View:
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): March 18, 1998
SL GREEN REALTY CORP.
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-13199
(Commission File Number) 13-3956775
(IRS Employer Id. Number)
70 West 36th Street
New York, New York 10018
(Address of principal executive offices) (Zip Code)
(212) 594-2700
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 18, 1998, SL Green Realty Corp. (the "Company") acquired from
the Helmsley organization two properties at 420 Lexington Avenue, New York,
New York (the Graybar Building) and 1466 Broadway, New York, New York
(collectively the "Helmsley Properties") for an aggregate purchase price of
approximately $144.0 million, including closing costs.
The Graybar Building, a 31-story building encompassing approximately 1.2
million rentable square feet, overlooks Grand Central Terminal, a central
transportation hub that is currently undergoing extensive renovations. 1466
Broadway, a 16-story landmark building encompassing approximately 290,000
rentable square feet is located at the corner of 42/nd/ Street and Broadway,
the heart of the Times Square redevelopment area. As of December 31, 1997,
the Graybar Building was 83% leased and 1466 Broadway was 87% leased.
The purchase price of the Helmsley Properties was funded with proceeds
from an interim debt financing in the aggregate amount of $275 million
through Lehman Brothers Holdings, Inc. (the "Bridge 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 independent appraisals on the properties.
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. (the
"Credit Facility") which was subsequently syndicated to a group of
participating banks (the "Credit Facility Banking Group"). In January 1998,
the Company asked the Credit Facility Banking Group to temporarily relieve
the Company from its obligations under the financial covenants of the Credit
Facility, in order to close the Bridge Facility. The Bridge Facility, in
addition to financing the Helmsley Properties, will pay off the outstanding
balance on the Company's unsecured line of credit and provide ongoing
liquidity for future acquisition and corporate needs. The term of this loan
is one year. The interest rate is determined by a schedule of the percent of
commitment outstanding and duration of the outstanding amounts, ranging from
170 basis points over the London Interbank Offered Rate ("LIBOR") to 300 basis
points over LIBOR. The constituent banks are eligible to participate in this
term loan. The Credit Facility will remain committed but unused until the
Bridge Facility is paid off through either permanent debt or an equity
financing and the Company's financial covenant obligations are restored.
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 Form of Agreement of Sale and Purchase dated as of January 30, 1998
between Graybar Building Company, as Seller, and SL Green Operating
Partnership, L.P., as Purchaser
2.2 Form of Agreement of Sale and Purchase dated January 30, 1998 between
1466 Broadway Associates, as Seller, and SL Green Operating Partnership,
L.P., as Purchaser
5.1 Loan Agreement between SL Green Operating Partnership, L.P. and Lehman
Brothers Holdings Inc., et al., dated as of March 20, 1998 (the "Bridge
Facility")
5.2 Agreement of Spreader, Consolidation and Modification of Mortgage
between SL Green Operating Partnership, L.P. and Lehman Brothers
Holdings Inc. dated as of March 20, 1998.
5.3 Pledge and Security Agreement between SL Green Operating Partnership,
L.P. and Lehman Brothers Holdings Inc., dated March 20, 1998
5.4 Assignment of Mortgage between SL Green Operating Partnership, L.P. and
Lehman Brothers Holdings Inc. relating to 35 West 43rd Street
5.5 Assignment of Mortgage between SL Green Operating Partnership, L.P. and
Lehman Brothers Holdings Inc. relating to 17 Battery Place
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 March 31, 1998
=============================================================================
AGREEMENT OF SALE AND PURCHASE
between
GRAYBAR BUILDING COMPANY,
SELLER
and
SL GREEN OPERATING PARTNERSHIP, L.P.,
PURCHASER
Date: January __, 1998
PREMISES:
420 LEXINGTON AVENUE
THE GRAYBAR BUILDING
NEW YORK, NEW YORK
=============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1 INCLUSIONS IN SALE AND EXCLUSIONS . . . . . . . . . . . . . . 1
ARTICLE 2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . 3
2.2 Payment of Purchase Price . . . . . . . . . . . . . . . . 3
2.2.1 Deposit . . . . . . . . . . . . . . . . . . . . . 3
2.2.2 Payment at Closing . . . . . . . . . . . . . . . . 4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 5
3.1 Representations of Seller . . . . . . . . . . . . . . . . 5
3.1.1 Space Leases . . . . . . . . . . . . . . . . . . . 5
3.1.2 Service and Maintenance Agreements . . . . . . . . 6
3.1.3 Brokerage Agreements . . . . . . . . . . . . . . . 6
3.1.4 Employees . . . . . . . . . . . . . . . . . . . . 7
3.1.5 Underlying Documents -- Operating Sublease . . . . 7
3.1.6 No Foreign Person . . . . . . . . . . . . . . . . 9
3.1.7 Incomplete Landlord's Work and Unpaid Work
Allowances . . . . . . . . . . . . . . . . . . . . 9
3.1.8 Litigation . . . . . . . . . . . . . . . . . . . . 9
3.2 Reliance upon Document Binders . . . . . . . . . . . . . 9
3.3 Authority and Binding Effect; No Breach or Prohibition . 10
3.4 Purchaser's Knowledge; Disclosure . . . . . . . . . . . . 10
3.5 Disclaimer of Representations and Warranties . . . . . . 11
3.6 Right to Adjourn Closing . . . . . . . . . . . . . . . . 11
ARTICLE 4 STATE OF TITLE OF PROPERTY . . . . . . . . . . . . . . . . . . 11
4.1 Permitted Encumbrances . . . . . . . . . . . . . . . . . 11
ARTICLE 5 TITLE INSURANCE AND ABILITY OF SELLER TO CONVEY . . . . . . . 15
5.1 Title Insurance . . . . . . . . . . . . . . . . . . . . . 15
5.2 Title Objections . . . . . . . . . . . . . . . . . . . . 16
5.3 No Further Action . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 6 CLOSING COSTS . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1. Purchaser's Obligations . . . . . . . . . . . . . . . . 18
6.2. Seller's Obligations . . . . . . . . . . . . . . . . . . 18
6.3. Other Costs . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 7 ASSIGNMENT AND ASSUMPTION OF CONTRACTS
AND SPACE LEASES . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 8 REAL ESTATE TAX PROTESTS . . . . . . . . . . . . . . . . . . . 19
ARTICLE 9 ACKNOWLEDGMENTS OF PURCHASER;
CONDITION OF PROPERTY . . . . . . . . . . . . . . . . . . . . 20
9.1 Analysis and Evaluation of the Property . . . . . . . . . 20
9.2 No Effect on Purchaser's Obligations . . . . . . . . . . 21
9.3 No Other Representations . . . . . . . . . . . . . . . . 22
9.4 Outside Representations . . . . . . . . . . . . . . . . . 22
9.5 Environmental Investigation of the Property . . . . . . . 22
9.6 Confidentiality . . . . . . . . . . . . . . . . . . . . . 23
9.7 Limited Disclosure . . . . . . . . . . . . . . . . . . . 23
9.8 Return of Information . . . . . . . . . . . . . . . . . . 24
9.9 Survival . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 10 OPERATIONS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . 24
10.1 Continued Operations . . . . . . . . . . . . . . . . . 24
10.2 Access to the Property . . . . . . . . . . . . . . . . 25
10.3 Space Leases . . . . . . . . . . . . . . . . . . . . . 25
10.4 Tenant Estoppel Certificates . . . . . . . . . . . . . 27
10.5 Request for Lessor Consent and Estoppel . . . . . . . . 29
10.6 Consent under Operating Sublease and Underlying Leases. 30
ARTICLE 11 CASUALTY AND EMINENT DOMAIN . . . . . . . . . . . . . . . . . 31
11.1 Casualty and Risk of Loss. . . . . . . . . . . . . . . . 31
11.2 Eminent Domain. . . . . . . . . . . . . . . . . . . . . . 33
11.3 Survival. . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 12 ASSESSMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 13 CLOSING ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . 35
13.1 Adjustments and Prorations . . . . . . . . . . . . . . . 35
13.1.1 Fixed Rents . . . . . . . . . . . . . . . . . . . . . . . 35
13.1.2 Overage Rent . . . . . . . . . . . . . . . . . . . . . . 37
13.1.3 Taxes and Assessments . . . . . . . . . . . . . . . . . 41
13.1.4 Deposits . . . . . . . . . . . . . . . . . . . . . . . . 42
13.1.5 Water and Sewer Charges . . . . . . . . . . . . . . . . 42
13.1.6 License Fees . . . . . . . . . . . . . . . . . . . . . . 42
13.1.7 Service and Maintenance Charges . . . . . . . . . . . . 42
13.1.8 Vault Fees . . . . . . . . . . . . . . . . . . . . . . . 43
13.1.9 Utilities . . . . . . . . . . . . . . . . . . . . . . . 43
13.1.10 Inventory . . . . . . . . . . . . . . . . . . . . . . . . 43
13.1.11 Tenant Security Deposits . . . . . . . . . . .. . . . . . 43
13.1.12 Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . 44
13.1.13 Employee Compensation . . . . . . . . . . . .. . . . . . 45
13.1.14 Tenant Improvement Work at Landlord's Cost . . . . . . . 45
13.1.15 Costs of Work to be Paid or Reimbursed to
Tenants . . . . . . . . . . . . . . . . . . . . . . . . . 46
13.1.16 Leasing Commissions . . . . . . . . . . . . . . . . . . . 46
13.1.17 Insurance Premiums . . . . . . . . . . . . . . . . . . . . 47
13.1.18 Operating Sublease Rent . . . . . . . . . . . . . . . . . 47
13.1.19 Other Adjustments . . . . . . . . . . . . . . . . . . . . 49
13.1.20 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 49
13.2 Determination of Closing Adjustments . . . . . . . . . . 49
13.3 Net Apportionments and Adjustments . . . . . . . . . . .. 49
13.3.1 Due Seller . . . . . . . . . . . . . . . . . . . . . . . .49
13.3.2 Due Purchaser . . . . . . . . . . . . . . . . . . . . . . 49
13.4 Other . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 14 CLOSING DOCUMENTS; OBLIGATIONS OF PURCHASERAND SELLER AT
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
14.1 Seller's Obligations at Closing . . . . . . . . . . . . 50
14.2 Purchaser's Obligations at Closing . . . . . . . . . . 52
ARTICLE 15 VIOLATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 16 SALES TAX . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 17 UNPAID TAXES . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 18 THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 56
18.1 The Closing. . . . . . . . . . . . . . . . . . . . . . 56
18.1.1 Location and Date of Closing . . . . . . . . . 56
18.1.2 Delivery of Documents . . . . . . . . . . . . . 56
18.2 Time of Essence . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 19 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 20 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
20.1 Purchaser's Default . . . . . . . . . . . . . . . . . . 58
20.2 Seller's Default . . . . . . . . . . . . . . . . . . . 59
ARTICLE 21 CONDITIONS; SURVIVAL . . . . . . . . . . . . . . . . . . . . 59
21.1 Conditions . . . . . . . . . . . . . . . . . . . . . . 59
21.2 Survival . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 22 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . 61
22.1 Assignment . . . . . . . . . . . . . . . . . . . . . . 61
22.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 23 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
23.1 Purchaser's Representation . . . . . . . . . . . . . . 63
ARTICLE 24 ESCROW . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 25 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 64
25.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . 64
25.2 Headings . . . . . . . . . . . . . . . . . . . . . . . 65
25.3 Governing Law . . . . . . . . . . . . . . . . . . . . . 65
25.4 Jurisdiction . . . . . . . . . . . . . . . . . . . . . 65
25.5 Waiver of Venue and Inconvenient Forum Claims . . . . . 66
25.6 Waiver of Jury Trial . . . . . . . . . . . . . . . . . 66
25.7 Successors and Assigns . . . . . . . . . . . . . . . . 66
25.8 Invalid Provisions . . . . . . . . . . . . . . . . . . 66
25.9 Schedules and Exhibits . . . . . . . . . . . . . . . . 66
25.10 No Other Parties . . . . . . . . . . . . . . . . . . . 67
25.11 Interpretation . . . . . . . . . . . . . . . . . . . . 67
25.12 Counterparts; Faxed Signatures . . . . . . . . . . . . 67
25.13 Binding Effect . . . . . . . . . . . . . . . . . . . . 67
25.14 Recordation . . . . . . . . . . . . . . . . . . . . . 67
25.15 Litigation Fees . . . . . . . . . . . . . . . . . . . 68
25.16 Title Omissions . . . . . . . . . . . . . . . . . . . 68
25.17 Defined Terms . . . . . . . . . . . . . . . . . . . . 68
25.18 Singular/Plural . . . . . . . . . . . . . . . . . . . 68
ARTICLE 26 AFFILIATED PURCHASE AGREEMENT . . . . . . . . . . . . . . . . 68
26.1 Affiliate Purchaser . . . . . . . . . . . . . . . . . . 68
26.2 Affiliate Properties . . . . . . . . . . . . . . . . . 69
26.3 Rights on Purchaser Default . . . . . . . . . . . . . . 69
SCHEDULES
A Description of Land
B Schedule of Space Leases
C Underlying Lease Documents
D Rent Roll
E Schedule of Service and Maintenance Agreements
F-1 Brokerage Agreements
F-2 Unpaid Earned Commissions under the Brokerage Agreements
G-1 Employees of Seller or Seller's Managing Agent at the Property
G-2 Written Agreements Relating to Building Employees
H Description of Contract Survey/Survey Exceptions
I Easements, Covenants and Agreements of Record
J Title Commitment Description (Contract Title Report)
K Title Exceptions in Contract Title Report to be Omitted by Seller
L-1 Form of Tenant Estoppel Statement
L-2 Form of Seller's Estoppel Statement
L-3 Form of Lessor's Estoppel Statement
L-4 Form of Seller's Operating Sublease Estoppel Statement
M-1 Incomplete Landlord's Work
M-2 Unpaid Work Allowances
N Pending Litigation Not Covered by Insurance
EXHIBITS
1 Assignment of the Operating Sublease
2 Bill of Sale
3 Assignment and Assumption of Service,
Maintenance and Concessionaire
Agreements
4 Assignment and Assumption of Landlord's Interest in Space Leases
5 Assignment of Licenses and/or Permits
6 Assignment of Warranties and Guarantees
7 Post-Closing Adjustment Letter
8 FIRPTA Certificate
9 Tenant Notice Letter
10 Assignment and Assumption of Brokerage Agreements
11 Assumption of Ground Lease
12 Escrow Letter
INITIALLED BINDERS
(a) Space Lease Binders
(b) Service and Maintenance Agreement Binders
(c) Brokerage Agreement Binders
(d) Operating Sublease Binder
(e) Underlying Leases Binder
LIST OF DEFINED TERMS
DEFINED TERM PAGE
Acceptable Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 31
Adjustment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 35
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Associates Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Brokerage Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
CAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Cash Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 35
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Contract Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Contract Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Document Binders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
escalation rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Escrow Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Federal Reserve Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Fixed Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Form TP-584 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . 12
Grant of Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Landgray . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Lessor's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Lessor's Estoppel Statement . . . . . . . . . . . . . . . . . . . . . . . 30
material part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Maximum Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mesne Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Metlife . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Metlife Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Metro-North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
NY Graybar L.P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
NY Graybar L.P. Consent . . . . . . . . . . . . . . . . . . . . . . . . . 29
Operating Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Operating Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Operating Sublease Binder . . . . . . . . . . . . . . . . . . . . . . . . . 7
Optional Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Overage Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
percentage rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . 11
Post-Closing Adjustment Letter . . . . . . . . . . . . . . . . . . . . . 51
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reletting Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Required Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
RPT Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Schedule of Space Leases . . . . . . . . . . . . . . . . . . . . . . . . . 5
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Seller's Article 10 Amount . . . . . . . . . . . . . . . . . . . . . . . 24
Seller's Estoppel Statement . . . . . . . . . . . . . . . . . . . . . 28, 30
Service and Maintenance Agreement Binders . . . . . . . . . . . . . . . . . 6
Service and Maintenance Agreements . . . . . . . . . . . . . . . . . . . . 6
Space Lease Binders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Space Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Space Leasing Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . 45
Subsequent Title Objection . . . . . . . . . . . . . . . . . . . . . . . 16
Tax Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tenant Estoppel Statement . . . . . . . . . . . . . . . . . . . . . . . . 27
Tenant Notice Letters . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Title Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Underlying Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Underlying Leases Binder . . . . . . . . . . . . . . . . . . . . . . . . 15
Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
AGREEMENT OF SALE AND PURCHASE (this "Agreement") is made and entered
into as of the _______ day of __________, 1998, by and between GRAYBAR
BUILDING COMPANY, a New York general partnership, having an office c/o
Helmsley Enterprises, Inc., 230 Park Avenue, New York, New York 10169
("Seller"), and SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership, having an office at 70 West 36th Street, New York, New York
10018 ("Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
Seller hereby agrees to sell and convey to Purchaser, and Purchaser
hereby agrees to purchase from Seller, upon the terms and conditions
hereinafter set forth, tenant's interest in a leasehold estate in the office
building known as the Graybar Building and located at 420 Lexington Avenue,
New York, New York (the "Property," as such term is defined in Article 1
hereof).
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, and subject to the terms and
conditions hereof, Seller and Purchaser hereby covenant and agree as follows:
ARTICLE 1
INCLUSIONS IN SALE AND EXCLUSIONS
---------------------------------
1.1 The term "Property" shall mean the following:
1.1.1 All of Seller's right, title and interest as tenant in
and to that certain Lease made by and between Precision Dynamics Corporation,
as Landlord, and Graybar Building Company as Tenant, dated as of June 1,
1964, and recorded in the Office of the Register of the City of New York, New
York County in Liber 5293 Cp. 35 (the "Operating Sublease"), which affects
the land described on Schedule "A" annexed hereto (the "Land").
1.1.2 All of Seller's right, title and interest under the
Operating Sublease, if any, in and to the buildings, structures and
improvements, together with the tenements, hereditaments and appurtenances
thereto belonging or in any way appertaining, now erected or situate on the
Land (collectively, the "Building").
1.1.3 All of Seller's right, title and interest in and to the
fixtures, equipment, machinery and personal property used in connection with
the operation of the Property and owned by Seller, and not being the property
of any space tenant, occupant at the Property, manager or leasing agent, or
any other party.
1.1.4 All right, title and interest of Seller under the
Operating Sublease, if any, in and to any land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the
Land, to the center line thereof, and any strips and gores adjacent to the
Land, and all right, title and interest of Seller, if any under the Operating
Sublease, in and to any award made or to be made in lieu thereof and in and
to any unpaid award for damage to the Land and Building by reason of change
of grade of any street.
1.1.5 All of lessor's interest in space leases now or hereafter
covering offices, stores and other spaces situate at or within the Building
(the "Space Leases") and all of the right, title and interest of the Seller
under the Space Leases (from and after the "Closing," as such term is defined
in Section 13.1 hereof), and, subject to the provisions of Section 13.1.11
hereof, all security deposits paid or deposited by space tenants or occupants
in respect of Space Leases (individually, a "Tenant" and collectively, the
"Tenants"), applicable to Tenants in possession under the Space Leases at
Closing, which shall not have been applied in accordance with the provisions
of such Space Leases.
1.1.6 All right, title and interest of Seller, if any, under
the Operating Sublease, in and to any easements, rights-of-way, interests,
appurtances and other rights of any kind relating to or pertaining to the
Land.
1.2 The term "Property" shall exclude the following:
1.2.1 Any existing cause of action, or damage claim, of Seller.
1.2.2 All rights and interests of Seller as tenant under the
Operating Sublease or as Landlord under a Space Lease arising prior to the
Closing (including but not limited to, tax refunds, casualty or condemnation
proceeds, applied tenant deposits, utility deposits, rent in arrears and rent
escalations) attributable to periods prior to Closing.
ARTICLE 2
PURCHASE PRICE
--------------
2.1 Purchase Price. The purchase price for the Property to be paid by
--------------
Purchaser to Seller shall be the amount of Seventy-Eight Million Dollars
($78,000,000.00) (the "Purchase Price").
2.2 Payment of Purchase Price. Purchaser agrees to pay the Purchase
-------------------------
Price to Seller as follows:
2.2.1 Deposit. Seven Million Eight Hundred Thousand Dollars
-------
($7,800,000.00) (the "Deposit") paid simultaneously herewith by Purchaser's
certified check or cashier's check, subject to collection, in the amount of
such sum payable to the direct order of "Bachner, Tally, Polevoy & Misher
LLP, as escrow agent," drawn on a bank which is a member of The New York
Clearing House Association. In the event such check fails to be paid by the
bank upon which it is drawn on first presentment, other than as a result of
an error of the drawee bank, then any rights of Purchaser hereunder may be
terminated by notice given by Seller to Purchaser. The proceeds of such
Deposit and all interest accrued thereon shall be held in escrow and shall be
payable in accordance with Article 24 hereof.
2.2.2 Payment at Closing. Seventy Million Two Hundred Thousand
------------------
Dollars ($70,200,00.00) (the "Cash Balance") shall be paid by Purchaser to
Seller at the Closing. The Cash Balance shall be paid by wire transfer of
immediate clearance "Federal Reserve Funds" (as such term is hereinafter
defined) to such account and bank as Seller may, in writing, designate,
provided that Seller may designate on one (1) business days notice that the
Cash Balance be wire transferred to not more than three (3) designated
recipients. As used herein, the term "Federal Reserve Funds" shall be deemed
to mean the receipt by a bank or banks in the continental United States
designated by Seller of U.S. dollars in form that does not require further
clearance, and may be applied at the direction of Seller by such recipient
bank or banks on the day of receipt of advice that such funds have been wire
transferred. The description of the manner in which such funds are to be
transmitted and the number of designated recipients thereof shall apply with
respect to the Cash Balance as well as to any other funds to be paid to
Seller hereunder, including but not limited to any funds to be paid to Seller
as a result of the adjustments to be made pursuant to Article 13 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
------------------------------
3.1 Representations of Seller. Seller hereby represents and warrants
-------------------------
to Purchaser that the following facts and conditions exist on the date
hereof, to the best of Seller's knowledge:
3.1.1 Space Leases. (a) The only Space Leases as of the date
------------
hereof are those listed on Schedule "B" annexed hereto (the "Schedule of
Space Leases"). A copy of each of the Space Leases set forth on Schedule "B"
has been reviewed by Purchaser and/or its counsel and delivered by Seller to
Purchaser simultaneously herewith in velobound binders (the "Space Lease
Binders") and initialed by Seller and Purchaser and/or their respective
counsel. No representation is made as to (i) possible assignments of any
Space Leases not consented to by Seller, or (ii) any subleases or
underleases.
(b) Seller does not warrant that any particular Space Lease will
be in force or effect at the Closing or that the Tenants will have performed
their obligations thereunder. The termination of any Space Lease prior to
the Closing shall not affect the obligations of Purchaser under this
Agreement, or entitle Purchaser to an abatement of or credit against the Cash
Balance, or give rise to any other claim on the part of Purchaser.
(c) If any space in the Building is vacant on the Closing Date,
Purchaser shall accept the Property subject to such vacancy, provided that
the vacancy was not permitted or created by Seller in violation of any
restrictions contained in this Agreement.
(d) The rent roll attached hereto as Schedule "D" (the "Rent
Roll") contains a list of:
(i) all Tenants of the Property as of the date hereof;
(ii) the premises in the Building leased to each Tenant;
(iii) the base rent billed to Tenants during the month of
December, 1997 and additional rent (exclusive of
real estate tax escalation amounts) billed to
Tenants during the month of December, 1997; and
(iv) the security deposit, if any, held by Seller with
respect to each Tenant as of October 31, 1997.
To the best of Seller's knowledge, the information contained on the Rent Roll
is true and correct in all material respects. With respect to any monetary
amounts described on the Rent Roll, the term "true and correct in all
material respects" shall be construed to mean that, to the extent the Rent
Roll overstates or understates the actual amounts of such items, the net
adverse economic effect on Purchaser of such understatements or
overstatements in the aggregate does not exceed an amount equal to four (4%)
percent of the Purchase Price.
3.1.2 Service and Maintenance Agreements. The only service and
----------------------------------
maintenance agreements affecting the Land or Building as of the date hereof
are those listed on Schedule "E" annexed hereto (the "Service and Maintenance
Agreements"). A copy of each the Service and Maintenance Agreements set
forth on Schedule "E" has been reviewed by Purchaser and/or its counsel and
delivered by Seller to Purchaser simultaneously herewith in velobound binders
(the "Service and Maintenance Agreement Binders") and initialed by Seller
and Purchaser and/or their respective counsel.
3.1.3 Brokerage Agreements. The only written agreements for
--------------------
the payment of leasing commissions in connection with the Space Leases as of
the date hereof are those listed on Schedule "F-1" annexed hereto (such
agreements, together with any additional such agreements made in accordance
with the provisions of this Agreement, collectively, the "Brokerage
Agreements"). A copy of each existing Brokerage Agreement has been delivered
by Seller to Purchaser simultaneously herewith in velobound binders (the
"Brokerage Agreement Binders") and initialed by Seller and Purchaser and/or
their respective counsel. Schedule "F-2" annexed hereto sets forth a list of
all (i) commissions which have been earned and are payable under the
Brokerage Agreements prior to the date of this Agreement which have not been
paid, and (ii) any commissions already earned under the Brokerage Agreements
and which are payable in one or more installments after the date of this
Agreement. Brokerage commissions payable under the Brokerage Agreements
shall be adjusted and prorated between Seller and Purchaser as provided in
Article 13 hereof.
3.1.4 Employees. The only employees of Seller or Seller's
---------
managing agent engaged in the operation or maintenance of the Property are
listed on Schedule "G-1" annexed hereto. Schedule "G-1" also sets forth the
position and current salary or wage rate of each such employee as of the date
of this Agreement. Except as set forth on Schedule "G-2" annexed hereto,
Seller has no written agreements relating to Building employees, including,
without limitation, union agreements, collective bargaining agreements,
employee benefit plans, and/or employment agreements covering Building
employees.
3.1.5 Underlying Documents -- Operating Sublease. (a) The
------------------------------------------
Operating Sublease is described in Schedule "C" annexed hereto. A velobound
copy of the Operating Sublease has been delivered by Seller to Purchaser
simultaneously herewith (the "Operating Sublease Binder").
(b) All basic rent payable under the Operating Sublease has
been paid through the current calendar month, and as of the Closing Date all
basic or fixed rent payable under the Operating Sublease shall have been paid
through the last day of the calendar month in which the Closing Date occurs.
"Overage Rent", as such term is used in the Operating Sublease, shall be
adjusted as provided in Article 13 herein.
(c) The Operating Sublease shall be in full force and effect
on the Closing Date.
(d) The consummation of the transactions contemplated in this
Agreement including the grant of consents herein required and the performance
of requirements for assignment set forth in the Operating Sublease, including
the execution and delivery of an assignment and assumption agreement, will
not result in a default under the Operating Sublease, nor give the lessor
thereunder a right to terminate the Operating Sublease.
(e) To the best of Seller's knowledge with respect to the
"Underlying Leases" (as such term is hereinafter defined):
(i) Each is in full force and effect and will be on the
Closing Date; and
(ii) The consummation of the transaction contemplated in
this Agreement including the grant of consents herein required and the
performance of requirements for assignment set forth in the Underlying Leases
and the Operating Sublease including the execution and delivery of an
assignment and assumption will not result in a default under the Operating
Sublease.
3.1.6 No Foreign Person. Seller is not a "foreign person" as
-----------------
such term is defined in Section 1445 of the Internal Revenue Code of 1954, as
amended (the "Code"), nor will the sale transaction herein contemplated be
subject to Section 897 of the Code or to the withholding requirements of
Section 1445 of the Code.
3.1.7 Incomplete Landlord's Work and Unpaid Work Allowances.
-----------------------------------------------------
Schedule "M-1" annexed hereto sets forth a list of items of construction or
leasehold improvement work remaining to be performed by Seller with respect
to the occupancy of any Tenant pursuant to the provisions of such Tenant's
Space Lease. Schedule "M-2" annexed hereto sets forth a list of remaining
contributions to be made by Seller with respect to construction or leasehold
improvement work being performed or which had been performed or remains to be
performed by Tenant for its occupancy pursuant to the provisions of such
Tenant's Space Lease.
3.1.8 Litigation. Seller has received no written notice of
-----------
any (i) pending condemnation or similar proceeding affecting the Property or
any portion thereof, or (ii) pending legal action, suit, arbitration, order
or judgment, government investigation or proceeding, in any case affecting
the Property or Seller (but not the partners, members or principals of
Seller, as the case may be) except for (x) claims and actions which are
covered by insurance and (y) those actions described on Schedule "N" annexed
hereto.
3.2 Reliance upon Document Binders. The Space Lease Binders, Brokerage
-------------------------------
Agreement Binders, Service and Maintenance Agreement Binders, Operating
Sublease Binder and Underlying Leases Binder are hereinafter collectively
called the "Document Binders." The instruments set forth in the Document
Binders constitute the sole reliance by Purchaser with respect to the matters
therein set forth and not the Schedules and Exhibits annexed hereto,
Purchaser acknowledging that, in the event of any conflict between the
matters set forth in any instrument in a Document Binder and any
representation contained in this Agreement or Schedules and Exhibits annexed
hereto, Purchaser has relied solely upon the instrument as set forth in the
Document Binders in entering into this Agreement.
3.3 Authority and Binding Effect; No Breach or Prohibition. Each party
------------------------------------------------------
hereto represents to the other that each person or entity executing this
Agreement by or on behalf of the representing party has the authority to act
on its behalf and to bind it, and that each person or entity executing any
closing documents by or on its behalf, has been or will be duly authorized to
act on its behalf, and that the performance of this Agreement will not be in
violation of its by-laws, charter, operating or partnership agreement, or any
law, ordinance, rule, regulation or order of any governmental body having
jurisdiction, or the provisions of any agreements to which it is a party or
by the terms of which it is bound, and, at the Closing, each party shall
furnish to the other party and to the "Title Company" (as such term is
defined in Section 5.1 hereof), reasonably satisfactory evidence of such
authority and approval. This Section shall survive the Closing.
3.4 Purchaser's Knowledge; Disclosure. To the extent that Purchaser
---------------------------------
has, subsequent to the date hereof, actual knowledge of any default or any
misrepresentation or incorrect warranty of Seller made in this Agreement or
in the Document Binders, Purchaser shall promptly notify Seller of same.
Reference is made to Section 21.1 hereof with respect to the effect of
Purchaser's knowledge of any misrepresentation or incorrect warranty at or
before the Closing Date.
3.5 Disclaimer of Representations and Warranties. Purchaser
--------------------------------------------
acknowledges that except as expressly provided herein, neither Seller nor
anyone acting for or on behalf of Seller has made any representation,
warranty, or promise to Purchaser concerning: (a) the physical aspect and
condition of any portion of the Property; (b) the feasibility or desirability
of the purchase of the Property; (c) the market status, projected income from
or development expenses of the Property; (d) the Property's compliance or
non-compliance with any requirements of laws; or (e) any other matter
whatsoever with respect to the Property (except as contained herein), express
or implied, including, by way of description but not limitation, those of
fitness for a particular purpose, tenantability, habitability and use; and
that all matters concerning the Property are to be independently verified by
Purchaser. Purchaser acknowledges that except as otherwise expressly
provided in this Agreement, it is purchasing the Property in its currently
existing physical condition and in its currently existing state of repair.
3.6 Right to Adjourn Closing. Seller shall have the right to adjourn
------------------------
the Closing for up to ninety (90) days for the purpose of curing any default,
misrepresentation or incorrect warranty.
ARTICLE 4
STATE OF TITLE OF PROPERTY
--------------------------
4.1 Permitted Encumbrances. Purchaser shall accept title to the
----------------------
Property subject to the following (the "Permitted Encumbrances"):
4.1.1 Any and all present and future zoning restrictions,
regulations, requirements, laws, ordinances, resolutions and orders of any
city, town or village in which the Property lies, and of all boards, bureaus,
commissions, departments and bodies of any municipal, county, state or
federal sovereign or other governmental authority now or hereafter having or
acquiring jurisdiction of the Property or the use and improvement thereof
(such authority is herein called a "Governmental Authority").
4.1.2 The state of facts shown on the survey described on
Schedule "H" annexed hereto (the "Contract Survey") and any other state of
facts shown on an accurate survey of the Property, or any part thereof,
provided such other state of facts does not materially adversely affect
Purchaser's ability to use the Building for its present uses.
4.1.3 The Space Leases listed on Schedule "B" annexed hereto,
and any extensions, renewals or modifications thereof, or new Space Leases
entered into in accordance with this Agreement. Nothing contained in this
Agreement shall be deemed to prohibit Seller from terminating any tenancy by
reason of default of a Tenant under its Space Lease, from bringing
proceedings to dispossess any Tenant, or applying a Tenant's security deposit
as allowed under its Space Lease.
4.1.4 The covenants, restrictions, easements, and agreements of
record listed on Schedule "I" annexed hereto, and such other covenants,
restrictions, easements and agreements of record, if any, affecting the
Property, or any part thereof, provided such other covenants, restrictions,
easements and agreements of record are not violated by existing structures,
and do not materially adversely affect the present use of the Building.
4.1.5 Any state of facts a physical inspection of the Property
would show.
4.1.6 The Service and Maintenance Agreements set forth on
Schedule "E" annexed hereto, and any renewals thereof, or substitutions
therefor, or additions thereto, provided such renewals, substitutions and
additions are made in the ordinary course of Seller's business.
4.1.7 All violations and/or notes or notices of violations of
law or municipal ordinances, orders, or requirements noted in or issued by
any Governmental Authority having jurisdiction against or affecting the
Property.
4.1.8 Any mechanic's lien or other lien which is the obligation
of a Tenant under any Space Lease to bond or remove of record.
4.1.9 Real estate taxes, assessments, Business Improvement
District charges and like charges for the fiscal year in which the Closing
occurs and all fiscal years thereafter.
4.1.10 Any exception to coverage by the Title Company, provided
that the Title Company insures same against collection out of or enforcement
against the Property.
4.1.11 Any easement or right of use created in favor of any
public utility company for electricity, steam, gas, telephone, water or other
service, and the right to install, use, maintain, repair and replace wires,
cables, terminal boxes, lines, service connections, poles, mains, facilities
and the like, upon, under and across the Property.
4.1.12 The printed exceptions contained in the form of title
insurance policy then issued by the Title Company which shall insure
Purchaser's title.
4.1.13 Possible lack of right to maintain vaults, fences
retaining walls, chutes, cornices and other installations encroaching beyond
the property line and possible variance between the record description and
the tax map.
4.1.14 The terms, covenants and conditions of the Operating
Sublease and the Underlying Leases.
4.1.15 The Seller's interest to be transferred hereunder, i.e.,
the tenant's interest in the Operating Sublease derives from the fee interest
in the Land by grant of term and leases from the following entities or their
predecessor-in-interest:
Metro-North Commuter Railroad Company ("Metro-North")
to
Landgray Associates ("Landgray")
to
Metropolitan Life Insurance Company ("Metlife")
to
Graybar Building Associates ("Associates")
to
New York Graybar Lease, L.P. ("NY Graybar L.P.")
to
Graybar Building Company ("Seller")
and accordingly the Operating Sublease dated as of June 1, 1964 between
Precision Dynamics Corporation, predecessor-in-interest to NY Graybar L.P.,
and Seller (the "Operating Sublease") is subject and subordinate to the
following (collectively "Underlying Leases"):
Operating Lease dated December 30, 1957 between Mary F. Finnegan,
predecessor-in-interest to Associates, and Rose Iacovone, predecessor-
in-interest to NY Graybar L.P., as amended by Agreement dated as of June
1, 1964 among Metlife, Associates and Precision Dynamics Corporation
(the "Operating Lease").
Sublease dated December 30, 1957 between Webb & Knapp, Inc. and Graysler
Corporation, predecessor-in-interest to Metlife, and Mary F. Finnegan,
predecessor-in-interest to Associates, as amended by Agreement dated as
of June 1, 1964 among Metlife, Associates and Precision Dynamics
Corporation (the "Mesne Lease").
Ground Lease dated December 30, 1957 between New York State Realty and
Terminal Company, predecessor-in-interest to Landgray, and Webb & Knapp,
Inc. and Graysler Corporation, predecessor-in-interest to Metlife, as
amended by Lease Renewal Agreement made as of December 31, 1987 between
Landgray and Metlife (the "Ground Lease").
Grant of Term made December 30, 1957 between The New York Central
Railroad Company, predecessor-in-interest to Metro-North, and New York
State Realty and Terminal Company, predecessor-in-interest to Landgray
(the "Grant of Term").
A velobound copy of each of the Underlying Leases has been delivered by
Seller to Purchaser simultaneously herewith (the "Underlying Leases
Binder").
ARTICLE 5
TITLE INSURANCE AND ABILITY OF SELLER TO CONVEY
-----------------------------------------------
5.1 Title Insurance. Purchaser agrees to make, promptly after the
---------------
signing hereof, application for a title insurance policy directly from
Chicago Title Insurance Company or Ticor Title Guarantee Company or Ticor
Title Insurance Company (the "Title Company"), and to purchase any fee title
insurance policy obtained by Purchaser in connection with the acquisition of
the Property directly from the Title Company, provided however, Purchaser may
obtain a fee title policy conditioned upon coinsurance of one-third of the
insured amount with Chicago Title Insurance Company, one-third with Ticor
Title Insurance Company, and one-third with First American Title Insurance
Company. Purchaser acknowledges receipt of a copy of the title report
described in Schedule "J" annexed hereto (the "Contract Title Report").
Purchaser further acknowledges and agrees that Purchaser has no objection to
the state of title set forth in the Contract Title Report except that, at or
before the Closing, Seller shall cause the title exceptions listed on
Schedule "K" annexed hereto to be omitted as exceptions to title by bonding,
satisfaction, affirmative insurance against collection, or otherwise. The
Permitted Encumbrances shall remain and Purchaser shall be obligated to
accept title subject to same. With respect to any continuation of the
Contract Title Report or an update to the Contract Survey, Purchaser shall
deliver to Seller's attorneys, Bachner, Tally, Polevoy & Misher LLP,
380 Madison Avenue, New York, New York 10017, Attention: Martin D. Polevoy,
Esq., a copy of such continuation or updated survey together with a written
statement by Purchaser of any objections to title which have appeared for the
first time in such continuation or on a survey obtained by Purchaser (a
"Subsequent Title Objection"), within ten (10) days of receipt of such
continuation or updated survey, but in no event later than fifteen (15) days
prior to the Closing Date, unless such change of circumstances occurred
within such fifteen (15) day period. The failure by Purchaser to deliver any
of the aforementioned documents to Seller's counsel within the time period
specified in this Section 5.1 shall constitute a waiver by Purchaser of any
and all objections that may arise with respect to matters contained in such
documents. In the event Purchaser sends a written statement to Seller
setting forth one or more Subsequent Title Objections which Seller is unable
to remedy prior to the Closing Date, Purchaser hereby grants to Seller a
reasonable adjournment of the Closing Date during which time Seller may
attempt to remedy same for a period not to exceed ninety (90) days.
5.2 Title Objections. If there are any liens, charges, easements,
----------------
agreements of record, encumbrances or other objections to title, other than
the Permitted Encumbrances and Subsequent Title Objections (which Purchaser
agrees to take title subject to) which are not waived in accordance with the
provisions of Section 5.1 (collectively, "Title Objections"), which (i) were
caused by, resulted from or arose out of a grant by Seller to any person or
entity of a mortgage or other security interest affecting the Property, or
the performance of work on behalf of Seller upon all or any portion of the
Property, then Seller shall remove such Title Objections; or (ii) are not of
the type described in clause (i) of this sentence, but are removable by the
payment of an ascertainable sum not to exceed in the aggregate $250,000.00
(the "Maximum Amount"), then Seller shall cause such Title Objections to be
removed. If Seller fails to remove any Title Objection(s) in accordance with
the provisions of the immediately preceding sentence, or if there exist any
Title Objection(s) which Seller is not obligated to remove pursuant to clause
(ii) of the immediately preceding sentence because the payment of funds in
excess of the Maximum Amount would be required to cure the same, Purchaser,
nevertheless, may elect (at or prior to Closing) to consummate the
transaction provided for herein subject to any such Title Objection(s) as may
exist as of the Closing Date, with a credit allocated against the Cash
Balance payable at the Closing equal to the sum necessary to remove such
Title Objection(s), not to exceed the Maximum Amount (in the event of a Title
Objection of the type described in clause (ii) of the immediately preceding
sentence); provided, however, if Purchaser makes such election, Purchaser
shall not be entitled to any other credit, nor shall Seller bear any further
liability, with respect to any Title Objection(s) of the type described in
clause (ii) of the immediately preceding sentence, but Seller shall remain
fully liable for the cost of removing any Title Objection(s) of the type
described in clause (i) of the immediately preceding sentence. If Purchaser
shall not so elect, Purchaser may terminate this Agreement and Seller's sole
liability thereafter shall be to cause the Deposit, together with any
interest earned thereon while in escrow, to be refunded to Purchaser, and,
upon the return of the Deposit and any such interest, this Agreement shall be
terminated, and the parties hereto shall be relieved of all further
obligations and liability under this Agreement, other than with respect to
the provisions of this Agreement which expressly survive a termination of
this Agreement.
5.3 No Further Action. Except as expressly set forth in Sections 5.1
-----------------
and 5.2 hereof, nothing contained in this Agreement shall be deemed to
require Seller to take or bring any action or proceeding or any other steps
to remove any Title Objections, or to expend any moneys therefor, nor shall
Purchaser have any right of action against Seller, at law or in equity, for
Seller's inability to convey title in accordance with the terms of this
Agreement.
ARTICLE 6
CLOSING COSTS
-------------
6.1. Purchaser's Obligations. Purchaser shall pay the costs of
-----------------------
examination of title and any owner's policy of title insurance to be issued
insuring Purchaser's title to the Property, as well as all other title
charges, survey fees, and any and all other costs or expenses incident to the
recordation of the Assignment of the Operating Sublease.
6.2. Seller's Obligations. Seller shall pay the following amounts
--------------------
payable in connection with the Assignment of the Operating Sublease:
(i) the amount imposed pursuant to Article 31 of the New York
State Tax Law (the "Tax Law"); and
(ii) the amount due in connection with the Real Property
Transfer Tax imposed by Title 11 of Chapter 21 of the
Administrative Code of the City of New York.
6.3. Other Costs. All other closing costs shall be allocated to and
-----------
paid by Seller and Purchaser in accordance with the manner in which such
costs are customarily borne by such parties in sales of similar property in
New York County, State of New York; provided, however, that each party shall
bear its own attorneys' fees. Any dispute between Seller and Purchaser as to
which party customarily bears any such closing cost (other than either
party's own attorney's fees) may be submitted by either party for resolution
to the president of the Real Estate Board of New York, Inc., whose
determination shall be binding upon the parties, provided, however, that in
no event shall the Closing Date be adjourned by reason of the submission of
any such dispute to the Real Estate Board of New York, Inc.
ARTICLE 7
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND SPACE LEASES
--------------------------------------------------------
At the Closing, Seller shall assign to Purchaser and Purchaser hereby
agrees to assume as of the Closing, all of the Space Leases, Brokerage
Agreements, and Service and Maintenance Agreements, by execution of the
respective assignments of the same as provided for in Article 14 hereof.
This Article shall survive the Closing.
ARTICLE 8
REAL ESTATE TAX PROTESTS
------------------------
All real estate assessment protests and proceedings affecting the
Property for the tax year in which title closes and prior years, if any, will
be prosecuted under Seller's direction and control. In the event of any
reduction in the assessed valuation of the Property for any such fiscal year,
the net amount of any tax savings, shall (a) with respect to fiscal years
ending prior to the Closing, be payable to Seller; and (b) with respect to
the fiscal year in which the Closing shall occur, after deduction of expenses
and attorneys' fees, be adjusted between Seller and Purchaser as of the
"Adjustment Date" (as defined in Section 13.1), in each instance net of sums
due to Tenants, which sums shall be paid to each Tenant entitled to same. If
a reduction in the assessed value of the Property is granted for a fiscal
year in or prior to the year in which title closes, and such reduction is in
the form of a credit for taxes payable at or after Closing, Seller shall be
entitled to receive a sum equal to such credit when granted. Purchaser shall
notify Seller of the fact that Purchaser has been granted a reduction in the
real estate assessment for the Property with respect to the fiscal year in
which the Closing occurs within ten (10) days after the occurrence of such
event. This Section shall survive the Closing.
ARTICLE 9
ACKNOWLEDGMENTS OF PURCHASER; CONDITION OF PROPERTY
---------------------------------------------------
9.1 Analysis and Evaluation of the Property. Before entering into this
---------------------------------------
Agreement, Purchaser acknowledges that it has made its own analysis and
evaluation of the Property, the operation, the income potential, profits and
expenses thereof, its condition and all other matters affecting or relating
to the transaction underlying this Agreement as Purchaser deemed necessary,
including, without limitation, the layout, Space Leases, square footage,
rents, income, expenses and operation of the Property. Purchaser has made
its own analysis and evaluation of the property bounds including the three
dimensional grants and reservations as described in Schedule "A" annexed
hereto. In entering into this Agreement, Purchaser has not been induced by
and has not relied upon any representations, warranties, statements or
covenants, express or implied, made by Seller or any agent, employee or other
representative of Seller, which are not expressly set forth in this
Agreement.
9.2 No Effect on Purchaser's Obligations. Purchaser further
------------------------------------
acknowledges that its covenants, agreements, and obligations under this
Agreement shall not be excused or modified by: (i) the business or financial
condition, or any bankruptcy or insolvency of any Tenant of the Property,
(ii) the physical condition of the Building or personal property, or its
fitness, merchantability or suitability for any use or purpose, (iii) the
Space Leases, rents, income or expenses of the Property, (iv) the compliance
or non-compliance with any laws, codes, ordinances, rules or regulations of
any Governmental Authority and any violations thereof existing or
subsequently imposed, (v) the environmental condition of the Property or the
Property's compliance or non-compliance with any laws, codes, ordinances,
rules or regulations of any Governmental Authority relating to the presence,
use, storage, handling or removal of any hazardous substances, (vi) the
current or future use of the Property, including, but not limited to, the
Property's use for commercial, retail, industrial or other purposes, (vii)
the current or future real estate tax liability, assessment or valuation of
the Property, (viii) the availability or non-availability of any benefits
conferred by Federal, state or municipal laws, whether for subsidiaries,
special real estate tax treatment or other benefits of any kind, (ix) the
availability or unavailability of any licenses, permits, approvals or
certificates which may be required in connection with the operation of the
Property, (x) the compliance or non-compliance of the Property, in its
current zoning or a variance with respect to the Property's non-compliance,
if any, with any zoning ordinances, except as herein specifically set forth,
or (xi) the conformity of the use of the Property with any certificate of
occupancy.
9.3 No Other Representations. Purchaser hereby expressly acknowledges
------------------------
that except as expressly provided herein, neither Seller nor anyone acting
for or on behalf of Seller has made any representation, warranty, or promise
to Purchaser concerning any of the foregoing, nor: (a) the physical aspect
and condition of any portion of the Property; (b) the feasibility or
desirability of the purchase of the Property; (c) the market status,
projected income from or development expenses for the Property; or (d) any
other matter whatsoever with respect to the Property (except as contained
herein), express or implied, including, by way of description, but not
limitation, those of fitness for a particular purpose, tenantability,
habitability and use; and that all matters concerning the Property have been
independently verified by Purchaser. Purchaser acknowledges and agrees to
take the Property "as is," in its currently existing physical condition and
state of repair, subject to ordinary use, wear, tear and natural
deterioration, and subject to casualty and condemnation as more particularly
set forth in Article 11 hereof.
9.4 Outside Representations. Seller is not liable or bound in any
-----------------------
manner by any verbal or written statements, representations, real estate
"set-ups," offering memorandum or information pertaining to the Property or
its physical condition, layout, Space Leases, footage, rents, income,
expenses, operation or any other matter or thing furnished by any agent,
employee, servant, or any other person, unless specifically set forth in this
Agreement. Purchaser hereby waives, to the extent permitted by law, any and
all implied warranties.
9.5 Environmental Investigation of the Property. Purchaser
-------------------------------------------
acknowledges that it has had an opportunity to conduct its own environmental
investigation of the Property and the property adjacent to the Property.
Purchaser is aware of the environmental conditions affecting or related to
the Property and Purchaser agrees to take the Property subject to such
conditions. Purchaser agrees to assume all environmental costs and
liabilities arising out of or in any way connected to the Property.
Purchaser hereby releases Seller from any obligation to pay any such costs
and liabilities. Purchaser agrees to indemnify and hold harmless Seller from
and against any such costs and liabilities.
9.6 Confidentiality. Purchaser acknowledges that all information
---------------
regarding the Property furnished (or to be furnished) to Purchaser is and has
been so furnished on the following conditions:
(i) Purchaser shall use the information solely for purposes of
evaluating the Property and consummating the transaction contemplated in
this Agreement; and
(ii) Purchaser shall, subject to the terms of Section 9.7, use its
best efforts to maintain the confidentiality of such information.
9.7 Limited Disclosure. Purchaser shall, and shall cause its
------------------
directors, officers and other personnel, and its agents, employees and
representatives, to hold in strict confidence and not disclose to any other
party without the prior written consent of Seller, any of the information
regarding the Property delivered, provided or furnished to Purchaser or any
of its agents, representatives or employees. Notwithstanding anything to the
contrary hereinabove set forth, Purchaser may disclose such information only:
(i) on a "need-to-know" basis to its employees, members or professional firms
serving it in connection with this transaction, or to any potential lenders,
but Purchaser shall require such parties to hold all such information in
strict confidence, and not to disclose such information to any other party
(without the prior written consent of Seller); (ii) to any other party,
subject to Seller's consent, which consent shall not be unreasonably withheld
or delayed; and (iii) to any governmental agency if such agency requires such
disclosure in order for Purchaser to comply with applicable laws or
regulations.
9.8 Return of Information. In the event the Closing does not occur for
---------------------
any reason and this Agreement is terminated, Purchaser shall promptly return
to Seller all copies of all such information without retaining any copy
thereof, except such as must be retained by any professionals to whom such
information was disclosed in accordance with this Article 9 in order to
comply with their professional obligations. Purchaser may also disclose the
terms of this Agreement to any other party approved by Seller, as long as
prior to such disclosure such party agrees to be bound by the provisions of
this Article 9 by an instrument reasonably acceptable to Seller in form and
content.
9.9 Survival. The provisions of this Article 9 shall terminate at the
--------
Closing provided, however, that if the Closing does not occur, the provisions
of this Article 9 shall survive the termination of this Agreement.
ARTICLE 10
OPERATIONS PRIOR TO CLOSING
---------------------------
10.1 Continued Operations. Between the date of this Agreement and the
--------------------
Closing, Seller shall continue to operate the Property in its usual and
customary manner. Notwithstanding the provisions of the immediately
preceding sentence, Seller shall not be required to expend more than
$250,000.00 during the term of this Agreement ("Seller's Article 10 Amount")
on repairs and replacements to the Building (including, but not limited to,
materials, labor, supervision and overhead). If the cost of such repairs and
replacements exceeds Seller's Article 10 Amount, Purchaser shall, at Closing,
reimburse Seller for all sums actually expended by Seller in excess of
Seller's Article 10 Amount. Any such amount payable to Seller shall be paid
in the manner specified in Section 2.2.2 hereof. Without otherwise modifying
or limiting in any respect the terms and provisions set forth in Article
3.1.4 of this Agreement, all Service and Maintenance Agreements shall be
terminated by Seller, at Purchaser's request (such request to be given not
less than five (5) business days prior to Closing), as early as is
permissible under the applicable agreement and, if so requested by Purchaser,
Seller shall execute, at no cost or expense to Seller, the appropriate
notice(s) requesting such termination(s) (provided such applicable agreement
is terminable). In no event shall Seller be required to terminate any
Service and Maintenance Agreements which will or may impose or give rise to a
claim, or additional penalty charge against Seller or will cause a
termination of the obligation of the contractor to provide service or
maintenance prior to the Closing, and Purchaser shall indemnify and hold
harmless and defend Seller with respect to any claims, cost or expense
arising out of such termination.
10.2 Access to the Property. Seller agrees to afford Purchaser
----------------------
reasonable access to the Property prior to the Closing, at reasonable times
upon reasonable notice, provided that Purchaser shall not enter any portion
of the Property unless accompanied by a representative of Seller. Purchaser
specifically agrees that neither it, nor its employees or agents, will
communicate directly with Seller's employees, Tenants or managing agent.
Purchaser also agrees that Seller shall not be required to incur any cost or
expense or commence any action to afford Purchaser such access.
10.3 Space Leases. Seller agrees that between the date hereof and the
------------
Closing, Seller shall:
10.3.1 Not, without Purchaser's prior written consent, which
consent shall not be unreasonably withheld or delayed, terminate any Space
Lease except by reason of a default by the Tenant thereunder.
10.3.2 Not permit occupancy of, or enter into any new Space
Lease for, space in the Building which is vacant as of the date hereof, or
which may hereafter become vacant, without first giving Purchaser written
notice of the identity of the proposed tenant, together with a summary of the
terms thereof in reasonable detail, and a statement of the amount of the
brokerage commission, if any, payable in connection therewith and the terms
of payment thereof. If Purchaser objects to such proposed Space Lease,
Purchaser shall so notify Seller within two (2) Business Days after the
giving of Seller's notice to Purchaser, in which case Seller shall not enter
into the proposed Space Lease. Purchaser shall thereafter pay to Seller on
the first day of each month between the date hereof and the Closing Date, by
cashier's or bank check payable to the direct order of Seller, the rent and
additional rent that would have been payable under the proposed Space Lease
from the date on which the Tenant's obligation to pay rent would have
commenced if Purchaser had not so objected until the Closing Date, less
(i) the amount of the brokerage commission specified in Seller's notice,
(ii) the cost of tenant improvement work required to be performed by the
landlord under the terms of the proposed Space Lease to suit the premises to
the tenant's occupancy, and (iii) the amount of cash work allowances required
to be given by the landlord to the tenant under the terms of the proposed
Space Lease (the "Reletting Expenses"), prorated in each case over the term
of the proposed Space Lease and apportioned as of the Closing Date. If
Purchaser does not so notify Seller of its objection, Seller shall have the
right to enter into the proposed Space Lease with the tenant identified in
Seller's notice and Purchaser shall pay to Seller, in the manner specified in
Section 2.2.2 hereof, the Reletting Expenses, to the extent actually incurred
by Seller, prorated in each case over the term of the Space Lease and
apportioned as of the later of the Closing Date or the rent commencement
date. Such payment shall be made by Purchaser to Seller at Closing and if
Closing does not occur for any reason other than by reason of Seller's
default, then the aggregate sum that would have been payable by Purchaser
shall be payable at the last scheduled Closing Date.
10.4 Tenant Estoppel Certificates. (a) Reasonably promptly after the
----------------------------
execution of this Agreement, Seller shall send a written request to each
Tenant in accordance with its Space Lease to furnish a tenant estoppel
statement substantially in the form such Tenant is obligated to furnish to
the landlord under its Space Lease, or if no such form is contained or
specified in a Tenant's Space Lease or if a Tenant's Space Lease provides
that the Tenant shall make additional statements beyond those specifically
provided for in the Space Lease ("Optional Statements"), then substantially
in the form annexed hereto as Schedule "L-1" (a "Tenant Estoppel Statement").
Seller shall deliver to Purchaser a copy of each executed Tenant Estoppel
Statement thereafter received from any Tenant reasonably promptly after
Seller's receipt of same. In no event shall Purchaser have any right to
terminate this Agreement, except as otherwise expressly provided in this
Section 10.4, nor shall Purchaser be entitled to a reduction of the Purchase
Price nor shall Purchaser's obligations under this Agreement be otherwise
affected in any manner on account of any statement or information contained
in any Tenant Estoppel Statement.
(b) Seller shall be obligated to furnish to Purchaser, as a
condition of Purchaser's obligation to close hereunder that Purchaser shall
receive, at or before Closing, with respect to each "Required Tenant" (as
such term is hereinafter defined), either (x) a Tenant Estoppel Statement, in
"Acceptable Form" (as such term is hereinafter defined), or (y) to the extent
that a Tenant Estoppel Statement (whether or not in Acceptable Form) is not
received from a Required Tenant (or is received but is incomplete), a
certificate in the form of Schedule "L-2" annexed hereto (a "Seller's
Estoppel Statement") executed by Seller. A Tenant Estoppel Statement
obtained by Seller from any Required Tenant shall be deemed to be in
"Acceptable Form" if such Tenant Estoppel Statement is on the form required
pursuant to this Section 10.4. Notwithstanding anything to the contrary
contained herein, a Tenant Estoppel Statement shall not be required to
contain any Optional Statements in order to be in "Acceptable Form."
(c) In the event that Seller is unable to fulfill the condition
set forth in Section 10.4(b) hereof by delivery of Tenant Estoppel Statements
and/or one or more Seller's Estoppel Statements, Seller shall have no
liability to Purchaser on account thereof, and Purchaser's sole remedy shall
be to terminate this Agreement and to receive a refund of the Deposit,
together with any accrued interest thereon, and upon such termination of this
Agreement neither party shall have any further obligation to the other party
hereunder except for those provisions of this Agreement which expressly
survive the termination of this Agreement.
(d) As used herein, the term "Required Tenants" shall mean:
(i) Metro-North Commuter Railroad under the Lease dated July
31, 1994 (as amended), and Dow Jones & Company under
Lease dated August 1, 1991 (as amended);
(ii) At least sixty-five (65%) percent of the Tenants whose
Leases cover, individually (or when combined with other
Leases for any such Tenant who occupies space in the
Building pursuant to multiple Leases), more than 25,000
rentable square feet in the Building exclusive of the
Required Tenants set forth in clause (i) of this
subsection 10.4(d); and
(iii) At least sixty-five (65%) percent of the Tenants whose
Leases cover, individually (or when combined with other
Leases for any such Tenant who occupies space in the
Building pursuant to multiple Leases), more than 4,000
rentable square feet, exclusive of the Tenants set forth
in clauses (i) and (ii) of this Subsection 10.4(d).
(e) The representations set forth in any Seller's Estoppel
Statement delivered pursuant to this Section 10.4 shall survive the Closing
for a period of ninety (90) days, or until such earlier date that the
Required Tenant delivers to Purchaser a Tenant Estoppel Statement in
Acceptable Form.
10.5 Request for Lessor Consent and Estoppel. From the date of this
-----------------------------------------
Agreement to the Closing Date, Seller shall:
(a) Use its reasonable efforts to obtain a written consent from NY
Graybar L.P., the lessor of the Operating Sublease to the assignment of the
Operating Sublease to Purchaser (the "NY Graybar L.P. Consent"). Upon
receipt of such consent, Seller shall deliver an original thereof to
Purchaser. However, if Seller has not received the NY Graybar L.P. Consent
within seven (7) days prior to the Closing Date, Seller may adjourn the
Closing for up to thirty (30) days for the purpose of procuring the NY
Graybar L.P. Consent, and in the event Seller fails to deliver the NY Graybar
L.P. Consent to Purchaser by a date not less than seven (7) days prior to the
Closing Date, as adjourned, either party may elect to terminate this
Agreement. If either party does so elect, Seller's sole liability thereafter
shall be to refund to Purchaser its Deposit, together with any interest
accrued thereon, and upon such termination of this Agreement neither party
shall have any further obligation to the other party hereunder except for
those provisions of this Agreement which expressly survive the termination of
this Agreement.
(b) Use its reasonable efforts to obtain an estoppel statement
from NY Graybar L.P., in the form annexed hereto as Schedule L-3 (the
"Lessor's Estoppel Statement").
(c) Provide Purchaser with a copy of any notice received under the
Operating Sublease, including without limitation, a notice of default.
(d) Maintain the Operating Sublease in full force and effect, make
all payments in a timely manner, and observe and perform all covenants and
obligations of lessee thereunder.
(e) Not, without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld or delayed, modify, amend, extend,
terminate, or otherwise alter the Operating Sublease, or any documents or
agreements relating thereto.
10.6 Consent under Underlying Leases.
--------------------------------
(a) From the date of this Agreement to the Closing Date, Seller
shall use reasonable efforts to obtain a written consent to the assignment of
the Operating Sublease from:
(i) Associates under the Operating Lease (the "Associates
Consent");
(ii) Metlife under the Mesne Lease (the "Metlife Consent");
(b) Seller shall be obligated to furnish to Purchaser, as a
condition of Purchaser's obligation to close hereunder that Purchaser shall
receive, at or before Closing, the NY Graybar L.P. Consent, Associates
Consent and Metlife Consent, and either (x) a Lessor Estoppel Statement, in
"Acceptable Form" (as such term is hereinafter defined), or (y) to the extent
that a Lessor Estoppel Statement (whether or not in Acceptable Form) is not
received from NY Graybar L.P. (or is received but is incomplete), a
certificate in the form of Schedule "L-4" annexed hereto (a "Seller's
Operating Sublease Estoppel Statement") executed by Seller. A Lessor
Estoppel Statement obtained by Seller from NY Graybar L.P. shall be deemed to
be in "Acceptable Form" if such Lessor's Estoppel Statement is the form of
Schedule "L-3."
(c) In the event Seller is unable to fulfill the conditions set
forth in Section 10.5 and Section 10.6 by delivery of: (i) a NY Graybar L.P.
Consent, (ii) Associates Consent, (iii) Metlife Consent and (iv) either a
Lessor's Estoppel Statement or Seller's Operating Sublease Estoppel
Statement, Seller shall have no liability to Purchaser on account thereof,
and Purchaser's sole remedy shall be to terminate this Agreement and to
receive a refund of the Deposit, together with any accrued interest thereon,
and upon such termination of this Agreement neither party shall have any
further obligation to the other party hereunder except for those provisions
of this Agreement which expressly survive the termination of this Agreement.
10.7 Purchaser's Consent Obligations. With respect to the obtaining of
-------------------------------
the NY Graybar L.P. Consent, Associates Consent and Metlife Consent,
Purchaser shall: (i) cooperate in submitting information, reference
material, financial and other data required under any applicable lease or
reasonably requested by a party to whom a request for consent was made, and
(ii) execute and deliver such instruments and assumptions required under any
applicable lease or reasonably requested by a party to whom a request for
consent was made.
ARTICLE 11
CASUALTY AND EMINENT DOMAIN
---------------------------
11.1 Casualty and Risk of Loss. Between the date of this Agreement
-------------------------
until the time of the delivery of the Deed as provided by Section 18.1.2
herein, the risk of loss or damage to the Property by fire or other casualty,
is borne and assumed by Seller. Seller's assumption of the risk of loss is
without any obligation or liability by Seller to repair the same, except
Seller, at Seller's sole option, shall have the right to repair or replace
such loss or damage to the Property. In the event any loss or damage to the
Property occurs, and Seller elects to make such repair or replacement, this
Agreement shall continue in full force and effect, and Seller shall be
entitled to a reasonable adjournment of the Closing Date, not to exceed one
hundred eighty (180) days. If Seller does not however elect to repair or
replace any such loss or damage, Purchaser shall have the following options
(provided, however, that if in Seller's reasonable judgment the cost of
repairing any such loss or damage to the Property will not exceed
$6,000,000.00. Purchaser will be deemed to have made the election set forth
in Section 11.1.2 hereof):
11.1.1 Declaring this Agreement terminated, in which event the
Deposit, together with any interest accrued thereon, shall be returned to
Purchaser, and upon such payment, this Agreement shall be null and void and
the parties hereto shall be relieved and released of and from any further
liability with respect to each other, except with respect to the provisions
of this Agreement which expressly survive the termination of this Agreement;
or
11.1.2 Accepting (i) the Assignment of the Operating Sublease
upon payment in full of the Purchase Price and without any abatement of the
Purchase Price by reason of such loss or damage, (ii) payment of the amount
of any insurance proceeds to the extent actually collected by Seller in
connection with such fire or other casualty, less the amount of the actual
expenses incurred by Seller in collecting such proceeds and in making repairs
to the Property occasioned by such fire or other casualty, and (iii) an
assignment (without warranty or recourse to Seller) of Seller's rights to any
payments to be made subsequent to the Closing Date under any hazard insurance
policy or policies in effect with respect to the Property. Purchaser shall
not be entitled to the payment of insurance proceeds or an assignment of
Seller's right to insurance proceeds if such proceeds are in excess of the
cost of repairing any loss or damage to the Property; Seller shall be
entitled to the excess proceeds, if any.
If Purchaser fails to exercise its option as set forth in Section 11.1.1
within ten (10) days after notice to Purchaser of any loss or damage to the
Property, Purchaser shall be deemed to have exercised the option set forth in
Section 11.1.2.
11.2 Eminent Domain. If prior to the Closing all or any part of the
--------------
Property is taken by condemnation or a taking in lieu thereof, the following
shall apply:
11.2.1 In the event a material part of the Property is taken,
Purchaser, by written notice to Seller (effective only if delivered within
fifteen (15) days after Purchaser receives notice of such taking), may elect
to cancel this Agreement prior to the Closing Date. In the event that
Purchaser shall so elect, the Deposit, together with any interest accrued
thereon, shall be returned to Purchaser, and upon such payment, this
Agreement shall be null and void and the parties hereto shall be relieved and
released of and from any further liability hereunder and with respect to each
other, except with respect to the provisions of this Agreement which
expressly survive the termination of this Agreement.
11.2.2 In the event a minor or immaterial part of the Property
is taken, or in the event of a change of legal grade, neither party shall
have any right to cancel this Agreement, and title shall nonetheless close in
accordance with this Agreement without any abatement of the Purchase Price or
any liability or obligation on the part of Seller by reason of such taking;
provided, however, that Seller shall, at Closing, (i) turn over and deliver
to Purchaser the amount of any award or other proceeds of such taking to the
extent actually collected by Seller as a result of such taking, less the
amount of the actual expenses incurred by Seller in collecting such award or
other proceeds and in making repairs to the Property occasioned by such
taking, and (ii) deliver to Purchaser an assignment (without warranty or
recourse to Seller) of Seller's right to any such award or other proceeds
which may be payable subsequent to the Closing Date as a result of such
taking.
11.2.3 The term "material part," as distinguished from a "minor
or immaterial part," as used herein shall mean a portion of the Property
having a value (based upon an appraisal by an appraiser acceptable to Seller,
subject to Purchaser's approval, which shall not be unreasonably withheld or
delayed) in excess of $6,000,000.00.
11.3 Survival. This Article 11 shall survive the Closing and is
--------
intended to be an express provision to the contrary within the meaning of
Section 5-1311 of the General Obligations Law.
ARTICLE 12
ASSESSMENTS
-----------
If on or after the date of this Agreement, the Property or any part
thereof shall be or shall have been affected by any real estate tax
assessment or assessments which are or may become payable in one or more
installments, Purchaser agrees to take title to the Property (without
reduction in or adjustment of the Purchase Price) subject to all unpaid
installments becoming due and payable after the date hereof.
ARTICLE 13
CLOSING ADJUSTMENTS
-------------------
13.1 Adjustments and Prorations. The following matters and items shall
--------------------------
be apportioned or adjusted between the parties hereto at the closing of title
to the Property pursuant to this Agreement (the "Closing"), as of 12:01 A.M.
of the day of the Closing (the "Adjustment Date"). The foregoing is based
upon the Seller having use of the funds constituting the cash portion of the
Purchase Price on the Closing Date, and thus the income and expense for the
Closing Date are for Purchaser's account. If the funds are not transferred
to be available to Seller on the Closing Date, then the Adjustment Date shall
be unchanged and Seller shall be entitled to a per diem addition of Twelve
Thousand Dollars ($12,000).
13.1.1 Fixed Rents.
-----------
(a) Fixed rents ("Fixed Rents") paid or payable by Tenants under
the Space Leases in connection with their occupancy shall be adjusted and
prorated on an if, as and when collected basis. Any Fixed Rents collected by
Purchaser or Seller after the Closing from any Tenant who owes Fixed Rents
for periods prior to the Closing, shall be applied: (i) first, in payment of
Fixed Rents owed by such Tenant for the calendar month in which the Closing
Date occurs; (ii) second, in payment of Fixed Rents owed by such Tenant for
the calendar month prior to the calendar month in which the Closing Date
occurs; (iii) third, in payment of Fixed Rents owed by such Tenant for the
period (if any) after the calendar month in which the Closing Date occurs
through the end of the calendar month in which such amount is collected; and
(iv) fourth, after Fixed Rents for all current periods have been paid in
full, in payment of Fixed Rents owed by such Tenant for the period prior to
the calendar month preceding the calendar month in which the Closing Date
occurs. Each such amount, less any costs of collection (including reasonable
attorneys' fees) reasonably allocable thereto, shall be adjusted and prorated
as provided above, and the party who receives such amount shall promptly pay
over to the other party the portion thereof to which it is so entitled. In
furtherance and not in limitation of the preceding sentence, with respect to
any Tenant which has paid all Fixed Rents for periods through the Closing,
if, prior to the Closing, Seller shall receive any prepaid Fixed Rents from a
Tenant attributable to a period following the Closing, at the Closing, Seller
shall pay over to Purchaser the amount of such prepaid Fixed Rents.
(b) Purchaser shall bill Tenants who owe Fixed Rents for periods
prior to the Closing on a monthly basis for a period of six (6) consecutive
months following the Closing Date and shall use commercially reasonable
efforts to collect such past due Fixed Rents; provided, however, that
-------- -------
Puractions or proceedings to collect any such past due Fixed Rents.
Notwithstanding the foregoing, if Purchaser is unable to collect such past
due Fixed Rents, Seller shall have the right, upon prior written notice to
Purchaser, to pursue such Tenants to collect Fixed Rent delinquencies
(including, without limitation, the prosecution of one or more lawsuits), but
Seller shall not be entitled to evict (by summary proceedings or otherwise)
any such Tenants. Any payment by a Tenant in an amount less than the full
amount of Fixed Rents and "Overage Rent" (as such term is defined in Section
13.1.2(a)) then due and owing by such Tenant, shall be applied first to Fixed
Rents (in the order of priority as to time periods as is set forth in Section
13.1.1(a) above) to the extent of all such Fixed Rents then due and owing by
such Tenant, and thereafter to Overage Rent (in the order of priority as to
time periods as is set forth in Section 13.1.2).
13.1.2 Overage Rent.
------------
(a) Any of the following charges and/or rents provided for by any
Space Lease: (i) the payment of additional rent based upon a percentage of
the Tenant's business during a specified annual or other period (sometimes
referred to as "percentage rent"), (ii) common area maintenance or "CAM"
charges, (iii) "escalation rent" or additional rent based upon increases in
real estate taxes, operating expenses, labor costs, cost of living, porter's
wages, or other index including the consumer price index or otherwise, or
(iv) any other items of additional rent, e.g., charges for electricity,
----
water, cleaning, overtime services, sundries and/or miscellaneous charges,
shall be adjusted and prorated on an if, as and when collected basis (such
percentage rent, CAM charges, escalation rent and other additional rent being
collectively called "Overage Rent").
(b) (i) Purchaser agrees that as to any Overage Rent for
accounting periods prior to the Closing that are to be paid after the
Closing, to pay the entire amount over to Seller upon receipt thereof, less
any costs of collection (including reasonable attorneys' fees) reasonably
allocable thereto. Purchaser agrees that it will (i) promptly render bills
for any such Overage Rent, (ii) bill Tenants such Overage Rent on a monthly
basis for a period of six (6) consecutive months thereafter, and (iii) use
commercially reasonable efforts to collect such Overage Rent; provided,
--------
however, that Purchaser shall have no obligation to commence any actions or
- -------
proceedings to collect any such Overage Rent.
(ii) Notwithstanding the foregoing, if Purchaser is unable to
collect such Overage Rent, Seller shall have the right, upon prior written
notice to Purchaser, to pursue Tenants to collect such delinquencies
(including, without limitation, the prosecution of one or more lawsuits), but
Seller shall not be entitled to evict (by summary proceedings or otherwise)
any such Tenants. Seller shall furnish to Purchaser all information relating
to the period prior to the Closing that is reasonably necessary for the
billing of such Overage Rent, and Purchaser will deliver to Seller,
concurrently with the delivery to Tenants, copies of all statements relating
to Overage Rent for a period prior to the Closing. Purchaser shall bill
Tenants for Overage Rent for accounting periods prior to the Closing in
accordance with and on the basis of such information furnished by Seller.
(c) Overage Rent for an accounting period in which the Closing
Date occurs shall be apportioned between Seller and Purchaser as of the
Adjustment Date, with Seller receiving the proportion of such Overage Rent
less a like portion of any costs and expenses (including reasonable
attorneys' fees) incurred in the collection of such Overage Rent that the
portion of such accounting period prior to the Closing Date bears to such
entire accounting period, and Purchaser receiving the proportion of such
Overage Rent less a like portion of any costs and expenses (including
reasonable attorneys' fees) incurred in the collection of such Overage Rent
that the portion of such accounting period from and after the Closing Date
bears to such entire accounting period. If, prior to the Closing, Seller
shall receive any installments of Overage Rent attributable to Overage Rent
for periods from and after the Closing Date, such sum shall be apportioned at
the Closing. If, after the Closing, Purchaser shall receive any installments
of Overage Rent attributable to Overage Rent for periods prior to the
Closing, seys' fees) incurred by Purchaser in the collection of such Overage
Rent shall be paid by Purchaser to Seller promptly after Purchaser receives
payment thereof.
(d) Any payment by a Tenant on account of Overage Rent (to the
extent not applied against Fixed Rents due and owing by such Tenant in
accordance with Section 13.1.1 (b) hereof) shall be applied to Overage Rent
then due in the following order of priority: (i) first, in payment of
Overage Rent for the accounting period in which the Closing Date occurs; (ii)
second, in payment of Overage Rent for the accounting period immediately
preceding the accounting period in which the Closing Date occurs; and (iii)
third, in payment of Overage Rent for the accounting period immediately
succeeding the accounting period in which the Closing Date occurs, and (iv)
thereafter in the chronological order in which such payments are due for
each such accounting period pursuant to the applicable Space Lease.
(e) To the extent that any portion of Overage Rent is required to
be paid monthly by Tenants, on account of estimated amounts for any calendar
year (or, if applicable, any Space Lease year or any other applicable
accounting period), and at the end of such calendar year (or Space Lease year
or other applicable accounting period, as the case may be), such estimated
amounts are to be recalculated based upon the actual expenses, taxes and
other relevant factors for that calendar year, Space Lease year or other
applicable accounting period, with the appropriate adjustments being made
with such Tenants, then such portion of the Overage Rent shall be prorated
between Seller and Purchaser at the Closing based on such estimated payments
(i.e., with Seller entitled to retain all monthly or other periodic
----
installments of such amounts paid with respect to periods prior to the
calendar month or other applicable installment period in which the Closing
occurs; Seller to pay to Purchaser at the Closing all monthly oy Seller with
respect to periods following the calendar month or other applicable
installment period in which the Closing occurs, and Seller and Purchaser to
apportion as of the Closing Date all monthly or other periodic installments
of such amounts with respect to the calendar month or other applicable
installment period in which the Closing occurs).
At the time(s) of final calculation and collection from (or
refund to) each Tenant of the amounts in reconciliation of actual Overage
Rent for a period for which estimated amounts paid by such Tenant have been
prorated, there shall be a re-proration between Seller and Purchaser. If,
with respect to any Tenant, the recalculated Overage Rent exceeds the
estimated amount paid by such Tenant, (i) the entire excess shall be paid by
Purchaser to Seller, if the accounting period for which such recalculation
was made expired prior to the Closing, and (ii) such excess shall be
apportioned between Seller and Purchaser as of the Closing Date (on the basis
described in the first sentence of Section 13.1.2(c) hereof), if the Closing
occurred during the accounting period for which such recalculation was made,
with Purchaser paying to Seller the portion of such excess which Seller is so
entitled to receive. If, with respect to any Tenant, the recalculated Overage
Rent is less than the estimated amount paid by such Tenant, (1) the entire
shortfall shall be paid by Seller to Purchaser (or, at Seller's option,
directly to the Tenant in question), if the accounting period for which such
recalculation was made expired prior to the Closing, and (2) such shortfall
shall be apportioned between Seller and Purchaser as of the Closing Date (on
the basis described in the first sentence of Section 13.1.2(c) hereof), if
the Closing occurred during the accounting period for which such
recalculation was made, with Seller paying to Purchaser (or, at Seller's
option, directly to the Tenant in question) the portion of such shortfall so
allocable to Seller.
(f) Until such time as all amounts required to be paid to Seller
by Purchaser pursuant to Section 13.1.1 and this Section 13.1.2 are paid in
full, but in no event for a period longer than twelve (12) months following
the Closing, Purchaser shall furnish to Seller, not less frequently than
monthly, a reasonably detailed accounting of such amounts owed by Purchaser;
which accounting shall be delivered to Seller on or prior to the fifteenth
day following the last day of each calendar month from and after the calendar
month in which the Closing occurs. Subsequent to the Closing, Seller
shalrior written notice to Purchaser, to review Purchaser's rental records
with respect to the Property during ordinary business hours on Business Days,
to ascertain the accuracy of such accountings.
13.1.3 Taxes and Assessments. Real estate taxes, assessments,
---------------------
Business Improvement District charges and like charges, ad valorem taxes and
personal property taxes, if any, on the basis of the fiscal year for which
assessed. If the Closing shall occur before the tax rate or assessment is
fixed, the apportionment of such real estate taxes and personal property
taxes, if any, shall be upon the basis of the tax rate for the immediately
preceding year applied to the latest assessed valuation; however, adjustment
will be made upon the actual tax amount, when determined. Any discount
received for early payment shall be for the benefit of Seller, and any
interest or penalty assessed for late payment shall be borne by Seller. Real
estate taxes shall be treated on an annualized basis even if tax payments
made in installments are not equal for each installment period. Thus, for
example, if the installment for the first half of a fiscal year is paid and
is higher than the second half installment, the proration will be based on
payment of fifty percent (50%) of the aggregate taxes for such fiscal year.
13.1.4 Deposits. Tax and utility company deposits, or deposits
--------
with any supplier of goods, if any, shall be paid by Purchaser to Seller (or,
at Seller's option, Seller shall obtain refunds of the deposits directly from
the taxing authority or utility company, as the case may be).
13.1.5 Water and Sewer Charges. Water charges and sewer rents
-----------------------
on the basis of the fiscal year, but if there are water meters on the
Property, Seller, to the extent obtainable, shall supply to Purchaser a water
meter reading current through the Adjustment Date, or if not feasible to so
read, to a date not more than thirty (30) days prior to the Adjustment Date,
and the unfixed meter charges based thereon for the intervening period shall
be apportioned on the basis of such last meter reading. Upon the taking of a
subsequent actual water meter reading, such apportionment shall be readjusted
and Seller or Purchaser, as the case may be, will promptly deliver to the
other the amount determined to be due upon such readjustment. If Seller is
unable to furnish such prior meter reading, any reading subsequent to the
Closing will be apportioned on a per diem basis from the date of such reading
immediately prior thereto, and Seller shall pay the proportionate charges due
up to the date of Closing. Unpaid water meter bills, frontage, sewer charges
and assessments which are the obligations of Tenants in accordance with the
terms of their respective Space Leases shall not be adjusted, nor shall the
same be deemed an objection to title, and Purchaser will take title subject
thereto.
13.1.6 License Fees. Amounts paid or payable with respect to
------------
assignable licenses and permits, if any, affecting the Property.
13.1.7 Service and Maintenance Charges. Amounts paid or payable
-------------------------------
with respect to the Service and Maintenance Agreements.
13.1.8 Vault Fees. Proration of vault charges or vault taxes
----------
shall be based upon the last bill received, or title company report, prorated
at the last known rate to the Adjustment Date. No proration shall be made if
such vault charge is the obligation of a Tenant in possession.
13.1.9 Utilities. Utility charges, including, but not limited
---------
to, electricity, gas, steam, telephone and other utilities (other than such
charges which are the obligation of Tenants under their respective Space
Leases), all prorated based upon the most current bill unless actual readings
are obtained as of the Adjustment Date, in which case such actual readings
shall govern, and each party shall pay the amount billed to it, respectively.
13.1.10 Inventory. The value of Building inventory and supplies
---------
(e.g., soap, cleaning powder, light bulbs, etc.) in unopened containers, if
----
any, in accordance with an inventory prepared by Seller, shall be credited to
Seller. Such value amount shall be determined based upon the cost thereof,
to the extent practical.
13.1.11 Tenant Security Deposits. (a) Security deposits of
------------------------
Tenants (other than those which are marketable securities, letters of credit,
or other non-cash items) shall be transferred, at Seller's option, either
(i) by direct assignment of the bank accounts in which deposited, or (ii) by
Seller retaining all rights in the bank accounts and crediting to Purchaser
the amount of the security deposits to be delivered pursuant to this
Agreement. In either event, there shall be maintained or credited to Seller
all interest earned or accrued to the Adjustment Date, less such portion of
the interest to which the respective Tenant would be entitled pursuant to its
Space Lease or by law. No allocation shall be made of security deposits
properly applied prior to the Adjustment Date, and Seller may retain such
amounts. Security deposits applied after the Adjustment Date shall be
applied in the order of priority set forth in paragraph (a) of Section 13.1.1
hereof. Security deposits held in the form of marketable securities shall be
assigned and delivered to Purchaser at Closing, with any interest thereon
through the Adjustment Date credited to Seller, less such portion to which
the Tenant would be entitled. Security deposits held in the form of letters
of credit shall be assigned and delivered to Purchaser at Closing; provided,
however, that if the consent or authorization of the issuer of any such
letter of credit is required, the failure to obtain such consent shall not
constitute grounds for Purchaser or Seller to adjourn the Closing, but Seller
shall cooperate with Purchaser in obtaining such consent subsequent to the
Closing.
(b) If any Tenant who owes past due rent as of the Closing
Date is evicted from the Building and its Space Lease is terminated, then
promptly after such eviction and termination, such Tenant's security deposit
shall be applied in the following order of priority: (i) first to the
reimbursement of Purchaser's reasonable costs and expenses in obtaining such
eviction and termination; (ii) then in the order of priority set forth in
Section 13.1.1 hereof.
(c) At Closing Purchaser shall indemnify and hold Seller free
and harmless from and against any claim made with respect to an assigned
security deposit, or a security deposit as to which Purchaser has received a
credit, and Purchaser shall give such notice to each Tenant with respect to a
security deposit as will eliminate or reduce Seller's responsibility.
13.1.12 Fuel. Proration shall be made of fuel on the Property
----
on the Adjustment Date, based upon a reading made by Seller's supplier as
close as obtainable to the Adjustment Date (reasonably adjusted to the
quantity present on the Adjustment Date). The value thereof shall be
calculated at Seller's last cost (including sales tax). If the heating,
ventilation or air conditioning for the Property is provided by a measurable
product (e.g. steam or gas) the adjustment will be based on meter readings
prorated, if necessary, to the Adjustment Date.
13.1.13 Employee Compensation. Proration shall be made of all
---------------------
wages of employees engaged at the Property, together with vacation pay,
social security taxes, workers' compensation, pension and other fringe
benefits. Fringe benefit years shall be based upon union contract rights, if
feasible, and otherwise determined as a fair allocation in Seller's judgment.
Seller shall not be charged with termination pay arising by reason of
Purchaser's termination of any employees, or failure to hire any employees at
or subsequent to the Closing, and Purchaser shall be fully liable for any
such termination pay. If employees engaged at the Building are in the employ
of an agent, then such adjustment or proration shall be made as appropriate
with the agent to reach the same economic result as if in the direct employ
of Seller. Compliance with the WARN act shall be Purchaser's responsibility.
13.1.14 Tenant Improvement Work at Landlord's Cost. With respect
------------------------------------------
to tenant improvement work performed or to be performed to leased space to be
paid at the landlord's cost pursuant to any Space Lease, (i) Purchaser shall
receive a credit against the Cash Balance at Closing for the cost of the
performance of any tenant improvement work required to be performed pursuant
to Space Leases executed (or renewal, extension or additional space rights or
options exercised) prior to December 1, 1997 (the "Space Leasing Cutoff
Date"), and (ii) Purchaser shall be obligated to pay, as and when due, for
the cost of the performance of any tenant improvement work required to be
performed pursuant to Space Leases entered into (or renewal, extension or
additional space rights or options exercised) on or after the Space Leasing
Cutoff Date, and the Cash Balance shall be increased by any sums expended by
Seller prior to closing for obligations referred to in this clause (ii).
13.1.15 Costs of Work to be Paid or Reimbursed to Tenants. With
-------------------------------------------------
respect to the cost of work performed or to be performed at the Property
attributable to leased space to be either paid or reimbursed to Tenants by
the landlord pursuant to any Space Lease, (i) Purchaser shall receive a
credit against the Cash Balance at Closing to the extent such payment or
reimbursement is required pursuant to a Space Lease executed (or renewal,
extension or additional space rights or options exercised) prior to the Space
Leasing Cutoff Date, and (ii) Purchaser shall be obligated to pay or
reimburse any such Tenant, as and when due, to the extent such payment or
reimbursement is required pursuant to a Space Lease entered into (or renewal,
extension or additional space rights or options exercised) on or after the
Space Leasing Cutoff Date, and the Cash Balance shall be increased by any sum
expended by Seller prior to Closing for obligations referred to in this
clause (ii).
13.1.16 Leasing Commissions. Brokerage and leasing commissions
-------------------
incurred in connection with the leasing of space at the Property shall be
prorated so that such commissions owed with respect to Space Leases executed
prior to the Space Leasing Cutoff Date shall be paid by Seller, and on or
after the Space Leasing Cutoff Date shall be paid, as and when due, by
Purchaser. No adjustment shall be made with respect to leasing or brokerage
commissions payable on or after the Closing Date as a consequence of an event
occurring after the Closing. Thus, proration of leasing commissions shall be
made if the leasing to which the leasing commission is attributable was made
prior to the Space Leasing Cutoff Date borne by Seller and if after the Space
Leasing Cutoff Date borne by Purchaser. If as of the Closing the leasing
commission is an obligation of Seller if an event occurs, (e.g. renewal,
expansion, etc.) and thereafter the event does occur then the leasing
commission if earned is to be borne by Purchaser and Purchaser shall
indemnify and hold Seller free and harmless from and against any liability
for leasing brokerage payable by Purchaser.
13.1.17 Insurance Premiums. No existing insurance policy shall
------------------
be assigned to Purchaser, and no adjustment of any insurance premiums shall
be made.
13.1.18 Operating Sublease Rent.
-----------------------
(a) Fixed or base rent under the Operating Sublease including
any portion thereof denominated or characterized as ground rent shall be
adjusted and prorated on a cash basis.
(b) Additional rent items other than Overage Rent payable
pursuant to the Operating Sublease (herein called the "Operating Sublease
Overage Rent" to distinguish such obligation from Space Tenants' obligations
for Overage Rent) shall likewise be adjusted and prorated on a cash basis but
with respect to additional rent not payable or retained by the lessor under
the Operating Sublease adjustments and prorations shall be made without
duplication.
(c) Operating Sublease Overage Rent is payable annually on a
calendar year basis. Purchaser shall pay the entire Operating Sublease
Overage Rent for the calendar year 1998 in accordance with the Operating
Sublease, but shall be entitled to a credit from Seller for the amount of
Operating Sublease Overage Rent allocable to the portion of 1998 ending on
the Adjustment Date, net of any credit against such Operating Sublease
Overage Rent to which Seller would be entitled under the Operating Sublease
for "excess cash payments" allocable to the portion of 1998 ending on the
Adjustment Date. Not less than ten (10) days prior to Closing, accountants
or other representatives for each of Seller and Purchaser shall agree upon a
projected Operating Sublease Overage Rent allocable to the portion of the
calendar year 1998 occurring prior to the Closing Date ("Seller's Period").
For the purpose of determining the projected Operating Sublease Overage Rent
for Seller's Period, the net income as determined by the terms and conditions
of the Operating Sublease shall be calculated for Seller's Period and
compared to the minimum net income for 1998 (i) prorated for Seller's Period,
and (ii) further adjusted to the extent permitted by the Operating Sublease
by deferrals, cash payments, deductions allocable to depreciation,
amortization of capital improvements and alterations for subtenants. If such
calculations result in an excess of Operating Sublease Overage Rent currently
payable for Seller's Period Seller's Period then, Purchaser shall receive a
credit at Closing equal to such excess amount. The credit referred to in the
preceding sentence shall be reduced by the amount of any estimated payments
on account of Operating Sublease Overage Rent made by Seller for the calendar
year 1998. If the excess cash payments for Seller's Period exceed the
Operating Sublease Overage Rent for Seller's Period, then Seller shall
receive a credit at Closing equal to such excess amount. The calculation of
Operating Sublease Overage Rent adjustment shall be recalculated at the
request of either party not less than sixty (60) nor more than one hundred
twenty (120) days after the end of the calendar year in which the Closing
Date occurs, and both Seller and Purchaser shall make appropriate operating
records available. In the event of a failure to agree on an adjustment
amount at the projection prior to Closing or at the post calendar year
recalculation, either party may cause a determination, having the force of an
arbitration by selection of a single arbitrator made jointly by Seller and
Purchaser upon ten (10) days notice given to a party and initiated by either
party with a proposed arbitrator. If within such ten (10) day period, the
parties do not agree upon a single arbitrator then either party may initiate
the then appropriate procedure before the American Arbitration Association
for Commercial Arbitration in the Borough of Manhattan, City and State of New
York. A determination by an arbitrator thus selected shall be final and
binding on the parties. The cost of such arbitration shall be borne equally
by Seller and Purchaser.
It is hereby agreed that no adjustments shall be included as part of the
Operating Sublease Overage Rent adjustment, with respect to either: (i)
"Unamortized Sums," or (ii) "Excess Cash Repayments," except to the extent
otherwise expressly provided above as to the adjustments for Seller's Period
(as each quoted term is herein defined). Unamortized Sums shall mean the
unamortized portion of amounts deductible in calculating Operating Sublease
Overage Rent attributable to expenditures made prior to January 1, 1998.
Excess Cash Repayments shall mean amounts which the sublessee is obligated to
pay for any portion of the term of the Operating Sublease occurring after
January 1, 1998 pursuant to Section 2.02(5) of the Operating Lease, as a
result of a reduction in Operating Sublease Overage Rent received by Seller
for any period prior to the Adjustment Date pursuant to Section 2.05(5) of
the Operating Lease.
Seller waives any right or claim it may have with respect to the
Unamortized Sums and agrees that the benefit thereof post closing shall inure
to Purchaser in determinations of Operating Lease Overage Rent.
Purchaser waives any right or claim it may have with respect to the
Excess Cash Repayments and agrees to assume such obligation in determinations
of Operating Sublease Overage Rent for 1998 and all future calendar years.
Each party agrees that the benefits and burdens of the understanding
expressed in the preceding two sentences are part of the consideration for
this Agreement.
13.1.19 Other Adjustments. (a) Rents due pursuant to
-----------------
Section 10.3.2 hereof.
(b) Reletting Expenses pursuant to Section 10.3.2 hereof.
13.1.20 Survival. The provisions of this Section 13.1 shall
--------
survive the Closing.
13.2 Determination of Closing Adjustments. The parties hereto agree to
------------------------------------
make a good faith effort to determine the adjustments and prorations to be
made at Closing, pursuant to this Article, at least three (3) Business Days
prior to the Closing Date.
13.3 Net Apportionments and Adjustments.
----------------------------------
13.3.1 Due Seller. In the event the net apportionments and
----------
adjustments as provided in Section 13.1 result in a payment due Seller, then
such payment shall be made at Closing in the manner set forth in
Section 2.2.2. In the event that despite Purchaser's good faith efforts,
the parties hereto are unable to determine the amount of the adjustments to
be paid to Seller at Closing, if any, on or before the date which is three
(3) Business Days prior to the Closing Date, such amount may be paid by
Purchaser to Seller at the Closing by cashier's or bank check, or by a
certified check of Purchaser drawn upon a bank which is a member of The New
York Clearing House Association (or any successor organization thereto), made
payable to Seller's direct order.
13.3.2 Due Purchaser. In the event the net apportionments and
-------------
adjustments as provided in Section 13.1 result in a payment due Purchaser,
then such payment shall be made at Closing by way of a credit against the
Cash Balance.
13.4 Other. Except as otherwise provided in this Agreement, the customs
-----
regarding title closings, as recommended by The Real Estate Board of New
York, Inc., shall apply to all apportionments.
ARTICLE 14
CLOSING DOCUMENTS; OBLIGATIONS OF PURCHASER
-------------------------------------------
AND SELLER AT CLOSING
---------------------
14.1 Seller's Obligations at Closing. On the Closing Date, Seller shall
-------------------------------
deliver or cause to be delivered to Purchaser the following:
14.1.1 An Assignment of the Operating Sublease containing the
covenant required by Section 13 of the Lien Law in proper form for recording
(the "Assignment"), in the form annexed hereto as Exhibit 1.
14.1.2 A Bill of Sale in the form annexed hereto as Exhibit 2.
14.1.3 A letter to each Tenant advising them of the change of
ownership of the Property in accordance with General Obligations Law
Section 7-105, in the form of Exhibit 9 annexed hereto (the "Tenant Notice
Letter"), and Purchaser agrees to deliver the Tenant Notice Letter to each
Tenant promptly after the Closing. Purchaser hereby indemnifies and holds
Seller harmless from and against all loss, cost and expense incurred by
Seller as a result of Purchaser's failure to so deliver the Tenant Notice
Letter to each Tenant promptly after the Closing, and this sentence shall
survive the Closing.
14.1.4 An Assignment and Assumption of Service, Maintenance and
Concessionaire Agreements, in the form annexed hereto as Exhibit 3.
14.1.5 An Assignment and Assumption of Landlord's Interest in
Space Leases, in the form annexed hereto as Exhibit 4.
14.1.6 All current records within Seller's possession reasonably
required for the continued operation of the Property, including but not
limited to, service contracts, plans, surveys, Space Leases, lease files,
licenses, permits, warranties, guaranties, insurance policies assigned to
Purchaser at Closing, records of current expenditures for repairs and
maintenance, and the certificate of occupancy.
14.1.7 An Assignment of Licenses and/or Permits, in the form
annexed hereto as Exhibit 5.
14.1.8 An Assignment of Warranties and Guarantees, in the form
annexed hereto as Exhibit 6.
14.1.9 An Assignment and Assumption of the Brokerage Agreements
in the form annexed hereto as Exhibit 10.
14.1.10 All keys and combinations to locks at the Property which
are in Seller's possession.
14.1.11 A duly executed letter agreement by which Seller and
Purchaser agree to correct any errors in prorations as soon after the Closing
as amounts are finally determined, in the form annexed hereto as Exhibit 7
(the "Post-Closing Adjustment Letter").
14.1.12 Evidence reasonably acceptable to Purchaser and the Title
Company authorizing the consummation by Seller of the transaction
contemplated by this Agreement, and the execution and delivery of documents
on behalf of Seller.
14.1.13 The certificate with respect to FIRPTA compliance in the
form of Exhibit 8 annexed hereto.
14.1.14 The New York City Department of Finance Real Property
Transfer Tax Return (the "RPT Return") and the New York State Combined Real
Estate Transfer Tax Return and Credit Line Mortgage Certificate (the "Form
TP-584").
14.1.15 The Tenant Estoppel Statements required pursuant to
Section 10.4 hereof (and/or Seller's Estoppel Statements in lieu of one or
more such required Tenant Estoppel Statements).
14.1.16 The Lessor's Consent (i.e., NY Graybar L.P. Consent) and
Lessor's Estoppel Statement or Seller's Operating Sublease Estoppel Statement
required pursuant to Section 10.5 or 10.6 hereof.
14.1.17 The Associates Consent and the Metlife Consent required
pursuant to Section 10.6 hereof.
14.2 Purchaser's Obligations at Closing. Purchaser shall deliver or
----------------------------------
cause to be delivered to Seller on the Closing Date the following:
14.2.1 The Cash Balance.
14.2.2 Duplicate originals of the Assignment and Assumption of
Landlord's Interest in Space Leases, the Assignment and Assumption of
Service, Maintenance and Concessionaire Agreements, the Assignment and
Assumption of Brokerage Agreements, the Post-Closing Adjustment Letter, the
RPT Return, Form TP-584, the Tenant Notice Letters, and an Assumption of the
Operating Sublease in the form of Exhibit 11 annexed hereto, duly executed by
Purchaser, together with such other documents and instruments necessary to
assume the tenant's interest in the Operating Sublease.
14.2.3 Evidence reasonably acceptable to Seller and the Title
Company authorizing the consummation by Purchaser of the transaction which is
the subject of this Agreement, and the execution and delivery of documents on
behalf of Purchaser.
14.2.4 Such other documents as may be reasonably and customarily
required by the Title Company to consummate the transaction contemplated by
this Agreement.
ARTICLE 15
VIOLATIONS
----------
Without limiting the generality of the provisions of this Article 15,
Purchaser agrees to purchase the Property subject to any and all notes or
notices of violations of law, or municipal ordinances, orders or requirements
whatsoever noted in or issued by any federal, state, municipal or other
governmental department, agency or bureau, or any other Governmental
Authority having jurisdiction over the Property (collectively, "Violations"),
or any lien imposed in connection with any of the foregoing, or any condition
or state of repair or disrepair or other matter or thing, whether or not
noted, which, if noted, would result in a violation being placed on the
Property. Seller shall have no duty to remove or comply with or repair or
disrepair any condition, matter or thing, whether or not noted, which, if
noted, would result in a violation being placed on the Property. Seller
shall have no duty to remove or comply with or repair any of the
aforementioned Violations, liens or other conditions, and Purchaser shall
accept the Property subject to all such Violations and liens, the existence
of any conditions at the Property which would give rise to such Violations or
liens, if any, and any governmental claims arising from the existence of such
Violations and liens, in each case without any abatement of or credit against
the Purchase Price.
ARTICLE 16
SALES TAX
---------
Although it is not anticipated that any sales tax shall be due and
payable, Purchaser agrees that Purchaser shall pay any sales tax assessed in
connection with the sale of the Property to Purchaser and save, defend,
indemnify and hold Seller harmless from and against any and all liability for
any sales tax which may now or hereafter be imposed upon Seller or the
Property with respect to the sale of any personal property. The parties
hereto agree that no part of the Purchase Price is attributable to personal
property. The provisions of this Section shall survive the Closing.
ARTICLE 17
UNPAID TAXES
------------
17.1 The amount of any unpaid real estate taxes, assessments, water
charges and sewer rents other than items subject to proration as heretofore
provided, which Seller is obligated to pay and discharge may, at the option
of Seller, be allowed to Purchaser out of the Cash Balance, provided that
official bills therefor with interest and penalties thereon calculated to
said date are furnished by Seller at the Closing.
17.2 Seller may use any portion of the Cash Balance to satisfy any liens
or encumbrances which exist on the Closing Date which are not Permitted
Encumbrances, provided that Seller delivers to Purchaser at Closing
instruments in recordable form sufficient to satisfy such liens and
encumbrances of record, together with the cost of recording or filing said
instruments, or pay such sums or perform such acts as will enable the Title
Company to insure Purchaser that such lien(s) will not be collected out of
the Property, or deposit with Purchaser's attorneys reasonably sufficient
funds to enable Purchaser's attorneys to obtain and record such instruments.
17.3 The existence of (i) any taxes, assessments, water charges, or
sewer rents referred to in Section 17.1, or (ii) any other liens or
encumbrances, shall not be deemed Title Objections if Seller elects to
proceed pursuant to the provisions of Section 17.2, provided that Seller
complies with the requirements set forth in Sections 17.1 and 17.2 hereof.
17.4 If Seller requests within a reasonable time prior to the Closing
Date, Purchaser agrees to provide at the Closing separate certified checks or
official cashier's checks, which in the aggregate equal the amount of the
Cash Balance, in order to facilitate the satisfaction of any unpaid (and due)
real estate taxes, assessments, water charges or sewer rents, liens and/or
encumbrances referred to in Section 17.1, and, if Seller elects to proceed
pursuant to the provisions of Section 17.2, the payment of any liens and
encumbrances referred to therein.
ARTICLE 18
THE CLOSING
-----------
18.1 The Closing. The sale and purchase of the Property contemplated
-----------
by the terms and conditions of this Agreement shall be consummated at the
Closing.
18.1.1 Location and Date of Closing. Subject to the
----------------------------
satisfaction of the terms and conditions herein set forth, the Closing shall
take place at the offices of Seller's attorneys, Bachner, Tally, Polevoy &
Misher LLP, 380 Madison Avenue, New York, New York at 10:00 A.M., on March
18, 1998 (the "Closing Date").
18.1.2 Delivery of Documents. At the Closing, the Assignment
---------------------
of the Ground Lease shall be delivered to the Purchaser upon Seller's receipt
of the payments provided for in Article 2, and the delivery of the documents
referred to in Section 14.2.
18.2 Time of Essence. Time shall be of the essence as to Purchaser's
---------------
obligations to close the purchase of the Property, pursuant to this
Agreement, on the Closing Date. For purposes of this Agreement, the term
"Business Day" shall mean all days except Saturdays, Sundays, and all days
observed by the Federal Government or New York State as legal holidays.
ARTICLE 19
NOTICES
-------
Except as otherwise provided in this Agreement, any and all notices,
elections, demands, requests and responses permitted or required to be given
pursuant to this Agreement shall be in writing, signed by the party giving
the same or by its attorneys, and shall be deemed to have been duly given and
effective upon being: (i) personally delivered with receipt for delivery; or
(ii) deposited with a nationally recognized express overnight delivery
service (e.g., Federal Express) for next Business Day delivery with receipt
for delivery; or (iii) deposited in the United States mail, postage prepaid,
certified with return receipt requested, to the other party at the address of
such other party set forth below, or at such other address within the
continental United States as may be designated by a notice of change of
address and given in accordance herewith. The time period in which a
response to any such notice, election, demand or request must be given shall
commence on the date of receipt thereof. Personal delivery to a party or to
any officer, partner, agent or employee of such party at said address shall
be deemed given and received at the time delivered. Rejection or other
refusal to accept, or inability to deliver because of changed address of
which no notice has been received, shall also constitute receipt. Any such
notice, election, demand, request or response shall be addressed to the
respective parties as follows:
(i) if to Seller, to:
c/o Helmsley Enterprises, Inc.
230 Park Avenue
New York, New York 10169
Attention: Harold A. Meriam, III, Esq.
with a copy to:
Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017-2513
Attention: Martin D. Polevoy, Esq.
(ii) if to Purchaser, to:
Benjamin P. Feldman, Esq.
SL Green Realty Corp.
70 West 36th Street
New York, New York 10018
with a copy to:
Richard A. Rosenbaum, Esq.
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel
153 East 53rd Street, 35th Floor
New York, New York 10022
ARTICLE 20
DEFAULT
-------
20.1 Purchaser's Default. If Purchaser fails to accept title and pay
-------------------
the Cash Balance in accordance with this Agreement, the Deposit, together
with all interest accrued thereon, if any, shall be retained by Seller as
liquidated damages and as Seller's sole and exclusive remedy for Purchaser's
default, except as provided in the last sentence of this Section 20.1 as to
post-closing defaults by Purchaser only. The provisions herein contained for
liquidated and agreed upon damages are bona fide provisions for such and are
not a penalty, the parties agreeing that by reason of Seller binding itself
to the sale of the Property and by reason of the withdrawal of the Property
from sale at a time when other parties would be interested in acquiring the
Property, that Seller will sustain damages if Purchaser defaults, which
damages will be substantial but will not be capable of determination with
mathematical precision, and therefore, as aforesaid, this provision for
liquidated and agreed upon damages has been incorporated in this Agreement as
a provision beneficial to both parties. Notwithstanding the foregoing
provisions of this Section, there shall be no limitation on Purchaser's
liabilities or Seller's remedies with respect to any indemnities made by
Purchaser that are specifically stated herein to survive the termination of
this Agreement.
20.2 Seller's Default. Reference is hereby made to Sections 21.1 and
----------------
21.2 hereof for Purchaser's exclusive remedies in the event of a breach of
representation or failure to perform any agreement set forth in this
Agreement on the part of Seller. If Seller shall default in the performance
of its obligations hereunder, whether or not Purchaser shall have elected to
accept title in accordance with the provisions of Section 5.2 hereof, then
Purchaser's sole remedy shall be either to (i) terminate this Agreement and
receive a refund of the Deposit together with any interest accrued thereon,
or (ii) bring an action for specific performance of Seller's obligations
under this Agreement, provided, however, that if Purchaser shall not have
commenced such action within a period of thirty (30) days following the date
scheduled for Closing hereunder, Purchaser shall be deemed to have waived its
right to proceed under this clause (ii) and shall be deemed instead to have
elected the remedy provided for in clause (i) of this sentence.
ARTICLE 21
CONDITIONS; SURVIVAL
--------------------
21.1 Conditions. (a) If Purchaser has actual knowledge, or should
----------
have actual knowledge by inspection of the Property or of the public records
at or before the Closing, that (i) any representation of Seller hereunder is
untrue, as of the date represented, or (ii) Seller has failed to perform,
observe or comply with any covenant, agreement or condition to be performed
hereunder, Purchaser shall notify Seller of such within five (5) days after
discovery by Purchaser. Purchaser's failure to so notify Seller shall be
deemed to constitute Purchaser's waiver of same as a condition to Closing and
otherwise.
(b) In the event that (A) any of Seller's representations made in
Section 3.1 are not true as of the date of this Agreement (and for the
purposes hereof a representation shall be untrue only if factually untrue and
having a material adverse business or legal impact on Purchaser), and
(B) Purchaser has actual knowledge, or should have actual knowledge by
inspection of the Property or of the public records at or before the Closing
that any of Seller's representations referred to in clause (A) of this
sentence are untrue, then Purchaser may, as its sole remedy (whether at law
or in equity), all other claims for damages or specific performances being
hereby expressly waived by Purchaser, elect to terminate this Agreement, and
the sole liability of Seller shall be to return to Purchaser the Deposit,
together with any interest accrued thereon, and thereupon, this Agreement
shall be null and void and the parties hereto shall be relieved of all
further obligations and liability under this Agreement, other than with
respect to those obligations and liabilities which expressly survive the
termination of this Agreement.
21.2 Survival. Except as specifically set forth to the contrary in this
--------
Agreement, none of the representations, warranties, covenants, indemnities,
agreements, obligations or commitments made by Seller in this Agreement shall
survive the Closing, the same being merged in the conveyance. If survival is
herein provided and no time specified, such matter or matters shall be the
basis for a claim against Seller only if asserted in writing within six (6)
months after the Closing Date.
ARTICLE 22
SUCCESSORS AND ASSIGNS
----------------------
22.1 Assignment. Neither this Agreement nor any of the rights of
----------
Purchaser hereunder (nor the benefits of such rights) may be assigned,
transferred or encumbered without Seller's prior written consent, which
consent may be granted or denied in Seller's sole and absolute discretion,
and any purported assignment, transfer or encumbrance without Seller's prior
written consent shall be void. Purchaser expressly covenants and agrees that:
(a) if Purchaser is a corporation, a sale or transfer (or the
granting of an option, put or call right with respect to a transfer) of more
than one percent (1%) (at any one time or, in the aggregate, from time to
time) of the shares of any class of the issued and outstanding stock of
Purchaser, its successors or assigns, or the issuance of additional shares of
any class of its stock to the extent of more than one percent (1%) (at any
one time or, in the aggregate, from time to time) of the number of shares of
said class of stock issued and outstanding on the date hereof, or
(b) if Purchaser is a partnership, joint venture or limited
liability company, a sale or transfer (or the granting of an option, put or
call right with respect to a transfer) of more than one percent (1%) (at any
one time or, in the aggregate, from time to time) of the partnership, joint
venture, membership or other unincorporated association interests of
Purchaser, its successors or assigns, or the issuance of additional
partnership, joint venture or member interests of any class to the extent of
more than one percent (1%) (at any one time or, in the aggregate, from time
to time) of the amount of partnership, joint venture or member interests
issued on the date hereof, shall, in any such case, constitute an assignment
of this Agreement. Unless, in each instance, the prior written consent of
Seller has been obtained, any such assignment shall constitute a material
default under this Agreement and shall entitle Seller to exercise all rights
and remedies under this Agreement, at law or equity, in the case of such a
default.
22.2 Affiliate. To enable Purchaser to assign its right to take title
---------
to the Property without a change in control or substantial change in equity
ownership, Seller shall not unreasonably withhold its consent to an
assignment of Purchaser's rights under this Agreement, concurrently with
Closing, to a general or limited partnership or limited liability company in
which the Purchaser named herein is the managing general partner or Manager,
and continues to own an equity interest in assignee that does not constitute
an assignment as described in Section 22.1(b) above. Any obligations of the
Purchaser may be performed by such assignee, and the Seller agrees to accept
such performance as if it were the performance of the Purchaser. No such
assignment shall modify the named Purchaser's obligations hereunder, reduce
or limit any liability of the named Purchaser or provide for a secondary
liability or surety obligation of the named Purchaser who shall remain
primarily liable notwithstanding any liability assumed by assignee. The
foregoing shall in no event cause liability on the part of Seller for failure
to consent and Purchaser or assignee's remedy shall be limited to specific
performance.
Notwithstanding anything to the contrary set forth above or elsewhere in
this Agreement, Purchaser shall have the right (subject to the provisions of
the next sentence), in Purchaser's sole discretion (and without the need or
any requirement for obtaining Seller's consent), to assign at Closing its
rights under this Agreement to any single purpose entity whose beneficial
interest is wholly owned by SL Green Operating Partnership, L.P.
Notwithstanding the provisions of the immediately preceding sentence, in the
event Purchaser intends to make such an assignment, no such assignment shall
be effective hereunder unless Purchaser notifies Seller of the fact that such
assignment has been or will be made not more than ten (10) days after
execution and delivery by Purchaser of this Agreement. In no event shall
Seller be requuments from any party other than Seller (as for example a
lessor consent) to accommodate such assignment.
ARTICLE 23
BROKERS
-------
23.1 Purchaser's Representation. Purchaser represents and warrants to
--------------------------
Seller that it has not dealt with any broker, finder or consultant other
than Eastdil Realty Company, LLC (the "Broker"), in connection with the
transaction which is the subject of this Agreement, and that all negotiations
involving Purchaser with respect to the terms of this Agreement were
conducted by or through Broker. Purchaser further represents and warrants
that in the event any claim is made for a broker's, finder's or consultant's
commission or fee by anyone other than Broker as a result of any acts or
actions of Purchaser or its representatives with respect to the within
transaction, Purchaser, its heirs, successors and assigns do hereby agree to
indemnify and hold Seller harmless from any and all loss, liability, cost,
damage or expense with respect to such claims (including, without limitation,
reasonable attorneys' fees and disbursements) without any charge or cost to
Seller. Seller shall pay the brokerage commission to Broker in accordance
with Seller's agreement with Broker if and when title passes hereunder. This
Section shall survive the Closing or earlier termination of this Agreement.
ARTICLE 24
ESCROW
------
The parties hereto have mutually requested that Bachner, Tally, Polevoy
& Misher LLP act as escrow agent (the "Escrow Agent") for the purpose of
holding the Deposit in accordance with the terms of this Agreement and the
Escrow Letter executed by and among Seller, Purchaser and Escrow Agent
contemporaneously with the execution of this Agreement in the form of Exhibit
12 annexed hereto (the "Escrow Letter"). Purchaser recognizes that Escrow
Agent represents Seller herein and has agreed to act as Escrow Agent as an
accommodation to both parties hereto. Purchaser further acknowledges and
agrees that in the event of any dispute between the parties to this Agreement
or the Escrow Letter, Escrow Agent shall be free to continue its
representation of Seller with regard to these matters. The Deposit, together
with the interest accrued thereon, if any, shall be held by Escrow Agent
until the earlier of the Closing, or such time as Seller or Purchaser may be
entitled to a refund thereof in accordance with this Agreement. At such time
Escrow Agent shall remit said sum, together with any interest actually
accrued thereon, to the party entitled thereto in accordance with this
Agreement. At the Closing, the Deposit, together with any interest actually
accrued thereon, shall be paid to Seller. Escrow Agent shall have no
liability to Seller or Purchaser with respect to the amount of interest
earned on the Deposit while in escrow.
ARTICLE 25
MISCELLANEOUS
-------------
25.1 Merger. This Agreement constitutes the entire understanding
------
between the parties with respect to the transaction contemplated herein, and
all prior or contemporaneous oral agreements, understandings, representations
and statements, and all prior written agreements, understandings,
representations and statements are merged into this Agreement. Neither this
Agreement nor any provisions hereof may be modified, amended, discharged or
terminated except by an instrument in writing signed by the party against
which the enforcement of such modification, amendment, discharge or
termination is sought, and then only to the extent set forth in such
instrument. Unless otherwise provided herein, no provision of this Agreement
may be waived except by an instrument in writing signed by the party against
which the enforcement of such waiver is sought.
25.2 Headings. The Article, Section, Schedule and Exhibit headings
--------
used herein are for convenience only, and are not to be used in determining
the meaning of this Agreement or any part hereof.
25.3 Governing Law. This Agreement and its interpretation and
-------------
enforcement shall be governed by the laws of the State of New York without
regard to conflict of law principles.
25.4 Jurisdiction. For the purposes of any suit, action or
------------
proceeding involving this Agreement, Seller and Purchaser hereby expressly
submit to the jurisdiction of all federal and state courts sitting in the
State of New York, and consent that any order, process, notice of motion or
other application to or by any such court, or a judge thereof, may be served
within or without such court's jurisdiction by registered mail or by personal
service, provided that a reasonable time for appearance is allowed, and
Seller and Purchaser agree that such courts shall have the exclusive
jurisdiction over any such suit, action or proceeding commenced by either or
both of said parties. In furtherance of such agreement, Seller and Purchaser
agree upon the request of the other party to discontinue (or agree to the
discontinuance of) any such suit, action or proceeding pending in any other
jurisdiction.
25.5 Waiver of Venue and Inconvenient Forum Claims. Seller and
---------------------------------------------
Purchaser hereby irrevocably waive any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement brought in any federal or state court sitting
in the State of New York, and hereby further irrevocably waive any claim that
any such suit, action or proceeding is brought in any inconvenient forum.
25.6 Waiver of Jury Trial. Each of the parties hereto waives,
--------------------
irrevocably and unconditionally, any and all right to trial by jury in any
action brought on, under, or by virtue of, or relating in any way to this
Agreement or the transactions contemplated hereby, or any of the documents
executed in connection herewith, the Property, or any claims, defenses,
rights of set-off or other actions pertaining hereto or to any of the
foregoing.
25.7 Successors and Assigns. This Agreement shall be binding on the
----------------------
successors and assigns of the parties hereto.
25.8 Invalid Provisions. If any term or provision of this Agreement,
------------------
or any part of any term or provision, or the application thereof to any
person or circumstance shall to any extent be held invalid or unenforceable,
the remainder of this Agreement or the application of such term or provision
or remainder thereof to persons or circumstances other than those as to which
it is held invalid and unenforceable shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
25.9 Schedules and Exhibits. All Schedules and Exhibits which are
----------------------
annexed to this Agreement are a part of this Agreement and are incorporated
herein by reference.
25.10 No Other Parties. The provisions of this Agreement are for
----------------
the sole benefit of the parties to this Agreement and their successors and
permitted assigns, and shall not give rise to any rights by or on behalf of
anyone other than such parties, and no party is intended to be a third party
beneficiary hereof. No provisions of this Agreement, or of any of the
documents and instruments executed in connection herewith, shall be construed
as creating in any person or entity other than Purchaser and Seller and their
permitted assigns any rights of any nature whatsoever.
25.11 Interpretation. This Agreement shall be construed without
--------------
regard to any presumption or other rule requiring construction against the
party causing this Agreement to be drafted.
25.12 Counterparts; Faxed Signatures. This Agreement may be
------------------------------
executed in multiple counterparts, each of which shall, when executed, be
deemed to be an original, and all of which when taken together shall
constitute but one agreement. Each party may rely upon a faxed counterpart
of this Agreement executed and delivered by the other party as if such
counterpart were an original counterpart.
25.13 Binding Effect. This Agreement shall not become a binding
--------------
obligation upon Seller until the same has been fully executed by Purchaser
and Seller, and until a fully executed original counterpart thereof has been
delivered by Seller to Purchaser.
25.14 Recordation. Neither this Agreement, nor any other
-----------
document related hereto, nor any memorandum thereof shall be recorded, and
any such recording shall be void and of no force or effect.
25.15 Litigation Fees. In the event that any litigation arises
---------------
under this Agreement, the prevailing party (which term shall mean the party
which obtains substantially all of the relief sought by such party) shall be
entitled to recover, as a part of its judgment, reasonable attorneys' fees.
25.16 Title Omissions. Any and all of the title matters which
---------------
Purchaser shall take title to the Property subject to, as specified in this
Agreement, may be omitted by Seller in the Assignment of the Ground Lease to
be delivered to Purchaser at the Closing, provided, however, that all such
provisions so omitted shall not be in violation of any covenants contained in
the Assignment of the Ground Lease.
25.17 Defined Terms. The references to defined terms used in
-------------
this Agreement are listed in the Section of this Agreement entitled "Defined
Terms."
25.18 Singular/Plural. The use of the singular shall be deemed
---------------
to include the plural, and vice versa, whenever the context so requires.
ARTICLE 26
AFFILIATED PURCHASE AGREEMENT
-----------------------------
26.1 Affiliate Purchaser. Purchaser or an Affiliate of Purchaser (as
-------------------
hereinafter defined) is concurrently entering into agreements to purchase one
or more properties from Seller or an Affiliate of Seller (as hereinafter
defined). As used herein, the term "Affiliate of Purchaser" shall mean any
entity or person under the control of, controlled by or under common control
with Purchaser. As used herein, the term "Affiliate of Seller" shall mean
any entity or person under the control of, controlled by or under common
control with Seller.
26.2 Affiliate Properties. The properties that Purchaser or an
--------------------
Affiliate of Purchaser and Seller or an Affiliate of Seller have entered into
agreements to sell are:
(i) 1466 Broadway, New York, N.Y.; and
(ii) 25 West 43rd Street, New York, N.Y. or a leasehold estate
therein (collectively "Affiliate Properties").
26.3 Rights on Purchaser Default. If Purchaser or an Affiliate of
---------------------------
Purchaser has entered into an agreement of sale and purchase with Seller or
an Affiliate of Seller pursuant to which Purchaser or an Affiliate of
Purchaser has agreed to purchase one or more Affiliate Properties (an
"Affiliate Contract"), and if Purchaser or Affiliate of Purchaser shall
default under the Affiliate Contract, or if for any other reason (other than
Seller or Affiliate of Seller's default) Purchaser or Affiliate of Purchaser
fails to acquire the property to be conveyed thereunder pursuant to the terms
thereof, or in the event Purchaser defaults under the Affiliate Contract or
otherwise is responsible without just cause for a delay of the closing under
the Affiliate Contract, then and in such event Seller, shall have the
following rights, which it may exercise in its sole and absolute discretion
without prior notice, at any time up to and including the completion of the
Closing (under this Agreement):
26.3.1 Seller may elect to terminate this Agreement (i) with the same
effect as if it were terminated for Purchaser's default
hereunder if the reason for Purchaser's failure to close under
the Affiliate Contract is Purchaser's or Affiliate of
Purchaser's default thereunder, or (ii) with the same effect
as if it were terminated pursuant to Section 11.1.1 hereof, if
the reason for Purchaser's or Affiliate of Purchaser's failure
to close under the Affiliate Contract is other than
Purchaser's Default thereunder; or
26.3.2 In the event Seller does not elect to terminate this Agreement
pursuant to subsection 26.3.1, or if Purchaser defaults under
the Affiliate Contract or otherwise is responsible without
just cause for a delay of the closing under the Affiliate
Contract, Seller may elect to adjourn the Closing hereunder to
a date which will be concurrent with any date to which the
closing under the Affiliate Contract may have been adjourned
so as to coordinate both closings; or
26.3.3 Seller may elect to proceed with the Closing (hereunder),
notwithstanding that the closing under the Affiliate Contract
has not occurred or may not thereafter occur.
26.4 From the date hereof and continuing through the period which is six
(6) months following the Closing, Seller shall make available to Ernst &
Young (as agent for Purchaser) at the offices of Seller or Seller's agent all
of the books and records with respect to the operation of the Property with
respect to calendar year 1997 and that portion of calendar year 1998
preceding any such investigation or audit during normal business hours.
During such period, Ernst & Young, at Purchaser's sole cost and expense, may
inspect and audit such books and records with respect to calendar year 1997
(and portion of 1998) and, in this regard, Seller shall cooperate (at no cost
to Seller) with Purchaser in Purchaser's inspection and audit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
of Sale and Purchase as of the date first above written.
GRAYBAR BUILDING COMPANY,
a New York general partnership
By: 9179 Equities Associates,
a New York general partnership
By:___________________________
Leona M. Helmsley
General Partner
SL GREEN OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: SL GREEN REALTY CORP.,
a Maryland corporation, its general
partner
By:___________________________
Name:
Title:
AGREEMENT OF SALE AND PURCHASE
between
1466 BROADWAY ASSOCIATES,
SELLER
and
SL GREEN OPERATING PARTNERSHIP, L.P.,
PURCHASER
Date: January __, 1998
PREMISES:
1466 BROADWAY
NEW YORK, NEW YORK
TABLE OF CONTENTS
Page
----
ARTICLE 1 INCLUSIONS IN SALE AND EXCLUSIONS . . . . . . . . . . . . . . . . 1
ARTICLE 2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Payment of Purchase Price. . . . . . . . . . . . . . . . . . 3
2.2.1 Deposit . . . . . . . . . . . . . . . . . . . . . 3
2.2.2 Payment at Closing . . . . . . . . . . . . . . . . 3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 4
3.1 Representations of Seller . . . . . . . . . . . . . . . . . 4
3.1.1 Leases . . . . . . . . . . . . . . . . . . . . . . 4
3.1.2 Service and Maintenance Agreements . . . . . . . . 5
3.1.3 Brokerage Agreements . . . . . . . . . . . . . . . 6
3.1.4 Employees . . . . . . . . . . . . . . . . . . . . 6
3.1.5 Intentionally Omitted . . . . . . . . . . . . . . 7
3.1.6 No Foreign Person . . . . . . . . . . . . . . . . 7
3.1.7 Incomplete Landlord's Work and Unpaid
Work Allowances . . . . . . . . . . . . . . . . 7
3.1.8 Litigation. . . . . . . . . . . . . . . . . . . . 7
3.2 Reliance upon Document Binders . . . . . . . . . . . . . . . 7
3.3 Authority and Binding Effect; No Breach or Prohibition. . . 8
3.4 Purchaser's Knowledge; Disclosure . . . . . . . . . . . . . 8
3.5 Disclaimer of Representations and Warranties . . . . . . . . 9
3.6 Right to Adjourn Closing. . . . . . . . . . . . . . . . . . 9
ARTICLE 4 STATE OF TITLE OF PROPERTY . . . . . . . . . . . . . . . . . . . 9
4.1 Permitted Encumbrances. . . . . . . . . . . . . . . . . . . 9
ARTICLE 5 TITLE INSURANCE AND ABILITY OF SELLER TO CONVEY . . . . . . . . 12
5.1 Title Insurance . . . . . . . . . . . . . . . . . . . . . 12
5.2 Title Objections . . . . . . . . . . . . . . . . . . . . . 13
5.3 No Further Action. . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 6 CLOSING COSTS . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1. Purchaser's Obligations . . . . . . . . . . . . . . . . . 15
6.2. Seller's Obligations . . . . . . . . . . . . . . . . . . . 15
6.3. Other Costs . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 7 ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND LEASES . . . . . . . 16
ARTICLE 8 REAL ESTATE TAX PROTESTS . . . . . . . . . . . . . . . . . . . 16
ARTICLE 9 ACKNOWLEDGMENTS OF PURCHASER; CONDITION OF PROPERTY . . . . . . 17
9.1 Analysis and Evaluation of the Property. . . . . . . . . 17
9.2 No Effect on Purchaser's Obligations . . . . . . . . . . . 17
9.3 No Other Representations1 . . . . . . . . . . . . . . . . 18
9.4 Outside Representations . . . . . . . . . . . . . . . . . 19
9.5 Environmental Investigation of the Property. . . . . . . . 19
9.6 Confidentiality . . . . . . . . . . . . . . . . . . . . . 19
9.7 Limited Disclosure . . . . . . . . . . . . . . . . . . . . 20
9.8 Return of Information . . . . . . . . . . . . . . . . . . 20
9.9 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 10 OPERATIONS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . 21
10.1 Continued Operations . . . . . . . . . . . . . . . . . . . 21
10.2 Access to the Property . . . . . . . . . . . . . . . . . . 22
10.3 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.4 Tenant Estoppel Certificates. . . . . . . . . . . . . . . 23
ARTICLE 11 CASUALTY AND EMINENT DOMAIN . . . . . . . . . . . . . . . . . 25
11.1 Casualty and Risk of Loss. . . . . . . . . . . . . . . . . 25
11.2 Eminent Domain. . . . . . . . . . . . . . . . . . . . . . 27
11.3 Survival. . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 12 ASSESSMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 13 CLOSING ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . 28
13.1 Adjustments and Prorations . . . . . . . . . . . . . . . . 28
13.1.1 Fixed Rents . . . . . . . . . . . . . . . . . . 29
13.1.2 Overage Rent . . . . . . . . . . . . . . . . . 30
13.1.3 Taxes and Assessments . . . . . . . . . . . . . 35
13.1.4 Deposits . . . . . . . . . . . . . . . . . . . 35
13.1.5 Water and Sewer Charges . . . . . . . . . . . . 35
13.1.6 License Fees . . . . . . . . . . . . . . . . . 36
13.1.7 Service and Maintenance Charges . . . . . . . . 36
13.1.8 Vault Fees . . . . . . . . . . . . . . . . . . 36
13.1.9 Utilities . . . . . . . . . . . . . . . . . . . 36
13.1.10 Inventory . . . . . . . . . . . . . . . . . . . 36
13.1.11 Tenant Security Deposits . . . . . .. 37
13.1.12 Fuel . . . . . . . . . . . . . . . . . . . . . 38
13.1.13 Employee Compensation . . . . . . . . . . . . . 38
13.1.14 Tenant Improvement Work at Landlord's Cost . . 39
13.1.15 Costs of Work to be Paid or Reimbursed to
Tenants. . . . . . . . . . . . . . . . . . . . 39
13.1.16 Leasing Commissions . . . . . . . . . . . . . . 39
13.1.17 Insurance Premiums . . . . . . . . . . . . . . 40
13.1.18 Intentionally Omitted . . . . . . . . . . . . . 40
13.1.19 Other Adjustments . . . . . . . . . . . . . . . 40
13.1.20 Survival . . . . . . . . . . . . . . . . . . . 40
13.2 Determination of Closing Adjustments. . . . . . . . . . . 40
13.3 Net Apportionments and Adjustments. . . . . . . . . . . . 40
13.3.1 Due Seller . . . . . . . . . . . . . . . . . . 40
13.3.2 Due Purchaser . . . . . . . . . . . . . . . . . 41
13.4 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 14 CLOSING DOCUMENTS; OBLIGATIONS OF PURCHASERAND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 41
14.1 Seller's Obligations at Closing. . . . . . . . . . . . . . . 41
14.2 Purchaser's Obligations at Closing . . . . . . . . . . . . . 43
ARTICLE 15 VIOLATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 16 SALES TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 17 UNPAID TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 18 THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 46
18.1 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . 46
18.1.1 Location and Date of Closing . . . . . . . . . . 46
18.1.2 Delivery of Documents. . . . . . . . . . . . . . 47
18.2 Time of Essence . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 19 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 20 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
20.1 Purchaser's Default. . . . . . . . . . . . . . . . . . . . 49
20.2 Seller's Default. . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 21 CONDITIONS; SURVIVAL . . . . . . . . . . . . . . . . . . . . . 50
21.1 Conditions. . . . . . . . . . . . . . . . . . . . . . . . . 50
21.2 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 22 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . 51
22.1 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 23 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
23.1 Purchaser's Representation. . . . . . . . . . . . . . . . . 53
ARTICLE 24 ESCROW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 25 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 54
25.1 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
25.2 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 55
25.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 55
25.4 Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . 55
25.5 Waiver of Venue and Inconvenient Forum Claims. . . . . . . 56
25.6 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . 56
25.7 Successors and Assigns. . . . . . . . . . . . . . . . . . . 56
25.8 Invalid Provisions. . . . . . . . . . . . . . . . . . . . . 56
25.9 Schedules and Exhibits. . . . . . . . . . . . . . . . . . . 56
25.10 No Other Parties. . . . . . . . . . . . . . . . . . . . . . 57
25.11 Interpretation. . . . . . . . . . . . . . . . . . . . . . . 57
25.12 Counterparts; Faxed Signatures. . . . . . . . . . . . . . . 57
25.13 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . 57
25.14 Recordation. . . . . . . . . . . . . . . . . . . . . . . . 57
25.15 Litigation Fees . . . . . . . . . . . . . . . . . . . . . . 58
25.16 Title Omissions . . . . . . . . . . . . . . . . . . . . . . 58
25.17 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 58
25.18 Singular/Plural . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 26 AFFILIATED PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . 58
26.1 Affiliate Purchaser . . . . . . . . . . . . . . . . . . . . 58
26.2 Affiliate Properties . . . . . . . . . . . . . . . . . . . . 59
26.3 Rights on Purchaser Default . . . . . . . . . . . . . . . . 59
SCHEDULES
A Description of Land
B Schedule of Leases
C Intentionally Omitted
D Rent Roll
E Schedule of Service and Maintenance
Agreements
F-1 Brokerage Agreements
F-2 Unpaid Earned Commissions under the Brokerage Agreements
G-1 Employees of Seller or Seller's Managing Agent at the Property
G-2 Written Agreements Relating to Building Employees
H Description of Contract Survey/Survey Exceptions
I Easements, Covenants and Agreements
of Record
J Title Commitment Description (Contract Title Report)
K Title Exceptions in Contract Title Report to be Omitted by Seller
L-1 Form of Tenant Estoppel Statement
L-2 Form of Seller's Estoppel Statement
M-1 Incomplete Landlord's Work
M-2 Unpaid Work Allowances
N Pending Litigation Not Covered by Insurance
EXHIBITS
1 Deed
2 Bill of Sale
3 Assignment and Assumption of Service,
Maintenance and Concessionaire
Agreements
4 Assignment and Assumption of Landlord's Interest in Leases
5 Assignment of Licenses and/or Permits
6 Assignment of Warranties and Guarantees
7 Post-Closing Adjustment Letter
8 FIRPTA Certificate
9 Tenant Notice Letter
10 Assignment and Assumption of Brokerage Agreements
11 Escrow Letter
INITIALLED BINDERS
(a) Lease Binders
(b) Service and Maintenance Agreement Binders
(c) Brokerage Agreement Binders
LIST OF DEFINED TERMS
DEFINED TERM PAGE
Acceptable Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Adjustment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Brokerage Agreement Binders . . . . . . . . . . . . . . . . . . . . . . . . 6
Brokerage Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
CAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Cash Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Contract Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Contract Title Report . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Deed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Document Binders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
escalation rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Escrow Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Federal Reserve Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Fixed Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Form TP-584 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . 10
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lease Binders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Leasing Cutoff Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
material part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Maximum Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
minor or immaterial part . . . . . . . . . . . . . . . . . . . . . . . . 28
Optional Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Overage Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
percentage rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Post-Closing Adjustment Letter . . . . . . . . . . . . . . . . . . . . . 43
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reletting Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Rent Roll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Required Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
RPT Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Schedule of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Seller's Article 10 Amount . . . . . . . . . . . . . . . . . . . . . . . 21
Seller's Estoppel Statement . . . . . . . . . . . . . . . . . . . . . . . 24
Service and Maintenance Agreement Binders . . . . . . . . . . . . . . . . . 6
Service and Maintenance Agreements . . . . . . . . . . . . . . . . . . . . 6
Subsequent Title Objection . . . . . . . . . . . . . . . . . . . . . . . 12
Tax Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tenant Estoppel Statement . . . . . . . . . . . . . . . . . . . . . . . . 23
Tenant Notice Letters . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Title Objections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
AGREEMENT OF SALE AND PURCHASE (this "Agreement") is made and entered
into as of January 20, 1998, by and between 1466 BROADWAY ASSOCIATES, a
New York general partnership, having an office c/o Helmsley Enterprises,
Inc., 230 Park Avenue, New York, New York 10169 ("Seller"), and SL GREEN
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an office
at 70 West 36th Street, New York, New York 10018 ("Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
Seller hereby agrees to sell and convey to Purchaser, and Purchaser
hereby agrees to purchase from Seller, upon the terms and conditions
hereinafter set forth, the "Property" (as such term is defined in Article 1
hereof).
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, and subject to the terms,
provisions and conditions hereof, Seller and Purchaser hereby covenant and
agree as follows:
ARTICLE 1
INCLUSIONS IN SALE AND EXCLUSIONS
----------------------------------
1.1 The term "Property" shall mean the following:
1.1.1 The land described in Schedule "A" annexed hereto (the
"Land").
1.1.2 All of Seller's right, title and interest in and to the
buildings, structures and improvements, together with the tenements,
hereditaments and appurtenances thereto belonging or in any way appertaining,
now erected or situate on the Land (collectively, the "Building"). The
Building's street address is 1466 Broadway (also known as 152 West 42nd
Street), New York, New York.
1.1.3 All of Seller's right, title and interest in and to the
fixtures, equipment, machinery and personal property used in connection with
the operation of the Building and owned by Seller, and not being the property
of any space tenant or occupant at the Building, manager or leasing agent,
or any other third party.
1.1.4 All right, title and interest of Seller, if any, in and
to any land lying in the bed of any street, road or avenue, opened or
proposed, in front of or adjoining the Land, to the center line thereof, and
any strips and gores adjacent to the Land, and all right, title and interest
of Seller in and to any award made or to be made in lieu thereof and in and
to any unpaid award for damage to the Land and Building by reason of change
of grade of any street.
1.1.5 All space leases now or hereafter covering offices,
stores and other spaces situate at or within the Building (the "Leases"), and
all of the right, title and interest of the landlord under the Leases, and,
subject to the provisions of Section 13.1.11 hereof, all security deposits
paid or deposited by space tenants or occupants in respect of Leases
(individually, a "Tenant" and collectively, the "Tenants"), applicable to
Tenants in possession under the Leases at "Closing" (as such term is defined
in Section 13.1 hereof), which shall not have been applied in accordance with
the provisions of such Leases.
1.2 The term "Property" shall exclude the following:
1.2.1 Any existing cause of action, or damage claim, of Seller.
1.2.2 All rights and interests of Seller as owner of the
Property arising prior to the Closing (including but not limited to, tax
refunds, casualty or condemnation proceeds, applied tenant deposits, utility
deposits, rent in arrears and rent escalations) attributable to periods prior
to Closing.
ARTICLE 2
PURCHASE PRICE
--------------
2.1 Purchase Price. The purchase price for the Property to be paid by
--------------
Purchaser to Seller shall be the amount of Sixty-Four Million Dollars
($64,000,000.00) (the "Purchase Price").
2.2 Payment of Purchase Price. Purchaser agrees to pay the Purchase
-------------------------
Price to Seller as follows:
2.2.1 Deposit. Six Million One Hundred Fifty Thousand Dollars
-------
($6,150,000.00) (the "Deposit") paid simultaneously herewith by Purchaser's
certified check or cashier's check, subject to collection, in the amount of
such sum payable to the direct order of "Bachner, Tally, Polevoy & Misher
LLP, as escrow agent," drawn on a bank which is a member of The New York
Clearing House Association. In the event such check fails to be paid by the
bank upon which it is drawn on first presentment, other than as a result of
an error of the drawee bank, then any rights of Purchaser hereunder may be
terminated by notice given by Seller to Purchaser. The proceeds of such
Deposit and all interest accrued thereon shall be held in escrow and shall be
payable in accordance with Article 24 hereof.
2.2.2 Payment at Closing. Fifty-Seven Million Eight Hundred
------------------
Fifty Thousand Dollars ($57,850,000.00) (the "Cash Balance") shall be paid by
Purchaser to Seller at the Closing. The Cash Balance shall be paid by wire
transfer of immediate clearance "Federal Reserve Funds" (as such term is
hereinafter defined) to such account and bank as Seller may, in writing,
designate, provided that Seller may designate on one (1) business days notice
that the Cash Balance be wire transferred to not more than three (3)
designated recipients. As used herein, the term "Federal Reserve Funds"
shall be deemed to mean the receipt by a bank or banks in the continental
United States designated by Seller of U.S. dollars in form that does not
require further clearance, and may be applied at the direction of Seller by
such recipient bank or banks on the day of receipt of advice that such funds
have been wire transferred. The description of the manner in which such
funds are to be transmitted and the number of designated recipients thereof
shall apply with respect to the Cash Balance as well as to any other funds to
be paid to Seller hereunder, including but not limited to any funds to be
paid to Seller as a result of the adjustments to be made pursuant to
Article 13 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIE
------------------------------
3.1 Representations of Seller. Seller hereby represents and warrants
-------------------------
to Purchaser that the following facts and conditions exist on the date
hereof, to the best of Seller's knowledge:
3.1.1 Leases. (a) The only Leases as of the date hereof are
------
those listed on Schedule "B" annexed hereto (the "Schedule of Leases"). A
copy of each of the Leases set forth on Schedule "B" has been reviewed by
Purchaser and/or its counsel and delivered by Seller to Purchaser
simultaneously herewith in velobound binders (the "Lease Binders") and
initialed by Seller and Purchaser and/or their respective counsel. No
representation is made as to (i) possible assignments of any Leases not
consented to by Seller, or (ii) any subleases or underleases.
(b) Seller does not warrant that any particular Lease will be in
force or effect at the Closing or that the Tenants will have performed their
obligations thereunder. The termination of any Lease prior to the Closing
shall not affect the obligations of Purchaser under this Agreement, or
entitle Purchaser to an abatement of or credit against the Cash Balance, or
give rise to any other claim on the part of Purchaser.
(c) If any space in the Building is vacant on the Closing Date,
Purchaser shall accept the Property subject to such vacancy, provided that
the vacancy was not permitted or created by Seller in violation of any
restrictions contained in this Agreement.
(d) The rent roll attached hereto as Schedule "D" (the "Rent
Roll") contains a list of:
(i) all Tenants of the Property as of the date hereof;
(ii) the premises in the Building leased to each Tenant;
(iii) the base rent billed to Tenants during the month of
December, 1997 and additional rent (exclusive of
real estate tax escalation amounts) billed to
Tenants during the month of December, 1997; and
(iv) the security deposit, if any, held by Seller with
respect to each Tenant as of October 31, 1997.
To the best of Seller's knowledge, the information contained on the Rent Roll
is true and correct in all material respects. With respect to any monetary
amounts described on the Rent Roll, the term "true and correct in all
material respects" shall be construed to mean that, to the extent the Rent
Roll overstates or understates the actual amounts of such items, the net
adverse economic effect on Purchaser of such understatements or
overstatements in the aggregate does not exceed an amount equal to four (4%)
percent of the Purchase Price.
3.1.2 Service and Maintenance Agreements. The only service and
----------------------------------
maintenance agreements affecting the Land or Building as of the date hereof
are those listed on Schedule "E" annexed hereto (the "Service and Maintenance
Agreements"). A copy of each the Service and Maintenance Agreements set
forth on Schedule "E" has been reviewed by Purchaser and/or its counsel and
delivered by Seller to Purchaser simultaneously herewith in velobound binders
(the "Service and Maintenance Agreement Binders") and initialed by Seller
and Purchaser and/or their respective counsel.
3.1.3 Brokerage Agreements. The only written agreements for
--------------------
the payment of leasing commissions in connection with the Leases as of the
date hereof are those listed on Schedule "F-1" annexed hereto (such
agreements, together with any additional such agreements made in accordance
with the provisions of this Agreement, collectively, the "Brokerage
Agreements"). A copy of each existing Brokerage Agreement has been delivered
by Seller to Purchaser simultaneously herewith in velobound binders (the
"Brokerage Agreement Binders") and initialed by Seller and Purchaser and/or
their respective counsel. Schedule "F-2" annexed hereto sets forth a list of
all (i) commissions which have been earned and are payable under the
Brokerage Agreements prior to the date of this Agreement which have not been
paid, and (ii) any commissions already earned under the Brokerage Agreements
and which are payable in one or more installments after the date of this
Agreement. Brokerage commissions payable under the Brokerage Agreements
shall be adjusted and prorated between Seller and Purchaser as provided in
Article 13 hereof.
3.1.4 Employees. The only employees of Seller or Seller's
---------
managing agent engaged in the operation or maintenance of the Property are
listed on Schedule "G-1" annexed hereto. Schedule "G-1" also sets forth the
position, length of employment and current salary or wage rate of each such
employee as of the date of this Agreement. Except as set forth on Schedule
"G-2" annexed hereto and except with respect to City Wide Maintenance (as
noted in Schedule G-1), Seller has no written agreements relating to Building
employees, including, without limitation, union agreements, collective
bargaining agreements, employee benefit plans, and/or employment agreements
covering Building employees.
3.1.5 Intentionally Omitted.
---------------------
3.1.6 No Foreign Person. Seller is not a "foreign person" as
-----------------
such term is defined in Section 1445 of the Internal Revenue Code of 1954, as
amended (the "Code"), nor will the sale transaction herein contemplated be
subject to Section 897 of the Code or to the withholding requirements of
Section 1445 of the Code.
3.1.7 Incomplete Landlord's Work and Unpaid Work Allowances.
-----------------------------------------------------
Schedule "M-1" annexed hereto sets forth a list of items of construction or
leasehold improvement work remaining to be performed by Seller with respect
to the occupancy of any Tenant pursuant to the provisions of such Tenant's
Lease. Schedule "M-2" annexed hereto sets forth a list of remaining
contributions to be made by Seller with respect to construction or leasehold
improvement work being performed or which had been performed or remains to be
performed by Tenant for its occupancy pursuant to the provisions of such
Tenant's Lease.
3.1.8 Litigation. Seller has received no written notice of
-----------
any (i) pending condemnation or similar proceeding affecting the Property or
any portion thereof, or (ii) pending legal action, suit, arbitration, order
or judgment, government investigation or proceeding, in any case affecting
the Property or Seller (but not the partners, members or principals of
Seller, as the case may be) except for (x) claims and actions which are
covered by insurance and (y) those actions described on Schedule "N" annexed
hereto.
3.2 Reliance upon Document Binders. The Lease Binders, Brokerage
-------------------------------
Agreement Binders and Service and Maintenance Agreement Binders are
hereinafter collectively called the "Document Binders." The instruments set
forth in the Document Binders constitute the sole reliance by Purchaser with
respect to the matters therein set forth and not the Schedules and Exhibits
annexed hereto, Purchaser acknowledging that, in the event of any conflict
between the matters set forth in any instrument in a Document Binder and any
representation contained in this Agreement or Schedules and Exhibits annexed
hereto, Purchaser has relied solely upon the instrument as set forth in the
Document Binders in entering into this Agreement.
3.3 Authority and Binding Effect; No Breach or Prohibition. Each party
------------------------------------------------------
hereto represents to the other that each person or entity executing this
Agreement by or on behalf of the representing party has the authority to act
on its behalf and to bind it, and that each person or entity executing any
closing documents by or on its behalf, has been or will be duly authorized to
act on its behalf, and that the performance of this Agreement will not be in
violation of its by-laws, charter, operating or partnership agreement, or any
law, ordinance, rule, regulation or order of any governmental body having
jurisdiction, or the provisions of any agreements to which it is a party or
by the terms of which it is bound, and, at the Closing, each party shall
furnish to the other party and to the "Title Company" (as such term is
defined in Section 5.1 hereof), reasonably satisfactory evidence of such
authority and approval. This Section shall survive the Closing.
3.4 Purchaser's Knowledge; Disclosure. To the extent that Purchaser
---------------------------------
has, subsequent to the date hereof, actual knowledge of any default or any
misrepresentation or incorrect warranty of Seller made in this Agreement or
in the Document Binders, Purchaser shall promptly notify Seller of same.
Reference is made to Section 21.1 hereof with respect to the effect of
Purchaser's knowledge of any misrepresentation or incorrect warranty at or
before the Closing Date.
3.5 Disclaimer of Representations and Warranties. Purchaser
--------------------------------------------
acknowledges that except as expressly provided herein, neither Seller nor
anyone acting for or on behalf of Seller has made any representation,
warranty, or promise to Purchaser concerning: (a) the physical aspect and
condition of any portion of the Property; (b) the feasibility or desirability
of the purchase of the Property; (c) the market status, projected income from
or development expenses of the Property; (d) the Property's compliance or
non-compliance with any requirements of laws; or (e) any other matter
whatsoever with respect to the Property (except as contained herein), express
or implied, including, by way of description but not limitation, those of
fitness for a particular purpose, tenantability, habitability and use; and
that all matters concerning the Property are to be independently verified by
Purchaser. Purchaser acknowledges that except as otherwise expressly
provided in this Agreement, it is purchasing the Property in its currently
existing physical condition and in its currently existing state of repair.
3.6 Right to Adjourn Closing. Seller shall have the right to adjourn
------------------------
the Closing for up to ninety (90) days for the purpose of curing any default,
misrepresentation or incorrect warranty.
ARTICLE 4
STATE OF TITLE OF PROPERTY
--------------------------
4.1 Permitted Encumbrances. Purchaser shall accept title to the
----------------------
Property subject to the following (the "Permitted Encumbrances"):
4.1.1 Any and all present and future zoning restrictions,
regulations, requirements, laws, ordinances, resolutions and orders of any
city, town or village in which the Property lies, and of all boards, bureaus,
commissions, departments and bodies of any municipal, county, state or
federal sovereign or other governmental authority now or hereafter having or
acquiring jurisdiction of the Property or the use and improvement thereof
(such authority is herein called a "Governmental Authority").
4.1.2 The state of facts shown on the survey prepared by Earl
B. Lovell - S.P. Belcher, Inc. described on Schedule "H" annexed hereto (the
"Contract Survey"), and the survey exceptions listed on Schedule "H" annexed
hereto, and any other state of facts shown on an accurate survey of the
Property, or any part thereof, provided such other state of facts does not
materially adversely affect Purchaser's ability to use the Building for its
present uses.
4.1.3 The Leases listed on Schedule "B" annexed hereto, and any
extensions, renewals or modifications thereof, or new Leases entered into in
accordance with this Agreement. Nothing contained in this Agreement shall be
deemed to prohibit Seller from terminating any tenancy by reason of default
of a Tenant under its Lease, from bringing proceedings to dispossess any
Tenant, or applying a Tenant's security deposit as allowed under its Lease.
4.1.4 The covenants, restrictions, easements, and agreements of
record listed on Schedule "I" annexed hereto, and such other covenants,
restrictions, easements and agreements of record, if any, affecting the
Property, or any part thereof, provided such other covenants, restrictions,
easements and agreements of record are not violated by existing structures,
and do not materially adversely affect the present use of the Building.
4.1.5 Any state of facts a physical inspection of the Property
would show.
4.1.6 The Service and Maintenance Agreements set forth on
Schedule "E" annexed hereto, and any renewals thereof, or substitutions
therefor, or additions thereto, provided such renewals, substitutions and
additions are made in the ordinary course of Seller's business.
4.1.7 All violations and/or notes or notices of violations of
law or municipal ordinances, orders, or requirements noted in or issued by
any Governmental Authority having jurisdiction against or affecting the
Property.
4.1.8 Any mechanic's lien or other lien which is the obligation
of a Tenant under any Lease to bond or remove of record.
4.1.9 Real estate taxes, assessments, Business Improvement
District charges and like charges for the fiscal year in which the Closing
occurs and all fiscal years thereafter.
4.1.10 Any exception to coverage by the Title Company, provided
that the Title Company insures same against collection out of or enforcement
against the Property.
4.1.11 Any easement or right of use created in favor of any
public utility company for electricity, steam, gas, telephone, water or other
service, and the right to install, use, maintain, repair and replace wires,
cables, terminal boxes, lines, service connections, poles, mains, facilities
and the like, upon, under and across the Property.
4.1.12 The printed exceptions contained in the form of title
insurance policy then issued by the Title Company which shall insure
Purchaser's title.
4.1.13 Possible lack of right to maintain vaults, fences retaining
walls, chutes, cornices and other installations encroaching beyond the
property line and possible variance between the record description and the
tax map.
ARTICLE 5
TITLE INSURANCE AND ABILITY OF SELLER TO CONVEY
-----------------------------------------------
5.1 Title Insurance. Purchaser agrees to make, promptly after the
---------------
signing hereof, application for a title insurance policy directly from
Chicago Title Insurance Company or Ticor Title Guarantee Company or Ticor
Title Insurance Company (the "Title Company"), and to purchase any fee title
insurance policy obtained by Purchaser in connection with the acquisition of
the Property directly from the Title Company, provided however, Purchaser may
obtain a fee title policy conditioned upon coinsurance of fifty (50%) percent
of the insured amount with each of Chicago Title Insurance Company and Ticor
Title Insurance Company. Purchaser acknowledges receipt of a copy of the
title report described in Schedule "J" annexed hereto (the "Contract Title
Report"). Purchaser acknowledges and agrees that Purchaser has no objection
to the state of title set forth in the Contract Title Report and the Contract
Survey except that, at or before the Closing, Seller shall cause the title
exceptions listed on Schedule "K" annexed hereto to be omitted as exceptions
to title by bonding, satisfaction, affirmative insurance against collection,
or otherwise. The Permitted Encumbrances shall remain and Purchaser shall be
obligated to accept title subject to same. With respect to any continuation
of the Contract Title Report or an updated Contract Survey, Purchaser shall
deliver to Seller's attorneys, Bachner, Tally, Polevoy & Misher LLP,
380 Madison Avenue, New York, New York 10017, Attention: Martin D. Polevoy,
Esq., a copy of such continuation or updated survey together with a written
statement by Purchaser of any objections to title which have appeared for the
first time in such continuation or on such updated survey (a "Subsequent
Title Objection"), within ten (10) days of receipt of such continuation or
updated survey, but in no event later than fifteen (15) days prior to the
Closing Date, unless such change of circumstances occurred within such
fifteen (15) day period. The failure by Purchaser to deliver any of the
aforementioned documents to Seller's counsel within the time period specified
in this Section 5.1 shall constitute a waiver by Purchaser of any and all
objections that may arise with respect to matters contained in such
documents. In the event Purchaser sends a written statement to Seller
setting forth one or more Subsequent Title Objections which Seller is unable
to remedy prior to the Closing Date, Purchaser hereby grants to Seller a
reasonable adjournment of the Closing Date during which time Seller may
attempt to remedy same for a period not to exceed ninety (90) days.
5.2 Title Objections. If there are any liens, charges, easements,
----------------
agreements of record, encumbrances or other objections to title, other than
the Permitted Encumbrances and Subsequent Title Objections (which Purchaser
agrees to take title subject to) which are not waived in accordance with the
provisions of Section 5.1 (collectively, "Title Objections"), which (i) were
caused by, resulted from or arose out of a grant by Seller to any person or
entity of a mortgage or other security interest affecting the Property, or
the performance of work on behalf of Seller upon all or any portion of the
Property, then Seller shall remove such Title Objections; or (ii) are not of
the type described in clause (i) of this sentence, but are removable by the
payment of an ascertainable sum not to exceed in the aggregate $250,000.00
(the "Maximum Amount"), then Seller shall cause such Title Objections to be
removed. If Seller fails to remove any Title Objection(s) in accordance with
the provisions of the immediately preceding sentence, or if there exist any
Title Objection(s) which Seller is not obligated to remove pursuant to clause
(ii) of the immediately preceding sentence because the payment of funds in
excess of the Maximum Amount would be required to cure the same, Purchaser,
nevertheless, may elect (at or prior to Closing) to consummate the
transaction provided for herein subject to any such Title Objection(s) as may
exist as of the Closing Date, with a credit allocated against the Cash
Balance payable at the Closing equal to the sum necessary to remove such
Title Objection(s), not to exceed the Maximum Amount (in the event of a Title
Objection of the type described in clause (ii) of the immediately preceding
sentence); provided, however, if Purchaser makes such election, Purchaser
shall not be entitled to any other credit, nor shall Seller bear any further
liability, with respect to any Title Objection(s) of the type described in
clause (ii) of the immediately preceding sentence, but Seller shall remain
fully liable for the cost of removing any Title Objection(s) of the type
described in clause (i) of the immediately preceding sentence. If Purchaser
shall not so elect, Purchaser may terminate this Agreement and Seller's sole
liability thereafter shall be to cause the Deposit, together with any
interest earned thereon while in escrow, to be refunded to Purchaser, and,
upon the return of the Deposit and any such interest, this Agreement shall be
terminated, and the parties hereto shall be relieved of all further
obligations and liability under this Agreement, other than with respect to
the provisions of this Agreement which expressly survive a termination of
this Agreement.
5.3 No Further Action. Except as expressly set forth in Sections 5.1
------------------
and 5.2 hereof, nothing contained in this Agreement shall be deemed to
require Seller to take or bring any action or proceeding or any other steps
to remove any Title Objections, or to expend any moneys therefor, nor shall
Purchaser have any right of action against Seller, at law or in equity, for
Seller's inability to convey title in accordance with the terms of this
Agreement.
ARTICLE 6
CLOSING COSTS
-------------
6.1. Purchaser's Obligations. Purchaser shall pay the costs of
-----------------------
examination of title and any owner's policy of title insurance to be issued
insuring Purchaser's title to the Property, as well as all other title
charges, survey fees, and any and all other costs or expenses incident to the
recordation of the "Deed" (as hereinafter defined).
6.2. Seller's Obligations. Seller shall pay the following amounts
--------------------
payable in connection with the transfer of the Deed:
(i) the amount imposed pursuant to Article 31 of the New York
State Tax Law (the "Tax Law"); and
(ii) the amount due in connection with the Real Property
Transfer Tax imposed by Title 11 of Chapter 21 of the
Administrative Code of the City of New York.
6.3. Other Costs. All other closing costs shall be allocated to and
-----------
paid by Seller and Purchaser in accordance with the manner in which such
costs are customarily borne by such parties in sales of similar property in
New York County, State of New York; provided, however, that each party shall
bear its own attorneys' fees. Any dispute between Seller and Purchaser as to
which party customarily bears any such closing cost (other than either
party's own attorney's fees) may be submitted by either party for resolution
to the president of the Real Estate Board of New York, Inc., whose
determination shall be binding upon the parties, provided, however, that in
no event shall the Closing Date be adjourned by reason of the submission of
any such dispute to the Real Estate Board of New York, Inc.
ARTICLE 7
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND LEASES
---------------------------------------------------
At the Closing, Seller shall assign to Purchaser and Purchaser hereby
agrees to assume as of the Closing, all of the Leases, Brokerage Agreements,
and Service and Maintenance Agreements, by execution of the respective
assignments of the same as provided for in Article 14 hereof. This Article
shall survive the Closing.
ARTICLE 8
REAL ESTATE TAX PROTESTS
------------------------
All real estate assessment protests and proceedings affecting the
Property for the tax year in which title closes and prior years, if any, will
be prosecuted under Seller's direction and control. In the event of any
reduction in the assessed valuation of the Property for any such fiscal year,
the net amount of any tax savings, shall (a) with respect to fiscal years
ending prior to the Closing, be payable to Seller; and (b) with respect to
the fiscal year in which the Closing shall occur, after deduction of expenses
and attorneys' fees, be adjusted between Seller and Purchaser as of the
"Adjustment Date" (as defined in Section 13.1), in each instance net of sums
due to Tenants, which sums shall be paid to each Tenant entitled to same. If
a reduction in the assessed value of the Property is granted for a fiscal
year in or prior to the year in which title closes, and such reduction is in
the form of a credit for taxes payable at or after Closing, Seller shall be
entitled to receive a sum equal to such credit when granted. Purchaser shall
notify Seller of the fact that Purchaser has been granted a reduction in the
real estate assessment for the Property with respect to the fiscal year in
which the Closing occurs within ten (10) days after the occurrence of such
event. This Section shall survive the Closing.
ARTICLE 9
ACKNOWLEDGMENTS OF PURCHASER; CONDITION OF PROPERTY
---------------------------------------------------
9.1 Analysis and Evaluation of the Property. Before entering into this
---------------------------------------
Agreement, Purchaser acknowledges that it has made its own analysis and
evaluation of the Property, the operation, the income potential, profits and
expenses thereof, its condition and all other matters affecting or relating
to the transaction underlying this Agreement as Purchaser deemed necessary,
including, without limitation, the layout, leases, square footage, rents,
income, expenses and operation of the Property. In entering into this
Agreement, Purchaser has not been induced by and has not relied upon any
representations, warranties, statements or covenants, express or implied,
made by Seller or any agent, employee or other representative of Seller,
which are not expressly set forth in this Agreement.
9.2 No Effect on Purchaser's Obligations. Purchaser further
------------------------------------
acknowledges that its covenants, agreements, and obligations under this
Agreement shall not be excused or modified by: (i) the business or financial
condition, or any bankruptcy or insolvency of any Tenant of the Property,
(ii) the physical condition of the Building or personal property, or its
fitness, merchantability or suitability for any use or purpose, (iii) the
leases, rents, income or expenses of the Property, (iv) the compliance or
non-compliance with any laws, codes, ordinances, rules or regulations of any
Governmental Authority and any violations thereof existing or subsequently
imposed, (v) the environmental condition of the Property or the Property's
compliance or non-compliance with any laws, codes, ordinances, rules or
regulations of any Governmental Authority relating to the presence, use,
storage, handling or removal of any hazardous substances, (vi) the current or
future use of the Property, including, but not limited to, the Property's use
for commercial, retail, industrial or other purposes, (vii) the current or
future real estate tax liability, assessment or valuation of the Property,
(viii) the availability or non-availability of any benefits conferred by
Federal, state or municipal laws, whether for subsidiaries, special real
estate tax treatment or other benefits of any kind, (ix) the availability or
unavailability of any licenses, permits, approvals or certificates which may
be required in connection with the operation of the Property, (x) the
compliance or non-compliance of the Property, in its current zoning or a
variance with respect to the Property's non-compliance, if any, with any
zoning ordinances, except as herein specifically set forth, or (xi) the
conformity of the use of the Property with any certificate of occupancy.
9.3 No Other Representations. Purchaser hereby expressly acknowledges
------------------------
that except as expressly provided herein, neither Seller nor anyone acting
for or on behalf of Seller has made any representation, warranty, or promise
to Purchaser concerning any of the foregoing, nor: (a) the physical aspect
and condition of any portion of the Property; (b) the feasibility or
desirability of the purchase of the Property; (c) the market status,
projected income from or development expenses for the Property; or (d) any
other matter whatsoever with respect to the Property (except as contained
herein), express or implied, including, by way of description, but not
limitation, those of fitness for a particular purpose, tenantability,
habitability and use; and that all matters concerning the Property have been
independently verified by Purchaser. Purchaser acknowledges and agrees to
take the Property "as is," in its currently existing physical condition and
state of repair, subject to ordinary use, wear, tear and natural
deterioration, and subject to casualty and condemnation as more particularly
set forth in Article 11 hereof.
9.4 Outside Representations. Seller is not liable or bound in any
-----------------------
manner by any verbal or written statements, representations, real estate
"set-ups," offering memorandum or information pertaining to the Property or
its physical condition, layout, leases, footage, rents, income, expenses,
operation or any other matter or thing furnished by any agent, employee,
servant, or any other person, unless specifically set forth in this
Agreement. Purchaser hereby waives, to the extent permitted by law, any and
all implied warranties.
9.5 Environmental Investigation of the Property. Purchaser
-------------------------------------------
acknowledges that it has had an opportunity to conduct its own environmental
investigation of the Property and the property adjacent to the Property.
Purchaser is aware of the environmental conditions affecting or related to
the Property and Purchaser agrees to take the Property subject to such
conditions. Purchaser agrees to assume all environmental costs and
liabilities arising out of or in any way connected to the Property.
Purchaser hereby releases Seller from any obligation to pay any such costs
and liabilities. Purchaser agrees to indemnify and hold harmless Seller from
and against any such costs and liabilities.
9.6 Confidentiality. Purchaser acknowledges that all information
---------------
regarding the Property furnished (or to be furnished) to Purchaser is and has
been so furnished on the following conditions:
(i) Purchaser shall use the information solely for purposes of
evaluating the Property and consummating the transaction contemplated in
this Agreement; and
(ii) Purchaser shall, subject to the terms of Section 9.7, use its
best efforts to maintain the confidentiality of such information.
9.7 Limited Disclosure. Purchaser shall, and shall cause its
------------------
directors, officers and other personnel, and its agents, employees and
representatives, to hold in strict confidence and not disclose to any other
party without the prior written consent of Seller, any of the information
regarding the Property delivered, provided or furnished to Purchaser or any
of its agents, representatives or employees. Notwithstanding anything to the
contrary hereinabove set forth, Purchaser may disclose such information only:
(i) on a "need-to-know" basis to its employees, members or professional firms
serving it in connection with this transaction, or to any potential lenders,
but Purchaser shall require such parties to hold all such information in
strict confidence, and not to disclose such information to any other party
(without the prior written consent of Seller); (ii) to any other party,
subject to Seller's consent, which consent shall not be unreasonably withheld
or delayed; and (iii) to any governmental agency if such agency requires such
disclosure in order for Purchaser to comply with applicable laws or
regulations.
9.8 Return of Information. In the event the Closing does not occur for
---------------------
any reason and this Agreement is terminated, Purchaser shall promptly return
to Seller all copies of all such information without retaining any copy
thereof, except such as must be retained by any professionals to whom such
information was disclosed in accordance with this Article 9 in order to
comply with their professional obligations. Purchaser may also disclose the
terms of this Agreement to any other party approved by Seller, as long as
prior to such disclosure such party agrees to be bound by the provisions of
this Article 9 by an instrument reasonably acceptable to Seller in form and
content.
9.9 Survival. The provisions of this Article 9 shall terminate
--------
at the Closing provided, however, that if the Closing does not occur, the
provisions of this Article 9 shall survive the termination of this Agreement.
ARTICLE 10
OPERATIONS PRIOR TO CLOSING
---------------------------
10.1 Continued Operations . Between the date of this Agreement and the
--------------------
Closing, Seller shall continue to operate the Property in its usual and
customary manner. Notwithstanding the provisions of the immediately
preceding sentence, Seller shall not be required to expend more than
$250,000.00 during the term of this Agreement ("Seller's Article 10 Amount")
on repairs and replacements to the Building (including, but not limited to,
materials, labor, supervision and overhead). If the cost of such repairs and
replacements exceeds Seller's Article 10 Amount, Purchaser shall, at Closing,
reimburse Seller for all sums actually expended by Seller in excess of
Seller's Article 10 Amount. Any such amount payable to Seller shall be paid
in the manner specified in Section 2.2.2 hereof. Without otherwise modifying
or limiting in any respect the terms and provisions set forth in Article
3.1.4 of this Agreement, all Service and Maintenance Agreements shall be
terminated by Seller, at Purchaser's request (such request to be given not
less than five (5) business days prior to Closing), as early as is
permissible under the applicable agreement and, if so requested by Purchaser,
Seller shall execute, at no cost or expense to Seller, the appropriate
notice(s) requesting such termination(s) (provided such applicable agreement
is terminable). In no event shall Seller be required to terminate any
Service and Maintenance Agreements which will or may impose or give rise to a
claim or additional penalty charge against Seller or will cause a termination
of the obligation of the contractor to provide service or maintenance prior
to the Closing, and Purchaser shall indemnify and hold harmless and defend
Seller with respect to any claims or cost or expense arising out of such
termination. Notwithstanding the above, as to that certain agreement with
City Wide Building Services Corp. listed on Schedule "E" and, also, with
respect to those employees listed on Schedule "G-1" who are employed by a
service contractor (as opposed to being employed by Seller), Seller will
cause the termination of such service contract if terminable without claim or
penalty as provided above and such employees at or before Closing so that, as
of Closing, such service contract will no longer be in effect and no such
employees will be employed at the Property as of Closing.
10.2 Access to the Property. Seller agrees to afford Purchaser
----------------------
reasonable access to the Property prior to the Closing, at reasonable times
upon reasonable notice, provided that Purchaser shall not enter any portion
of the Property unless accompanied by a representative of Seller. Purchaser
specifically agrees that neither it, nor its employees or agents, will
communicate directly with Seller's employees, Tenants or managing agent.
Purchaser also agrees that Seller shall not be required to incur any cost or
expense or commence any action to afford Purchaser such access.
10.3 Leases. Seller agrees that between the date hereof and the
------
Closing, Seller shall:
10.3.1 Not, without Purchaser's prior written consent, which
consent shall not be unreasonably withheld or delayed, terminate any Lease
except by reason of a default by the Tenant thereunder or as required by law.
10.3.2 Not permit occupancy of, or enter into any new lease for,
space in the Building which is vacant as of the date hereof, or which may
hereafter become vacant, without first giving Purchaser written notice of the
identity of the proposed tenant, together with a summary of the terms thereof
in reasonable detail, and a statement of the amount of the brokerage
commission, if any, payable in connection therewith and the terms of payment
thereof. If Purchaser objects to such proposed lease, Purchaser shall so
notify Seller within two (2) Business Days after the giving of Seller's
notice to Purchaser, in which case Seller shall not enter into the proposed
lease. Purchaser shall thereafter pay to Seller on the first day of each
month between the date hereof and the Closing Date, by cashier's or bank
check payable to the direct order of Seller, the rent and additional rent
that would have been payable under the proposed lease from the date on which
the Tenant's obligation to pay rent would have commenced if Purchaser had not
so objected until the Closing Date, less (i) the amount of the brokerage
commission specified in Seller's notice, (ii) the cost of tenant improvement
work required to be performed by the landlord under the terms of the proposed
lease to suit the premises to the tenant's occupancy, and (iii) the amount of
cash work allowances required to be given by the landlord to the tenant under
the terms of the proposed lease (the "Reletting Expenses"), prorated in each
case over the term of the proposed lease and apportioned as of the Closing
Date. If Purchaser does not so notify Seller of its objection, Seller shall
have the right to enter into the proposed lease with the tenant identified in
Seller's notice and Purchaser shall pay to Seller, in the manner specified in
Section 2.2.2 hereof, the Reletting Expenses, to the extent actually incurred
by Seller, prorated in each case over the term of the Lease and apportioned
as of the later of the Closing Date or the rent commencement date. Such
payment shall be made by Purchaser to Seller at Closing and if Closing does
not occur for any reason other than by reason of Seller's default, then the
aggregate sum that would have been payable by Purchaser shall be payable at
the last scheduled Closing Date.
10.4 Tenant Estoppel Certificates. (a) Reasonably promptly after the
----------------------------
execution of this Agreement, Seller shall send a written request to each
Tenant in accordance with its Lease to furnish a tenant estoppel statement
substantially in the form such Tenant is obligated to furnish to the landlord
under its Lease, or if no such form is contained or specified in a Tenant's
Lease or if a Tenant's Lease provides that the Tenant shall make additional
statements beyond those specifically provided for in the Lease ("Optional
Statements"), then substantially in the form annexed hereto as Schedule "L-1"
(a "Tenant Estoppel Statement"). Seller shall deliver to Purchaser a copy
of each executed Tenant Estoppel Statement thereafter received from any
Tenant after Seller's receipt of same. In no event shall Purchaser have any
right to terminate this Agreement, except as otherwise expressly provided in
this Section 10.4, nor shall Purchaser be entitled to a reduction of the
Purchase Price nor shall Purchaser's obligations under this Agreement be
otherwise affected in any manner on account of any statement or information
contained in any Tenant Estoppel Statement.
(b) Seller shall be obligated to furnish to Purchaser, as a
condition of Purchaser's obligation to close hereunder that Purchaser shall
receive, at or before Closing, with respect to each "Required Tenant" (as
such term is hereinafter defined), either (x) a Tenant Estoppel Statement, in
"Acceptable Form" (as such term is hereinafter defined), or (y) to the extent
that a Tenant Estoppel Statement (whether or not in Acceptable Form) is not
received from a Required Tenant (or is received but is incomplete), a
certificate in the form of Schedule "L-2" annexed hereto (a "Seller's
Estoppel Statement") executed by Seller. A Tenant Estoppel Statement
obtained by Seller from any Required Tenant shall be deemed to be in
"Acceptable Form" if such Tenant Estoppel Statement is on the form required
pursuant to this Section 10.4. Notwithstanding anything to the contrary
contained herein, a Tenant Estoppel Statement shall not be required to
contain any Optional Statements in order to be in "Acceptable Form."
(c) In the event that Seller is unable to fulfill the condition
set forth in Section 10.4(b) hereof by delivery of Tenant Estoppel Statements
and/or one or more Seller's Estoppel Statements, Seller shall have no
liability to Purchaser on account thereof, and Purchaser's sole remedy shall
be to terminate this Agreement and to receive a refund of the Deposit,
together with any accrued interest thereon, and upon such termination of this
Agreement neither party shall have any further obligation to the other party
hereunder except for those provisions of this Agreement which expressly
survive the termination of this Agreement.
(d) As used herein, the term "Required Tenants" shall mean:
(i) The Gap, Inc. under the Lease dated December 1, 1990; and
(ii) at least seventy-five (75%) percent of the Tenants whose
Leases cover, individually (or when combined with other
Leases for any such Tenant who occupies space in the
Building pursuant to multiple Leases), more than 3,000
rentable square feet in the Building.
(e) The representations set forth in any Seller's Estoppel
Statement delivered pursuant to this Section 10.4 shall survive the Closing
for a period of ninety (90) days, or until such earlier date that the
Required Tenant delivers to Purchaser a Tenant Estoppel Statement in
Acceptable Form.
ARTICLE 11
CASUALTY AND EMINENT DOMAIN
---------------------------
11.1 Casualty and Risk of Loss. Between the date of this Agreement
-------------------------
until the time of the delivery of the Deed as provided by Section 18.1.2
herein, the risk of loss or damage to the Property by fire or other casualty,
is borne and assumed by Seller. Seller's assumption of the risk of loss is
without any obligation or liability by Seller to repair the same, except
Seller, at Seller's sole option, shall have the right to repair or replace
such loss or damage to the Property. In the event any loss or damage to the
Property occurs, and Seller elects to make such repair or replacement, this
Agreement shall continue in full force and effect, and Seller shall be
entitled to a reasonable adjournment of the Closing Date, not to exceed one
hundred eighty (180) days. If Seller does not however elect to repair or
replace any such loss or damage, Purchaser shall have the following options
(provided, however, that if in Seller's reasonable judgment the cost of
repairing any such loss or damage to the Property will not exceed
$6,000,000.00, Purchaser will be deemed to have made the election set forth
in Section 11.1.2 hereof):
11.1.1 Declaring this Agreement terminated, in which event the
Deposit, together with any interest accrued thereon, shall be returned to
Purchaser, and upon such payment, this Agreement shall be null and void and
the parties hereto shall be relieved and released of and from any further
liability with respect to each other, except with respect to the provisions
of this Agreement which expressly survive the termination of this Agreement;
or
11.1.2 Accepting (i) the Deed upon payment in full of the
Purchase Price and without any abatement of the Purchase Price by reason of
such loss or damage, (ii) payment of the amount of any insurance proceeds to
the extent actually collected by Seller in connection with such fire or other
casualty, less the amount of the actual expenses incurred by Seller in
collecting such proceeds and in making repairs to the Property occasioned by
such fire or other casualty, and (iii) an assignment (without warranty or
recourse to Seller) of Seller's rights to any payments to be made subsequent
to the Closing Date under any hazard insurance policy or policies in effect
with respect to the Property. Purchaser shall not be entitled to the payment
of insurance proceeds or an assignment of Seller's right to insurance
proceeds if such proceeds are in excess of the cost of repairing any loss or
damage to the Property; Seller shall be entitled to the excess proceeds, if
any.
If Purchaser fails to exercise its option as set forth in Section 11.1.1
within ten (10) days after notice to Purchaser of any loss or damage to the
Property, Purchaser shall be deemed to have exercised the option set forth in
Section 11.1.2.
11.2 Eminent Domain. If prior to the Closing all or any part of the
--------------
Property is taken by condemnation or a taking in lieu thereof, the following
shall apply:
11.2.1 In the event a material part of the Property is taken,
Purchaser, by written notice to Seller (effective only if delivered within
fifteen (15) days after Purchaser receives notice of such taking), may elect
to cancel this Agreement prior to the Closing Date. In the event that
Purchaser shall so elect, the Deposit, together with any interest accrued
thereon, shall be returned to Purchaser, and upon such payment, this
Agreement shall be null and void and the parties hereto shall be relieved and
released of and from any further liability hereunder and with respect to each
other, except with respect to the provisions of this Agreement which
expressly survive the termination of this Agreement.
11.2.2 In the event a minor or immaterial part of the Property
is taken, or in the event of a change of legal grade, neither party shall
have any right to cancel this Agreement, and title shall nonetheless close in
accordance with this Agreement without any abatement of the Purchase Price or
any liability or obligation on the part of Seller by reason of such taking;
provided, however, that Seller shall, at Closing, (i) turn over and deliver
to Purchaser the amount of any award or other proceeds of such taking to the
extent actually collected by Seller as a result of such taking, less the
amount of the actual expenses incurred by Seller in collecting such award or
other proceeds and in making repairs to the Property occasioned by such
taking, and (ii) deliver to Purchaser an assignment (without warranty or
recourse to Seller) of Seller's right to any such award or other proceeds
which may be payable subsequent to the Closing Date as a result of such
taking.
11.2.3 The term "material part," as distinguished from a "minor
or immaterial part," as used herein shall mean a portion of the Property
having a value (based upon an appraisal by an appraiser acceptable to Seller,
subject to Purchaser's approval, which shall not be unreasonably withheld or
delayed) in excess of $6,000,000.00.
11.3 Survival. This Article 11 shall survive the Closing and is
---------
intended to be an express provision to the contrary within the meaning of
Section 5-1311 of the General Obligations Law.
ARTICLE 12
ASSESSMENTS
-----------
If on or after the date of this Agreement, the Property or any part
thereof shall be or shall have been affected by any real estate tax
assessment or assessments which are or may become payable in one or more
installments, Purchaser agrees to take title to the Property (without
reduction in or adjustment of the Purchase Price) subject to all unpaid
installments becoming due and payable after the date hereof.
ARTICLE 13
CLOSING ADJUSTMENTS
-------------------
13.1 Adjustments and Prorations. The following matters and items shall
--------------------------
be apportioned or adjusted between the parties hereto at the closing of title
to the Property pursuant to this Agreement (the "Closing"), as of 12:01 A.M.
of the day of the Closing (the "Adjustment Date"). The foregoing is based
upon the Seller having use of the funds constituting the cash portion of the
Purchase Price on the Closing Date, and thus the income and expense for the
Closing Date are for Purchaser's account. If the funds are not transferred
to be available to Seller on the Closing Date, then the Adjustment Date shall
be unchanged and Seller shall be entitled to a per diem addition of Ten
Thousand ($10,000) Dollars.
13.1.1 Fixed Rents.
-----------
(a) Fixed rents ("Fixed Rents") paid or payable by Tenants under
the Leases in connection with their occupancy shall be adjusted and prorated
on an if, as and when collected basis. Any Fixed Rents collected by Purchaser
or Seller after the Closing from any Tenant who owes Fixed Rents for periods
prior to the Closing, shall be applied: (i) first, in payment of Fixed Rents
owed by such Tenant for the calendar month in which the Closing Date occurs;
(ii) second, in payment of Fixed Rents owed by such Tenant for the calendar
month prior to the calendar month in which the Closing Date occurs; (iii)
third, in payment of Fixed Rents owed by such Tenant for the period (if any)
after the calendar month in which the Closing Date occurs through the end of
the calendar month in which such amount is collected; and (iv) fourth, after
Fixed Rents for all current periods have been paid in full, in payment of
Fixed Rents owed by such Tenant for the period prior to the calendar month
preceding the calendar month in which the Closing Date occurs. Each such
amount, less any costs of collection (including reasonable attorneys' fees)
reasonably allocable thereto, shall be adjusted and prorated as provided
above, and the party who receives such amount shall promptly pay over to the
other party the portion thereof to which it is so entitled. In furtherance
and not in limitation of the preceding sentence, with respect to any Tenant
which has paid all Fixed Rents for periods through the Closing, if, prior to
the Closing, Seller shall receive any prepaid Fixed Rents from a Tenant
attributable to a period following the Closing, at the Closing, Seller shall
pay over to Purchaser the amount of such prepaid Fixed Rents.
(b) Purchaser shall bill Tenants who owe Fixed Rents for periods
prior to the Closing on a monthly basis for a period of six (6) consecutive
months following the Closing Date and shall use commercially reasonable
efforts to collect such past due Fixed Rents; provided, however, that
-------- -------
Purchaser shall have no obligation to commence any actions or proceedings to
collect any such past due Fixed Rents. Notwithstanding the foregoing, if
Purchaser is unable to collect such past due Fixed Rents, Seller shall have
the right, upon prior written notice to Purchaser, to pursue such Tenants to
collect Fixed Rent delinquencies (including, without limitation, the
prosecution of one or more lawsuits), but Seller shall not be entitled to
evict (by summary proceedings or otherwise) any such Tenants. Any payment by
a Tenant in an amount less than the full amount of Fixed Rents and "Overage
Rent" (as such term is defined in Section 13.1.2(a)) then due and owing by
such Tenant, shall be applied first to Fixed Rents (in the order of priority
as to time periods as is set forth in Section 13.1.1(a) above) to the extent
of all such Fixed Rents then due and owing by such Tenant, and thereafter to
Overage Rent (in the order of priority as to time periods as is set forth in
Section 13.1.2).
13.1.2 Overage Rent.
------------
(a) Any of the following charges and/or rents provided for by any
Lease: (i) the payment of additional rent based upon a percentage of the
Tenant's business during a specified annual or other period (sometimes
referred to as "percentage rent"), (ii) common area maintenance or "CAM"
charges, (iii) "escalation rent" or additional rent based upon increases in
real estate taxes, operating expenses, labor costs, cost of living, porter's
wages, or other index including the consumer price index or otherwise, or
(iv) any other items of additional rent, e.g., charges for electricity,
----
water, cleaning, overtime services, sundries and/or miscellaneous charges,
shall be adjusted and prorated on an if, as and when collected basis (such
percentage rent, CAM charges, escalation rent and other additional rent being
collectively called "Overage Rent").
(b) (i) Purchaser agrees that as to any Overage Rent for
accounting periods prior to the Closing that are to be paid after the
Closing, to pay the entire amount over to Seller upon receipt thereof, less
any costs of collection (including reasonable attorneys' fees) reasonably
allocable thereto. Purchaser agrees that it will (i) promptly render bills
for any such Overage Rent, (ii) bill Tenants such Overage Rent on a monthly
basis for a period of six (6) consecutive months thereafter, and (iii) use
commercially reasonable efforts to collect such Overage Rent; provided,
--------
however, that Purchaser shall have no obligation to commence any actions or
- -------
proceedings to collect any such Overage Rent.
(ii) Notwithstanding the foregoing, if Purchaser is unable to
collect such Overage Rent, Seller shall have the right, upon prior written
notice to Purchaser, to pursue Tenants to collect such delinquencies
(including, without limitation, the prosecution of one or more lawsuits), but
Seller shall not be entitled to evict (by summary proceedings or otherwise)
any such Tenants. Seller shall furnish to Purchaser all information relating
to the period prior to the Closing that is reasonably necessary for the
billing of such Overage Rent, and Purchaser will deliver to Seller,
concurrently with the delivery to Tenants, copies of all statements relating
to Overage Rent for a period prior to the Closing. Purchaser shall bill
Tenants for Overage Rent for accounting periods prior to the Closing in
accordance with and on the basis of such information furnished by Seller.
(c) Overage Rent for an accounting period in which the Closing
Date occurs shall be apportioned between Seller and Purchaser as of the
Adjustment Date, with Seller receiving the proportion of such Overage Rent
less a like portion of any costs and expenses (including reasonable
attorneys' fees) incurred in the collection of such Overage Rent that the
portion of such accounting period prior to the Closing Date bears to such
entire accounting period, and Purchaser receiving the proportion of such
Overage Rent less a like portion of any costs and expenses (including
reasonable attorneys' fees) incurred in the collection of such Overage Rent
that the portion of such accounting period from and after the Closing Date
bears to such entire accounting period. If, prior to the Closing, Seller
shall receive any installments of Overage Rent attributable to Overage Rent
for periods from and after the Closing Date, such sum shall be apportioned at
the Closing. If, after the Closing, Purchaser shall receive any installments
of Overage Rent attributable to Overage Rent for periods prior to the
Closing, such sum less any costs and expenses (including reasonable
attorneys' fees) incurred by Purchaser in the collection of such Overage Rent
shall be paid by Purchaser to Seller promptly after Purchaser receives
payment thereof.
(d) Any payment by a Tenant on account of Overage Rent (to the
extent not applied against Fixed Rents due and owing by such Tenant in
accordance with Section 13.1.1 (b) hereof) shall be applied to Overage Rent
then due in the following order of priority: (i) first, in payment of
Overage Rent for the accounting period in which the Closing Date occurs; (ii)
second, in payment of Overage Rent for the accounting period immediately
preceding the accounting period in which the Closing Date occurs; and (iii)
third, in payment of Overage Rent for the accounting period immediately
succeeding the accounting period in which the Closing Date occurs, and (iv)
thereafter in the chronological order in which such payments are due for
each such accounting period pursuant to the applicable Lease.
(e) To the extent that any portion of Overage Rent is required to
be paid monthly by Tenants, on account of estimated amounts for any calendar
year (or, if applicable, any Lease year or any other applicable accounting
period), and at the end of such calendar year (or Lease year or other
applicable accounting period, as the case may be), such estimated amounts are
to be recalculated based upon the actual expenses, taxes and other relevant
factors for that calendar year, Lease year or other applicable accounting
period, with the appropriate adjustments being made with such Tenants, then
such portion of the Overage Rent shall be prorated between Seller and
Purchaser at the Closing based on such estimated payments (i.e., with Seller
----
entitled to retain all monthly or other periodic installments of such amounts
paid with respect to periods prior to the calendar month or other
applicable installment period in which the Closing occurs; Seller to pay to
Purchaser at the Closing all monthly or other periodic installments of such
amounts theretofore received by Seller with respect to periods following the
calendar month or other applicable installment period in which the Closing
occurs, and Seller and Purchaser to apportion as of the Closing Date all
monthly or other periodic installments of such amounts with respect to the
calendar month or other applicable installment period in which the
Closing occurs).
At the time(s) of final calculation and collection from (or
refund to) each Tenant of the amounts in reconciliation of actual Overage
Rent for a period for which estimated amounts paid by such Tenant have been
prorated, there shall be a re-proration between Seller and Purchaser. If,
with respect to any Tenant, the recalculated Overage Rent exceeds the
estimated amount paid by such Tenant, (i) the entire excess shall be paid by
Purchaser to Seller, if the accounting period for which such recalculation
was made expired prior to the Closing, and (ii) such excess shall be
apportioned between Seller and Purchaser as of the Closing Date (on the basis
described in the first sentence of Section 13.1.2(c) hereof), if the Closing
occurred during the accounting period for which such recalculation was made,
with Purchaser paying to Seller the portion of such excess which Seller is so
entitled to receive. If, with respect to any Tenant, the recalculated Overage
Rent is less than the estimated amount paid by such Tenant, (1) the entire
shortfall shall be paid by Seller to Purchaser (or, at Seller's option,
directly to the Tenant in question), if the accounting period for which such
recalculation was made expired prior to the Closing, and (2) such shortfall
shall be apportioned between Seller and Purchaser as of the Closing Date (on
the basis described in the first sentence of Section 13.1.2(c) hereof), if
the Closing occurred during the accounting period for which such
recalculation was made, with Seller paying to Purchaser (or, at Seller's
option, directly to the Tenant in question) the portion of such shortfall so
allocable to Seller.
(f) Until such time as all amounts required to be paid to Seller
by Purchaser pursuant to Section 13.1.1 and this Section 13.1.2 are paid in
full, but in no event for a period longer than twelve (12) months following
the Closing, Purchaser shall furnish to Seller, not less frequently than
monthly, a reasonably detailed accounting of such amounts owed by Purchaser;
which accounting shall be delivered to Seller on or prior to the fifteenth
day following the last day of each calendar month from and after the calendar
month in which the Closing occurs. Subsequent to the Closing, Seller shall
have the right from time to time, on prior written notice to Purchaser, to
review Purchaser's rental records with respect to the Property during
ordinary business hours on Business Days, to ascertain the accuracy of such
accountings.
13.1.3 Taxes and Assessments. Real estate taxes,
---------------------
assessments, Business Improvement District charges and like charges, ad
valorem taxes and personal property taxes, if any, on the basis of the fiscal
year for which assessed. If the Closing shall occur before the tax rate or
assessment is fixed, the apportionment of such real estate taxes and personal
property taxes, if any, shall be upon the basis of the tax rate for the
immediately preceding year applied to the latest assessed valuation; however,
adjustment will be made upon the actual tax amount, when determined. Any
discount received for early payment shall be for the benefit of Seller, and
any interest or penalty assessed for late payment shall be borne by Seller.
Real estate taxes shall be treated on an annualized basis even if tax
payments made in installments are not equal for each installment period.
Thus, for example, if the installment for the first half of a fiscal year is
paid and is higher than the second half installment, the proration will be
based on payment of fifty percent (50%) of the aggregate taxes for such
fiscal year.
13.1.4 Deposits. Tax and utility company deposits, or deposits
--------
with any supplier of goods, if any, shall be paid by Purchaser to Seller (or,
at Seller's option, Seller shall obtain refunds of the deposits directly from
the taxing authority or utility company, as the case may be).
13.1.5 Water and Sewer Charges. Water charges and sewer rents
-----------------------
on the basis of the fiscal year, but if there are water meters on the
Property, Seller, to the extent obtainable, shall supply to Purchaser a water
meter reading current through the Adjustment Date, or if not feasible to so
read, to a date not more than thirty (30) days prior to the Adjustment Date,
and the unfixed meter charges based thereon for the intervening period shall
be apportioned on the basis of such last meter reading. Upon the taking of a
subsequent actual water meter reading, such apportionment shall be readjusted
and Seller or Purchaser, as the case may be, will promptly deliver to the
other the amount determined to be due upon such readjustment. If Seller is
unable to furnish such prior meter reading, any reading subsequent to the
Closing will be apportioned on a per diem basis from the date of such reading
immediately prior thereto, and Seller shall pay the proportionate charges due
up to the date of Closing. Unpaid water meter bills, frontage, sewer charges
and assessments which are the obligations of Tenants in accordance with the
terms of their respective Leases shall not be adjusted, nor shall the same be
deemed an objection to title, and Purchaser will take title subject thereto.
13.1.6 License Fees. Amounts paid or payable with respect to
------------
assignable licenses and permits, if any, affecting the Property.
13.1.7 Service and Maintenance Charges. Amounts paid or payable
-------------------------------
with respect to the Service and Maintenance Agreements.
13.1.8 Vault Fees. Proration of vault charges or vault taxes
----------
shall be based upon the last bill received, or title company report, prorated
at the last known rate to the Adjustment Date. No proration shall be made if
such vault charge is the obligation of a Tenant in possession.
13.1.9 Utilities. Utility charges, including, but not limited
---------
to, electricity, gas, steam, telephone and other utilities (other than such
charges which are the obligation of Tenants under their respective Leases),
all prorated based upon the most current bill unless actual readings are
obtained as of the Adjustment Date, in which case such actual readings shall
govern, and each party shall pay the amount billed to it, respectively.
13.1.10 Inventory. The value of Building inventory and supplies
---------
(e.g., soap, cleaning powder, light bulbs, etc.) in unopened containers,
----
if any, in accordance with an inventory prepared by Seller, shall be credited
to Seller. Such value amount shall be determined based upon the cost
thereof, to the extent practical.
13.1.11 Tenant Security Deposits. (a) Security deposits of
------------------------
Tenants (other than those which are marketable securities, letters of credit,
or other non-cash items) shall be transferred, at Seller's option, either
(i) by direct assignment of the bank accounts in which deposited, or (ii) by
Seller retaining all rights in the bank accounts and crediting to Purchaser
the amount of the security deposits to be delivered pursuant to this
Agreement. In either event, there shall be maintained or credited to Seller
all interest earned or accrued to the Adjustment Date, less such portion of
the interest to which the respective Tenant would be entitled pursuant to its
Lease or by law. No allocation shall be made of security deposits properly
applied prior to the Adjustment Date, and Seller may retain such amounts.
Security deposits applied after the Adjustment Date shall be applied in the
order of priority set forth in paragraph (a) of Section 13.1.1 hereof.
Security deposits held in the form of marketable securities shall be assigned
and delivered to Purchaser at Closing, with any interest thereon through the
Adjustment Date credited to Seller, less such portion to which the Tenant
would be entitled. Security deposits held in the form of letters of credit
shall be assigned and delivered to Purchaser at Closing; provided, however,
that if the consent or authorization of the issuer of any such letter of
credit is required, the failure to obtain such consent shall not constitute
grounds for Purchaser or Seller to adjourn the Closing, but Seller shall
cooperate with Purchaser in obtaining such consent subsequent to the Closing.
(b) If any Tenant who owes past due rent as of the Closing
Date is evicted from the Building and its Lease is terminated, then promptly
after such eviction and termination, such Tenant's security deposit shall be
applied in the following order of priority: (i) first to the reimbursement
of Purchaser's reasonable costs and expenses in obtaining such eviction and
termination; (ii) then in the order of priority set forth in Section 13.1.1
hereof.
(c) At Closing Purchaser shall indemnify and hold Seller free
and harmless from and against any claim made with respect to an assigned
security deposit, or a security deposit as to which Purchaser has received a
credit, and Purchaser shall give such notice to each Tenant with respect to a
security deposit as will eliminate or reduce Seller's responsibility.
13.1.12 Fuel. Proration shall be made of fuel on the Property
----
on the Adjustment Date, based upon a reading made by Seller's supplier as
close as obtainable to the Adjustment Date (reasonably adjusted to the
quantity present on the Adjustment Date). The value thereof shall be
calculated at Seller's last cost (including sales tax). If the heating,
ventilation or air conditioning for the Property is provided by a measurable
product (e.g. steam or gas) the adjustment will be based on meter readings
prorated, if necessary, to the Adjustment Date.
13.1.13 Employee Compensation. Proration shall be made of all
---------------------
wages of employees engaged at the Property, together with vacation pay,
social security taxes, workers' compensation, pension and other fringe
benefits. Fringe benefit years shall be based upon union contract rights, if
feasible, and otherwise determined as a fair allocation in Seller's judgment.
Seller shall not be charged with termination pay arising by reason of
Purchaser's termination of any employees, or failure to hire any employees at
or subsequent to the Closing, and Purchaser shall be fully liable for any
such termination pay. If employees engaged at the Building are in the employ
of an agent, then such adjustment or proration shall be made as appropriate
with the agent to reach the same economic result as if in the direct employ
of Seller. Compliance with the WARN act shall be Purchaser's responsibility.
13.1.14 Tenant Improvement Work at Landlord's Cost. With respect
------------------------------------------
to tenant improvement work performed or to be performed to leased space to be
paid at the landlord's cost pursuant to any Lease, (i) Purchaser shall
receive a credit against the Cash Balance at Closing for the cost of the
performance of any tenant improvement work required to be performed pursuant
to Leases executed (or renewal, extension or additional space rights or
options exercised) prior to December 1, 1997 (the "Leasing Cutoff Date"), and
(ii) Purchaser shall be obligated to pay, as and when due, for the cost of
the performance of any tenant improvement work required to be performed
pursuant to Leases entered into (or renewal, extension or additional space
rights or options exercised) on or after the Leasing Cutoff Date, and the
Cash Balance shall be increased by any sums expended by Seller prior to
closing for obligations referred to in this clause (ii).
13.1.15 Costs of Work to be Paid or Reimbursed to Tenants. With
--------------------------------------------------
respect to the cost of work performed or to be performed at the Property
attributable to leased space to be either paid or reimbursed to Tenants by
the landlord pursuant to any Lease, (i) Purchaser shall receive a credit
against the Cash Balance at Closing to the extent such payment or
reimbursement is required pursuant to a Lease executed (or renewal, extension
or additional space rights or options exercised) prior to the Leasing Cutoff
Date, and (ii) Purchaser shall be obligated to pay or reimburse any such
Tenant, as and when due, to the extent such payment or reimbursement is
required pursuant to a Lease entered into (or renewal, extension or
additional space rights or options exercised) on or after the Leasing Cutoff
Date, and the Cash Balance shall be increased by any sum expended by Seller
prior to Closing for obligations referred to in this clause (ii).
13.1.16 Leasing Commissions. Brokerage and leasing commissions
-------------------
incurred in connection with the leasing of space at the Property shall be
prorated so that such commissions owed with respect to Leases executed prior
to the Leasing Cutoff Date shall be paid by Seller, and on or after the
Leasing Cutoff Date shall be paid, as and when due, by Purchaser. No
adjustment shall be made with respect to leasing or brokerage commissions
payable on or after the Closing Date as a consequence of an event occurring
after the Closing. Thus, proration of leasing commissions shall be made if
the leasing to which the leasing commission is attributable was made prior to
the Leasing Cutoff Date borne by Seller and if after the Leasing Cutoff Date
borne by Purchaser. If as of the Closing the leasing commission is an
obligation of Seller if an event occurs, (e.g. renewal, expansion, etc.) and
thereafter the event does occur then the leasing commission if earned is to
be borne by Purchaser and Purchaser shall indemnify and hold Seller free and
harmless from and against any liability for leasing brokerage payable by
Purchaser.
13.1.17 Insurance Premiums. No existing insurance policy shall
------------------
be assigned to Purchaser, and no adjustment of any insurance premiums shall
be made.
13.1.18 Intentionally Omitted.
---------------------
13.1.19 Other Adjustments. (a) Rents due pursuant to
------------------
Section 10.3.2 hereof.
(b) Reletting Expenses pursuant to Section 10.3.2 hereof.
13.1.20 Survival. The provisions of this Section 13.1 shall
---------
survive the Closing.
13.2 Determination of Closing Adjustments. The parties hereto agree to
------------------------------------
make a good faith effort to determine the adjustments and prorations to be
made at Closing, pursuant to this Article, at least three (3) Business Days
prior to the Closing Date.
13.3 Net Apportionments and Adjustments.
----------------------------------
13.3.1 Due Seller. In the event the net apportionments and
----------
adjustments as provided in Section 13.1 result in a payment due Seller, then
such payment shall be made at Closing in the manner set forth in
Section 2.2.2. In the event that despite Purchaser's good faith efforts,
the parties hereto are unable to determine the amount of the adjustments to
be paid to Seller at Closing, if any, on or before the date which is three
(3) Business Days prior to the Closing Date, such amount may be paid by
Purchaser to Seller at the Closing by cashier's or bank check, or by a
certified check of Purchaser drawn upon a bank which is a member of The New
York Clearing House Association (or any successor organization thereto), made
payable to Seller's direct order.
13.3.2 Due Purchaser. In the event the net apportionments and
-------------
adjustments as provided in Section 13.1 result in a payment due Purchaser,
then such payment shall be made at Closing by way of a credit against the
Cash Balance.
13.4 Other. Except as otherwise provided in this Agreement, the customs
-----
regarding title closings, as recommended by The Real Estate Board of New
York, Inc., shall apply to all apportionments.
ARTICLE 14
CLOSING DOCUMENTS; OBLIGATIONS OF PURCHASER
-------------------------------------------
AND SELLER AT CLOSING
---------------------
14.1 Seller's Obligations at Closing. On the Closing Date, Seller shall
-------------------------------
deliver or cause to be delivered to Purchaser the following:
14.1.1 A Bargain and Sale Deed without Covenant against
Grantor's Acts containing the covenant required by Section 13 of the Lien Law
in proper form for recording (the "Deed"), in the form annexed hereto as
Exhibit 1.
14.1.2 A Bill of Sale in the form annexed hereto as Exhibit 2.
14.1.3 A letter to each Tenant advising them of the change of
ownership of the Property in accordance with General Obligations Law
Section 7-105, in the form of Exhibit 9 annexed hereto (the "Tenant Notice
Letters"), and Purchaser agrees to deliver the Tenant Notice Letter to each
Tenant promptly after the Closing. Purchaser hereby indemnifies and holds
Seller harmless from and against all loss, cost and expense incurred by
Seller as a result of Purchaser's failure to so deliver the Tenant Notice
Letter to each Tenant promptly after the Closing, and this sentence shall
survive the Closing.
14.1.4 An Assignment and Assumption of Service, Maintenance and
Concessionaire Agreements, in the form annexed hereto as Exhibit 3.
14.1.5 An Assignment and Assumption of Landlord's Interest in
Leases, in the form annexed hereto as Exhibit 4.
14.1.6 All current records within Seller's possession reasonably
required for the continued operation of the Property, including but not
limited to, service contracts, plans, surveys, Leases, lease files, licenses,
permits, warranties, guaranties, insurance policies assigned to Purchaser at
Closing, records of current expenditures for repairs and maintenance, and the
certificate of occupancy.
14.1.7 An Assignment of Licenses and/or Permits, in the form
annexed hereto as Exhibit 5.
14.1.8 An Assignment of Warranties and Guarantees, in the form
annexed hereto as Exhibit 6.
14.1.9 An Assignment and Assumption of the Brokerage Agreements
in the form annexed hereto as Exhibit 10.
14.1.10 All keys and combinations to locks at the Property which
are in Seller's possession.
14.1.11 A duly executed letter agreement by which Seller and
Purchaser agree to correct any errors in prorations as soon after the Closing
as amounts are finally determined, in the form annexed hereto as Exhibit 7
(the "Post-Closing Adjustment Letter").
14.1.12 Evidence reasonably acceptable to Purchaser and the Title
Company authorizing the consummation by Seller of the transaction
contemplated by this Agreement, and the execution and delivery of documents
on behalf of Seller.
14.1.13 The certificate with respect to FIRPTA compliance in the
form of Exhibit 8 annexed hereto.
14.1.14 The New York City Department of Finance Real Property
Transfer Tax Return (the "RPT Return") and the New York State Combined Real
Estate Transfer Tax Return and Credit Line Mortgage Certificate (the "Form
TP-584").
14.1.15 The Tenant Estoppel Statements required pursuant to
Section 10.4 hereof (and/or Seller's Estoppel Statements in lieu of one or
more such required Tenant Estoppel Statements).
14.2 Purchaser's Obligations at Closing. Purchaser shall deliver
----------------------------------
or cause to be delivered to Seller on the Closing Date the following:
14.2.1 The Cash Balance.
14.2.2 Duplicate originals of the Assignment and Assumption of
Landlord's Interest in Leases, the Assignment and Assumption of Service,
Maintenance and Concessionaire Agreements, the Assignment and Assumption of
Brokerage Agreements, the Post-Closing Adjustment Letter, the RPT Return,
Form TP-584 and the Tenant Notice Letters, duly executed by Purchaser.
14.2.3 Evidence reasonably acceptable to Seller and the Title
Company authorizing the consummation by Purchaser of the transaction which is
the subject of this Agreement, and the execution and delivery of documents on
behalf of Purchaser.
14.2.4 Such other documents as may be reasonably and customarily
required by the Title Company to consummate the transaction contemplated by
this Agreement.
ARTICLE 15
VIOLATIONS
----------
Without limiting the generality of the provisions of this Article 15,
Purchaser agrees to purchase the Property subject to any and all notes or
notices of violations of law, or municipal ordinances, orders or requirements
whatsoever noted in or issued by any federal, state, municipal or other
governmental department, agency or bureau, or any other Governmental
Authority having jurisdiction over the Property (collectively, "Violations"),
or any lien imposed in connection with any of the foregoing, or any condition
or state of repair or disrepair or other matter or thing, whether or not
noted, which, if noted, would result in a violation being placed on the
Property. Seller shall have no duty to remove or comply with or repair or
disrepair any condition, matter or thing, whether or not noted, which, if
noted, would result in a violation being placed on the Property. Seller
shall have no duty to remove or comply with or repair any of the
aforementioned Violations, liens or other conditions, and Purchaser shall
accept the Property subject to all such Violations and liens, the existence
of any conditions at the Property which would give rise to such Violations or
liens, if any, and any governmental claims arising from the existence of such
Violations and liens, in each case without any abatement of or credit against
the Purchase Price.
ARTICLE 16
SALES TAX
---------
Although it is not anticipated that any sales tax shall be due and
payable, Purchaser agrees that Purchaser shall pay any sales tax assessed in
connection with the sale of the Property to Purchaser and save, defend,
indemnify and hold Seller harmless from and against any and all liability for
any sales tax which may now or hereafter be imposed upon Seller or the
Property with respect to the sale of any personal property. The parties
hereto agree that no part of the Purchase Price is attributable to personal
property. The provisions of this Section shall survive the Closing.
ARTICLE 17
UNPAID TAXES
------------
17.1 The amount of any unpaid real estate taxes, assessments, water
charges and sewer rents other than items subject to proration as heretofore
provided, which Seller is obligated to pay and discharge may, at the option
of Seller, be allowed to Purchaser out of the Cash Balance, provided that
official bills therefor with interest and penalties thereon calculated to
said date are furnished by Seller at the Closing.
17.2 Seller may use any portion of the Cash Balance to satisfy any liens
or encumbrances which exist on the Closing Date which are not Permitted
Encumbrances, provided that Seller delivers to Purchaser at Closing
instruments in recordable form sufficient to satisfy such liens and
encumbrances of record, together with the cost of recording or filing said
instruments, or pay such sums or perform such acts as will enable the Title
Company to insure Purchaser that such lien(s) will not be collected out of
the Property, or deposit with Purchaser's attorneys reasonably sufficient
funds to enable Purchaser's attorneys to obtain and record such instruments.
17.3 The existence of (i) any taxes, assessments, water charges, or
sewer rents referred to in Section 17.1, or (ii) any other liens or
encumbrances, shall not be deemed Title Objections if Seller elects to
proceed pursuant to the provisions of Section 17.2, provided that Seller
complies with the requirements set forth in Sections 17.1 and 17.2 hereof.
17.4 If Seller requests within a reasonable time prior to the Closing
Date, Purchaser agrees to provide at the Closing separate certified checks or
official cashier's checks, which in the aggregate equal the amount of the
Cash Balance, in order to facilitate the satisfaction of any unpaid (and due)
real estate taxes, assessments, water charges or sewer rents, liens and/or
encumbrances referred to in Section 17.1, and, if Seller elects to proceed
pursuant to the provisions of Section 17.2, the payment of any liens and
encumbrances referred to therein.
ARTICLE 18
THE CLOSING
-----------
18.1 The Closing. The sale and purchase of the Property contemplated
-----------
by the terms and conditions of this Agreement shall be consummated at the
Closing.
18.1.1 Location and Date of Closing. Subject to the
----------------------------
satisfaction of the terms and conditions herein set forth, the Closing shall
take place at the offices of Seller's attorneys, Bachner, Tally, Polevoy &
Misher LLP, 380 Madison Avenue, New York, New York at 10:00 A.M., on
March 18, 1998 (the "Closing Date").
18.1.2 Delivery of Documents. At the Closing, the Deed shall
---------------------
be delivered to the Purchaser upon Seller's receipt of the payments provided
for in Article 2, and the delivery of the documents referred to in
Section 14.2.
18.2 Time of Essence. Time shall be of the essence as to
---------------
Purchaser's obligations to close the purchase of the Property, pursuant to
this Agreement, on the Closing Date. For purposes of this Agreement, the
term "Business Day" shall mean all days except Saturdays, Sundays, and all
days observed by the Federal Government or New York State as legal holidays.
ARTICLE 19
NOTICES
-------
Except as otherwise provided in this Agreement, any and all notices,
elections, demands, requests and responses permitted or required to be given
pursuant to this Agreement shall be in writing, signed by the party giving
the same or by its attorneys, and shall be deemed to have been duly given and
effective upon being: (i) personally delivered with receipt for delivery; or
(ii) deposited with a nationally recognized express overnight delivery
service (e.g., Federal Express) for next Business Day delivery with receipt
for delivery; or (iii) deposited in the United States mail, postage prepaid,
certified with return receipt requested, to the other party at the address of
such other party set forth below, or at such other address within the
continental United States as may be designated by a notice of change of
address and given in accordance herewith. The time period in which a
response to any such notice, election, demand or request must be given shall
commence on the date of receipt thereof. Personal delivery to a party or to
any officer, partner, agent or employee of such party at said address shall
be deemed given and received at the time delivered. Rejection or other
refusal to accept, or inability to deliver because of changed address of
which no notice has been received, shall also constitute receipt. Any such
notice, election, demand, request or response shall be addressed to the
respective parties as follows:
(i) if to Seller, to:
1466 Broadway Associates
c/o Helmsley Enterprises, Inc.
230 Park Avenue
New York, New York 10169
Attention: Harold A. Meriam, III, Esq.
with a copy to:
Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017-2513
Attention: Martin D. Polevoy, Esq.
(ii) if to Purchaser, to:
Benjamin P. Feldman, Esq.
SL Green Realty Corp.
70 West 36th Street
New York, New York 10018
with a copy to:
Richard A. Rosenbaum, Esq.
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel
153 East 53rd Street, 35th Floor
New York, New York 10022
ARTICLE 20
DEFAULT
-------
20.1 Purchaser's Default. If Purchaser fails to accept title and pay
-------------------
the Cash Balance in accordance with this Agreement, the Deposit, together
with all interest accrued thereon, if any, shall be retained by Seller as
liquidated damages and as Seller's sole and exclusive remedy for Purchaser's
default, except as provided in the last sentence of this Section 20.1 as to
post-closing defaults by Purchaser only. The provisions herein contained for
liquidated and agreed upon damages are bona fide provisions for such and are
not a penalty, the parties agreeing that by reason of Seller binding itself
to the sale of the Property and by reason of the withdrawal of the Property
from sale at a time when other parties would be interested in acquiring the
Property, that Seller will sustain damages if Purchaser defaults, which
damages will be substantial but will not be capable of determination with
mathematical precision, and therefore, as aforesaid, this provision for
liquidated and agreed upon damages has been incorporated in this Agreement as
a provision beneficial to both parties. Notwithstanding the foregoing
provisions of this Section, there shall be no limitation on Purchaser's
liabilities or Seller's remedies with respect to any indemnities made by
Purchaser that are specifically stated herein to survive the termination of
this Agreement.
20.2 Seller's Default. Reference is hereby made to Sections 21.1 and
----------------
21.2 hereof for Purchaser's exclusive remedies in the event of a breach of
representation or failure to perform any agreement set forth in this
Agreement on the part of Seller. If Seller shall default in the performance
of its obligations hereunder, whether or not Purchaser shall have elected to
accept title in accordance with the provisions of Section 5.2 hereof, then
Purchaser's sole remedy shall be either to (i) terminate this Agreement and
receive a refund of the Deposit together with any interest accrued thereon,
or (ii) bring an action for specific performance of Seller's obligations
under this Agreement, provided, however, that if Purchaser shall not have
commenced such action within a period of thirty (30) days following the date
scheduled for Closing hereunder, Purchaser shall be deemed to have waived its
right to proceed under this clause (ii) and shall be deemed instead to have
elected the remedy provided for in clause (i) of this sentence.
ARTICLE 21
CONDITIONS; SURVIVAL
--------------------
21.1 Conditions. (a) If Purchaser has actual knowledge, or should
----------
have actual knowledge by inspection of the Property or of the public records
at or before the Closing, that (i) any representation of Seller hereunder is
untrue, as of the date represented, or (ii) Seller has failed to perform,
observe or comply with any covenant, agreement or condition to be performed
hereunder, Purchaser shall notify Seller of such within five (5) days after
discovery by Purchaser. Purchaser's failure to so notify Seller shall be
deemed to constitute Purchaser's waiver of same as a condition to Closing and
otherwise.
(b) In the event that (A) any of Seller's representations made in
Section 3.1 are not true as of the date of this Agreement (and for the
purposes hereof a representation shall be untrue only if factually untrue and
having a material adverse business or legal impact on Purchaser), and
(B) Purchaser has actual knowledge, or should have actual knowledge by
inspection of the Property or of the public records at or before the Closing
that any of Seller's representations referred to in clause (A) of this
sentence are untrue, then Purchaser may, as its sole remedy (whether at law
or in equity), all other claims for damages or specific performances being
hereby expressly waived by Purchaser, elect to terminate this Agreement, and
the sole liability of Seller shall be to return to Purchaser the Deposit,
together with any interest accrued thereon, and thereupon, this Agreement
shall be null and void and the parties hereto shall be relieved of all
further obligations and liability under this Agreement, other than with
respect to those obligations and liabilities which expressly survive the
termination of this Agreement.
21.2 Survival. Except as specifically set forth to the contrary in this
--------
Agreement, none of the representations, warranties, covenants, indemnities,
agreements, obligations or commitments made by Seller in this Agreement shall
survive the Closing, the same being merged in the conveyance. If survival is
herein provided and no time specified, such matter or matters shall be the
basis for a claim against Seller only if asserted in writing within six (6)
months after the Closing Date.
ARTICLE 22
SUCCESSORS AND ASSIGNS
----------------------
22.1 Assignment. Neither this Agreement nor any of the rights of
----------
Purchaser hereunder (nor the benefits of such rights) may be assigned,
transferred or encumbered without Seller's prior written consent, which
consent may be granted or denied in Seller's sole and absolute discretion,
and any purported assignment, transfer or encumbrance without Seller's prior
written consent shall be void. Purchaser expressly covenants and agrees that:
(a) if Purchaser is a corporation, a sale or transfer (or the
granting of an option, put or call right with respect to a transfer) of more
than one percent (1%) (at any one time or, in the aggregate, from time to
time) of the shares of any class of the issued and outstanding stock of
Purchaser, its successors or assigns, or the issuance of additional shares of
any class of its stock to the extent of more than one percent (1%) (at any
one time or, in the aggregate, from time to time) of the number of shares of
said class of stock issued and outstanding on the date hereof, or
(b) if Purchaser is a partnership, joint venture or limited
liability company, a sale or transfer (or the granting of an option, put or
call right with respect to a transfer) of more than one percent (1%) (at any
one time or, in the aggregate, from time to time) of the partnership, joint
venture, membership or other unincorporated association interests of
Purchaser, its successors or assigns, or the issuance of additional
partnership, joint venture or member interests of any class to the extent of
more than one percent (1%) (at any one time or, in the aggregate, from time
to time) of the amount of partnership, joint venture or member interests
issued on the date hereof, shall, in any such case, constitute an assignment
of this Agreement. Unless, in each instance, the prior written consent of
Seller has been obtained, any such assignment shall constitute a material
default under this Agreement and shall entitle Seller to exercise all rights
and remedies under this Agreement, at law or equity, in the case of such a
default.
Notwithstanding anything to the contrary set forth above or
elsewhere in this Agreement, Purchaser shall have the right (subject to the
provisions of the next sentence), in Purchaser's sole discretion (and without
the need or any requirement for obtaining Seller's consent), to assign at
Closing its rights under this Agreement to any single purpose entity whose
beneficial interest is wholly owned by SL Green Operating Partnership, L.P..
Notwithstanding the provisions of the immediately preceding sentence, in the
event Purchaser intends to make such an assignment, no such assignment shall
be effective hereunder unless Purchaser notifies Seller of the fact that
such assignment has been or will be made not more than ten (10) days after
execution and delivery by Purchaser of this Agreement. In no event shall
Seller be required to modify any instruments from a party other than Seller
(as for example a lessor consent) to accommodate such assignment.
ARTICLE 23
BROKERS
-------
23.1 Purchaser's Representation. Purchaser represents and warrants
--------------------------
to Seller that it has not dealt with any broker, finder or consultant
other than Eastdil Realty Company, LLC (the "Broker"), in connection with the
transaction which is the subject of this Agreement, and that all negotiations
involving Purchaser with respect to the terms of this Agreement were
conducted by or through Broker. Purchaser further represents and warrants
that in the event any claim is made for a broker's, finder's or
consultant's commission or fee by anyone other than Broker as a result of
any acts or actions of Purchaser or its representatives with respect to the
within transaction, Purchaser, its heirs, successors and assigns do hereby
agree to indemnify and hold Seller harmless from any and all loss,
liability, cost, damage or expense with respect to such claims
(including, without limitation, reasonable attorneys' fees and disbursements)
without any charge or cost to Seller. Seller shall pay the brokerage
commission to Broker in accordance with Seller's agreement with Broker if and
when title passes hereunder. This Section shall survive the Closing or
earlier termination of this Agreement.
ARTICLE 24
ESCROW
------
The parties hereto have mutually requested that Bachner, Tally, Polevoy
& Misher LLP act as escrow agent (the "Escrow Agent") for the purpose of
holding the Deposit in accordance with the terms of this Agreement and the
Escrow Letter executed by and among Seller, Purchaser and Escrow Agent
contemporaneously with the execution of this Agreement in the form of Exhibit
11 annexed hereto (the "Escrow Letter"). Purchaser recognizes that Escrow
Agent represents Seller herein and has agreed to act as Escrow Agent as an
accommodation to both parties hereto. Purchaser further acknowledges and
agrees that in the event of any dispute between the parties to this Agreement
or the Escrow Letter, Escrow Agent shall be free to continue its
representation of Seller with regard to these matters. The Deposit, together
with the interest accrued thereon, if any, shall be held by Escrow Agent
until the earlier of the Closing, or such time as Seller or Purchaser may be
entitled to a refund thereof in accordance with this Agreement. At such time
Escrow Agent shall remit said sum, together with any interest actually
accrued thereon, to the party entitled thereto in accordance with this
Agreement. At the Closing, the Deposit, together with any interest actually
accrued thereon, shall be paid to Seller. Escrow Agent shall have no
liability to Seller or Purchaser with respect to the amount of interest
earned on the Deposit while in escrow.
ARTICLE 25
MISCELLANEOUS
-------------
25.1 Merger. This Agreement constitutes the entire understanding
------
between the parties with respect to the transaction contemplated herein, and
all prior or contemporaneous oral agreements, understandings, representations
and statements, and all prior written agreements, understandings,
representations and statements are merged into this Agreement. Neither this
Agreement nor any provisions hereof may be modified, amended, discharged or
terminated except by an instrument in writing signed by the party against
which the enforcement of such modification, amendment, discharge or
termination is sought, and then only to the extent set forth in such
instrument. Unless otherwise provided herein, no provision of this Agreement
may be waived except by an instrument in writing signed by the party against
which the enforcement of such waiver is sought.
25.2 Headings. The Article, Section, Schedule and Exhibit headings used
--------
herein are for convenience only, and are not to be used in determining the
meaning of this Agreement or any part hereof.
25.3 Governing Law. This Agreement and its interpretation and
-------------
enforcement shall be governed by the laws of the State of New York without
regard to conflict of law principles.
25.4 Jurisdiction. For the purposes of any suit, action or proceeding
------------
involving this Agreement, Seller and Purchaser hereby expressly submit to the
jurisdiction of all federal and state courts sitting in the State of New
York, and consent that any order, process, notice of motion or other
application to or by any such court, or a judge thereof, may be served within
or without such court's jurisdiction by registered mail or by personal
service, provided that a reasonable time for appearance is allowed, and
Seller and Purchaser agree that such courts shall have the exclusive
jurisdiction over any such suit, action or proceeding commenced by either or
both of said parties. In furtherance of such agreement, Seller and Purchaser
agree upon the request of the other party to discontinue (or agree to the
discontinuance of) any such suit, action or proceeding pending in any other
jurisdiction.
25.5 Waiver of Venue and Inconvenient Forum Claims. Seller and
---------------------------------------------
Purchaser hereby irrevocably waive any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement brought in any federal or state court sitting
in the State of New York, and hereby further irrevocably waive any claim that
any such suit, action or proceeding is brought in any inconvenient forum.
25.6 Waiver of Jury Trial. Each of the parties hereto waives,
--------------------
irrevocably and unconditionally, any and all right to trial by jury in any
action brought on, under, or by virtue of, or relating in any way to this
Agreement or the transactions contemplated hereby, or any of the documents
executed in connection herewith, the Property, or any claims, defenses,
rights of set-off or other actions pertaining hereto or to any of the
foregoing.
25.7 Successors and Assigns. This Agreement shall be binding on the
----------------------
successors and assigns of the parties hereto.
25.8 Invalid Provisions. If any term or provision of this Agreement,
------------------
or any part of any term or provision, or the application thereof to any
person or circumstance shall to any extent be held invalid or unenforceable,
the remainder of this Agreement or the application of such term or provision
or remainder thereof to persons or circumstances other than those as to which
it is held invalid and unenforceable shall not be affected thereby, and each
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
25.9 Schedules and Exhibits. All Schedules and Exhibits which are
----------------------
annexed to this Agreement are a part of this Agreement and are incorporated
herein by reference.
25.10 No Other Parties. The provisions of this Agreement are for
----------------
the sole benefit of the parties to this Agreement and their successors and
permitted assigns, and shall not give rise to any rights by or on behalf of
anyone other than such parties, and no party is intended to be a third party
beneficiary hereof. No provisions of this Agreement, or of any of the
documents and instruments executed in connection herewith, shall be construed
as creating in any person or entity other than Purchaser and Seller and their
permitted assigns any rights of any nature whatsoever.
25.11 Interpretation. This Agreement shall be construed without
--------------
regard to any presumption or other rule requiring construction against the
party causing this Agreement to be drafted.
25.12 Counterparts; Faxed Signatures. This Agreement may be
------------------------------
executed in multiple counterparts, each of which shall, when executed, be
deemed to be an original, and all of which when taken together shall
constitute but one agreement. Each party may rely upon a faxed counterpart
of this Agreement executed and delivered by the other party as if such
counterpart were an original counterpart.
25.13 Binding Effect. This Agreement shall not become a binding
--------------
obligation upon Seller until the same has been fully executed by Purchaser
and Seller, and until a fully executed original counterpart thereof has been
delivered by Seller to Purchaser.
25.14 Recordation. Neither this Agreement, nor any other document
-----------
related hereto, nor any memorandum thereof shall be recorded, and any such
recording shall be void and of no force or effect.
25.15 Litigation Fees. In the event that any litigation arises
---------------
under this Agreement, the prevailing party (which term shall mean the party
which obtains substantially all of the relief sought by such party) shall be
entitled to recover, as a part of its judgment, reasonable attorneys' fees.
25.16 Title Omissions. Any and all of the title matters which
---------------
Purchaser shall take title to the Property subject to, as specified in this
Agreement, may be omitted by Seller in the Deed to be delivered to Purchaser
at the Closing, provided, however, that all such provisions so omitted shall
not be in violation of any covenants contained in the Deed.
25.17 Defined Terms. The references to defined terms used in this
-------------
Agreement are listed in the Section of this Agreement entitled "Defined
Terms."
25.18 Singular/Plural. The use of the singular shall be deemed to
---------------
include the plural, and vice versa, whenever the context so requires.
ARTICLE 26
AFFILIATED PURCHASE AGREEMENT
-----------------------------
26.1 Affiliate Purchaser. Purchaser or an Affiliate of Purchaser (as
-------------------
hereinafter defined) is concurrently entering into agreements to purchase one
or more properties from Seller or an Affiliate of Seller (as hereinafter
defined). As used herein, the term "Affiliate of Purchaser" shall mean any
entity or person under the control of, controlled by or under common control
with Purchaser. As used herein, the term "Affiliate of Seller" shall mean
any entity or person under the control of, controlled by or under common
control with Seller.
26.2 Affiliate Properties. The properties that Purchaser or an
--------------------
Affiliate of Purchaser and Seller or an Affiliate of Seller have entered into
agreements to sell are:
(i) 25 West 43rd Street, New York, N.Y. or a leasehold estate
therein; and
(ii) 420 Lexington Avenue, New York, N.Y. or a leasehold estate
therein (collectively "Affiliate Properties").
26.3 Rights on Purchaser Default. If Purchaser or an Affiliate of
---------------------------
Purchaser has entered into an agreement of sale and purchase with Seller or
an Affiliate of Seller pursuant to which Purchaser or an Affiliate of
Purchaser has agreed to purchase one or more Affiliate Properties (an
"Affiliate Contract"), and if Purchaser or Affiliate of Purchaser shall
default under the Affiliate Contract, or if for any other reason (other than
Seller or Affiliate of Seller's default) Purchaser or Affiliate of Purchaser
fails to acquire the property to be conveyed thereunder pursuant to the terms
thereof, or in the event Purchaser defaults under the Affiliate Contract or
otherwise is responsible without just cause for a delay of the Closing under
the Affiliate Contract, then and in such event Seller, shall have the
following rights, which it may exercise in its sole and absolute discretion
without prior notice, at any time up to and including the completion of the
Closing (under this Agreement):
26.3.1 Seller may elect to terminate this Agreement (i) with the same
effect as if it were terminated for Purchaser's default
hereunder if the reason for Purchaser's failure to close under
the Affiliate Contract is Purchaser's or Affiliate of
Purchaser's default thereunder, or (ii) with the same effect
as if it were terminated pursuant to Section 11.1.1 hereof, if
the reason for Purchaser's or Affiliate of Purchaser's failure
to close under the Affiliate Contract is other than
Purchaser's Default thereunder; or
26.3.2 In the event Seller does not elect to terminate this Agreement
pursuant to subsection 26.3.1, or if Purchaser defaults under
the Affiliate Contract or otherwise is responsible without
just cause for a delay of the closing under the Affiliate
Contract, Seller may elect to adjourn the Closing hereunder to
a date which will be concurrent with any date to which the
closing under the Affiliate Contract may have been adjourned
so as to coordinate both closings; or
26.3.3 Seller may elect to proceed with the Closing (hereunder),
notwithstanding that the closing under the Affiliate Contract
has not occurred or may not thereafter occur.
26.4 From the date hereof and continuing through the period which is six (6)
months following the Closing, Seller shall make available to Ernst & Young
(as agent for Purchaser) all of the books and records with respect to the
operation of the Property with respect to calendar year 1997 and that portion
of calendar year 1998 preceding any such investigation or audit during normal
business hours. During such period, Ernst & Young, at Purchaser's sole cost
and expense, may inspect and audit such books and records with respect to
calendar year 1997 (and portion of 1998) and, in this regard, Seller shall
cooperate (at no cost to Seller) with Purchaser in Purchaser's inspection and
audit.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
of Sale and Purchase as of the date first above written.
1466 BROADWAY ASSOCIATES,
a New York general partnership
By: /s/ Leona M. Helmsley
----------------------------------
Leona M. Helmsley, Individually and as
Executrix of Estate of Harry B. Helmsley
SL GREEN OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: SL GREEN REALTY CORP.,
a Maryland corporation, its general
partner
By: /s/ Benjamin P. Feldman
-------------------------
Name:
Title:
EXHIBIT 1
---------
Deed
----
NYBTU FORM 8001
BARGAIN AND SALE DEED WITHOUT COVENANT AGAINST GRANTOR'S ACTS
THIS INDENTURE, made the _____ day of __________, nineteen hundred and ____
BETWEEN _______________________________________, a _________________________,
having an address at _______________________________________________________
party of the first part, and
__________________________________, a ____________________, having an
address at _____________________________________________________________
party of the second part,
WITNESSETH, that the party of the first part, in consideration of ten dollars
and other valuable consideration paid by the party of the second part, does
hereby grant and release unto the party of the second part, the heirs or
successors and assigns of the party of the second part forever,
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the
______________________ and more particularly described on Exhibit A attached
hereto and hereby made a part hereof.
TOGETHER with all right, title and interest, if any, of the party of the
first part in and to any streets and roads abutting the above described
premises to the center lines thereof; TOGETHER with the appurtenances and all
the estate and rights of the party of the first part in and to said premises;
TO HAVE AND TO HOLD the premises herein granted unto the party of the second
part, the heirs or successors and assigns of the party of the second part
forever.
AND the party of the first part, in compliance with Section 13 of the Lien
Law, covenants that the party of the first part will receive the
consideration for this conveyance and will hold the right to receive such
consideration as a trust fund to be applied first for the purpose of paying
the cost of the improvement and will apply the same first to the payment of
the cost of the improvement before using any part of the total of the same
for any other purpose. The word "party" shall be construed as if it read
"parties" whenever the sense of this indenture so requires.
IN WITNESS WHEREOF, the party of the first part has duly executed this deed
the day and year first above written.
IN PRESENCE OF: (SELLER)
_______________________________ ________________________________________
- --------------------------------------------------------------------------
STATE OF NEW YORK, COUNTY OF ___________________ SS:
On the ____ day of __________, 19__, before me personally came
__________________________, to me known to be the individual described in and
who executed the foregoing instrument, and acknowledged that he executed the
same.
________________________________
Notary Public
STATE OF NEW YORK, COUNTY OF ___________________ SS:
On the ____ day of __________, 19__, before me personally came
___________________________________, to me known, who, being by me duly
sworn, did depose and say that he (resides at No./maintains an office at)
____________________________________________________________________________
_________________________________________; that _he is the
________________________ of _______________________________________, the
corporation described in and which executed the foregoing instrument(; that
he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by order of the
board of directors of said corporation), and that he signed his name thereto
by like order (of the board of directors of said corporation).
________________________________
Notary Public
BARGAIN AND SALE DEED
WITHOUT COVENANT AGAINST GRANTOR'S ACTS
TITLE NO.
________________________________
TO
________________________________
SECTION
BLOCK
LOT
COUNTY OR TOWN
RETURN BY MAIL TO:
_____________________________________________
_____________________________________________
_____________________________________________
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
EXHIBIT 2
---------
Bill of Sale
------------
KNOW ALL MEN BY THESE PRESENTS that 1466 BROADWAY ASSOCIATES,
having an office c/o Helmsley Enterprises, Inc., 230 Park Avenue, New York,
New York 10169 ("Seller") for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration to it in hand paid, at or
before the unsealing and delivery of these presents by ,
--------------------
having an office at _______________________________________________________
("Purchaser"), the receipt and sufficiency whereof are hereby
acknowledged, has transferred and conveyed and by these presents does
quitclaim, release, transfer and convey unto Purchaser, its successors and
assigns, all fixtures, machinery and equipment to the extent same constitute
personal property, and all other personal property (collectively, the
"Personal Property") owned by Seller, attached or appurtenant to, or used in
connection with the occupancy and operation of those certain premises known
as 1466 Broadway a/k/a 152 West 42nd Street, New York, New York (the
"Premises").
TO HAVE AND TO HOLD, the same unto Purchaser, its successors and
assigns, forever.
This transfer is made as part of the transfer of the Premises
by Seller to Purchaser as of the date hereof, and both parties agree and
acknowledge that no part of the consideration therefor is allocated to the
Personal Property.
This transfer is made without representation, warranty or guaranty
by, or recourse against, Seller of any kind whatsoever.
Neither Seller nor any agent or representative of Seller has made,
and Seller is not liable or bound in any manner by, any express or implied
warranties, guaranties, inducements, representations or information
pertaining to the Personal Property or any part thereof, the physical
condition, the uses which can be made of the same or any other matter or
thing with respect thereto and the Personal Property is being transferred "as
is".
IN WITNESS WHEREOF, Seller has signed this instrument as of this
day of , 199 .
------- -------------------- ---
1466 BROADWAY ASSOCIATES
By:__________________________
Name:
Title:
EXHIBIT 3
---------
Assignment and Assumption of Service,
Maintenance and Concessionaire Agreements
-----------------------------------------
KNOW ALL MEN BY THESE PRESENTS, that 1466 BROADWAY ASSOCIATES,
having an office c/o Helmsley Enterprises, Inc., 230 Park Avenue, New York,
New York 10169 (the "Assignor"), in consideration of Ten Dollars ($10.00) in
hand paid by having an office at
-------------------------------
(the "Assignee"), the receipt and
sufficiency of which are hereby acknowledged, does hereby assign, transfer
and set over to Assignee, all of Assignor's right, title and interest in and
to any service, maintenance and concessionaire agreements (including, but not
limited to, any management agreement) affecting the premises known as 1466
Broadway a/k/a 152 West 42nd Street, New York, New York (the "Premises") in
effect on the date hereof (the "Agreements").
TO HAVE AND TO HOLD, the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions therein contained. This Assignment is made without
warranty or representation by, or recourse against, Assignor of any kind
whatsoever.
This Assignment is made in connection with the transfer this
day of the Premises by Assignor to Assignee.
Assignee hereby assumes the performance of all of the terms,
covenants and conditions of the Agreements on Assignor's part to be performed
thereunder on, from and after the date hereof and will well and truly perform
all of the terms, covenants and conditions of the Agreements from and after
the date hereof, and with the same force and effect as though Assignee had
signed the Agreements as a party named therein.
This Agreement shall not be construed as a representation or
warranty by Assignor as to the transferability of the Agreements, and
Assignor shall have no liability to Assignee in the event that any or all of
the Agreements (i) are not transferable to Assignee or (ii) are canceled or
terminated by reason of this assignment or any acts of Assignee.
IN WITNESS WHEREOF, Assignor and Assignee have signed this
instrument as of the day of , 199 .
------- ----------------- ---
Assignor: 1466 BROADWAY ASSOCIATES
By:__________________________
Name:
Title:
Assignee: ( )
By:__________________________
Name:
Title:
EXHIBIT 4
---------
Assignment and Assumption of Landlord's Interest in Leases
----------------------------------------------------------
KNOW ALL MEN BY THESE PRESENTS that 1466 BROADWAY ASSOCIATES,
having an office c/o Helmsley Enterprises, Inc., 230 Park Avenue, New York,
New York 10169 (the "Assignor"), in consideration of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid by
---------------------
, having an office at
----- ----------------------------------
(the "Assignee"), the receipt and sufficiency of which are hereby
acknowledged, hereby assigns unto Assignee all of Assignor's right, title and
interest in and to the following:
(i) All leases (the "Leases") made and entered into by any
and all tenants at those certain premises known as 1466 Broadway
a/k/a 152 West 42nd Street, New York, New York (the "Premises");
and
(ii) All security deposits, if any, held by Assignor under the
Leases.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions contained in the Leases. This Assignment is made
without warranty or representation by, or recourse against, Assignor of any
kind whatsoever.
Assignee hereby assumes the performance of all of the terms,
covenants and conditions of the Leases (including but not limited to the
obligation to pay for tenant improvement work and cash work allowances)
herein assigned by Assignor to Assignee on, from and after the date hereof
and hereby agrees to perform all of the terms, covenants and conditions of
the Leases to be performed on, from and after the date hereof, all with the
full force and effect as if Assignee had signed the Leases originally as the
landlord named therein, and, in addition, with respect to the payment and
performance of tenant improvement work and payment of cash work allowances,
Assignee hereby assumes the obligation to perform such work and make such
payments with respect to Leases entered into on or after
------------------
- , 1997 (the "Leasing Cutoff Date").
Assignee does hereby agree for itself and its successors and
assigns to hold and apply all security deposits in accordance with the terms
of the Leases pursuant to which the same were initially deposited.
Assignee does hereby agree for itself, its successors and assigns,
to indemnify, defend and save Assignor, its successors and assigns, harmless
from and against any and all claims and liability asserted or arising in
connection with the performance by Assignee under the Leases (i) on, from and
after the date hereof, and (ii) with respect to the payment and performance
of tenant improvement work and payment of cash work allowances pursuant to
Leases entered into on or after the Leasing Cutoff Date, on, from and after
the Leasing Cutoff Date.
IN WITNESS WHEREOF, the parties hereto have signed this
instrument as of this day of , 199 .
------ ----------------- ---
Assignor: 1466 BROADWAY ASSOCIATES
By:__________________________
Name:
Title:
Assignee: ( )
By:__________________________
Name:
Title:
EXHIBIT 5
---------
Assignment of Licenses and/or Permits
-------------------------------------
KNOW ALL MEN BY THESE PRESENTS that 1466 BROADWAY ASSOCIATES,
having an office c/o Helmsley Enterprises, Inc., 230 Park Avenue, New York,
New York 10169 (the "Assignor"), in consideration of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid by
---------------------
, having an office at
--- -----------------------------------
(the "Assignee"), the receipt and sufficiency of which are duly
acknowledged, hereby assigns and quitclaims unto Assignee all of Assignor's
right, title and interest, if any, in and to all assignable licenses and/or
permits, if any, relating to and affecting those certain premises known as
1466 Broadway a/k/a 152 West 42nd Street, New York, New York (the
"Premises").
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions therein contained.
This Assignment is made in connection with the transfer this day of
the Premises by Assignor to Assignee.
This Assignment is made without warranty or representation by,
or recourse against Assignor of any kind whatsoever.
IN WITNESS WHEREOF, the undersigned has signed this Assignment
as of this day of , 199 .
------ ---------------- ---
1466 BROADWAY ASSOCIATES
By:__________________________
Name:
Title:
EXHIBIT 6
---------
Assignment of Warranties and Guarantees
---------------------------------------
KNOW ALL MEN BY THESE PRESENTS that 1466 BROADWAY ASSOCIATES,
having an office c/o Helmsley Enterprises, Inc., 230 Park Avenue, New York,
New York 10169 (the "Assignor"), in consideration of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid by
---------------------
, having an office at
- --------------------------------------
(the "Assignee"), the receipt and sufficiency of which are duly
acknowledged, hereby assigns and quitclaims unto Assignee all of Assignor's
right, title and interest, if any, in and to all assignable warranties and
guarantees of contractors, manufacturers, suppliers and/or installers, if
any, relating to those certain premises known as 1466 Broadway a/k/a 152 West
42nd Street, New York, New York (the "Premises"), including all assignable
warranties and guarantees covering the materials, goods and equipment
installed in or upon the Premises.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions therein contained.
This Assignment is made in connection with the transfer this day of
the Premises by Assignor to Assignee.
This Assignment is made without warranty or representation by, or
recourse against, Assignor of any kind whatsoever.
IN WITNESS WHEREOF, the undersigned has signed this Assignment
as of this day of , 199 .
------- ------------------ ---
1466 BROADWAY ASSOCIATES
By:__________________________
Name:
Title:
EXHIBIT 7
---------
Post-Closing Adjustment Letter
------------------------------
, 199
-------------------- ---
(Name and Address of
Purchaser)
Re: 1466 Broadway a/k/a 152 West 42nd Street,
New York, New York (the "Premises")
--------------------------------------------
Gentlemen:
In connection with the closing adjustments made pursuant to the transfer
of title of the Premises by the undersigned to you, a copy of which closing
adjustments is annexed hereto, it is hereby agreed that if any arithmetic
calculations shall prove to be erroneous, or any adjustment shall be omitted,
same shall be adjusted between you and the undersigned after the closing.
Any such adjustment shall be paid promptly after same is ascertained. The
obligation to correct any erroneous adjustment or to make any additional
adjustment in accordance with the above shall survive the closing.
Very truly yours,
1466 BROADWAY ASSOCIATES
By:__________________________
Name:
Title:
AGREED TO:
(Purchaser)
By:___________________
Name:
Title:
EXHIBIT 8
---------
FIRPTA Certificate
------------------
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. To inform the transferee that withholding of
tax is not required upon the disposition of a U.S. real property interest by
1466 Broadway Associates, the undersigned hereby certifies the following on
behalf of 1466 Broadway Associates:
1. 1466 Broadway Associates is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms
are defined in the Internal Revenue Code and Income Tax
Regulations);
2. 1466 Broadway Associates' U.S. employer identification number
is , and
----------
3. 1466 Broadway Associates' office address is c/o Helmsley
Enterprises, Inc., 230 Park Avenue, New York, New York 10169.
The undersigned understands that this certification may be
disclosed to the Internal Revenue Service by the transferee and that any
false statement contained herein could be punished by fine, imprisonment, or
both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of 1466 Broadway Associates.
Dated:___________________________ _____________________________
(Title)
EXHIBIT 9
---------
Tenant Notice Letter
--------------------
(Letterhead of Seller)
CERTIFIED MAIL
- --------------
RETURN RECEIPT REQUESTED
- ------------------------
AND BY HAND
- -----------
, 199
---------------------- ---
(Tenant)
Re: Acquisition of 1466 Broadway, New York, New York (the "Property")
-----------------------------------------------------------------
Dear ________________:
We are pleased to announce that ____________________ has today acquired
the Property from 1466 Broadway Associates. _________________________'s
address is ______________________________.
Any security held in accordance with your lease at the
Property ("Lease") has been transferred to _________________________. If
that security is in the form of a letter of credit, _________________________
will shortly be in touch with you to arrange for appropriate changes to the
letter of credit to reflect _________________________'s acquisition of the
Property.
From this day forward, all checks payable to the landlord under
your Lease should be made payable to:
Should you have any questions concerning the acquisition of the
Property by _________________________, please call ____________________ at
______________.
Very truly yours,
1466 BROADWAY ASSOCIATES
By:_____________________
Accepted and Agreed to:
(PURCHASER)
By:______________________
EXHIBIT 10
Assignment and Assumption of Brokerage Agreements
-------------------------------------------------
KNOW ALL MEN BY THESE PRESENTS that 1466 BROADWAY ASSOCIATES,
having an office c/o Helmsley Enterprises, Inc., 230 Park Avenue, New York,
New York 10169 (the "Assignor"), in consideration of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid by
---------------------
, having an office at
- -------------------------------------
(the "Assignee"), the receipt and sufficiency of which are hereby
acknowledged, does hereby assign, transfer and set over to Assignee, all of
Assignor's right, title and interest in and to all brokerage agreements set
forth on Exhibit 1 annexed hereto (the "Brokerage Agreements").
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions contained in the Brokerage Agreements. This
Assignment is made without warranty or representation by, or recourse
against, Assignor of any kind whatsoever.
This Assignment is made in connection with the conveyance as of the
date hereof by Assignor to Assignee of the premises known as and located at
1466 Broadway a/k/a 152 West 42nd Street, New York, New York.
Assignee hereby assumes the obligation to pay any commissions
coming due under the Brokerage Agreements as a result of the exercise after
__________ , 199 (the "Leasing Cutoff Date") of any option or right of
---
first refusal by the "Tenant" under any "Lease" (as such terms are
defined in that certain Agreement of Sale and Purchase between Assignor, as
Seller, and Assignee, as Purchaser dated ______________), or the leasing
after the Leasing Cutoff Date of additional space by any such Tenant, or the
renewal or extension of the term of any Lease entered into after the Leasing
Cutoff Date.
IN WITNESS WHEREOF, the parties hereto have signed this instrument
as of this day of , 199 .
--------- --------------------- ---
ASSIGNOR:
1466 BROADWAY ASSOCIATES
By:
-------------------------------------
Name:
Title:
ASSIGNEE:
( )
--------------------------------------
By:
-------------------------------------
Name:
Title:
EXHIBIT 11
Escrow Letter
-------------
Dated: ________________
Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017
Re: Agreement of Sale and Purchase (the "Agreement") between 1466
Broadway Associates ("Seller") and _____________ ("Purchaser")
dated ______________
Premises: 1466 Broadway, New York, New York
Gentlemen:
Pursuant to the above-referenced Agreement made this date by and
between the undersigned, you are required to act as escrow agent, to hold $
_________ ("Escrow Deposit") in escrow, in accordance with the terms and
conditions hereinafter set forth. The Escrow Deposit shall be deposited in an
interest bearing account with Citibank, N.A.
The Escrow Deposit together with interest earned thereon, if any,
shall be released or delivered to the party entitled thereto pursuant to the
Agreement with reasonable promptness after you shall have received notice:
(a) from both parties to this Escrow Letter authorizing release of the
Escrow Deposit; or
(b) of the occurrence of either of the following events:
(i) the closing under the Agreement; or
(ii) the receipt by Escrow Agent of a written notice from either
party to this Escrow Letter stating that an event has occurred
under the Agreement entitling the party delivering such notice
to the Escrow Deposit, whereupon Escrow Agent shall deliver
written notice (the "Default Notice") thereof to the other
party and, unless such other party shall have delivered a
written notice of objection to Escrow Agent within ten (10)
days following receipt by such other party of the Default
Notice, Escrow Agent shall deliver the Escrow Deposit to the
party initially requesting the Escrow Deposit.
It is agreed that the duties of Escrow Agent are only such as are
herein specifically provided, being purely ministerial in nature, and that
Escrow Agent shall incur no liability whatever except for willful misconduct
or gross negligence so long as Escrow Agent has acted in good faith. The
undersigned hereby release Escrow Agent from any act done or omitted to be
done by Escrow Agent in good faith in the performance of Escrow Agent's
duties hereunder.
Escrow Agent shall be under no responsibility with respect to the
Escrow Deposit other than faithfully to follow the instructions herein
contained. Without limiting the generality of the foregoing, Escrow Agent
shall have no responsibility to protect the Escrow Deposit, or to do any act
or thing whatever in regard to the Escrow Deposit. Escrow Agent shall not be
responsible for any failure to demand, collect or enforce any obligation with
respect to the Escrow Deposit or for any diminution in value of the Escrow
Deposit from any cause. Escrow Agent may consult with counsel and shall be
fully protected in any action taken in good faith, in accordance with such
advice. Escrow Agent shall not be required to defend any legal proceedings
which may be instituted against Escrow Agent in respect of the subject matter
of these instructions unless requested so to do by the undersigned and
indemnified to the satisfaction of Escrow Agent against the cost and expense
of such defense. Escrow Agent shall not be required to institute legal
proceedings of any kind. Escrow Agent shall have no responsibility for the
genuineness or validity of any document or other item deposited with Escrow
Agent, and shall be fully protected in acting in accordance with any written
instructions given to Escrow Agent hereunder and believed by Escrow Agent to
have been signed by the proper parties.
Unless otherwise set forth in the first paragraph hereof the Escrow
Deposit shall not include interest thereon. If pursuant to said paragraph the
Escrow Deposit shall include interest, the same shall be deemed to mean only
the interest actually earned from the date deposited in an interest bearing
form to the date withdrawn. Escrow Agent shall not have any duty to maximize
the rate or interest or duration of interest bearing form. If deposited in a
form which is not convertible to cash when Escrow Agent is required to
release the Escrow Deposit, Escrow Agent shall be deemed to have complied
with the requirement of release by delivery of a duly executed assignment of
its rights in the Escrow Deposit.
Escrow Agent assumes no liability under this Escrow Letter except
that of a stakeholder. If there is any dispute as to whether Escrow Agent is
obligated to deliver the Escrow Deposit, or as to whom the Escrow Deposit is
to be delivered, Escrow Agent will not be obligated to make any delivery of
the Escrow Deposit, but in such event may hold the Escrow Deposit until
receipt by Escrow Agent of an authorization in writing signed by all the
persons having interest in such dispute, directing the disposition of the
Escrow Deposit, or in the absence of such authorization, Escrow Agent may
hold the sum until the final determination of the rights of the parties in an
appropriate proceeding. If such written authorization is not given, or
proceedings for such determination are not begun and diligently continued,
Escrow Agent is not required to bring an appropriate action or proceeding for
leave to deposit the Escrow Deposit in court pending such determination, but
may at Escrow Agent's sole discretion make a deposit of the Escrow Deposit in
court and in such event all liability and responsibility of Escrow Agent
shall terminate upon such deposit having been made. In making delivery of the
Escrow Deposit in the manner provided for in this Escrow Letter, Escrow Agent
shall have no further liability in the matter.
The undersigned hereby jointly and severally agree to indemnify and
hold the Escrow Agent free and harmless from and against any claim,
liability, suit, cost (including Escrow Agent's reasonable counsel fees) or
other obligation incurred or arising out of this Escrow Letter excluding only
Escrow Agent's liability for its own willful misconduct or gross negligence.
Purchaser and Seller have mutually requested that Escrow Agent act
as escrow agent for the purpose of holding the Escrow Deposit in accordance
with the terms of this Escrow Letter. Purchaser acknowledges that Escrow
Agent represents Seller herein and has agreed to act as escrow agent as an
accommodation to both parties hereto. Purchaser waives all claims in the
nature of conflict of interest against Escrow Agent and further agrees that
in the event of any dispute between Purchaser and Seller, Escrow Agent shall
be free to continue its representation of Seller with regard to these
matters.
Upon delivery of the Escrow Deposit in accordance with this Escrow
Letter, Purchaser and Seller hereby release Escrow Agent from all obligations
and liability hereunder.
Escrow Agent has executed this Escrow Letter to confirm that Escrow
Agent is holding, and will hold, the Escrow Deposit in escrow pursuant to the
provisions of this Escrow Letter.
Except as otherwise provided in this Escrow Letter, any and all
notices, elections, demands, requests and responses thereto permitted or
required to be given under this Escrow Letter shall be in writing, signed by
the party giving the same, and shall be deemed to have been properly given
and shall be deemed effective upon being personally delivered, or after being
deposited in the United States mail, postage prepaid, certified with return
receipt requested, to the other parties at the address of the other parties
set forth below or at such other address within the continental United States
as the other parties may designate by notice specifically designated as a
notice of change of address and given in accordance herewith; provided,
however, that the time period in which a response to any such notice,
election, demand or request must be given shall commence on the date of
receipt thereof; and provided further that no notice of change of address
shall be effective until the date of receipt thereof. Personal delivery to a
party or to any officer, partner, agent or employee of such party at said
address shall constitute receipt. Rejection or other refusal to accept or
inability to deliver because of changed address of which no notice has been
received shall also constitute receipt. Any such notice, election, demand,
request or response shall be addressed as follows:
Seller at: Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017
Attn: Martin D. Polevoy, Esq.
Purchaser:
Attn:
Escrow Agent at: Bachner, Tally, Polevoy & Misher LLP
380 Madison Avenue
New York, New York 10017
Attn: Martin D. Polevoy, Esq.
This Escrow Letter constitutes the entire agreement with respect to
the terms and conditions of such escrow and any modification, amendment or
supplement shall be binding only if made pursuant to an instrument in writing
executed by each of the parties hereto. This Escrow Letter shall be binding
upon and inure to the benefit of our respective successors and assigns except
that the within escrow shall not inure to the benefit of either of the
undersigned's assigns, unless and until you have received a duly executed
assignment and assumption (in form satisfactory to you) of all or the
assignor's obligations hereunder.
Very truly yours,
1466 BROADWAY ASSOCIATES
By:___________________________________
(Purchaser)
By:____________________________________
Accepted and Agreed to:
__________________________________
Bachner, Tally, Polevoy & Misher LLP
Seller's Federal Tax Identification Number
is ___________________.
Purchaser's Federal Tax Identification Number
is ___________________.
=============================================================================
LOAN AGREEMENT
between
SL GREEN OPERATING PARTNERSHIP, L.P.
and
SLG GRAYBAR LLC
and
SLG GRAYBAR 2 LLC
and
NEW GREEN 1140 REALTY LLC
and
SLG 17 BATTERY LLC
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 March 20, 1998
$275,000,000.00
=============================================================================
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
-----------
SECTION 2. AMOUNT AND TERMS OF FACILITY. . . . . . . . . . . . . . . 25
Section 2.01 Advances . . . . . . . . . . . . . . . . . . . . . . 25
--------
Section 2.02 Notice of Borrowing. . . . . . . . . . . . . . . . . 26
-------------------
Section 2.03 Disbursement of Funds. . . . . . . . . . . . . . . . 26
---------------------
Section 2.04 The Note . . . . . . . . . . . . . . . . . . . . . . 27
--------
Section 2.05 Interest. . . . . . . . . . . . . . . . . . . . . . . 27
--------
Section 2.06 Intentionally Deleted. . . . . . . . . . . . . . . . 28
---------------------
Section 2.07 Intentionally Deleted. . . . . . . . . . . . . . . . 28
---------------------
Section 2.08 Intentionally Deleted. . . . . . . . . . . . . . . . 28
---------------------
Section 2.09 Extension of Maturity Date. . . . . . . . . . . . . 28
--------------------------
Section 2.10. Principal Payments. . . . . . . . . . . . . . . . . . 29
------------------
Section 2.11 Voluntary Prepayments. . . . . . . . . . . . . . . . 29
---------------------
Section 2.12 Intentionally Deleted. . . . . . . . . . . . . . . . 29
---------------------
Section 2.13 Application of Payments and Prepayments. . . . . . . 29
---------------------------------------
Section 2.14 Method and Place of Payment. . . . . . . . . . . . . 29
--------------------------
Section 2.15 Intentionally Deleted. . . . . . . . . . . . . . . . 30
---------------------
Section 2.16 Interest Rate Unascertainable, Increased Costs,
-----------------------------------------------
Illegality. . . . . . . . . . . . . . . . . . . . . . 30
----------
Section 2.17 Funding Losses. . . . . . . . . . . . . . . . . . . . 32
--------------
Section 2.18 Increased Capital. . . . . . . . . . . . . . . . . . 32
-----------------
Section 2.19 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 33
-----
Section 2.20 Use of Proceeds and Limitations on Advances. . . . 34
-------------------------------------------
Section 2.21 Addition of 321 West 44/th/ Street . . . . . . . . . 35
----------------------------------
Section 2.22 Intentionally Deleted . . . . . . . . . . . . . . . . 37
---------------------
Section 2.23 Intentionally Deleted. . . . . . . . . . . . . . . . 37
---------------------
Section 2.24 Decision Making by Agent . . . . . . . . . . . . . . 37
------------------------
Section 2.25 Additional Assets . . . . . . . . . . . . . . . . . . 38
-----------------
Section 2.26 Pro Rata Interests . . . . . . . . . . . . . . . . . 38
------------------
SECTION 3. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 39
Section 3.01 Conditions Precedent to Initial Advance . . . . . . . 39
---------------------------------------
Section 3.02 Conditions Precedent to All Advances of the Loan. . . 44
------------------------------------------------
Section 3.03 Acceptance of Borrowings. . . . . . . . . . . . . . . 46
------------------------
Section 3.04 Sufficient Counterparts. . . . . . . . . . . . . . . 46
-----------------------
SECTION 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 46
Section 4.01 Organizational Status. . . . . . . . . . . . . . . . 46
---------------------
Section 4.02 Power and Authority. . . . . . . . . . . . . . . . . 46
-------------------
Section 4.03 No Violation. . . . . . . . . . . . . . . . . . . . . 47
------------
Section 4.04 Litigation. . . . . . . . . . . . . . . . . . . . . . 47
----------
Section 4.05 Financial Statements: Financial Condition; etc. . . . 47
----------------------------------------------
Section 4.06 Solvency. . . . . . . . . . . . . . . . . . . . . . . 47
--------
Section 4.07 Material Adverse Change. . . . . . . . . . . . . . . 48
-----------------------
Section 4.08 Use of Proceeds; Margin Regulations. . . . . . . . . 48
-----------------------------------
Section 4.09 Governmental Approvals. . . . . . . . . . . . . . . . 48
----------------------
Section 4.10 Completed Repairs. . . . . . . . . . . . . . . . . . 48
-----------------
Section 4.11 Tax Returns and Payments. . . . . . . . . . . . . . . 48
------------------------
Section 4.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 48
-----
Section 4.13 Closing Date Transactions. . . . . . . . . . . . . . 49
-------------------------
Section 4.14 Representations and Warranties in Loan Documents. . . 49
------------------------------------------------
Section 4.15 True and Complete Disclosure. . . . . . . . . . . . . 49
----------------------------
Section 4.16 Ownership of Real Property Assets; Existing Security
----------------------------------------------------
Instruments . . . . . . . . . . . . . . . . . . . . . 50
-----------
Section 4.17 No Default. . . . . . . . . . . . . . . . . . . . . . 50
----------
Section 4.18 Licenses, etc. . . . . . . . . . . . . . . . . . . . 50
-------------
Section 4.19 Compliance With Law. . . . . . . . . . . . . . . . . 51
-------------------
Section 4.20 Brokers . . . . . . . . . . . . . . . . . . . . . . . 51
-------
Section 4.21 Judgments . . . . . . . . . . . . . . . . . . . . . . 51
---------
Section 4.22 Property Manager . . . . . . . . . . . . . . . . . . 51
----------------
Section 4.23 Assets of the REIT . . . . . . . . . . . . . . . . . 51
------------------
Section 4.24 REIT Status . . . . . . . . . . . . . . . . . . . . . 52
-----------
Section 4.25 Operations . . . . . . . . . . . . . . . . . . . . . 52
----------
Section 4.26 Stock . . . . . . . . . . . . . . . . . . . . . . . . 52
-----
Section 4.27 Ground Leases . . . . . . . . . . . . . . . . . . . . 52
-------------
Section 4.28 Guarantors . . . . . . . . . . . . . . . . . . . . . 52
----------
Section 4.29 Status of Property . . . . . . . . . . . . . . . . . 52
------------------
Section 4.30 Survival . . . . . . . . . . . . . . . . . . . . . . 55
--------
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 55
Section 5.01 Financial Reports . . . . . . . . . . . . . . . . . . 55
-----------------
Section 5.02 Books, Records and Inspections . . . . . . . . . . . 58
------------------------------
Section 5.03 Maintenance of Insurance. . . . . . . . . . . . . . . 58
------------------------
Section 5.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 62
-----
Section 5.05 Corporate Franchises; Conduct of Business . . . . . . 62
-----------------------------------------
Section 5.06 Compliance with Law. . . . . . . . . . . . . . . . . 63
-------------------
Section 5.07 Performance of Obligations. . . . . . . . . . . . . . 63
--------------------------
Section 5.08 Stock . . . . . . . . . . . . . . . . . . . . . . . . 63
-----
Section 5.09 Change in Rating . . . . . . . . . . . . . . . . . . 63
----------------
Section 5.10 Maintenance of Properties. . . . . . . . . . . . . . 63
-------------------------
Section 5.11 Compliance with ERISA. . . . . . . . . . . . . . . . 63
---------------------
Section 5.12 Settlement/Judgment Notice . . . . . . . . . . . . . 65
--------------------------
Section 5.13 Acceleration Notice . . . . . . . . . . . . . . . . . 65
-------------------
Section 5.14 Intentionally Deleted. . . . . . . . . . . . . . . . 65
---------------------
Section 5.15 Intentionally Deleted. . . . . . . . . . . . . . . . 65
---------------------
Section 5.16 Intentionally Deleted. . . . . . . . . . . . . . . . 65
---------------------
Section 5.17 Intentionally Deleted. . . . . . . . . . . . . . . . 65
---------------------
Section 5.18 Intentionally Deleted. . . . . . . . . . . . . . . . 65
---------------------
Section 5.19 Intentionally Deleted. . . . . . . . . . . . . . . . 65
---------------------
Section 5.20 Intentionally Deleted . . . . . . . . . . . . . . . . 65
---------------------
Section 5.21 Manager . . . . . . . . . . . . . . . . . . . . . . . 65
-------
Section 5.22 Further Assurances . . . . . . . . . . . . . . . . . 65
------------------
Section 5.23 REIT Status . . . . . . . . . . . . . . . . . . . . . 66
-----------
Section 5.24 Additional Covenants . . . . . . . . . . . . . . . . 66
--------------------
Section 5.25 Intentionally Deleted. . . . . . . . . . . . . . . . 66
---------------------
Section 5.26 Keep Well Covenants. . . . . . . . . . . . . . . . . 66
-------------------
Section 5.27 Existing Environmental Conditions, Required Repairs and
-------------------------------------------------------
Preparation of Environmental Reports . . . . . . . . 66
------------------------------------
Section 5.28 Intentionally Deleted. . . . . . . . . . . . . . . . 67
---------------------
Section 5.29 Compliance with Terms of Leaseholds . . . . . . . . . 67
-----------------------------------
Section 5.30 Equity or Debt Offerings . . . . . . . . . . . . . . 67
------------------------
Section 5.31 Notice of Certain Events . . . . . . . . . . . . . . 68
------------------------
Section 5.32 17 Battery Place Condominium . . . . . . . . . . . . 68
----------------------------
SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 68
Section 6.01 Bar Building and 17 Battery Place. . . . . . . . . . 68
---------------------------------
Section 6.02 Intentionally Deleted . . . . . . . . . . . . . . . . 68
---------------------
Section 6.03 Liens. . . . . . . . . . . . . . . . . . . . . . . . 68
-----
Section 6.04 Restriction on Fundamental Changes. . . . . . . . . . 69
----------------------------------
Section 6.05 Transactions with Affiliates. . . . . . . . . . . . . 69
----------------------------
Section 6.06 Plans. . . . . . . . . . . . . . . . . . . . . . . . 69
-----
Section 6.07 Distributions . . . . . . . . . . . . . . . . . . . . 70
-------------
Section 6.08 Tenant Concentration . . . . . . . . . . . . . . . . 70
--------------------
Section 6.09 Restriction on Indebtedness . . . . . . . . . . . . . 70
---------------------------
Section 6.10 Real Property Assets . . . . . . . . . . . . . . . . 70
--------------------
Section 6.11 Intentionally Deleted. . . . . . . . . . . . . . . . 71
---------------------
Section 6.12 Organizational Documents . . . . . . . . . . . . . . 71
------------------------
Section 6.13 Intentionally Deleted . . . . . . . . . . . . . . . . 71
---------------------
Section 6.14 Intentionally Deleted . . . . . . . . . . . . . . . . 71
---------------------
Section 6.15 Restrictions on Investments . . . . . . . . . . . . . 71
---------------------------
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 72
Section 7.01 Events of Default. . . . . . . . . . . . . . . . . . 72
-----------------
Section 7.02 Rights and Remedies. . . . . . . . . . . . . . . . . 75
-------------------
SECTION 8. INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . 76
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 76
Section 9.01 Payment of Agent's and Syndication Agent's Expenses,
----------------------------------------------------
Indemnity, etc . . . . . . . . . . . . . . . . . . . 76
--------------
Section 9.02 Notices. . . . . . . . . . . . . . . . . . . . . . . 77
-------
Section 9.03 Successors and Assigns . . . . . . . . . . . . . . . 79
----------------------
Section 9.04 Amendments and Waivers. . . . . . . . . . . . . . . . 79
----------------------
Section 9.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . 80
------------------------------
Section 9.06 Governing Law; Submission to Jurisdiction. . . . . . 80
-----------------------------------------
Section 9.07 Confidentiality Disclosure of Information. . . . . . 80
-----------------------------------------
Section 9.08. Recourse . . . . . . . . . . . . . . . . . . . . . . 81
--------
Section 9.09. Sale of Loan, Co-Lenders, Participations and
--------------------------------------------
Servicing . . . . . . . . . . . . . . . . . . . . . . 81
---------
Section 9.10 Borrower's and the REIT's Assignment. . . . . . . . . 84
------------------------------------
Section 9.11 Counterparts. . . . . . . . . . . . . . . . . . . . . 84
------------
Section 9.12 Effectiveness. . . . . . . . . . . . . . . . . . . . 84
-------------
Section 9.13 Headings Descriptive. . . . . . . . . . . . . . . . . 84
--------------------
Section 9.14 Marshaling; Recapture. . . . . . . . . . . . . . . . 84
---------------------
Section 9.15 Severability. . . . . . . . . . . . . . . . . . . . . 85
------------
Section 9.16 Survival. . . . . . . . . . . . . . . . . . . . . . . 85
--------
Section 9.17 Domicile of Loan Portions. . . . . . . . . . . . . . 85
-------------------------
Section 9.18 Intentionally Deleted. . . . . . . . . . . . . . . . 85
---------------------
Section 9.19 Calculations; Computations . . . . . . . . . . . . . 85
--------------------------
Section 9.20 WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . 85
-----------------------
Section 9.21 No Joint Venture . . . . . . . . . . . . . . . . . . 85
----------------
Section 9.22 Estoppel Certificates. . . . . . . . . . . . . . . . 85
---------------------
Section 9.23 No Other Agreements. . . . . . . . . . . . . . . . . 86
-------------------
Section 9.24 Controlling Document. . . . . . . . . . . . . . . . . 86
--------------------
Section 9.25 No Benefit to Third Parties. . . . . . . . . . . . . 86
---------------------------
Section 9.26 Joint and Several. . . . . . . . . . . . . . . . . . 87
-----------------
SCHEDULES
Schedule 1 Mortgaged 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 Intentionally Deleted
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
Schedule 17 Existing Mortgage Debt
Schedule 18 Graybar Leases
EXHIBITS
Exhibit A Notice of Borrowing
Exhibit B The Note
Exhibit C Intentionally Deleted
Exhibit D Intentionally Deleted
Exhibit E Voluntary Prepayment Notice
Exhibit F Assignment of Management Agreement
and Subordination of Management Fees
Exhibit G Ground Lease Estoppel
Exhibit H Compliance Certificate
Exhibit I The Guaranty
THIS LOAN AGREEMENT, dated as of March ____, 1998 is made among SL
GREEN OPERATING PARTNERSHIP, L.P. (the "Partnership"), SLG GRAYBAR LLC, SLG
GRAYBAR 2 LLC, NEW GREEN 1140 REALTY LLC, and SLG 17 BATTERY LLC
(collectively, 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.
"Acquisition Properties" shall mean, individually and collectively,
----------------------
as the context may require, The Graybar Building, 1466 Broadway and 321 West
44th Street; all of which are located in the City of New York and State of
New York.
"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).
"Advance" shall mean each advance 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 Loan 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 Mortgaged 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.
"Assignment of Leases and Rents" shall mean that certain blanket
------------------------------
first-priority present assignment of even date herewith giv-Lender and
Syndication Agent of all present and future leases of all or any part of the
Mortgaged Assets and all renewals thereof and all rents, additional rents,
revenues, issues and profits derived from the Mortgaged Assets.
"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 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 primet 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 cross indexing the
column corresponding to the principal balance of the Loan and the row
corresponding to the applicable time period in the matrix set forth below:
BASE RATE MARGIN
----------------
Outstanding Principal Balance of the Loan
$240,000,000
or more
Less than but less than $260,000,000
Time Period $240,000,000 $260,000,000 or more
- -----------------------------------------------------------------------------
March 18, 1998 .5% .8% 1.05%
to June 17, 1998
June 18, 1998 to .8% 1.05% 1.3%
September 17,1998
After 1.3% 1.55% 1.8%
September 17, 1998
The Base Rate Margin shall be determined by reference to the matrix
above, and any change in the Base Margin Rate shall be effective immediately
upon the date of a change in the outstanding principal balance of the Loan or
the applicable period as set forth in the matrix above.
"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 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 Travelers 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 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.
"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, or (B) the sum of the
Eurodollar Rate Margin and the Eurodollar Rate as the same shall adjust each
month, thereafter, or (ii) in the event Base Rate is being used pursuant to
Section 2.16 hereof, the rate per annum determined by adding four percent
(4%) per annum to the Base Rate as from time to time 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.
"Employee Benefit Plan" shall mean an employee benefit plan within
---------------------
the meaning of Section 3(3) of ERISA.
"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 one month 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 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 cross indexing
the column corresponding to the then outstanding principal balance of the
Loan and the row corresponding to the applicable time period in the matrix
set forth below:
EURODOLLAR RATE MARGIN
----------------------
==============================================================================
SL GREEN OPERATING PARTNERSHIP, L.P., NEW GREEN 1140
REALTY LLC and SLG 17 BATTERY LLC
(collectively, Borrower)
to
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 as mortgagee
(Lender)
___________________________________
AGREEMENT OF SPREADER,
CONSOLIDATION AND
MODIFICATION OF MORTGAGE
___________________________________
Dated: As of March 20, 1998
PREPARED BY AND UPON
RECORDATION RETURN TO:
Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
Attention: Mitchell G. Williams, Esq.
File No.: 16248-00337
=============================================================================
THIS AGREEMENT OF SPREADER, CONSOLIDATION, AND MODIFICATION OF
MORTGAGE (the "Security Instrument") is made as of March 20, 1998 among SL
GREEN OPERATING PARTNERSHIP, L.P. (the "Partnership"), NEW GREEN 1140 REALTY
LLC (the "Green LLC") and SLG 17 BATTERY LLC (the "17 LLC"; the Partnership,
the Green LLC and the 17 LLC are hereinafter referred to as, individually and
collectively, as the context requires as, the "Borrower") each having an
address at 70 West 36/th/ Street, New York, New York 10018, and LEHMAN
BROTHERS HOLDINGS INC. D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS
HOLDINGS INC., a Delaware corporation ("Lehman"), having an address at Three
World Financial Center, 200 Vesey Street, New York, New York 10285 as
mortgagee (the term "Lender" hereinafter referring to Lehman individually as
a Co- Lender (as defined in the Loan Agreement (herein defined)) and as Agent
(as defined in the Loan Agreement) for one or more Co-Lenders and as
Syndication Agent (as defined in the Loan Agreement).
RECITALS:
Borrower is the fee owner of the Land (as defined in Section
1.1(a)) and the leasehold owner of the Leased Land (as defined in Section
1.1(b)) and Lender is the owner and holder of certain mortgages covering the
fee estate in the Land and the leasehold estate of Borrower in the Leased
Land, which mortgages are more particularly described in Exhibit C attached
---------
hereto (hereinafter collectively referred to as the "Existing Mortgages"),
and of the notes, bonds or other obligations secured thereby (hereinafter
collectively referred to as the "Existing Notes").
There is now owing on the Existing Notes and the Existing Mortgages
the unpaid principal sum of $149,513,915.20 together with interest thereon
(the "Existing Indebtedness").
Borrower by its Consolidated Amended and Restated Promissory Note
of even date herewith given to Lender is indebted to Lender in the aggregate
principal sum of $275,000,000.00 (the Consolidated Amended and Restated
Promissory Note together with all modifications, substitutions and amendments
thereof shall collectively be referred to as the "Note"). The Note evidences
a new indebtedness of $125,486,084.80 together with the renewal,
confirmation, extension, modification, amendment and restatement of an
existing indebtedness of $149,513,915.20 evidenced by the Existing Notes
secured by the Existing Mortgages, with interest from the date thereof at the
rates set forth in the Note, principal and interest to be payable in
accordance with the terms and conditions provided in the Note.
Borrower and Lender have agreed in the manner hereinafter set forth
to (i) spread the Existing Mortgages and the respective liens thereof over
those portions of the Property (as defined in Section 1.1) not already
covered thereby, (ii) consolidate and coordinate the respective liens of the
Existing Mortgages and (iii) modify the terms and provisions of the Existing
Mortgages.
Borrower desires to secure the timely payment of the Debt (as
defined in Article
2) and the performance of all of its obligations under the Note, the Loan
Agreement and the Other Obligations (as defined in Article 2).
NOW, THEREFORE, in pursuance of said agreement and in consideration
of One Dollar ($1) and other valuable consideration, the parties hereto agree
as follows:
A. SPREADING OF MORTGAGE. The Existing Mortgages and the
---------------------
respective liens thereof are hereby spread to cover those portions of the
Property not already covered thereby.
B. CONSOLIDATION OF MORTGAGES. The liens of the Existing
--------------------------
Mortgages as so spread, are hereby consolidated and coordinated so
that together they shall hereafter constitute in law but one mortgage, a
single lien, covering the Property and securing the principal sum of
$149,513,915.30, together with
interest thereon as hereinafter provided (the Existing Mortgages, as so
spread, consolidated and coordinated and as modified, amended, restated,
ratified and confirmed pursuant to the provisions of this Agreement being
hereinafter collectively referred to as the "Security Instrument").
C. INTENTIONALLY DELETED.
-----------------
D. THIS AGREEMENT.
-----------
(1) Borrower shall promptly cause this Agreement to be filed,
registered or recorded in such manner and in such places as may be required
by any present or future law in order to publish notice and fully to protect
the lien of the Security Instrument upon, and the interest of Lender in, the
Property. Borrower will pay all filing, registration and recording fees, and
all reasonable expenses incident to the preparation, execution and
acknowledgment of this Agreement, and all Federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or
in connection with the filing, registration, recording, execution and
delivery of this Agreement and Borrower shall hold harmless and indemnify
Lender against any liability incurred by reason of the imposition of any tax
on the issuance, making, filing, registration or recording of this Agreement.
(2) Borrower represents, warrants and covenants that there
are no offsets, counterclaims or defenses against the Debt, this Agreement,
the Security Instrument, the Loan Agreement or the Note, that Borrower has
full power, authority and legal right to execute this Agreement and to keep
and observe all of the terms of this Agreement on Borrower's part to be
observed or performed, and that the Loan Agreement, the Note, the Security
Instrument and this Agreement constitute valid and binding obligations of
Borrower.
(3) This Agreement, and any provisions hereof, may not be
modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Borrower or Lender, but only
by an agreement in writing signed by the party against whom the enforcement
of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
(4) This Agreement shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns.
(5) This Agreement may be executed in any number of duplicate
originals and each duplicate original shall be deemed to be an original. The
Agreement may be executed in several counterparts, each of which counterparts
shall be deemed an original instrument and all of which together shall
constitute a single agreement. The failure of any party hereto to execute
this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
(6) If any term, covenant or condition of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be construed without such provision.
(7) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the applicable laws of
the United States of America.
(8) Except as otherwise provided to the contrary in the
following numbered Sections, all defined terms in the following numbered
Sections shall have the meaning given to such terms in the above body of this
Agreement and all references to the "Note" and the "Security Instrument"
shall refer to the Existing Mortgages as spread, coordinated, combined,
consolidated, modified, amended and restated pursuant to the provisions of
this Agreement.
J. MODIFICATION OF MORTGAGE. The terms, covenants and provisions
------------------------
of the Existing Mortgages are hereby modified, amended and restated so that
henceforth the terms, covenants and provisions of this Agreement and the Loan
Agreement shall supersede the terms, covenants and provisions of the Existing
Mortgages and the terms, covenants and provisions of the Existing Mortgages
shall read the same as the following Articles and Sections of this Agreement.
The Security Instrument as herein modified, amended, spread and restated, is
hereby ratified and confirmed in all respects by Borrower.
ARTICLE 1 - GRANTS OF SECURITY
Section 1.1. PROPERTY MORTGAGED. Borrower does hereby irrevocably
--------------
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey
to Lender, and grant a security interest to Lender in and to the following
property, rights, interests and estates to the extent now owned or hereafter
acquired by Borrower (hereinafter referred to, individually and collectively,
as the context requires as, the "Property"):
(a) Land. The real property described in Exhibit A attached hereto and
---- ---------
made a part hereof (the "Land");
(b) Ground Lease. That certain ground lease (the "Ground Lease") dated
------------
October 1, 1951, by and between Phoenix Mutual Life Insurance Company
("Owner"), and 67 West 44/th/ Street Inc., which by those certain assignments
described in Exhibit B attached hereto and by that certain Assignment and
---------
Assumption of Ground Lease, dated August 20, 1997, by and between 1140 Sixth
Avenue Associates, L.P. and the Green LLC, been assigned to the Green LLC, as
tenant and the leasehold estate created thereby in the real property
described therein and in Exhibit B attached hereto which is made a part
---------
hereto (the "Leased Land"), including all assignments, modifications,
extensions and renewals of the Ground Lease and all credits, deposits,
options, privileges and rights of the Green LLC as tenant under the Ground
Lease, including but not limited to, the right, if any, to renew or extend
the Ground Lease for a succeeding term or terms and also including all the
right, title, claim or demand whatsoever of Lender either in law or in
equity, in possession or expectancy, of, in and to the Green LLC's right, as
tenant under the Ground Lease, to elect under Section 365(h)(1) of the
Bankruptcy Code, Title 11 U.S.C.A. Section101 et seq. (the "Bankruptcy Code")
to terminate or treat the Ground Lease as terminated in the event (i) of the
bankruptcy reorganization or insolvency of the Owner, and (ii) the rejection
of the Ground Lease by the Owner, as debtor in possession, or by a Trustee
for the Owner, pursuant to Section 365 of the Bankruptcy Code;
(c) Additional Land. All additional lands, estates and development
---------------
rights hereafter acquired by Borrower for use in connection with the Land
and/or the Leased Land and the development of the Land and/or the Leased
Land and all additional lands and estates therein which may, from time to
time, by supplemental mortgage or otherwise be expressly made subject to the
lien of this Security Instrument;
(d) Improvements. The buildings, structures, fixtures, additions,
------------
enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter erected or located on the Land and/or the
Leased Land (the "Improvements");
(e) Easements. All easements, rights-of-way or use, rights, strips and
---------
gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, and all
estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any
way now or hereafter belonging, relating or pertaining to the Land, the
Leased Land and/or the Improvements including, but not limited to, those
arising under and by virtue of the Ground Lease, and the reversion and
reversions, remainder and remainders, and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the Land
and/or the Leased Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and
in equity, of Borrower of, in and to the Land, the Leased Land and/or the
Improvements, including, but not limited to, those arising under and by
virtue of the Ground Lease, and every part and parcel thereof, with the
appurtenances thereto;
(f) Fixtures and Personal Property. All machinery, equipment, fixtures
------------------------------
(including, but not limited to, all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) and other property of every
kind and nature whatsoever owned by Borrower, or in which Borrower has or
shall have an interest, now or hereafter located upon the Land, the Leased
Land and/or the Improvements, or appurtenant thereto, and usable in
connection with the present or future operation and occupancy of the Land,
the Leased Land and/or the Improvements and all building equipment, materials
and supplies of any nature whatsoever owned by Borrower, or in which Borrower
has or shall have an interest, now or hereafter located upon the Land, the
Leased Land and/or the Improvements, or appurtenant thereto, and usable in
connection with the present or future operation and occupancy of the Land,
the Leased Land and/or the Improvements (collectively, the "Personal
Property"), and the right, title and interest of Borrower in and to any of
the Personal Property which
may be subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the state or states where any of
the Property is located (the "Uniform Commercial Code"), superior in lien to
the lien of this Security Instrument and all proceeds and products of the
above;
(g) Leases and Rents. All leases and other agreements affecting the
----------------
use, enjoyment or occupancy of the Land, the Leased Land, and the
Improvements heretofore or hereafter entered into, whether entered into
before or after the filing by or against Borrower of any petition for relief
under 11 U.S.C. Section 101, et seq. as the same may be amended from time to
time (the "Bankruptcy Code") (the "Leases") and all right, title and interest
of Borrower, its successors and assigns therein and thereunder, including,
without limitation, cash or securities, if any, and other cash equivalents,
if any, and any Lease Guaranties (hereinafter defined) deposited thereunder
to secure the performance by the lessees of their obligations thereunder and
all rents, income, additional rents, revenues, issues, profits (including all
oil and gas or other mineral royalties and bonuses), pass throughs,
tenant-required contributions for taxes, costs for major improvements,
leasing commissions, capital expenditures and other cash items from the Land
and the Improvements whether paid or accruing before or after the filing by
or against Borrower of any petition for relief under the Bankruptcy Code and
all proceeds from the sale, termination or other disposition of the Leases or
from any award, judgment or payment which may heretofore or hereafter be made
with respect to any action or proceeding brought with respect to the Leases
whether paid or accruing before or after the filing by or against Borrower of
any petition for relief under the Bankruptcy Code (collectively, the "Rents")
and the right to receive and apply the Rents to the payment of the Debt; and
all deposits made by Borrower pursuant to this Security Instrument or other
agreement with Lender regarding the Property and any accounts in which such
deposits are held;
(h) Condemnation Awards. All awards or payments, including interest
-------------------
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to
or decrease in the value of the Property;
(i) Insurance Proceeds. All proceeds of and any unearned premiums on
------------------
any insurance policies covering the Property, including, without limitation,
the right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(j) Tax Certiorari. All refunds, rebates or credits in connection with
--------------
a reduction in real estate taxes and assessments charged against the Property
as a result of tax certiorari or any applications or proceedings for
reduction;
(k) Conversion. All proceeds of the conversion, voluntary or
----------
involuntary, of any of the foregoing including, without limitation, proceeds
of insurance and condemnation awards, into cash or liquidation claims;
(l) Rights. The right, in the name and on behalf of Borrower, to
------
appear in and defend any action or proceeding brought with respect to the
Property and to commence any action or proceeding to protect the interest of
Lender in the Property;
(m) Agreements. All agreements, contracts, certificates, instruments,
----------
franchises, permits, licenses, plans, specifications and other documents, now
or hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of
the Land and/or the Leased Land and any part thereof and any Improvements or
respecting any business or activity conducted on the Land and/or the Leased
Land and any part thereof and all right, title and interest of Borrower
therein and thereunder, including, without limitation the right, upon the
happening of any default hereunder, to receive and collect any sums payable
to Borrower thereunder;
(n) Trademarks. All tradenames, trademarks, servicemarks, logos,
----------
copyrights, goodwill, books and records and all other general intangibles
relating to or used in connection with the operation of the Property;
(o) Other Rights. Any and all other rights of Borrower in and to the
------------
items set forth in Subsections (a) through (n) above and all proceeds and
products of any of the foregoing and all rights and privileges pertaining
thereto.
Section 1.2. ASSIGNMENT OF RENTS. Borrower hereby absolutely and
-------------------
unconditionally assigns to Lender Borrower's right, title and interest in and
to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless,
subject to the terms of this Section 1.2, Section 3.7, and Section 4.4,
Lender grants to Borrower a revocable license to collect and receive the
Rents. Borrower shall hold the Rents, or a portion thereof sufficient to
discharge all current sums due on the Debt, for use in the payment of such
sums.
Section 1.3. SECURITY AGREEMENT. This Security Instrument is both a
-----------------------
real property mortgage and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible
in nature, of Borrower in the Property. By executing and delivering this
Security Instrument, Borrower hereby grants to Lender, as security for the
Obligations (defined in Section 2.3), a security interest in the Personal
Property to the full extent that the Personal Property may be subject to the
Uniform Commercial Code.
Section 1.4. PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender
---------------------
any and all monies now or hereafter held by Lender, including, without
limitation, any sums deposited in the Escrow Fund (as defined in Section
3.5), Net Proceeds (as defined in Section 4.3), the Lock-Box Account (as
defined in Section 4.4), if any, and condemnation awards or payments
described in Section 3.6, as additional security for the Obligations until
expended or applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property, with
all privileges and appurtenances thereunto belonging unto and to the use and
benefit of Lender and the heirs, successors and assigns of Lender, forever;
provided, however, with respect to the Ground Lease and the Leased Land, such
period shall be for and during the rest, residue and remainder of the term of
years yet to come and unexpired in the Ground Lease (as the same may be
renewed or extended); subject nevertheless to the rents, covenants,
conditions and provisions of the Ground Lease;
PROVIDED, HOWEVER, these presents are upon the express condition
that, if Borrower shall well and truly pay to Lender the Debt at the time and
in the manner provided in the Note and this Security Instrument, shall well
and truly perform the Other Obligations as set forth in this Security
Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, these presents and
the estate hereby granted shall cease, terminate and be void.
ARTICLE 2. - DEBT AND OBLIGATIONS SECURED
Section 2.1. DEBT. This Security Instrument and the grants,
----
assignments and transfers made in Article 1 are given for the purpose of
securing the following, in such order of priority as Lender may determine in
its sole discretion (the "Debt"):
(a) the payment of the indebtedness evidenced by the Note in lawful
money of the United States of America;
(b) the payment of interest, default interest, late charges and other
sums, as provided in the Note, the Loan Agreement, this Security Instrument
or Other Security Documents (defined below);
(c) Funding Costs (as defined in the Loan Agreement);
(d) the payment of all other moneys agreed or provided to be paid by
Borrower in the Note, the Loan Agreement, this Security Instrument or the
Other Security Documents including, but not limited to, all Fees (as defined
in the Loan Agreement) and Transaction Costs (as defined in the Loan
Agreement);
(e) the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the security
interest created hereby; and
(f) the payment of all sums advanced and costs and expenses incurred by
Lender in connection with the Debt or any part thereof, any renewal,
extension, or change of or substitution for the Debt or any part thereof, or
the acquisition or perfection of the security therefor, whether made or
incurred at the request of Borrower or Lender.
Notwithstanding the provisions this Section 2.1 to the contrary,
Borrower agrees that all payments made to reduce the amount of the Debt shall
be deemed applied first to that portion of the Debt that is in excess of the
Existing Indebtedness secured by this Security Instrument.
Section 2.2. OTHER OBLIGATIONS. This Security Instrument and the
------------------
grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "Other Obligations"):
(a) the performance of all other obligations of Borrower contained
herein;
(b) the performance of each obligation of Borrower contained in any
other agreement given by Borrower to Lender which is for the purpose of
further securing the obligations secured hereby, and any amendments,
modifications and changes thereto; and
(c) the performance of each obligation of Borrower contained in any
renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of the Note, the Loan
Agreement, this Security Instrument or Other Security Documents.
Section 2.3. DEBT AND OTHER OBLIGATIONS. Borrower's obligations for
---------------------------
the payment of the Debt and the performance of the Other Obligations shall be
referred to collectively below as the "Obligations."
Section 2.4. PAYMENTS. Unless payments are made in the required
--------
amounts in immediately available funds at the place where the Note is payable,
remittances in payment of all or any part of the Debt shall not, regardless
of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Lender in funds immediately available
at the place where the Note is payable (or any other place as Lender, in
Lender's sole discretion, may have established by delivery of written notice
thereof to Borrower) and shall be made and accepted subject to the condition
that any check or draft may be handled for collection in accordance with the
practice of the collecting bank or banks. Acceptance by Lender of any
payment in an amount less than the amount then due shall be deemed an
acceptance on account only, and the failure to pay the entire amount then due
shall be and continue to be an Event of Default (defined herein).
ARTICLE 3. - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1. PAYMENT OF DEBT. Borrower will pay the Debt at the time
---------------
and in the manner provided in the Note and in this Security Instrument.
Section 3.2. INCORPORATION BY REFERENCE. All the covenants,
------------------------------
conditions and agreements contained in (a) the Loan Agreement, (b) the
Note and (c) all and
any of the documents other than the Note, the Loan Agreement or this Security
Instrument now or hereafter executed by Borrower and/or others and by or in
favor of Lender, which wholly or partially secure or guaranty payment of the
Note, including without limitation each Loan Document (as defined in the Loan
Agreement) (the "Other Security Documents"), are hereby made a part of this
Security Instrument to the same extent and with the same force as if fully
set forth herein.
Section 3.3. INSURANCE. Borrower shall obtain and maintain, or cause
---------
to be maintained, insurance for Borrower and the Property as provided in the
Loan Agreement.
Section 3.4. PAYMENT OF TAXES, ETC. (a) Borrower shall promptly pay
-----------------------
all taxes, assessments, water rates, sewer rents, governmental impositions, and
other charges, including without limitation vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land and/or the
Leased Land, now or hereafter levied or assessed or imposed against the
Property or any part thereof (the "Taxes"), all ground rents payable under
the Ground Lease (the "Ground Rents"), maintenance charges and similar
charges, now or hereafter levied or assessed or imposed against the Property
or any part thereof (the "Other Charges"), and all charges for utility
services (other than those specifically billed to, and payable by, tenants)
provided to the Property as same become due and payable. Borrower will
deliver to Lender, promptly upon Lender's request, evidence reasonably
satisfactory to Lender that the Taxes, Other Charges and utility service
charges have been so paid or are not then delinquent. Borrower shall not
suffer and shall promptly cause to be paid and discharged any lien or charge
whatsoever which may be or become a lien or charge against the Property.
Except to the extent sums sufficient to pay all Taxes and Other Charges have
been deposited with Lender in accordance with the terms of this Security
Instrument, Borrower, upon Lender's request, shall furnish to Lender paid
receipts (or, if paid receipts are not available, other evidence reasonably
satisfactory to Lender) for the payment of the Taxes and Other Charges prior
to the date the same shall become delinquent.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Taxes, provided that (i) no
event, act or condition which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default (a "Default") or Event of Default
has occurred and is continuing under the Loan Agreement, the Note, this
Security Instrument or any of the Other Security Documents, (ii) Borrower is
not prohibited from doing so under the provisions of any other mortgage, deed
of trust or deed to secure debt affecting the Property, (iii) such proceeding
shall suspend the collection of the Taxes from Borrower and from the Property
or Borrower shall have paid all of the Taxes under protest, (iv) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower is subject and shall not
constitute a default thereunder, (v) neither the Property nor any part
thereof
or interest therein will be in danger of being sold, forfeited, terminated,
cancelled or lost, (vi) Borrower shall have deposited with Lender adequate
reserves for the payment of the Taxes, together with all interest and
penalties thereon, unless Borrower has paid all of the Taxes under protest,
and (vii) Borrower shall have furnished the security as may be required in
the proceeding, together with all interest and penalties thereon.
Section 3.5. ESCROW FUND. Subject to the last sentence of this
-------------
Section 3.5, Borrower shall pay to Lender on the first day of each calendar
month (a) one-twelfth of an amount which would be sufficient to
pay the Taxes payable, or reasonably estimated by Lender to be payable,
during the next ensuing
twelve (12) months and (b) one-twelfth of an amount which would be sufficient
to pay the payment of the premiums due under the Policies (as defined in the
Loan Agreement) (the "Insurance Premiums") due for the renewal of the
coverage afforded by the Policies upon the expiration thereof (the amounts in
(a) and (b) above shall be called the "Escrow Fund"). Borrower agrees to
notify Lender promptly of any changes to the amounts, schedules and
instructions for payment of any Taxes and Insurance Premiums of which it has
obtained knowledge and authorizes Lender or its agent to obtain the bills for
Taxes and Other Charges directly from the appropriate taxing authority. The
Escrow Fund and the payments of interest or principal or both, payable
pursuant to the Note shall be added together and shall be paid as an
aggregate sum by Borrower to Lender. Lender will apply the Escrow Fund to
payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to Sections 3.3 and 3.4 hereof. If the amount of the Escrow Fund
shall exceed the amounts due for Taxes and Insurance Premiums pursuant to
Sections 3.3 and 3.4 hereof, Lender shall, in its discretion, return any
excess to Borrower or credit such excess against future payments to be made
to the Escrow Fund. In allocating such excess, Lender may deal with the
person shown on the records of Lender to be the owner of the Property. If
the Escrow Fund is not sufficient to pay the items set forth in (a) and (b)
above, Borrower shall pay to Lender, promptly after demand, an amount which
Lender shall reasonably estimate as sufficient to make up the deficiency.
The Escrow Fund shall be held in a non-interest bearing account, shall not
constitute a trust fund and may be commingled with other monies held by
Lender. No earnings or interest on the Escrow Fund shall be payable to
Borrower. The obligations contained in this Section 3.5 shall be applicable
only upon, and from and after, notification thereof by Lender, which
notification may take place (i) at any time a Default or Event of Default has
occurred and is continuing or (ii) if Borrower is delinquent, beyond any
applicable notice and grace periods, in the payment of any Taxes or Insurance
Premiums two or more times during the term of the Loan.
Section 3.6. CONDEMNATION. Borrower shall promptly give Lender notice
------------
of the actual or threatened commencement of any condemnation or eminent
domain proceeding and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Lender may participate in any
such proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall, at
its expense, diligently prosecute any such proceedings, and shall consult
with Lender, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Notwithstanding any taking by
any public or quasi-public authority through eminent domain or
otherwise (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of such taking), Borrower shall continue to pay
the Debt at the time and in the manner provided for its payment in the Note
and in this Security Instrument and the Debt shall not be reduced until any
award or payment therefor shall have been actually received and applied by
Lender, after the deduction of expenses of collection, to the reduction or
discharge of the Debt. Lender shall not be limited to the interest paid on
the award by the condemning authority but shall be entitled to receive out of
the award interest at the rate or rates provided herein or in the Note. If
the Property or any portion thereof is taken by a condemning authority,
Borrower shall promptly commence and diligently prosecute the Restoration (as
defined in the Loan Agreement) of the Property and otherwise comply with the
provisions of Section 4.3 of this Security Instrument. In the event Lender
is not required to disburse Net Proceeds (as defined herein) to Borrower in
accordance with Section 4.3 of this Security Instrument, Lender may apply any
award or payment to the reduction or discharge of the Debt whether or not
then due and payable. The amount of any award or payment so applied in
excess of the Debt shall be returned to Borrower. If the Property is sold,
through foreclosure or otherwise, prior to the receipt by Lender of the award
or payment, Lender shall have the right, whether or not a deficiency judgment
on the Note shall have been sought, recovered or denied, to receive the award
or payment, or a portion thereof sufficient to pay the Debt.
Section 3.7. LEASES AND RENTS. (a) Except as otherwise consented to
-------------
by Lender, or as may be provided in Subsection 3.7(b) below, all Leases shall
be written on the standard form of lease which shall have been approved by
Lender. Upon request, Borrower shall furnish Lender with executed originals
of all Leases or copies thereof. No material changes may be made to the
Lender-approved standard lease without the prior written consent of Lender,
which consent shall be deemed granted if not otherwise denied within ten (10)
Business Days after Lender's receipt of any written request for approval;
provided, however that if such request includes a copy of the lease marked to
indicate the variations from the standard form approved by Lender, the period
within which Lender must respond shall be reduced to seven (7) Business Days.
In addition, all renewals of Leases and all proposed leases shall provide for
rental rates and terms comparable to existing local market rates and terms
and shall be arms-length transactions with bona fide, independent third party
tenants. All proposed Leases and renewals of existing Leases shall be
subject to the prior approval of Lender and its counsel, at Borrower's
expense, which consent shall be deemed granted if not otherwise denied within
ten (10) Business Days after Lender's receipt of written request for
approval; provided, however that if such request includes a copy of the
proposed or renewal lease marked to indicate the variations from the standard
form approved by Lender, the period within which Lender must respond shall be
reduced to seven (7) Business Days. All Leases shall provide that they are
subordinate to this Security Instrument and that the lessee agrees to attorn
to Lender. Borrower (i) shall observe and perform all the obligations
imposed upon the lessor under the Leases (except that with respect to the
Ground Lease, it shall observe and perform all of the obligations imposed
upon lessee) and shall not do or permit to be done anything to impair the
value of the Leases as security for the Debt; (ii) shall promptly send copies
to Lender of all notices of default which Borrower shall send or receive
thereunder; (iii) shall enforce all of the terms, covenants and conditions
contained in the Leases upon the part of the lessee thereunder to be observed
or
performed, short of termination thereof; (iv) shall not collect any of the
Rents more than one (1) month in advance; (v) shall not execute any other
assignment of the lessor's interest in the Leases or the Rents; (vi) shall
not alter, modify or change the terms of the Leases without the prior written
consent of Lender, or cancel or terminate the Leases or accept a surrender
thereof or convey or transfer or suffer or permit a conveyance or transfer of
the Land or of any interest therein so as to effect a merger of the estates
and rights of, or a termination or diminution of the obligations of, lessees
thereunder; (vii) shall not alter, modify or change the terms of any
guaranty, letter of credit or other credit support with respect to the Leases
(the "Lease Guaranty") or cancel or terminate such Lease Guaranty without the
prior written consent of Lender; and (viii) shall not consent to any
assignment of or subletting under the Leases not in accordance with their
terms, without the prior written consent of Lender. Borrower agrees that it
will give prompt notice to Lender at any time that (A) Leases comprising more
than five percent (5%) of the leasable space in the Property, whether
individually or in the aggregate, are terminated or have expired and have not
been renewed by the related tenant thereunder or (B) tenants under Leases
comprising more than five percent (5%) of the leasable space in the Property,
whether individually or in the aggregate, have vacated their leased space,
ceased operating their business in such space or have subleased such space,
commenced any action or proceeding relating to bankruptcy, made an assignment
for the benefit of creditors or availed themselves or have been subjected to
any similar action or proceeding. Upon written request made by Borrower,
Lender shall enter into its standard form of subordination, non-disturbance
and attornment agreement with any tenant or proposed tenant occupying or to
occupy at least 5,000 square feet of leasable space in the Property, provided
that all other conditions which may apply to any such tenant or its
respective Lease under this Article 3.7 have been satisfied.
(b) Notwithstanding the provisions of Subsection 3.7(a) above,
renewals or amendments of existing Leases and proposed Leases for commercial
space shall not be subject to the prior approval of Lender provided all of
the following conditions are satisfied: (i) the rental income pursuant to the
renewal, or amended or proposed Lease is not more than ten percent (10%) of
the total rental income for the Property, (ii) the renewal, amended or
proposed Lease covers less than ten percent (10%) of the Property, in the
aggregate ((i) and (ii), "Minor Leases"), (iii) the renewal, amended or
proposed Lease shall provide for rental rates and terms comparable to
existing local market rates and terms, (iv) the renewal or proposed Lease
shall be an arms-length transaction with a bona fide, independent third party
tenant and (v) the renewal, amended or proposed Lease shall satisfy other
criteria as shall be reasonably required by Lender and of which Borrower has
been notified by Lender at least thirty (30) days prior to the date on which
the relevant document is executed. Borrower shall deliver to Lender copies
of all Leases which are entered into pursuant to the preceding sentence
together with Borrower's certification that it has satisfied all of the
conditions of the preceding sentence within thirty (30) days after the
execution of the Lease.
(c) To the extent permitted by law, Borrower shall promptly
deposit with Lender any and all monies representing security deposits under
the Leases, whether or not Borrower actually received such monies (the
"Security Deposits"). Lender shall hold the Security Deposits in accordance
with the terms of the respective Lease, and shall only release
the Security Deposits in order to return a tenant's Security Deposit to such
tenant if such tenant is entitled to the return of the Security Deposit under
the terms of the Lease and is not otherwise in default under the Lease. To
the extent required by Applicable Laws (defined below), Lender shall hold the
Security Deposits in an interest bearing account selected by Lender in its
sole discretion. The provisions of this Section 3.7(c) shall be applicable
only upon notification by Lender, which notification may take place at any
time a Default or Event of Default has occurred and is continuing. If such
Security Deposits are held by Borrower, Borrower shall deposit the Security
Deposits into a segregated account with a federally insured institution as
approved by Lender.
Section 3.8. MAINTENANCE OF PROPERTY. Borrower shall cause the
-------------------------
Property to be maintained in a good and safe condition and repair.
The Improvements
and the Personal Property shall not be removed, demolished or materially
altered (except for normal replacement of the Personal Property) without the
consent of Lender, which consent shall not be unreasonably withheld, except
that Lender's approval shall not be required for non-structural alterations
made by Borrower or tenant improvements made pursuant to the terms of any
Lease that has otherwise been approved by Lender or for which Lender's
approval is not required, or, in the case of Personal Property, if it is to
be replaced. Borrower shall promptly repair, replace or rebuild any part of
the Property which may be destroyed by any casualty, or become damaged, worn
or dilapidated or which may be affected by any proceeding of the character
referred to in Section 3.6 hereof and shall complete and pay for any
structure at any time in the process of construction or repair on the Land
and/or the Leased Land. Borrower shall not initiate, join in, acquiesce in,
or consent to any change in any private restrictive covenant, zoning law or
other public or private restriction, limiting or defining the uses which may
be made of the Property or any part thereof. If under applicable zoning
provisions the use of all or any material portion of the Property is or shall
become a nonconforming use, Borrower will not cause or permit the
nonconforming use to be discontinued or abandoned without the express written
consent of Lender, which consent shall not be unreasonably withheld.
Section 3.9. WASTE. Borrower shall not commit or suffer any waste of
-----
the Property or make any change in the use of the Property which will in any
way materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way materially impair the value of the Property or
the security of this Security Instrument. Borrower will not, without the
prior written consent of Lender, permit any drilling or exploration for or
extraction, removal, or production of any minerals from the surface or the
subsurface of the Land, regardless of the depth thereof or the method of
mining or extraction thereof.
Section 3.10. COMPLIANCE WITH LAWS. (a) Borrower shall promptly comply
--------------------
with (or cause compliance with) all existing and future federal, state and
local laws, orders, ordinances, governmental rules and regulations or court
orders affecting or which may be interpreted to affect the Property, or the
use thereof including, but not limited to, the Americans with Disabilities
Act ("ADA") (collectively, the "Applicable Laws"), except for Applicable
Laws, (a) which Borrower is contesting in good faith and in compliance with
and pursuant to appropriate proceedings diligently prosecuted (provided that
such contest does not and cannot (i) expose Lender or Borrower to any
criminal liability or penalty, (ii) give rise to a lien against the Property,
or (iii) otherwise materially adversely affect the Property or the value
thereof, or (b) the failure to observe which, taken individually or in the
aggregate, could not be reasonably expected to result in a Material Adverse
Effect (as defined in the Loan Agreement).
(b) Borrower shall from time to time, upon Lender's request,
provide Lender with evidence reasonably satisfactory to Lender that the
Property complies with all Applicable Laws or is exempt from compliance with
Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any
document regarding Lender's approval of alterations of the Property, Borrower
shall not alter the Property in any manner which would materially increase
Borrower's responsibilities for compliance with Applicable Laws without the
prior written approval of Lender, which approval shall not be unreasonably
withheld. Lender's approval of the plans, specifications, or working
drawings for alterations of the Property shall create no responsibility or
liability on behalf of Lender for their completeness, design, sufficiency or
their compliance with Applicable Laws. The foregoing shall apply to tenant
improvements constructed by Borrower or by any of its tenants. Lender may
condition any such approval upon receipt of a certificate of compliance with
Applicable Laws from an independent architect, engineer, or other person
acceptable to Lender.
(d) Borrower shall give prompt notice to Lender of the receipt by
Borrower of any notice related to a violation of any Applicable Laws and of
the commencement of any proceedings or investigations which relate to
compliance with Applicable Laws.
(e) Borrower will take appropriate measures to prevent and will
not engage in or knowingly permit any illegal activities at the Property.
Section 3.11. INTENTIONALLY OMITTED.
---------------------
Section 3.12. PAYMENT FOR LABOR AND MATERIALS. Borrower will
-------------------------------
promptly pay when due all bills and costs for labor, materials,
and specifically
fabricated materials incurred by or on behalf of Borrower in connection with
the Property and never permit to exist beyond the due date thereof in respect
of the Property or any part thereof any lien or security interest, subject to
Borrower's right to contest the same as set forth in this Security
Instrument, even though inferior to the liens and the security interests
hereof, and in any event never permit to be created or exist in respect of
the Property or any part thereof any other or additional lien or security
interest other than the liens or security interests hereof, except for the
Permitted Exceptions (defined below).
Section 3.13. INTENTIONALLY OMITTED.
---------------------
Section 3.14. PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe
-------------------------------
and perform each and every term to be observed or performed by Borrower
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Property, or given by Borrower to Lender for the purpose of
further securing an obligation secured hereby and any amendments,
modifications or changes thereto.
Section 3.15. BUSINESS WITH AFFILIATES. Borrower shall not engage in
------------------------
business transactions with any Affiliate (as defined in the Loan Agreement)
of Borrower or of any general partner or Borrower unless the terms and
conditions thereof will be intrinsically fair, at not more than market rates
and substantially similar or more favorable to those that would be available
on an arms-length basis with persons or entities that are not affiliated with
each other.
Section 3.16. CURRENT BUSINESS. Borrower shall continue to carry on
----------------
and shall not change its current business subject to the terms and conditions
contained in the Loan Agreement.
Section 3.17. CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower will not
-------------------------------------
change Borrower's name, identity (including its trade name or names) chief
executive office, principal place of business or, if not an individual,
Borrower's corporate, partnership or other structure without
notifying the Lender of such change in writing at least ten
(10) days prior to the effective date of such change and,
in the case of a change in Borrower's structure, without
first obtaining the prior written consent of the Lender; provided, however,
that the Green LLC and/or the 17 Battery LLC may be merged or similarly
collapsed into the Partnership, or the Ground Lease may be assigned by the
Green LLC to the Partnership, without the prior consent of Lender. Borrower
will execute and deliver to the Lender, prior to or contemporaneously with
the effective date of any such change, any financing statement or financing
statement change required by the Lender to establish or maintain the
validity, perfection and priority of the security interest granted herein. At
the request of the Lender, Borrower shall execute a certificate in form
satisfactory to the Lender listing the trade names under which Borrower
intends to operate the Property, and representing and warranting that
Borrower does business under no other trade name with respect to the
Property.
Section 3.18. EXISTENCE. Borrower will continuously maintain its
---------
existence, good standing and its rights to do business in its state of
organization, the state where the Property is located and all other
jurisdictions in which it is required, together with its franchises and trade
names.
ARTICLE 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1. PROPERTY USE. The Property shall be used only for office
------------
and retail space and related uses, and for no other use without the prior
written consent of Lender, which consent may be withheld in Lender's sole and
absolute discretion.
Section 4.2. INTENTIONALLY OMITTED.
---------------------
Section 4.3. RESTORATION. Subject to the provisions of the Ground Lease
-----------
and the 17 Battery Place Tenancy Agreement (as defined in the Loan Agreement)
as applicable, the following provisions shall apply in connection with the
Restoration of the Property:
(a) If the Net Proceeds shall be less than $250,000 and the
costs of completing the Restoration shall be less than $250,000, the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that
all of the conditions set forth in Subsection 4.3(b)(i) are met and Borrower
delivers to Lender (i) a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Security Instrument and (ii) a monthly accounting of all
payments, costs and expenditures made by Borrower in connection with the
Restoration.
(b) If the Net Proceeds are equal to or greater than $250,000
or the costs of completing the Restoration is equal to or greater than
$250,000 Lender shall make the Net Proceeds available for the Restoration in
accordance with the provisions of this Subsection 4.3(b). The term "Net
Proceeds" for purposes of this Section 4.3 shall mean: (i) the net amount of
all insurance proceeds received by Lender pursuant to Subsection 5.03(b)(i),
(iv), (vi) and (vii) of the Loan Agreement as a result of such damage or
destruction, after deduction of its reasonable costs and expenses (including,
but not limited to, reasonable counsel fees), if any, in collecting same
("Insurance Proceeds"), or (ii) the net amount of all awards and payments
received by Lender with respect to a taking referenced in Section 3.6 of this
Security Instrument, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in
collecting the same ("Condemnation Proceeds"), whichever the case may be.
(i) The Net Proceeds shall be made available to Borrower for the
Restoration provided that each of the following conditions are met:
(A) no Default or Event of Default shall have occurred and be
continuing under the Loan Agreement, the Note, this Security Instrument or
any of the Other Security Documents;
(B) (1) in the event the Net Proceeds are Insurance Proceeds, less than
fifty percent (50%) of the total floor area of the Improvements has been
damaged, destroyed or rendered unusable as a result of such fire or other
casualty or (2) in the event the Net Proceeds are Condemnation
Proceeds, less than ten percent (10%) of the land constituting the Property
is taken;
(C) Leases demising in the aggregate a percentage amount equal to or
greater than the Rentable Space Percentage (hereinafter defined) of the total
rentable space in the Property which has been demised under executed and
delivered Leases in effect as of the date of the occurrence of such fire or
other casualty or taking, whichever the case may be, shall remain in full
force and effect (subject to any rent abatement or rights of termination
resulting from such casualty pursuant to the terms of the Leases) during and
after the completion of the Restoration. The term "Rentable Space
Percentage" shall mean (1) in the event the Net Proceeds are Insurance
Proceeds, a percentage amount equal to fifty percent (50%), and (2) in the
event the Net Proceeds are Condemnation Proceeds, a percentage amount equal
to seventy-five percent (75%);
(D) Borrower shall commence the Restoration as soon as reasonably
practicable (but in no event later than thirty (30) days after such damage or
destruction or taking) and shall diligently pursue the same to satisfactory
completion (Restoration shall be deemed commenced upon the filing of a
building permit);
(E) Lender shall be satisfied that any operating deficits, including
all scheduled payments of principal and interest under the Note at the
Contract Rate (as defined in the Loan Agreement) which will be incurred with
respect to the Property as a result of the occurrence of any such fire or
other casualty or taking, whichever the case may be, will be covered out of
(1) the Net Proceeds, (2) the insurance coverage
referred to in Subsection 3.3(a)(iii), if applicable, or (3) by other funds
of Borrower;
(F) Intentionally deleted.
(G) Lender shall be satisfied that the Restoration will be completed on
or before the earliest to occur of (1) twelve (12) months prior to the
Maturity Date (as defined in the Loan Agreement), (2) twelve (12) months
after the occurrence of such fire or other casualty or taking, whichever the
case may be, (3) the earliest date required for such completion under the
terms of any Leases which are required in accordance with the provisions of
Subsection 4.3(b)(1)(C) to remain in effect subsequent to the occurrence of
such fire or other casualty or taking, whichever the case may be, or (4) such
time as may be required under applicable zoning law, ordinance, rule or
regulation in order to repair and restore the Property to the condition it
was in immediately prior to such fire or other casualty or to as nearly as
possible the condition it was in immediately prior to such taking, as
applicable;
(H) the Property and the use thereof after the Restoration will be in
compliance with and permitted under all applicable zoning laws, ordinances,
rules and regulations;
(I) the Restoration shall be done and completed by Borrower in an
expeditious and diligent fashion and in compliance with all applicable
governmental laws, rules and regulations (including, without limitation, all
applicable Environmental Laws, as defined in the Loan Agreement);
(J) such fire or other casualty or taking, as applicable, does not
result in the permanent loss of access to the Property or the Improvements.
(ii) The Net Proceeds shall be held by Lender in a non-interest bearing
account and, until disbursed in accordance with the provisions of this
Subsection 4.3(b), shall constitute additional security for the Obligations.
The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower
from time to time during the course of the Restoration, upon receipt of
evidence reasonably satisfactory to Lender that (A) all materials installed
and work and labor performed (except to the extent that they are to be paid
for out of the requested disbursement) in connection with the Restoration
have been paid for in full, and (B) there exist no notices of pendency, stop
orders, mechanic's or materialman's liens or notices of intention to file
same, or any other liens or encumbrances of any nature whatsoever on the
Property arising out of the Restoration which have not either been fully
bonded to the reasonable satisfaction of Lender and discharged of record or
in the alternative fully insured to the reasonable satisfaction of Lender by
the title company insuring the lien of this Security Instrument.
(iii) All plans and specifications required in connection with the
Restoration shall be subject to prior review and acceptance in all respects
by Lender and by an independent consulting engineer selected by Lender (the
"Restoration Consultant"), which review and acceptance shall not be
unreasonably withheld. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or obtained
in connection with the Restoration. The identity of the contractors,
subcontractors and materialmen engaged in the Restoration, as well as the
contracts under which they have been engaged, shall be subject to prior
review and acceptance by Lender and the Restoration Consultant , which review
and
acceptance shall not be unreasonably withheld. All costs and expenses
incurred by Lender in connection with making the Net Proceeds available for
the Restoration including, without limitation, reasonable counsel fees and
disbursements and the Restoration Consultant's fees, shall be paid by
Borrower.
(iv) In no event shall Lender be obligated to make disbursements of the
Net Proceeds in excess of an amount equal to the costs actually incurred from
time to time for work in place as part of the Restoration, as certified by
the Restoration Consultant, minus the Retainage. The term "Retainage" as
-----
used in this Subsection 4.3(b) shall mean an amount equal to 10% of the costs
actually incurred for work in place as part of the Restoration, as certified
by the Restoration Consultant, until the Restoration has been completed. The
Retainage shall in no event, and notwithstanding anything to the contrary set
forth above in this Subsection 4.3(b), be less than the amount actually held
back by Borrower from contractors, subcontractors and materialmen engaged in
the Restoration. The Retainage shall not be released until the Restoration
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection 4.3(b) and that all
approvals necessary for the re-occupancy and use of the Property have been
obtained from all appropriate governmental and quasi-governmental
authorities, and Lender receives evidence reasonably satisfactory to Lender
that the costs of the Restoration have been paid in full or will be paid in
full out of the Retainage, provided, however, that Lender will release the
portion of the Retainage being held with respect to any contractor,
subcontractor or materialman simultaneously engaged in the Restoration as of
the date upon which the Restoration Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily completed all
work and has supplied all materials in accordance with the provisions of the
contractor's, subcontractor's or
materialman's contract, and the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums due to
the contractor, subcontractor or materialman as may be reasonably requested
by Lender or by the title company insuring the lien of this Security
Instrument. If required by Lender, the release of any such portion of the
Retainage shall be approved by the surety company, if any, which has issued a
payment or performance bond with respect to the contractor, subcontractor or
materialman.
(v) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the reasonable opinion of Lender, be sufficient to pay in full
the balance of the costs which are reasonably estimated by the Restoration
Consultant to be incurred in connection with the completion of the
Restoration, Borrower shall deposit the deficiency (the "Net Proceeds
Deficiency") with Lender before any further disbursement of the Net Proceeds
shall be made. The Net Proceeds Deficiency deposited with Lender shall be
held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Subsection 4.3(b) shall constitute additional security for the Obligations.
(vii) The excess, if any, of the Net Proceeds and the remaining balance,
if any, of the Net Proceeds Deficiency deposited with Lender after the
Restoration Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Subsection 4.3(b), and
the receipt by Lender of evidence reasonably satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in full,
shall be remitted by Lender to
Borrower, provided no Default or Event of Default shall have occurred and
shall be continuing under the Loan Agreement, the Note, this Security
Instrument or any of the Other Security Documents.
(viii) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Subsection 4.3(b)(vii) may be retained and applied by Lender
toward the payment of the Debt whether or not then due and payable in such
order, priority and proportions as Lender in its discretion shall deem proper
or, at the discretion of Lender, the same may be paid, either in whole or in
part, to Borrower for such purposes as Lender shall designate, in its
discretion. If Lender shall receive and retain Net Proceeds, Lender shall
apply such sums in the reduction of the Debt and the lien of this Security
Instrument shall be reduced only by the amount thereof.
Section 4.4. LOCK-BOX ACCOUNT. Upon the occurrence of and during the
----------------
continuance of an Event of Default, Lender shall have the right, upon written
notice to Borrower to require that, from and after the next succeeding date
of payment of an installment of principal and interest under the Note, all
Rents with respect to the Property, at Lender's discretion, be paid directly
to the Manager or New Manager, as applicable and deposited daily by the
Manager or New Manager, as applicable in the name designated by Lender
directly to a designated lock-box account (the "Lock-Box Account"), opened by
Lender at a bank (the "Lock-Box Bank"), which account shall be within the
exclusive control of Lender. Notwithstanding the foregoing, Lender shall
have the right to require that each tenant under the Leases make all payments
under its respective Lease, (y) if by wire transfer, to the Lock-Box Account
and (z) if by check, money order or similar manner of payment, by mail to a
designated lock-box (the "Lock-Box") within the exclusive control of Lender.
All amounts deposited into the Lock-Box shall be collected and deposited
daily by the Manager or New Manager, as applicable (or, if required by
Lender, by the Lock-Box Bank) into the Lock-Box Account. Amounts on deposit
in the Lock-Box Account or held in the Lock-Box shall be applied by Lender
to, among other things, the payment of the Debt and operating expenses and
Taxes of the Property, in such order and priority as Lender shall determine
in its sole discretion.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section 5.1. WARRANTY OF TITLE. Borrower has good title to the
-----------------
Property and has the right to mortgage, grant, bargain, sell, pledge,
assign, warrant,
transfer and convey the same and that Borrower possesses, other than the
Permitted Exceptions, (a) an unencumbered fee simple absolute estate in the
Land and the Improvements, (b) an unencumbered leasehold estate in the
Leased Land created by and pursuant to the provisions of the Ground Lease and
(c) an unencumbered tenancy-in-common interest in 17 Battery Place (as
defined in the Loan Agreement), and that it owns the Property free and clear
of all liens, encumbrances and charges whatsoever except for those exceptions
shown in the title insurance policy insuring the lien of
this Security Instrument (the "Permitted Exceptions"). Borrower further
represents and warrants that (a) the Ground Lease is in full force and effect
and has not been modified or amended in any manner whatsoever, (b) to the
best of its knowledge, there are no defaults under the Ground Lease and no
event has occurred which but for the passage of time, or notice, or both
would constitute a default under the Ground Lease, (c) all rents, additional
rents and other sums due and payable under the Ground Lease have been paid in
full, and (d) neither Borrower nor the landlord under the Ground Lease has
commenced any action or given or received any notice for the purpose of
terminating the Ground Lease. Borrower shall forever warrant, defend and
preserve the title and the validity and priority of the lien of this Security
Instrument and shall forever warrant and defend the same to Lender against
the claims of all persons whomsoever.
Section 5.2. INTENTIONALLY DELETED.
---------------------
Section 5.3. INTENTIONALLY DELETED.
---------------------
Section 5.4. VALIDITY OF DOCUMENTS. (a) The execution, delivery and
---------------------
performance of the Note, the Loan Agreement, this Security Instrument and
Other Security Documents and the borrowing evidenced by the Note (i) are
within the authority and power of Borrower; (ii) have been authorized by all
requisite limited liability company/corporate/partnership action; (iii) have
received all necessary licenses, approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with, result in a
breach of or constitute (with notice or lapse of time, or both) a default
under any provision of law, rule, regulation, writ, any order or judgment of
any court or governmental authority, the articles of incorporation, by-laws,
partnership or trust agreement, or other governing instrument of Borrower or
its subsidiaries, or any indenture, agreement or other instrument to which
Borrower is a party or by which it or any of its assets or the Property is or
may be bound or affected; (v) will not result in the creation or imposition
of any lien, charge or encumbrance whatsoever upon any of its assets, except
the lien and security interest created hereby; and (vi) will not require any
authorization or license from any governmental or other body except as may
have already been obtained, or any filing with, any governmental or other
body (except for the recordation of this instrument in appropriate land
records in the State where the Property is located and except for Uniform
Commercial Code filings relating to the security interest created hereby);
and (b) the Loan Agreement, the Note, this Security Instrument and the Other
Security Documents constitute the legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting the rights of creditors generally and to the application of
general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (i) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (ii) concepts of materiality, reasonableness, good
faith and fair dealing.
Section 5.5. INTENTIONALLY DELETED.
---------------------
Section 5.6. INTENTIONALLY DELETED.
---------------------
Section 5.7. NO FOREIGN PERSON. Borrower is not a "foreign person"
-----------------
within the meaning of Sections 1445(f)(3) of the Internal Revenue Code of
1986, as amended and the related Treasury Department regulations, including
temporary regulations.
Section 5.8. SEPARATE TAX LOT. The Property is assessed for real
-----------------
purposes as one or more wholly independent tax lot or lots, separate from
any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvements is assessed and taxed together with
the Property or any portion thereof.
Section 5.9. INTENTIONALLY OMITTED.
---------------------
Section 6.0. LEASES. (a) Borrower is the sole owner of the entire
------
lessor's interest in the Leases; (b) to the best knowledge of Borrower, the
Leases are valid and enforceable; (c) the terms of all alterations,
modifications and amendments to the Leases are reflected in the certified
occupancy statement delivered to and approved by Lender; (d) none of the
Rents reserved in the Leases have been assigned or otherwise pledged or
hypothecated by Borrower other than to Lender; (e) none of the Rents have
been collected for more than one (1) month in advance; (f) the premises
demised under the Leases have been completed and the tenants under the Leases
have accepted the same and have taken possession of the same on a rent-paying
basis; (g) to the best knowledge of Borrower, there exist no offsets or
defenses to the payment of any portion of the Rents; (h) no Lease contains an
option to purchase, right of first refusal to purchase, or any other similar
provision; (i) no person or entity has any possessory interest in, or right
to occupy, the Property except under and pursuant to a Lease; (j) each Lease
is subordinate to this Security Instrument and the tenant under each Lease
agrees to attorn to Lender either pursuant to its terms or a recorded
subordination and attornment agreement; (k) there are no prior assignments,
pledges, hypothecations or other encumbrances by Borrower of any Leases or
any portion of Rents due and payable or to become due and payable thereunder
which are presently outstanding and have priority to the assignment of rents
executed in connection with this Security Instrument; and (l) the Property is
not subject to any Lease other than the Leases described in the rent rolls
delivered pursuant to the Loan Agreement.
Section 5.9. INTENTIONALLY DELETED.
---------------------
Section 5.10. BUSINESS PURPOSES. The loan evidenced by the Note is
-----------------
solely for the business purpose of Borrower,
and is not for personal, family, household, or agricultural purposes.
Section 5.11. INTENTIONALLY DELETED.
---------------------
Section 5.12. MAILING ADDRESS. Borrower's mailing address, as set forth
---------------
in the opening paragraph hereof or as changed in accordance with the
provisions hereof, is true and correct.
Section 5.13. INTENTIONALLY DELETED.
---------------------
Section 5.14. INTENTIONALLY DELETED.
---------------------
Section 5.15. ILLEGAL ACTIVITY. No portion of the Property has been or
-------------
will be purchased with proceeds of any illegal activity.
Section 5.16. CONTRACTS. All contracts, agreements, consents, waivers,
---------
documents and writings of every kind or character at any time to which the
Borrower is a party to be delivered to Lender pursuant to any of the
provisions of this Security Instrument are valid and enforceable against the
Borrower and, to the best knowledge of Borrower, are enforceable against all
other parties thereto, and in all respects are what they purport to be and,
to the best knowledge of Borrower, to the extent that any such writing shall
impose any obligation or duty on the party thereto or constitute a waiver of
any rights which any such party might otherwise have, said writing shall be
valid and enforceable against said party in accordance with the terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally.
Section 5.18. SURVIVAL. The foregoing representations and warranties
--------
shall survive the execution and delivery of this Security Instrument and
shall continue in full force and effect until the Debt has been fully paid
and satisfied and Lender has no further commitment to advance funds
hereunder. The request for any Advance (as defined in the Loan Agreement)
under the Loan Agreement by Borrower or on its behalf shall constitute a
certification that the aforesaid representation and warranties are true and
correct as of the date of such request, except to the extent any such
representation or warranty shall relate to an earlier date.
ARTICLE 6 - OBLIGATIONS AND RELIANCES
Section 6.1. RELATIONSHIP OF BORROWER AND LENDER. The relationship between
-----------------------------------
Borrower and Lender is solely that of debtor and creditor, and Lender has no
fiduciary or other special relationship with Borrower, and no term or
condition of any of the Note, this Security Instrument and the Other Security
Documents shall be construed so as to deem the relationship between Borrower
and Lender to be other than that of debtor and creditor.
Section 6.2. NO RELIANCE ON LENDER. The officers of the REIT, are
-----------------
experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
Section 6.3. NO LENDER OBLIGATIONS. (a) Notwithstanding the provisions
---------------------
of Subsections 1.1(f) and (l) or Section 1.2, Lender is not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such agreements, contracts,
certificates, instruments, franchises, permits, trademarks, licenses and
other documents.
(b) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Security
Instrument, the Loan Agreement, the Note or the Other Security Documents,
including without limitation, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal,
or insurance policy, Lender shall not be deemed to have warranted, consented
to, or affirmed the sufficiency, the legality or effectiveness of same, and
such acceptance or approval thereof shall not constitute any warranty or
affirmation with respect thereto by Lender.
Section 6.4. RELIANCE. Borrower recognizes and acknowledges that in
---------
accepting the Loan Agreement, the Note, this Security Instrument and the
Other Security Documents, Lender is expressly and primarily relying on the
truth and accuracy of the warranties and representations set forth in Article
5 without any obligation to investigate the Property and notwithstanding any
investigation of the Property by Lender; that such reliance existed on the
part of Lender prior to the date hereof; that the warranties and
representations are a material inducement to Lender in accepting the Loan
Agreement, the Note, this Security Instrument and the Other Security
Documents; and that Lender would not be willing to make the loan evidenced by
the Loan Agreement, the Note, this Security Instrument and the Other Security
Documents and accept this Security Instrument in the absence of the
warranties and representations as set forth in Article 5.
ARTICLE 7 - FURTHER ASSURANCES
Section 7.1. RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
-------------------------------------------
forthwith upon the execution and delivery of this Security Instrument
and thereafter, from
time to time, will cause this Security Instrument and any of the Other
Security Documents creating a lien or security interest or evidencing the
lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully
to protect and perfect the lien or security interest hereof upon, and the
interest of Lender in, the Property. Borrower will pay all taxes, filing,
registration or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, this Security
Instrument, the Other Security Documents, any note or mortgage supplemental
hereto, any security instrument with respect to the Property and any
instrument of further assurance, and any modification or amendment of the
foregoing documents, and all federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of this Security Instrument, any mortgage
supplemental hereto, any security instrument with respect to the Property or
any instrument of further assurance, and any modification or amendment of the
foregoing documents, except for any income taxes imposed on Lender or where
prohibited by law so to do.
Section 7.2. FURTHER ACTS, ETC. Borrower will, at the cost of Borrower,
-----------------
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts,
deeds, conveyances, mortgages, assignments, notices of assignments, transfers
and assurances as Lender shall, from time to time, reasonably require, for
the better assuring, conveying, assigning, transferring, and confirming unto
Lender the property and rights hereby mortgaged, granted, bargained, sold,
conveyed, confirmed, pledged, assigned, warranted and transferred or intended
now or hereafter so to be, or which Borrower may be or may hereafter become
bound to convey or assign to Lender, or for carrying out the intention or
facilitating the performance of the terms of this Security Instrument or for
filing, registering or recording this Security Instrument, or for complying
with all Applicable Laws if Borrower fails to cure promptly any violations of
Applicable Laws, except that Borrower's obligations and liabilities shall not
be increased in a manner inconsistent with its obligations and liabilities
under this Security Instrument. Borrower, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so,
one or more financing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Lender in the Property.
Borrower grants to Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender at law and in equity, including without
limitation such rights and remedies available to Lender pursuant to this
Section 7.2.
Section 7.3. CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.
--------------------------------------------------------
(a) If any law is enacted or adopted or amended after the date of
this Security
Instrument which deducts the Debt from the value of the Property for the
purpose of taxation or which imposes a tax, either directly or indirectly, on
the Debt or Lender's interest in the Property, Borrower will pay the tax,
with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Borrower would be unlawful or taxable
to Lender or unenforceable or provide the basis for a defense of usury, then
Lender shall have the option by written notice of not less than ninety (90)
days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit
or credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of this Security
Instrument or the Debt. If such claim, credit or deduction shall be required
by law, Lender shall have the option, by written notice of not less than
ninety (90) days, to declare the Debt immediately due and payable.
(c) If at any time the United States of America, any State thereof
or any subdivision of any such State shall require revenue or other stamps to
be affixed to the Note, this Security Instrument, or any of the Other
Security Documents or impose any other tax or charge on the same, Borrower
will pay for the same, with interest and penalties thereon, if any.
Section 7.4. ESTOPPEL CERTIFICATES. (a) Borrower shall deliver to
---------------------
Lender, promptly upon request, duly executed estoppel
certificates from any one or more lessees as
required by Lender in the form attached to the Loan Agreement to the extent
lessees are required to do so under their respective Leases.
(b) Upon any transfer or proposed transfer contemplated by Section
19.1 hereof, at Lender's request, Borrower shall provide an estoppel
certificate to any Co-Lender or Participant (as each term is defined in the
Loan Agreement) or any prospective Co-Lender or Participant in such form,
substance and detail as Lender, such Co-Lender or Participant or prospective
Co-Lender or Participant may reasonably require.
(c) The delivery by Borrower and Lender of estoppel certificates
and similar statements shall otherwise be governed by the Loan Agreement.
Section 7.5. FLOOD INSURANCE. After Lender's request, Borrower shall
---------------
deliver evidence satisfactory to Lender that no portion of the Improvements
is situated in a federally designated "special flood hazard area" or, if
located with such area, Borrower shall maintain the insurance prescribed in
Section 5.03 of the Loan Agreement.
Section 7.6. SPLITTING OF SECURITY INSTRUMENT. This Security
------------------------------------
Instrument and
the Note shall, at any time until the same shall be fully paid and satisfied,
at the sole election of Lender, be split or divided into two or more notes
and two or more security instruments, each of which shall cover all or a
portion of the Property to be more particularly described therein. To that
end, Borrower, upon written request of Lender, shall execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered by the then
owner of the Property, to Lender and/or its designee or designees substitute
notes and security instruments in such principal amounts, aggregating not
more than the then unpaid principal amount of this Security Instrument, and
containing terms, provisions and clauses identical in all material respects
to those contained herein and in the Note, and such other documents and
instruments as may be required by Lender.
Section 7.7. REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of
---------------------
an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any Other Security Document which is not of public record, and, in
the case of any such mutilation, upon surrender and cancellation of such Note
or Other Security Document, Borrower will issue, in lieu thereof, a
replacement Note or Other Security Document, dated the date of such lost,
stolen, destroyed or mutilated Note or Other Security Document in the same
principal amount thereof and otherwise of like tenor.
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE
Section 8.1. LENDER RELIANCE. Borrower acknowledges that Lender has
---------------
examined and relied on the experience of Borrower and its general partner and
member in owning and operating properties such as the Property in agreeing to
make the loan secured hereby, and will continue to rely on Borrower's
ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt
and the performance of the Other Obligations. Borrower acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale
of the Property.
Section 8.2. NO SALE/ENCUMBRANCE. Except as permitted herein and under
-------------------
the terms and conditions contained in the Loan Agreement, Borrower agrees
that Borrower shall not, without the prior written consent of Lender, sell,
convey, mortgage, grant, bargain, encumber, pledge, assign, or otherwise
transfer the Property or any part thereof or permit the Property or any part
thereof to be sold, conveyed, mortgaged, granted, bargained, encumbered,
pledged, assigned, or otherwise transferred.
Section 8.3. SALE/ENCUMBRANCE DEFINED. A sale, conveyance, mortgage,
-----------------------
grant, bargain, encumbrance, pledge, assignment, or transfer within the
meaning of this Article 8 shall be deemed to include, but not limited to, (a)
an installment sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement
by Borrower leasing all or a substantial part of the Property for other than
actual occupancy by a space tenant thereunder or a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower's right, title
and interest in and to any Leases or any Rents; (c) if Borrower or any
general partner or limited partner of Borrower is a corporation, the
voluntary or involuntary sale, conveyance, transfer or pledge of such
corporation's stock or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise (other than
transfers of shares in the REIT), or the creation or issuance of new stock by
which an aggregate of more than 10% of such corporation's stock shall be
vested in a party or parties who are not now stockholders (other than the
issuance of shares in the REIT); (d) if Borrower or any general partner or
limited partner of Borrower is a limited or general partnership or joint
venture, the change, removal or resignation of a general partner, managing
partner or limited partner, or the transfer or pledge of the partnership
interest of any general partner, managing partner or limited partner or any
profits or proceeds relating to such partnership interest whether in one
transfer or a series of transfers and (e) if Borrower, or any general or
limited partner or member of Borrower is a limited liability company, the
change, removal or resignation of any member or the transfer or pledge of the
membership interest of any member or any profits or proceeds relating to such
membership interest whether in one or a series of transactions or the
voluntary or involuntary sale, conveyance, transfer or pledge of any
membership interests (or the membership interests of any limited liability
company directly or indirectly controlling such limited liability company by
operation of law or otherwise). Notwithstanding the foregoing, (i) transfer
by devise or descent or by operation of law upon the death of a partner or
stockholder of Borrower or any general partner thereof or (ii) any transfer
permitted under the Loan Agreement shall not be deemed to be a sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer within the meaning of this Article 8.
Section 8.4. LENDER'S RIGHTS. Lender reserves the right to condition
----------------
the consent required hereunder upon a modification of the
terms hereof and on
assumption of the Note, the Loan Agreement, this Security Instrument and the
Other Security Documents as so modified by the proposed transferee, payment
of all of Lender's expenses incurred in connection with such transfer, or
such other conditions as Lender shall determine in its sole discretion to be
in the interest of Lender. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder
in order to declare the Debt immediately due and payable upon Borrower's
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
or transfer of the Property without Lender's consent. This provision shall
apply to every sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
or transfer of the Property.
ARTICLE 9 - PREPAYMENT
Section 9.1. PREPAYMENT. The Debt may be prepaid only in strict
----------
accordance with the express terms and conditions of the Note and the Loan
Agreement including, but not limited to, the payment of any Funding Costs.
ARTICLE 10 - DEFAULT
Section 10.1. EVENTS OF DEFAULT. The occurrence of any one or more of
-----------------
the following events shall constitute an "Event of Default":
(a) the occurrence of an "Event of Default", as such term is defined in
the Loan Agreement.
(b) if any of the Taxes or Other Charges is not paid when the same is
due and payable except to the extent sums sufficient to pay such Taxes and
Other Charges have been deposited with Lender in accordance with the terms of
this Security Instrument;
(c) if the Policies are not kept in full force and effect, or if the
Policies are not delivered to Lender upon request or Borrower has not
delivered evidence of the renewal of the Policies thirty (30) days prior to
their expiration as provided in the Loan Agreement;
(d) if Borrower violates or does not comply with any of the provisions
of Sections 3.7, 4.3 and Articles 8 and 13;
(e) intentionally deleted;
(f) intentionally deleted;
(g) if Borrower shall be in default beyond the expiration of any
applicable notice and/or cure period under any other mortgage, deed of trust,
deed to secure debt or other security agreement covering any part of the
Property whether it be superior or junior in lien to this Security
Instrument;
(h) if the Property becomes subject to any mechanic's, materialman's or
other lien other than a lien for local real estate taxes and assessments not
then due and payable and the lien shall remain undischarged of record (by
payment, bonding or otherwise) for a period of forty-five (45) days;
(i) if any federal tax lien is filed against Borrower, any general
partner or member of Borrower or the Property and same is not discharged of
record within forty-five (45) days after same is filed;
(j) intentionally deleted;
(k) if any default occurs under that certain environmental indemnity
agreement dated the date hereof given by Borrower and the REIT to Lender (the
"Environmental Indemnity") and such default continues after the expiration of
applicable notice and grace periods, if any;
(l) if any default occurs under
any guaranty or indemnity executed in connection herewith and such default
continues after the expiration of applicable grace periods, if any;
(m) intentionally deleted;
(n) if Borrower defaults under the Management Agreement beyond the
expiration of applicable notice and grace periods, if any, thereunder or if
cancelled, terminated or surrendered, unless in such case (a) Borrower shall
enter into a new management agreement on market terms and conditions no less
favorable than the Management Agreement and with a management company
satisfactory to Lender, (b) Borrower self-manages the Property or (c) such
cancellation, termination or surrender is directed by Lender pursuant to the
terms of that certain Assignment of Management Agreement and Subordination of
Management Fees (the "Subordination of Management Agreement") dated the date
hereof between Borrower, Manager (as defined in the Subordination of
Management Agreement) and Lender for a reason other than an Event of Default
thereunder;
(o) if Borrower shall fail, after the applicable notice and grace
period contained in the Ground Lease, if any, in the payment of any rent,
additional rent or other charge mentioned in or made payable by the Ground
Lease when said rent or other charge is due and payable;
(p) if there shall occur any default by Borrower, as tenant, under the
Ground Lease in the observance or performance of any term, covenant or
condition of the Ground Lease on the part of Borrower to be observed or
performed and
said default is not cured following the expiration of any applicable grace
and notice period therein provided or if the leasehold estate created by the
Ground Lease shall be surrendered or the Ground Lease shall be terminated or
cancelled for any reason or under any circumstances whatsoever, or if any of
the terms, covenants or conditions of the Ground Lease shall in any manner be
modified, changed, supplemented, altered, or amended without the consent of
Lender;
(q) if for more than ten (10) days after notice from Lender or such
shorter time as provided for in the Note, the Loan Agreement, this Security
Agreement and the Other Security Documents, Borrower shall continue to be in
default under any other term, covenant or condition of this Security
Instrument in the case of any default which can be cured by the payment of a
sum of money, or for thirty (30) days after notice from Lender or such
shorter time as provided for in the Note, the Loan Agreement, this Security
Agreement and the Other Security Documents in the case of any other default,
provided that if such default cannot reasonably be cured within such thirty
(30) day period or such shorter time as provided for in the Note, the Loan
Agreement, this Security Agreement and the Other Security Documents and
Borrower shall have commenced to cure such default within such thirty (30)
day period or such shorter time as provided for in the Note, the Loan
Agreement, this Security Agreement and the Other Security Documents and
thereafter diligently and expeditiously proceeds to cure the same, such
thirty (30) day period or such shorter time as provided for in the Note, the
Loan Agreement, this Security Agreement and the Other Security Documents
shall be extended for so long as it shall require Borrower in the exercise of
due diligence to cure such default, it being agreed that no such extension
shall be for a period in excess of ninety (90) days;
(r) if Borrower fails to cure promptly any violations of Applicable
Laws within thirty (30) days after notice by Lender;
(s) if any condemnation proceeding is instituted which would, in
Lender's reasonable judgment, materially impair the use and enjoyment of the
Property for its intended purposes; or
(t) if Borrower shall fail to reimburse Lender within then (10) days
after notice by Lender with interest calculated at the Default Rate (as
defined in the Loan Agreement), for all Insurance Premiums or Taxes and Other
Charges, together with interest and penalties imposed thereon, paid by Lender
pursuant to this Security Instrument.
Section 10.2. DEFAULT INTEREST. Borrower does hereby agree that upon
----------------
the occurrence of an Event of Default, Lender shall be entitled to receive and
Borrower shall pay interest on the entire principal amount outstanding of the
Note at a rate equal to the Default Rate. The Default Rate shall be computed
(i) for all Events of Default which can be cured by the payment of a sum of
money, from the date upon which such payment was due, and (ii) for all other
Events of Default, from the occurrence of the Event of Default until, for all
Events of Default, the earlier of the date upon which the Event of Default is
cured or the date upon which the Debt is paid in full. Interest calculated
at the Default Rate shall be added to the Debt, and shall be deemed secured
by this Security Instrument. This clause, however, shall not be construed as
an agreement or privilege to extend the date of the payment of the Debt, nor
as a waiver of any other right or remedy accruing to Lender by reason of the
occurrence of any Default or Event of Default.
ARTICLE 11 - RIGHTS AND REMEDIES
Section 11.1. REMEDIES. Upon the occurrence of any Event of Default,
---------
Borrower agrees that Lender may take such action, without notice or demand,
as it deems advisable to protect and enforce its rights against Borrower and
in and to the Property, including, but not limited to, the following actions,
each of which may be pursued concurrently
or otherwise, at such time and in such order as Lender may determine, in its
sole discretion, without impairing or otherwise affecting the other rights
and remedies of Lender.
(a) declare the entire unpaid Debt to be immediately due and payable;
(b) institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Instrument under any applicable provision of law
in which case the Property or any interest therein may be sold for cash or
upon credit in one or more parcels or in several interests or portions and in
any order or manner;
(c) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Security Instrument for the portion of the Debt then due
and payable, subject to the continuing lien and security interest of this
Security Instrument for the balance of the Debt not then due, unimpaired and
without loss of priority;
(d) sell for cash or upon credit the Property or any part thereof and
all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one
or more sales, as an entity or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein, in the
Note, the Loan Agreement or in the Other Security Documents;
(f) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Security Instrument, the Loan
Agreement or the Other Security Documents;
(g) apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the
adequacy of the security for the Debt and without regard for the solvency of
Borrower, the REIT, or of any person, firm or other entity liable for the
payment of the Debt;
(h) subject to any applicable law, the license granted to Borrower
under Section 1.2 shall automatically be revoked and Lender may enter into or
upon the Property, either personally or by its agents, nominees or attorneys
and dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and its
agents or servants wholly therefrom, and take possession of all books,
records and accounts relating thereto and Borrower agrees to surrender
possession of the Property and of such books, records and accounts to Lender
upon demand, and thereupon Lender may (i) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every part
of the Property and conduct the business thereat; (ii) complete any
construction on the Property in such manner and form as Lender deems
advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Property; (iv) exercise all rights and powers of
Borrower with respect to the Property, whether in the name of Borrower or
otherwise, including, without limitation, the right to make, cancel, enforce
or modify Leases, obtain and evict tenants, and demand, sue for, collect and
receive all Rents of the Property and every part thereof; (v) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to Lender
or to such receiver and, in default thereof, Borrower may be evicted by
summary proceedings or otherwise; and (vii) apply the receipts from the
Property to the payment of the Debt, in such order, priority and proportions
as Lender shall deem appropriate in its sole discretion after deducting
therefrom all expenses (including reasonable attorneys' fees) incurred in
connection with the aforesaid operations and all amounts necessary to pay the
Taxes, Other Charges, insurance and other expenses in connection with the
Property, as well as just and reasonable compensation for the services of
Lender, its counsel, agents and employees;
(i) exercise any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting
the generality of the foregoing: (i) the right to take possession of the
Personal Property or any part thereof, and to take such other measures as
Lender may deem necessary for the care, protection and preservation of the
Personal Property, and (ii) request Borrower at its expense to assemble the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended
action by Lender with respect to the Personal Property sent to Borrower in
accordance with the provisions hereof at least five (5) days prior to such
action, shall constitute commercially reasonable notice to Borrower;
(j) apply any sums then deposited in the Escrow Fund, if any, and any
other sums held in escrow or otherwise by Lender in accordance with the terms
of this Security Instrument or any Other Security Document to the payment of
the following items in any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Operating Expenses (as defined in the Loan Agreement);
(iv) Interest on the unpaid principal balance of the Note;
(v) Amortization of the unpaid principal balance of the Note;
(vi) All other sums payable pursuant to the Note, the Loan
Agreement, this Security Instrument and
the Other Security Documents, including
without limitation advances made
by Lender pursuant to the terms
of this Security Instrument;
(k) surrender the Policies maintained pursuant to Article 3 hereof,
collect the unearned Insurance Premiums and apply such sums as a credit on
the Debt in such priority and proportion as Lender in its discretion shall
deem proper, and in connection therewith, Borrower hereby appoints Lender as
agent and attorney-in-fact (which is coupled with an interest and is
therefore irrevocable) for Borrower to collect such Insurance Premiums;
(l) pursue such other remedies as Lender may have under applicable law;
(m) apply the undisbursed balance of any Net Proceeds Deficiency
deposit, together with interest thereon, to the payment of the Debt in such
order, priority and proportions as Lender shall deem to be appropriate in its
discretion; and/or
(n) require a Lock-Box Account pursuant to Section 4.4 and apply all
sums in the Lock-Box Account to the payment of the Debt, in such order,
priority and proportions as Lender shall deem appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale, or otherwise, of less
than all of the Property, this Security Instrument shall continue as a lien
and security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section
11.1 to the contrary, if any Event of Default as described in clause (i) or
(ii) of Subsection 10.1(f) shall occur, the entire unpaid Debt shall be
automatically due and payable, without any further notice, demand or other
action by Lender.
Section 11.2. APPLICATION OF PROCEEDS. The purchase money, proceeds
------------------------
and avails of any disposition of the Property, or any part
thereof, or any other sums collected by Lender pursuant to the Note,
the Loan Agreement, this
Security Instrument or the Other Security Documents, may be applied by Lender
to the payment of the Debt in such priority and proportions as Lender in its
discretion shall deem proper; provided, however, that if no Event of Default
has occurred and is continuing, Lender's application of such sums shall be
governed by the Loan Agreement.
Section 11.3. RIGHT TO CURE DEFAULTS. Upon the occurrence of any
------------------------
Default or Event of Default, Lender may, but without any obligation to
do so and without notice to or demand on Borrower and without
releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such
extent as Lender may deem necessary to protect the security hereof. Lender
is authorized to enter upon the Property for such purposes, or appear in,
defend, or bring any action or proceeding to protect its interest in the
Property and the cost and expense thereof (including reasonable attorneys'
fees to the extent permitted by law), with interest as provided in this
Section 11.3, shall constitute a portion of the Debt and shall be due and
payable to Lender upon demand. All such costs and expenses incurred by
Lender in remedying such Default or Event of Default or in appearing in,
defending, or bringing any such action or proceeding shall bear interest at
the Default Rate, for the period after notice from Lender that such cost or
expense was incurred to the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be
secured by this Security Instrument and the Other Security Documents and
shall be promptly due and payable after demand by Lender therefor.
Section 11.4. ACTIONS AND PROCEEDINGS. Lender has the right to appear
-----------------------
in and defend any action or proceeding brought with
respect to the Property and
to bring any action or proceeding, in the name and on behalf of Borrower,
which Lender, in its discretion, decides should be brought to protect its
interest in the Property.
Section 11.5. RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the
-------------------------------------
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to
whether or not the balance of the Debt shall be due, and without prejudice to
the right of Lender thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Borrower existing at the time such
earlier action was commenced.
Section 11.6. EXAMINATION OF BOOKS AND RECORDS. Lender, each
--------------------------------------
Co-Lender, and their agents, accountants and attorneys
shall have the right, upon providing
Borrower with prior written notice, to examine and inspect at any reasonable
time the records, books, management and other papers of Borrower and the REIT
which reflect upon their financial condition (including, without limitation,
leases, statements bills and invoices), at the Property or at the principal
place of business of Borrower, the REIT, their Affiliates or where the books
and records are located. Lender and its agents shall have the right to make
copies and extracts
from the foregoing records and other papers. In addition, Lender, its
agents, accountants and attorneys shall have the right to examine, copy and
audit the books and records of Borrower, the REIT and their affiliates
pertaining to the income, expenses and operation of the Property during
reasonable business hours at any office of Borrower, the REIT, their
Affiliates or where the books and records are located. This Section 11.6
shall apply throughout the term of the Note and without regard to whether a
Default or Event of Default has occurred or is continuing.
Section 11.7. OTHER RIGHTS, ETC. (a) The failure of Lender to
------------------
insist upon strict performance of any term hereof shall not be deemed to
be a waiver of
any term of this Security Instrument. Borrower shall not be relieved of
Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower to take any action to foreclose this
Security Instrument or otherwise enforce any of the provisions hereof or of
the Note, the Loan Agreement or the Other Security Documents, (ii) the
release, regardless of consideration, of the whole or any part of the
Property, or of any person liable for the Debt or any portion thereof, or
(iii) any agreement or stipulation by Lender extending the time of payment or
otherwise modifying or supplementing the terms of the Note, the Loan
Agreement, this Security Instrument or the Other Security Documents.
(b) It is agreed that the risk of loss or damage to the Property
is on Borrower, and Lender shall have no liability whatsoever for decline in
value of the Property, for failure to maintain the Policies, or for failure
to determine whether insurance in force is adequate as to the amount of risks
insured. Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Lender thereafter to foreclose this Security Instrument. The rights
of Lender under this Security Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No
act of Lender shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Lender shall not
be limited exclusively to the rights and remedies herein stated but shall be
entitled to every right and remedy now or hereafter afforded at law or in
equity.
Section 11.8. RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
--------------------------------------------
release any portion of the Property for such consideration as
Lender may require
without, as to the remainder of the Property, in any way impairing or
affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof
as Lender may require without being accountable for so doing to any other
lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
Section 11.9. VIOLATION OF LAWS. If the Property is not in compliance
-----------------
with Applicable Laws, Lender may impose additional requirements upon Borrower
in connection herewith including, without limitation, monetary reserves or
financial equivalents.
Section 11.10. RECOURSE AND CHOICE OF REMEDIES. Subject to the recourse
-------------------------------
obligations and liabilities of Borrower and the REIT contained in Section
9.08 of the Loan Agreement and notwithstanding any other provision of this
Security Instrument, Lender and other Indemnified Parties (defined in Section
13.1 below) are entitled to enforce the obligations of Borrower contained in
Section 13.2 without first resorting to or exhausting any security or
collateral and without first having recourse to the Note or any of the
Property, through foreclosure or acceptance of a deed in lieu of foreclosure
or otherwise, and in the event Lender commences a foreclosure action against
the Property, Lender is entitled to pursue a deficiency judgment with respect
to such obligations against Borrower. The liability of Borrower is not
limited to the original principal amount of the Note. Notwithstanding the
foregoing, nothing herein shall inhibit or prevent Lender from foreclosing
pursuant to this Security Instrument or exercising any other rights and
remedies pursuant to the Note, the Loan Agreement, this Security Instrument
and the Other Security Documents, whether simultaneously with foreclosure
proceedings or in any other sequence. A separate action or actions may be
brought and prosecuted against Borrower, whether or not action is brought
against any other person or entity or whether or not any other person or
entity is joined in the action or actions. In addition, Lender shall have
the right but not the obligation to join and participate in, as a party if it
so elects, any administrative or judicial proceedings or actions initiated in
connection with any matter addressed in the Environmental Indemnity.
Borrower shall remain liable for any deficiency if the proceeds from any sale
or other disposition of the Property are insufficient to satisfy the
Obligation in full.
Section 11.11. RIGHT OF ENTRY. Lender and its agents shall have the
---------------
right to enter and inspect the Property at all reasonable
times, including, without
limitation, the right to enter and inspect in order to conduct an appraisal
of the Property. This Section 11.11 shall apply throughout the term of the
Note and without regard to whether a Default or Event of Default has occurred
or is continuing.
ARTICLE 12 - INTENTIONALLY OMITTED
ARTICLE 13 - INDEMNIFICATION
Section 13.1. GENERAL INDEMNIFICATION. Borrower shall, at its sole
-----------------------
cost and expense, protect, defend, indemnify, release and hold
harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement,
punitive damages, foreseeable and unforeseeable consequential damages, of
whatever kind or nature (including but not limited to reasonable attorneys'
fees and other costs of defense) (the "Losses") imposed upon or incurred by
or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any one or more of the following
(excluding Losses incurred by any Indemnified Party as a result of any
Indemnified Party's wilful misconduct or gross negligence or those arising
solely from a state of facts that first comes into existence after Lender or
a third party acquires title to the Property through foreclosure or deed in
lieu thereof or the exercise of any other right or remedy and not caused by
Borrower): (a) any and all lawful action that may be taken by Lender in
connection with the enforcement of the provisions of this Security Instrument
or the Note, the Loan Agreement or the Other Security Documents, whether or
not suit is filed in connection with same, or in connection with Borrower
and/or any partner, member, joint venturer or shareholder thereof becoming a
party to a voluntary or involuntary federal or state bankruptcy, insolvency
or similar proceeding; (b) any accident, injury to or death of persons or
loss of or damage to property occurring in, on or about the Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (c) any use, nonuse or condition in,
on or about the Property or any part thereof or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (d) any
failure on the part of Borrower to perform or be in compliance with any of
the terms of this Security Instrument; (e) performance of any labor or
services or the furnishing of any materials or other property in respect of
the Property or any part thereof; (f) the failure of any person to file
timely with the Internal Revenue Service an accurate Form 1099-B, Statement
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with the Security
Instrument, or to supply a copy thereof in a timely fashion to the recipient
of the proceeds of the transaction in connection with which this Security
Instrument is made; (g) any failure of the Property to be in compliance with
any Applicable Laws; (h) the enforcement by any Indemnified Party of the
provisions of this Article 13; (i) any and all claims and demands whatsoever
which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants,
or agreements contained in any Lease; (j) the payment of any commission,
charge or brokerage fee to anyone which may be payable in connection with the
funding of the loan evidenced by the Note and secured by this Security
Instrument; or (k) any misrepresentation made by Borrower in this Security
Instrument or any Other Security Document. Any amounts payable to Lender by
reason of the application of this Section 13.1 shall become due and payable
within ten (10) days written notice therefor and shall bear interest at the
Default Rate from the date loss or damage is sustained by Lender until paid.
For purposes of this Article 13, the term "Indemnified Parties" means Lender
and any person or entity who is or will have been involved in the origination
of this loan, any person or entity who is or will have been involved in the
servicing of this loan, any person or entity in whose name the encumbrance
created by this Security Instrument is or will have been recorded, persons
and entities who may hold or acquire or will have held a full or partial
interest in this loan (including, but not limited to, Participants and each
Co-Lender (as defined in the Loan Agreement) as well as custodians, trustees
and other fiduciaries who hold or have held a full or partial interest in
this loan for the benefit of third parties) as well as the respective
directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and
assigns of any and all of the foregoing (including but not limited to any
other person or entity who holds or acquires or will have held a
participation or other full or partial interest in this loan or the Property,
whether during the term of this loan or as a part of or following a
foreclosure of this loan and including, but not limited to, any successors by
merger, consolidation or acquisition of all or a substantial portion of
Lender's assets and business).
Section 13.2. MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its
-------------------------------
sole cost and expense, protect, defend, indemnify, release
and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making
and/or recording of this Security Instrument, the Note, the Loan Agreement or
any of the Other Security Documents.
Section 13.3. INTENTIONALLY OMITTED.
---------------------
Section 13.4. INTENTIONALLY OMITTED.
---------------------
Section 13.5. DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER
----------------------------------------------
FEES AND EXPENSES. Upon
- ------------------
written request by any Indemnified Party, Borrower shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties
may, in their sole and absolute discretion, engage their own attorneys and
other professionals to defend or assist them, and, at the option of
Indemnified Parties, their attorneys shall control the resolution of claim or
proceeding. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
ARTICLE 14 - WAIVERS
Section 14.1. WAIVER OF COUNTERCLAIM. Borrower hereby waives the right
----------------------
to assert a counterclaim, other than a mandatory or
compulsory counterclaim, in
any action or proceeding brought against it by Lender arising out of or in
any way connected with this Security Instrument, the Note, the Loan
Agreement, the Other Security Documents or the Obligations.
Section 14.2. MARSHALLING AND OTHER MATTERS. Borrower hereby waives,
------------------------------
to the extent permitted by law, the benefit of all
appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and
all rights of marshalling in the event of any sale hereunder of the Property
or any part thereof or any interest therein. Further, Borrower hereby
expressly waives any and all rights of redemption from sale under any order
or decree of foreclosure of this Security Instrument on behalf of Borrower,
and on behalf of each and every person acquiring any interest in or title to
the Property subsequent to the date of this Security Instrument and on behalf
of all persons to the extent permitted by applicable law.
Section 14.3. WAIVER OF NOTICE. Borrower shall not be entitled to any
----------------
notices of any nature whatsoever from Lender except with respect to matters
for which this Security Instrument specifically and expressly provides for
the giving of notice by Lender to Borrower and except with respect to matters
for which Lender is required by applicable law to give notice, and Borrower
hereby expressly waives the right to receive any notice from Lender with
respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.
Section 14.4. INTENTIONALLY OMITTED.
---------------------
Section 14.5. SOLE DISCRETION OF LENDER. Wherever pursuant to this
--------------------------
Security Instrument (a) Lender exercises any right given to it
to approve or
disapprove, (b) any arrangement or term is to be satisfactory to Lender, or
(c) any other decision or determination is to be made by Lender, the decision
of Lender to approve or disapprove, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and
determinations made by Lender, shall be in the sole and absolute discretion
of Lender and shall be final and conclusive, except as may be otherwise
expressly and specifically provided herein.
Section 14.6. INTENTIONALLY OMITTED.
--------------------
SECTION 14.7. WAIVER OF TRIAL BY JURY. BORROWER, AND BY ITS ACCEPTANCE
----------------------
OF THIS SECURITY INSTRUMENT, LENDER, EACH CO-LENDER, PARTICIPANTS
(AS DEFINED IN
THE LOAN AGREEMENT), AGENT AND SYNDICATION AGENT EACH HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE LOAN AGREEMENT, THIS SECURITY INSTRUMENT
OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS
OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
ARTICLE 15 - RECOURSE
Section 15.1. RECOURSE. The recourse obligations of Borrower and the
------
REIT relating to the Debt and the Obligations (as defined in the Loan
Agreement) shall be governed by Section 9.08 of the Loan Agreement.
ARTICLE 16 - NOTICES
Section 16.1. NOTICES. All notices or other written communications
-----
hereunder shall be deemed to have been properly given (i) upon delivery, if
delivered in person or by facsimile transmission with receipt acknowledged in
writing by the recipient thereof with respect to deliveries in person or by
answerback if delivered by facsimile transmission, (ii) one (1) Business Day
(defined below) after having been deposited for overnight delivery with any
reputable overnight courier service, or (iii) five (5) Business Days after
having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
If to Agent or Syndication Agent, as follows:
Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, a division of
Lehman Brothers Holdings Inc.
Three World Financial Center, 8th Floor
New York, New York 10285
Telecopier Number: (212) 526-7423
Attention: David Juge
and to
Hatfield Philips Inc.
285 Peachtree Center Avenue
Marquis Two Tower
Atlanta, Georgia 30303
Telecopier Number: (404) 420-5610
Attention: Mr. Greg Winchester
If to Borrower or the REIT, as follows:
SL Green Operating Partnership, L.P.
70 West 36th Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Facsimile No. (212) 594-0086
with a copy to:
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel
200 Park Avenue
New York, New York 10166
Attention: Robert J. Ivanhoe, Esq.
Facsimile No. (212) 801-6400
or addressed as such party may from time to time designate by written notice
to the other parties.
Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in New
York, New York.
ARTICLE 17 - SERVICE OF PROCESS
Section 17. CONSENT TO SERVICE. Borrower will maintain a place of
------------------
business or an agent for service of process in New York, New York and give
prompt notice to Lender of the address of such place of business and of the
name and address of any new agent appointed by it, as appropriate. Borrower
further agrees that the failure of its agent for service of process to give
it notice of any service of process will not impair or affect the validity of
such service or of any judgment based thereon.
Section 17.2. SUBMISSION TO JURISDICTION. With respect to any claim or
--------------------------
action arising hereunder or under the Note or the Other Security Documents,
Borrower (a) irrevocably submits to the nonexclusive jurisdiction of the
courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York, New York, and appellate courts from
any thereof, and (b) irrevocably waives any objection which it may have at
any time to the laying on venue of any suit, action or proceeding arising out
of or relating to this Security Instrument brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.
Section 17.3. JURISDICTION NOT EXCLUSIVE. Nothing in this Security
--------------------------
Instrument will be deemed to preclude Lender from bringing an action or
proceeding with respect hereto in any other jurisdiction.
ARTICLE 18 - APPLICABLE LAW
SECTION 18.1. CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE DEEMED
-------------
TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE
STATE OF NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED HOWEVER, THAT
WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE
LIEN OF
THIS SECURITY INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE
LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED SHALL APPLY.
Section 18.2. USURY LAWS. This Security Instrument and the Note are
-----------
subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the Debt at a rate which could subject the
holder of the Note to either civil or criminal liability as a result of being
in excess of the maximum interest rate which Borrower is permitted by
applicable law to contract or agree to pay. If by the terms of this Security
Instrument or the Note, Borrower is at any time required or obligated to pay
interest on the Debt at a rate in excess of such maximum rate, the rate of
interest under the Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of
such maximum rate shall be applied and shall be deemed to have been payments
in reduction of the principal balance of the Note. All sums paid or agreed
to be paid to Lender for the use, forbearance, or detention of the Debt
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Note until
payment in full so that the rate or amount of interest on account of the Debt
does not exceed the maximum lawful rate of interest from time to time in
effect and applicable to the Debt for so long as the Debt is outstanding.
Section 18.3. PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
------------------------------------
and remedies provided in this Security Instrument may be
exercised only to the
extent that the exercise thereof does not violate any applicable provisions
of law and are intended to be limited to the extent necessary so that they
will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any
applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be affected
thereby.
ARTICLE 19 - SECONDARY MARKET
Section 19.1. TRANSFER OF LOAN. The Lender shall have the right in its
-------------
sole discretion at any time during the term of this Security Instrument to
sell, assign, syndicate, participate or otherwise transfer and/or dispose of
all or any portion of its interest in the loan evidenced by the Note, in
accordance with, and subject to, the terms, covenants, conditions and
restrictions set forth in the Loan Agreement.
ARTICLE 20 - COSTS
Section 20.1. PERFORMANCE AT BORROWER'S EXPENSE. Borrower acknowledges
----------------------------------
and confirms that Lender shall impose certain commitment fees
and certain other
reasonable administrative processing and due diligence in connection with (a)
the extension, renewal, modification, amendment and termination of its loans,
(b) the release, addition or substitution of collateral therefor, (c)
obtaining certain consents, waivers and approvals with respect to the
Property, or (d) the review of any Lease or proposed Lease or the preparation
or review of any subordination, non-disturbance and attornment agreement (the
occurrence of any of the above shall be called an "Event"). Borrower further
acknowledges and confirms that it shall be responsible for the payment of all
costs of an appraisal or reappraisal of the Property or any part thereof,
whether required by law, regulation, Lender or any governmental or
quasi-governmental authority. Borrower hereby acknowledges and agrees to
pay, promptly after demand, all such fees (as the same may be increased or
decreased from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the occurrence
of any Event or otherwise. Wherever it is provided for herein that Borrower
pay any costs and expenses, such costs and expenses shall include, but not be
limited to, all legal fees and disbursements of Lender, whether retained
firms, the reimbursement for the expenses of in-house staff or otherwise and
Lender's out-of-pocket expenses.
Section 20.2. ATTORNEY'S FEES FOR ENFORCEMENT. (a) Borrower shall pay
--------------------------------
all reasonable legal fees incurred by Lender in connection with
(i) the preparation of the Note, the Loan Agreement, this Security
Instrument and the
Other Security Documents and (ii) the items set forth in Section 20.1 above,
and (b) Borrower shall pay to Lender promptly upon demand any and all
expenses, including reasonable legal expenses, reasonable attorneys' fees and
due diligence costs incurred or paid by Lender in protecting its interest in
the Property or Personal Property or in collecting any amount payable
hereunder or in enforcing its rights hereunder with respect to the Property
or Personal Property, whether or not any legal proceeding is commenced
hereunder or thereunder and whether or not any Default or Event of Default
shall have occurred and is continuing, together with interest thereon at the
Default Rate from the date paid or incurred by Lender until such expenses are
paid by Borrower.
ARTICLE 21 - DEFINITIONS
Section 21.1. GENERAL DEFINITIONS. Unless the context clearly
---------------------
indicates a contrary intent or unless otherwise specifically
provided herein, words
used in this Security Instrument may be used interchangeably in singular or
plural form and the word "Borrower" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any
interest therein, including, but not limited to, the leasehold estate created
by the Ground Lease," the word "Lender" shall mean "Lender and any subsequent
holder of the Note and any Co-Lender (as defined in the Loan Agreement)," the
word "Note" shall mean "the Note and any other evidence of indebtedness
secured by this Security Instrument," the word "person" shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, and any other entity, the word "Property"
shall include any portion of the Property and any interest therein, and the
phrases "attorneys' fees" and "counsel
fees" shall include any and all attorneys', paralegal and law clerk fees and
disbursements, including, but not limited to, fees and disbursements at the
pre-trial, trial and appellate levels incurred or paid by Lender in
protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder.
ARTICLE 22 - MISCELLANEOUS PROVISIONS
Section 22.1. NO ORAL CHANGE. This Security Instrument, and any
---------------
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part
of Borrower or Lender, 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.
Section 22.2. LIABILITY. If Borrower consists of more than one person,
---------
the obligations and liabilities of each such person hereunder shall be joint
and several, subject to Section 9.08 of the Loan Agreement. This Security
Instrument shall be binding upon and inure to the benefit of Borrower and
Lender and their respective successors and assigns forever.
Section 22.3. INAPPLICABLE PROVISIONS. If any term, covenant or
------------------------
condition of the Note, the Loan Agreement or this
Security Instrument is held to be
invalid, illegal or unenforceable in any respect, the Note, the Loan
Agreement and this Security Instrument shall be construed without such
provision.
Section 22.4. HEADINGS, ETC. The headings and captions of various
-------------
Sections of this Security Instrument are for convenience of reference only
and are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof.
Section 22.5. DUPLICATE ORIGINALS; COUNTERPARTS. This Security
------------------------------------
Instrument may be executed in any number of duplicate
originals and each duplicate
original shall be deemed to be an original. This Security Instrument may be
executed in several counterparts, each of which counterparts shall be deemed
an original instrument and all of which together shall constitute a single
Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
Section 22.6. NUMBER AND GENDER. Whenever the context may require, any
-----------------
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
Section 22.7. SUBROGATION. If any or all of the proceeds of the Note
-----------
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used,
Lender shall be subrogated to all of the rights, claims, liens, titles, and
interests existing against the Property heretofore held by, or in favor of,
the
holder of such indebtedness and such former rights, claims, liens, titles,
and interests, if any, are not waived but rather are continued in full force
and effect in favor of Lender and are merged with the lien and security
interest created herein as cumulative security for the repayment of the Debt,
the performance and discharge of Borrower's obligations hereunder, under the
Note and the Other Security Documents and the performance and discharge of
the Other Obligations.
Section 22.8. NO JOINT VENTURE. Notwithstanding anything to the
------------------
contrary herein contained, Lender by entering into this
Security Instrument or by
taking any action pursuant hereto, will not be deemed a partner or joint
venturer with Borrower and Borrower agrees to hold Lender harmless from any
damages and expenses resulting from such a construction of the relationship
of the parties hereto or any assertion thereof.
Section 22.9. NO BENEFIT TO THIRD PARTIES. This Security Instrument
----------------------------
is for
the sole and exclusive benefit of Borrower and Lender and all conditions of
the obligations of Lender hereunder are imposed solely and exclusively for
the benefit of Lender and its assigns and no other person shall have standing
to require satisfaction of such conditions in accordance with their terms or
be entitled to assume that Lender will refuse to meet its obligations
hereunder in the absence of strict compliance with any and all thereof and no
other person shall under any circumstances be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part
by the Lender at any time if it in its sole discretion deems it advisable to
do so. Without limiting the generality of the foregoing, Lender shall not
have any duty or obligation to anyone to ascertain that funds advanced
pursuant to the terms of the Loan Agreement are used to pay the cost of
constructing the improvements on the Property or to acquire materials and
supplies to be used in connection therewith or to pay costs of owning,
operating and maintaining same.
Section 22.10. ENTIRE AGREEMENT. The Note, the Loan Agreement, this
----------------
Security Instrument and the Other Security Documents constitute the entire
understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior
written or oral understandings and agreements between Borrower and Lender
with respect thereto. Borrower hereby acknowledges that, except as
incorporated in writing in the Note, the Loan Agreement, this Security
Instrument and the Other Security Documents, there are not, and were not, and
no persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, the Loan
Agreement, this Security Instrument and the Other Security Documents.
Section 22.11. BROKERS. Borrower and Lender hereby represent and
-------
warrant
that no brokers or finders were used in connection with procuring the
financing contemplated hereby and Borrower hereby agrees to indemnify and
save Lender harmless from and against any and all liabilities, losses, costs
and expenses (including attorneys' fees or court costs) suffered or incurred
by Lender as a result of any claim or assertion by any party claiming by,
through or under Borrower, that it is entitled to compensation in connection
with the financing contemplated
hereby and Lender hereby agrees to indemnify and save Borrower harmless from
and against any and all liabilities, losses, costs and expenses (including
attorneys' fees or court costs) suffered or incurred by Borrower as a result
of any claim or assertion by any party claiming by, through or under Lender
that it is entitled to compensation in connection with the financing
contemplated hereby.
ARTICLE 23 - INTENTIONALLY DELETED
ARTICLE 24 - STATE SPECIFIC PROVISIONS
Section 24.1. TRUST FUND. Pursuant to Section 13 of the New York Lien
----------
Law, Borrower shall receive the advances secured hereby and shall hold the
right to receive the advances as a trust fund to be applied first for the
purpose of paying the cost of any improvement and shall apply the advances
first to the payment of the cost of any such improvement on the Property
before using any part of the total of the same for any other purpose.
Section 24.2. COMMERCIAL PROPERTY. Borrower represents that this
---------------------
Security Instrument does not encumber real property
principally improved or to be
improved by one or more structures containing in the aggregate not more than
six residential dwelling units, each having its own separate cooking
facilities.
Section 24.3. INSURANCE. The provisions of subsection 4 of Section 254
---------
of the New York Real Property Law covering the insurance of buildings against
loss by fire shall not apply to this Security Instrument. In the event of
any conflict, inconsistency or ambiguity between the provisions of Section
3.3 hereof and the provisions of subsection 4 of Section 254 of the New York
Real Property Law covering the insurance of buildings against loss by fire,
the provisions of Section 3.3 shall control.
Section 24.4. LEASES. Lender shall have all of the rights against
------
lessees of the Property set forth in Section 291-f of the Real Property Law
of New York.
Section 24.5. STATUTORY CONSTRUCTION. The clauses and covenants
-----------------------
contained in this Security Instrument that are construed by
Section 254 of the New York
Real Property Law shall be construed as provided in those sections (except as
provided in Section 24.3). The additional clauses and covenants contained in
this Security Instrument shall afford rights supplemental to and not
exclusive of the rights conferred by the clauses and covenants construed by
Section 254 and shall not impair, modify, alter or defeat such rights (except
as provided in Section 24.3), notwithstanding that such additional clauses
and covenants may relate to the same subject matter or provide for different
or additional rights in the same or similar contingencies as the clauses and
covenants construed by Section 254. The rights of Lender arising under the
clauses and covenants contained in this Security Instrument shall be
separate, distinct and cumulative and none of them shall be in exclusion of
the others. No act of Lender shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision,
anything herein or otherwise to the contrary notwithstanding. In the event
of any inconsistencies between the provisions of Section 254 and the
provisions of this Security Instrument, the provisions of this Security
Instrument shall prevail.
Section 24.6. MAXIMUM PRINCIPAL AMOUNT SECURED. Notwithstanding anything
----------------------------------
contained herein to the contrary, the maximum amount of principal
indebtedness secured by this Security Instrument at the time of execution
hereof or which under any contingency may become secured by this Security
Instrument at any time hereafter is $149,513,915.18, plus (a) taxes, charges
or assessments which may be imposed by law upon the Property; (b) premiums on
insurance policies covering the Property; (c) expenses incurred in upholding
the lien of this Security Instrument, including, but not limited to (i) the
expenses of any litigation to prosecute or defend the rights and lien created
by this Security Instrument; (ii) any amount, cost or charges to which Lender
becomes subrogated, upon payment, whether under recognized principles of law
or equity, or under express statutory authority and (iii) interest at the
Default Rate (or regular interest rate).
Section 24.7. THE GROUND LEASE. Borrower shall (i) pay all rents,
----------------
additional rents and other sums required to be paid by Borrower, as tenant in
accordance with, and subject to, the provisions of the Ground Lease, (ii)
diligently perform and observe all of the terms, covenants and conditions of
the Ground Lease on the part of Borrower, as tenant thereunder, and (iii)
promptly notify Lender of the giving of any notice by the landlord under the
Ground Lease to Borrower of any default by Borrower, as tenant thereunder,
and deliver to Lender a true copy of each such notice. Borrower shall not,
without the prior consent of Lender, surrender the leasehold estate created
by the Ground Lease or terminate or cancel the Ground Lease or modify,
change, supplement, alter or amend the Ground Lease, in any respect, either
orally or in writing, and if Borrower shall default in the performance or
observance of any term, covenant or condition of the Ground Lease on the part
of Borrower, as tenant thereunder, Lender shall have the right, but shall be
under no obligation, to pay any sums and to perform any act or take any
action as may be appropriate to cause all of the terms, covenants and
conditions of the Ground Lease on the part of Borrower to be performed or
observed on behalf of Borrower, to the end that the rights of Borrower in, to
and under the Ground Lease shall be kept unimpaired and free from default.
If the landlord under the Ground Lease shall deliver to Lender a copy of any
notice of default under the Ground Lease, such notice shall constitute full
protection to Lender for any action taken or omitted to be taken by Lender,
in good faith, in reliance thereon. Borrower shall exercise each individual
option, if any, to extend or renew the term of the Ground Lease upon demand
by Lender made at any time within one (1) year prior to the last day upon
which any such option may be exercised, and Borrower hereby expressly
authorizes and appoints Lender its attorney-in-fact to exercise any such
option in the name of and upon behalf of Borrower, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest.
Section 24.8. SUBLEASES. Notwithstanding anything contained in the
---------
Ground Lease to the contrary, Borrower shall not further sublet any portion
of the Leased Land without prior written consent of Lender. Each such
Lender-approved sublease hereafter made shall provide that, (a) in the event
of the termination of the Ground Lease, the lease shall not terminate or be
terminable by the lessee; (b) in the event of any action for the foreclosure
of this Security Instrument, the lease shall not terminate or be terminable
by the subtenant by reason of the termination of the Ground Lease unless the
lessee is specifically named and joined in any such action and unless a
judgment is obtained therein against the lessee; and (c) in the event that
the Ground Lease is terminated as aforesaid, the lessee shall attorn to the
lessor under the Ground Lease or to the purchaser at the sale of the Property
on such foreclosure, as the case may be. In the event that any portion of
the Leased Land shall be sublet pursuant to the terms of this Subsection,
such sublease shall be deemed to be included in the Property.
Section 24.9. NO MERGER OF FEE AND LEASEHOLD ESTATES; RELEASES. So
---------------------------------------------------
long as any portion of the Debt shall remain unpaid,
unless Lender shall otherwise
consent, the fee title to the Leased Land and the leasehold estate therein
created pursuant to the provisions of the Ground Lease shall not merge but
shall always be kept separate and distinct, notwithstanding the union of such
estates in Borrower, Owner, or in any other person by purchase, operation of
law or otherwise. Lender reserves the right, at any time, to release
portions of the Property, including, but not limited to, the leasehold estate
created by the Ground Lease, with or without consideration, at Lender's
election, without waiving or affecting any of its rights hereunder or under
the Note or the Other Security Documents and any such release shall not
affect Lender's rights in connection with the portion of the Property not so
released.
Section 24.10. BORROWER'S ACQUISITION OF FEE ESTATE. In the event that
------------------------------------
Borrower, so long as any portion of the Debt remains unpaid, shall be the
owner and holder of the fee title to the Leased Land, the lien of this
Mortgage shall be spread to cover Borrower's fee title to the Leased Land and
said fee title shall be deemed to be included in the Property. Borrower
agrees, at its sole cost and expense, including without limitation, Lender's
reasonable attorney's fees, to (i) execute any and all documents or
instruments necessary to subject its fee title to the Leased Land to the lien
of this Mortgage; and (ii) provide a title insurance policy which shall
insure that the lien of this Mortgage is a first lien on Borrower's fee title
to the Leased Land.
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower the day and year first above written.
SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: SL GREEN REALTY CORP., a Maryland corporation,
its general partner
By: /s/ David J. Nettina
------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
------------------------
Benjamin P. Feldman
Executive Vice President
NEW GREEN 1140 REALTY LLC, a New York limited
liability company
By: SL GREEN OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, its managing
member
By: SL GREEN REALTY CORP., a Maryland
corporation, its general partner
By: /s/ David J. Nettina
------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
------------------------
Benjamin P. Feldman
Executive Vice President
SLG 17 BATTERY LLC, a New York limited liability
company
By: SL GREEN OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, its managing
member
By: SL GREEN REALTY CORP., a Maryland
corporation, its general partner
By: /s/ David J. Nettina
------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
------------------------
Benjamin P. Feldman
Executive Vice President
ACKNOWLEDGMENTS
(to be attached)
EXHIBIT A
(Exhibit Begins On Next Page)
EXHIBIT B
---------
That certain Ground Lease dated October 1, 1951, by and between Phoenix
Mutual Life Insurance Company, and 67 West 44th Street Inc., which by those
certain assignments described below has been assigned to New Green 1140
Realty LLC as tenant:
1. Assignment of Lease made by 67 WEST 44TH ST. INC. to FAWCETT ASSOCIATES,
a N.Y. Limited Partnership, dated 9/3/58 and recorded 9/5/58 in
Liber 5049 Cp. 304.
2. Assignment of Lease made by FAWCETT ASSOCIATES, a N.Y. Limited Partnership,
to THE KRATTER CORPORATION, a Delaware Corporation, dated as of 1/9/60, and
recorded 3/23/64 in Liber 5271 Cp. 339.
3. Assignment of Lease made by THE KRATTER CORPORATION, a Delaware
Corporation, to 67 WEST 44TH ST. INC., dated 3/1/65, and recorded
3/2/65 in Liber 5316 Cp. 287.
4. Assignment of Lease made by 67 WEST 44TH ST. INC. to 44TH SIXTH
CORPORATION, dated 8/27/65, and recorded 8/30/65 in Liber 5340 Cp. 345.
5. Modification Agreement made by SUTTON ASSOCIATES, INC. and 44TH SIXTH
CORPORATION, dated 4/30/66, and recorded 5/19/66 in Record Liber 58 Page 223.
6. Assignment of Lease made by 44TH SIXTH CORPORATION to 1140 SIXTH AVENUE
COMPANY, dated as of 10/1/66, and recorded 12/8/66 in Record Liber 130 Page
397.
7. Assignment of Lease made by 1140 SIXTH AVENUE COMPANY, a N.Y.
Limited Partnership, to CALNY CONSTRUCTION CORP., dated 7/21/71,
and recorded 7/22/71 in Reel 211 Page 1499.
8. Assignment of Lease made by CALNY CONSTRUCTION CORP. to 1140 SIXTH AVENUE
COMPANY, a N.Y. Limited Partnership, dated 7/21/71, and
recorded 7/22/71 in Reel 211 Page 1572.
9. Assignment of Lease made by 1140 SIXTH AVENUE COMPANY, a N.Y.
Limited Partnership, to CALNY CONSTRUCTION CORP., dated 10/19/71,
and recorded 10/21/71 in Reel 220 Page 50.
10.Assignment of Lease made by CALNY CONSTRUCTION CORP. to 1140 SIXTH AVENUE
COMPANY, a N.Y. Limited Partnership, dated 10/19/71, and recorded
10/21/71 in Reel 220 Page 112.
11.Assignment of Lease made by 1140 SIXTH AVENUE COMPANY, a N.Y.
Limited Partnership, to KAYEMACLER REALTY INC., dated as of 1/1/74,
and recorded 3/8/74 in Reel 307 Page 1108.
12.Assignment of Lease made by KAYEMACLER REALTY INC. to AVAMERICAS
ASSOCIATES, a N.Y. Limited Partnership, dated as of 1/1/74, and recorded
3/8/74 in Reel 307 Page 1169;
13.Assignment of Lease made by AVAMERICAS ASSOCIATES, a N.Y.
Limited Partnership, to KAYEMACLER REALTY INC., dated 5/7/74, and
recorded 5/7/74 in Reel 312 Page 1567.
14.Assignment of Lease made by KAYEMACLER REALTY INC. to AVAMERICAS
ASSOCIATES, a N.Y. Limited Partnership, dated 5/7/74, and
recorded 5/15/74 in Reel 313 Page 898.
15.Assignment of Lease made by AVAMERICAS ASSOCIATES, a N.Y. Limited
Partnership, to KAYEMACLER REALTY INC., dated 7/2/74, and
recorded 7/3/74 in Reel 318 Page 804.
16.Assignment of Lease made by KAYEMACLER REALTY INC. to AVAMERICAS
ASSOCIATES, dated as of 7/2/74, and recorded 7/10/74 in
Reel 318 Page 1713.
17.Assignment and Assumption of Lease made by AVAMERICAS ASSOCIATES,
a N.Y. Limited Partnership, to 1140 ASSOCIATES, a
N.Y. Limited Partnership, dated 9/15/82, and recorded 9/16/82
in Reel 638 Page 1777.
18.Assignment and Assumption of Ground Lease made by and between 1140
ASSOCIATES, a N.Y. Limited Partnership, and
INTER-OCEAN REALTY ASSOCIATES, a N.Y. Limited Partnership,
dated 5/2/84, and recorded 5/11/84 in Reel 792 Page 203.
19.Assignment and Assumption of Ground Lease made by and between INTER-OCEAN
REALTY ASSOCIATES and 1140 SIXTH ASSOCIATES L.P. dated as of 12/29/92 and
recorded 1/7/93 in Reel 1934 Page 1141.
20.Assignment and Assumption of Ground Lease made by and between 1140 SIXTH
AVENUE ASSOCIATES, L.P. and NEW GREEN 1140 REALTY LLC, dated 8/20/97 and
recorded in the office of the City Register, New York County, New York.
EXHIBIT C
(Description of Mortgage)
I. Parcel I
1. Mortgage made by 1466 Broadway
to The Chase Manhattan Bank, dated February 29, 1980, recorded in the
Office of the Register of the City of New York, County of New York,
(the "CITY REGISTER'S OFFICE) on June 18, 1980 in Reel/Liber 527 of
Mortgages, page 1796, and the note therein referred to, which said
note and mortgage were given to secure the payment of the principal
sum of $1,800,000 with interest thereon at the rate specified in
said note;
mortgage tax paid $27,000;
2. Mortgage made by 1466 Broadway to The Chase Manhattan Bank, dated February
29, 1980, recorded in the City Register's Office on June 18, 1980 in
Reel/Liber 527 of Mortgages, Page 237, and the note therein referred to,
which said note and mortgage were given to secure the payment of the
principal sum of $1,800,000 with interest thereon at the rate specified in
said note;
mortgage tax paid $27,000;
Which mortgage (1) and (2) were consolidated by consolidation agreement made
by and between 1466 Broadway Associates and The Chase Manhattan Bank, dated
February 29, 1980, recorded in the City Register's Office on October 30, 1980
in Reel/Liber 542 of Mortgages, Page 216 to form a single lien of $3,600,000;
3. Mortgage made by 1466 Broadway to The Chase Manhattan Bank, dated February
29, 1980, recorded in the City Register's Office on June 18, 1980 in
Reel/Liber 527 of Mortgages, Page 1918, and the note therein referred to,
which said note and mortgage were given to secure the payment of the
principal sum of $1,800,000 with interest thereon at the rate specified in
said note;
mortgage tax paid $27,000;
Which mortgage together with Mortgages (1) and (2) were consolidated by
consolidation agreement made by and between 1466 Broadway Associates and The
Chase Manhattan Bank, dated February 29, 1980, recorded in the City
Register's Office on December 19, 1980 in Reel/Liber 547 of Mortgages, Page
1952 to form a single lien of $5,400,000;
4. Mortgage made by 1466 Broadway
Associates to The Chase Manhattan Bank, dated December 23, 1981,
recorded in the City Register's Office on December 30, 1981 in
Reel/Liber 597 of Mortgages, Page 1812, and the note therein referred
to, which said note and mortgage were given to secure the payment of
the principal sum of 6,600,000 with interest thereon at the rate
specified in said note;
mortgage tax paid $99,000;
Which mortgage together with Mortgages (1), (2) and (3) were consolidated by
a spreader and consolidation agreement made by and between The Chase
Manhattan Bank and 1466 Broadway Associates, dated January 8, 1982, recorded
in the City Register's Office on January 21, 1982 in Reel/Liber 601 of
Mortgages, Page 1978 to form a single lien interest of $12,000,000 and
spreads the lien of Mortgages (1), (2) and (3) to cover the fee interest;
Which four (4) mortgages as consolidated were assigned by assignment of
mortgage by The Chase Manhattan Bank to Barclays Bank International Limited,
dated January 20, 1982 in Reel/Liber 603 of Mortgages, Page 760 to assign the
four (4) mortgages as consolidated;
Which four (4) mortgages as consolidated were modified by mortgage and
modification agreement made by and between Barclays Bank International
Limited and 1466 Broadway Associates, dated January 26, 1982,
recorded in the City Register's Office on
January 26, 1982 in Reel/Liber 603 of Mortgages, Page 764 to modify the terms
of the four (4) mortgages as consolidated;
Which four (4) mortgages as consolidated were further assigned by assignment
of mortgage by Barclays Bank International Limited and The Chase Manhattan
Bank, N.A., dated August 15, 1983, recorded in the City Register's Office on
October 5, 1983 in Reel/Liber 723 of Mortgages, Page 1203 to further assign
the four (4) mortgages as consolidated;
5. Mortgage made by 1466 Broadway Associates to The Chase Manhattan
Bank, dated August 29, 1983, recorded in the City Register's
Office on October 5, 1983 in Reel/Liber 723 of Mortgages, Page
1207 and the note therein referred to, which said note and mortgage
were given to secure the payment of the principal sum of $6,375,000
with interest thereon at the rate specified in said note;
mortgage tax paid $143,437.50
Which mortgage together with Mortgages (1), (2),(3), and (4) by consolidation
agreement made by and between 1466 Broadway Associates and The Chase
Manhattan Bank, dated August 29, 1983, recorded in the City Register's Office
on October 5, 1983 in Reel/Liber 723 of Mortgages, Page 1214 were
consolidated to form a single lien of 18,375,000;
6. Mortgage made by 1466 Broadway Associates to Mony Pension
Insurance Corporation, dated June 6, 1986, recorded in the City
Register's Office on June 18, 1986 in Reel/Liber 1077 of Mortgages,
Page 1781, and the note therein referred to, which said note and
mortgage were given to secure the payment of the principal sum of
$26,625,000 with interest thereon at the rate specified in
said note, which mortgage by its terms consolidates Mortgages (1),
(2), (3), (4), and (5) to form a single first mortgage lien in the
principal sum of $45,000,000;
mortgage tax paid $599,062.50;
Which six (6) mortgages as consolidated were assigned by assignment of
mortgage by Mony Pension Insurance Corporation to Mutual Life Insurance
Company, dated August 30, 1987, recorded in the City Register's Office on
February 15, 1989 in Reel/Liber 1844 of Mortgages, Page 1776 to assign the
six (6) mortgages as consolidated;
Which six (6) mortgages as consolidated were modified by mortgage
modification agreement made by 1466 Broadway Associates and the Mutual Life
Insurance Company of New York, dated January 23, 1992, recorded in the City
Register's Office on January 30, 1992 in Reel/Liber 1844 of Mortgages, Page
1228 to modify the terms of the six mortgages as consolidated;
Which six mortgages as consolidated were further assigned by assignment of
mortgage/deed of trust and other loan documents made by The Mutual Life
Insurance Company of New Yrok to Ausa Life Insurance Company, Inc., dated
December 31, 1993, recorded in the City Register's Office on February 7, 1994
in Reel/Liber 2056 of Mortgages, Page 201;
Which six mortgages as consolidated were further modified by second mortgage
modification agreement made by and between 1466 Broadway Associates and Ausa
Life Insurance Company Inc., dated August 5, 1996, recorded in the City
Register's Office on August 20, 1996 in Reel/Liber 2371 of Mortgages, Page
1184;
Which six mortgages as consolidated was further assigned by assignment of
mortgage made by Ausa Life Insurance Company, Inc. to 633 LLC, dated October
15, 1997, recorded in the City Register's Office on _____ __, 19__ in
Reel/Liber ____ of Mortgages, Page ___.
Parcel II
Mortgage dated as of January 19, 1994, made by 110 to Home Savings of America
FSB, in the original principal amount of $9,000,000.00 and recorded in the
City Register on February 1, 1994 in Reel 2054, Page 176; which mortgage was
corrected by a Correction Mortgage, dated as of January 19, 1994, made by
110 to Home, and recorded in the City Register on August 10, 1994 in Reel
2127, Page 1764; which mortgage was modified by a Substituted Mortgage B
Spreader and Note and Mortgage Modification Agreement, dated as of June 19,
1997 between 110 and Home in the original principal amount of $8,723,418.00,
and recorded in the City Register on August 20, 1997, in Reel 2489, Page 46.
Parcel III
1. Mortgage dated as of August 21, 1923, recorded on August 22, 1923
in Reel/Liber 3387, MP 126, in the original principal amount of
$320,000.
Mortgage tax paid $1,600.
2. Assignment of Mortgage, dated November 17, 1924, recorded on
November 18, 1924 in Reel/Liber 3506, MP 404, in the original
principal amount of $430,000.
Mortgage tax paid $2,150.
Which mortgage, together with Mortgage 1 were consolidated by consolidation
and extension agreement, dated November 17, 1924, recorded on November 18,
1924 in Reel/Liber 3511, MP 224, to form a single lien of $750,000.
Which two (2) mortgages as consolidated were assigned by assignment of
mortgage on January 31, 1951, recorded on February 2, 1951, in Reel/Liber
5216, MP 171.
3. Mortgage dated as of June 14, 1957, recorded on June 23, 1957 in
Reel/Liber 5483, MP 413, in the original principal amount of 183,224.83.
Mortgage tax paid $916.00.
Which mortgage, together with Mortgage 1 and 2 were consolidated by
consolidation and extension agreement dated June 14, 1957, recorded June 24,
1957 in Reel/Liber 5683, MP 587, to form a single lien of $650,000.
4. Mortgage dated as of June 28, 1963, recorded on June 31, 1963 in
Reel/Liber 6173, MP 74, in the original principal amount of $145,682.21.
Mortgage tax paid $.
Which mortgage, together with Mortgage 1, 2, and 3 were consolidated by
consolidation and extension agreement dated June 14, 1963, recorded on June
14, 1963 in Reel/Liber 6178, MP 179, to form a single lien of $725,000.
Which four (4) mortgages were assigned as consolidated by assignment of
mortgage dated May 10, 1973, recorded on May 25, 1973 in Reel 279, Page 1499.
5. Mortgage dated May 24, 1973, recorded on May 25, 1973 in
Reel/Liber 279, Page 1494, in the original principal amount of
402,988.29.
Mortgage tax paid $5,037.50.
Which mortgage, together with Mortgage 1, 2, 3, and 4 were consolidated by
consolidation
and extension agreement dated May 24, 1973, recorded on June 5, 1973 in
Reel/Liber 280, Page 1123, to form a single lien of $1,000,000.
Which five (5) mortgage's terms were extended by extension agreement dated
May 24, 1983, recorded on December 14, 1983 in Reel 744, Page 1917.
Which five (5) mortgages were assigned by assignment of mortgage dated
December 19, 1994, recorded on January 14, 1985 in Reel 866, Page 299.
6. Mortgage dated December 19, 1984, recorded on January 14, 1985 in
Reel 866, Page 221, in the original principal amount of 8,692,898.86.
Mortgage tax paid $195,590.25.
Which mortgage, together with Mortgage 1, 2, 3, 4, and 5 were consolidated by
agreement of spreader consolidation and modification of mortgage, dated
December 19, 1984, recorded on January 14, 1985 in Reel 866, Page 255 to form
a single lien of 9,500,000.
Which six (6) mortgage's terms were modified by modification of consolidation
agreement on August 24, 1995, recorded on September 8, 1985 in Reel 2241,
Page 1813.
Which six (6) mortgages were further modified by second modification of
consolidation agreement on December 21, 1995, recorded on February 20, 1996
in Reel 866, Page 255.
Which six (6) mortgages were severed by mortgage severance and modification
agreement dated January 25, 1996, recorded on January 30, 1996 in Reel 2293,
Page 1403, which mortgages were severed as follows:
(a)A mortgage in the amount of 2,660,000 as evidenced by Reel 2293, Page 1499
which is now satisfied; and
(b)A mortgage in the amount of 6, 840,000.
Which six (6) mortgages were assigned by assignment of mortgage dated January
25, 1996, recorded February 20, 1996 as severed in the amount of 6,840,000.
Which six (6) mortgages were modified and extended by modification and
extension agreement dated January 30, 1996, recorded on February 20, 1996.
Which six (6) were further assigned by The Bank of New York to Lehman
Brothers Holdings Inc. d/b/a Lehman Capital, a division of Lehman Brothers
Holdings, Inc. dated August 11, 1997, recorded on December 30, 1997 in Reel
2526, Page 2027.
Parcel IV
1. (i) Mortgage Severance Agreement dated 1/1/93.
(ii)Substitute Note No. 1-A dated as of 1/1/93 made by 1414 Americas Company,
Benjamin Duhl and William N. Segal to Principal Mutual Life Insurance Company
in the principal amount of $6,424,000.
(iii)Substitute Note No. 1-B dated as of 1/1/93 made by 1414 Americas
Company, Benjamin Duhl and William N. Segal to Principal Mutual Life
Insurance Company in the principal amount of $876,000.
2.Assignment of Substitute Mortgage No. 1 in the amount of $7,300,000 dated
6/19/96 by and between Principal Mutual Life Insurance Company and The Paul
Revere Life Insurance Company recorded ___________, 1996 Reel 2339 Page 0368.
3.(i)Mortgage in the amount of $2,700,000 dated 6/19/96 between 1414
Management Associates L.P. and The Paul Revere Life Insurance Company
recorded on 6/28/96 in Reel 2339 Page 378.
(ii)Mortgage Note in the amount of $2,700,000 dated 6/19/96 by 1414
Management Associates L.P. and The Paul Revere Life Insurance Company.
4.Mortgage Consolidation and Modification Agreement made by and between 1414
Management Associates, L.P. and The Paul Revere Life Insurance Company dated
6/19/96, and recorded on 6/28/96 in Reel 2339 Page 385 which consolidates
above mortgages to form a single lien of $10,000,000.
5.Consolidation of Notes dated 6/19/96 by 1414 Management Associates L.P. and
The Paul Revere Life Insurance Company, dated June 19, 1996, recorded June
28, 1996 in Reel 2339, Page 385. which consolidates above notes to form a
single note evidencing a principal indebtedness in the amount of $10,000,000.
6.Mortgage Assignment dated 3/27/97 but effective 3/26/97 made by The Paul
Revere Life Insurance Company to LSOF Partners XII, L.P, recorded on June 12,
1997 in Reel 2465, Pge 1645..
7. Mortgage Assignment made by LSOF Partners XII, L.P. to Lehman Brothers
Holdings Inc. d/b/a Lehman Capital, a division of Lehman Brothers Holdings
Inc., dated August 20, 1997, recorded December 23, 1997 on Reel 2525, Page
799.
8. Modification and Spreader Agreement made by and between SL Green Operating
Partnership, L.P. and Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a
Division of Lehman Brothers Holdings Inc.
Parcel V
1 .Mortgage in the amount of 2,000,000, dated August 27, 1965,
recorded on August 30, 1965 in Liber 6411, MP 446.
2 .Mortgage in the amount of 250,000, dated July 11, 1966,
recorded on July 11, 1966 in Liber 84, Page 82.
3. Assignment of Mortgage, dated July 15, 1966, recorded on July 20,
1977, in Liber 84, RP 87.
4. Mortgage in the amount of $250,000, date July 23, 1970, in
Reel 179, Page 451.
5. Mortgage in the amount of $1,100,000, dated August 27, 1965,
recorded on August 30, 1965, in Liber 6411, Page 451.
6. Assignment of Mortgage, dated June 8, 1971, recorded on June 10,
1971, in Reel 206, Page 1939.
7. Mortgage, in the amount of $537,252.68, dated July 21, 1971,
recorded on July 22, 1971, in Reel 211, Page 1505.
8. Mortgage in the amount $9,275,721.21, dated December 30,
1983, recorded on January 10, 1984, in Reel 753, Page 1326.
9. Assignment of Mortgage, dated May 2, 1984, recorded on May 11,
1984 in Reel 792, Page 212.
10. Mortgage in the amount of $10,029,768.62, dated May 2, 1984,
recorded on May 11, 1984, Reel 792, Page 239.
11. Mortgage in the amount of $5,500,000, dated June 27, 1985,
recorded on July 5, 1985 in Reel 932, Page 1879.
12. Assignment of Mortgage, dated September 14, 1988, recorded
on September 27, 1988, in Reel 1470, Page 1697.
13. Mortgage in the amount of $3,500,000 dated September 19,
1988, recorded on September 27, 1988 in Reel 1470, Page 1711, wich
mortgage, together with the above mortgages were consolidated to form
a single lien in the principal amount of 31,000,000.
Which mortgages, as consolidated, were reduced to the amount of $9,500,000 in
a certificate of reduction dated December 29, 1992, recorded on January 7,
1993 in Reel 1934, Page 1149.
Which mortgages, as consolidated, were assigned on December 29, 1992, and
recorded on January 7, 1993 in Reel 1934, Page 1156.
Which mortgages were further consolidated by a restated consolidated
leasehold mortgage to form single lien of $9,500,000 on December 30, 1992,
recorded on January 7, 1993 in Reel 1934, Page 1168.
Which mortgages, as consolidated, were assigned by assignment of mortgage on
July 1, 1997, and recorded on July 28, 1997 in Reel 2480, Page 142.
Which mortgages, as consolidated, were assigned by assignment of mortgage on
August 13, 1997, recorded on December 23, 1997 in Reel 2525, Page 824.
TABLE OF CONTENTS
Page
ARTICLE 1 - GRANTS OF SECURITY........................3
Section 1.1.PROPERTY MORTGAGED...................3
Section 1.2.ASSIGNMENT OF RENTS..................6
Section 1.3.SECURITY AGREEMENT...................7
Section 1.4.PLEDGE OF MONIES HELD................7
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED..............7
Section 2.1.DEBT.................................7
Section 2.2.THER OBLIGATIONS....................8
Section 2.3.DEBT AND OTHER OBLIGATIONS...........8
Section 2.4.PAYMENTS.............................8
ARTICLE 3 - BORROWER COVENANTS........................9
Section 3.1.PAYMENT OF DEBT......................9
Section 3.2.INCORPORATION BY REFERENCE...........9
Section 3.3.INSURANCE............................9
Section 3.4.PAYMENT OF TAXES, ETC...............14
Section 3.5.ESCROW FUND.........................14
Section 3.6.CONDEMNATION........................15
Section 3.7.LEASES AND RENTS....................16
Section 3.8.MAINTENANCE OF PROPERTY.............17
Section 3.9.WASTE...............................18
Section 3.10.COMPLIANCE WITH LAWS...............18
Section 3.11.INTENTIONALLY OMITTED..............18
Section 3.12.PAYMENT FOR LABOR AND MATERIALS....19
Section 3.13.INTENTIONALLY OMITTED..............19
Section 3.14.PERFORMANCE OF OTHER AGREEMENTS....19
Section 3.15.BUSINESS WITH AFFILIATES...........19
Section 3.16.CURRENT BUSINESS...................19
Section 3.17.CHANGE OF NAME, IDENTITY OR STRUCTURE...19
Section 3.18EXISTENCE................................19
ARTICLE 4 - SPECIAL COVENANTS........................20
Section 4.1.PROPERTY USE........................20
Section 4.2.INTENTIONALLY OMITTED...............20
Section 4.3.RESTORATION.........................20
Section 4.4.LOCK-BOX ACCOUNT....................24
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES...........24
Section 5.1.WARRANTY OF TITLE...................24
Section 5.2.AUTHORITY...........................24
Section 5.3.LEGAL STATUS AND AUTHORITY..........25
Section 5.4.VALIDITY OF DOCUMENTS...............25
Section 5.5.LITIGATION..........................25
Section 5.6.STATUS OF PROPERTY..................26
Section 5.7.NO FOREIGN PERSON...................27
Section 5.8.SEPARATE TAX LOT....................27
Section 5.9.INTENTIONALLY OMITTED...............27
Section 5.10.LEASES.............................27
Section 5.11.FINANCIAL CONDITION................28
Section 5.12.BUSINESS PURPOSES..................28
Section 5.13.TAXES..............................28
Section 5.14.MAILING ADDRESS....................28
Section 5.15.NO CHANGE IN FACTS OR CIRCUMSTANCES....28
Section 5.16.DISCLOSURE.............................28
Section 5.17.ILLEGAL ACTIVITY.......................28
Section 5.18.CONTRACTS..............................28
Section 5.19.SURVIVAL...............................29
ARTICLE 6 - OBLIGATIONS AND RELIANCES....................29
Section 6.2.NO RELIANCE ON LENDER...................29
Section 6.3.NO LENDER OBLIGATIONS...................29
Section 6.4.RELIANCE................................29
ARTICLE 7 - FURTHER ASSURANCES...........................30
Section 7.1.RECORDING OF SECURITY INSTRUMENT, ETC...30
Section 7.2.FURTHER ACTS, ETC.......................30
Section 7.3.CHANGES IN TAX, DEBT, CREDIT AND
DOCUMENTARY STAMP LAWS..................31
Section 7.4.ESTOPPEL CERTIFICATES...................31
Section 7.5.FLOOD INSURANCE.........................31
Section 7.6.SPLITTING OF SECURITY INSTRUMENT........31
Section 7.7.REPLACEMENT DOCUMENTS...................32
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE......................32
Section 8.1.LENDER RELIANCE.........................32
Section 8.2.NO SALE/ENCUMBRANCE.....................32
Section 8.3.SALE/ENCUMBRANCE DEFINED................32
Section 8.4.LENDER'S RIGHTS.........................33
ARTICLE 9 - PREPAYMENT...................................33
Section 9.1.PREPAYMENT..............................33
ARTICLE 10 - DEFAULT.....................................33
Section 10.1.EVENTS OF DEFAULT......................33
Section 10.2.DEFAULT INTEREST.......................36
ARTICLE 11 - RIGHTS AND REMEDIES..........................37
Section 11.1.REMEDIES................................37
Section 11.2.APPLICATION OF PROCEEDS.................40
Section 11.3.RIGHT TO CURE DEFAULTS..................40
Section 11.4.ACTIONS AND PROCEEDINGS.................40
Section 11.5.RECOVERY OF SUMS REQUIRED TO BE PAID....40
Section 11.6.EXAMINATION OF BOOKS AND RECORDS........40
Section 11.7.OTHER RIGHTS, ETC.......................41
Section 11.8.RIGHT TO RELEASE ANY PORTION OF THE PROPERTY..41
Section 11.9.VIOLATION OF LAWS.......................42
Section 11.10.RECOURSE AND CHOICE OF REMEDIES........42
Section 11.11.RIGHT OF ENTRY.........................42
ARTICLE 12 - INTENTIONALLY OMITTED........................42
ARTICLE 13 - INDEMNIFICATION..............................42
Section 13.1.GENERAL INDEMNIFICATION..................42
Section 13.2.MORTGAGE AND/OR INTANGIBLE TAX...........44
Section 13.3.INTENTIONALLY OMITTED....................44
Section 13.4.INTENTIONALLY OMITTED....................44
Section 13.5.DUTY TO DEFEND; ATTORNEYS'
FEES AND OTHER FEES AND EXPENSES.........44
ARTICLE 14 - WAIVERS.......................................44
Section 14.1.WAIVER OF COUNTERCLAIM....................44
Section 14.2.MARSHALLING AND OTHER MATTERS.............44
Section 14.3.WAIVER OF NOTICE..........................44
Section 14.4.INTENTIONALLY OMITTED.....................45
Section 14.5.SOLE DISCRETION OF LENDER.................45
Section 14.6.INTENTIONALLY OMITTED.....................45
SECTION 14.7.WAIVER OF TRIAL BY JURY.................45
ARTICLE 15 - RECOURSE.......................45
Section 15.1.RECOURSE..................45
ARTICLE 16 - NOTICES.........................45
Section 16.1.NOTICES....................45
ARTICLE 17 - SERVICE OF PROCESS..............47
Section 17.1.CONSENT TO SERVICE.........47
Section 17.2.SUBMISSION TO JURISDICTION..47
Section 17.3.JURISDICTION NOT EXCLUSIVE..47
ARTICLE 18 - APPLICABLE LAW...................47
Section 18.1.CHOICE OF LAW................47
Section 18.2.USURY LAWS...................47
Section 18.3.PROVISIONS SUBJECT TO APPLICABLE LAW....48
ARTICLE 19 - SECONDARY MARKET.................48
Section 19.1TRANSFER OF LOAN.............48
ARTICLE 20 - COSTS............................48
Section 20.1PERFORMANCE AT BORROWER'S EXPENSE.........48
Section 20.2ATTORNEY'S FEES FOR ENFORCEMENT...........49
ARTICLE 21 - DEFINITIONS...................................49
Section 21.1.GENERAL DEFINITIONS......................49
ARTICLE 22 - MISCELLANEOUS PROVISIONS......................49
Section 22.1.NO ORAL CHANGE...........................49
Section 22.2.LIABILITY................................49
Section 22.3.INAPPLICABLE PROVISIONS..................50
Section 22.4.HEADINGS, ETC............................50
Section 22.5.DUPLICATE ORIGINALS; COUNTERPARTS........50
Section 22.6.NUMBER AND GENDER........................50
Section 22.7.SUBROGATION..............................50
Section 22.8.NO JOINT VENTURE.........................50
Section 22.9.NO BENEFIT TO THIRD PARTIES..............50
Section 22.10.ENTIRE AGREEMENT........................51
ARTICLE 23 - INTENTIONALLY DELETED.........................51
ARTICLE 24 - STATE SPECIFIC PROVISIONS.....................51
Section 24.1.TRUST FUND................................51
Section 24.2.COMMERCIAL PROPERTY.......................51
Section 24.3.INSURANCE.................................52
Section 24.4.LEASES....................................52
Section 24.5.STATUTORY CONSTRUCTION....................52
Section 24.6.MAXIMUM PRINCIPAL AMOUNT SECURED..........52
Section 24.7.THE GROUND LEASE..........................52
Section 24.8.SUBLEASES.................................53
Section 24.9.NO MERGER OF FEE AND LEASEHOLD ESTATES;
RELEASES..................................53
Section 24.10.BORROWER'S ACQUISITION OF FEE ESTATE.....53
DEFINITIONS
--------
The terms set forth below are defined in the following Sections of this
Security Instrument:
(A) Additional Security Instruments: Article 23, Section 23.1;
-------------------------------
(B) Applicable Laws: Article 3, Subsection 3.10(a);
---------------
(C) Attorneys' Fees/Counsel Fees: Article 21, Section 21.1;
----------------------------
(D) Bankruptcy Code: Article 1, Subsection 1.1(b);
---------------
(E) Borrower: Preamble and Article 21, Section 21.1;
--------
(F) Business Day: Article 16, Section 16.1;
------------
(G) Restoration Consultant: Article 4, Subsection 4.3(b)(iii);
----------------------
(H) Retainage: Article 4, Subsection 4.3(b)(iv);
---------
(I) Debt: Article 2, Section 2.1;
----
(J) Default Rate: Article 10, Section 10.1(t);
------------
(K) Environmental Indemnity: Article 10, Subsection 10.1(k);
-----------------------
(L) Escrow Fund: Article 3, Section 3.5;
-----------
(M) Event: Article 20, Section 20.1;
-----
(N) Event of Default: Article 10, Section 10.1;
----------------
(O) Existing Mortgages: Recitals;
------------------
(P) Existing Notes: Recitals;
---------------
(Q) GAAP: Article 3, Subsection 3.11(a);
----
(R) Improvements: Article 1, Subsection 1.1(c);
------------
(S) Indemnified Parties: Article 13, Section 13.1;
-------------------
(T) Indemnitor: Article 10, Subsection 10.1(q);
----------
(U) Insurance Premiums: Article 3, Subsection 3.3(b);
------------------
(V) Land: Article 1, Subsection 1.1(a);
----
(W) Lease Guaranty: Article 3, Subsection 3.7(a);
--------------
(X) Leased Land: Article 1, Subsection 1.1(b);
-----------
(Y) Leases: Article 1, Subsection 1.1(f);
-------
(Z) Lender: Preamble and Article 21, Section 21.1;
------
(AA) Lockbox Account: Article 4, Section 4.4;
---------------
(BB) Losses: Article 13, Section 13.1;
-------
(CC) Net Proceeds: Article 4, Subsection 4.3(b);
------------
(DD) Net Proceeds Deficiency: Article 4, Subsection 4.3(b)(vi);
-----------------------
(EE) Note: Recital C and Article 21, Section 21.1;
----
(FF) Obligations: Article 2, Section 2.3;
-----------
(GG) Other Charges: Article 3, Subsection 3.4(a);
-------------
(HH) Other Obligations: Article 2, Section 2.2;
-----------------
(II) Other Security Documents: Article 3, Section 3.2;
------------------
(JJ) Owner: Article 1, Subsection 1.1(b);
-----
(KK) Partnership: Preamble;
-----------
(LL) Permitted Exceptions: Article 5, Section 5.1;
--------------------
(MM) Person: Article 21, Section 21.1;
------
(NN) Personal Property: Article 1, Subsection 1.1(e);
-----------------
(OO) Policies/Policy: Article 3, Subsection 3.3(b);
---------------
(PP) Property: Article 1, Section 1.1 and Article 21, Section 21.1;
--------
(QQ) REIT: Article 5, Section 5.5;
----
(RR) Rents: Article 1, Subsection 1.1(f);
-----
(SS) Restoration: Article 3, Subsection 3.3(h);
-----------
(TT) Security Deposits: Article 3, Subsection 3.7(c);
-----------------
(UU) Security Instrument: Recital B;
-------------------
(VV) Taxes: Article 3, Subsection 3.4(a);
-----
(WW) Uniform Commercial Code: Article 1, Subsection 1.1(e)
-----------------------
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") dated as of
---------
March 20, 1998, is made by and between SL GREEN OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership (the "Partnership") having its principal
-----------
place of business at 70 West 36th Street, New York, New York 10018 and
LEHMAN BROTHERS HOLDINGS INC. d/b/a LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware corporation having its principal place of
business at Three World Financial Center, 200 Vesey Street, New York, New
York 10285 (hereinafter referred to as the "Lender").
------
R E C I T A L S:
A. The Partnership, by that certain Consolidated Amended and
Restated Promissory Note of even date herewith, is indebted to the Lender in
the principal sum of $275,000,000.00, or so much thereof as may be advanced
and unpaid, in lawful money of the United States of America (the note,
together with all extensions, renewals, modifications, substitutions and
amendments thereof shall collectively be referred to as the "Note"), with
----
interest from the date thereof at the rates set forth in the Note, principal
and interest to be payable in accordance with the terms and conditions
provided in the Note and that certain Loan Agreement dated as of the date
hereof between the Partnership and the Lender (as amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement").
--------------
B. The Partnership has a Membership Interest (as hereinafter
defined) equal to one hundred percent (100%) of SLG Graybar 2 LLC (the
"Company").
-------
C. As a condition to the Lender's making the loan as evidenced by
the Note, the Partnership is required to pledge and grant a security interest
in the Collateral (as hereinafter defined) as security for the Secured
Obligations (as hereinafter defined).
NOW THEREFORE, to induce the Lender to enter into the Loan
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used herein and not
-----------
otherwise defined herein have the meanings assigned to them in the Loan
Agreement. In addition, as used herein:
"Collateral" shall have the meaning assigned to such term in
----------
Section 3 hereof.
"Distribution" shall mean, with respect to the Company, a transfer
------------
of Property to a Member on account of a Membership Interest.
"Economic Interest" shall mean, with respect to the Company, the
-----------------
right to receive allocations of Profit and Loss, Distributions, returns of
capital and distributions of assets upon a dissolution of the Company.
"Event of Default" shall mean the occurrence of an Event of Default
----------------
under the Loan Agreement and any breach of representation or warranty or
violation or noncompliance with any term, covenant or condition of this
Agreement including, without limitation, Sections 2, 5 and 6 hereof.
"Management Right" shall mean, with respect to the Company, the
----------------
right of a Member to participate in the management of the Company, to vote on
any matter, and to grant or withhold consent or approval of action on behalf
of the Company.
"Member" shall mean, with respect to the Company, the members
------
executing the Operating Agreement.
"Membership Interest" shall mean, with respect to the Company, a
-------------------
Member's Economic Interest and Management Right.
"Operating Agreement" shall mean, with respect to the Company, the
-------------------
Operating Agreement of the Company as the same may have been modified or
amended.
"Profit and Loss" shall mean, with respect to the Company, the net
---------------
profit and net loss of the Company as computed in accordance with GAAP with
respect to any fiscal period of the Company.
"Property" shall many any property, real or personal, tangible or
--------
intangible, including money, and any legal or equitable interest in such
property.
"Records" shall have the meaning assigned to such term in Section
-------
2(a) hereof.
"Secured Obligations" shall mean all of the obligations under the
-------------------
Note, the Loan Agreement, the Security Instrument and all of the other Loan
Documents.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
-----------------------
as in effect from time to time in the State of New York or, as the context
may require, in effect in the state or states where any of the Collateral is
located.
Section 2. Representations and Warranties. The Partnership
------------------------------
represents and warrants to the Lender that:
(a) The chief place of business and chief executive office of the
Partnership and the office where the Partnership keeps its records
concerning the Collateral (hereinafter, collectively the "Records") and
-------
the original copies of the Operating Agreement are located, is at 70
West 36th Street, New York, New York 10018.
(b) The Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business and is in good standing in
all other places where necessary in light of the business it conducts
and the property it owns and intends to conduct and own and in light of
the transactions contemplated by this Agreement. No filing, recording,
publishing or other act that has not been made or done is necessary or
desirable in connection with the existence or good standing of the
Partnership or the conduct of its business.
(c) The Partnership has the full power, authority and legal right
to execute, deliver and perform its obligations under this Agreement and
the Operating Agreement. The execution, delivery and performance by the
Partnership of this Agreement and the Operating Agreement and the
consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary partnership action. Each of this
Agreement and the Operating Agreement has been duly executed and
delivered by the Partnership, has not been amended or otherwise
modified, is in full force and effect and is the legal, valid and
binding obligation of the Partnership, enforceable against the
Partnership in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and to the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including, without
limitation, (i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (ii) concepts of
materiality, reasonableness, good faith and fair dealing. The
Partnership is not in default in the performance of any covenant or
obligation set forth in the Operating Agreement or, to the best of the
Partnership's knowledge, in any Loan Document to which it is a party.
(d) The Partnership is the sole beneficial owner of the Collateral
pledged by it under Section 3 hereof, free and clear of all claims,
mortgages, pledges, liens, security interests and other encumbrances of
any nature whatsoever (and no right or option to acquire the same exists
in favor of any other person or entity), except for the assignment,
pledge and security interest in favor of the Lender created or provided
for herein, and agrees that it will not encumber or grant any security
interest in or with respect to the Collateral or permit any of the
foregoing.
(e) The pledge and security interest hereunder in favor of the
Lender constitutes a first priority pledge and security interest in and
to all of the Collateral pledged by the Partnership hereunder.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein will conflict with
or result in a breach of, or require any consent under, any applicable
law or regulation, or any order, writ, injunction or decree of any court
or governmental authority or agency, or any agreement or instrument to
which the Partnership is a party or by which the Partnership or the
Partnership's property is bound or to which the Partnership is subject,
or constitute a default under any such agreement or instrument, or
(except for the liens created pursuant hereto) result in the creation or
imposition of any lien or encumbrance upon any of the Partnership's
revenues or assets pursuant to the terms of any such agreement or
instrument.
(g) No authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency
are necessary for the execution, delivery or performance by the
Partnership of this Agreement or the Operating Agreement.
(h) There is no action, suit or proceeding at law or in equity by
or before any government authority, arbitral tribunal or other body now
pending, or to the best knowledge of the Partnership, threatened against
or affecting the Company, the Partnership or any of their respective
property or the Collateral which could have a material adverse effect on
such party's condition, financial or otherwise.
(i) The Partnership is not (i) an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, or an "investment advisor" within
the meaning of the Investment Company Act of 1940 or (ii) an "electric
utility company", a "holding company" or either a "subsidiary company"
or an "affiliate" of a "holding company" as such terms are defined in
the Public Utility Holding Company Act of 1935.
(j) The sole Member of the Company is the Partnership.
Section 3. Collateral. As collateral security for the prompt
----------
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Partnership hereby pledges,
assigns, hypothecates and transfers to the Lender, and hereby grants to the
Lender, a lien on and security interest in, all of the Partnership's right,
title and interest in, to and under the following, whether now owned by the
Partnership or hereafter acquired and whether now existing or hereafter
coming into existence and wherever located (all being collectively referred
to herein as "Collateral"):
----------
(a) its Membership Interest in the Company, including, without
limitation, all of its right, title and interest in, to and under
the Operating Agreement of the Company, including, without
limitation, (i) all rights of the Partnership to receive moneys due
but unpaid and to become due under or pursuant to the Operating
Agreement, (ii) all rights of the Partnership to participate in the
operation or management of the Company and to take actions or
consent to actions in accordance with the provisions of the
Operating Agreement, (iii) all rights of the Partnership to
property of the Company, (iv) all rights of the Partnership to
receive proceeds of any insurance, bond, indemnity, warranty or
guaranty with respect to the Operating Agreement, (v) all claims of
the Partnership for damages arising out of or for breach of or
default under the Operating Agreement and (vi) all rights of the
Partnership to terminate, amend, supplement, modify or waive
performance under the Operating Agreement, to perform thereunder
and to compel performance and otherwise to exercise all remedies
thereunder;
(b) all certificates, if any, representing the Partnership's
Membership Interest or a distribution or return of capital upon or
with respect to its interest in the Company or resulting from a
split-up, revision, reclassification or other like change of the
Membership Interest or otherwise received in exchange therefor, and
any subscription warrants, rights or options issued to the holders
of, or otherwise in respect of, the Membership Interest;
(c) to the extent not included in the foregoing, all proceeds,
products, rents, revenues, issues, profits, royalties, income,
benefits, accessions, additions, substitutions and replacements of
and to any and all of the foregoing.
Section 4. Provisions Concerning Uncertificated Securities
-----------------------------------------------
Collateral. With respect to any portion of the Collateral (including without
- ----------
limitation any Membership Interest) which may now or hereafter be deemed to
be "uncertificated securities" under the Uniform Commercial Code, it is the
Partnership's intent to grant to Lender a perfected security interest in such
Collateral both by filing and by "control," as contemplated by Section
47-9115 of the Uniform Commercial Code. Accordingly, the Partnership, the
Lender and the Company hereby agree as follows:
(a) New York law and the provisions of the Uniform Commercial Code
shall govern the pledge of and security interest granted in such Collateral,
the perfection of the security interest, the effect of perfection, the
priority of the security interest, and all related matters concerning this
Agreement.
(b) The Company hereby agrees to honor any directives or instructions
received from the Lender with respect to the transfer or other disposition of
any Membership Interest without the need for any authorization or consent
from the Partnership, to the same extent as if the Lender, rather than
Partnership, was the actual owner of the Membership Interest. The
Partnership hereby expressly consents to Lender's receipt and exercise of
such rights.
(c) Nothing in the foregoing subsection (b) shall limit or reduce any
rights of the Partnership with respect to any Membership Interest, subject in
all respects to the other terms and provisions of this Agreement.
(d) The parties agree that the Company shall deliver to the Lender a
"Transaction Statement" acceptable to the Lender evidencing the notation of
the pledge of such Company's Membership Interests purusant to this Agreement.
Section 5. Covenants. The Partnership covenants and agrees:
---------
(a) The Partnership shall not (i) cancel or terminate the
Operating Agreement or consent to or accept any cancellation or
termination thereof, (ii) amend, supplement or otherwise modify the
Operating Agreement (as in effect on the date hereof and as thereafter
amended, modified or supplemented with the consent of the Lender) or
consent to same or (iii) petition, request or take any other legal or
administrative action that seeks, or may reasonably be expected, to
rescind, terminate, amend, modify or suspend the Operating Agreement or
consent to same.
(b) The Partnership shall preserve and maintain its existence as a
Delaware limited partnership and all of its licenses, rights, privileges
and franchises that are necessary or desirable for the fulfillment of
its obligations under this Agreement, the Operating Agreement and each
other Loan Document to which it is or is intended to be a party.
(c) The Partnership shall pay and discharge all taxes now or
hereafter imposed on it, on its income or profits, on any of its
property or upon the liens provided for herein prior to the date on
which penalties attach thereto; the Partnership shall promptly pay any
valid, final judgment enforcing any such tax and cause the same to be
satisfied of record and it shall also pay, or cause to be paid, when due
all claims for labor, material, supplies or services that, if unpaid,
could by law result in a mechanics' lien.
(d) The Partnership shall not create, incur, assume or suffer to
exist any lien upon any of the Collateral.
(e) The Partnership shall notify the Lender promptly upon
obtaining knowledge of any action, suit or proceeding at law or in
equity by or before any government authority, arbitral tribunal or other
body pending or threatened against the Company or the Partnership which
could result in a Material Adverse Effect (as defined in the Loan
Agreement) on the Company's or the Partnership's condition, financial or
otherwise.
(f) The Partnership shall not sell, assign, transfer or otherwise
dispose of all or any part of its Membership Interest in the Company, or
consent to the creation of any Membership Interest in the Company
without the prior consent of the Lender.
(g) The Partnership shall not without the prior consent of the
Lender voluntarily withdraw as the managing member of the Company.
(h) The Partnership shall not take or consent to any action to
terminate, dissolve or liquidate the Company or commence or consent to
the commencement of any proceeding seeking the termination, dissolution
or liquidation of the Company.
(i) Promptly after the Partnership knows or has reason to believe
that any Default or Event of Default has occurred, the Partnership shall
deliver to the Lender notice of such event describing the same in
reasonable detail together with, or as soon thereafter as possible, a
written description of the action that the Partnership has taken or
proposes to take with respect thereto.
Section 6. Further Assurances; Remedies. In furtherance of the
----------------------------
grant of the pledge and security interest pursuant to Section 3 hereof, the
Partnership hereby agrees with the Lender as follows:
6.1 Delivery and Other Perfection. The Partnership shall:
-----------------------------
(a) if any of the above-described ownership interests, shares,
securities, moneys, property or Membership Interests required to be
pledged by the Partnership under Section 3 hereof is received by the
Partnership after the occurrence and during the continuance of an Event
of Default, forthwith either (i) transfer and deliver to the Lender such
interests, money and property so received by the Partnership, all of
which thereafter shall be held by the Lender, pursuant to the term of
this Agreement, as part of the Collateral or (ii) take such other action
as the Lender shall deem necessary or appropriate to duly record the
Lien created hereunder in such ownership interests, moneys, property or
Membership Interests in said clauses;
(b) give, execute, deliver, file and/or record any financing
statement, continuation statement, notice, instrument, document,
agreement or other papers that may be necessary or desirable (in the
reasonable judgment of the Lender) to create, preserve, perfect or
validate the security interest granted pursuant hereto or to enable the
Lender to exercise and enforce its rights hereunder with respect to such
pledge and security interest, including, without limitation, after the
occurrence and during the continuance of an Event of Default, causing
any or all of the Collateral to be transferred of record into the name
of the Lender or its nominee (and the Lender agrees that if any
Collateral is transferred into its name or the name of its nominee, it
will thereafter promptly give to the Partnership copies of any notices
and communications received by it with respect to the Collateral).
Without limiting the generality of the foregoing, the Partnership shall,
after the occurrence and during the continuance of an Event of Default,
if any Collateral shall be evidenced by a promissory note or other
instrument, deliver and pledge to the Lender such note or instrument
duly endorsed or accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to the
Lender;
(c) maintain, hold and preserve full and accurate Records, and
stamp or otherwise mark such Records in such manner as the Lender may
reasonably require in order to reflect the security interests granted by
this Agreement; and
(d) permit representatives of the Lender, upon reasonable notice,
at any time during normal business hours to inspect and make abstracts
from its Records, and permit representatives of the Lender to be present
at the Partnership's place of business to make copies of all
communications and remittances relating to the Collateral, and forward
copies of any notices or communications received by the Partnership with
respect to the Collateral, all in such manner as the Lender may require.
6.2 Other Financing Statements and Liens. Without the prior
------------------------------------
consent of the Lender, the Partnership shall not file or suffer to be on
file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Lender is not named as the sole Lender.
6.3 Preservation of Rights. The Lender shall not be required to
----------------------
take any steps necessary to preserve any rights against prior parties to any
of the Collateral.
6.4 Collateral.
----------
(a) So long as no Event of Default shall have occurred and be
continuing, the Partnership shall have the right to (i) exercise all
voting, consensual and other powers of ownership pertaining to the
Collateral for all purposes not inconsistent with the terms of this
Agreement, the Loan Agreement and other Loan Documents, provided that
--------
the Partnership agrees that it will not vote the Collateral in any
manner that is inconsistent with the terms of this Agreement, the Loan
Agreement and other Loan Documents; and the Lender shall execute and
deliver to the Partnership or cause to be executed and delivered to the
Partnership all such proxies, powers of attorney, dividend and other
orders, and all such instruments, without recourse, as the Partnership
may reasonably request for the purpose of enabling the Partnership to
exercise the rights and powers which it is entitled to exercise pursuant
to this Section 6.4(a), and (ii) receive and retain any and all cash
(and cash equivalents) dividends or distributions paid on the
Collateral, provided that any liquidating distributions resulting from
the sale, exchange or disposition of any of the Property owned by the
Company shall become part of the Collateral and, if received by the
Partnership, shall be held for the benefit of Lender, subject to the
terms of this Agreement and the Loan Agreement.
(b) Any provisions of the Operating Agreement restricting the
transferability of the Membership Interests in the Company shall not
apply to the exercise by the Lender of any of its rights and remedies
under any Loan Document or to any sale, assignment, transfer or other
disposition by the Lender of all or any part of any Membership Interest
in the Company. The Partnership hereby consents to the admission of the
Lender as a Member in the Company pursuant to the exercise of the
Lender's rights and remedies pursuant to this Agreement or any other
Loan Document.
6.5 Events of Default. During the period during which an Event of
-----------------
Default shall have occurred and be continuing:
(a) the Lender shall (i) have all of the rights and remedies with
respect to the Collateral of a Lender under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional rights and
remedies to which a Lender is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Lender were the sole
and absolute owner thereof (and the Partnership agrees to take all such
action as may be appropriate to give effect to such right) and (ii)
receive and retain any and all cash (and cash equivalents) dividends or
distributions paid on the Collateral, provided that any liquidating
distributions resulting from the sale, exchange or disposition of any of
the Property owned by the Company shall become part of the Collateral
and, if received by the Partnership, shall be held for the benefit of
Lender, subject to the terms of this Agreement and the Loan Agreement.
(b) the Lender may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may modify
the terms of, any of the Collateral;
(c) the Lender may, in its name or in the name of the Partnership
or otherwise, demand, sue for, collect or receive any money or property
at any time payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do so; and
(d) the Lender may, upon ten days' prior notice to the Partnership
of the time and place, with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the
possession, custody or control of the Lender or any of its agents, sell,
lease, assign or otherwise dispose of all or any part of such
Collateral, at such place or places as the Lender deems best, and for
cash or for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of the time or
place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and any Person may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so
disposed of at any public sale (or, to the extent permitted by law, at
any private sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Partnership, any such
demand, notice and right or equity being hereby expressly waived and
released. The Lender may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the sale may be so
adjourned.
The proceeds of each collection, sale or other disposition under this Section
6.5 shall be applied in accordance with Section 6.8 hereof.
The Partnership recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Lender may be compelled, with respect to any sale of all
or any part of the Collateral which constitutes a "security" under the
Securities Act of 1933, as amended, to limit purchasers to those who will
agree, among other things, to acquire tment and not with a view to the
distribution or resale thereof. The Partnership acknowledges that any such
private sale may be at prices and on terms less favorable to the Lender than
those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner and that
Lender shall not have any obligation to engage in public sales and no
obligation to delay the sale of any such Collateral for the period of time
necessary to permit the respective issuer thereof to register it for public
sale.
6.6 Removals. Without at least 30 days' prior notice to the
--------
Lender, the Partnership shall not maintain any of its books and records with
respect to the Collateral pledged by it hereunder at any office or maintain
its principal place of business at any place other than at the address set
forth in Section 2(a).
6.7 Private Sale. Lender shall not incur any liability as a result
------------
of the sale of the Collateral, or any part thereof, at any private sale
pursuant to Section 6.5 hereof conducted in a commercially reasonable manner.
The Partnership hereby waives any claims against Lender by reason of the fact
that the price at which the Collateral may have been sold at such a private
sale was less than the price which might have been obtained at a public sale
or was less than the aggregate amount of the Secured Obligations.
6.8 Application of Proceeds. Except as otherwise herein expressly
-----------------------
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash at the time
held by the Lender under this Section 6, shall be applied by the Lender in
accordance with the Loan Agreement. As used in this Section 6, "proceeds"
--------
of Collateral shall mean cash, securities and other property realized in
respect of, and distributions in kind of, Collateral, including any thereof
received under any reorganization, liquidation or adjustment of debt of the
Partnership or any issuer of or obligor on any of the Collateral.
6.9 Attorney-in-Fact. Without limiting any rights or powers
----------------
granted by this Agreement to the Lender while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default, the Lender is hereby appointed the attorney-in-fact of
the Partnership for the purpose of carrying out the provisions of this
Section 6 and taking any action and executing any instruments which the
Lender may deem necessary or advisable to accomplish the purposes hereof,
which appointment as attorney-in-fact is irrevocable and coupled with
interest. Without limiting the gs in respect of the Collateral, the Lender
shall have the right and power to receive, endorse and collect all checks
made payable to the order of the Partnership representing any distribution or
other payment in respect of the Collateral or any part thereof and to give
full discharge for the same.
6.10 Termination. When all of the Secured Obligations shall have
-----------
been paid in full, this Agreement shall terminate and the Lender shall
forthwith cause to be assigned, transferred and delivered, against receipt
but without any recourse, warranty or representation whatsoever, any
remaining Collateral and money received in respect thereof, to or on the
order of the Partnership.
6.11 Expenses. The Partnership agrees to pay to Lender all
--------
out-of-pocket expenses (including reasonable expenses for legal services of
every kind) of, or incident to, the enforcement of any of the provisions of
this Section 6, or performance by the Lender of any obligations of the
Partnership in respect of the Collateral which the Partnership has failed or
refused to perform, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Lender in respect thereof, by litigation or
otherwise, and all such expenses shall be Secured Obligations to the Lender
secured under Section 3 hereof.
6.12 Intentionally Deleted.
---------------------
Section 7. Miscellaneous.
-------------
7.1 No Implied Waiver. No failure on the part of Lender or any of
-----------------
its agents to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or remedy hereunder shall operate as a
waiver thereof, and no single or partial exercise by Lender or any of its
agents of any right, power or remedy hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.
7.2 Notices. All notices, requests and other communications
-------
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in
accordance with the provisions of the Loan Agreement.
7.3 Amendments. This Agreement may be amended or modified only by
----------
an instrument in writing signed by the Partnership and the Lender, and any
provision of this Agreement may be waived, in writing, by the Lender. Any
waiver shall be effective only in the specific instance and for the specified
purpose for which it was given.
7.4 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the respective successors and assigns of the
Partnership and the Lender (provided, however, that the Partnership shall not
-------- -------
assign or transfer its rights and obligations hereunder without the prior
written consent of the Lender).
7.5 Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which when taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
7.6 Agents. The Lender may employ agents and attorneys-in-fact in
------
connection herewith and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good
faith.
7.7 Severability. If any provision hereof is invalid or
------------
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of Lender in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) the invalidity or unenforceability of any provision hereof
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
7.8 Headings. Headings appearing herein are used solely for
--------
convenience of reference and are not intended to affect the interpretation of
any provision of this Agreement.
7.9 Further Assurances. The Partnership agrees to do such further
------------------
acts and things and to pay the reasonable costs and expenses in connection
with such acts, and to execute and deliver or cause to be executed and
delivered such additional documentation, additional conveyances, assignments,
and similar instruments, as the Lender may at any time reasonably request in
connection with the administration and enforcement of this Agreement or with
respect to the Collateral or any part thereof or in order better to assure
and confirm unto the Lender its rights and remedies hereunder or to further
effectuate the purposes of this Agreement, including without limitation to
perfect or maintain the perfection or first priority nature of the assignment
and security interest granted hereby and to grant and to perfect a security
interest in any additional interest the Partnership acquires in the Company
during the term of the Loan Agreement. The Partnership agrees that, where
permitted under applicable law, a carbon, photographic, or other reproduction
of this Agreement or of a financing statement is sufficient as a financing
statement.
7.10 Acknowledgement by the Company. The Company by executing this
------------------------------
Agreement, hereby acknowledges the security interest of and the rights of the
Lender under this Agreement and agree to the transfers of the Partnership's
interest in the Company to Lender made or to be made under or pursuant to
this Agreement.
7.11 Submission to Jurisdiction. Any legal action or proceeding
--------------------------
with respect to this Agreement and any action for enforcement of any judgment
in respect thereof may be brought in the courts of the State of New York or
of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, the Partnership hereby accepts
for itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from
any thereof. The Partnership hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of Lender to serve process in
any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Partnership in any other jurisdiction.
7.12 Governing Law. This Agreement shall be deemed to be a contract
-------------
entered into pursuant to the laws of the State of New York and shall in all
respects be governed, construed, applied and enforced in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: SL GREEN REALTY CORP., a Maryland corporation,
its general partner
By: /s/ David J. Nettina
-----------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
-----------------------------
Benjamin P. Feldman
Executive Vice President
LEHMAN BROTHERS HOLDINGS INC. D/B/A LEHMAN CAPITAL,
A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a
Delaware corporation
By: /s/ Francis Gilhool
---------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
SLG GRAYBAR 2 LLC, a New York limited liability company
By: SL GREEN OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership, its sole member
By: SL GREEN REALTY CORP., a Maryland corporation,
its general partner
By: /s/ David J. Nettina
-----------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
-----------------------------
Benjamin P. Feldman
Executive Vice President
ASSIGNMENT OF MORTGAGE
KNOW THAT SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("Assignor") having its principal place of
business at 70 West 36/th/ Street New York, New York 10018
ASSIGNOR,
in consideration of Ten Dollars ($10.00) and other lawful consideration
paid by LEHMAN BROTHERS HOLDINGS INC., d/b/a Lehman
Capital, a division of Lehman Brothers Holdings
Inc., a Delaware corporation ("Assignee") having an
address at Three World Financial Center, New York,
New York 10285
ASSIGNEE,
hereby assigns unto the assignee in accordance with, and subject to, the
terms of that certain Security Agreement, dated the date hereof, between
Assignor and Assignee (the "Security Agreement"), those certain mortgages as
more particularly described on Exhibit A attached hereto and made part hereof
---------
(collectively, the "Mortgage"), and covering the premises known as 35 West
43rd Street and 34-36 West 44th Street, New York, New York;
TOGETHER with the bonds or notes or obligations described in the Mortgage,
and the monies due and to grow due thereon with the interest;
TO HAVE AND TO HOLD the same unto Assignee and to the successors, legal
representatives and assigns of assignee forever.
The Assignor hereby states, upon knowledge, that the Assignee is not acting
as a nominee of the mortgagor under the Mortgage and that the Mortgage
continues to secure a bona fide obligation.
IT IS EXPRESSLY UNDERSTOOD AND AGREED that this Assignment is made without
any recourse to, and without any covenant or warranty, express or implied, by
the assignor in any event whatsoever, except as expressly set forth in the
aforesaid Security Agreement and the Loan Agreement (as defined in the
Security Agreement).
The word "assignor" or "assignee" shall be construed as if it read
"assignors" or "assignees" whenever the sense of this instrument so requires.
IN WITNESS HEREOF, the assignor has duly executed this Assignment as of
the 20th day of March, 1998.
SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: SL Green Realty Corp., a Maryland corporation,
its general partner
By: /s/ David J. Nettina
------------------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
------------------------------------
Benjamin P. Feldman
Executive Vice President
ACKNOWLEDGMENT
(To Be Attached)
EXHIBIT A
---------
1. Mortgage, dated as of March 2, 1983, in the principal sum of
$3,768,000.00 given by Bar Building Associates Joint Venture
("Borrower") to Chase Manhattan Bank, N.A. ("Chase") and recorded on
March 11, 1983, in the New York County Register's Office in Reel 672,
Page 567, upon which a tax of $84,780.00 was duly paid and the note
secured thereby ("Mortgage 1").
a. Mortgage 1 was modified and spread pursuant to a Mortgage
Modification and Spreader Agreement, dated as of April 13, 1983,
entered into between Borrower, Lawplaza, Inc. ("Lawplaza") and
Chase, recorded in the Register's Office on May 2, 1983 in Reel
683, Page 795. The Mortgage Modification and Spreader Agreement
spreads the lien of Mortgage 1 to cover the leasehold estate in
Block 1259 Lot 117 as evidenced by instrument recorded in the
Register's Office in Reel 552, page 1531.
2. Mortgage, dated March 2, 1983, in the principal sum of $1,800,000.00
given by Borrower to Chase and recorded in the New York County
Register's Office on March 11, 1983, in Reel 672, Page 600, upon which a
tax of $40,500.00 was duly paid and the note secured thereby ("Mortgage
2").
a. Mortgage 2 was modified and spread pursuant to a Mortgage
Modification and Spreader Agreement, dated as of April 13, 1983,
entered into between Borrower, Lawplaza and Chase, recorded in the
Register's Office on May 2, 1983 in Reel 683, Page 808. The
Mortgage Modification and Spreader Agreement spreads the lien of
Mortgage 2 to cover the Leasehold Estate in Block 1259 Lot 117 as
evidenced by instrument recorded in the New York County Register's
Office in Reel 552, Page 1531.
3. Mortgage, dated as of March 2, 1983, in the principal sum of
$3,700,000.00 given by Borrower to Chase and recorded in the New York
County Register's Office on March 11, 1983 in Reel 672, Page 632, upon
which a tax of $83,250.00 was duly paid and the note secured thereby
("Mortgage 3").
a. Mortgage 3 was modified and spread pursuant to a Mortgage
Modification and Spreader Agreement, dated as of April 13, 1983,
entered into between Borrower, Lawplaza and Chase and recorded in
the Register's Office on May 2, 1983 in Reel 683, Page 821. The
Mortgage Modification and Spreader Agreement spreads the lien of
Mortgage 3 to cover the leasehold estate in Block 1259 Lot 117, as
evidenced by instrument recorded in the Register's Office in Reel
552, Page 1531.
b. Mortgages 1, 2 and 3 as modified and spread, were assigned pursuant
to an Assignment of Mortgage, dated June 21, 1984, given by Chase
to The Bowery Savings Bank ("Bowery") and recorded in the New York
County Register's Office on June 28, 1984, in Reel 808, Page 1146.
c. Mortgages 1, 2 and 3 as modified, spread and assigned, were
consolidated and spread pursuant to a Consolidation and Spreader
Agreement, dated June 22, 1984, entered into between Madara
Associates ("Madara") and Patrent Associates ("Patrent"), together
doing business as Borrower, and Bowery, and recorded in the New
York County Register's Office on June 28, 1984 in Reel 808, Page
1197, on which a mortgage tax of $0 was duly paid (the
"Consolidation Agreement"). The Consolidation Agreement
consolidates Mortgages 1 through 3 to form a single lien of
$8,500,000.00 and spreads Mortgages 1 through 3 to cover the fee
estate of Block 1259 Lot 15, as evidenced by an instrument recorded
in the Register's Office in Reel 672, Page 520.
d. Mortgages 1, 2 and 3, as so consolidated were further assigned
pursuant to an Assignment of Mortgage, dated July 24, 1986, given
by Bowery to The Travelers Insurance Company and recorded in the
New York County Register's Office on August 7, 1986, in Reel 1100,
Page 1385.
4. Mortgage, dated June 22, 1984, in the principal sum of $10,000,000.00
given by Madara and Patrent, together doing business as Borrower, and
Lawplaza, to The Association of the Bar of the City of New York
("Association"), and recorded in the New York County Register's Office
on June 28, 1984, in Reel 808, Page 1186 upon which a tax of $225,000.00
was duly paid and the note secured thereby ("Mortgage 4").
a. Mortgage 4 was collaterally assigned pursuant to an Assignment of
Mortgage, dated November 19, 1984, given by the Association to
Morgan Guaranty Trust Company of New York ("Morgan"), and recorded
in the New York County Register's Office on March 12, 1985 in Reel
885, Page 1163.
Mortgage 4 was assigned pursuant to an Assignment of Mortgage,
dated August 1, 1986, given by Morgan and the Association to The
Travelers Insurance Company, and recorded in the New York County
Register's Office on August 7, 1986 in Reel 1100, Page 1381.
5. Mortgage, dated July 30, 1986, in the principal sum of $7,750,000.00
given by Borrower to The Travelers Insurance Company and recorded in the
New York County Register's Office on August 7, 1986, in Reel 1100, Page
1390 upon which a tax of $174,375.00 was duly paid and the note secured
thereby ("Mortgage 5").
a. Mortgages 1 through 5 were consolidated and spread pursuant to that
certain Spreader, Consolidation and Modification Agreement (the
"Spreader, Consolidation and Modification Agreement"), dated July
30, 1986, between Madara and Patrent, together doing business as
Borrower, and The Travelers Insurance Company, and recorded in the
New York County Register's Office on August 7, 1986 in Reel 1100,
Page 1401. By which Spreader, Consolidation and Modification
Agreement, Mortgages 1 through 5 were consolidated to form a single
lien in the sum of $26,250,000.00.
b. Release of part of mortgaged premises made by The Travelers
Insurance Company, dated April 8, 1992, and recorded in the New
York County Register's Office on April 14, 1992 in Reel 1862, Page
1475. This releases the fee of Block 1259 Lot 117 from the lien of
Mortgage 4.
c. Said Spreader, Consolidation and Modification Agreement was amended
pursuant to a certain First Amendment to Agreement of Spreader,
Consolidation and Modification of Mortgage, between Madara and
Patrent, together doing business as Borrower and The Travelers
Insurance Company (the "First Amendment to Spreader, Consolidation
and Modification Agreement"), dated April 8, 1992, and recorded in
the New York County Register's Office on April 14, 1992 in Reel
1862, Page 1479.
d. A Modification and Spreader Agreement was made by and between The
Travelers Insurance Company and Borrower and Lawplaza, dated as of
April 8, 1992, and recorded in the New York County Register's
Office on April 14, 1992 in Reel 1862, Page 1530.
e. The foregoing was further modified and spread pursuant to a certain
Modification and Spreader Agreement among The Travelers Insurance
Company, Borrower and Lawplaza, dated as of April 8, 1992, and
recorded in the New York County Register's Office on April 14, 1992
in Reel 1862, Page 1552.
f. The foregoing was further reduced, modified and severed pursuant to
a certain Agreement of Reduction, Modification and Severance among
The Travelers Insurance Company, Borrower and Lawplaza, dated as of
June 28, 1996, and recorded in the New York County Register's
Office on July 10, 1996 in Reel 2342, Page 1157; and by which the
lien of Mortgages 1 through 5, as amended, modified, severed and
reduced, was split into two liens of: (i) $15,000,000.00, as
evidenced by Mortgages 1 through 5, as modified; and (ii)
$3,000,000.00 as evidenced by that certain mortgage, dated June 28,
1996, and more particularly described below as "Second Mortgage".
6. Which lien of $15,000,000.00 and the notes secured thereby was assigned
by The Travelers Insurance Company to Praedium Bar LLC, by Assignment of
Mortgage, dated September 30, 1996, and recorded October 11, 1996, in
the New York County Register's Office, in Reel 2380, Page 1854.
7. Which Mortgage and the notes secured thereby, as modified, was assigned
byPraedium by Assignment of Mortgage dated August 20, 1997, to SL Green
Operating Partnership L.P., to be recorded in the New York County
Register's office.
ASSIGNMENT OF MORTGAGE
KNOW THAT SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("Assignor") having its principal place of
business at 70 West 36/th/ Street New York, New York 10018
ASSIGNOR,
in consideration of Ten Dollars ($10.00) and other lawful consideration
paid by LEHMAN BROTHERS HOLDINGS INC., d/b/a Lehman
Capital, a division of Lehman Brothers Holdings
Inc., a Delaware corporation ("Assignee") having an
address at Three World Financial Center, New York,
New York 10285
ASSIGNEE,
hereby assigns unto the assignee in accordance with, and subject to, the
terms of that certain Security Agreement, dated the date hereof, between
Assignor and Assignee (the "Security Agreement"), those certain mortgages as
more particularly described on Exhibit A attached hereto and made part hereof
---------
(collectively, the "Mortgage"), and covering the premises known as 17
Battery Place, New York, New York;
TOGETHER with the bonds or notes or obligations described in the Mortgage,
and the monies due and to grow due thereon with the interest;
TO HAVE AND TO HOLD the same unto Assignee and to the successors, legal
representatives and assigns of assignee forever.
The Assignor hereby states, upon knowledge, that the Assignee is not acting
as a nominee of the mortgagor under the Mortgage and that the Mortgage
continues to secure a bona fide obligation.
IT IS EXPRESSLY UNDERSTOOD AND AGREED that this Assignment is made without
any recourse to, and without any covenant or warranty, express or implied, by
the assignor in any event whatsoever, except as expressly set forth in the
aforesaid Security Agreement and the Loan Agreement (as defined in the
Security Agreement).
The word "assignor" or "assignee" shall be construed as if it read
"assignors" or "assignees" whenever the sense of this instrument so requires.
IN WITNESS HEREOF, the assignor has duly executed this Assignment as of
the 20th day of March, 1998.
SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: SL Green Realty Corp., a Maryland corporation,
its general partner
By: /s/ David J. Nettina
--------------------------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
--------------------------------------
Benjamin P. Feldman
Executive Vice President
ACKNOWLEDGMENT
(To Be Attached)
EXHIBIT A
---------
1. Mortgage made by 17 Battery Place North Associates II to Connecticut
Mutual Life Insurance Company in the amount of $6,500,000, dated as of
June 9, 1986 and recorded on June 10, 1986 in the New York County
Register's Office in Reel 1074, Page 514, upon which mortgage tax in the
amount of $146,250 was paid and the note secured thereby ("17 Mortgage
1");
a. 17 Mortgage 1 was assigned pursuant to an Assignment of Mortgage,
dated March 21, 1996, given by Massachusetts Mutual Life Insurance
Company, successor by merger to Connecticut Mutual Life Insurance
Company to CS First Boston Mortgage Capital Corp. and recorded in
the New York County Register's Office on March 27, 1996, in Reel
2307, Page 1103.
2. Mortgage made by Downtown Acquisition Partners, L.P. to CS First Boston
Mortgage Capital Corp. in the amount of $18,500,000, dated as as of
March 22, 1996 and recorded on March 27, 1996 in the New York County
Register's Office in Reel 2307, Page 1110, upon which mortgage tax in
in the amount of $508,750 was paid and the note secured thereby ("17
Mortgage 2");
a. 17 Mortgage 1 and 17 Mortgage 2 were consolidated into a single
lien of $25,000,000 by that certain Mortgage Consolidation,
Modification, Extension, Assignment of Rents and Security Agreement
between Downtown Acquisition Partners, L.P. and CS First Boston
Mortgage Capital Corp. dated March 22, 1996 and recorded March 27,
1996 in Reel 2307, Page 1118.
b. 17 Mortgage 1 and 17 Mortgage 2, as consolidated, were assigned by
that certain Assignment of Mortgage by Credit Suisse First Boston
Mortgage Capital LLC, successor to CS First Boston Mortgage Capital
Corp., to The Chase Manhattan Bank ("Chase"), as trustee under that
certain Pool I Pooling and Servicing Agreement dated as of April
25, 1997 and recorded on June 6, 1997 in Reel 2463 Page 793.
c. 17 Mortgage 1 and 17 Mortgage 2, as consolidated and assigned by
Chase, were assigned to SL Green Operating Partnership, L.P. by
that certain Assignment of Mortgage dated December 19, 1997.
d. Partial Release of Mortgage by SL Green Operating Partnership, L.P.
to SLG 17 Battery LLC dated as of December 19, 1997
e. Modification and Splitter Agreement dated as of December 19, 1997
by and between SL Green Operating Partnership, L.P. and 17 Battery
Upper Partners LLC, which splits the lien of 17 Mortgage 1 and 17
Mortgage 2, as consolidated and assigned, into (i) a $15,500,000
mortgage (the "1/st/ Split Mortgage") and (ii) a $9,500,000
mortgage (the "2/nd/ Split Mortgage"), which 2/nd/ Split Mortgage
was assigned to G 17 Battery Partners LLC by that certain
Assignment of Mortgage dated as of December 19, 1997 and is
subordinate to the 1/st/ Split Mortgage pursuant to that certain
Intercreditor and Subordination Agreement dated as of December 19,
1997 between SL Green Operating Partnership, L.P. and G 17 Battery
Partners LLC.