obligations.
As modified and split purusuant to that certain Modification and Splitter
Agreement, dated as of December 19, 1997, between SL Green Operating
Partnership, L.P., as mortgagee, and 17 Battery Upper Partners LLC, as
mortgagor (the "MODIFICATION AND SPLITTER"), and intended to be recorded in
the City Register's Office; which Modification and Splitter modified and
split the above-referenced $25,000,000 consolidated notes (i.e. Note Nos. 1
and 2) and the mortgages securing same into:
(i) (x) an Amended and Restated Substitute Mortgage, Assignment of
Leases and Rents and Security Agreement No. 1 ("SUBSTITUTE MORTGAGE NO.
1"), dated as of December 19, 1997, between SL Green Operating
Partnership, L.P., as mortgagee, and 17 Battery Upper Partners LLC, as
mortgagor, and (y) an Amended and Restated Substitute Mortgage Note No.
1 in a reduced principal amount of $15,500,000 ("SUBSTITUTE NOTE NO.
1"), dated as of December 19, 1997, made by 17 Battery Upper Partners
LLC to SL Green Operating Partnership, L.P., to which this Exhibit A is
attached, which Substitute Note No. 1 amends and restates consolidated
Note Nos. 1 and 2 to the extent of $15,500,000.00; and
(ii) (x) an Amended and Restated Substitute Mortgage No. 2
("SUBSTITUTE MORTGAGE NO. 2"), dated as of December 19, 1997, between SL
Green Operating Partnership, L.P., as mortgagee, and 17 Battery Upper
Partners LLC, as mortgagor, and (y) an Amended and Restated Substitute
Mortgage Note No. 2 in a reduced principal amount of $9,500,000
("SUBSTITUTE NOTE NO. 2"), dated as of December 19, 1997, made by 17
Battery Upper Partners LLC to SL Green Operating Partnership, L.P.,
which Substitute Note No. 2 amends and restates Notes Nos. 1 and 2 to
the extent of $9,500,000.00. Such Substitute Note No. 2 is a separate
instrument and is not included in the note to which this Exhibit A is
attached.
State of New York )
) ss.:
County of New York )
On the 19th day of December, in the year 1997, before me, the undersigned, a
Notary Public in and for said State, personally appeared Allen I. Gross,
personally known to me or proved to me on the basis of satisfactory evidence
to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.
___________________________
Notary Public
State of New York )
) ss.:
County of New York )
On the 19th day of December, in the year 1997, before me, the undersigned, a
Notary Public in and for said State, personally appeared Benjamin P. Feldman,
personally known to me or proved to me on the basis of satisfactory evidence
to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.
___________________________
Notary Public
EXHIBIT 5.1
===========================================================================
SENIOR UNSECURED
REVOLVING LINE OF CREDIT AGREEMENT
between
SL GREEN OPERATING PARTNERSHIP, L.P.
and
SL GREEN REALTY CORP.
and
LEHMAN BROTHERS HOLDINGS INC.
D/B/A LEHMAN CAPITAL, A DIVISION
OF LEHMAN BROTHERS HOLDINGS INC.,
Individually as a Co-Lender and as Agent for one or more Co-Lenders
and as Syndication Agent
Dated as of December 18, 1997
$140,000,000.00
===========================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT FACILITY. . . . . . . 30
Section 2.01 Advances . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.02 Notice of Borrowing. . . . . . . . . . . . . . . . . 31
Section 2.03 Disbursement of Funds. . . . . . . . . . . . . . . . 31
Section 2.04 The Note . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.05 Interest. . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.06 Interest Periods. . . . . . . . . . . . . . . . . . . 33
Section 2.07 Minimum Amount of Eurodollar Portions. . . . . . . . 34
Section 2.08 Conversion or Continuation. . . . . . . . . . . . . . 34
Section 2.09 Voluntary Reduction of Facility Amount; Extension of
Maturity Date; Termination of Facility Amount. . . . 35
Section 2.10. Principal Payments. . . . . . . . . . . . . . . . . . 36
Section 2.11 Voluntary Prepayments. . . . . . . . . . . . . . . . 36
Section 2.12 Mandatory Prepayments. . . . . . . . . . . . . . . . 36
Section 2.13 Application of Payments and Prepayments. . . . . . . 36
Section 2.14 Method and Place of Payment. . . . . . . . . . . . . 36
Section 2.15 Fees. . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.16 Interest Rate Unascertainable,
Increased Costs, Illegality. . . . . . . . . . . . . 37
Section 2.17 Funding Losses. . . . . . . . . . . . . . . . . . . . 40
Section 2.18 Increased Capital. . . . . . . . . . . . . . . . . . 41
Section 2.19 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.20 Use of Proceeds and Limitations on Advances. . . . 43
Section 2.21 Intentionally Deleted. . . . . . . . . . . . . . . . 43
Section 2.22 Intentionally Deleted . . . . . . . . . . . . . . . . 43
Section 2.23 Intentionally Deleted. . . . . . . . . . . . . . . . 43
Section 2.24 Decision Making by Agent . . . . . . . . . . . . . . 43
Section 2.25 Additional Unencumbered Assets . . . . . . . . . . . 43
Section 2.26 Pro Rata Interests . . . . . . . . . . . . . . . . . 44
SECTION 3. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 44
Section 3.01 Conditions Precedent to the Initial Advance. . . . . 44
Section 3.02 Conditions Precedent to All Advances of the Loan. . . 50
Section 3.03 Acceptance of Borrowings. . . . . . . . . . . . . . . 51
Section 3.04 Sufficient Counterparts. . . . . . . . . . . . . . . 51
SECTION 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 52
Section 4.01 Organizational Status. . . . . . . . . . . . . . . . 52
Section 4.02 Power and Authority. . . . . . . . . . . . . . . . . 52
Section 4.03 No Violation. . . . . . . . . . . . . . . . . . . . . 52
Section 4.04 Litigation. . . . . . . . . . . . . . . . . . . . . . 53
Section 4.05 Financial Statements: Financial Condition; etc. . . . 53
Section 4.06 Solvency. . . . . . . . . . . . . . . . . . . . . . . 53
Section 4.07 Material Adverse Change. . . . . . . . . . . . . . . 53
Section 4.08 Use of Proceeds; Margin Regulations. . . . . . . . . 53
Section 4.09 Governmental Approvals. . . . . . . . . . . . . . . . 54
Section 4.10 Completed Repairs. . . . . . . . . . . . . . . . . . 54
Section 4.11 Tax Returns and Payments. . . . . . . . . . . . . . . 54
Section 4.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.13 Closing Date Transactions. . . . . . . . . . . . . . 55
Section 4.14 Representations and Warranties in Loan Documents. . . 55
Section 4.15 True and Complete Disclosure. . . . . . . . . . . . . 55
Section 4.16 Ownership of Real Property Assets;
Existing Security Instruments . . . . . . . . . . . . 56
Section 4.17 No Default. . . . . . . . . . . . . . . . . . . . . . 56
Section 4.18 Licenses, etc. . . . . . . . . . . . . . . . . . . . 56
Section 4.19 Compliance With Law. . . . . . . . . . . . . . . . . 57
Section 4.20 Brokers . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.21 Judgments . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.22 Property Manager . . . . . . . . . . . . . . . . . . 57
Section 4.23 Assets of the REIT . . . . . . . . . . . . . . . . . 57
Section 4.24 REIT Status . . . . . . . . . . . . . . . . . . . . . 58
Section 4.25 Operations . . . . . . . . . . . . . . . . . . . . . 58
Section 4.26 Stock . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 4.27 Ground Leases . . . . . . . . . . . . . . . . . . . . 58
Section 4.28 Guarantors . . . . . . . . . . . . . . . . . . . . . 58
Section 4.29 Status of Property . . . . . . . . . . . . . . . . . 58
Section 4.30 Survival . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 61
Section 5.01 Financial Reports . . . . . . . . . . . . . . . . . . 62
Section 5.02 Books, Records and Inspections . . . . . . . . . . . 65
Section 5.03 Maintenance of Insurance. . . . . . . . . . . . . . . 65
Section 5.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.05 Corporate Franchises; Conduct of Business . . . . . . 70
Section 5.06 Compliance with Law. . . . . . . . . . . . . . . . . 70
Section 5.07 Performance of Obligations. . . . . . . . . . . . . . 70
Section 5.08 Stock . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 5.09 Change in Rating . . . . . . . . . . . . . . . . . . 71
Section 5.10 Maintenance of Properties. . . . . . . . . . . . . . 71
Section 5.11 Compliance with ERISA. . . . . . . . . . . . . . . . 71
Section 5.12 Settlement/Judgment Notice . . . . . . . . . . . . . 72
Section 5.13 Acceleration Notice . . . . . . . . . . . . . . . . . 72
Section 5.14 Intentionally Deleted. . . . . . . . . . . . . . . . 72
Section 5.15 Intentionally Deleted. . . . . . . . . . . . . . . . 72
Section 5.16 Minimum Net Worth . . . . . . . . . . . . . . . . . . 73
Section 5.17 Total Indebtedness . . . . . . . . . . . . . . . . . 73
Section 5.18 Coverage Ratios . . . . . . . . . . . . . . . . . . . 73
Section 5.19 Replacement Reserve . . . . . . . . . . . . . . . . . 73
Section 5.20 Intentionally Deleted . . . . . . . . . . . . . . . . 73
Section 5.21 Manager . . . . . . . . . . . . . . . . . . . . . . . 74
Section 5.22 Further Assurances . . . . . . . . . . . . . . . . . 74
Section 5.23 REIT Status . . . . . . . . . . . . . . . . . . . . . 74
Section 5.24 Additional Covenants . . . . . . . . . . . . . . . . 74
Section 5.25 Minimum Unencumbered Assets . . . . . . . . . . . . . 74
Section 5.26 Keep Well Covenants. . . . . . . . . . . . . . . . . 74
Section 5.27 Existing Environmental Conditions,
Required Repairs and
Preparation of Environmental Reports. . . . . . . . . 75
Section 5.28 Unused Borrowing Capacity . . . . . . . . . . . . . . 75
Section 5.29 Compliance with Terms of Leaseholds . . . . . . . . . 76
Section 5.30 Equity or Debt Offerings . . . . . . . . . . . . . . 76
Section 5.31 Notice of Certain Events . . . . . . . . . . . . . . 76
Section 5.32 17 Battery Place Condominium . . . . . . . . . . . . 76
SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 76
Section 6.01 Bar Building and 17 Battery Place. . . . . . . . . . 76
Section 6.02 Intentionally Deleted . . . . . . . . . . . . . . . . 76
Section 6.03 Liens. . . . . . . . . . . . . . . . . . . . . . . . 77
Section 6.04 Restriction on Fundamental Changes. . . . . . . . . . 77
Section 6.05 Transactions with Affiliates. . . . . . . . . . . . . 78
Section 6.06 Plans. . . . . . . . . . . . . . . . . . . . . . . . 78
Section 6.07 Distributions . . . . . . . . . . . . . . . . . . . . 78
Section 6.08 Tenant Concentration . . . . . . . . . . . . . . . . 79
Section 6.09 Restriction on Prepayment of Unsecured Debt . . . . . 79
Section 6.10 Real Property Assets . . . . . . . . . . . . . . . . 79
Section 6.11 Maximum Secured Recourse Indebtedness . . . . . . . . 79
Section 6.12 Organizational Documents . . . . . . . . . . . . . . 79
Section 6.13 Negative Pledge Covenant . . . . . . . . . . . . . . 79
Section 6.14 Unsecured Debt of Guarantors . . . . . . . . . . . . 80
Section 6.15 Restrictions on Investments . . . . . . . . . . . . . 80
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 81
Section 7.01 Events of Default. . . . . . . . . . . . . . . . . . 81
Section 7.02 Rights and Remedies. . . . . . . . . . . . . . . . . 84
SECTION 8. INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . 85
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.01 Payment of Agent's and Syndication
Agent's Expenses, Indemnity, etc. . . . . . . . . . . 85
Section 9.02 Notices. . . . . . . . . . . . . . . . . . . . . . . 86
Section 9.03 Successors and Assigns . . . . . . . . . . . . . . . 88
Section 9.04 Amendments and Waivers. . . . . . . . . . . . . . . . 88
Section 9.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . 89
Section 9.06 Governing Law; Submission to Jurisdiction. . . . . . 89
Section 9.07 Confidentiality Disclosure of Information. . . . . . 90
Section 9.08. Recourse . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.09. Sale of Loan, Co-Lenders, Participations and
Servicing . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.10 Borrower's and the REIT's Assignment . . . . . . . . 94
Section 9.11 Counterparts. . . . . . . . . . . . . . . . . . . . . 94
Section 9.12 Effectiveness. . . . . . . . . . . . . . . . . . . . 94
Section 9.13 Headings Descriptive. . . . . . . . . . . . . . . . . 94
Section 9.14 Marshaling; Recapture. . . . . . . . . . . . . . . . 94
Section 9.15 Severability. . . . . . . . . . . . . . . . . . . . . 94
Section 9.16 Survival. . . . . . . . . . . . . . . . . . . . . . . 94
Section 9.17 Domicile of Loan Portions. . . . . . . . . . . . . . 95
Section 9.18 Intentionally Deleted. . . . . . . . . . . . . . . . 95
Section 9.19 Calculations; Computations . . . . . . . . . . . . . 95
Section 9.20 WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . 95
Section 9.21 No Joint Venture . . . . . . . . . . . . . . . . . . 95
Section 9.22 Estoppel Certificates. . . . . . . . . . . . . . . . 95
Section 9.23 No Other Agreements. . . . . . . . . . . . . . . . . 96
Section 9.24 Controlling Document. . . . . . . . . . . . . . . . . 96
Section 9.25 No Benefit to Third Parties. . . . . . . . . . . . . 96
Section 9.26 Joint and Several. . . . . . . . . . . . . . . . . . 96
SCHEDULES
Schedule 1 Unencumbered Assets
Schedule 2 List of Real Property Assets
Schedule 3 Loan Parties, Operating Entities and Subsidiaries
Schedule 4 Required Estoppel Certificates
Schedule 5 Litigation
Schedule 6 Employee Benefit Plans
Schedule 7 Permitted Liens as of Closing Date
Schedule 8 REIT Assets
Schedule 9A REIT Business Operations
Schedule 9B Borrower Business Operations
Schedule 10 Ground Leases
Schedule 11 Mortgage Assets
Schedule 12 Exception to Representations and Warranties
Schedule 13 Permitted Investments
Schedule 14 Guarantors
Schedule 15 Management Agreements
Schedule 16 Post-Closing Repairs
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B The Note
Exhibit C Notice of Conversion or Continuation
Exhibit D Notice of Voluntary Reduction of Facility Amount
Exhibit E Voluntary Prepayment Notice
Exhibit F Subordination of Management Agreement
Exhibit G Ground Lease Estoppel
Exhibit H Compliance Certificate
THIS SENIOR UNSECURED REVOLVING LINE OF CREDIT AGREEMENT, dated as
of December 18, 1997 is made among SL GREEN OPERATING PARTNERSHIP, L.P. (the
"Borrower"), SL GREEN REALTY CORP. (the "REIT") and LEHMAN BROTHERS HOLDINGS
INC., D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a
Delaware corporation, ("Lehman") individually as a Co-Lender ("Lender") and
as Agent for one or more Co-Lenders ("Agent") and as Syndication Agent
("Syndication Agent").
SECTION 1. DEFINITIONS.
Section 1.01 Definitions. As used herein, the following terms
-----------
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular
number the plural and in the plural number the singular.
"Adjusted EBITDA" shall mean with respect to any Person for any
---------------
period, EBITDA less (a) gains and/or losses on asset sales and debt
restructurings, (b) Minimum Capital Expenditure Reserves, and (c) straight
line rent adjustments for the applicable period.
"Adjusted NOI" shall mean for any Real Property Asset, the product
------------
of (i) Net Operating Income for the three (3) month period immediately
preceding the date of determination, multiplied by (ii) four (4); for the
purposes of this definition, the Adjusted NOI for the Bar Building shall
mean, until and unless Borrower shall own the fee simple and leasehold title
to the Bar Building, the product of (a) the lesser of (1) the actual cash
received and applied to interest then due to Borrower under the Bar Building
Loan Documents during the three (3) month period immediately preceding the
date of determination on account of the interest becoming payable during such
period, less Minimum Capital Expenditures Reserves and Minimum Management
Fees for such period and (2) the Net Operating Income of the Bar Building for
such period, less Minium Capital Expenditures Reserves and Minimum Management
Fees for such period multiplied by (b) four (4).
"Administrative Fee" shall have the meaning provided in Section
------------------
2.15(b).
"Administrative Fee Letter" shall mean those certain letter
-------------------------
agreements between any successor Agent and Borrower and the REIT providing
for the payment of the Administrative fee set forth therein.
"Advance" shall mean each advance and readvance of the principal
-------
balance of the Loan.
"Affiliate" shall mean, with reference to a specified Person, any
---------
Person that directly or indirectly through one or more intermediaries
Controls or is Controlled by or is under common Control with the specified
Person and any Subsidiaries (including Consolidated Subsidiaries) of such
specified Person.
"Agent" shall have the meaning provided in the opening paragraph
-----
of this Agreement and in Section 9.09(e).
"Agreement" shall mean this Senior Unsecured Revolving Line of
---------
Credit Agreement as the same may from time to time hereafter be modified,
supplemented or amended.
"Agreement of Sale" means that certain Amended and Restated
-----------------
Agreement of Sale dated as of June 23, 1997 between 17 Battery Upper Partners
and SLG 17 Battery LLC.
"Annual Operating Budget" shall have the meaning provided in
-----------------------
Section 5.01.
"Applicable Laws" shall mean all existing and future federal,
---------------
state and local laws, statutes, orders, ordinances, rules, and regulations or
orders, writs, injunctions or decrees of any court affecting Borrower, any
Loan Party or any Real Property Asset, or the use thereof including, but not
limited to, all zoning, fire safety and building codes, the Americans with
Disabilities Act, and all Environmental Laws (as defined in the Environmental
Indemnity).
"Appraisal" shall mean an appraisal prepared in accordance with the
---------
requirements of FIRREA, prepared by an independent third party appraiser
holding an MAI designation, who is state licensed or state certified in the
State of New York, who meets the requirements of FIRREA and who has at least
ten (10) years real estate experience appraising properties of a similar
nature and type as 110 E. 42/nd/ Street and who is otherwise reasonably
satisfactory to the Agent.
"Appraisal Period" shall mean, with respect to 110 E.42/nd/ Street,
----------------
each eighteen (18) month period commencing on the date of the Appraisal of
110 E.42/nd/ Street that was delivered to Agent prior to Closing and each
Appraisal of 110 E. 42/nd/ Street delivered thereafter to Agent pursuant to
clause (iii) of the definition of Total Unencumbered Asset Value.
"Assets" of any Person means all assets of such Person that would,
------
in accordance with GAAP, be classified as assets of a company conducting a
business the same as or similar to that of such Person, including without
limitation, all Real Property Assets and Permitted Investments.
"Assignment and Assumption" shall have the meaning provided in
-------------------------
Section 9.09.
"Assumed Debt Service" means with respect to all Unsecured Debt of
--------------------
any Person for any period, the aggregate annual payment of interest and
principal that would be due on such Unsecured Debt assuming an annual loan
constant equal to the Treasury Rate in effect as of the date of calculation.
"Bankruptcy Code" shall mean Title 11 of the United States Code
---------------
entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time
promulgated thereunder, and any comparable applicable foreign laws relating
to bankruptcy, insolvency or creditors' rights.
"Bar Building" shall mean those certain Real Property Assets
------------
located at 36 West 44/th/ Street, New York, New York and 35 West 43/rd/
Street, New York, New York.
"Bar Building Asset" shall mean the Bar Building and the Bar
------------------
Building Loan Documents .
"Bar Building Event of Default" shall mean a "Forbearance
-----------------------------
Termination Default", as such term is defined under the Settlement
Agreement.
"Bar Building Loan Documents" shall mean the Bar Building Notes,
----------------------------
the Bar Building Mortgages, the Settlement Agreement, the Cash Management
Agreement, the Transfer and Escrow Agreement, the Bar Building Management
Agreement and any other documents or instruments evidencing, recurring, or
guaranteeing the Bar Building Notes or perfecting Borrower's Lien on the Bar
Building.
"Bar Building Management Agreement" shall mean that certain
---------------------------------
management agreement dated June 2, 1996 between the Bar Building Mortgagor
and SL Green Management Corp. with respect to the Bar Building.
"Bar Building Mortgages" shall mean the mortgages securing the Bar
----------------------
Building Notes and encumbering the Bar Building, as more fully described
therein.
"Bar Building Mortgagor" shall mean, collectively, Bar Building
----------------------
Associates Joint Venture, a New York joint venture with respect to the fee
interest in 36 West 44th Street, New York, New York and Lawplaza, Inc., a New
York corporation with respect to the leasehold estate in 35 West 43rd Street,
New York, New York, together with their respective successors and assigns.
"Bar Building Notes" shall mean those two certain mortgage notes
------------------
in the principal amount of $15,000,000.00 and $3,000,000.00, respectively,
and more particularly described on Schedule 11 attached hereto, as the same
may be modified, amended or supplemented.
"Base Period" shall have the meaning provided in Section 5.18(a).
-----------
"Base Rate" shall mean, on any particular date, a rate per annum
---------
equal to the rate of interest publicly announced by Agent as its prime rate
in effect on such day, with any change in said rate to be effective as of the
date of such change; however, if Lehman is the Agent or if any successor
agent does not announce its rate or ceases to announce a prime rate, Base
Rate shall mean, on any particular date, a rate per annum equal to the rate
of interest published in The Wall Street Journal as the "prime rate", as in
effect on such day, with any change in the Base Rate resulting from a change
in said prime rate to be effective as of the date of the relevant change in
said prime rate; provided, however, that if more than one prime rate is
published in The Wall Street Journal for a day, the average of the prime
rates shall be used; provided, further, however, that the prime rate (or the
average of the prime rates) will be rounded to the nearest 1/16 of 1% or, if
there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
In the event that The Wall Street Journal should cease or
temporarily interrupt publication, then the Base Rate shall mean the daily
average prime rate published in another business newspaper, or business
section of a newspaper, of national standing chosen by Agent. If The Wall
Street Journal resumes publication, the substitute index will immediately be
replaced by the prime rate published in The Wall Street Journal.
In the event that a prime rate is no longer generally published or
is limited, regulated or administered by a governmental or quasi-governmental
body, then Agent shall select a comparable interest rate index which is
readily available to Borrower and verifiable by Borrower but is beyond the
control of Agent or any Co-Lender. Agent shall give Borrower prompt written
notice of its choice of a substitute index and when the change became
effective.
Such substitute index will also be rounded to the nearest 1/16 of
1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%.
The determination of the Base Rate by Agent shall be conclusive
absent manifest error.
"Base Rate Margin" means the applicable percentage per annum set
----------------
forth in the column "Base Rate Margin" determined by reference to the column
(a) "Unsecured Debt Rating of Borrower" then in effect in the event such a
rating is assigned by the Rating Agencies or (b) "Leverage Ratio" then in
effect in the event (i) an Unsecured Debt Rating of Borrower has not been
assigned by the Rating Agencies or (ii) the rating assigned by such Rating
Agencies is worse than BBB-/Baa3, each as set forth below:
Unsecured Debt
Rating of Borrower Leverage Ratio Base Rate Margin
BBB-/Baa3 or better <35% 0%
greater than or equal to 35% and
lesser than or equal to 45% .10%
>45% 0.25%
The Base Rate Margin for the Base Rate Portion shall be determined
by reference to the Unsecured Debt Rating of Borrower or Leverage Ratio, as
applicable, in effect from time to time, and each change in the Base Rate
Margin shall be effective immediately following the date such Unsecured Debt
Rating or Leverage Ratio, as applicable, is announced or determined pursuant
to the Compliance Certificate of Borrower.
"Base Rate Portion" shall mean the portion of the Loan made and/or
-----------------
being maintained at a rate of interest based upon the Base Rate.
"Best" shall mean A.M. Best Company, Inc.
----
"Book Value" shall mean, with respect to any asset of any Person,
----------
the net book value of such assets that is reflected on such Person's
consolidated financial statements, including any deduction, adjustment or
allowance made at any time for depreciation, amortization, or otherwise as
calculated and prepared in accordance with GAAP.
"Borrower" shall have the meaning provided in the first paragraph
--------
of this Agreement and any successor Borrower expressly permitted hereunder.
"Borrowing" shall mean a borrowing of one Type of Advance from
---------
Agent and the Co-Lenders on a given date (or resulting from conversions or
continuations on a given date), having in the case of Eurodollar Portions the
same Interest Period.
"Business Day" shall mean (i) for all purposes other than as
------------
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which Agent, or
any Co-Lender or banking institutions are authorized or required by law or
other government actions to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Portions, any day which is a Business Day described in clause (i)
and which is also a day for trading by and between banks for U.S. dollar
deposits in the relevant interbank Eurodollar market.
"Capital Expenditures" shall mean, for any Person, for any period,
--------------------
all expenditures made by such Person during such period for equipment, fixed
assets, real property or improvements, or for replacements or substitutions
therefor or additions thereto, that have a useful life of more than one year.
"Capitalized Lease" as to any Person shall mean (i) any lease of
-----------------
property, real or personal, the obligations under which are capitalized on
the consolidated balance sheet of such Person and its Subsidiaries, and (ii)
any other such lease to the extent that the then present value of the minimum
rental commitment thereunder should, in accordance with GAAP, be capitalized
on a balance sheet of the lessee.
"Capitalized Lease Obligations" as to any Person shall mean all
-----------------------------
obligations of such Person and its Subsidiaries under or in respect of
Capitalized Leases.
"Cash Collateral Disbursement Account" shall have the meaning
------------------------------------
provided in the Cash Management Agreement.
"Cash Equivalents" shall mean any of the following, to the extent
----------------
owned by a Person free and clear of all Liens: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) Federally
insured certificates of deposit of or time deposits with any commercial bank
that is a Co-Lender or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause (c)
below, is organized under the laws of the United States or any State thereof
and has combined capital and surplus of at least $1 billion or (c) commercial
paper issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Services.
"Cash Management Agreement" shall mean that certain Management
-------------------------
Agreement dated June 28, 1996 between the Bar Building Mortgagor, SL Green
Management Corp. and The Travellers Insurance Company as assigned by various
mesne assignments to Borrower, as the same may be modified, amended or
supplemented from time to time.
"Change in Law" shall have the meaning provided in Section 2.19(c).
-------------
"Closing Date" shall mean the date of this Agreement.
------------
"Code" shall mean the Internal Revenue Code of 1986, as amended
----
from time to time, and any successor statute, together with all final rules
and regulations from time to time promulgated thereunder.
"Co-Lender" shall mean any entity or entities to which Lender sells
---------
with novation all or any part of its right, title and interest in, to and
under the Loan, and any successors or assigns of Lender or any Co-Lender
pursuant to Section 9.09.
"Commitment" shall mean each Co-Lender's obligations under the Loan
----------
Documents to make Advances.
"Common OP Units" shall mean all limited partnership interests in
---------------
the Borrower other than Preferred OP Units.
"Compliance Certificate" shall have the meaning set forth in
----------------------
Section 5.01(b)(ii).
"Consolidated Interest Expense" means with respect to any Person
-----------------------------
for any period, without duplication of interest previously included in such
calculation, interest accrued or payable by such Person and its Subsidiaries
during such period in respect of Total Debt determined on a consolidated
basis in accordance with GAAP.
"Consolidated Subsidiaries" shall mean those Persons (including
-------------------------
Borrower) set forth on Schedule 3 hereof, and any other Persons required to
be consolidated with Borrower or the REIT under GAAP in Borrower's or the
REIT's consolidated financial statements, and only for so long as (i) such
Persons continue to be required to be consolidated with Borrower or the REIT
under GAAP in Borrower's or the REIT's consolidated financial statements or
(ii) none of the events described in Section 7.01(e) have occurred with
respect to any such Persons.
"Contingent Obligation" as to any Person shall mean any obligation
---------------------
of such Person guaranteeing or intended to guarantee any Indebtedness, leases
(including Capitalized Leases) dividends or other obligations ("primary
-------
obligations") of any other Person (the "primary obligor") in any manner,
- ----------- ---------------
whether directly or indirectly, including, without limitation, any obligation
of such Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor,(ii) to advance or supply funds (x) for the purchase or payment of
any such primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth,
solvency or other financial condition of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof: provided, however, that the term Contingent Obligation
-------- -------
shall not include endorsements of instruments for deposit or collection in
the ordinary course of business or obligations of such Person which would not
be required to be disclosed under GAAP as liabilities or footnoted on such
Person's financial statement. The amount of any accrued or accruable
Contingent Obligation shall be determined in accordance with GAAP.
"Contract Rate" shall mean the rate or rates of interest (which
-------------
rate shall include the applicable margin added thereto pursuant to the terms
of this Agreement) per annum provided for in this Agreement which are
applicable to the Loan from time to time so long as no Event of Default has
occurred and is continuing. If more than one rate of interest is applicable
to the Loan, then, unless the context indicates that the Contract Rate is to
be determined for each Loan Portion, the Contract Rate shall be the average
of such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%)
with such average to be weighted according to the relative size of the Loan
Portions to which such different rates are applicable. The determination of
the Contract Rate by Agent shall be conclusive absent manifest error.
"Control" shall mean in (a) in the case of a corporation,
-------
ownership, directly or through ownership of other entities, of at least ten
percent (10%) of all the voting stock (exclusive of stock which is voting
only as required by applicable law or in the event of nonpayment of dividends
and pays dividends only on a nonparticipating basis at a fixed or floating
rate), and (b) in the case of any other entity, ownership, directly or
through ownership of other entities, of at least ten percent (10%) of all of
the beneficial equity interests therein (calculated by a method that excludes
from equity interests, ownership interests that are nonvoting (except as
required by applicable law or in the event of nonpayment of dividends or
distributions) and pay dividends or distributions only on a non-participating
basis at a fixed or floating rate) or, in any case, (c) the power directly or
indirectly, to direct or control, or cause the direction of, the management
policies of another Person, whether through the ownership of voting
securities, general partnership interests, common directors, trustees,
officers by contract or otherwise. The terms "controlled" and "controlling"
shall have meanings correlative to the foregoing definition of "Control."
"Current Co-Lender"shall mean each of the Co-Lenders which is not
-----------------
a Defaulting Co-Lender.
"Debt Service" means with respect to any Person for any period, the
------------
sum (without duplication) of (a) Consolidated Interest Expense of such Person
for such period plus (b) scheduled principal amortization of Total Debt and
any unscheduled principal amortization payments actually made or required to
be made during such period pursuant to a settlement of debt (giving effect to
any principal payments actually made or required to be made other than
scheduled balloon payments due on the applicable maturity date that are not
then due or past due and voluntary prepayments) of such Person for such
period (whether or not such required payments are made).
"Default" shall mean any event, act or condition which shall have
-------
occurred and which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default.
"Default Rate" shall mean for each Loan Portion the lesser of
------------
(a) the Maximum Legal Rate or (b) the greater of (i) the rate per annum
determined by adding four percent (4%) per annum to (A) the Contract Rate
applicable to each Loan Portion immediately prior to a Default until the
expiration of the applicable Interest Periods, and (B) the sum of the
Eurodollar Rate Margin and the Eurodollar Rate for an Interest Period of one
month, as the same shall adjust each month, thereafter, or (ii) the rate per
annum determined by adding four percent (4%) per annum to the Base Rate as
from time to time is in effect.
"Defaulting Co-Lender" shall have the meaning ascribed to it in
--------------------
Section 9.09(d).
"Distribution" shall mean any dividends (other than dividends
------------
payable solely in equities), distributions, return of capital to any
stockholders, general or limited partners or members, distributions or
delivery of property or cash to stockholders, general or limited partners or
members, or any redemption, retirement, purchase or other acquisition,
directly or indirectly, of any shares of any class of capital stock now or
hereafter outstanding (or any options or warrants issued with respect to
capital stock) general or limited partnership interest, or, without
duplication, the setting aside of any funds for the foregoing; provided,
however, that the foregoing definition shall not be deemed to include
payments of any of the foregoing interests made in the form of salaries,
bonuses, wages or similar employee compensation.
"Dollars" and the symbol "$" each mean the lawful money of the
------- -
United States of America.
"Domestic Lending Office" shall mean the office set forth in
-----------------------
Section 9.02 for Agent and the Co-Lenders, or such other office as may be
designated from time to time by written notice to Borrower.
"EBITDA" shall mean with respect to any Person for any period,
------
earnings (or losses) before interest and taxes of such Person and its
Subsidiaries for such period plus, to the extent deducted in computing such
earnings (or losses) before interest (including, without limitation, the
interest portion of payments made under Capitalized Leases) and taxes,
depreciation and amortization expense and other non-cash charges, all as
determined on a consolidated basis with respect to such Person and its
Subsidiaries in accordance with GAAP; provided, however, EBITDA shall exclude
earnings or losses resulting from (i) cumulative changes in accounting
practices, (ii) discontinued operations, (iii) extraordinary items, (iv) net
income or net losses of any entity acquired in a pooling of interest
transaction for the period prior to the acquisition, (v) net income or net
losses of a Subsidiary or any other Loan Party that is unavailable to the
Borrower or the REIT, (vi) net income or net losses not readily convertible
into Dollars or remittable to the United States, (vii) gains and losses from
the sale of assets, and (viii) net income or net losses from corporations,
partnerships, associations, joint ventures or other entities in which the
Borrower, the REIT or a Subsidiary thereof has a minority interest and in
which neither Borrower, the REIT or their Subsidiaries has Control, except to
the extent actually received.
"Employee Benefit Plan" shall mean an employee benefit plan within
---------------------
the meaning of Section 3(3) of ERISA.
"Engineering Reports" shall have the meaning provided in Section
-------------------
3.01(p).
"Environmental Indemnity" shall mean that certain environmental
-----------------------
indemnity agreement dated the date hereof given by Borrower and the REIT to
the Agent, individually as a Co-Lender and as Agent, and Lehman as
Syndication Agent and Co-Lender, as the same may be supplemented or amended
from time to time.
"Environmental Laws"shall have the meaning provided in the
------------------
Environmental Indemnity.
"Environmental Reports" shall mean written environmental site
---------------------
assessments, prepared by independent qualified environmental professionals
reasonably acceptable to Agent, for each Real Property Asset, containing the
following: (1) a Phase I environmental site assessment analyzing the presence
of environmental contaminants, polychlorinated biphenyls or storage tanks and
other Hazardous Substances at each of the Real Property Assets, the risk of
contamination from off-site Hazardous Substances and compliance with
Environmental Laws, such assessments shall be conducted in accordance with
ASTM Standard E 1527-93, or any successor thereto published by ASTM, with
respect to each of the Real Property Assets, (ii) an asbestos survey of each
of the Real Property Assets, which shall include random sampling of materials
and air quality testing, (iii) if any of the Real Property Assets is used for
residential housing, an assessment of the presence of lead-based paint, lead
in water and radon in the improvements (other than units that are not owned
or leased by Borrower, the REIT, any other Loan Party or any Affiliate
thereof), and (iv) such further site assessments Agent may reasonably require
or request due to the results obtained in (i), (ii) or (iii) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time and any successor statute, together with
all final rules and regulations promulgated thereunder. Section references
to ERISA are to ERISA, as in effect at the date of this Agreement and any
provisions of ERISA substituted therefor.
"ERISA Controlled Group" means any corporation or entity or trade
----------------------
or business or person that is a member of any group described in Section
414(b), (c), (m) or (o) of the Code of which Borrower, the REIT or any
Guarantor is a member.
"Eurocurrency Reserve Requirements" shall mean, with respect to
---------------------------------
each day during an Interest Period for Eurodollar Portions, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Federal Reserve Board or other governmental authority or agency having
jurisdiction with respect thereto for determining the maximum reserves
(including, without limitation, basic, supplemental, marginal and emergency
reserves) for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D) maintained by a member bank of the Federal
Reserve System.
"Eurodollar Base Rate" shall mean, for any Interest Period, the
--------------------
rate per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period which appears on the Telerate Page 3750
as of 11:00 a.m. (London, England time) two (2) Business Days prior to the
first day of such Interest Period. The determination of the Eurodollar Base
Rate by Agent shall be conclusive absent manifest error.
"Eurodollar Lending Office" shall mean the office of Agent (or any
-------------------------
Co-Lender) designated as such by Agent from time to time by written notice to
Borrower.
"Eurodollar Portions" shall mean each portion of the Loan made
-------------------
and/or being maintained at a rate of interest calculated by reference to the
Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day during an
---------------
Interest Period for Eurodollar Portions, a rate per annum equal to the
Eurodollar Base Rate, or, if any Co-Lender is subject to Eurocurrency Reserve
Requirements, whether or not such reserves are actually incurred or
maintained, the average of the Eurodollar Base Rate and the Adjusted
Eurodollar Base Rate (defined below), with such average to be weighted
according to the percentage of the Eurodollar Portion subject to such Co-
Lender's interest in the Loan and the balance of such Eurodollar Portion.
The Adjusted Eurodollar Base Rate shall mean a rate per annum, determined for
each day during an Interest Period in accordance with the following formula
(rounded upwards to the nearest whole multiple of l/16th of one percent):
Eurodollar Base Rate
---------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Rate Margin" means the applicable percentage per annum
----------------------
set forth in the column "Eurodollar Rate Margin" determined by reference to
the column (a) "Unsecured Debt Rating of Borrower" then in effect in the
event such a rating is assigned by the Rating Agencies or (b) "Leverage
Ratio" then in effect in the event an Unsecured Debt Rating of Borrower has
not been assigned by the Rating Agencies or the rating assigned by such
Rating Agencies is worse than BBB-/Baa3, each as set forth below:
Unsecured Debt Eurodollar Rate
Rating of Borrower Leverage Ratio Margin
<35% 1.20%
greater than or equal to 35% and
less than or equal to 45% 1.30%
>45% 1.45%
BBB-/Baa3 1.15%
BBB/Baa2 or better 1.10%
The Eurodollar Rate Margin for the Eurodollar Rate Portions shall
be determined by reference to the Unsecured Debt Rating of Borrower or
Leverage Ratio, as applicable, and any change in the Eurodollar Rate Margin
shall be effective immediately following the date such Unsecured Debt Rating
or Leverage Ratio, as applicable, is announced or determined, pursuant to the
Compliance Certificate of Borrower.
"Event of Default" shall have the meaning provided in Section 7.
----------------
"Extension Fee" shall mean a non-refundable fee equal to 0.25% of
-------------
the Facility Amount.
"Facility Amount" shall initially mean U.S. $140,000,000.00, as
---------------
such amount may be permanently or temporarily reduced pursuant to Sections
2.09 or 2.12 or otherwise pursuant to the terms and conditions of this
Agreement.
"Facility Fee" shall have the meaning provided in the Fee Letter.
------------
"Federal Reserve Board" shall mean the Board of Governors of the
---------------------
Federal Reserve System as constituted from time to time, or any successor
thereto in function.
"Fees" shall mean all amounts payable pursuant to Sections 2.09,
----
2.15, 2.17 and 9.01.
"Fee Letter" shall mean that certain letter agreement between
----------
Borrower, the REIT and Lehman dated the date hereof.
"Financial Covenants" shall mean Sections 5.16, 5.17, 5.18, 5.25,
-------------------
5.28, 6.07, 6.08 and 6.11.
"FIRREA" means the Financial Institutions Reform, Recovery and
------
Enforcement Act of 1989, as amended from time to time.
"Fixed Charges" means the amount of scheduled lease payments with
-------------
respect to leasehold interests or obligations of the subject Person with
respect to Capitalized Leases and dividends and distributions on all classes
of preferred stock or Preferred OP Units of such Person.
"Funding Costs" shall have the meaning provided in Section 2.17.
-------------
"Funds from Operations" shall mean consolidated net income (loss)
---------------------
before extraordinary items, computed in accordance with GAAP, plus, to the
extent deducted in determining net income (loss) and without duplication, (i)
gains (or losses) from debt restructuring and sales of property (or
adjustments to basis of properties or other assets), (ii) non-recurring
charges, (iii) provisions for losses, (iv) real estate related depreciation,
amortization and other non-cash charges (excluding amortization of financing
costs), and (v) amortization of organizational expenses minus, to the extent
included in net income (loss) and without duplication, (a) non-recurring
income and (b) equity income (loss) from unconsolidated partnerships and
joint ventures less the proportionate share of funds from operations of such
partnerships and joint ventures, which adjustments shall be calculated on a
consistent basis.
"Furnished Information" shall have the meaning provided in Section
---------------------
4.15.
"GAAP" shall mean United States generally accepted accounting
----
principles on the date hereof and as in effect from time to time during the
term of this Agreement, and consistent with those utilized in the preparation
of the financial statements referred to in Section 4.05.
"Ground Lease" shall mean those ground leases described on Schedule
------------
10 and any other ground lease that complies with the provisions set forth in
Section 4.27.
"Ground Lease Estoppel" shall have the meaning provided in Section
---------------------
3.01(a)(xi).
"Guarantor" shall mean the Loan Parties identified on Schedule 14
---------
and each owner, other than the Borrower and the REIT, of an Unencumbered
Asset.
"Guaranty" shall mean that certain Guaranty of Payment dated the
--------
date hereof made by the Guarantors to Agent, the Syndication Agent and the
Co-Lenders, as the same may be supplemented or amended from time to time.
"Hazardous Substances" shall have the meaning provided in the
--------------------
Environmental Indemnity.
"Improvements" shall mean any building, structure, fixture,
------------
addition, enlargement, extension, modification, repair, replacement or
improvement now or hereafter located or erected on any Real Property Asset.
"Increased Capital Costs" shall have the meaning provided in
-----------------------
Section 2.18.
"Indebtedness" of any Person shall mean, without duplication, (i)
------------
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument, (iii) the
outstanding undrawn amount of all letters of credit issued for the account of
such Person and, without duplication, all un-reimbursed amounts drawn
thereunder, (iv) all indebtedness of any other person or entity secured by
any Lien on any property owned by such Person, whether or not such
indebtedness has been assumed, (v) all Contingent Obligations of such Person,
(vi) all Unfunded Benefit Liabilities of such Person, (vii) all payment
obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors,
collars and similar agreements) and currency swaps and similar agreements,
(viii) all indebtedness and liabilities of such Person secured by any Lien or
mortgage on any property of such Person, whether or not the same would be
classified as a liability on a balance sheet, (ix) the liability of such
Person in respect of banker's acceptances and the estimated liability under
any participating mortgage, convertible mortgage or similar arrangement, (x)
the aggregate principal amount of rentals or other consideration payable by
such Person in accordance with GAAP over the remaining unexpired term of all
Capitalized Leases of such Person, (xi) all judgments or decrees by a court
or courts or competent jurisdiction entered against such Person, (xii) all
indebtedness, payment obligations, contingent obligations, etc. of any
partnership in which such Person holds a general partnership interest,
provided that if such indebtedness is non-recourse, only the portion of such
indebtedness equal to such Person's percentage ownership interest in such
partnership shall be included in this definition, (xiii) all convertible debt
and subordinated debt owed by such Person, (xiv) all Preferred OP Units (if
any) and preferred stock issued by such Person that, in either case, are
redeemable for cash on a mandatory basis, a cash equivalent, a note
receivable or similar instrument or are convertible on a mandatory basis to
Indebtedness as defined herein (other than Indebtedness described in clauses
(iii), (vi), (x), (xi) or (xiv) of this definition), and (xv) all
obligations, liabilities, reserves and any other items which are listed as a
liability on a balance sheet of such Person determined on a consolidated
basis in accordance with GAAP, but excluding (A) all general contingency
reserves and reserves for deferred income taxes and investment credit and (B)
all customary trade payables and accrued expenses not more than sixty (60)
days past due and (C) any indebtedness of such Person evidenced by a note or
notes that is secured by a pledge of cash or Cash Equivalents with a value
equal to or greater than the amount of the related indebtedness and which
generates cash flow sufficient to pay all sums due on such indebtedness when
the same are due and payable.
"Indemnitee" shall have the meaning provided in Section 9.01(c).
----------
"Intercreditor Agreement" shall have the meaning provided in
-----------------------
Section 9.04.
"Interest Period" shall have the meaning provided in Section 2.06.
---------------
"Investment Grade Tenant" shall mean any tenant which has an
-----------------------
Unsecured Debt Rating of BBB- or better as assigned by S&P or Baa3 or better
as assigned by Moody's.
"Leases" shall mean all leases and other agreements, whether or not
------
in writing, to which an owner of a Real Property Asset is a party or by which
such owner is bound, pursuant to which a Person is permitted to use, enjoy or
occupy all or any portion of any Real Property Asset, whether heretofore or
hereafter entered into.
"Leverage Ratio" means, with respect to the REIT, the Borrower and
--------------
their Consolidated Subsidiaries, the ratio, expressed as a percentage, of
(a) such Person's Total Debt to (b) the Total Value of such Person's Assets.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, collateral assignment, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
effect as any of the foregoing, inchoate liens arising under ERISA to secure
the Contingent Liabilities of Borrower, the REIT, or any Loan Party, and the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction, domestic or foreign in
connection with the creation of a security interest.
"Loan" shall mean, in the aggregate, the then outstanding and
----
unpaid Advances made to Borrower under this Agreement and the Note pursuant
to the terms hereof, the aggregate outstanding principal amount of which
shall not exceed at any time the Facility Amount.
"Loan Documents" shall mean this Agreement, the Note, the Guaranty,
--------------
the Environmental Indemnity, the Subordination of Management Agreement, the
Ground Lease Estoppel, the Intercreditor Agreement, and any other documents
or instruments evidencing, securing or guaranteeing the Loan.
"Loan Party" shall mean, individually and collectively, as the
----------
context requires, Borrower, the REIT, each Guarantor, and the general
partners of Borrower if Borrower is a limited partnership, and the managing
members of Borrower if Borrower is a limited liability company.
"Loan Portion" shall mean the Base Rate Portion and each Eurodollar
------------
Portion of the Loan.
"Majority Co-Lenders" shall have the meaning provided in the
-------------------
Intercreditor Agreement, provided that prior to Syndication, it shall mean
the Lender. With respect to the provisions of this Agreement requiring the
consent, approval, disapproval or determination of the Majority Co-Lenders,
each Current Co-Lender's Pro Rata Interest shall be used as the means of
calculating the Majority Co-Lenders and the term "Majority Co-Lenders" shall
mean those Current Co-Lenders whose Pro Rata Interests, at any time, in the
aggregate, is equal to or greater than the percentage prescribed in
Intercreditor Agreement based solely on the aggregate owned by all Current
Co-Lenders; the Pro Rata Interests in the Loan of Defaulting Co-Lenders shall
not be taken into account in the calculation of the Majority Co-Lenders.
"Management Agreements" shall mean those management agreements
---------------------
described on Schedule 15, and any subsequent management agreements entered
into pursuant to Section 5.21.
"Manager" shall mean SL Green Management LLC or another wholly
-------
owned Affiliate or Subsidiary of Borrower.
"Margin Stock" shall have the meaning provided such term in
------------
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean any condition which has a
-----------------------
material adverse effect upon (i) the business, operations, properties, assets
or condition (financial or otherwise) of Borrower or the REIT or any of the
Loan Parties, taken as a whole, or (ii) the ability of Borrower or the REIT
or the Loan Parties to perform, or of Agent, or any Co-Lender to enforce, any
of the Obligations.
"Maturity Date" shall mean December 18, 2000, as such date may be
-------------
extended pursuant to Section 2.09(b) or such earlier date on which the
principal balance of the Loan and all other sums due in connection with the
Loan shall be due as a result of the acceleration of the Loan.
"Maximum Legal Rate" shall mean the maximum nonusurious interest
------------------
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws
of such state or states whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions of the Loan.
"Minimum Capital Expenditure Reserves" shall mean, for any Real
------------------------------------
Property Asset, $0.40 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Minimum Leasing Commission Reserves" shall mean for any Real
-----------------------------------
Property Asset, $0.51 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Minimum Management Fees" shall mean three percent (3%) of Rents
-----------------------
from the related Real Property Asset for the three (3) month period
immediately preceding the calculation.
"Minimum Reserves" shall mean the sum of Minimum Capital
----------------
Expenditure Reserves, Minimum Tenant Improvement Reserves and Minimum Leasing
Commission Reserves.
"Minimum Tenant Improvement Reserves" shall mean for any Real
-----------------------------------
Property Asset, $1.78 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Moody's" shall mean Moody's Investor Service, Inc.
-------
"Multiemployer Plan" shall mean a Plan which is a "multiemployer
------------------
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Operating Income" shall mean, with respect to any Real
--------------------
Property Asset, for the period of determination, the Rents derived from the
customary operation of such Real Property Asset, less Operating Expenses
attributable to such Real Property Asset, and shall include only the sum of
(i) the Rents received or expected to be received, and earned in accordance
with GAAP, pursuant to Leases in place under which the tenant is in occupancy
of the premises demised thereunder (unless such tenant has not taken
occupancy due to tenant improvement work or tenant build-out that is not the
subject of dispute and is not yet completed) on the date of such calculation
and under which Tenant is on a full rent paying basis and is not more than
thirty (30) days delinquent in such rent payments, plus (ii) other income
actually received and earned in accordance with GAAP with respect to such
Real Property Asset, plus (iii) rent loss or business interruption insurance
proceeds received or expected to be received during or relating to such
period due to a casualty that has occurred prior to the date of calculation
plus (iv) parking or other income, less Operating Expenses actually paid or
payable on an accrual basis in accordance with GAAP attributable to such Real
Property Asset during such period, as set forth on operating statements and
schedules reasonably satisfactory to Agent. Net Operating Income shall be
calculated in accordance with customary accounting principles applicable to
real estate. Notwithstanding the foregoing, Net Operating Income shall not
include (i) any condemnation or insurance proceeds (excluding rent loss or
business interruption insurance proceeds as described above), (ii) any
proceeds resulting from the sale, exchange, transfer, financing or
refinancing of all or any portion of the Real Property Asset for which it is
to be determined, (iii) amounts received from tenants as security deposits
unless actually applied toward the payment of rent or additional rent in
accordance with the terms of such tenant's lease, (iv) interest income and
(v) any type of income otherwise included in Net Operating Income but paid
directly by any tenant to a Person other than Borrower or a Loan Party or its
agents or representatives.
"Net Worth" shall mean, with respect to a Person, consolidated net
---------
worth as calculated in accordance with GAAP.
"New Manager" shall have the meaning provided in Section 5.21.
-----------
"Non-use Fee" shall have the meaning provided in Section 2.15(a).
-----------
"Non-use Fee Due Date" shall mean the date which is five (5)
--------------------
business days after the date Agent has furnished Borrower with an invoice
showing the amount of the quarterly Non-use Fee and a detailed calculation of
the same in accordance with Section 2.15.
"Note" shall have the meaning provided in Section 2.04.
----
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
2.02.
"Notice of Conversion or Continuation" shall have the meaning
------------------------------------
provided in Section 2.08.
------------
"Obligations" shall mean all payment, performance and other
-----------
obligations, liabilities and indebtedness of every nature of (i) Borrower and
the REIT from time to time owing to Agent or any Co-Lender under or in
connection with this Agreement or any other Loan Document, or (ii) the REIT
and the other Loan Parties under or in connection with the Guaranty or any
other Loan Documents.
"Occupancy Level" shall mean, for each Real Property Asset, the
---------------
percentage of rentable square feet in such Real Property Asset actually
occupied by tenants under their respective Leases on a full rent paying basis
or during any free rent period provided for in such Lease. For purposes of
this definition, if a tenant has sublet all or a portion of the premises
demised under its Lease, and such subtenant is actually occupying such
premises or portion thereof, the tenant shall be deemed to be actually
occupying such premises or portion thereof, as the case may be.
"110 E. 42nd Street" shall mean that certain Real Property Asset
------------------
located at 110 E. 42nd Street, New York, New York.
"Operating Entities" shall mean those partnership or limited
------------------
liability companies set forth on Schedule 3, as such Schedule may be amended
or supplemented from time to time, and any partnership or limited liability
company, in which the Borrower or the REIT, own singly or together, a
majority or all of the economic interest therein and either the Borrower or
the REIT, either directly or indirectly, is the sole managing general partner
or sole managing member.
"Operating Expenses" shall mean, with respect to any Real Property
------------------
Asset, for any given period (and shall include the pro rata portion for such
period of all such expenses attributable to, but not paid during, such
period), all out-of-pocket expenses to be paid or payable, as determined in
accordance with GAAP, by Borrower, the REIT or the applicable Loan Party
during that period in connection with the operation of such Real Property
Asset for which it is to be determined, including without limitation and
without duplication:
(i) expenses for cleaning, repair, maintenance, decoration and
painting of the such Real Property Asset (including, without limitation,
parking lots and roadways), net of any insurance proceeds in respect of
any of the foregoing;
(ii) wages (including overtime payments), benefits, payroll taxes
and all other related expenses for Borrower's, the REIT's or other Loan
Party's on-site personnel, up to and including (but not above) the level
of the on-site manager, engaged in the repair, operation and maintenance
of such Real Property Asset and service to tenants and on-site personnel
engaged in audit and accounting functions performed by Borrower, the
REIT or the applicable Loan Party;
(iii) management fees pursuant to the Management Agreement, but in
no event less than the Minimum Management Fees. Such fees shall include
all fees for management services whether such services are performed at
such Real Property Asset or off-site;
(iv) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, utility or similar
item and the cost of building and cleaning supplies;
(v) the cost of any leasing commissions and tenant concessions or
improvements payable by Borrower, the REIT or any Loan Party pursuant to
any leases which are in effect for such Real Property Asset at the
commencement of that period as such costs are recognized in accordance
with GAAP, but in no event less than the Minimum Leasing Commission
Reserves and Minimum Tenant Improvement Reserves with respect to such
period, respectively;
(vi) rent, liability, casualty, fidelity, errors and omissions,
liability, workmen's compensation and other insurance premiums;
(vii) legal, accounting and other professional fees and expenses;
(viii) the cost of all equipment to be used in the ordinary course
of business, which is not capitalized in accordance with GAAP.
(ix) real estate, personal property and other taxes;
(x) advertising and other marketing costs and expenses;
(xi) the Minimum Capital Expenditure Reserves;
(xii) casualty losses to the extent not reimbursed by an
independent third party; and
(xiii) if applicable, all common area charges, maintenance charges
and other assessments or charges under any condominium regime.
Notwithstanding the foregoing, Operating Expenses shall not include (i)
depreciation or amortization or any other non-cash item of expense; (ii)
interest, principal, fees, costs and expense reimbursements of Agent and the
Co-Lenders in administering the Loan; or (iii) any expenditure (other than
leasing commissions, tenant improvement costs and replacement reserves as
described above) which is properly treatable as a capital item under GAAP.
"OP Units" shall mean the Common OP Units and the Preferred OP
--------
Units.
"Other Assets" shall mean all Assets of a Person that are not Real
------------
Property Assets.
"Participant" shall have the meaning provided in Section 9.09(i).
-----------
"PBGC" shall mean the Pension Benefit Guaranty Corporation
----
established under ERISA, or any successor thereto.
"Permitted Investments" shall mean, at any time, (a) fee simple or
---------------------
leasehold interests (which comply with the requirements of Section 4.27)
owned entirely by the Borrower in real property located in the borough of
Manhattan, City of New York, New York and improved by fully operational Class
B or better office buildings, provided however, that fifteen percent (15%) of
the Total Value of such Assets may be real property located outside of the
borough of Manhattan, and (b) all of the categories of investments, as
limited individually as a percentage of the Total Value of all of Borrower's
consolidated Assets in the table below, which, when combined, shall be not
in excess of the lesser of (i) thirty percent (30%) of Borrower's Net Worth
as of the date of calculation, and (ii) fifteen percent (15%) of the Total
Value of all of Borrower's consolidated Assets as of the date of calculation: