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
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
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SECTION 2. AMOUNT AND TERMS OF FACILITY. . . . . . . . . . . . . . . 25
Section 2.01 Advances . . . . . . . . . . . . . . . . . . . . . . 25
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Section 2.02 Notice of Borrowing. . . . . . . . . . . . . . . . . 26
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Section 2.03 Disbursement of Funds. . . . . . . . . . . . . . . . 26
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Section 2.04 The Note . . . . . . . . . . . . . . . . . . . . . . 27
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Section 2.05 Interest. . . . . . . . . . . . . . . . . . . . . . . 27
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Section 2.06 Intentionally Deleted. . . . . . . . . . . . . . . . 28
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Section 2.07 Intentionally Deleted. . . . . . . . . . . . . . . . 28
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Section 2.08 Intentionally Deleted. . . . . . . . . . . . . . . . 28
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Section 2.09 Extension of Maturity Date. . . . . . . . . . . . . 28
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Section 2.10. Principal Payments. . . . . . . . . . . . . . . . . . 29
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Section 2.11 Voluntary Prepayments. . . . . . . . . . . . . . . . 29
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Section 2.12 Intentionally Deleted. . . . . . . . . . . . . . . . 29
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Section 2.13 Application of Payments and Prepayments. . . . . . . 29
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Section 2.14 Method and Place of Payment. . . . . . . . . . . . . 29
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Section 2.15 Intentionally Deleted. . . . . . . . . . . . . . . . 30
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Section 2.16 Interest Rate Unascertainable, Increased Costs,
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Illegality. . . . . . . . . . . . . . . . . . . . . . 30
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Section 2.17 Funding Losses. . . . . . . . . . . . . . . . . . . . 32
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Section 2.18 Increased Capital. . . . . . . . . . . . . . . . . . 32
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Section 2.19 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 2.20 Use of Proceeds and Limitations on Advances. . . . 34
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Section 2.21 Addition of 321 West 44/th/ Street . . . . . . . . . 35
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Section 2.22 Intentionally Deleted . . . . . . . . . . . . . . . . 37
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Section 2.23 Intentionally Deleted. . . . . . . . . . . . . . . . 37
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Section 2.24 Decision Making by Agent . . . . . . . . . . . . . . 37
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Section 2.25 Additional Assets . . . . . . . . . . . . . . . . . . 38
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Section 2.26 Pro Rata Interests . . . . . . . . . . . . . . . . . 38
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SECTION 3. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 39
Section 3.01 Conditions Precedent to Initial Advance . . . . . . . 39
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Section 3.02 Conditions Precedent to All Advances of the Loan. . . 44
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Section 3.03 Acceptance of Borrowings. . . . . . . . . . . . . . . 46
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Section 3.04 Sufficient Counterparts. . . . . . . . . . . . . . . 46
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SECTION 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 46
Section 4.01 Organizational Status. . . . . . . . . . . . . . . . 46
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Section 4.02 Power and Authority. . . . . . . . . . . . . . . . . 46
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Section 4.03 No Violation. . . . . . . . . . . . . . . . . . . . . 47
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Section 4.04 Litigation. . . . . . . . . . . . . . . . . . . . . . 47
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Section 4.05 Financial Statements: Financial Condition; etc. . . . 47
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Section 4.06 Solvency. . . . . . . . . . . . . . . . . . . . . . . 47
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Section 4.07 Material Adverse Change. . . . . . . . . . . . . . . 48
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Section 4.08 Use of Proceeds; Margin Regulations. . . . . . . . . 48
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Section 4.09 Governmental Approvals. . . . . . . . . . . . . . . . 48
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Section 4.10 Completed Repairs. . . . . . . . . . . . . . . . . . 48
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Section 4.11 Tax Returns and Payments. . . . . . . . . . . . . . . 48
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Section 4.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 48
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Section 4.13 Closing Date Transactions. . . . . . . . . . . . . . 49
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Section 4.14 Representations and Warranties in Loan Documents. . . 49
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Section 4.15 True and Complete Disclosure. . . . . . . . . . . . . 49
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Section 4.16 Ownership of Real Property Assets; Existing Security
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Instruments . . . . . . . . . . . . . . . . . . . . . 50
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Section 4.17 No Default. . . . . . . . . . . . . . . . . . . . . . 50
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Section 4.18 Licenses, etc. . . . . . . . . . . . . . . . . . . . 50
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Section 4.19 Compliance With Law. . . . . . . . . . . . . . . . . 51
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Section 4.20 Brokers . . . . . . . . . . . . . . . . . . . . . . . 51
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Section 4.21 Judgments . . . . . . . . . . . . . . . . . . . . . . 51
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Section 4.22 Property Manager . . . . . . . . . . . . . . . . . . 51
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Section 4.23 Assets of the REIT . . . . . . . . . . . . . . . . . 51
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Section 4.24 REIT Status . . . . . . . . . . . . . . . . . . . . . 52
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Section 4.25 Operations . . . . . . . . . . . . . . . . . . . . . 52
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Section 4.26 Stock . . . . . . . . . . . . . . . . . . . . . . . . 52
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Section 4.27 Ground Leases . . . . . . . . . . . . . . . . . . . . 52
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Section 4.28 Guarantors . . . . . . . . . . . . . . . . . . . . . 52
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Section 4.29 Status of Property . . . . . . . . . . . . . . . . . 52
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Section 4.30 Survival . . . . . . . . . . . . . . . . . . . . . . 55
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SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . 55
Section 5.01 Financial Reports . . . . . . . . . . . . . . . . . . 55
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Section 5.02 Books, Records and Inspections . . . . . . . . . . . 58
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Section 5.03 Maintenance of Insurance. . . . . . . . . . . . . . . 58
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Section 5.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 62
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Section 5.05 Corporate Franchises; Conduct of Business . . . . . . 62
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Section 5.06 Compliance with Law. . . . . . . . . . . . . . . . . 63
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Section 5.07 Performance of Obligations. . . . . . . . . . . . . . 63
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Section 5.08 Stock . . . . . . . . . . . . . . . . . . . . . . . . 63
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Section 5.09 Change in Rating . . . . . . . . . . . . . . . . . . 63
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Section 5.10 Maintenance of Properties. . . . . . . . . . . . . . 63
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Section 5.11 Compliance with ERISA. . . . . . . . . . . . . . . . 63
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Section 5.12 Settlement/Judgment Notice . . . . . . . . . . . . . 65
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Section 5.13 Acceleration Notice . . . . . . . . . . . . . . . . . 65
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Section 5.14 Intentionally Deleted. . . . . . . . . . . . . . . . 65
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Section 5.15 Intentionally Deleted. . . . . . . . . . . . . . . . 65
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Section 5.16 Intentionally Deleted. . . . . . . . . . . . . . . . 65
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Section 5.17 Intentionally Deleted. . . . . . . . . . . . . . . . 65
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Section 5.18 Intentionally Deleted. . . . . . . . . . . . . . . . 65
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Section 5.19 Intentionally Deleted. . . . . . . . . . . . . . . . 65
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Section 5.20 Intentionally Deleted . . . . . . . . . . . . . . . . 65
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Section 5.21 Manager . . . . . . . . . . . . . . . . . . . . . . . 65
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Section 5.22 Further Assurances . . . . . . . . . . . . . . . . . 65
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Section 5.23 REIT Status . . . . . . . . . . . . . . . . . . . . . 66
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Section 5.24 Additional Covenants . . . . . . . . . . . . . . . . 66
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Section 5.25 Intentionally Deleted. . . . . . . . . . . . . . . . 66
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Section 5.26 Keep Well Covenants. . . . . . . . . . . . . . . . . 66
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Section 5.27 Existing Environmental Conditions, Required Repairs and
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Preparation of Environmental Reports . . . . . . . . 66
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Section 5.28 Intentionally Deleted. . . . . . . . . . . . . . . . 67
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Section 5.29 Compliance with Terms of Leaseholds . . . . . . . . . 67
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Section 5.30 Equity or Debt Offerings . . . . . . . . . . . . . . 67
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Section 5.31 Notice of Certain Events . . . . . . . . . . . . . . 68
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Section 5.32 17 Battery Place Condominium . . . . . . . . . . . . 68
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SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . 68
Section 6.01 Bar Building and 17 Battery Place. . . . . . . . . . 68
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Section 6.02 Intentionally Deleted . . . . . . . . . . . . . . . . 68
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Section 6.03 Liens. . . . . . . . . . . . . . . . . . . . . . . . 68
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Section 6.04 Restriction on Fundamental Changes. . . . . . . . . . 69
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Section 6.05 Transactions with Affiliates. . . . . . . . . . . . . 69
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Section 6.06 Plans. . . . . . . . . . . . . . . . . . . . . . . . 69
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Section 6.07 Distributions . . . . . . . . . . . . . . . . . . . . 70
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Section 6.08 Tenant Concentration . . . . . . . . . . . . . . . . 70
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Section 6.09 Restriction on Indebtedness . . . . . . . . . . . . . 70
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Section 6.10 Real Property Assets . . . . . . . . . . . . . . . . 70
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Section 6.11 Intentionally Deleted. . . . . . . . . . . . . . . . 71
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Section 6.12 Organizational Documents . . . . . . . . . . . . . . 71
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Section 6.13 Intentionally Deleted . . . . . . . . . . . . . . . . 71
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Section 6.14 Intentionally Deleted . . . . . . . . . . . . . . . . 71
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Section 6.15 Restrictions on Investments . . . . . . . . . . . . . 71
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SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . 72
Section 7.01 Events of Default. . . . . . . . . . . . . . . . . . 72
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Section 7.02 Rights and Remedies. . . . . . . . . . . . . . . . . 75
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SECTION 8. INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . 76
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 76
Section 9.01 Payment of Agent's and Syndication Agent's Expenses,
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Indemnity, etc . . . . . . . . . . . . . . . . . . . 76
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Section 9.02 Notices. . . . . . . . . . . . . . . . . . . . . . . 77
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Section 9.03 Successors and Assigns . . . . . . . . . . . . . . . 79
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Section 9.04 Amendments and Waivers. . . . . . . . . . . . . . . . 79
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Section 9.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . 80
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Section 9.06 Governing Law; Submission to Jurisdiction. . . . . . 80
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Section 9.07 Confidentiality Disclosure of Information. . . . . . 80
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Section 9.08. Recourse . . . . . . . . . . . . . . . . . . . . . . 81
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Section 9.09. Sale of Loan, Co-Lenders, Participations and
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Servicing . . . . . . . . . . . . . . . . . . . . . . 81
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Section 9.10 Borrower's and the REIT's Assignment. . . . . . . . . 84
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Section 9.11 Counterparts. . . . . . . . . . . . . . . . . . . . . 84
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Section 9.12 Effectiveness. . . . . . . . . . . . . . . . . . . . 84
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Section 9.13 Headings Descriptive. . . . . . . . . . . . . . . . . 84
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Section 9.14 Marshaling; Recapture. . . . . . . . . . . . . . . . 84
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Section 9.15 Severability. . . . . . . . . . . . . . . . . . . . . 85
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Section 9.16 Survival. . . . . . . . . . . . . . . . . . . . . . . 85
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Section 9.17 Domicile of Loan Portions. . . . . . . . . . . . . . 85
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Section 9.18 Intentionally Deleted. . . . . . . . . . . . . . . . 85
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Section 9.19 Calculations; Computations . . . . . . . . . . . . . 85
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Section 9.20 WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . 85
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Section 9.21 No Joint Venture . . . . . . . . . . . . . . . . . . 85
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Section 9.22 Estoppel Certificates. . . . . . . . . . . . . . . . 85
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Section 9.23 No Other Agreements. . . . . . . . . . . . . . . . . 86
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Section 9.24 Controlling Document. . . . . . . . . . . . . . . . . 86
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Section 9.25 No Benefit to Third Parties. . . . . . . . . . . . . 86
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Section 9.26 Joint and Several. . . . . . . . . . . . . . . . . . 87
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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
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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,
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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
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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
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Loan.
"Affiliate" shall mean, with reference to a specified Person, any
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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
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of this Agreement and in Section 9.09(e).
"Agreement" shall mean this Loan Agreement as the same may from
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time to time hereafter be modified, supplemented or amended.
"Agreement of Sale" means that certain Amended and Restated
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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
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Section 5.01.
"Applicable Laws" shall mean all existing and future federal,
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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
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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,
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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,
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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
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Section 9.09.
"Assignment of Leases and Rents" shall mean that certain blanket
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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
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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
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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
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Building Loan Documents .
"Bar Building Event of Default" shall mean a "Forbearance
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Termination Default", as such term is defined under the Settlement
Agreement.
"Bar Building Loan Documents" shall mean the Bar Building Notes,
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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
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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
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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
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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
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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
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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
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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
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being maintained at a rate of interest based upon the Base Rate.
"Best" shall mean A.M. Best Company, Inc.
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"Book Value" shall mean, with respect to any asset of any Person,
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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
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of this Agreement and any successor Borrower expressly permitted hereunder.
"Borrowing" shall mean a borrowing of one Type of Advance from
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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
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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,
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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
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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
----------------------
<TABLE>
<CAPTION>
Outstanding Principal Balance of the Loan
Time Period Less than $240,000,000 $240,000,000 or more but less $260,000,000 or more
than $260,000,000
<S> <C> <C> <C>
March __, 1998 to June ____, 1.7% 2.0% 2.25%
1998
June ___, 1998 to September ___, 2.0% 2.25% 2.5%
1998
After September ___, 1998 2.5% 2.75% 3.0%
</TABLE>
The Eurodollar Rate Margin for the Eurodollar Rate Portions shall
be determined by reference to the matrix above, and any change in the
Eurodollar Rate Margin shall be effective immediately upon the date of a
change in the outstanding principal balance of the Loan or the applicable
time period as set forth the matrix above.
"Event of Default" shall have the meaning provided in Section 7.
----------------
"Existing Mortgage Debt" shall mean those certain existing
----------------------
mortgages, as more particularly described on Schedule 17 attached hereto as
the same may be modified, amended or supplemented, which Existing Mortgage
Debt encumbers 673 First Avenue, 50 West 23/rd/ Street, 470 Park Avenue South
and 29 West 35th Street.
"Extension Fee" shall mean a non-refundable fee equal to 0.375% of
-------------
the amount outstanding under the Loan.
"Facility Amount" shall initially mean U.S. $275,000,000.00, as
---------------
such amount may be reduced pursuant to Section 2.11 or otherwise pursuant to
the terms and conditions of this Agreement.
"Federal Reserve Board" shall mean the Board of Governors of the
---------------------
Federal Reserve System as constituted from time to time, or any successor
thereto in function.
"Fees" shall mean all amounts payable pursuant to Sections 2.09,
----
2.15, 2.17 and 9.01.
"Fee Letter" shall mean that certain letter agreement between
----------
Borrower, the REIT and Lehman dated the date hereof.
"Financial Covenants" shall mean Sections 6.07, 6.08 and 6.09.
-------------------
"FIRREA" means the Financial Institutions Reform, Recovery and
------
Enforcement Act of 1989, as amended from time to time.
"Funding Costs" shall have the meaning provided in Section 2.17.
-------------
"Funds from Operations" shall mean consolidated net income (loss)
---------------------
before extraordinary items, computed in accordance with GAAP, plus, to the
extent deducted in determining net income (loss) and without duplication, (i)
gains (or losses) from debt restructuring and sales of property (or
adjustments to basis of properties or other assets), (ii) non-recurring
charges, (iii) provisions for losses, (iv) real estate related depreciation,
amortization and other non-cash charges (excluding amortization of financing
costs), and (v) amortization of organizational expenses minus, to the extent
included in net income (loss) and without duplication, (a) non-recurring
income and (b) equity income (loss) from unconsolidated partnerships and
joint ventures less the proportionate share of funds from operations of such
partnerships and joint ventures, which adjustments shall be calculated on a
consistent basis.
"Furnished Information" shall have the meaning provided in Section
---------------------
4.15.
"GAAP" shall mean United States generally accepted accounting
----
principles on the date hereof and as in effect from time to time during the
term of this Agreement, and consistent with those utilized in the preparation
of the financial statements referred to in Section 4.05.
"Graybar Building" shall mean that real property located at 420
----------------
Lexington Avenue, New York, New York.
"Graybar Leases" shall mean all those ground leases, as the same
--------------
may be assigned and/or amended, affecting the Graybar Building as further
described on Schedule 18
"Graybar Operating Lease" shall mean that certain Operating
-----------------------
Sublease dated June 1, 1964 between Precision Dynamics Corporation (now New
York Graybar Lease L.P.), as sub-sublandlord, and Harry D. Helmsley d/b/a/
Graybar Building Company as sub-subtenant, as sub-subtenant's interest has
been assigned to SLG Graybar LLC
"Ground Lease" shall mean those ground leases described on Schedule
------------
10 and any other ground lease that complies with the provisions set forth in
Section 4.27.
"Ground Lease Estoppel" shall have the meaning provided in Section
---------------------
3.01(a)(xi).
"Guarantor" shall mean the Loan Parties identified on Schedule 14
---------
and each owner, other than the Borrower and the REIT, of a Mortgaged Asset.
"Guaranty" shall mean a Guaranty of Payment in substantially in
--------
form as attached hereto as Exhibit "I".
----------
"Hazardous Substances" shall have the meaning provided in the
--------------------
Environmental Indemnity.
"Improvements" shall mean any building, structure, fixture,
------------
addition, enlargement, extension, modification, repair, replacement or
improvement now or hereafter located or erected on any Real Property Asset.
"Increased Capital Costs" shall have the meaning provided in
-----------------------
Section 2.18.
"Indebtedness" of any Person shall mean, without duplication, (i)
------------
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (ii) all indebtedness of such Person
evidenced by a note, bond, debenture or similar instrument, (iii) the
outstanding undrawn amount of all letters of credit issued for the account of
such Person and, without duplication, all un-reimbursed amounts drawn
thereunder, (iv) all indebtedness of any other person or entity secured by
any Lien on any property owned by such Person, whether or not such
indebtedness has been assumed, (v) all Contingent Obligations of such Person,
(vi) all Unfunded Benefit Liabilities of such Person, (vii) all payment
obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors,
collars and similar agreements) and currency swaps and similar agreements,
(viii) all indebtedness and liabilities of such Person secured by any Lien or
mortgage on any property of such Person, whether or not the same would be
classified as a liability on a balance sheet, (ix) the liability of such
Person in respect of banker's acceptances and the estimated liability under
any participating mortgage, convertible mortgage or similar arrangement, (x)
the aggregate principal amount of rentals or other consideration payable by
such Person in accordance with GAAP over the remaining unexpired term of all
Capitalized Leases of such Person, (xi) all judgments or decrees by a court
or courts or competent jurisdiction entered against such Person, (xii) all
indebtedness, payment obligations, contingent obligations, etc. of any
partnership in which such Person holds a general partnership interest,
provided that if such indebtedness is non-recourse, only the portion of such
indebtedness equal to such Person's percentage ownership interest in such
partnership shall be included in this definition, (xiii) all convertible debt
and subordinated debt owed by such Person, (xiv) all Preferred OP Units (if
any) and preferred stock issued by such Person that, in either case, are
redeemable for cash on a mandatory basis, a cash equivalent, a note
receivable or similar instrument or are convertible on a mandatory basis to
Indebtedness as defined herein (other than Indebtedness described in clauses
(iii), (vi), (x), (xi) or (xiv) of this definition), and (xv) all
obligations, liabilities, reserves and any other items which are listed as a
liability on a balance sheet of such Person determined on a consolidated
basis in accordance with GAAP, but excluding (A) all general contingency
reserves and reserves for deferred income taxes and investment credit and (B)
all customary trade payables and accrued expenses not more than sixty (60)
days past due and (C) any indebtedness of such Person evidenced by a note or
notes that is secured by a pledge of cash or Cash Equivalents with a value
equal to or greater than the amount of the related indebtedness and which
generates cash flow sufficient to pay all sums due on such indebtedness when
the same are due and payable.
"Indemnitee" shall have the meaning provided in Section 9.01(c).
----------
"Initial Advance" shall mean that certain Advance on the date
---------------
hereof in the principal amount of $225,459,896.05; which Initial Advance
shall be comprised of $107,613,915.30 in outstanding indebtedness under the
Interim Loan Agreement, as the Interim Loan Agreement is amended and restated
in its entirety pursuant to the provisions hereof, and $117,845,980.75 in new
indebtedness.
"Intercreditor Agreement" shall have the meaning provided in
-----------------------
Section 9.04.
"Interest Period" shall mean for any Eurodollar Portion, a one
---------------
month period commencing on the date of the making of any Advance (including
the date of any conversion from the Base Rate Portion) and each Interest
Period occurring thereafter in respect of such Eurodollar Portion shall
commence on the date next succeeding the date on which the next preceding
Interest Period expires. If any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day. If any Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month. No Interest Period in respect of any
Eurodollar Portion shall extend beyond the Maturity Date.
"Interim Loan Agreement" shall mean that certain Loan Agreement
----------------------
dated as of August 20, 1997, as amended by that certain First Modification of
Loan Agreement and Collateral Account Agreement dated as of September 15,
1997, each between the Partnership, New Green 1140 Realty LLC ("1140 LLC"),
the REIT and Agent and as further amended by Letter Agreements dated
September 20, 1997, September 29, 1997, and October 20, 1997, between the
Partnership, the REIT, 1140 LLC and Agent, and that certain Second
Modification of Loan Agreement and Collateral Account Agreement dated
December 17, 1997, between the Partnership, the REIT, 1140 LLC, 50W23 LLC and
Agent, and as further amended by that certain Third Modification of Loan
Agreement and Collateral Account Agreement dated as of December 29, 1997,
between the Partnership, the REIT, 50W23 LLC and Agent and that certain
Fourth Modification of Loan Agreement and Collateral Account Agreement dated
as of January 13, 1998, between the Partnership, the REIT, 50W23 LLC and
Agent.
"Investment Grade Tenant" shall mean any te- or better as assigned
-----------------------
by S&P or Baa3 or better as assigned by Moody's.
"Leases" shall mean all leases and other agreements, whether or not
------
in writing, to which an owner of a Real Property Asset is a party or by which
such owner is bound, pursuant to which a Person is permitted to use, enjoy or
occupy all or any portion of any Real Property Asset, whether heretofore or
hereafter entered into.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, collateral assignment, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
effect as any of the foregoing, inchoate liens arising under ERISA to secure
the Contingent Liabilities of Borrower, the REIT, or any Loan Party, and the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction, domestic or foreign in
connection with the creation of a security interest.
"Loan" shall mean, in the aggregate, the then outstanding and
----
unpaid Advances made to Borrower under this Agreement and the Note pursuant
to the terms hereof, the aggregate outstanding principal amount of which
shall not exceed at any time the Facility Amount.
"Loan Documents" shall mean this Agreement, the Note, the Security
--------------
Instruments, the Environmental Indemnity, the Assignment of Leases and
Rents, the Subordination of Management Agreement, the Ground Lease Estoppel,
the Pledge Agreement, each estoppel certificate, each UCC Financing Statement
filed in connection herewith, subordination, attornment and non-disturbance
agreements, the Intercreditor Agreement and any other documents or
instruments evidencing, securing or guaranteeing the Loan.
"Loan Party" shall mean, individually and collectively, as the
----------
context requires, Borrower, the REIT, each Guarantor, and the general
partners of Borrower if Borrower is a limited partnership, and the managing
members of Borrower if Borrower is a limited liability company.
"Loan Portion" shall mean the Base Rate Portion and each Eurodollar
------------
Portion of the Loan.
"Majority Co-Lenders" shall have the meaning provided in the
-------------------
Intercreditor Agreement, provided that prior to Syndication, it shall mean
the Lender. With respect to the provisions of this Agreement requiring the
consent, approval, disapproval or determination of the Majority Co-Lenders,
each Current Co-Lender's Pro Rata Interest shall be used as the means of
calculating the Majority Co-Lenders and the term "Majority Co-Lenders" shall
mean those Current Co-Lenders whose Pro Rata Interests, at any time, in the
aggregate, is equal to or greater than the percentage prescribed in
Intercreditor Agreement based solely on the aggregate owned by all Current
Co-Lenders; the Pro Rata Interests in the Loan of Defaulting Co-Lenders shall
not be taken into account in the calculation of the Majority Co-Lenders.
"Management Agreements" shall mean those management agreements
---------------------
described on Schedule 15, and any subsequent management agreements entered
into pursuant to Section 5.21.
"Manager" shall mean SL Green Management LLC or another wholly
-------
owned Affiliate or Subsidiary of Borrower.
"Margin Stock" shall have the meaning provided such term in
------------
Regulation U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean any condition which has a
-----------------------
material adverse effect upon (i) the business, operations, properties, assets
or condition (financial or otherwise) of Borrower or the REIT or any of the
Loan Parties, taken as a whole, or (ii) the ability of Borrower or the REIT
or the Loan Parties to perform, or of Agent, or any Co-Lender to enforce, any
of the Obligations.
"Maturity Date" shall mean March 17, 1999, as such date may be
-------------
extended pursuant to Section 2.09(b) or such earlier date on which the
principal balance of the Loan and all other sums due in connection with the
Loan shall be due as a result of the acceleration of the Loan.
"Maximum Legal Rate" shall mean the maximum nonusurious interest
------------------
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness evidenced by the
Note and as provided for herein or the other Loan Documents, under the laws
of such state or states whose laws are held by any court of competent
jurisdiction to govern the interest rate provisions of the Loan.
"Minimum Capital Expenditure Reserves" shall mean, for any Real
------------------------------------
Property Asset, $0.40 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Minimum Leasing Commission Reserves" shall mean for any Real
-----------------------------------
Property Asset, $0.51 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Minimum Management Fees" shall mean three percent (3%) of Rents
-----------------------
from the related Real Property Asset for the three (3) month period
immediately preceding the calculation.
"Minimum Reserves" shall mean the sum of Minimum Capital
----------------
Expenditure Reserves, Minimum Tenant Improvement Reserves and Minimum Leasing
Commission Reserves.
"Minimum Tenant Improvement Reserves" shall mean for any Real
-----------------------------------
Property Asset, $1.78 per net rentable square foot of such Real Property
Asset per annum, or, for any shorter period, such amount multiplied by a
fraction the numerator of which is the length of the applicable period in
months (or portions thereof) and the denominator of which is 12.
"Moody's" shall mean Moody's Investor Service, Inc.
-------
"Mortgaged Assets" shall mean the real property listed on Schedule
----------------
1 attached hereto and made a part hereof. Borrower's interest in the Graybar
Building, including, without limitation, Borrower's interest (if any) in the
Graybar Leases, if any, and the Graybar Operating Lease, shall be deemed a
Mortgaged Assets notwithstanding the fact that they are not encumbered by the
Lien of the Security Instrument.
"Multiemployer Plan" shall mean a Plan which is a "multiemployer
------------------
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Operating Income" shall mean, with respect to any Real
--------------------
Property Asset, for the period of determination, the Rents derived from the
customary operation of such Real Property Asset, less Operating Expenses
attributable to such Real Property Asset, and shall include only the sum of
(i) the Rents received or expected to be received, and earned in accordance
with GAAP, pursuant to Leases in place under which the tenant is in occupancy
of the premises demised thereunder (unless such tenant has not taken
occupancy due to tenant improvement work or tenant build-out that is not the
subject of dispute and is not yet completed) on the date of such calculation
and under which Tenant is on a full rent paying basis and is not more than
thirty (30) days delinquent in such rent payments, plus (ii) other income
actually received and earned in accordance with GAAP with respect to such
Real Property Asset, plus (iii) rent loss or business interruption insurance
proceeds received or expected to be received during or relating to such
period due to a casualty that has occurred prior to the date of calculation
plus (iv) parking or other income, less Operating Expenses actually paid or
payable on an accrual basis in accordance with GAAP attributable to such Real
Property Asset during such period, as set forth on operating statements and
schedules reasonably satisfactory to Agent. Net Operating Income shall be
calculated in accordance with customary accounting principles applicable to
real estate. Notwithstanding the foregoing, Net Operating Income shall not
include (i) any condemnation or insurance proceeds (excluding rent loss or
business interruption insurance proceeds as described above), (ii) any
proceeds resulting from the sale, exchange, transfer, financing or
refinancing of all or any portion of the Real Property Asset for which it is
to be determined, (iii) amounts received from tenants as security deposits
unless actually applied toward the payment of rent or additional rent in
accordance with the terms of such tenant's lease, (iv) interest income and
(v) any type of income otherwise included in Net Operating Income but paid
directly by any tenant to a Person other than Borrower or a Loan Party or its
agents or representatives.
"Net Worth" shall mean, with respect to a Person, consolidated net
---------
worth as calculated in accordance with GAAP.
"New Manager" shall have the meaning provided in Section 5.21.
-----------
"Note" shall have the meaning provided in Section 2.04.
----
"Notice of Borrowing" shall have the meaning provided in Section
-------------------
2.02.
"Obligations" shall mean all payment, performance and other
-----------
obligations, liabilities and indebtedness of every nature of (i) Borrower and
the REIT from time to time owing to Agent or any Co-Lender under or in
connection with this Agreement or any other Loan Document, or (ii) the REIT
and the other Loan Parties under or in connection with the Guaranty or any
other Loan Documents.
"110 E. 42nd Street" shall mean that certain Real Property Asset
------------------
located at 110 E. 42nd Street, New York, New York.
"Operating Entities" shall mean those partnership or limited
------------------
liability companies set forth on Schedule 3, as such Schedule may be amended
or supplemented from time to time, and any partnership or limited liability
company, in which the Borrower or the REIT, own singly or together, a
majority or all of the economic interest therein and either the Borrower or
the REIT, either directly or indirectly, is the sole managing general partner
or sole managing member.
"Operating Expenses" shall mean, with respect to any Real Property
------------------
Asset, for any given period (and shall include the pro rata portion for such
period of all such expenses attributable to, but not paid during, such
period), all out-of-pocket expenses to be paid or payable, as determined in
accordance with GAAP, by Borrower, the REIT or the applicable Loan Party
during that period in connection with the operation of such Real Property
Asset for which it is to be determined, including without limitation and
without duplication:
(i) expenses for cleaning, repair, maintenance, decoration and
painting of the such Real Property Asset (including, without limitation,
parking lots and roadways), net of any insurance proceeds in respect of
any of the foregoing;
(ii) wages (including overtime payments), benefits, payroll taxes
and all other related expenses for Borrower's, the REIT's or other Loan
Party's on-site personnel, up to and including (but not above) the level
of the on-site manager, engaged in the repair, operation and maintenance
of such Real Property Asset and service to tenants and on-site personnel
engaged in audit and accounting functions performed by Borrower, the
REIT or the applicable Loan Party;
(iii) management fees pursuant to the Management Agreement, but
in no event less than the Minimum Management Fees. Such fees shall
include all fees for management services whether such services are
performed at such Real Property Asset or off-site;
(iv) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, utility or similar
item and the cost of building and cleaning supplies;
(v) the cost of any leasing commissions and tenant concessions or
improvements payable by Borrower, the REIT or any Loan Party pursuant to
any leases which are in effect for such Real Property Asset at the
commencement of that period as such costs are recognized in accordance
with GAAP, but in no event less than the Minimum Leasing Commission
Reserves and Minimum Tenant Improvement Reserves with respect to such
period, respectively;
(vi) rent, liability, casualty, fidelity, errors and omissions,
liability, workmen's compensation and other insurance premiums;
(vii) legal, accounting and other professional fees and
expenses;
(viii) the cost of all equipment to be used in the ordinary
course of business, which is not capitalized in accordance with GAAP.
(ix) real estate, personal property and other taxes;
(x) advertising and other marketing costs and expenses;
(xi) the Minimum Capital Expenditure Reserves;
(xii) casualty losses to the extent not reimbursed by an
independent third party; and
(xiii) if applicable, all common area charges, maintenance
charges and other assessments or charges under any condominium regime.
Notwithstanding the foregoing, Operating Expenses shall not include (i)
depreciation or amortization or any other non-cash item of expense; (ii)
interest, principal, fees, costs and expense reimbursements of Agent and the
Co-Lenders in administering the Loan; or (iii) any expenditure (other than
leasing commissions, tenant improvement costs and replacement reserves as
described above) which is properly treatable as a capital item under GAAP.
"OP Units" shall mean the Common OP Units and the Preferred OP
--------
Units.
"Other Assets" shall mean all Assets of a Person that are not Real
------------
Property Assets.
"Participant" shall have the meaning provided in Section 9.09(i).
-----------
"PBGC" shall mean the Pension Benefit Guaranty Corporation
----
established under ERISA, or any successor thereto.
"Permitted Investments" shall mean, at any time, (a) fee simple or
---------------------
leasehold interests (which comply with the requirements of Section 4.27)
owned entirely by the Borrower in real property located in the borough of
Manhattan, City of New York, New York and improved by fully operational Class
B or better office buildings, provided however, that fifteen percent (15%) of
the Total Value of such Assets may be real property located outside of the
borough of Manhattan, and (b) all of the categories of investments, as
limited individually as a percentage of the Total Value of all of Borrower's
consolidated Assets in the table below, which, when combined, shall be not
in excess of the lesser of (i) thirty percent (30%) of Borrower's Net Worth
as of the date of calculation, and (ii) fifteen percent (15%) of the Total
Value of all of Borrower's consolidated Assets as of the date of calculation:
<TABLE>
<CAPTION>
Permitted Investment
Maximum percentage of
Total Value of
Borrower's
<S> <C>
Mortgages, deeds of trust, deeds to secure debt or similar instruments or receivables that are a
Lien on real property which are improved by fully operational Class B or better office buildings and 15%
secure indebtedness evidenced by a note or bond (excluding the Bar Building Mortgages)
Partnerships or limited liability companies in which the Borrower owns a majority of the economic
interest and the Borrower, either directly or indirectly, is the sole managing general partner or
the sole managing member and which partnership or limited liability company primarily owns real 15%
properties which are improved by fully operational Class B or better office buildings, and further,
that the Borrower or a Subsidiary thereof is both the managing agent and leasing agent of such
properties.
Partnerships or limited liability companies in which the Borrower either (a) owns less than a
majority of the economic interest and/or (b) is the not the sole managing general partner and/or (c)
is not the sole managing member, but is the both the managing and leasing agent (either directly or 10%
indirectly) and which partnership or limited liability company primarily owns real properties which
are improved by fully operational Class B or better office buildings
</TABLE>
For purposes of calculating the foregoing: (A) the amount of each
Permitted Investment will be deemed to be the Book Value of such Asset; and
(B) partnerships and limited liability companies for purposes of determining
Permitted Investments shall not include partnerships and limited liability
companies that are wholly owned and controlled by the Partnership, either
directly or indirectly. Undeveloped land and land that is then being
developed are also not Permitted Investments. In addition, Permitted
Investments which relate to investments in (1) direct fee or leasehold
interests on, (2) mortgages or other security instruments on, or (3)
interests in entities owning, real property not located in the borough of
Manhattan, City of New York, New York, shall not in the aggregate exceed,
without duplication, fifteen percent (15%) of the Total Value of Borrower's
consolidated Assets. Notwithstanding the foregoing, the Borrower's
investment in (x) the 17 Battery Place Mortgage shall be deemed a Permitted
Investment, and (y) SLG 17 Battery LLC's tenancy-in-common interest in 17
Battery Place, as more fully described in Schedule 13, shall be deemed a
Permitted Investment, notwithstanding that in each case it may otherwise
breach the limitations set forth above with respect to the maximum percentage
of Borrower's Net Worth and Total Value of Borrower's consolidated Assets;
provided, however, that the Permitted Investment limitations set forth above
shall be deemed to have been utilized due to the 17 Battery Place Mortgage
and tenancy-in-common interest, and any further investments in mortgages and
partnership interests, shall be subject to the Permitted Investment
limitations after consideration of the inclusion of the 17 Battery Place
Mortgage and tenancy-in-common interests. Any modification, waiver or
amendment of the limitations on Permitted Investments set forth above shall
be subject to the consent or approval of the Majority Co-Lenders.
"Permitted Liens" shall have the meaning provided in Section 6.03.
---------------
"Person" shall mean and include any individual, partnership, joint
------
venture, firm, corporation, limited liability company, association, company,
trust or other enterprise or any government or political subdivision or
agency, department or instrumentality thereof.
"Plan" means any employee benefit plan subject to the provisions
----
of Title IV of ERISA or which is subject to the provisions of Section 412 of
the Code or Section 302 of ERISA, for which Borrower, any other Loan Party or
any member of either of their ERISA Controlled Group has any obligation or
liability, or potential obligation or liability, whether direct or indirect.
"Plan Asset Entity" shall mean any "employee benefit plan" as
-----------------
defined in ERISA, any "plan" as defined in Section 4975 of the Code, and any
entity any portion or all of the assets of which are deemed pursuant to
United States Department of Labor Regulation Section 2510.3-101 or otherwise
pursuant to ERISA or the Code to be, for any purpose of ERISA or Section 4975
of the Code, assets of any such "employee benefit plan" or "plan" which
invests in such entity.
"Pledge Agreement" shall mean that certain Pledge Agreement dated
----------------
the date hereof given by the Partnership to Agent as a Co-Lender and
Syndication Agent.
"Policies" shall have the meaning provided in Section 5.03(c).
--------
"Post-Closing Repairs" shall have the meaning provided in Section
--------------------
5.27(b).
"Preferred OP Units" shall mean those limited partnership interests
------------------
(if any) in the Partnership having a priority or preferred status (relative
to all other limited partnership interests in the Partnership) with respect
to distributions or returns of the holders of such units.
"Pro Rata Interest" shall mean the proportionate share of each Co
-----------------
Lender in the Loan, this Agreement, the other Loan Documents and the
obligations to make Advances pursuant to the terms of this Agreement.
Notwithstanding the foregoing, with respect to any approvals, consents or
determinations that are to be made by the Majority Co-Lenders, Pro Rata
Interest shall mean, with respect to each Current Co-Lender, a percentage
equal to the amount of the Loan owned by such Current Co-Lender divided by
the aggregate amount of the Loan owned by all of the Current Co-Lenders,
multiplied by 100.
"Purchase Price" shall mean, with respect to any Real Property
--------------
Asset, the actual purchase price paid for the Real Property Asset, including
the actual outstanding principal balance of any mortgage liens to which title
was taken subject or were granted to an independent third party lender or to
the seller to finance the purchase of such Real Property Asset only, but
excluding all closing costs, (e.g., transfer taxes, mortgage taxes, title
insurance premiums) and excluding all closing adjustments.
"Qualifying Insurer" shall have the meaning provided in Section
------------------
5.03(c).
"Quarter" shall mean a period of ninety (90) days.
-------
"Rating Agencies" shall mean both Standard & Poor's Rating Services
---------------
and Moody's Investor Service, Inc. If either of such agencies discontinue
its rating of Borrower or the REIT or its ratings of real estate investment
trusts generally, Agent and the Majority Co-Lenders shall, within six (6)
months of such discontinuance, agree upon another nationally recognized
statistical ratings agency that assigns a rating to Borrower and the REIT
("Substitute Rating Agency"), and the term Rating Agencies shall include such
Substitute Rating Agency. During any time that only one Rating Agency is
assigning a rating to Borrower and the REIT, that agency's rating shall be
used for all calculations under this Agreement.
"REIT" shall have the meaning set forth in the opening paragraph
----
of this Agreement.
"Real Property Assets" shall mean the real property set forth on
--------------------
Schedules 2A and 2B, as such Schedules may be amended or supplemented from
time to time, and all real property owned, directly or indirectly, wholly or
partly, by Borrower, the REIT, any Operating Entity or any other Loan Party
(including, without limitation, all Mortgaged Assets), subject to the
conditions of Sections 6.10.
"Recourse Indebtedness" of any Person means all Indebtedness of
---------------------
such Person and its Subsidiaries for which recourse for payment may be made
against such Person for the obligations secured thereunder. For purposes of
this definition, if only a portion of such Indebtedness is recourse to such
Person the entire amount of such Indebtedness shall be deemed to be Recourse
Indebtedness.
"Register" shall have the meaning provided in Section 9.09.
--------
"Regulation D" shall mean Regulation D of the Federal Reserve Board
------------
as from time to time in effect and any successor to all or any portion
thereof.
"Rents" shall mean all income, rents, additional rents, revenues,
-----
issues and profits (including all oil and gas or other mineral royalties and
bonuses) and all pass-throughs and tenant's required contributions for taxes,
insurance, maintenance costs, utilities, tenant improvements, leasing
commissions, capital expenditures and other items accrued to Borrower or any
Loan Party from the Real Property Assets (other than tenant security
deposits).
"Reportable Event" has the meaning set forth in Section 4043(c)(3),
----------------
(5), (6) or (13) of ERISA (other than a Reportable Event as to which the
provision of 30 days' notice to the PBGC is waived under applicable
regulations).
"Responsible Officer" means the Chairman of the Board, President,
-------------------
the Chief Operating Officer, the Chief Financial Officer, the Chief Executive
Officer, the Executive Vice President or the Senior Vice President-Finance of
the REIT.
"Restoration" shall have the meaning provided in Section 5.03(h).
-----------
"S&P" shall mean Standard & Poor's Rating Services.
---
"Scheduled Payment Date" shall mean the first Business Day of each
----------------------
calendar month.
"Security Instrument" shall mean that certain duly recorded blanket
-------------------
mortgage, mortgage deed, deed of trust, trust deed, security deed, deed to
secure debt or other real estate security instrument of even date herewith
given by Borrower and the REIT to Agent as Co-Lender and Syndication Agent,
constituting a valid first mortgage lien on the good and marketable fee
simple absolute and leasehold title, as applicable, to the Mortgaged Assets,
subject to no other liens or encumbrances other than those as shall be
approved by Agent and its counsel.
"17 Battery Place" shall mean that certain Real Property Asset
----------------
located at 17 Battery Place, New York, New York.
"17 Battery Place Cash Collateral Agreement" means that certain
------------------------------------------
Cash Collateral Agreement dated December 19, 1997 between 17 Battery Upper
Partners and SLG 17 Battery LLC.
"17 Battery Place Mortgage" means that certain mortgage dated
-------------------------
December 19, 1997 in the principal amount of $15,500,000.00 granted by 17
Battery Upper Partners to Borrower on 17 Battery Upper Partner's tenancy-in-
common interest in 17 Battery Place, together with the note or notes secured
thereby.
"17 Battery Place Tenancy Agreement" shall mean that certain
----------------------------------
tenancy-in-common agreement dated December 19, 1997 between SLG 17 Battery
LLC and 17 Battery Upper Partners with respect to 17 Battery Place.
"17 Battery Place Transaction Documents" means the 17 Battery Place
--------------------------------------
Tenancy Agreement, the 17 Battery Place Mortgage, the Agreement of Sale, the
17 Battery Place Cash Collateral Agreement and other documents evidencing,
guaranteeing or securing the obligations under the foregoing documents.
"17 Battery Upper Partners" shall mean 17 Battery Upper Partners
-------------------------
LLC, a New York limited liability company.
"Settlement Agreement" shall mean that certain settlement agreement
--------------------
dated June 28, 1996 between the Bar Building Mortgagor and The Travelers
Insurance Company, as amended by that certain First Amendment to Settlement
Agreement and First Amendment to Consent, Direction and Recognition
Agreement, each dated June 28, 1996 between the Bar Building Mortgagor and
The Travelers Insurance Company, as the same may be modified, amended or
supplemented from time to time.
"Solvent" as to any Person shall mean that (i) the sum of the
-------
assets of such Person, at a fair valuation based upon appraisals or
comparable valuation, will exceed its liabilities, including contingent
liabilities, (ii) such Person will have sufficient capital with which to
conduct its business as presently conducted and as proposed to be conducted
and (iii) such Person has not incurred debts, and does not intend to incur
debts, beyond its ability to pay such debts as they mature. For purposes of
this definition, "debt" means any liability on a claim, and "claim" means (x)
---- -----
a right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, or (y) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such Contingent Liabilities, such
liabilities shall be computed in accordance with GAAP at the amount which, in
light of all the facts and circumstances existing at the time, represents the
amount which can reasonably be expected to become an actual or matured
liability.
"Subordination of Management Agreement" shall mean a Subordination
-------------------------------------
of Management Agreement substantially in the form set forth as Exhibit "F"
hereto.
"Subsidiary" of any Person shall mean and include (i) any
----------
corporation Controlled by such Person, directly or indirectly through one or
more intermediaries, and (ii) any partnership, association, joint venture or
other entity Controlled by such Person, directly or indirectly through one or
more intermediaries and (iii) all of the parties listed as Subsidiaries on
Schedule 3.
"Substantial Asset" shall mean Real Property Assets of Borrower,
-----------------
the REIT and any other Loan Party which, in the aggregate, constitutes more
than 15% of the consolidated Net Operating Income of Borrower, the REIT and
the other Loan Parties, derived from all Real Property Assets.
"Substitute Rating Agency" shall have the meaning provided in the
------------------------
definition of "Rating Agencies".
"Syndication" shall have the meaning provided in Section 9.09(c).
-----------
"Syndication Agent" shall have the meaning provided in the opening
------------------
paragraph of this Agreement.
"Taxes" shall have the meaning provided in Section 2.19.
-----
"Telerate Page 3750" means the display designated as "Page 3750"
------------------
on the Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
"Termination Event" shall mean (i) a Reportable Event, or (ii) the
-----------------
initiation of any action by Borrower, any member of Borrower's or any other
Loan Party's ERISA Controlled Group or any other person to terminate a Plan
or the treatment of an amendment to an ERISA Plan as a termination under
ERISA, in either case, which would result in liability to Borrower, any Loan
Party or any of their ERISA Controlled Group in excess of $500,000, (iii) the
institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan,
(iv) any partial or total withdrawal from a Multiemployer Plan which in
either case, which would result in liability to Borrower, any Loan Party or
any of their ERISA Controlled Groups in excess of $500,000 or (v) the taking
of any action would require security to the Plan under Section 401(a)(29) of
the Code.
"Title Searches" shall mean (i) reports of UCC, tax lien, judgment
--------------
and litigation searches with respect to any Person and (ii) searches of title
to each of the Real Property Assets.
"Total Mortgaged Asset Value" means the sum, without duplication,
---------------------------
of the aggregate value of all Mortgaged Assets, calculated as of the date of
determination as follows:
(i) for Mortgaged Assets that have been owned or leased for less
than three (3) months prior to the date of determination, an amount
equal to ninety-five percent (95%) of the Purchase Price for such
Mortgaged Assets; and
(ii) for Mortgaged Assets that have been owned for more than three
(3) months prior to the date of determination, the Adjusted NOI for such
Mortgaged Assets divided by 0.10; and
(iii) notwithstanding the foregoing, provided that 110 E.
42/nd/ Street is an Mortgaged Asset, until June 1, 1999 (the initial
Appraisal Period), the value for 110 E. 42/nd/ Street shall be equal to
$28,100,000.00; provided that, in the event of a material casualty to,
or condemnation of, 110 E. 42/nd/ Street, the value of 110 E. 42/nd/
Street shall be calculated in accordance with clause (i) or (ii) above,
as applicable; upon completion of restoration (or upon the expiration of
the initial Appraisal Period), Borrower may deliver a then current
Appraisal of 110 E. 42/nd/ Street reasonably satisfactory to the
Majority Co-Lenders, and the value of 110 E. 42/nd/ Street for the
Appraisal Period beginning on the date of such then current Appraisal
shall be the appraised value pursuant to said Appraisal.
Provided, however, with respect to SLG 17 Battery LLC's tenancy-in-common
interest in 17 Battery Place, the value for 17 Battery Place shall be
calculated solely on the basis of the Purchase Price of, or the Adjusted NOI
from, as applicable, the tenancy-in-common interest owned by the SLG 17
Battery LLC.
"Total Value" means the sum, without duplication, of (i) the Total
-----------
Mortgaged Asset Value and (ii) the aggregate value of all Assets of Borrower
on a consolidated basis that are not Mortgaged Assets, calculated as of the
date of determination as follows:
(i) for Real Property Assets (other than Mortgaged Assets) that
have been owned for less than three (3) months prior to the date of
determination, an amount equal to ninety-five percent (95%) of the
Purchase Price for such Real Property Assets;
(ii) for Real Property Assets (other than the Mortgaged Assets)
that have been owned for more than three (3) months prior to the date
of determination, the Adjusted NOI for such Real Property Assets divided
by 0.10;
(iii) for Permitted Investments (other than the Mortgaged
Assets and other Real Property Assets), the Book Value of such Assets;
and
(iv) Borrower's unrestricted cash and Cash Equivalents as of the
date of determination, calculated in accordance with GAAP.
"Transaction Costs" shall mean all costs and expenses paid or
-----------------
payable by Borrower or any other Loan Party relating to the Transactions
including, without limitation, the costs and expenses of the Syndication
Agent and Agent in conducting its due diligence with respect to the
Transactions, financing fees, commitment fees, advisory fees, reasonable
legal fees, reasonable accounting fees, and title insurance charges, whether
directly or as reimbursement to the Syndication Agent or Agent.
"Transactions" shall mean each of the transactions contemplated by
------------
the Loan Documents.
"Transfer And Escrow Agreement" shall mean that certain Transfer
-----------------------------
and Escrow Agreement dated June 28, 1996 between the Bar Building Mortgagor,
The Travelers Insurance Company and Chicago Title Insurance Company, as
escrow agent, as the same may be modified, amended or supplemented.
"Transferee" shall have the meaning provided in Section 9.07.
----------
"Type" shall mean the type of any portion of the Loan determined
----
with respect to the interest option applicable thereto, i.e., the Base Rate
----
Portion or a Eurodollar Portion.
"UCC Searches" shall have the meaning provided in Section 3.01(g).
------------
"Unfunded Benefit Liabilities" means with respect to any Plan at
----------------------------
any time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan (on the basis of assumptions prescribed by the PBGC for the purpose of
Section 4044 of ERISA).
"Unsecured Debt Rating" shall mean with respect to a Person, the
---------------------
rating assigned by the Rating Agencies to such Person's long term unsecured
debt obligations; provided, however, that if such ratings are not equivalent,
the lower rating shall apply.
"Unsecured Line of Credit" shall mean that existing $140,000,000.00
------------------------
Senior Unsecured Line of Credit dated December 18, 1997, as amended by that
certain Amendment to Senior Unsecured Revolving Line of Credit Agreement
dated January 12, 1998, between the Partnership, the REIT, Lehman
individually and as Lender, Agent and Syndication Agent, BankBoston, N.A.,
individually as a Co-Lender and as Successor Agent for one or more Co-
Lenders, Bank Leumi USA, as a Co-Lender and Deutsche Bank AG, New York
and/or Cayman Islands Branches, as a Co-Lender and Deutsche Bank AG, New York
Branch as Documentation Agent.
"West 44/th/ Street Property" shall mean 321 West 44/th/ Street,
---------------------------
New York, New York.
SECTION 2. AMOUNT AND TERMS OF FACILITY.
Section 2.01 Advances. (a) Borrower acknowledges that on the
--------
date hereof, Lender has made the Initial Advance. Subject to and upon the
terms and conditions herein set forth, Lender and each Co-Lender agrees, at
any time and from time to time on and after the Closing Date and prior to the
Maturity Date, to make its pro rata share of Advances to Borrower, which
Advances shall not exceed in aggregate principal amount at any time
outstanding, the Facility Amount at such time.
(b) Advances may be voluntarily prepaid pursuant to Section 2.11,
but in no event shall any prepaid Advance be re-advanced. All outstanding
Advances shall mature on the Maturity Date, without further action on the
part of Agent or any Co-Lender.
(c) Each Advance of the Loan shall be in the minimum increments of
One Million Dollars (U.S. $1,000,000.00). No Advance shall be made after the
Maturity Date. There shall be no more than five (5) Eurodollar Portions
outstanding at any one time.
(d) The obligation of Lender and each Co-Lender to make their pro
rata share of each Advance of the Loan is several and not joint. Neither
Agent, Lender nor any Co-Lender shall be liable for the failure of any other
Co-Lender to fund its pro rata share of any Advance hereunder.
Notwithstanding the provisions of this Section 2.01 to the contrary,
Borrower shall maintain a minimum of $15,200,000.00 in the form of borrowing
capacity under this Agreement, as measured by the unfunded portion of the
maximum Facility Amount (the "Minimum Available Capacity") which Borrower is
eligible to borrow hereunder, to be used to acquire the West 44/th/ Street
Property and upon said acquisition, the West 44/th/ Street Property will be
added and subjected to the Lien of the Loan Documents in accordance with the
terms of Section 2.21 hereof. Borrower shall maintain the Minimum Available
Capacity until such time as the West 44/th/ Street Property is acquired
and subjected to the Lien of the Loan Documents or such Minimum Available
Capacity is used to acquire the West 44/th/ Street Property and subjected it
to the Lien of the Loan Documents.
Section 2.02 Notice of Borrowing. Whenever Borrower desires an
-------------------
Advance hereunder, it shall give Agent at Agent's office prior to 10:00
A.M., New York City time, telex, facsimile, or telephonic notice (promptly
confirmed in writing) of each Advance to be made hereunder, at least three
(3) Business Days prior to such Advance being made. Each such notice (a
"Notice of Borrowing") (i) shall be irrevocable, (ii) shall be executed on
behalf of Borrower and the REIT by a Responsible Officer of Borrower or of
the REIT, (iii) shall specify (w) the aggregate principal amount of the
requested Advance and (x) the date of Borrowing (which shall be a Business
Day), (iv) shall certify that, taking into account the amount of the
requested Advance, to the best of Borrower's knowledge, no Default or Event
of Default has occurred and is continuing, all provisions of the Loan
Documents including, but not limited to the Financial Covenants, will be
complied with after giving effect to such Advance, (v) shall contain a
description of the intended use of the Advance and (vi) shall be in the form
annexed hereto as Exhibit "A".
-----------
Section 2.03 Disbursement of Funds. No later than 2:00 P.M., New
---------------------
York City time on the date specified in each Notice of Borrowing, provided
all conditions precedent to the making of such Advance have been complied
with, Agent will make available to Borrower by disbursing to or at the
direction of Borrower, or by depositing in Borrower's account at Agent's
office, the amount of the requested Advance to the extent that Agent has
received, in immediately available federal funds, each Co-Lender's pro rata
share of such Advance from each Co-Lender.
Section 2.04 The Note. (a) Borrower's and the REIT's obligation
--------
to pay the principal of, and interest on, the Loan shall be evidenced by the
promissory note (as amended, modified, supplemented, extended or
consolidated, the "Note") duly executed and delivered by Borrower and the
REIT substantially in the form of Exhibit "B" hereto in a principal amount
-----------
equal to the Facility Amount with blanks appropriately completed in
conformity herewith. The Note shall (i) be payable to the order of Agent, on
behalf of the Co-Lenders, (ii) be dated the Closing Date, and (iii) mature on
the Maturity Date. If required by a Co-Lender that is not a Co-Lender as of
the date hereof, Borrower and the REIT hereby agree to execute a supplemental
Note in the principal amount of such Co-Lender's pro rata share of the
Facility Amount, substantially in the form of Exhibit "B" hereto, with blanks
appropriately completed, and such supplemental Note shall (i) be payable to
order of Agent, on account of such Co-Lender, (ii) be dated as of the Closing
Date, and (iii) mature on the Maturity Date. Such supplemental Note shall
provide that it evidences a portion of the existing indebtedness hereunder
and not any new or additional indebtedness of Borrower or the REIT.
(b) Agent is hereby authorized, at its option, (i) to endorse on
the schedule attached to each Note (or on a continuation of such schedule
attached to each such Note and made a part thereof) an appropriate notation
evidencing the date and amount of each Advance evidenced thereby and the pro
rata share thereof of each Co-Lender, and the date and amount of each
principal and interest payment in respect thereof, and/or (ii) to record such
Advances and such payments in its books and records. Such schedule or such
books and records, as the case may be, shall be conclusive and binding on
Borrower and the REIT absent manifest error, provided that the failure to
make any notation shall not affect the obligations of Borrower, any Guarantor
or the REIT or the rights of Lender or any Co-Lender hereunder or under the
Guaranty.
Section 2.05 Interest. (a) Borrower and the REIT shall pay
--------
interest in respect of the outstanding principal amount of the Loan at a rate
per annum which shall be equal to the sum of (i) the Eurodollar Rate Margin
plus the Eurodollar Rate, or (ii) if the Eurodollar Rate is not available
pursuant to Section 2.16 hereof, the Base Rate Margin plus the Base Rate.
(b) Intentionally Deleted.
---------------------
(c) Intentionally Deleted.
---------------------
(d) In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of
the Loan and, to the extent permitted by law, overdue interest in respect of
the Loan, shall bear interest at the Default Rate, calculated from the date
such payment was due without regard to any grace or cure periods contained
herein.
(e) Interest on the Loan shall accrue from and including the date
of each Borrowing thereof to but excluding the date of any repayment thereof
(provided that any Advance borrowed and repaid on the same day shall accrue
one day's interest) and Borrower and the REIT shall pay such interest, (A)
monthly in arrears on each Scheduled Payment Date, (B) on the date of any
prepayment (on the amount prepaid), (C) on the Maturity Date (whether by
acceleration or otherwise) and (D) after the Maturity Date, on demand.
(f) Interest on the outstanding principal balance of the Loan
shall be calculated on the basis of a three hundred sixty (360) day year
based on the actual number of days elapsed.
(g) This Agreement and the Note are subject to the express
condition that at no time shall Borrower or the REIT be obligated or required
to pay interest on the principal balance of the Loan at a rate which could
subject Lender or any Co-Lender to either civil or criminal liability as a
result of being in excess of the Maximum Legal Rate. If by the terms of this
Agreement or the Loan Documents, Borrower or the REIT is at any time required
or obligated to pay interest on the principal balance due hereunder at a rate
in excess of the Maximum Legal Rate, the interest rate or the Default Rate,
as the case may be, shall be deemed to be immediately reduced to the Maximum
Legal Rate and all previous payments in excess of the Maximum Legal Rate
shall be deemed to have been payments in reduction of principal and not on
account of the interest due hereunder. All sums paid or agreed to be paid to
Agent for the use, forbearance, or detention of the sums due under the Loan,
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Loan until
payment in full so that the rate or amount of interest on account of the Loan
does not exceed the Maximum Legal Rate of interest from time to time in
effect and applicable to the Loan for so long as the Loan is outstanding.
Section 2.06 Intentionally Deleted.
---------------------
Section 2.07 Intentionally Deleted.
---------------------
Section 2.08 Intentionally Deleted.
---------------------
Section 2.09 Extension of Maturity Date. (a) Intentionally
--------------------------
Deleted.
(b) Provided no Event of Default has occurred and is continuing
under the Loan Documents, Borrower may request an extension of the initial
Maturity Date for an additional six (6) month period by giving Agent written
notice to extend on or prior to the date that is three (3) months prior to
the initial Maturity Date. Such request shall be accompanied by a Compliance
Certificate of Borrower as required pursuant to Section 5.01(b)(ii). Agent
shall, upon approval or disapproval of the Co-Lenders, consent to or deny, as
applicable, such request for extension. If Agent does not give written
notice to Borrower of Co-Lender's acceptance or denial of such extension
request on or prior to the date which is one (1) month prior to the initial
Maturity Date, then Agent and the Co-Lenders shall be deemed to have denied
Borrower's request for extension of the Maturity Date. If the Co-Lenders
consent to the extension, the nonrefundable Extension Fee shall be payable by
Borrower on account of its exercise of and Co-Lenders' granting of the
extension option provided for herein within five (5) Business Days of Co-
Lenders' consenting to such extension. The payment of the Extension Fee, to
the extent received, shall constitute payment by Borrower to each Co-Lender
in the amount of such Co-Lender's pro rata share in such fee.
(c) Intentionally Deleted.
---------------------
Section 2.10. Principal Payments. Borrower and the REIT shall pay
------------------
the then outstanding principal balance of the Loan together with all accrued
and unpaid interest thereon and all other sums then due and payable under
this Agreement and the other Loan Documents on the Maturity Date.
Section 2.11 Voluntary Prepayments. Borrower and the REIT shall
---------------------
have the right to prepay the Loan, in whole or in part, from time to time on
the following terms and conditions: (a) Borrower shall give Agent written
notice (or telephonic notice promptly confirmed in writing), in the form
attached hereto as Exhibit E, which notice shall be irrevocable, of its
intent to prepay all or a portion of the Loan, at least three (3) Business
Days prior to a prepayment, which notice shall specify the amount of such
prepayment and what Loan Portions are being prepaid, (b) each prepayment
shall be in an aggregate principal amount of One Million Dollars (U.S.
$1,000,000.00) or any integral multiple of One Hundred Thousand U.S. Dollars
(U.S. $100,000.00) in excess thereof, and (c) prepayments of Eurodollar
Portions made pursuant to this Section on a date other than on the last day
of the Interest Period applicable thereto shall be accompanied by payment of
any Funding Costs which Lender and the Co-Lenders shall incur as a result of
such early payment. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein.
Notwithstanding the provisions this Section 2.11 to the contrary, Borrower
agrees that all payments made to reduce the outstanding principal balance of
the Loan shall be deemed applied first to that portion of the outstanding
principal balance of the Loan that is in excess of the amount secured by the
Security Instrument.
Section 2.12 Intentionally Deleted.
---------------------
Section 2.13 Application of Payments and Prepayments. Unless
---------------------------------------
specifically provided otherwise, all payments and prepayments of the Loan,
whether voluntary or otherwise, shall be applied first, to unpaid Fees, any
reasonable out-of-pocket costs and expenses of Agent and any Co-Lender
arising as a result of such prepayment and any Funding Costs, second, to pay
any accrued and unpaid interest then payable with respect to the Loan, and
third, to pay the outstanding principal amount of the Loan. Notwithstanding
the provisions of this Section 2.13 to the contrary, Borrower and the REIT
agree that in the event Agent enters into an Intercreditor Agreement, all
payments and prepayments shall be applied in accordance with the terms of
said Intercreditor Agreement.
Section 2.14 Method and Place of Payment.
--------------------------
(a) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Note shall be made to
Agent not later than 1:00 p.m., eastern time, on the date when due and shall
be made in lawful money of the United States of America in immediately
available funds at Agent's Office, and any funds received by Agent after such
time shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day. Each payment (including all prepayments on account
of principal and interest on the Loan), to the extent received, shall
constitute payment by Borrower and the REIT to each Co-Lender in the amount
of such Co-Lender's pro rata share of such payment.
(b) Whenever any payment to be made hereunder or under the Note or
other Loan Documents shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
(c) All payments made by Borrower hereunder, under the Note and
the other Loan Documents, shall be made irrespective of, and without any
deduction for, any setoff or counterclaims.
Section 2.15 Intentionally Deleted.
---------------------
Section 2.16 Interest Rate Unascertainable, Increased Costs,
-----------------------------------------------
Illegality. (a) In the event that Agent has reasonably determined, or has
- ----------
been notified by any Co-Lender that it has reasonably determined (which
determination or notice shall, absent manifest error, be final and conclusive
and binding upon all parties hereto) that:
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of the Eurodollar Rate; or
(ii) at any time, that the relevant Eurodollar Rate shall not
represent the effective pricing to Lender or the Co-Lenders for funding
or maintaining the Loan, or Lender and the Co-Lenders shall incur
increased costs or reduction in the amounts received or receivable
hereunder, in any such case because of (x) any change since the date of
this Agreement in any applicable law or governmental rule, regulation,
guideline, order, request or directive or any interpretation thereof and
including the introduction of any new law or governmental rule,
regulation, guideline, order, request or directive (such as, for
example, but not limited to, a change in official reserve requirements,
but, in all events, excluding reserves required under Regulation D of
the Federal Reserve Board to the extent included in the computation of
the Eurodollar Rate), whether or not having the force of law and whether
or not failure to comply therewith would be unlawful, and/or (y) other
circumstances affecting Lender, any Co-Lender or the interbank
Eurodollar market or the position of Lender or any Co-Lender in such
market; or
(iii) at any time, that the making or continuance by it of the
Loan at the appropriate Eurodollar Rate has become unlawful in order for
Lender or any Co-Lender, in good faith, to comply with any law or
governmental rule, regulation, guideline, order, request or directive
(whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), or any change therein, or any
change in the interpretation or administration thereof by any govern-
mental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or has become impracticable as
a result of a contingency occurring after the date of this Agreement
which materially and adversely affects the interbank Eurodollar market;
then, and in any such event, Agent shall, promptly after making such
determination or receiving notice thereof from any Co-Lender, give notice by
telephone promptly confirmed in writing to Borrower. Thereafter (x) in the
case of clause (i) above, Borrower's right to request advances, and any
Notice of Borrowing, given by Borrower with respect to any Borrowing which
has not yet been made shall be deemed canceled and rescinded by Borrower, (y)
in the case of clause (ii) above, Borrower and the REIT shall pay to Agent,
upon such Agent's written demand therefor to Borrower, such additional
amounts (in the form of an increased rate of interest, or a different method
of calculating interest, or otherwise, as Agent shall reasonably determine)
as shall be required to compensate Lender and any Co-Lender for such
increased costs or reduction in amounts received or receivable hereunder (it
being understood and agreed by the parties hereto that in the event that
Agent shall fail to notify Borrower promptly after such determination, then
Borrower and the REIT shall not be liable to pay to Agent any additional
amounts relating to the period prior to Agent's notifying Borrower, and (z)
in the case of clause (iii) above, Borrower shall take one of the actions
specified in clause (b) below as promptly as possible and, in any event,
within the time period required by law. The written demand provided for in
clause (y) shall demonstrate in reasonable detail the circumstances giving
rise to such demand and the calculation of the amounts demanded; provided
that Borrower and the REIT shall not be obligated to pay an amount in excess
of the amount directly attributable to the Loan hereunder (it being
understood and agreed that Agent shall not be required to deliver any docu-
mentation substantiating such amounts).
(b) In the case that the Loan is affected by the circumstances
described in clause (a)(ii) or (a)(iii) above, (i) if any Advance has not yet
been made but is then the subject of a Notice of Borrowing, Borrower shall
be deemed to have canceled and rescinded such notice, or (ii) if any
principal amount under the Loan is then outstanding, such amount shall
automatically convert into a Base Rate Portion.
(c) In the event that following the giving of notice based on the
conditions described in clause (a)(i) above that such conditions no longer
exist, Agent shall promptly give written notice thereof to Borrower,
whereupon Borrower's right to request Advances from Agent and Lender's and
any Co-Lender's obligation to make Advances shall be automatically restored.
(d) In the event that following its giving of a notice based on
the conditions described in clause (a)(iii) above that such conditions no
longer exist, Agent shall promptly give written notice thereof to Borrower,
whereupon Borrower's right to request Advances from Agent and Lender's and
any Co-Lender's obligation to make Advances shall be automatically restored.
(e) The amount of any increased costs or reductions in amounts
referred to in Section 2.16(a)(ii) with respect to Lender and each Co-Lender
shall be based on the assumption that Lender and any Co-Lender funded the
Loan in the interbank Eurodollar market, although the parties hereto agree
that Lender or Co-Lender may fund all or any portion of the Loan in any
manner it independently determines. For purposes of any demand for payment
made by Agent under Sections 2.16(a)(ii) or 2.18, in attributing Lender's or
any Co-Lender's general costs relating to eurocurrency operations or its
commitments or customers, or in averaging any costs over a period of time,
Agent and the affected Co-Lender may use any reasonable attribution and/or
averaging method which it deems appropriate, reasonable and practical. The
agreements in this Section 2.16 shall survive the termination of this
Agreement and the payment of the Note and all other Obligations.
Section 2.17 Funding Losses. Borrower and the REIT shall
--------------
compensate Lender and the Co-Lenders for all reasonable losses, expenses and
liabilities, to the extent actually incurred (including, without limitation,
any loss, expense or liability incurred by Lender or any Co-Lender in
connection with the liquidation or reemployment of deposits or funds required
by it to make or carry the Loan), excluding loss of anticipated profits
("Funding Costs"), that Lender or any Co-Lender sustains: (a) if for any
reason (other than a default by Agent or any Co-Lender) a Borrowing of an
Advance does not occur on a date specified therefor in a Notice of Borrowing
(whether or not rescinded, canceled or withdrawn or deemed rescinded,
canceled or withdrawn, pursuant to Section 2.16(a) or 2.16(b) or otherwise),
(b) if any prepayment (whether voluntary or mandatory), repayment (including,
without limitation, payment after acceleration) occurs on a date which is not
the last day of an Interest Period, (c) if any prepayment is not made on any
date specified in a notice of prepayment given by Borrower, or (d) as a
consequence of any default by Borrower or the REIT in repaying the Loan when
required by the terms of this Agreement. Borrower shall pay such Funding
Costs on the date specified for the date of prepayment or repayment of any
Eurodollar Portion of the Loan under clause (b) or (c) above, or within five
(5) Business Days of written demand therefor by Agent with respect to clause
(d) above. Calculation of all amounts payable to Agent under this Section
2.17 shall be made on the assumption that Lender and each Co-Lender has
funded its relevant Eurodollar Portion through (i) the purchase of a
Eurodollar deposit bearing interest at the Eurodollar Rate in an amount equal
to the amount of such Eurodollar Portion, and (ii) the transfer of such
Eurodollar deposit from an offshore office of Lender or any Co-Lender to a
domestic office of Lender and the Co-Lenders in the United States of America,
provided that Lender and the Co-Lenders may fund their Eurodollar Portion of
the Loan in any manner that they in their sole discretion choose and the
foregoing assumption shall only be made in order to calculate amounts payable
under this Section 2.17. Agent shall provide Borrower with a statement
detailing the basis for requesting such amounts and the calculation thereof,
and such statement shall, absent manifest error, be final and conclusive and
binding upon Borrower, the REIT and all Loan Parties). The agreements in this
Section 2.17 shall survive the termination of this Agreement and the payment
of the Note and all other Obligations.
Section 2.18 Increased Capital. If Agent shall have reasonably
-----------------
determined (or received notice from any Co-Lender of its reasonable
determination that) in good faith, that compliance with any applicable law,
rule, regulation, guideline, request or directive (whether or not having the
force of law), other than increases in rates of taxation or other matters not
directly related to increased capital costs, which shall be imposed, issued
or amended from and after the date of this Agreement by any governmental
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the capital or assets of Lender or any Co-
Lender as a consequence of its commitments or obligations hereunder, then
from time to time, upon Agent's delivering a written demand therefor to
Borrower, setting forth its reasonable calculations, Borrower and the REIT
shall pay to Agent on demand such additional amount or amounts ("Increased
Capital Costs") as will compensate Lender and any Co-Lender for such
reduction. Such calculations may use any reasonable averaging and
attribution methods selected by Agent and the affected Co-Lenders. The
agreements in this Section 2.18 shall survive the termination of this
Agreement and the payment of the Note and all other Obligations.
Section 2.19 Taxes. (a) All payments made by Borrower or the
-----
REIT under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental authority excluding, in the case of Lender or
any Co-Lender, net income and franchise taxes imposed on Agent, Lender, any
Co-Lender or Participant (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called "Taxes").
(b) Notwithstanding anything to the contrary herein, if at any
time or from time to time Taxes are required to be deducted or withheld from
the payments required to be made to Lender or any Co-Lender hereunder solely
by reason of a Change in Law after the date hereof (other than as a result of
any transfer or assignment of any of the obligations of Borrower hereunder),
all payments required to be made by Borrower and the REIT hereunder
(including any additional amounts that may be payable pursuant to this clause
(b)) shall be increased to the extent required so that the net amount
received by Lender or any Co-Lender after the deduction or withholding of
Taxes imposed solely by reason of a Change in Law after the date hereof will
be not less than the full amount that would otherwise have been receivable
had no such deduction or withholding been imposed by reason of such Change in
Law. In the event that this clause (b) shall be operative, Borrower and the
REIT shall promptly provide to Agent evidence of payment of such Taxes to the
appropriate taxing authority and shall promptly forward to Agent any official
tax receipts or other documentation with respect to the payment of the Taxes
as may be issued by the taxing authority. If Borrower or the REIT fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit
to Agent the required receipts or other required documentary evidence,
Borrower and the REIT shall indemnify Agent and any Co-Lender for any
incremental taxes, interest or penalties that may become payable by Lender or
Co-Lender as a result of any such failure. The agreements in this Section
2.19 shall survive the termination of this Agreement and the payment of the
Note and all other Obligations.
(c) For purposes of this Section 2.19 the term "Change in Law"
shall mean the following events: (i) the enactment of any legislation by the
United States, including the enactment, amendment or modification of a
treaty; (ii) the lapse, by its terms, of any law of the United States or any
treaty to which the United States is a party; or (iii) the promulgation of
any temporary or final regulation under the Code.
(d) Each Co-Lender that is not incorporated under the laws of the
United States of America or a state thereof agrees that, prior to the first
date on which any payment is due to it hereunder, it will deliver to Borrower
and Agent (i) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Co-Lender is entitled to receive payments
under this Agreement and the Note payable to it, without deduction or with-
holding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Co-Lender required to deliver to Borrower and Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the preceding sentence further undertakes to
deliver to Borrower and Agent two further copies of the said letter and Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or other
manner of certification, as the case may be, on or before the date that any
such letter or form expires (which, in the case of the Form 4224, is the last
day of each U.S. taxable year of the non-U.S. Co-Lender) or becomes obsolete
or after the occurrence of any event requiring a change in the most recent
letter and form previously delivered by it to Borrower and Agent, and such
other extensions or renewals thereof as may reasonably be requested by
Borrower or Agent, certifying in the case of a Form 1001 or 4224 that such
Co-Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless in
any such case an event (including, without limitation, any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or
which would prevent such Co-Lender from duly completing and delivering any
such letter or form with respect to it and such Co-Lender advises Borrower
and Agent that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax, and in the case of a Form
W-8 or W-9, establishing an exemption from United States backup withholding
tax. Notwithstanding clause (a) of this Section 2.19, if a Co-Lender fails to
provide a duly completed Form 1001 or 4224 or other applicable form and,
under applicable law, in order to avoid liability for Taxes, Borrower is
required to withhold on payments made to such Co-Lender that has failed to
provide the applicable form, Borrower shall be entitled to withhold the
appropriate amount of Taxes. In such event, Borrower shall promptly provide
to such Co-Lender or Agent evidence of payment of such Taxes to the
appropriate taxing authority and shall promptly forward to such Co-Lender or
Agent any official tax receipts or other documentation with respect to the
payment of the Taxes as may be issued by the taxing authority.
Section 2.20 Use of Proceeds and Limitations on Advances.
-------------------------------------------
Borrower shall use the proceeds of the Loan solely (i) to pay down the entire
outstanding principal balance of the Unsecured Line of Credit to zero, (ii)
to acquire the fee and ground leasehold interests in the Acquisition
Properties, (iii) to acquire Permitted Investments, (iv) to acquire the fee
and ground leasehold interests in Real Property Assets wholly owned by the
Borrower which are fully operational Class B (or better) office buildings,
(v) for capital improvements, expansion or renovation to Real Property Assets
of the type described in clause (iv) above, owned by Borrower or any Loan
Party, (vi) for working capital or (vii) for the refinancing of mortgage debt
encumbering properties of the type described in clause (iv) above.
Section 2.21 Addition of 321 West 44/th/ Street . Upon
----------------------------------
Borrower's acquisition of the fee interest in the West 44/th/ Street
Property, title to which shall be held solely in the name of the Partnership,
the REIT or a wholly owned and controlled subsidiary or affiliate thereof,
Borrower shall (a) use its best efforts to have the existing mortgages
assigned to Lender and said mortgages shall be modified, consolidated and
spread with the Lien of the Security Instrument and (b) add and subject the
West 44/th/ Street Property to the Lien of the Loan Documents, including,
without limitation, the Security Instrument, as a first lien thereon.
Borrower shall deliver to Agent, among other things, the following with
respect to the West 44/th/ Street Property:
i. An opinion of Borrower's or the appropriate Loan Party's counsel
reasonably satisfactory to Agent stating (u) that subjecting the West 44/th/
Street Property to the Lien of the Security Instrument and the other Loan
Documents does not and will not affect or impair the ability of Lender to
enforce its remedies under the Security Instrument and Loan Documents, (v)
that the Security Instrument and the other Loan Documents, as modified to
encumber the West 44/th/ Street Property has been duly authorized, executed
and delivered by Borrower and is valid and enforceable in accordance with
their terms, subject to bankruptcy and equitable principles relating to the
appropriate Loan Party, (w) that Borrower or the appropriate Loan Party is
qualified to do business and in good standing under the laws of the
jurisdiction where the West 44/th/ Street Property is located, (x) the
encumbrance of the West 44/th/ Street Property with the Lien of the Security
Instrument and the Loan Documents shall not cause a breach of, or a default
under any agreement, document or instrument to which Borrower or the
appropriate Loan Party is a party or to which it or its properties are bound
or affected and (y) the anticipated modification of the Security Instrument
will not affe trust or Borrower as a qualified real estate subsidiary under
Section 856 of the Code.
ii. A certification by Borrower (x) that the certificates, opinions and
other instruments which have been or are therewith delivered to or deposited
with Agent in connection with the addition of the West 44/th/ Street Property
conform to the requirements of this Agreement and the Security Instrument,
(y) that all conditions precedent herein have been complied with and (z) that
all conditions precedent to the modification of the Security Instrument
contained in this Agreement have been fulfilled.
iii. Intentionally Deleted.
iv. Original executed counterparts of the agreement modifying the
Security Instrument and the Loan Documents so as to encumber the West 44/th/
Street Property, including without limitation, financing statements or other
documents necessary to grant or perfect Agent's first priority security
interest on behalf of the Co-Lenders in the fixtures and personalty located
thereon and the Rents derived therefrom.
v. An appropriate endorsement to the title insurance policy insuring
the lien of the Security Instrument, as modified, on Borrower's or the
appropriate Loan Party's ownership of the fee interest in the West 44/th/
Street Property, in form and substance satisfactory to Agent insuring that
the Security Instrument, as modified, is a valid and enforceable first lien
on the property intended to be insured thereby, provided, said Title Policy
shall contain, among other things, a mortgage tax endorsement reasonably
satisfactory to the Agent and the Majority Co-Lenders.
vi. Evidence reasonably satisfactory to Agent to the effect that the
West 44/th/ Street Property and the use thereof are in substantial compliance
with the applicable zoning, subdivision, and all other applicable federal,
state or local laws and ordinances affecting the West 44/th/ Street Property,
and that all building and operating licenses and permits necessary for the
use and occupancy of the West 44/th/ ed and are in full force and effect.
vii. An Environmental Report dated within six (6) months prior to
delivery which states that the West 44/th/ Street Property does not contain
any Hazardous Substances or risk of contamination from off-site Hazardous
Substance, and which otherwise shall be reasonably satisfactory to the
Majority Co-Lenders.
viii. Payment of the Transaction Costs and other expenses incurred
by Agent and all Co-Lenders including reasonable counsel fees and
disbursements in connection with the modification of the Security Instrument
and the other Loan Documents to include the West 44/th/ Street Property.
ix. A survey of the West 44/th/ Street Property certified to Agent, as
Agent for the Co-Lenders, its successors and assigns, dated or redated within
60 days of the modification of the Security Instrument and the other Loan
Documents to include the West 44/th/ Street Property, prepared by a land
surveyor licensed in the State of New York pursuant to the then current New
York standards for title surveys and otherwise reasonably satisfactory to
Agent.
x. Payment of all recording charges, filing fees, taxes, or other
expenses, including but not limited to intangibles taxes and documentary
stamp taxes in connection with the recording of the modification of the
Security Instrument and the other Loan Documents.
xi. A property inspection report reasonably satisfactory to Agent dated
within six (6) months of delivery prepared by an independent licensed
engineer reasonably satisfactory to Agent, prepared in accordance with
Agent's then current guidelines for property inspection reports, stating,
among other things, that the West 44/th/ Street Property is in good condition
and repair and free of damage or waste and is in compliance with the
Americans with Disabilities Act and is otherwise satisfactory to Agent.
xii. Original certificates and copies of policies of insurance required
under the terms of the Security Instrument for the West 44/th/ Street
Property.
xiii. Certified copies of all Leases with respect to the West 44/th/
Street Property and tenant estoppel certificates as reasonably required by
Agent.
xiv. Certified copies of all subordination, attornment and
non-disturbance agreements, if any, each of which shall be in form and
substance reasonably satisfactory to Agent.
xv. Certified copies of all contracts and agreements relating to the
management, leasing and operation of the West 44/th/ Street Property, if any,
each of which shall be in form and substance reasonably satisfactory to
Agent.
xvi. Such evidence as Agent reasonably deems necessary to indicate
compliance with all requirements of Applicable Laws and such evidence as
Agent may deem reasonably necessary or appropriate to evidence the
availability of all utilities, including water, sewers, gas and electricity,
as may be necessary for the use of the West 44/th/ Street Property as
intended.
xvii. Intentionally Deleted.
xviii. Intentionally Deleted.
xix. A certification signed on behalf of the REIT and the Borrower
by a Responsible Officer of the REIT certifying that all of the represenations
and warranties contained in the Security Instrument and in
the other Loan Documents, after giving effect to the addition of the West
44/th/ Street Property, are true and correct in all material respects with
respect to the West 44/th/ Street Property and that to the best of its
knowledge, there is then no Default or Event of Default hereunder.
xx. Borrower has otherwise complied with all conditions precedent to an
Advance under Article III of this Agreement.
xxi. UCC Searches with respect to the West 44/th/ Street Property,
Borrower, and the Loan Parties.
xxii. Such other certificates, opinions, documents and instruments
relating to the modification of the Security Instrument and the other Loan
Documents as reasonably requested by Agent and the Majority Co-Lenders and
all corporate and other proceedings and all other documents (including,
without limitation, all documents referred to herein and not appearing as
exhibits hereto) and all legal matters in connection therewith shall be
reasonably satisfactory in form and substance to Agent and the Majority
Co-Lenders.
Section 2.22 Intentionally Deleted.
---------------------
Section 2.23 Intentionally Deleted.
---------------------
Section 2.24 Decision Making by Agent. Borrower and the REIT
------------------------
acknowledge and agree that all approvals, consents, requests, calculations,
determinations, decisions, waivers, amendments and modifications that Agent
is entitled to make under this Agreement are subject to the approval or
consent of some or all of the Co-Lenders pursuant to the terms and conditions
of this Agreement and the Intercreditor Agreement, whether or not such
approval or consent is expressly stated herein or otherwise.
Section 2.25 Additional Assets. (a) If Borrower, the REIT or
-----------------
any subsidiary or affiliate thereof acquires any Real Property Asset after
the date hereof, and all or a portion of any Advance hereunder is used in
whole or in part to acquire such Real Property Asset, it shall notify Agent
and together with such notification, deliver to Agent, with respect to such
Real Property Asset, such items as Agent and the Co-Lenders may reasonably
request, which information shall be current as of the date delivered, and
shall include, without limitation, all the documentation and information
required pursuant to Section 2.21 hereof. If such Real Property Asset is
owned by a Loan Party other than a Guarantor or Borrower, such Loan Party
shall execute and deliver a guaranty in the form of the Guaranty. Such Asset
shall immediately be mortgaged to Lender and Lender shall have a perfected
first Lien on such Asset. Borrower shall, with respect to said Real Property
Asset, among other things, execute and deliver to Agent all documentation,
certifications, reports and polices necessary to create and perfect said Lien
and required in connection with the acquisition of the West 44/th/ Street
Property.
(b) Upon Borrower's, the REIT's or any subsidiary or affiliate
thereof acquisition of fee title to the Bar Building pursuant to the Bar
Building Settlement Agreement, Borrower shall simultaneously with said
acquisition (i) have the existing mortgages assigned to Lender, to the extent
not owned by Lender, and said mortgages shall be modified, consolidated and
spread with the Lien of the Security Instrument and (ii) add and subject the
Bar Building to the Lien of the Loan Documents, including, without
limitation, the Security Instrument, as a first lien thereon. Borrower shall
also deliver to Agent, among other things, with respect to the Bar Building
those terms required pursuant to Section 2.21(i), (iv), (v) and (viii)
hereof.
(c) Upon Borrower's, the REIT's or any subsidiary or affiliate
thereof acquisition of fee title to the 17 Battery Place, Borrower shall
simultaneously with said acquisition add and subject 17 Battery Place to the
Lien of the Loan Documents, including, without limitation, the Security
Instrument, as a first lien thereon. Borrower shall also deliver to Agent,
among other things, with respect to 17 Battery Place those terms required
puthe REIT's or any subsidiary or affiliate thereof acquisition of any other
material Asset, Borrower shall simultaneously with said acquisition notify
Agent and deliver to Agent, with respect to said Asset, all documentation,
reports and information as reasonably requested by Agent.
Section 2.26 Pro Rata Interests. The liabilities of each of the
------------------
Co-Lenders are several and not joint, and each Co-Lenders' obligations to
Borrower and the REIT under this Agreement shall be reduced by the amount of
any Assignment and Assumption by such Co-Lender. No Co-Lender shall be
responsible for the obligations of any other Co-Lender. Each Co-Lender shall
be liable to Borrower and the REIT only for their respective proportionate
shares of the Loan and of the obligations and liabilities of the Lender under
the Loan Documents. If for any reason any of the Co-Lenders shall fail or
refuse to abide by their obligations under this Agreement, the other Co-
Lenders shall not be relieved of their obligations, if any, hereunder,
including their obligations to make their pro rata share of any Advance on
the date set forth for such Advance in the Notice of Borrowing;
notwithstanding the foregoing, the Co-Lenders shall have the right, but not
the obligation, at their sole option, to make the defaulting Co-Lender's pro
rata share of such Advance pursuant to the terms of the Intercreditor
Agreement.
SECTION 3. CONDITIONS PRECEDENT.
Section 3.01 Conditions Precedent to Initial Advance. The
---------------------------------------
obligation of Lender and each Co-Lender to make the Initial Advance of the
Loan (or its pro rata share thereof) on the Closing Date is subject to the
satisfaction by Borrower and the REIT on the Closing Date of the following
conditions precedent:
(a) Loan Documents.
--------------
(i) Loan Agreement. Borrower and the REIT shall have executed and
--------------
delivered this Agreement to Agent.
(ii) The Note. Borrower and the REIT shall have executed and
--------
delivered to Agent the Note in the amount, maturity and as otherwise provided
herein.
(iii) Security Instruments. Borrower and the REIT shall have
--------------------
executed and delivered to Agent, the Security Instrument.
(iv) Assignment of Leases and Rents. Borrower shall have executed
------------------------------
and delivered to Agent, the Assignment of Leases and Rents.
(v) Environmental Indemnity. Borrower and the REIT shall have
-----------------------
executed and delivered to Agent, the Environmental Indemnity.
(vi) Assignment of Management Agreement and Subordination of
-------------------------------------------------------
Management Fees. Borrower and the appropriate Loan Parties shall have
- ---------------
executed and delivered to the Agent, the Assignment of Management Agreement
and Subordination of Management Fees with respect to each Real Property Asset
substantially in the form as set forth on Exhibit "F".
(vii) Certificate of Compliance. Borrower and the REIT shall
-------------------------
have executed and delivered to Agent the Compliance Certificate.
(viii) Pledge Agreement. Borrower shall have executed and
----------------
delivered to Agent the Pledge Agreement.
(ix) Security Agreement. Borrower shall have executed and
------------------
delivered to Agent a Security Agreement with respect to the Partnership's
pledge of its membership interest in SLG Graybar 2 LLC, together with a
transaction statement of SLG Graybar 2 LLC, both in form and substance
satisfactory to Agent.
(x) Ground Leases. If the Borrower or any other Loan Party owns
-------------
a leasehold estate in a Real Property Asset, (A) a certified copy of the
Ground Lease for such Real Property Asset, together with all amendments and
modifications thereto and a recorded memorandum thereof, which Ground Lease
shall be reasonably satisfactory in all material respects to Agent and all of
the Co-Lenders in their sole discretion and (B) a Ground Lease estoppel,
executed by the fee owner and ground lessor of such Real Property Asset,
which estoppel shall be reasonably satisfactory to Agent and all of the
Co-Lenders in their sole discretion.
(xi) Flood Plain. Agent shall have received reasonably
-----------
satisfactory evidence indicating which of the Real Property Assets are in a
flood plain.
(xii) Bar Building and 17 Battery Place Assignments. With
----------------------------------------------
respect to the Bar Building and 17 Battery Place, Borrower (A) shall have
executed and delivered ting Notes and the original notes relating to the 17
Battery Place Mortgage, together with executed endorsements (or allonges)
thereto, without recourse and (C) shall, with respect to the Bar Building,
have executed and delivered an assignment of all its rights, title and
interest in and to the Bar Building Settlement Agreement.
(xii) Intentionally Deleted.
---------------------
(b) Opinions of Counsel.
-------------------
Agent shall have received legal opinions, dated the Closing Date,
from counsel to Borrower and the other Loan Parties, in form and substance
reasonably satisfactory to the Agent and all of the Co-Lenders and their
counsel, that, among other things: (i) this Agreement and the Loan Documents
have been duly authorized, executed and delivered by Borrower and the REIT
and the other Loan Parties (to the extent a party thereto) and are valid and
enforceable against such Persons in accordance with their terms, subject to
bankruptcy and equitable principles; (ii) that Borrower and the REIT are
qualified to do business and in good standing under the laws of the
jurisdiction in which it is organized, in which it is transacting business
(subject to materiality exceptions) and where the Mortgaged Assets are
located; (iii) the encumbrance of the Mortgaged Assets with the Liens of the
Loan Documents shall not cause a breach of, or a default under, any
agreement, document or instrument to which Borrower or the REIT is a party or
to which they or any of their properties are bound or affected; (iv) the
Pledge Agreement, and the relating Uniform Commercial Code Financing
Statements, will provide a valid and perfected Lien in the collateral
intended to be secured thereby; and (v) the Loan does not violate any usury
laws.
(c) Organizational Documents. The Agent shall have received (i)
------------------------
with respect to each Borrower which is a corporation, and the REIT, the
certificate of incorporation of Borrower and the REIT, as ay of State as of a
date not more than thirty (30) days prior to the Closing Date, together with
a good standing certificate from such Secretary of State and a good standing
certificate from the Secretaries of State (or the equivalent thereof) of each
other State in which each Real Property Asset is located and in which each of
them is required to be qualified to transact business, each to be dated a
date not more than thirty (30) days prior to the Closing Date, (ii) with
respect to each Borrower which is a limited partnership, the agreement of
limited partnership of such Person, as amended, modified or supplemented to
the Closing Date, certified to be true, correct and complete by a general
partner of such Person, together with a copy of the certificate of limited
partnership of such entity, as amended, modified or supplemented to the
Closing Date, certified to be true, correct and complete by the appropriate
Secretary of State as of a date not more than thirty (30) days prior to the
Closing Date, together with a good standing certificate from such Secretary
of State and a good standing certificate from the Secretary of State (or the
equivalent thereof) of each other State in which each such Person is required
to be qualified to transact business (subject to materiality exceptions),
each to be dated not more than thirty (30) days prior to the Closing Date,
(iii) with respect to each Borrower which is a general partnership, the
agreement of general partnership of such Borrower, as amended, modified or
supplemented to the Closing Date, certified to be true, complete and correct
by a general partner of Borrower and such Loan Party, together with a copy of
such Borrower's doing business certificate (or the equivalent thereof), as
amended, modified or supplemented to the Closing Date, certified to be true,
correct and complete by the appropriate Secretary of State (or County Clerk's
or Recorder's Office, as the case may be) as of a date not more than thirty
(30) days prior to the Closing Date, in each satisfactory to the Agent and
all of the Co-Lenders, (iv) with respect to each Borrower which is a limited
liability company, a copy of the articles of organization certified by the
appropriate Secretary of State as of a date not more than thirty (30) days
prior to the Closing Date, together with a copy of the operating agreement
with all amendments thereto certified by the managing member and a good
standing certificate from such Secretary of State and a good standing
certificate from the Secretary of State (or the equivalent thereof) of each
other State in which each such Person is required to be qualified to transact
business (subject to materiality exceptions), each to be dated not more than
thirty (30) days prior to the Closing Date, and (v) evidence reasonably
satisfactory to the Syndication Agent and all of the Co-Lenders that the REIT
is a "qualified real estate investment trust" and that each Borrower is a
"qualified REIT subsidiary", each as defined in Section 856 of the Code,
including, without limitation, copies of the REIT's or Borrower's real estate
investment trust registration statement and all amendments thereto, any
similar material documents filed with the United States Securities and
Exchange Commission or issued in connection with a public offering of equity
securities by Borrower or the REIT.
(d) Certified Resolutions, etc. Agent shall have received a
--------------------------
certificate of the secretary or assistant secretary of Borrower and the REIT
which is a corporation and dated the Closing Date, certifying (i) the names
and true signatures of the incumbent officers of such Person authorized to
sign the applicable Loan Documents, (ii) the by-laws of such Person as in
effect on the Closing Date, (iii) the resolutions of such Person's board of
directors approving and authorizing the execution, delivery and performance
of all Loan Documents executed by such Person, and (iv) that there have been
no changes in the certificate of incorporation of such Person since the date
of the most recent certification thereof by the appropriate Secretary of
State.
(e) Estoppel Certificates. Agent shall have received executed
---------------------
estoppel letters or certificates with respect to the Leases in effect at the
Mortgaged Assets, which estoppel certificates shall be in form, substance and
quantity acceptable to Agent.
(f) Insurance. Agent shall have received certificates of
---------
insurance demonstrating insurance coverage in respect of each of the Real
Property Assets in compliance with the requirements contained herein.
(g) Lien Search Reports. Agent shall have received satisfactory
-------------------
(i.e., showing no Liens other than Permitted Liens) UCC searches, together
with tax lien, judgment and litigation searches conducted in the appropriate
jurisdictions by a search firm reasonably acceptable to the Agent and all of
the Co-Lenders with respect to the Real Property Assets, Borrower, the REIT
and the Bar Building Mortgagor.
(h) Payment of Taxes. Agent shall have received proof of payment
----------------
of any required recording fees, mortgage recording taxes, documentary stamp
taxes, intangibles taxes or other similar costs in connection with the making
of such Advance.
(i) Intentionally Deleted.
---------------------
(j) Financing Statements. Agent shall have received, within a
--------------------
reasonable time following the Closing Date, acknowledgment copies (or other
evidence of filing) of each UCC-l financing statement signed by Borrower
and/or the REIT, as debtor, naming Agent, as secured party, and filed in the
appropriate offices of each jurisdiction where the Mortgaged Assets and
Borrower are located.
(k) Title Insurance Policies; Surveys. Agent shall have received
---------------------------------
(i) Title Policies issued by a title insurance company satisfactory to Agent
and all of the Co-Lenders insuring the lien of the Security Instruments on
the Mortgaged Assets, in form and substance satisfactory to the Agent and all
of the Co-Lenders insuring that the Security Instruments are a first lien on
the good and marketable fee simple and/or leasehold title, as applicable, of
Borrower to the Mortgaged Asset (other than the Bar Building and the Graybar
Building), and that the Pledged Mortgages are a first lien on the good and
marketable fee simple title and leasehold interest respectively of the Bar
Building Mortgagor in the Bar Building and mortgagor under the 17 Battery
Place Mortgage in 17 Battery Place, together with a "tie-in" and first loss
endorsement satisfactory to the Syndication Agent and all of the Co-Lenders;
each Title Policy shall contain, among other things, a mortgage tax
endorsement satisfactory to the Agent and all of the Co-Lenders, and (ii) a
recent survey with respect to each of the Mortgaged Assets certified to
Agent, its successors and assigns, dated within 60 days prior to the Closing
Date prepared by a land surveyor licensed in each of the states where the
Real Property Assets are located pursuant to the then current New York
standards for title surveys and otherwise reasonably satisfactory to the
Agent and all of the Co-Lenders.
(l) Financial Statements . Agent shall have received the (i)
--------------------
consolidated audited financial statements of Borrower, the REIT and their
Consolidated Subsidiaries for the most recently ended fiscal year of
Borrower, REIT and their Consolidated Subsidiaries and the unaudited
consolidated financial statemen quarter of Borrower, the REIT and their
Consolidated Subsidiaries ending since the end of such entity's most recent
fiscal year and (ii) for each Mortgaged Asset, annual operating statements
and occupancy statements for Borrower's two (2) most recent fiscal year
together with current year to date operating statements, current occupancy
statements and the operating and capital budget approved by Borrower or the
appropriate Loan Party for the current fiscal year. Such financial
statements shall be reasonably acceptable to the Agent and all of the
Co-Lenders in their sole discretion, and each such statement shall be
certified by a Responsible Officer of the REIT on behalf of the REIT and the
Borrower that, as of the Closing Date, except as reflected in any subsequent
such statement which is delivered to the Agent and the Co-Lenders, there has
been no material adverse change in the financial condition of any Mortgaged
Asset or Borrower or the REIT since the date thereof.
(m) Environmental Matters. Agent shall have received
---------------------
Environmental Reports with respect to each of the Mortgaged Assets each of
which shall be in form and substance reasonably satisfactory to the Agent and
all of the Co-Lenders.
(n) Fees and Operating Expenses. Agent shall have received, for
---------------------------
its and the Co-Lenders' account as applicable, all Transaction Costs, the
Fees and other fees and expenses due and payable hereunder on or before the
Closing Date, including, without limitation, the reasonable costs of all
engineering, environmental and real property appraisal reports required to be
delivered hereunder, if any, and the reasonable fees and expenses accrued
through the Closing Date, of counsel retained by the Agent and the
Co-Lenders.
(o) Consents, Licenses, Approvals, etc. Agent shall have received
-----------------------------------
certified copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance Loan Documents, or in
connection with any of the Transactions, and such consents, licenses and
approvals shall be in full force and effect.
(p) Intentionally Deleted.
----------------------
(q) Engineering Reports. Agent shall have received engineering
-------------------
reports dated within six (6) months of delivery prior to the Closing Date and
in form and substance reasonably satisfactory to the Agent and all of the
Co-Lenders with respect to each of the Mortgaged Assets; such engineering
reports shall be prepared in accordance with Agent's then current guidelines
for property inspection reports by licensed engineers reasonably acceptable
to Agent and all of the Co-Lenders (the "Engineering Reports"), and such
Engineering Report should state, among other things, that each Real Property
Asset is in good condition and repair, free from damage and waste (reasonable
wear and tear excepted) and is in substantial compliance with the Americans
with Disabilities Act.
(r) Zoning Compliance. Agent shall have received evidence
-----------------
reasonably satisfactory to Agent and all of the Co-Lenders to the effect that
each of the Real Property Assets and the use thereof are in substantial
compliance with the applicable zoning, subdivision, and all other applicable
federal, state or local laws and ordinances affecting each of the Real
Property Assets, and that all building and operating licenses and permits
necessary for the use and occupancy of each of the Real Property Assets as an
office building including, but not limited to, current certificates of
occupancy, if available, have been obtained and are in full force and effect.
(s) Leases. Agent shall have received copies of all Leases with
------
respect to each Real Property Asset which shall be reasonably satisfactory to
Agent and all of the Co-Lenders.
(t) Contracts and Agreements. Agent shall have received certified
------------------------
copies of all contracts and agreements relating to the management, leasing
and operation of each of the Real Property Assets, each of which shall be
reasonably satisfacof the Real Property Assets.
(v) Representations and Warranties. Agent shall have received a
------------------------------
certification by the REIT and Borrower certifying that all of the
representations and warranties contained in this Agreement, the Security
Instruments and the other Loan Documents are true and correct in all material
respects with respect to each of the Real Property Assets, Borrower and each
Loan Party, and that to the best of its knowledge, there is no Default or
Event of Default hereunder.
(w) Certification as to Covenants. Agent shall have received a
-----------------------------
certificate of a Responsible Officer of the REIT on behalf of the REIT and
Borrower together with other evidence reasonably satisfactory to Agent and
all of the Co-Lenders that, as of the Closing Date, the Financial Covenants
are complied with and, to the best of its knowledge, there is no Default or
Event of Default hereunder.
(x) Certification as to Applicable Laws. Agent shall have
-----------------------------------
received such evidence as Agent and all of the Co-Lenders shall deem
reasonably necessary to establish (including, without limitation, a
certificate of the REIT for itself and on behalf of Borrower) that each Real
Property Asset is in material compliance with all Applicable Laws as of the
Closing Date.
(y) Additional Matters. Agent shall have received such other
------------------
certificates, opinions, documents and instruments relating to the
Transactions as may have been reasonably requested by Agent and any of the
Co-Lenders, and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and not
appearing as exhibits hereto) and all legal matters in connection with the
Transactions shall be reasonably satisfactory in form and substance to Agent
and all of the Co-Lenders.
Section 3.02 Conditions Precedent to All Advances of the Loan.
------------------------------------------------
The obligation of Lender and each Co-Lender to make any Advance under the
Loan (including the initial Advance made on or after the Closing Date) (or
its pro rata share thereof) is subject to the satisfaction on the date such
Advance is made of the following conditions precedent:
(a) Representations and Warranties. The representations and
------------------------------
warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different
date) shall be true and correct in all material respects on such date both
before and after giving effect to the making of such Advance.
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such date either before or after
giving effect to the making of such Advance.
(c) No Injunction. No law or regulation shall have been adopted,
-------------
no order, judgment or decree of any governmental authority shall have been
issued, and no litigation shall be pending or threatened in writing, which in
the good faith judgment of Agent would enjoin, prohibit or restrain, or
impose or result in the imposition of any material adverse condition upon,
the making of the Advances or Borrower's, the REIT's or any Guarantor's
obligation to pay (or Agent or any Co-Lender's rights to receive payment) of
the Loan and the other Obligations or the consummation of the Transactions.
(d) No Material Adverse Effect. No event, act or condition shall
--------------------------
have occurred and be continuing after the Closing Date which has had or could
be reasonably expected to have a Material Adverse Effect.
(e) Notice of Borrowing. Agent shall have received a fully
-------------------
executed Notice of Borrowing in respect of the Advance to be made on such
date, together with a fully executed Compliance Certificate incorporating all
material modifications and changes required to be made to the most recent
Compliance Certifpt for matters identified on Schedule 5 (as the same may be
amended or supplemented), no actions, suits or proceedings shall be pending
or threatened with respect to the Transactions or the Loan Documents,
Borrower or any of the other Loan Parties, or with respect to the Real
Property Assets, could be reasonably expected to, individually or in the
aggregate, result in a Material Adverse Effect and matters identified on
Schedule 5, individually or in the aggregate, have not resulted in a Material
Adverse Effect.
(g) Title Insurance Searches. Agent or any Co-Lender shall have
------------------------
received an updated Title Search and an appropriate endorsement to the title
insurance policy showing no title exceptions that are reasonably unacceptable
to Lender.
(h) Intentionally Deleted.
---------------------
(i) Additional Matters. Agent shall have received such other
------------------
certificates, opinions, documents and instruments relating to the subject
Advance as may have been reasonably requested by or any of the Co-Lenders and
all corporate and other proceedings and all other documents (including,
without limitation, all documents referred to herein and not appearing as
exhibits hereto) and all legal matters in connection with the subject Advance
shall be reasonably satisfactory in form and substance to Agent and the
Majority Co-Lenders.
Section 3.03 Acceptance of Borrowings. The acceptance by Borrower
------------------------
of the proceeds of each Advance shall constitute a representation and war-
ranty by Borrower to Agent and the Co-Lenders that all of the conditions
required to be satisfied under this Section 3 in connection with the making
of such Advance have been satisfied.
Section 3.04 Sufficient Counterparts. All certificates,
-----------------------
agreements, legal opinions and other documents and papers referred to in this
Section 3, unless otherwise specified, shall be delivered to Agent and shall
be reasonably satisfactory in form and substance to Agent and the Majority
Co-Lenders (unless the form thereof is prescribed herein) and Borrower shall
deliver sufficient counterparts of all such materials for distribution to
Agent and each Co-Lender.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce Agent, Lender and the Co-Lender to enter into
this Agreement and to make the Loan, Borrower and the other Loan Parties make
the following representations and warranties, which shall survive the
execution and delivery of this Agreement and the Note and the making of the
Loan and each Advance:
Section 4.01 Organizational Status. (a) Each of Borrower and the
---------------------
other Loan Parties (i) is a duly organized and validly existing corporation
or partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
formation, (ii) has all requisite power and authority, to own its property
and assets (including the Real Property Assets), the Bar Building Loan
Documents, the 17 Battery Place Transaction Documents and all other Permitted
Investments and to transact the business in which it is engaged or presently
proposes to engage (including this Transaction) and (iii) has duly qualified
and is authorized to do business and is in good standing as a foreign
corporation or foreign partnership, as the case may be, in every jurisdiction
in which it owns or leases real property (including the Real Property Assets)
or in which the nature of its business requires it to be so qualified.
(b) The Partnership is the sole member of (i) New Green 1140
Realty LLC, (ii) SLG 17 Battery LLC and (iii) SLG Graybar 2 LLC. SLG Graybar
2 LLC is the sole member of SLG Graybar LLC.
Section 4.02 Power and Authority. Each of Borrower and the other
-------------------
Loan Parties has the power and authority to execute, deliver and carry out
the terms and provisions of each of the Loan Documents to which it is a party
and has taken all necessary action, to authorize the execution, delivery and
performance by it of such Loan Documents to which it is a party. Each of
Borrower and the other Loan Parties has duly executed and delivered each such
Loan Document, and each such Loan Document constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, except as
enforcement may be limited by applicable insolvency, bankruptcy or other laws
affecting creditors' rights generally, and by general principles of equity
whether enforcement is sought in a proceeding in equity or at law.
Section 4.03 No Violation. Neither the execution, delivery or
------------
performance by Borrower or any other Loan Party of the Loan Documents to
which it is a party, nor the compliance by such Person with the terms and
provisions thereof nor the consummation of the Transactions, (a) will
contravene any applicable provision of any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumental-
ity having jurisdiction thereof, or (b) will conflict with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the Assets
(including the Real Property Assets) of Borrower or any of the other Loan
Parties (or of any partnership of which such Person is a partner) pursuant to
the terms of any indenture, mortgage, deed of trust, agreement or other
instrument to which Borrower or any of the other Loan Parties (or of any
partnership of which such Person is a partner) is a party or by which it or
any of its Assets (including the Real Property Assets) is bound or to which
it may be subject, or (c) will, with respect to Borrower or any Loan Party
which is a partnership, violate any provisions of the partnership agreement
of such Person (or the partnership agreement of any partnership of which such
Person is a partner), or (d) will, with respect to the Borrower or any of the
Loan Parties which is a corporation, violate any provision of the Certificate
of Incorporation or By-Laws of such Person.
Section 4.04 Litigation. Except as set forth on Schedule 5,
----------
there are no actions, suits or proceedings, judicial, administrative or
otherwise, pending or, to the best of Borrower's or the REIT's knowledge,
threatened with respect to any of the Transactions or Loan Documents,
Borrower, the REIT, or any of the other Loan Parties, or with respect to the
Real Property Assets, that could be reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect. All matters set
forth on Schedule 5 do not, individually or in the aggregate, result in a
Material Adverse Effect.
Section 4.05 Financial Statements: Financial Condition; etc. The
----------------------------------------------
financial statements delivered to Lender were prepared in accordance with
GAAP consistently applied and fairly present the financial condition and the
results of operations of Borrower, the REIT and their Consolidated
Subsidiaries and the Mortgaged Assets covered thereby on the dates and for
the periods covered thereby, except as disclosed in the notes thereto and,
with respect to interim financial statements, subject to normally recurring
year-end adjustments and the absence of full footnote disclosures. Neither
Borrower nor the REIT nor any of their Consolidated Subsidiaries has any
material liability (contingent or otherwise) not reflected in such financial
statements or in the notes thereto. There has been no adverse change in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading or would affect Borrower's or
the REIT's ability to perform its obligations under this Agreement.
Section 4.06 Solvency. On the Closing Date and after and giving
--------
effect to the Transactions, Borrower and the Loan Parties will be Solvent.
Section 4.07 Material Adverse Change. Since the date of the most
-----------------------
recent audited financial statements delivered to Lender, there has occurred
no event, act or condition, and to the best of Borrower's or the REIT's
knowledge, there is no prospective event or condition which has had, or is in
good faith anticipated to have, a Material Adverse Effect.
Section 4.08 Use of Proceeds; Margin Regulations. All proceeds
-----------------------------------
of each Advance will be used by Borrower and the REIT only in accordance with
the provisions of Section 2.20. No part of the proceeds of any Advance will
be used by Borrower and the REIT to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock. Neither the making of any Advance nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of Regulations G, T, U or
X of the Federal Reserve Board.
Section 4.09 Governmental Approvals. No order, consent,
----------------------
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required (or if required, has been
obtained) to authorize, or is required in connection with (i) the execution,
delivery and performance of any Loan Document or the consummation by Borrower
or any Loan Party of any of the Transactions or (ii) the legality, validity,
binding effect or enforceability against Borrower or any Loan Party of any
Loan Document.
Section 4.10 Completed Repairs. All of the maintenance/repair
-----------------
and environmental conditions set forth on Schedule 16 hereto that are marked
as completed or remediated on such Schedule have been completed or remediated
as applicable.
Section 4.11 Tax Returns and Payments. Borrower, the REIT and
------------------------
the other Loan Parties have filed all tax returns required to be filed by
them for which the filing date has passed and not been extended and has paid
all taxes and assessments payable by such Persons which have become due,
other than (a) those not yet delinquent or (b) those that are reserved
against in accordance with GAAP which are being diligently contested in good
faith by appropriate proceedings.
Section 4.12 ERISA. Neither Borrower nor any of the other Loan
-----
Parties has any Employee Benefit Plans other than those listed on Schedule 6.
No accumulated funding deficiency (as defined in Section 412 of the Code or
Section 302 of ERISA) or Reportable Event has occurred with respect to any
Plan. As of the Closing Date, the Unfunded Benefit Liabilities do not in the
aggregate exceed $1,000,000. Borrower, the other Loan Parties and each
member of their respective ERISA Controlled Group have complied in all
material respects with the requirements of ERISA and the Code and plan
documents for each Employee Benefit Plan and Plans and are not in default (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan. With respect to any Multiemployee Plan, neither Borrower
nor any of the other Loan Parties, nor any member of their respective ERISA
Controlled Groups is subject to any current or potential withdrawal liability
or annual withdrawal liability payments, which, individually or in the
aggregate, could materially adversely affect any of such Persons. To the
knowledge of Borrower, the other Loan Parties and their respective ERISA
Controlled Group, no Multiemployer Plan is or is likely to be in
reorganization (within the meaning of Section 4241 of ERISA or Section 418 of
the Code) or is insolvent (as defined in Section 4245 of ERISA). No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Plan (other than routine contributions thereto) or any
trust established under Title IV of ERISA (other than routine contributions
thereto) has been, or is expected by Borrower, the other Loan Parties, or any
member of their respective ERISA Controlled Group to be, incurred by
Borrower, the other Loan Parties, or any member of their respective ERISA
Controlled Group. Except as otherwise disclosed on Schedule 6 hereto, none of
Borrower, the other Loan Parties, nor, any member of their respective ERISA
Controlled Group has any liability (contingent or otherwise) with respect to
any post-retirement benefit under any "welfare plan" (as defined in Section
3(1) of ERISA), other than liability for continuation coverage under Part 6
of Title I of ERISA or any corresponding state or local law or ordinance. No
lien under Section 412(n) of the Code or 302(f) of ERISA or requirement to
provide security under Section 401(a)(29) of the Code or Section 307 of ERISA
has been or is reasonably expected by Borrower, the other Loan Parties, or
any member of their respective ERISA Controlled Group to be imposed on the
assets of Borrower, the other Loan Parties, or any member of their respective
ERISA Controlled Group. Neither Borrower nor any other Loan Party is a party
to any collective bargaining agreement which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.
Neither Borrower nor any Loan Party nor any of their ERISA Controlled Group
has engaged in any transaction prohibited by Section 406 of ERISA or Section
4975 of the Code for which a statutory or administrative exemption was not
available, which could result in any material liability being imposed on any
such Person or in a Material Adverse Effect. As of the Closing Date and
throughout the term of the Loan, neither Borrower nor any other Loan Party is
or will be an "employee benefit plan" as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, and none of the assets of Borrower or
any other Loan Party will constitute "plan assets" of one or more such plans
for purposes of Title I of ERISA. As of the Closing Date and throughout the
term of the Loan, neither Borrower nor any other Loan Party is or will be a
"governmental plan" within the meaning of Section 3(3) of ERISA and neither
Borrower nor any other Loan Party will be subject to state statutes
applicable to Borrower or such Loan Party regulating investments and
fiduciary obligations, of Borrower or any Loan Party wivernmental plans.
Section 4.13 Closing Date Transactions. On the Closing Date and
-------------------------
immediately prior to the making of the initial Advance hereunder, the
Transactions (other than the making of the Loan) intended to be consummated
on the Closing Date will have been consummated substantially in accordance
with the terms of the relevant Loan Documents and in accordance with all
Applicable Laws. All consents and approvals of, and filings and
registrations with, and all other actions by, any Person (other than Agent,
Syndication Agent or any Co-Lender) required in order to make or consummate
such Transactions have been obtained, given, filed or taken and are or will
be in full force and effect.
Section 4.14 Representations and Warranties in Loan Documents.
------------------------------------------------
All representations and warranties made by Borrower, the REIT or any other
Loan Party in the Loan Documents are true and correct in all material
respects.
Section 4.15 True and Complete Disclosure. All factual
----------------------------
information (taken as a whole) furnished by or on behalf of Borrower, the
REIT or any other Loan Party in writing to Agent and/or the Syndication Agent
on or prior to the Closing Date, for purposes of or in connection with this
Agreement or any of the Transactions (the "Furnished Information") is, and
all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Borrower or any other Loan Party in writing to Agent and/or
the Syndication Agent will be, true, accurate and complete in all material
respects and will not omit any material fact necessary to make such
information (taken as a whole) not misleading on the date as of which such
information is dated or furnished. As of the Closing Date, there are no
facts, events or conditions directly and specifically affecting Borrower, the
REIT or any other Loan Party known to Borrower or the REIT or any other Loan
Party and not disclosed to Agent and the Syndication Agent, in the Furnished
Information, in the Schedules attached hereto or in the other Loan Documents,
which, individually or in the aggregate, have or could be reasonably expected
to have a Material Adverse Effect.
Section 4.16 Ownership of Real Property Assets; Existing Security
----------------------------------------------------
Instruments. Borrower or the Operating Entities have good and marketable fee
- -----------
simple or leasehold title in all of the Real Property Assets (other than the
Bar Building; with respect to 17 Battery Place, such title is in the form of
a tenancy-in-common interest as more fully described in the 17 Battery Place
Tenancy Agreement) and good title to all of their personal property subject
to no Lien of any kind except for Permitted Liens. The Bar Building Mortgagor
has a good and marketable fee simple or leasehold title and leasehold estate,
respectively, in the Bar Building. Borrower, or a Guarantor, as applicable,
has good and marketable fee simple title to all of the Mortgaged Assets. As
of the date of this Agreement, there are no options or other rights to
acquire any of the Mortgaged Assets that run in favor of any Person and there
are no mortgages, deeds of trust, indentures, debt instruments or other
agreements creating a Lien against any of the Mortgaged Assets other than
Permitted Liens.
Section 4.17 No Default. To the best of Borrower's and the other
----------
Loan Party's knowledge, no Default or Event of Default exists under or with
respect to any Loan Document. To the best knowledge of Borrower and the
other Loan Parties, no Bar Building Event of Default exists. To the best
knowledge of Borrower and the other Loan Parties, neither Borrower, any Loan
Party nor any of their respective Subsidiaries or the Bar Building Mortgagor
or any party under the 17 Battery Place Mortgage is in default in any mate-
rial respect beyond any applicable grace period under or with respect to any
other material agreement, instrument or undertaking to which it is a party or
by which it or any of its properties or assets is bound in any respect, the
existence of which default could result in a Material Adverse Effect. To the
best knowledge of Borrower and the other Loan Parties, neither the Bar
Building Mortgagor nor the Bar Building is subject to or is an asset in any
bankruptcy or similar insolvency proceeding. To the best knowledge of
Borrower and the other Loan Parties, no default has occurred under any of the
terms, covenants or provisions of the Graybar Leases and the Graybar
Operating Lease and Borrower and the other Loan Parties know of no event
which, but for the passage of time or the giving of notice, or both, would
constitute an event of default under the Graybar Leases and/or the Graybar
Operating Lease.
Section 4.18 Licenses, etc. Borrower or the applicable Loan
-------------
Party has obtained and holds in full force and effect, all material
franchises, trademarks, tradenames, copyrights, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements,
rights of way and other rights, consents and approvals which are necessary
for the operation of the Real Property Assets and their respective businesses
as presently conducted.
Section 4.19 Compliance With Law. Borrower, the REIT and each
-------------------
Loan Party is in compliance with all Applicable Laws and other laws, rules,
regulations, orders, judgments, writs and decrees, noncompliance with which
would likely result in a Material Adverse Effect.
Section 4.20 Brokers. Borrower, the REIT, each Loan Party, Agent
-------
and each Co-Lender hereby represent and warrant that no brokers or finders
were used by them in connection with procuring the financing contemplated
hereby and Borrower and the REIT hereby agree to indemnify and save Agent and
each Co-Lender harmless from and against any and all liabilities, losses,
costs and expenses (including attorneys' fees or court costs) suffered or
incurred by Agent or any Co-Lender as a result of any claim or assertion by
any party claiming by, through or under Borrower, the REIT or any Loan Party,
that it is entitled to compensation in connection with the financing
contemplated hereby and Agent and each Co-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 Agent or any Co-Lender that it is entitled to
compensation in connection with the financing contemplated hereby.
Section 4.21 Judgments. There are no judgments, decrees, or
---------
orders of any kind against Borrower or any Loan Party unpaid of record which
would materially and adversely affect the ability of Borrower or any Loan
Party to comply with its obligations under the Loan or this Agreement in a
timely manner. There are (i) no federal tax claims or liens assessed or
filed against Borrower or any Loan Party or, to the best of Borrower's
knowledge, against 17 Battery Upper Partners, (ii) to the best of Borrower's
knowledge, none of the Bar Building Mortgagor, the Bar Building, 17 Battery
Upper Partners or 17 Battery Place is subject to or is an asset in any
bankruptcy or similar insolvency proceeding, and (iii) there are no material
judgments against Borrower or any Loan Party unsatisfied of record or
docketed in any court of the States in which the Real Property Assets are
located or in any other court located in the United States and no petition in
bankruptcy or similar insolvency proceeding has ever been filed by or against
Borrower or any Loan Party, and neither Borrower nor any Loan Party has ever
made any assignment for the benefit of creditors or taken advantage of any
insolvency act or any act for the benefit of debtors.
Section 4.22 Property Manager. As of the date hereof, the
----------------
manager of the Real Property Assets is the Manager. The Manager is an
Affiliate of the REIT. The leasing agent for the Real Property Assets and
the Bar Building is the Manager.
Section 4.23 Assets of the REIT. The sole assets of the REIT are
------------------
its general partnership interest in the Borrower, such other assets that may
be incidental to or required in connection with the ownership of such general
partnership interest, and as set forth on Schedule 8. The REIT is the sole
general partner of the Borrower.
Section 4.24 REIT Status. The REIT is a "qualified real estate
-----------
investment trust", as defined in Section 856 of the Code.
Section 4.25 Operations. The REIT conducts its business only
----------
through Borrower, except as described on Schedule 9A and the Borrower
conducts its business only in its own name, except as described on Schedule
9B.
Section 4.26 Stock. The REIT lists all of its outstanding shares
-----
of stock on the New York Stock Exchange.
Section 4.27 Ground Leases. With respect to those Real Property
-------------
Assets in which Borrower or any other Loan Party or, in the case of the Bar
Building, the Bar Building Mortgagor, holds a leasehold estate in the entire
Real Property Asset under a ground lease, with respect to each such ground
lease (i) Borrower or the respective Loan Party or the Bar Building Mortgagor
is the owner of a valid and subsisting interest as tenant under the Ground
Lease; (ii) the Ground Lease is in full force and effect, unmodified and not
supplemented by any writing or otherwise; (iii) all rent, additional rent and
other charges reserved therein have been paid to the extent they are payable
to the date hereof; (iv) the remaining term of the Ground Lease, including
all extension options that may be unilaterally exercised by the tenant
thereunder as of right, is at least ten (10) years after the Maturity Date;
(v) Borrower or the respective Loan Party or the Bar Building Mortgagor
enjoys the quiet and peaceful possession of the estate demised thereby,
subject to any sublease; (vi) to the best knowledge of the Borrower and/or
the applicable Loan Party, the Borrower or the respective Loan Party or the
Bar Building Mortgagor is not in default under any of the terms thereof and
there are no circumstances which have occurred and, with the passage of time
or the giving of notice or both, would constitute an event of default
thereunder; (vii) to the best knowledge of the Borrower and/or the applicable
Loan Party, the lessor under the Ground Lease is not in default under any of
the terms or provisions thereof on the part of the lessor to be observed or
performed; (viii) to the best knowledge of the Borrower and/or the applicable
Loan Party, the lessor under the Ground Lease has satisfied all of its repair
or construction obligations, if any, to date pursuant to the terms of the
Ground Lease; (ix) Schedule 10 lists all the Ground Leases to which any of
the Real Property Assets are subject and all amendments and modifications
thereto; and (x) the lessor idule 10 for each Ground Lease is the current
lessor under the related Ground Lease.
Section 4.28 Guarantors. Each Guarantor, if any, is a wholly
----------
owned Subsidiary of Borrower.
Section 4.29 Status of Property. With respect to each Real
------------------
Property Asset, except as set forth on Schedule 12:
(a) No portion of any improvement on the Real Property Asset is
located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located
within any such area, Borrower or the respective Loan Party has obtained and
will maintain the insurance prescribed in Section 5.03 hereof.
(b) Borrower or the respective Loan Party has obtained all
necessary certificates, licenses and other approvals, governmental and
otherwise, necessary for the operation of the Real Property Asset and the
conduct of its business and all required zoning, building code, land use,
environmental and other similar permits or approvals, all of which are in
full force and effect as of the date hereof.
(c) To the best knowledge of Borrower or the REIT, the Real
Property Asset and the present and contemplated use and occupancy thereof are
in full compliance with all applicable zoning ordinances (without reliance
upon grandfather provisions or adjoining or other properties), building
codes, land use and environmental laws, laws relating to the disabled
(including, but not limited to, the ADA) and other similar laws.
(d) The Real Property Asset is served by all utilities required
for the current or contemplated use thereof. All utility service is provided
by public utilities and the Real Property Asset has accepted or is equipped
to accept such utility service.
(e) All public roads and streets necessary for service of and
access to the Real Property Asset for the current or contemplated use thereof
have been completed, are serviceable and all-weather and are physically and
legally open for use by the public.
(f) The Real Property Asset is served by public water and sewer
systems or, if the Real Property Asset is not serviced by a public water and
sewer system, such alternate systems are adequate and meet, in all material
respects, all requirements and regulations of, and otherwise complies in all
material respects with, all Applicable Laws.
(g) Neither Borrower nor the respective Loan Party is aware of any
latent or patent structural or other significant deficiency of the Real
Property Asset. The Real Property Asset is free of damage and waste that
would materially and adversely affect the value of the Real Property Asset,
is in good repair and there is no deferred maintenance other than ordinary
wear and tear. The Real Property Asset is free from damage caused by fire or
other casualty. There is no pending or, to the actual knowledge of Borrower
or the REIT, threatened condemnation proceedings affecting the Real Property
Asset, or any part thereof.
(h) To the best knowledge of Borrower or the REIT, all costs and
expenses of any and all labor, materials, supplies and equipment used in the
construction of the improvements on the Real Property Asset have either (i)
been paid in full, (ii) are not yet due and payable or (iii) are being
contested in good faith by Borrower or the applicable Loan Party. Subject to
Borrower's or the respective Loan Party's right to contest as set forth in
any Permitted Mortgage Debt related to such Real Property Asset, there are no
mechanics' or similar liens or claims that have been filed and recorded for
work, labor or materials that affects the Real Property Asset and that are or
may be liens prior to, or coordinate with, the lien of this Security
Instrument.
(i) Borrower or the respective Loan Party has paid in full for,
and is the owner of, all furnishings, fixtures and equipment (other than
tenants' property) used in connection with the operation of the Real Property
Asset, free and clear of any and all security interests, liens or
encumbrances, except for Permitted Liens and purchase money financing which
is not a Lien on the fee title of such Real Property Asset and is incurred in
the ordinary course of business.
(j) All liquid and solid waste disposal, septic and sewer systems
located on the Real Property Asset are in a good and safe condition and
repair and in compliance with all Applicable Laws.
(k) All amenities, access routes or other items that materially
benefit the Real Property Asset are under direct control of Borrower or the
respective Loan Party, constitute permanent easements that benefit all or
part of the Real Property Asset or are public property, and the Real Property
Asset, by virtue of such easements or otherwise, is contiguous to a
physically open, dedicated all weather public street, and has the necessary
permits for ingress and egress.
(l) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments (including assessments payable in future
installments), insurance premiums, leasehold payments, or other outstanding
charges affecting the Real Property Asset.
(m) The Real Property Asset is assessed for real estate tax
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
Real Property Asset or any portion thereof.
(n) Subject to the provisions of the Security Instrument which
shall govern with respect to Mortgaged Assets, with respect to Leases which
relate to Real Property Assets owned by Borrower or the respective Loan
Party, (i) Borrower or the respective Loan Party is the sole owner of the
entire lessor's interest in the Leases; (ii) to the best knowledge of
Borrower or the REIT, the Leases are valid and enforceable; (iii) the terms
of all alterations, modifications and amendments to the Leases are reflected
in the certified occupancy statement delivered to and approved by Agent; (iv)
with respect to the Mortgaged Assets none of the rents reserved in the
Ledvance; (vi) 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; (vii) to the best knowledge of Borrower
or the REIT, there exist no offsets or defenses to the payment of any portion
of the rents; (viii) with respect to Mortgaged Assets no Lease contains an
option to purchase, right of first refusal to purchase, or any other similar
provision; (ix) no person or entity has any possessory interest in, or right
to occupy, the Real Property Asset except under and pursuant to a Lease; (x)
with respect to Mortgaged Assets, there are no prior assignments, pledges,
hypothecations or other encumbrances of any Leases or any portion of rents
due and payable or to become due and payable thereunder which are presently
outstanding; and (xi) the Real Property Asset is not subject to any Lease
other than the Leases described in the rent rolls delivered pursuant to
Section 5.01(a).
(o) No portion of the Real Property Asset has been or will be
purchased with proceeds of any illegal activity.
(p) All contracts, agreements, consents, waivers, documents and
writings of every kind or character at any time to which the Borrower or any
Loan Party is a party to be delivered to Agent pursuant to any of the
provisions hereof are valid and enforceable against the Borrower and such
Loan Party 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 4.30 Survival. The foregoing representations and
--------
warranties shall survive the execution and delivery of this Agreement and
shall continue in full force and effect until the indebtedness evidenced by
the Note has been fully paid and satisfied and Lender and the Co-Lenders have
no further commitment to advance funds hereunder. The request for any
Advance under this Agreement by Borrower or on its behalf shall constitute a
certification that the aforesaid representations and warranties are true and
correct in all material respects as of the date of such request, except to
the extent any such representation or warranty shall relate solely to an
earlier date.
SECTION 5. AFFIRMATIVE COVENANTS.
Borrower and the REIT covenant and agree that on and after the
Closing Date and until the Obligations (other than inchoate indemnity and
expense reimbursement obligations) are paid in full:
Section 5.01 Financial Reports. (a) Borrower will furnish to
-----------------
Agent: (i) annual audited consolidated financial statements of the REIT and
its Consolidated Subsidiaries prepared in accordance with GAAP within 90 days
(or within up to 105 days if Borrower receives such an extension from the
Securities and Exchange Commission) of the end of the REIT's fiscal year
prepared by nationally recognized independent public accountants (which
accountant's opinion shall be unqualified) including the related consolidated
statements of income, cash flow and retained earnings and setting forth in
comparative form the figures for the corresponding prior year period; (ii)
within 45 days after the close of each quarterly accounting period in each
fiscal year, the management prepared consolidated balance sheet of each of
the REIT and its Consolidated Subsidiaries and each of Borrower and its
Consolidated Subsidiaries, as of the end of such quarterly period and the
related consolidated statements of income, cash flow and retained earnings
for such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, each prepared in accordance
with GAAP (subject to non-material audit adjustments and the absence of full
footnote disclosures); (iii) quarterly and annual operating statements
(prepared on a basis consistent with that used in the preparation of the GAAP
aforesaid financial statements of the REIT) for each Mortgaged Asset,
including a comparison with the most recent Annual Operating Budget, within
45 days of the end of each calendar quarter, (iv) annual unaudited
consolidated financial statements of Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP (subject, in the case of
unaudited statements, to non-material audit adjustments and the absence of
full footnote disclosures) within 90 days of the end of Borrower's fiscal
year and, if audited, prepared by independent public accountants (which
accountant's opinion shall be unqualified), including the related
consolidated statements of income, cash flow and retained earnings and
setting forth in comparative form the figures for the corresponding prior
year period; and (v) copies of all of the REIT's and Borrower's quarterly and
annual filings with the Securities and Exchange Commission and all
shareholder reports and letters to the REIT's and Borrower's shareholders or
partners, as the case may be and all other publicly released information
promptly but in no event later than thirty (30) days after their filing or
mailing; and (vi) an annual operating and capital budget for each of the
Mortgaged Assets (the "Annual Operating Budget"), including cash flow
projections for the upcoming year, presented on a monthly basis consistent
with the quarterly and annual operating statements referred to in clause
(iii) above at least 30 days prior to the start of each calendar year.
Borrower and the REIT will furnish such additional reports or data, but no
more often than on a quarterly basis, as Agent may reasonably request
including, without limitation, monthly operating statements, a certified rent
roll, leasing and management reports for each Mortgaged Asset, and an
accounting for security deposits. Borrower and the REIT shall maintain a
system of accounting capable of furnishing all such information and data, and
shall maintain its books and records respecting financial and accounting
matters in a proper manner and on a basis consistent with that used in the
preparation of the aforesaid financial statements of Borrower.
(b) Officer's Certificates; Comfort Letters. (i) At the time of
---------------------------------------
the delivery of the financial statements under clause (a) above, Borrower
shall provide a certificate signed by a Responsible Officer of the REIT on
behalf of the Borrower and the REIT for itself and as general partner of
Borrower that such (x) financial statements have been prepared in accordance
with GAAP (unless such financial statements are not required to be prepared
in accordance with GAAP pursuant to this Agreement) and fairly present the
consolidated financial condition and the results of operations of the REIT,
its Consolidated Subsidiaries, Borrower, its Consolidated Subsidiaries and
the Mortgaged Assets, as applicable, on the dates and for the periods
indicated, subject, in the case of interim financial statements, to normally
recurring year end adjustments, (y) to the best knowledge of Borrower and the
REIT that no Default or Event of Default has occurred on the date of such
certificate or, if any Default or Event of Default has occurred and is
continuing on such date, specifying the nature and extent thereof and the
action Borrower has taken, is taking and/or proposes to take in respect
thereof and (z) that since the date of the most recent prior annual and
quarterly financial statements delivered pursuant to such clause no change
has occurred in the financial position of Borrower or the REIT or their
respective Consolidated Subsidiaries, which change could result in a Material
Adverse Effect, and (ii) at the time of delivery of the Annual Operating
Budget pursuant to Section 5.01(a)(v), a written statement of the assumptions
used in connection with respect to the Annual Operating Budget, together with
a certificate of the REIT for itself and as general partner of Borrower to
the effect that such budget and assumptions are reasonable and represent
Borrower's or the appropriate Loan Party's good faith estimate of such Net
Operating Income and anticipated capital expenditures, it being understood
and agreed that there may often be a difference between financial projections
and actual results.
(ii) Within 45 days of the end of each calendar quarter, Borrower
shall provide a certificate of the REIT for itself and as a general partner
of Borrower substantially in the form attached as Exhibit "H" hereto
("Compliance Certificate") certifying that no Default or Event of Default has
occurred, that there has been no change in the REIT's tax status as a real
estate investment trust, as defined under Section 856 of the Code, and
demonstrating compliance with the Financial Covenants and with Section 6.15
hereof (including providing copies of the most recently available unaudited
operating statements of the Mortgaged Assets) and the provisions of Sections
5.12, 5.13, 5.19, 5.27(b), 5.31 and 6.09, and containing calculations
verifying such compliance commencing with the calendar quarter ending on
December 31, 1997; provided that the certificate for the last calendar
quarter with respect to Section 6.07 may be delivered within 90 days after
the end of such fiscal year with the audited financial statements for the
year then ended.
(iii) Within 90 days of the end of Borrower's fiscal year
through the Maturity Date, Borrowel provide an agreed upon procedures letter
or audit prepared by a nationally recognized independent certified public
accounting firm satisfactory to Agent verifying that the covenants contained
in Sections 5.16, 5.17, 5.18, 5.19, 6.07 and 6.11 are complied with at the
end of such period.
(c) Notice of Default or Litigation. Promptly after Borrower or
-------------------------------
any other Loan Party obtains actual knowledge thereof, Borrower and the REIT
shall give Agent notice of (i) the occurrence of a Default or any Event of
Default, (ii) the occurrence of (v) any default that is not cured, or any
event of default, under any partnership agreement of Borrower, any Loan
Party, any mortgage, deed of trust, indenture or other debt or security
instrument, covering obligations in a principal amount in excess of
$1,000,000.00 and covering any of the Assets of Borrower or (w) any event of
default under any other material agreement to which Borrower, the REIT or any
other Loan Party is a party, which, if not cured could be reasonably expected
to result in a Material Adverse Effect, (x) the occurrence of any Bar
Building Event of Default, (y) any event, act or condition which may render
the Transfer and Escrow Agreement and the related Bar Building Loan Documents
unenforceable in whole or part, (z) if the Bar Building Mortgagor or the Bar
Building or 17 Battery Upper Partners or 17 Battery Place or any interest
therein is subject to any bankruptcy or similar insolvency proceeding, (iii)
if 17 Battery Upper Partners or 17 Battery Place is subject to any federal
tax lien or claim, (iv) any litigation or governmental proceeding pending or
threatened (in writing) against Borrower, the REIT or any other Loan Party or
the Bar Building Mortgagor or 17 Battery Upper Partners which could be
reasonably expected to result in a Material Adverse Effect and (iv) any other
event, act or condition which could be reasonably expected to result in a
Material Adverse Effect. Each notice delivered pursuant to this Section
5.01(c) shall be accompanied by a certificate of the REIT for itself and as
general partner of Borrower setting forth the details of the occurrence
referred to therein and describing the actions Borrower and the REIT have
taken, are taking or propose to take with respect thereto.
(d) Asset Information. Promptly after they have been prepared,
-----------------
but in no event later than the time frames set forth in Section 5.01(a),
Borrower shall deliver to Agent schedules that provide the following
information:
(i) Funds from Operations of Borrower and the REIT
calculation for the preceding quarter;
(ii) Adjusted NOI for the preceding quarter for each Real
Property Asset;
(iii) Listing of the Book Value of each Permitted
Investment; and
(iv) Listing of all Real Property Assets and Other Assets
acquired, transferred or sold during the preceding quarter and the
Purchase Price paid or price received, as the case may be, for such
Asset.
(e) Intentionally Deleted.
---------------------
(f) Tenants. With respect to Mortgaged Assets, Borrower shall
-------
notify Agent within 15 days of any change in occupancy, lease commencement,
extension, expiration, termination or default with respect to tenants under
any lease for more than 10,000 square feet.
(g) Tax Returns. Promptly after they are filed with the Internal
-----------
Revenue Service, copies of all annual federal income tax returns and
amendments thereto of the Borrower, the REIT and the Loan Parties.
(h) Condemnation and Casualty. Borrower shall immediately notify
-------------------------
Agent of any fire or other casualty or any pending or threatened condemnation
or eminent domain proceeding with respect to all or any portion of an
Mortgaged Asset.
(i) Other Information. From time to time, Borrower shall provide
-----------------
such other information and financial documents relating to Borrower as Agent
may reasonably request subject to the terms of any written confidentiality
agreements to which Borrower is a party.
Section 5.02 Books, Records and Inspections. Borrower shall, and
------------------------------
shall cause each applicable Loan Party to, at Borrower's or such Loan Party's
principal place of business or at each Real Property Asset, keep proper books
of record and account in which full, true and correct entries shall be made.
Borrower shall and shall cause each applicable Loan Party to, permit officers
and designated representatives of Agent, at Agent's expense to visit and
inspect any of the Real Property Assets, and to examine and copy the books of
record and account of Borrower and any Loan Party and the Real Property
Assets (including, without limitation, leases, statements, bills and
invoices), discuss the affairs, finances and accounts of Borrower and any
Loan Party, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable notice and at such reasonable
times as Agent may desire. Any Co-Lender may accompany the Agent on such
visit or inspection.
Section 5.03 Maintenance of Insurance. (a) Borrower and the
------------------------
other Loan Parties shall (i) maintain with financially sound and reputable
insurance companies insurance on itself and its Other Assets in commercially
reasonable amounts, (ii) maintain Agent as named additional insured in re-
spect of any such liability insurance required to be maintained hereunder,
and (iii) furnish to Agent from time to time, upon written request, certifi-
cates of insurance or certified copies or abstracts of all insurance policies
required under this Agreement and such other information relating to such
insurance as Agent or any Co-Lender may reasonably request.
(b) With respect to the Bar Building, Borrower shall require the
Bar Building Mortgagor to carry the insurance coverage required under the Bar
Building Loan Documents; with respect to each Real Property Asset other than
the Bar Building, Borrower shall obtain and maintain, or cause to be
maintained, insurance providing at least the following coverages; provided,
however, that Borrower shall insure or provide gap insurance for such risks
and in such amounts as may be necessary to provide the coverage set forth
below for the Bar Building:
(i) comprehensive all risk insurance on the Real Property
Assets, including contingent liability from Operation of Building Laws,
Demolition Costs and Increased Cost of Construction Endorsements, in
each case (A) in an amount equal to 100% of the "Full Replacement Cost,"
which for purposes of this Agreement shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities
and footings) with a waiver of depreciation, but the amount shall in no
event be less than the outstanding principal balance of the Note; (B)
containing an agreed amount endorsement with respect to the improvements
owned or leased by Borrower waiving all co-insurance provisions; (C)
providing for no deductible in excess of $50,000; and (D) containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement if any of the
improvements or the use of the Real Property Asset shall at any time
constitute legal non-conforming structures or uses. The Full
Replacement Cost shall be redetermined from time to time (but not more
frequently than once in any twenty-four (24) calendar months) at the
request of Agent by an appraiser or contractor designated and paid by
Borrower and approved by Agent, which approval shall not be unreasonably
withheld, or by an engineer or appraiser in the regular employ of the
insurer. After the first appraisal, additional appraisals may be based
on construction cost indices customarily employed in the trade. No
omission on the part of Agent to request any such ascertainment shall
relieve Borrower of any of its obligations under this Section. In
addition, Borrower shall obtain (y) flood hazard insurance if any
portion of the improvements is currently or at any time in the future
located in a federally designated "special flood hazard area", or
otherwise required by Agent and (z) earthquake insurance in amounts and
in form and substance satisfactory to Agent and the Majority Co-Lenders
in the event the Real Property Asset is located in an area with a high
degree of seismic activity, or otherwise as required by Agent, provided
that the insurance pursuant to clauses (y) and (z) hereof shall be on
terms consistent with the comprehensive all risk insurance policy
required under this Section 5.03, except that the deductible on such
insurance shall not be in excess of five percent (5%) of the appraised
value of the Real Property Asset;
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon,
in or about the Real Property Asset, such insurance (A) to be on the
so-called "occurrence" form with a combined single limit of not less
than $1,000,000; (B) to continue at not less than the aforesaid limit
until required to be changed by Agent in writing by reason of changed
economic conditions making such protection inadequate; and (C) to cover
at least the following hazards: (1) premises and operations; (2)
products and completed operations on an "if any" basis; (3) independent
contractors; and (4) blanket contractual liability for all written and
oral contracts;
(iii) business income and rent loss insurance (A) covering
all risks required to be covered by the insurance provided for in
Subsection 5.03(b)(i); (B) containing an extended period of indemnity
endorsement which provides that after the physical loss to the
improvements and personal property has been repaired, the continued loss
of income will be insured until such income either returns to the same
level it was at prior to the loss, or the expiration of twelve (12)
months from the date of the loss, whichever first occurs, and
notwithstanding that the policy may expire prior to the end of such
period; and (C) in an amount equal to 100% of the projected gross income
from the Real Property Asset for a period of twelve (12) months. The
amount of such business income insurance shall be determined prior to
the date hereof and at least once each year thereafter based on the
greatest of: (x) Borrower's reasonable estimate of the gross income
from the Real Property Asset; and (y) the estimate of gross income set
forth in the annual operating budget delivered pursuant to Section
5.01(a);
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Real Property
Asset (A) owner's contingent or protective liability insurance covering
claims not covered by or under the terms or provisions of the above
mentioned commercial general liability insurance policy; and (B) the
insurance provided for in clause (i) above written in a so-called
builder's risk completed value form (1) on a non-reporting basis, (2)
against all risks insured against pursuant to Section 5.03(b)(i), (3)
including permission to occupy the Real Property Asset, and (4) with an
agreed amount endorsement waiving co-insurance provisions;
(v) if Borrower now or hereafter has any employees, workers'
compensation, subject to the statutory limits of the state in which the
Real Property Asset is located, and employer's liability insurance (A)
with a limit per accident and per disease per employee, and (B) in an
amount for disease aggregate in respect of any work or operations on or
about the Real Property Asset, or in connection with the Real Property
Asset or its operation (if applicable), in each case reasonably required
by Agent;
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Agent on terms
consistent with the commercial general liability insurance policy
required under Subsection 3.3(a)(ii);
(vii) umbrella liability insurance in an amount not less
than $20,000,000 per occurrence on terms consistent with the commercial
general liability insurance policy required under Subsection 3.3(a)(ii);
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence of $5,000,000; and
(ix) such other insurance and in such amounts as Agent from
time to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to
the Real Property Asset located in or around the region in which the
Real Property Asset is located.
(c) All insurance provided for hereunder shall be obtained under
valid and enforceable policies (the "Policies" or in the singular, the
"Policy"), and shall be subject to the approval of Agent and the Majority Co-
Lenders (which approval shall not be unreasonably withheld) as to insurance
companies, amounts, forms, deductibles, loss payees and insurers. The
Policies shall be issued by financially sound and responsible insurance
companies authorized to do business in the state in which the Real Property
Asset is located. Each insurance company must have a rating of "A" or better
for claims paying ability assigned by Standard & Poor's Rating Group or, if
Standard & Poor's Rating Group does not assign a rating for such insurance
company, such insurance company must have a general policy rating of A or
better and a financial class of VIII or better by Best (each such insurer
shall be referred to below as a "Qualified Insurer"). Not less than thirty
(30) days prior to the expiration dates of the Policies theretofore furnished
to Agent, certified copies of the Policies marked "premium paid" or
accompanied by evidence reasonably satisfactory to Agent of payment of the
premiums due thereunder shall be delivered by Borrower to Agent; provided,
however, that in the case of renewal Policies, Borrower may furnish Agent
with binders therefor to be followed by the original Policies when issued.
(d) Borrower shall not obtain (i) any umbrella or blanket
liability or casualty Policy unless, in each case, such Policy is approved in
advance in writing by Agent and approved by the Majority Co-Lenders (which
consent shall not be unreasonably withheld) and such Policy is issued by a
Qualified Insurer, or (ii) separate insurance concurrent in form or
contributing in the event of loss with that required in Section 5.03(b) to be
furnished by, or which may be reasonably required to be furnished by,
Borrower. In the event Borrower obtains separate insurance or an umbrella or
a blanket Policy, Borrower shall notify Agent of the same and shall cause
certified copies of each Policy to be delivered as required in Section
5.03(b). Any blanket insurance Policy shall (a) specifically allocate to the
Real Property Asset the amount of coverage from time to time required
hereunder or (b) be written on an occurrence basis for the coverages required
hereunder with a limit per occurrence in an amount equal to the amount of
coverage required hereunder and shall otherwise provide the same protection
as would a separate Policy insuring only the Property in compliance with the
provisions of Section 5.03(b).
(e) All Policies of insurance provided for in Section 5.03(b)
shall contain clauses or endorsements to the effect that:
(i) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or canceled without at least 30
days' written notice to Agent and any other party named therein as an
insured; and
(ii) each Policy shall provide that the issuers thereof shall
give written notice to Agent if the Policy has not been renewed thirty
(30) days prior to its expiration.
(f) Borrower shall furnish to Agent, on or before thirty (30) days
after the close of each of Borrower's fiscal years, a statement certified by
Borrower or a duly authorized officer of Borrower of the amounts of insurance
maintained in compliance herewith, of the risks covered by such insurance and
of the insurance company or companies which carry such insurance and, if
requested by Agent, verification of the adequacy of such insurance by an
independent insurance broker or appraiser acceptable to Agent.
(g) If at any time Agent is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Agent
shall have the right, without notice to Borrower to take such action as Agent
deems reasonably necessary to protect its interest in the Real Property
Assets, including, without limitation, the obtaining of such insurance
coverage as Agent and the Co-Lenders deems appropriate, and all reasonable
expenses incurred by Agent and the Co-Lenders in connection with such action
or in obtaining such insurance and keeping it in effect shall be paid by
Borrower and the REIT to Agent promptly after demand and shall bear interest
in accordance with Section 10.2 hereof.
(h) Subject to the provisions of the Security Instrument which
shall govern with respect to Mortgaged Assets, if the Real Property Assets
shall be damaged or destroyed, in whole or in part, by fire or other
casualty, or condemned or taken by eminent domain, Borrower shall give prompt
notice of such damage or taking to Agent and shall promptly commence and
diligently prosecute the completion of the repair and restoration of the Real
Property Asset as nearly as possible to the condition the Real Property Asset
was in immediately prior to such fire or other casualty or taking (the
"Restoration"). Borrower shall pay all costs of such Restoration whether or
not such costs are covered by insurance or any condemnation award.
Section 5.04 Taxes. Borrower and the other Loan Parties shall
-----
pay or cause to be paid, when due (i.e., before any penalty or fine could be
levied or charged), all taxes, charges and assessments and all other lawful
claims required to be paid by Borrower, the other Loan Parties, except as
contested in good faith and by appropriate proceedings diligently conducted,
if adequate reserves have been established with respect thereto in accordance
with GAAP. Upon request from Agent, Borrower shall provide evidence to Agent
of payment of such taxes, charges, assessments and other lawful claims.
Section 5.05 Corporate Franchises; Conduct of Business. (a)
-----------------------------------------
Borrower and each Loan Party shall do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and
good standing in the State of its organization and in each state in which a
Real Property Asset is located, and its respective franchises, licenses,
permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals, except
where the failure to so preserve any of the foregoing (other than existence
and good standing) would not, individually or in the aggregate, result in a
Material Adverse Effect.
(b) The Borrower shall carry on and conduct its business in
substantially the same manner and substantially the same field of enterprise
as it is presently conducted and only by the Borrower through itself or the
Guarantors, except as described on Schedule 9B.
(c) The REIT shall carry on and conduct its business in
substantially the same manner and substantially the same field of enterprise
as it is presently conducted and only through Borrower, except as described
in Schedule 9A.
-----------
Section 5.06 Compliance with Law. Subject to the provisions of
-------------------
the Security Instrument which shall govern with respect to Mortgaged Assets,
Borrower and the other Loan Parties shall comply with all Applicable Laws,
rules, statutes, regulations, decrees and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of their business and the ownership of their property
(including the Real Property Assets), except for such laws, rules, statutes,
regulations, decrees, orders and restrictions, (a) which Borrower or such
other Loan Party are 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 any of Agent, the Co-Lenders Borrower,
the other Loan Parties to any criminal liability or penalty, (ii) give rise
to a Lien against any of the Assets or any Real Property Asset, or (iii)
otherwise materially adversely affect any of the Assets 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. Borrower, the REIT and the applicable Loan Parties shall not use or
permit the use of all or any portion of any Real Property Asset for any
illegal activity.
Section 5.07 Performance of Obligations. Borrower, the REIT and
--------------------------
each Loan Party shall perform all of their obligations under the terms of
each mortgage, indenture, security agreement, debt instrument, lease,
undertaking and contract by which it or any of its Real Property Assets is
bound or to which it is a party.
Section 5.08 Stock. The REIT shall cause its issued and
-----
outstanding shares of stock to be listed for trading on the New York Stock
Exchange.
Section 5.09 Change in Rating. Borrower shall promptly notify
----------------
Agent in writing of the initial receipt of and any subsequent change,
downgrade or withdrawal, or threatened change, downgrade or withdrawal of
Borrower's or the REIT's Unsecured Debt Rating.
Section 5.10 Maintenance of Properties. Borrower and the other
-------------------------
Loan Parties shall ensure that the Real Property Assets are kept in their
current condition and repair, normal wear and tear, pending capital
improvements and casualty damage in the process of being repaired or restored
excepted.
Section 5.11 Compliance with ERISA. (a) Borrower and the other
---------------------
Loan Parties shall maintain each Employee Benefit Plan and Plan in material
compliance with all material applicable requirements of ERISA and the Code
and with all material applicable final regulations promulgated thereunder.
Borrower and the other Loan Parties shall provide to Agent, within ten (10)
days of sending or receipt by Borrower or the other Loan Parties, copies of
all filings or correspondence with the Internal Revenue Service, PBGC,
Department of Labor, Plan, Multiemployer Plan or union, regarding any Plan,
or regarding or disclosing any liability or potential liability or violation
of law under any Employee Benefit Plan.
(b) Borrower and the other Loan Parties shall also provide to
Agent, with ten (10) days of filing or receipt by Borrower or the other Loan
Parties, (i) any notice from the Department of Labor or Internal Revenue
Service of assessment or investigation regarding a prohibited transaction
under Section 4975 of the Code or Section 406 of ERISA, (ii) any notice from
a Multiemployer Plan of withdrawal with respect to a Multiemployer Plan,
(iii) notice from the Internal Revenue Service of imposition of excise tax
with respect to an Employee Benefit Plan, (iv) any Form 5500 filed by any
Borrower or Loan Party with respect to an Employee Benefit Plan which
includes a qualified accountant's opinion, or (v) notice regarding a proposed
termination from the PBGC.
(c) Neither Borrower nor any other Loan Party shall engage in any
transaction which could reasonably be expected to cause any obligation, or
action taken or to be taken, hereunder (or the exercise by Agent or the Co-
Lenders of any of its rights under this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under ERISA or result in a violation of a
state statute regulating governmental plans that would subject Agent or any
Co-Lender to liability for a violation of ERISA or such a state statute.
(d) Borrower and the REIT further covenant and agree to deliver to
Agent such certifications or other evidence from time to time throughout the
term of the Loan, as reasonably requested by Agent or the Co-Lenders in their
sole discretion, that (i) neither Borrower nor any other Loan Party is an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject
to Title I of ERISA, or a "governmental plan" within the meaning of Section
3(3) of ERISA; (ii) neither Borrower nor any other Loan Party is subject to
state statutes applicable to Borrower or any Loan Party regulating
investments and fiduciary obligations of Borrower or any Loan Party with
respect to governmental plans; and (iii) with respect to each Loan Party and
Borrower, at least one of the following circumstances is true:
(i) Equity interests in Borrower or such Loan Party are
publicly offered securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(ii) Less than 25 percent of each outstanding class of equity
interests in Borrower or such Loan Party are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Borrower or such Loan Party qualifies as an
"operating company" or a "real estate operating company" within the
meaning of 29 C.F.R. Section 2510.3-101(c) or (e) or an investment
company registered under The Investment Company Act of 1940.
Section 5.12 Settlement/Judgment Notice. Borrower agrees that
--------------------------
it shall, within ten (10) days after it effects a settlement of any
obligation in excess of $1,000,000.00 provide written notice to Agent of such
settlement together with a certification signed by the REIT for itself and as
general partner of Borrower certifying based upon the most recent quarterly
consolidated financial statements of Borrower, the REIT and their
Consolidated Subsidiaries, such settlement will not cause Borrower or the
REIT to violate the financial covenants set forth herein. Borrower further
agrees that it shall, within ten (10) days after entry against it of a final
judgment in excess of $1,000,000.00 or final judgments in excess of
$1,000,000.00 in the aggregate (to the extent not covered by insurance)
during the immediately preceding twelve (12) month period, provide written
notice to Agent of such judgment.
Section 5.13 Acceleration Notice. Borrower agrees that it shall,
-------------------
within ten (10) days after receipt of written notice that any Indebtedness of
Borrower or any Loan Party in a principal amount in excess of $1,000,000.00
has been accelerated, provide written notice to Agent of such acceleration.
Section 5.14 Intentionally Deleted.
---------------------
Section 5.15 Intentionally Deleted.
---------------------
Section 5.16 Intentionally Deleted.
---------------------
Section 5.17 Intentionally Deleted.
---------------------
Section 5.18 Intentionally Deleted.
---------------------
Section 5.19 Intentionally Deleted.
---------------------
Section 5.20 Intentionally Deleted.
---------------------
Section 5.21 Manager. The Real Property Assets shall at all
-------
times be managed by the Manager or the Borrower or a wholly owned Subsidiary
of Borrower pursuant to a management agreement reasonably satisfactory to the
Majority Co-Lenders. If (i) any manager of a Mortgaged Asset shall become
insolvent or (ii) an Event of Default shall occur and be continuing, then the
Majority Co-Lenders, at their option, may require Borrower to engage a bona-
fide, independent third party management agent approved by the Majority Co-
Lenders, in their reasonable discretion (the "New Manager") to manage such
Real Property Asset. The New Manager shall be engaged by Borrower pursuant
to a written management agreement that complies with the terms hereof and is
otherwise reasonably satisfactory to the Majority Co-Lenders in all respects
and the New Manager shall execute and deliver to Agent a Subordination of
Management Agreement.
Section 5.22 Further Assurances. Borrower will, at Borrower's
------------------
sole cost and expense, at any time and from time to time upon request of
Agent take or cause to be taken any action and execute, acknowledge, deliver
or record any further documents, opinions, negative pledge agreements or
other instruments which Agent or any Co-Lender in its reasonable discretion
deems necessary or appropriate to carry out the purposes of this Agreement
and the other Loan Documents including to consummate the transfer or sale of
the Loan or any portion thereof, provided that Borrower shall not be required
to amend or modify this Agreement or any other Loan Documents in a material
manner.
Section 5.23 REIT Status. The REIT shall at all times maintain
-----------
its status as a "qualified real estate investment trust" under Section 856 of
the Code.
Section 5.24 Additional Covenants. (a) Borrower and the REIT
--------------------
shall give prompt notice to Agent of the receipt by Borrower, the REIT or any
Loan Party of (i) any notice related to a violation of any Applicable Laws
and (ii) the commencement of any proceedings or investigations which relate
to compliance with Applicable Laws which in any instance could be reasonably
expected to have a Material Adverse Effect.
(b) Borrower and the REIT will take appropriate measures to
prevent and will not engage in or knowingly permit any illegal activities at
any Real Property Asset.
(c) Borrower and the REIT shall use best efforts to get all
consents and/or approvals required under the terms of the Graybar Leases and
the Graybar Operating Lease to encumber SLG Graybar LLC's interest in the
Graybar Building to the Lien of the Loan Documents, including, without
limitation, the Security Instrument and shall, among other things, deliver to
Agent any and all title insurance policy(s) and/or an opinion(s) of
Borrower's or the appropriate Loan Party's counsel as may be reasonably
requested by Agent and shall, upon obtaining such consents and/or approvals,
execute and deliver all documentation reasonably required by Agent to spread
the Lien of the Loan Documents, including, without limitation, the Security
Instrument, to encumber SLG Graybar LLC's interest in the Graybar Building at
which time the Pledge Agreement shall terminate.
Section 5.25 Intentionally Deleted.
---------------------
Section 5.26 Keep Well Covenants. The Partnership and the REIT
-------------------
shall (a) cause each Borrower and each Guarantor to be operated and managed
in such a manner that it will fulfill its obligations under the Loan
Documents and the Guaranty; (b) not file any petition for relief under the
United States Bankruptcy Code or under any similar federal or state law
against any such Borrower or Guarantors; and (c) provide funding to each
Borrower and each Guarantor to the extent necessary to enable each Borrower
and each Guarantor to fulfill its obligations under the Loan Documents and
the Guaranty and to remain Solvent.
Section 5.27 Existing Environmental Conditions, Required Repairs
---------------------------------------------------
and Preparation of Environmental Reports. (a) At the request of Agent, at
- ----------------------------------------
any time that Agent has a reason to believe that there may be Hazardous
Substances present on any Real Property Asset or any violation of
Environmental Law with respect to any Real Property Asset, Borrower shall
provide to Agent, within sixty (60) days after such request, at the expense
of Borrower and the REIT, an Environmental Report for all Real Property
Assets that have been acquired after the date hereof, or with respect to the
Real Property Assets owned as of the date hereof, any Real Property Asset for
which Agent has a reasonable basis for requiring such an Environmental Report
(including, without limitation, the fact that an environmental report was not
delivered at or prior to the Closing Date or there is a basis to believe that
there may be Hazardous Materials or a threat of a Release with respect to
such Real Property Asset) as described in such request. Without limiting the
generality of the foregoing, if Agent or the Majority Co-Lenders determine at
any time that a material risk exists that any such Environmental Report will
not be provided within the time referred to above, Agent may retain an
environmental consulting firm to prepare such Environmental Report at the
expense of Borrower and the REIT, and Borrower hereby grants and agrees to
cause any Loan Party which owns any Real Property Asset described in such
request to grant at the time of such request, to Agent, such firm and any
agents of representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto their respective Real
Property Assets to undertake such an assessment.
(b) Borrower shall, within twelve (12) months of the Closing Date
cause the environmental conditions and maintenance/repairs (the "Post-Closing
Repairs") set forth on Schedule 16 attached hereto for each of the Mortgaged
Assets set forth therein to be remediated or completed. Borrower further
agrees to deliver evidence reasonably satisfactory to the Lender and each
Co-Lender that the Post-Closing Repairs have been fully completed and paid
for within such twelve (12) month period in a manner not inconsistent with
the terms of this Agreement.
Section 5.28 Intentionally Deleted.
---------------------
Section 5.29 Compliance with Terms of Leaseholds. (a) Subject
-----------------------------------
to the provisions of the Security Instrument which shall govern with respect
to Mortgaged Assets, Borrower, the REIT and the applicable Loan Party shall,
subject to good faith disputes with tenants thereunder, make all payments and
otherwise perform all obligations in respect of Leases of real property, keep
such Leases in full force and effect and not allow such Leases to lapse or be
terminated or any rights to renew such Leases to be forfeited or canceled,
notify the Agent of any default by any party with respect to such Leases (to
the extent known to Borrower) and cooperate with the Agent in all respects to
cure any such default and cause each Loan Party to do so.
(b) Borrower, the REIT and the applicable Loan Party shall make
all payments and otherwise perform all obligations in respect of the Graybar
Operating Lease, keep the Graybar Operating Lease in full force and effect
and not allow the Graybar Operating Lease to lapse or be terminated or any
rights to renew the Graybar Operating Lease to be forfeited or canceled and
cooperate with the Agent in all respects to cure any default under the
Graybar Operating Lease and cause the applicable Loan Party to do so.
Section 5.30 Equity or Debt Offerings. All net proceeds (after
------------------------
payment of underwriter and placement fees and other expenses directly related
to such equity or debt offering) from any equity or debt offering by the REIT
shall be promptly paid to Lender and applied to the then outstanding balance
of the Loan.
Section 5.31 Notice of Certain Events. (a) Borrower shall,
------------------------
within ten (10) days of obtaining actual knowledge thereof, notify Agent of
(i) any execution of, or material modification to, cancellation, surrender or
termination of any lease or sublease relating to the Bar Building, (ii) any
change in the identity of any lessee or sublessee of the Bar Building or
(iii) any lapse in insurance coverage or any tax delinquency relating to the
Bar Building or (iv) any casualty to or condemnation of all or any part of
the Bar Building or (v) any material environmental condition with respect to
the Bar Building or (vi) the occurrence of any Bar Building Event of Default
or (vii) the occurrence of any default that continues beyond the expiration
of any applicable notice or cure period under the 17 Battery Place
Transaction Documents.
(b) Borrower shall, within ten (10) days of obtaining actual
knowledge thereof, notify Agent of any default under (i) the Graybar
Operating Lease and/or the Graybar Leases or (ii) any fee or leasehold
mortgage encumbering the Graybar Building, the Graybar Operating Lease and/or
the Graybar Leases, or any portion of any of the foregoing.
Section 5.32 17 Battery Place Condominium. Borrower and SLG 17
----------------------------
Battery LLC shall diligently take all actions required to convert 17 Battery
Place into a condominium pursuant to the terms and provisions of, and within
the time frame contemplated in, the 17 Battery Place Transaction Documents.
SECTION 6. NEGATIVE COVENANTS.
Borrower and the REIT covenant and agree that on and after the
Closing Date until the Obligations (other than inchoate indemnity and expense
reimbursement Obligations) are paid in full:
Section 6.01 Bar Building and 17 Battery Place. Neither Borrower
---------------------------------
nor SLG 17 Battery LLC shall amend, waive or modify any of its rights or any
defaults with respect to any Bar Building Loan Document or the 17 Battery
Place Transaction Documents. Other than immaterial or ministered changes,
neither Borrower nor SLG 17 Battery LLC shall amend or modify any of the
terms or conditions of any Bar Building Loan Document or the 17 Battery Place
Transaction Documents without the prior written consent of the Majority Co-
Lenders.
Section 6.02 Intentionally Deleted.
---------------------
Section 6.03 Liens. Borrower and the other Loan Parties shall
-----
not, create, incur, assume or suffer to exist, directly or indirectly, any
Lien on any Mortgaged Asset other than the following (collectively, the
"Permitted Liens"):
(a) The Liens set forth on (i) the title insurance policy insuring
the lien of the Security Instrument, (ii) Borrower's title insurance policy
insuring the lien of (A) the Bar Building Mortgages, other than Liens that
exist as of the date hereof and are junior to the Bar Building Mortgages and
(B) the 17 Battery Place Mortgage, as assigned to Agent and (iii) Borrower's
title insurance policy insuring Borrower's leasehold interest in the Graybar
Building (collectively, the "Title Insurance Permitted Liens").
(b) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by Law (other than any Lien imposed by
ERISA) created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings diligently
conducted, and with respect to which adequate bonds have been posted if
required to do so by Applicable Law;
(d) Sidewalk violations or other municipal violations that are not
material and are not a Lien on the related Real Property Asset other than the
Title Insurance Permitted Liens; and
(e) Intentionally Deleted.
---------------------
Section 6.04 Restriction on Fundamental Changes. (a) Without
----------------------------------
the prior written consent of the Majority Co-Lenders, which consent may be
withheld in the sole and absolute discretion of the Majority Co-Lenders, (i)
the Partnership, the REIT and the other Loan Parties shall not enter into any
merger or consolidation with, or sell, lease, transfer or otherwise dispose
of any Substantial Assets within any one calendar year to, any Person other
than the Partnership or a wholly owned Subsidiary of the Partnership and
(ii) the REIT shall not sell, transfer, pledge, assign or encumber its
general partnership interest in the Partnership and (iii) the Partnership
shall not sell, transfer, pledge, assign or encumber its membership interest
in any Guarantor or any other Borrower and (iv) SLG Graybar 2 LLC shall not
sell, transfer, pledge, assign or encumber its membership interest in SLG
Graybar LLC.. Notwithstanding the foregoing, neither the Partnership, the
REIT nor any Loan Party shall enter into any arrangement, directly or
indirectly, whereby the Partnership, the REIT or any Loan Party shall sell or
transfer any Real Property Asset (in a single or multiple transaction) owned
by any of them in order then or thereafter to lease such property or lease
other Real Property Asset that it intends to use for substantially the same
purpose as the Real Property Asset being sold or transferred.
(b) Intentionally Deleted.
Section 6.05 Transactions with Affiliates. Borrower and the
----------------------------
other Loan Parties shall not enter into any material transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Borrower, other than on terms and conditions substantially
as favorable as would be obtainable at the time in a comparable arm's-length
transaction with a Person other than an Affiliate of Borrower.
Section 6.06 Plans. Borrower and the other Loan Parties shall
-----
not, nor shall they permit any member of their respective ERISA Controlled
Group to, (i) establish, become liable for, or amend any Plan or fail to make
contributions when due under any Plan or take or omit to take any other
action which would (A) increase the aggregate present value of the Unfunded
Benefit Liabilities under all Plans or withdrawal liability under a
Multiemployer Plan for which Borrower or any Loan Party or any member of
their respective ERISA Controlled Groups (determined without reference to
Section 414(m) or (o) of the Code, if liabilities of entities in Borrower or
the Loan Parties' ERISA Controlled Group solely by reason of Section 414(m)
or (o) of the Code could not result in liability to Borrower or any Loan
Party) to an amount in excess of $500,000 or (B) result in liability or
Contingent Obligation for any post-retirement benefit under any "welfare
plan" (as defined in Section 3(1) of ERISA), or any withdrawal liability or
exit fee or charge with respect to any "welfare plan" (as defined in Section
3(1) of ERISA), other than liability for continuation coverage under Part 6
of Title I of ERISA, or state or local laws which require similar
continuation coverage for which the employee pays approximately the full cost
of coverage, or (ii) engage in any transaction prohibited by Section 406 of
ERISA or Section 4975 of the Code for which a statutory or administrative
exemption was not available and which would result in a material liability
being imposed on such Person or could be reasonably expected to have a
Material Adverse Effect.
Section 6.07 Distributions. The REIT and Borrower (without
-------------
duplication) shall not pay or declare Distributions (a) if an Event of
Default has occurred and is continuing or (b) that in the aggregate exceeds
95% during the first year after the Closing and 90% thereafter, of the Funds
From Operations of Borrower, both individually and combined with the REIT
(without duplication), in any four consecutive calendar quarters (or if four
consecutive calendar quarters have not passed since the date hereof, the
quarterly periods from the date hereof); provided that notwithstanding the
foregoing, so long as no Event of Default has occurred and is continuing, the
REIT may pay or declare Distributions without violating this covenant in (i)
the amount necessary to maintain the REIT's status as a real estate
investment trust under Section 856 of the Code and applicable state tax law,
or (ii) the amount necessary for the REIT to avoid the payment of any federal
income or excise tax. For purposes of the calculation only, Funds From
Operations shall be determined without taking into account the effect of
Distributions on either Preferred or Common OP Units, and Distributions shall
include all distributions on Preferred and Common OP Units.
Section 6.08 Tenant Concentration. No single tenant or
--------------------
Affiliates of such tenant pursuant to one or more Leases shall, in the
aggregate, lease space in Real Property Assets of Borrower, the REIT or any
Loan Party which provides for Rent (including without limitation, percentage
rent) in excess of 5%, if such tenant is not an Investment Grade Tenant, or
10%, if such tenant is an Investment Grade Tenant, of the aggregate Rents
derived from all Leases of such Real Property Assets.
Section 6.09 Restriction on Indebtedness. Neither Borrower, the
---------------------------
REIT or any subsidiary or affiliate thereof nor any Guarantor shall at any
time have any liability, contingent or otherwise, to any other Person under
any Indebtedness other than (i) the debt evidenced by the Loan Documents,
(ii) the non-use fee and other fees or sums due under the Unsecured Line of
Credit, (iii) trade payables incurred in the ordinary course of business and
(iv) the Existing Mortgage Debt.
Section 6.10 Real Property Assets. Neither the Borrower, the
--------------------
REIT nor any other Loan Party shall acquire any Real Property Asset unless an
Environmental Report for such Real Property Asset dated within six (6) months
of the proposed acquisition date has been prepared and if requested,
delivered to Agent showing that there are no Hazardous Substances or other
environmental conditions on such Real Property Asset not in compliance with
Environmental Laws.
Section 6.11 Intentionally Deleted.
---------------------
(b) Intentionally Deleted.
---------------------
Section 6.12 Organizational Documents. Other than immaterial or
------------------------
ministerial changes, neither Borrower, the REIT nor any other Loan Party
shall make any amendments or modifications to their partnership agreements,
corporate charters, by-laws, certificates of incorporation, articles of
organization or other organizational documents without the prior approval of
the Majority Co-Lenders.
Section 6.13 Intentionally Deleted.
---------------------
Section 6.14 Intentionally Deleted.
---------------------
Section 6.15 Restrictions on Investments. In addition to the
---------------------------
provisions of Section 2.20, neither Borrower, the REIT or any Loan Party
shall make or permit to exist or remain outstanding any investment other than
investments in:
(a) marketable direct or guaranteed obligations of the United States of
America that mature within one (1) year from the date of purchase by the
Borrower, the REIT or any Loan Party;
(b) marketable direct obligations of any of the following: Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal
Home Loan banks, Federal National Mortgage Association, Government National
Mortgage association, Bank for Cooperatives, Federal Intermediate Credit
Banks, Federal Financing Banks, Export-Import Bank of the United States,
Federal Land Bank, or any other agency or instrumentality of the United
States of America that mature within one (1) year from the date of purchase
by the Borrower, the REIT or any Loan Party;
(c) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$100,000,000.00; provided, however, that the aggregate amount at any time so
invested with any single bank having total assets of less than
$1,000,000,000.00 will not exceed $200,000.00;
(d) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any State which at the times of purchase are rate by Moody's or by
S&P at not less than "P 2" if then rated by Moody's, and not less than "A 2",
if then rated by S&P;
(e) mortgage-backed securities guaranteed by the Government National
Mortgage Association, the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation and other mortgage-backed bonds which
at the time of purchase are rated by Moody's or by S&P at not less than "Aa"
if then rated by Moody's and not less than "AA" if then rated by S&P that
mature within one (1) year from the date of purchase by the Borrower, the
REIT or any Loan Party;
(f) repurchase agreements having a term not greater than 90 days and
fully secured by securities described in the foregoing subsection (a), (b) or
(e) with banks described in the foregoing subsection (c) or with financial
institutions or other corporations having total assets in excess of
$500,000,000.00;
(g) shares of so-called "money market funds" registered with the SEC
under the Investment Company Act of 1940 which maintain a level per-share
value, invest principally in investments described in the foregoing
subsections (a) through (f) and have total assets in excess of
$50,000,000.00;
(h) Permitted Investments.
SECTION 7. EVENTS OF DEFAULT
Section 7.01 Events of Default. The occurrence and continuance
-----------------
of any of the following events, acts, occurrences or conditions shall
constitute an Event of Default under this Agreement, regardless of whether
such event, act, occurrence or condition is voluntary or involuntary or
results from the operation of law or pursuant to or as a result of compliance
by any Person with any judgment, decree, order, rule or regulation of any
court or administrative or governmental body:
(a) Failure to Make Payments. Borrower and the REIT shall (i)
-------------------------
default in the payment when due of any principal of the Loan, or (ii) default
in the payment within five (5) days after the due date of (x) any interest on
the Loan or (y) any Fees, Transaction Costs or any other amounts owing
hereunder; provided, however, that any interest payable with respect to any
delinquent payment shall be calculated at the Default Rate from the date such
payment was actually due as if there were no grace period.
(b) Breach of Representation or Warranty. Any representation or
------------------------------------
warranty made by Borrower, the REIT or any other Loan Party herein or in any
other Loan Document or in any certificate or statement delivered pursuant
hereto or thereto shall prove to be false or misleading in any material
respect on the date as of which made or deemed made: provided,
--------
however, that if such breach is capable of being cured, then Borrower shall
- -------
have a period of thirty (30) days after delivery of notice from Agent to cure
any such breach.
(c) Breach of Covenants.
-------------------
(i) Borrower, the REIT or any other Loan Party shall fail to
perform or observe any agreement, covenant or obligation arising under
Sections 2.25(b), 5.01, 5.03, 5.12, 5.13, 5.27(b), 6.03, 6.04, 6.07,
6.08, 6.09, 6.10, 6.14 and 6.15.
(ii) Borrower, the REIT or any of the Loan Parties shall fail
to perform or observe any agreement, covenant or obligation arising
under (a) Section 5.19 and such failure shall continue uncured for more
than five (5) days after delivery or notice thereof or (b) this
Agreement (except those described in subsections (a), (b) and (c)(i)
above and the preceding clause (a)), and such failure shall continue
uncured for thirty (30) days after delivery of notice thereof, or such
longer period of time as is reasonably necessary to cure such Default,
provided that Borrower has commenced and is diligently prosecuting the
cure of such Default and cures it within ninety (90) days.
(iii) Borrower, the REIT or any other Loan Party shall
fail to perform or observe any agreement, covenant or obligation arising
under any provision of the Loan Documents other than this Agreement,
which failure shall continue after the end of any applicable grace
period provided therein.
(d) Default Under Other Agreements. Borrower, the REIT or any
------------------------------
other Loan Party shall default beyond any applicable grace period in the
payment, performance or observance of any obligation or condition with
respect to any other Indebtedness in excess of $1,000,000 or any other event
shall occur or condition exist, if the effect of such default, event or
condition is to accelerate the maturity of any Indebtedness in excess of
$1,000,000 or to permit (without regard to any required notice or lapse of
time) the holder or holders thereof, or any trustee or agent for such
holders, to accelerate the maturity of any such Indebtedness in excess of
$1,000,000 or any such Indebtedness shall become or be declared to be due and
payable prior to its stated maturity and the forgoing conditions are not
cured within thirty (30) days after the condition occurs.
(e) Bankruptcy, etc. (i) Borrower or any other Loan Party shall
---------------
commence a voluntary case concerning itself under the Bankruptcy Code; or
(ii) aninvoluntary case is commenced against Borroweror any other Loan Party-
and the petition is not controverted within thirty (30) days, or is not
dismissed within ninety (90) days, after commencement of the case or (iii) a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Borrower, any other
Loan Party or Borrower or any other Loan Party commences any other
proceedings under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower, any
other Loan Party or there is commenced against Borrower or any other Loan
Party any such proceeding which remains undismissed for a period of ninety
(90) days; or (iv) any order of relief or other order approving any such case
or proceeding is entered; or (v) Borrower or any other Loan Party is
adjudicated insolvent or bankrupt; or (vi) Borrower or any other Loan Party
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of ninety (90) days; or (vii) Borrower or any other Loan Party makes
a general assignment for the benefit of creditors; or (viii) Borrower, any
other Loan Party shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or (ix)
Borrower or any other Loan Party shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debt; or (x) Borrower or
any other Loan Party shall by any act or failure to act consent to, approve
of or acquiesce in any of the foregoing; or (xi) any corporate or partnership
action is taken by Borrower or any other Loan Party for the purpose of
effecting any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii) any Plan
-----
shall incur an accumulated funding deficiency (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived, or fail to make a
required installment payment on or before the due date under Section 412 of
the Code or Section 302 of ERISA, or (iii) Borrower or any of the Loan
Parties or a member of their respective ERISA Controlled Group shall have
engaged in a transaction which is prohibited under Section 4975 of the Code
or Section 406 of ERISA which could result in the imposition of liability in
excess of $1,000,000.00 on any of Borrower or any other Loan Party or any
member of their respective ERISA Controlled Group and an exemption shall not
be applicable or have been obtained under Section 408 of ERISA or Section
4975 of the Code, or (iv) Borrower or any of the other Loan Parties or any
member of their respective ERISA Controlled Group shall fail to pay when due
an amount which it shall have become liable to pay to the PBGC, any Plan, any
Multiemployer Plan or a trust established under Section 4049 of ERISA, or (v)
Borrower shall have received a notice from the PBGC of its intention to
terminate a Plan or to appoint a trustee to administer such Plan or
Multiemployer Plan, which notice shall not have been withdrawn within
fourteen (14) days after the date thereof, or (vi) a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating
that an ERISA Plan must be terminated or have a trustee appointed to
administer any ERISA Plan, or (vii) Borrower or any of the other Loan Parties
or a member of their respective ERISA Controlled Group suffers a partial or
complete withdrawal from a Multiemployer Plan or is in default (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan, or (viii) a proceeding shall be instituted against any of Borrower or
any of the other Loan Parties or any member of their respective ERISA
Controlled Group to enforce Section 515 of ERISA, or (ix) any other event or
condition shall occur or exist with respect to any Employee Benefit Plan,
Plan or Multiemployer Plan which could subject Borrower or any of the other
Loan Parties or any member of their respective ERISA Controlled Group to any
tax, penalty or other liability in excess of $1,000,000.00 or the imposition
of any lien or security interest on Borrower or any of the other Loan Parties
or any member of their respective ERISA Controlled Group, or (x) with respect
to any Multiemployer Plan, the institution of a proceeding to enforce Section
515 of ERISA, to terminate such Plan, the receipt of a notice of
reorganization or insolvency under Sections 4241 or 4245 of ERISA, in any
event which could result in liability in excess of $1,000,000.00 to Borrower,
any other Loan Party or any member of any of their ERISA Controlled Group, or
(xi) the assets of Borrower or any other Loan Party become or are deemed to
be assets of an Employee Benefit Plan. No Event of Default under this
Section 7.01(f) shall be deemed to be, or have been, waived or corrected
because of any disclosure by Borrower or any Loan Party. The occurrence of
any of the events Set forth in (iv), (v), (vi), (vii) or (viii) above, shall
not be an Event of Default if the potential liability to the ERISA Controlled
Group as a result of such occurrence, assuming that the Plan terminated
immediately thereon or the ERISA controlled Group immediately withdrew from
the Multiemployer Plan, would not exceed $1,000,000.00, either individually
or in the aggregate for all occurrences.
(g) Judgments. One or more judgments or decrees (i) in an
---------
aggregate amount of $1,000,000 or more are entered against Borrower, the REIT
or any other Loan Parties or (ii) which, with respect to Borrower and the
other Loan Parties, could result in a Material Adverse Effect, shall be
entered by a court or courts of competent jurisdiction against any of such
Persons (other than any judgment as to which, and only to the extent, a
reputable insurance company has acknowledged coverage of such claim in
writing or has actually reimbursed such judgment creditor) and (x)stayed (by
appeal or otherwise), discharged, paid, bonded or vacated within thirty (30)
days or (y) enforcement proceedings shall be commenced by any creditor on any
such judgments or decrees.
(h) REIT. The REIT fails to remain a publicly-traded real estate
----
investment trust in good standing with the New York Stock Exchange and with
the Securities and Exchange Commission.
(i) Material Adverse Effect. If any Material Adverse Effect shall
-----------------------
occur.
(j) Bar Building. If (i) a monetary default occurs under the
------------
Settlement Agreement, (ii) an Event of Default occurs under the Bar Building
Loan Documents, (iii) the Bar Building or any part thereof shall become an
asset in a voluntary or involuntary bankruptcy or insolvency proceeding or
(iv) the responsibility for the management of the Bar Building is transferred
from Borrower or a wholly-owned subsidiary or affiliate thereof.
(k) 17 Battery Place. If a default occurs under the 17 Battery
----------------
Place Tenancy Agreement or the 17 Battery Place Mortgage after the expiration
of any applicable notice and cure periods contained therein.
(l) Graybar Building. If a default occurs under the Graybar
----------------
Operating Lease and/or the Graybar Leases after the expiration of any
applicable notice and cure periods contained therein.
Section 7.02 Rights and Remedies. (a) Upon the occurrence of any
-------------------
Event of Default described in Section 7.01(e), the Facility Amount shall
automatically and immediately terminate and the unpaid principal amount of
and any and all accrued interest on the Loan and any and all accrued Fees and
other Obligations shall automatically become immediately due and payable,
with all additional interest thereon calculated at the Default Rate from the
occurrence of the Default until the Loan is paid in full and without
presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by Borrower and the
other Loan Parties, and the obligation of Lender and all Co-Lenders to make
any Advances hereunder shall thereupon terminate; and upon the occurrence and
during the continuance of any other Event of Default, Agent, upon approval by
the Majority Co-Lenders, may, by written notice to Borrower, (i) declare that
the Facility Amount is terminated, whereupon the Facility Amount and the
obligation of Lender and all Co-Lenders to make any Advances (or their pro
rata share thereof) hereunder shall immediately terminate, and (ii) declare
the unpaid principal amount of and any and all accrued and unpaid interest on
the Loan and any and all accrued Fees and other Obligations to be, and the
same shall thereupon be, immediately due and payable with all additional
interest thereon calculated at the Default Rate from the occurrence of the
Default until the Loan is paid in full and without presentation, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to
demand or accelerate and notice of acceleration), all of which are hereby
expressly waived by Borrower and the other Loan Parties.
(b) If an Event of Default has occurred and is continuing, Agent
and any Co-Lender may offset any indebtedness, obligations or liabilities
owed to Borrower against any indebtedness, obligations or liabilities of
Borrower or the REIT to it.
(c) If an Event of Default has occurred and is continuing, Agent
and any Co-Lender may avail itself of any remedies available to it under the
Loan Documents or at law or equity.
SECTION 8. INTENTIONALLY DELETED.
SECTION 9. MISCELLANEOUS.
Section 9.01 Payment of Agent's and Syndication Agent's Expenses,
----------------------------------------------------
Indemnity, etc. Borrower and the REIT shall:
- --------------
(a) whether or not the Transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of Agent and
the Syndication Agent in connection with Agent's and the Syndication Agent's
due diligence review of the Mortgaged Assets, the negotiation, preparation,
execution and delivery of the Loan Documents and the documents and
instruments referred to therein, and all out-of-pocket expenses of Agent and
the Syndication Agent in connection with the syndication and/or
administration of the Loan and any amendment, waiver or consent relating to
any of the Loan Documents and of Agent and the Syndication Agent in
connection with the preservation of rights under, any amendment, waiver or
consent relating to, and enforcement of, the Loan Documents and the documents
and instruments referred to therein or in connection with any restructuring
or rescheduling of the Obligations (including, without limitation, the
reasonable fees and disbursements of counsel for Agent and the Syndication
Agent);
(b) pay, and hold Agent, the Syndication Agent, and each Co-Lender
harmless from and against, any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and hold Agent, the
Syndication Agent, and each Co-Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to Agent, the Syndication Agent or such Co-
Lender) to pay such taxes; and
(c) indemnify Agent, (in its capacity as Lender and as Agent), the
Syndication Agent (in its capacity as Syndication Agent and as a Co-Lender)
and each Co-Lender, its officers, directors, employees, representatives and
agents and any persons or entities owned or Controlled by, owning or
Controlling, or under common Control or Affiliated with Agent, the
Syndication Agent, or each Co-Lender (each an "Indemnitee") from, and hold
each of them harmless against, any and all losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs
or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitee in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto) that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed
on, asserted against or incurred by any Indemnitee as a result of, or arising
in any manner out of, or in any way related to or by reason of, (i) the
breach of any of Borrower's, the REIT's or other Loan Party's representations
and warranties or of any of Borrower's, REIT's or other Loan Party's
Obligations, (ii) a default under Sections 4.12 or 5.11, including, without
limitation, reasonable attorneys' fees and costs incurred in the
investigation, defense, and settlement of losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining
any individual prohibited transaction exemption under ERISA that may be
required, and (iii) the exercise by Agent, the Syndication Agent and the Co-
Lenders of their rights and remedies (including, without limitation,
foreclosure) under any Loan Documents (but excluding, as to any Indemnitee,
any such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements incurred by
reason of the gross negligence or willful misconduct of such Indemnitee)
(collectively, "Indemnified Liabilities"). Borrower and the REIT further
agree that, without Agent's, the Syndication Agent's or the Co-Lenders' prior
written consent, they will not enter into any settlement of a lawsuit, claim
or other proceeding arising or relating to any Indemnified Liability unless
such settlement includes an explicit and unconditional release from the party
bringing such lawsuit, claim or other proceeding of each Indemnitee.
Borrower's and the REIT's obligations under this Section shall survive the
termination of this Agreement and the payment of the Obligations.
Section 9.02 Notices. Except as otherwise by expressly provided
-------
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile, telex, or
cable communication), and shall be deemed to have been duly given or made
when delivered by hand, or five (5) days after being deposited in the United
States mail, certified or registered, postage prepaid, or, in the case of
telex notice, when sent, answerback received, or, in the case of facsimile
notice, when sent, answerback received, or, in the case of a nationally
recognized overnight courier service, one (1) Business Day after delivery to
such courier service, addressed, in the case of Borrower, Agent and the
Syndication Agent, at the addresses specified below, or to such other
addresses as may be designated by any party in a written notice to the other
parties hereto, Syndication Agent, 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
with copies thereof, with respect to all notices delivered in
accordance with Section 2, to:
Lehman Brothers, Inc.
101 Hudson Street
Jersey City, New Jersey 07302
Telecopier Number: (201) 524-4439
Attention: Mr. Chris Czako
If to Borrower or the REIT, as follows:
SL Green Operating Partnership, L.P.
70 West 36/th/ 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
Section 9.03 Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of Borrower, the REIT, Agent, the
Syndication Agent, the Co-Lenders, all future holders of the Note and their
respective successors and assigns.
Section 9.04 Amendments and Waivers. (a) Neither this Agreement,
----------------------
the Note, any other Loan Document to which Borrower, the REIT or any other
Loan Party is a party nor any terms hereof or thereof may be amended,
supplemented, modified or waived other than in a writing executed by
Borrower, the REIT, any other applicable Loan Party and Agent. If all or a
portion of the Loan and the Facility Amount is sold to a Co-Lender pursuant
to Section 9.09, the Borrower and the REIT acknowledge and agree that any
amendment, modification approval, waiver or request to be granted regarding
the terms of this Agreement shall be given in accordance with the terms,
provisions and conditions of this Agreement and the intercreditor agreement
to be entered into between Lender, as Agent, and each Co-Lender (the
"Intercreditor Agreement"), provided that such terms, provisions and
conditions shall have been disclosed to Borrower and the REIT; Lender agrees
that the terms of such Intercreditor Agreement shall not be inconsistent with
this Agreement, the other Loan Documents or the Assignment and Assumption and
in the event of any such inconsistency the terms of this Agreement shall
control. The parties hereto acknowledge and agree that after the occurrence
of a Syndication, any amendment, modification, approval, waiver or request to
be granted regarding the terms of this Agreement shall be given in accordance
with the terms, provisions and conditions of the Intercreditor Agreement.
The authority of Agent to act as Agent hereunder arises pursuant to and is
governed by the Intercreditor Agreement and this Agreement.
(b) In the case of any waiver, Borrower, the REIT, Agent and all
Co-Lenders shall be restored to their former position and rights hereunder
and under the outstanding Note and any other Loan Documents, and any Default
or Event of Default waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or Event
of Default, or impair any right consequent thereon.
(c) Borrower acknowledges and agrees that this Agreement amends
and restates the terms and conditions of the Interim Loan Agreement in its
entirety and that the Collateral Account Agreement (as defined in the Interim
Loan Agreement) is terminated.
Section 9.05 No Waiver; Remedies Cumulative. No failure or delay
------------------------------
on the part of Agent or any Co-Lender in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between Borrower or any other Loan Party and Agent or any Co-Lender shall
operate as a waiver thereof nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Loan Document preclude
any other or further exercise thereof or the exercise of any other right,
power or privilege hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which Agent or any Co-Lender would otherwise have, absent a requirement or
provision therefor in any Loan Documents. No notice to or demand on Borrower
or any other Loan Party shall in any case entitle Borrower or any other Loan
Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Agent or any Co-Lender,
to any other or further action in any circumstances without notice or demand.
Section 9.06 Governing Law; Submission to Jurisdiction. (a) 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,
provided however, that with respect to the creation, perfection, priority and
enforcement of the lien of the Security Instruments, and the determination of
deficiency judgments, the laws of the State where the Real Property Asset is
located shall apply.
(b) Any legal action or proceeding with respect to this Agreement
or any other Loan Document 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, Borrower and the REIT hereby accept
for themselves and in respect of their property, generally and uncondi-
tionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. Borrower and the REIT irrevocably consent
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to Borrower and the REIT at their addresses
set forth in Section 9.02. Borrower and REIT hereby irrevocably waive any
objection which they 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 or any other Loan Document brought in the courts referred to
above and hereby further irrevocably waive and agree 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 Agent or any Co-Lender, to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against Borrower or the REIT in any other jurisdiction.
Section 9.07 Confidentiality Disclosure of Information. Each
-----------------------------------------
party hereto shall treat the transactions contemplated hereby and all
financial and other information furnished to it about Borrower, the other
Loan Parties and the Real Property Assets, as confidential; provided,
however, that such confidential information may be disclosed (a) as required
by law or pursuant to generally accepted accounting procedures, (b) to
officers, directors, employees, agents, partners, investors, attorneys,
accountants, engineers, other consultants, Affiliates and Co-Lenders of the
parties hereto who need to know such information, provided such Persons are
instructed to treat such information confidentially, (c) by Agent or the
Syndication Agent on a similar confidential basis to any Participant,
Affiliate, Co-Lender, servicer, or assignee ("Transferee"), which disclosure
to Transferees and prospective Transferees may include any and all
information which has been delivered to Agent or the Syndication Agent by
Borrower or any other Loan Party pursuant to this Agreement or the other Loan
Documents or which has been delivered to Agent or the Syndication Agent in
connection with Agent's or the Syndication Agent's or the Co-Lenders' credit
evaluation of Borrower and the REIT prior to entering into this Agreement, or
(d) upon the written consent of the party whose otherwise confidential
information would be disclosed.
Borrower and the REIT acknowledge and agree that Agent and the
Syndication Agent may provide to the Co-Lenders, and that Agent, the
Syndication Agent and each of the Co-Lenders may provide to any Participant,
originals or copies of this Agreement, all Loan Documents and all other
documents, instruments, certificates, opinions, insurance policies, letters
of credit, reports, requisitions and other materials and information of every
nature or description, and may communicate all oral information, at any time
submitted by or on behalf of Borrower, the REIT or any other Loan Party or
received by Agent or the Syndication Agent in connection with the Loan or
Borrower or any other loan Party.
Section 9.08. Recourse. The Loan and the Obligations shall be full
--------
recourse to Borrower and the REIT.
Section 9.09. Sale of Loan, Co-Lenders, Participations and
--------------------------------------------
Servicing.
- ---------
(a) Lender and any Co-Lender may, at their option, sell with
novation all or any part of their right, title and interest in, and to, and
under the Loan, including, without limitation, all or a portion of their
obligation to make Advances, and its interest in the outstanding principal
balance of the Loan, to one or more additional Co-Lenders; if no Event of
Default has occurred and is continuing, each Co-Lender shall be subject to
the prior written approval of Borrower, which approval shall not be
unreasonably withheld or delayed. Each additional Co-Lender shall enter into
an assignment and assumption agreement (the "Assignment and Assumption")
assigning a portion of Lender's or Co-Lender's rights and obligations under
the Loan, and pursuant to which the additional Co-Lender accepts such
assignment and assumes the assigned obligations. From and after the
effective date specified in the Assignment and Assumption (i) each Co-Lender
shall be a party hereto and to each Loan Document to the extent of the
applicable percentage or percentages set forth in the Assignment and
Assumption and, except as specified otherwise herein, shall succeed to the
rights and obligations of Lender and the Co-Lenders hereunder and thereunder
in respect of the Loan (including, without limitation, its pro rata share of
Lender's and each Co-Lenders' obligations to make Advances hereunder), and
(ii) Lender, as lender and each Co-Lender, as applicable, shall, to the
extent such rights and obligations have been assigned and assumed by it
pursuant to such Assignment and Assumption, relinquish its rights and be
released from its obligations hereunder and under the Loan Documents. Each
prospective Co-Lender that has been approved by Borrower pursuant to this
Section 9.09(a) that becomes a Co-Lender shall have the right to assign its
entire Pro Rata Interest in the Loan to an Affiliate thereof, provided that
such Affiliate complies with the other requirements of this Section 9.09(a).
(b) Intentionally Deleted.
(c) Borrower agrees that it shall, in connection with any sale of
all or any portion of the Loan, whether in whole or to an additional Co-
Lender or Participant (a "Syndication"), within ten (10) business days after
requested by Agent or the Syndication Agent, furnish Agent or the Syndication
Agent with the certificates required under Section 9.22(a) and (b) and such
other information as reasonably requested by any additional Co-Lender or
Participant in performing its due diligence in connection with its purchase
of an interest in the Loan and the Facility Amount.
(d) If for any reason the Agent, as a Co-Lender, but not as an
Agent, or any of the other Co-Lenders shall fail or refuse to (i) make timely
payment to any other party of any amount required to be paid by it hereunder
or under the Loan Documents, or (ii) abide by its other obligations under
this Agreement or the other Loan Documents within two (2) Business Days after
receipt of notice that the Agent has determined that such Co-Lender has so
failed or refused (or in the case of the Agent in its capacity as Co-Lender,
after receipt of notice that the Majority Co-Lenders have determined that the
Agent in its capacity as Co-Lender has so failed or refused) (each a
"Defaulting Co-Lender"), then, in addition to the rights and remedies that
may be available to the Agent and the other Co-Lenders at law and in equity,
such Defaulting Co-Lender's right to participate in the administration of the
Loan and the Loan Documents, including without limitation, any rights to
consent to or direct any action or inaction of the Agent or to be taken into
account in the calculation of Majority Co-Lenders, shall be suspended during
the pendency of such failure or refusal.
(e) Lender (or an Affiliate of Lender) shall act as administrative
agent for itself and the Co-Lenders (together with any successor
administrative agent, the "Agent") pursuant to this Section 9.09(e).
Borrower acknowledges that Lender, as Agent shall have the sole and exclusive
authority to execute and perform this Agreement and each Loan Document on
behalf of itself, as Lender and as agent for itself and the Co-Lenders
subject to the terms of the Intercreditor Agreement. Except as otherwise
provided herein, Borrower shall have no obligation to recognize or deal
directly with any Co-Lender, and no Co-Lender shall have any right to deal
directly with Borrower with respect to the rights, benefits and obligations
of Borrower under this Agreement, the Loan Documents or any one or more
documents or instruments in respect thereof. Borrower may rely conclusively
on the actions of Lender as Agent to bind Lender and the Co-Lenders, notwith-
standing that the particular action in question may, pursuant to this
Agreement or any Intercreditor Agreement among Agent and the Co-Lenders, be
subject to the consent or direction of the Co-Lenders. Lender may resign as
Agent of the Co-Lenders, in its sole discretion, without the consent of
Borrower. Upon any such resignation, a successor Agent shall be determined
pursuant to the terms of the Intercreditor Agreement.
Notwithstanding any provision to the contrary in this Agreement,
neither the Agent nor the Syndication Agent shall have any duties or
responsibilities except those expressly set forth herein and in the
Intercreditor Agreement and no covenants, functions, responsibilities,
duties, obligations or liabilities of Agent or the Syndication Agent shall be
implied by or inferred from this Agreement, the Intercreditor Agreement, or
any other Loan Document, or otherwise exist against Agent or the Syndication
Agent.
(f) Except to the extent its obligations hereunder and its
interest in the Loan have been assigned pursuant to one or more Assignments
and Assumption, Lehman, as Syndication Agent and Agent, shall have the same
rights and powers under this Agreement as any other Co-Lender and may
exercise the same as though it were not the Syndication Agent or Agent,
respectively. The term "Co-Lender" or "Co-Lenders" shall, unless otherwise
expressly indicated, include Lehman in its individual capacity. Lehman and
the other Co-Lenders and their respective affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage
in any kind of business with, Borrower, any Loan Party or any Affiliate of
Borrower or any Loan Party and any Person or entity who may do business with
or own securities of Borrower or any Loan Party or any Affiliate of Borrower
or any Loan Party or any Affiliate thereof, all as if they were not serving
in such capacities hereunder and without any duty to account therefor to each
other.
(g) Intentionally Deleted.
(h) Lender, as Agent, shall maintain at its domestic lending
office or at such other location as Lender, as Agent, shall designate in
writing to each Co-Lender and Borrower a copy of each Assignment and
Assumption delivered to and accepted by it and a register for the recordation
of the names and addresses of the Co-Lenders, the amount of each Co-Lender's
proportionate share of the Facility Amount and the Loan and the name and
address of each Co-Lender's agent for service of process (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Lender, as Agent, and the Co-Lenders may
treat each person or entity whose name is recorded in the Register as a Co-
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by Borrower or any Co-Lender during
normal business hours upon reasonable prior notice to the Agent. A Co-Lender
may change its address and its agent for service of process upon written
notice to Lender, as Agent, which notice shall only be effective upon actual
receipt by Lender, as Agent, which receipt will be acknowledged by Lender, as
Agent, upon request.
(i) Notwithstanding anything herein to the contrary, any financial
institution or other entity may be sold a participation interest in the Loan
by Lender or any Co-Lender without Borrower's consent (such financial
institution or entity, a "Participant") (x) if such sale is without novation
and (y) if the other conditions set forth in this paragraph are met. No
Participant shall be considered a Co-Lender hereunder or under the Note or
the Loan Documents. No Participant shall have any rights under this
Agreement, the Note or any of the Loan Documents and the Participant's rights
in respect of such participation shall be solely against Lender or Co-Lender,
as the case may be, as set forth in the participation agreement executed by
and between Lender or Co-Lender, as the case may be, and such Participant.
The terms of any participation agreement between Lender or Co-Lender, as the
case may be, and its Participant shall not grant the Participant any consent
rights except for consent to (i) changes in the interest rate and term of the
Loan, (ii) increase in the principal amount of the Loan (except for
protective advances), (iii) release of any party liable for repayment of the
Loan, (iv) forbearance, (v) consents to Liens other than Permitted Liens on
the Real Property Assets or the Rents related thereto, (vi) the acceleration
of the Loan or the taking of any enforcement action with respect to the Loan.
No participation shall relieve Lender or Co-Lender, as the case may be, from
its obligations hereunder or under the Note or the Loan Documents and Lender
or Co-Lender, as the case may be, shall remain solely responsible for the
performance of its obligations hereunder.
(j) Notwithstanding any other provision set forth in this
Agreement, the Lender or any Co-Lender may at any time create a security
interest in all or any portion of its rights under this Agreement (including,
without limitation, amounts owing to it in favor of any Federal Reserve Bank
in accordance with Regulation A of the Board of Governors of the Federal
Reserve System), provided that no such security interest or the exercise by
the secured party of any of its rights thereunder shall release Lender or Co-
Lender from its funding obligations hereunder.
Section 9.10 Borrower's and the REIT's Assignment. Neither
------------------------------------
Borrower nor the REIT may assign its rights or obligations hereunder without
the prior written consent of Agent and all of the Co-Lenders.
Section 9.11 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an orig-
inal, but all of which shall together constitute one and the same instrument.
Section 9.12 Effectiveness. This Agreement shall become
-------------
effective on the date on which all of the parties hereto shall have signed a
counterpart hereof and shall have delivered the same to the Syndication
Agent.
Section 9.13 Headings Descriptive. The heading of the several
--------------------
Sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision
of this Agreement.
Section 9.14 Marshaling; Recapture. Agent shall be under no
---------------------
obligation to marshal any assets in favor of Borrower, any other Loan Party
or any other party or against or in payment of any or all of the Obligations.
To the extent Agent receives any payment by or on behalf of Borrower or any
other Loan Party, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to Borrower or such other Loan Party or its estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof which has been paid, re-
duced or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included (other than for interest calculations) within
the liabilities of Borrower or such other Loan Party to Agent and the Co-
Lenders as of the date such initial payment, reduction or satisfaction
occurred.
Section 9.15 Severability. In case any provision in or obligation
------------
under this Agreement or the Note or the other Loan Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 9.16 Survival. Except as expressly provided to the
--------
contrary herein, all indemnities set forth herein including, without
limitation, in Sections 2.16, 2.17, 2.18, 2.19 and 9.01 shall survive the
execution and delivery of this Agreement, the Note and the Loan Documents and
the making and repayment of the Loan hereunder.
Section 9.17 Domicile of Loan Portions. Lender and the Co
-------------------------
Lenders may transfer and carry any Loan Portion at, to or for the account of
any domestic or foreign branch office, subsidiary or affiliate, subject to
Section 2.19.
Section 9.18 Intentionally Deleted.
---------------------
Section 9.19 Calculations; Computations. Except as otherwise
--------------------------
expressly provided herein, the financial statements to be furnished to Agent
or the Syndication Agent pursuant hereto shall be made and prepared in ac-
cordance with GAAP consistently applied throughout the periods involved and
consistent with GAAP as used in the preparation of the financial statements
referred to in Section 4.05.
SECTION 9.20 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED
-----------------------
BY APPLICABLE LAW, BORROWER, AGENT AND ALL CO-LENDERS EACH HEREBY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 9.21 No Joint Venture. Notwithstanding anything to the
----------------
contrary herein contained, neither Agent, the Syndication Agent nor any Co-
Lender by entering into this Agreement or by taking any action pursuant
hereto, will not be deemed a partner or joint venturer with Borrower or the
REIT or any Loan Party and Borrower and the REIT agree to hold Agent, the
Syndication Agent and each Co-Lender harmless from any damages and expenses
resulting from such a construction of the relationship of the parties hereto
or any assertion thereof.
Section 9.22 Estoppel Certificates. (a) Borrower, the REIT and
---------------------
Agent, each hereby agree at any time and from time to time upon not less than
ten (10) days prior written notice by Borrower, the REIT or Agent, to
execute, acknowledge and deliver to the party specified in such notice, a
statement, in writing, certifying whether this Agreement is unmodified (or if
there have been modifications stating the modifications hereto), and stating
whether or not, to the best knowledge of such certifying party, any Default
or Event of Default has occurred and is then continuing, and, if so,
specifying each such Default or Event of Default; provided, however, that it
-------- -------
shall be a condition precedent to Lender's obligation, as Agent, to deliver
the statement pursuant to this Section, that Agent shall receive, together
with Borrower's request for such statement, a certificate of a general
partner or senior executive officer of Borrower and the REIT, stating that to
the best knowledge of such certifying party, no Default or Event of Default
exists as of the date of such certificate (or specifying such Default or
Event of Default).
(b) Within five (5) Business Days of Agent's request, Borrower
shall execute and deliver a certificate of the general partner of Borrower
and the REIT or senior executive officer of Borrower and the REIT confirming
the then aggregate outstanding principal balance of the Loan, the outstanding
principal balance of each Eurodollar Portion and the Base Rate Portion, the
Contract Rate for each Loan Portion, the dates to which all interest has been
paid, and the Interest Period for each Eurodollar Portion. Such statement
shall be binding and conclusive on Borrower and the REIT absent manifest
error.
(c) Agent on behalf of the Co-Lenders agrees at any time and
from time to time upon not less than ten (10) days prior written notice by
Borrower, to execute, acknowledge and deliver to the party specified in such
notice, a statement, in writing, stating (i) the then current outstanding
principal balance under this Agreement, (ii) the Contract Rate and the
interest rate of each outstanding Loan Portion, (iii) whether it has
delivered any notices of default under this Agreement and (iv) whether this
Agreement is unmodified, and if there have been modifications, stating the
modifications hereto).
Section 9.23 No Other Agreements. The Loan Documents constitute
-------------------
the entire understanding of the parties with respect to the transactions
contemplated hereby, and all prior understandings with respect thereto,
whether written or oral, shall be of no force and effect.
Section 9.24 Controlling Document. In the event of a conflict
--------------------
between the provisions of this Agreement and the other Loan Documents, the
provisions of this Agreement shall control and govern the conflicting
provisions of the other Loan Documents.
Section 9.25 No Benefit to Third Parties. This Agreement is for
---------------------------
the sole and exclusive benefit of Borrower, the REIT, and Agent, the
Syndication Agent and the Co-Lenders and all conditions of the obligation of
Lender and the Co-Lenders to make Advances hereunder are imposed solely and
exclusively for the benefit of Lender and the Co-Lenders and their 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 and the Co-Lenders will refuse to make Advances 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 Agent and the Co-
Lenders at any time if they in their sole discretion deem it advisable to do
so. Without limiting the generality of the foregoing, neither Agent nor the
Co-Lenders shall have any duty or obligation to anyone to ascertain that
funds advanced hereunder are used as required by the terms hereof or to pay
the cost of constructing the improvements on any of the Real Property Assets
or to acquire materials and supplies to be used in connection therewith or to
pay costs of owning, operating and maintaining same.
Section 9.26 Joint and Several. Borrower and the REIT are each
-----------------
jointly and severally liable for the payment in full of the Loan and all
other sums owing under this Agreement, the Note, and any other Loan Documents
and the performance of all of the Obligations.
(NO FURTHER TEXT ON THIS PAGE)
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date 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
SLG GRAYBAR LLC, a New York limited liability
company
By: SLG GRAYBAR 2 LLC, a New York limited liability
company, its managing member
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 GRAYBAR 2 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
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
SL GREEN REALTY CORP., a Maryland corporation
By: /s/ David J. Nettina
-----------------------
David J. Nettina
Chief Financial Officer
By: /s/ Benjamin P. Feldman
-----------------------
Benjamin P. Feldman
Executive Vice President
EXHIBIT A
NOTICE OF BORROWING
SL GREEN OPERATING PARTNERSHIP, L.P.
SL GREEN REALTY CORP.
70 West 36/th/ Street
New York, New York 10018
______________________, 19_____
_____________________________
_____________________________
_____________________________
Ladies and Gentlemen:
We refer to that certain Loan Agreement dated as of ____________ __,
1998 between us and you (the "Loan Agreement"). This certificate is
delivered to you pursuant to Section 2.02 of the Loan Agreement as one of the
inducements for an Advance in the amount of $______________, which will bring
the total unpaid principal balance of the Note to $______________. All
capitalized terms used herein shall have the same meanings herein as they
have in the Loan Agreement.
In order to induce you to make this advance, we hereby represent and
certify as follows:
1. No Default or Event of Default has occurred and is continuing
under the Loan Agreement, the Note, or any other Loan Documents or would
result from the proposed Advance or would result from the application of
the proceeds therefrom.
2. Each of the representations and warranties set forth in the
Loan Agreement, the Note, and all other Loan Documents are true and
correct in all material respects as of the date hereof (other than such
representations and warranties that by their terms refer to a date other
than the date of such Advance).
3. All conditions in the Loan Agreement, the Note, and all other
Loan Documents to an Advance will be satisfied after giving effect to
the Advance hereby requested, including, without limitation, compliance
with the Financial Covenants.
The undersigned hereby notifies you that the date of the Borrowing shall
be _____________________ of the Advance shall be utilized for
_______________).
(SL GREEN OPERATING PARTNERSHIP L.P.)
(SL GREEN REALTY CORP.)
By:
--------------------------------------------
Name:
Title:
EXHIBIT B
CONSOLIDATED AMENDED AND RESTATED PROMISSORY NOTE
$275,000,000.00 New York, New York
As of March ____, 1998
FOR VALUE RECEIVED SL GREEN OPERATING PARTNERSHIP, L.P. (the
"Partnership"), SLG GRAYBAR LLC (the "Graybar LLC"), SLG GRAYBAR 2 LLC (the
"Member LLC"), NEW GREEN 1140 REALTY LLC (the "Green LLC"), SLG 17 BATTERY
LLC (the "17 LLC") and SL GREEN REALTY CORP. (the "REIT"; the Partnership,
the Graybar LLC, the Member LLC, the Green LLC, the 17 LLC and the REIT are
hereinafter referred to, 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 hereby unconditionally promise to pay to the order
of LEHMAN BROTHERS HOLDINGS INC. D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware corporation, having an address at Three
World Financial Center, 200 Vesey Street, New York, New York 10285 ("Lehman")
individually as a Co-Lender and as Agent for one or more Co-Lenders and as
Syndication Agent (Lehman, as a Co-Lender, hereinafter referred to as
"Holder") the principal sum of TWO HUNDRED SEVENTY-FIVE MILLION AND 00/100
DOLLARS ($275,000,000.00) with interest from the date hereof at the rates set
forth in that certain Loan Agreement dated the date hereof between Borrower,
SL Green Realty Corp. (the "REIT") and Lehman (the "Loan Agreement"),
principal (as so much thereof as may be advanced and unpaid) and interest to
be payable in accordance with the terms and conditions provided herein and
the Loan Agreement, and otherwise subject to all other terms and conditions
contained in the Loan Agreement, until such principal amount is paid in full.
This Note evidences the new and additional indebtedness of
$125,486,084.80 and also the existing indebtedness of $149,513,915.20
remaining unpaid on, and previously evidenced by, the bonds, notes or
obligations, including any supplemental or replacement notes, if any, secured
by the those certain mortgages described on Schedule 1 hereto (the "Existing
--------
Indebtedness") contemporaneously assigned to Lender; it being the intention
- ------------
of this Note that it shall constitute both a renewal, extension and
modification, amendment and restatement of the terms of payment of such
Existing Indebtedness and also an expression of the terms of payment of such
new and additional indebtedness.
The whole of the principal sum of this Note, together with all
interest accrued and unpaid thereon and all other sums due under the Loan
Agreement, the Security Instruments covering the Mortgaged Assets (as defined
in the Loan Agreement), the other Loan Documents (as defined in the Loan
Agreement) and this Note (all such sums hereinafter collectively referred to
as the "Debt") shall, at the election of the Holder and without notice,
become immediately due and payable upon an occurrence of an Event of Default
in accordance with the terms of the Loan Agreement. All of the terms,
covenants and conditions contained in the Loan Documents are hereby made a
part of this Note to the same extent and with the same force as if they were
fully set forurrence of an Event of Default or upon the failure of Borrower
to pay the Debt in full on demand on the Maturity Date, Holder shall be
entitled to receive and Borrower shall pay interest on the entire unpaid
principal sum at the Default Rate pursuant to the terms of the Loan
Agreement. The Default Rate shall be computed from the occurrence of the
Event of Default until the earlier of the date upon which the Event of
Default is cured or the date upon which the Debt is paid in full. This
charge shall be added to the Debt, and shall be deemed secured by the
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 Holder by reason of the
occurrence of any Event of Default.
This Note is the Note referred to in the Loan Agreement and is
entitled to the benefits thereof and shall be subject to the provisions
thereof. As provided in the Loan Agreement, this Note is subject to
voluntary prepayments, in whole or in part, from time to time upon the
occurrence of the events specified therein. This Note is secured by the
Security Instrument and the other Loan Documents (both as defined in the Loan
Agreement).
Whenever used, the singular number shall include the plural, the
plural the singular, and the words "Holder", "Borrower" and the REIT shall
include their respective successors, assigns, heirs, executors and
administrators, including additional Co-Lenders pursuant to the terms of the
Loan Agreement.
This Note is subject to the express condition that at no time shall
Borrower be obligated or required to pay interest on the principal balance
due hereunder at a rate which could subject Holder to either civil or
criminal liability as a result of being in excess of the Maximum Legal Rate.
If by the terms of this Note, Borrower is at any time required or obligated
to pay interest on the principal balance due hereunder at a rate in excess
the Maximum Legal Rate, the interest rates set forth in the Loan Agreement or
the Default Rate, as the case may be, shall be deemed to be immediately
reduced to such Maximum Legal Rate and all previous payments in excess of the
Maximum Legal Rate shall be deemed to have been payments in reduction of
principal and not on account of the interest due hereunder. All sums paid or
agreed to be paid to Holder 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 Legal Rate from time to time in effect
and applicable to the Debt for so long as the Debt is outstanding.
This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part
of Borrower or Holder, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
Subject to the recourse limitations and obligations set forth in
Section 9.08 of the Loan Agreement, the Debt and the Obligations shall be
full recourse to Borrower and the REIT.
Borrower and all others who may become liable for the payment of
all or any part of the Debt do hereby severally waive presentment and demand
for payment, notice of dishonor, protest and notice of protest and non-
payment. No release of any security for the Debt or extension of time for
payment of this Note or any installment hereof, and no alteration, amendment
or waiver of any provision of the Loan Documents made by agreement between
Holder and any other person or party shall release, modify, amend, waive,
extend, change, discharge, terminate or affect the liability of Borrower, and
any others who may become liable for the payment of all or any part of the
Debt, under the Loan Documents.
This Note shall be governed and construed in accordance with the
laws of the State of New York and the applicable laws of the United States of
America.
(NO FURTHER TEXT ON THIS PAGE)
IN WITNESS WHEREOF, Borrower has duly executed and delivered
this Note 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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
SLG GRAYBAR LLC, a New York limited liability
company
By: SLG GRAYBAR 2 LLC, a New York limited liability
company, its managing member
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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
SLG GRAYBAR 2 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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
SL GREEN REALTY CORP., a Maryland corporation
By: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
ACKNOWLEDGMENT
(to be attached)
SCHEDULE 1
----------
(To be Attached)
EXHIBIT C
Intentionally Deleted
---------------------
EXHIBIT D
Intentionally Deleted
---------------------
EXHIBIT E
NOTICE OF VOLUNTARY PREPAYMENT
______________________, 19_____
_____________________________
_____________________________
_____________________________
Ladies and Gentlemen:
We refer to that certain Loan Agreement dated as of _____________, 1998
between us and you (the "Loan Agreement"). This certificate is delivered to
you pursuant to Section 2.11 of the Loan Agreement. All capitalized terms
used herein shall have the same meanings herein as they have in the Loan
Agreement.
In order to induce you to accept this prepayment, we hereby represent and
certify as follows:
1. No Default or Event of Default has occurred and is continuing under the
Loan Agreement, the Note, or any other Loan Document or would result from the
prepayment described herein.
2. Each of the representations and warranties set forth in the Loan Agreement,
the Note, and all other Loan Documents are true and correct in all material
respects as of the date hereof (other than such representations and
warranties that by their terms refer to a date other than the date of such
prepayment).
The undersigned hereby notifies you that it has elected to prepay
$______________.
(SL GREEN OPERATING PARTNERSHIP L.P.)
(SL GREEN REALTY CORP.)
By:
--------------------------------------------
Name:
Title:
EXHIBIT F
ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES
THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF
MANAGEMENT FEES ("Assignment") is made as of the _____ day of March, 1998, by
SL GREEN OPERATING PARTNERSHIP, L.P. (the "Partnership"), SLG GRAYBAR LLC
(the "Graybar LLC"), NEW GREEN 1140 REALTY LLC (the "Green LLC"), and SLG 17
BATTERY LLC (the "17 LLC") (the Partnership, the Graybar LLC, the Green LLC
and the 17 LLC are hereinafter referred to, individually and collectively, as
the context requires, as "Borrower") and LEHMAN BROTHERS HOLDINGS INC. D/B/A
LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a Delaware
corporation, having an address at Three World Financial Center, 200 Vesey
Street, New York, New York 10285, individually as a Co-Lender ("Lehman") and
as Agent for one or more Co-Lenders ("Agent") and as Syndication Agent
(Agent, Syndication Agent and the Co-Lenders are hereinafter referred to as
the "Lender"), and is acknowledged and consented to by SL GREEN MANAGEMENT
LLC, a New York limited liability company ("Green LLC") and SL GREEN
MANAGEMENT CORP., a New York corporation ("Green Corp.") and SL GREEN
LEASING, INC., a New York Corporation ("Leasing") each having its principal
place of business at 70 West 36/th/ Street, New York, New York 10013 (Green
LLC, Green Corp., and Leasing, collectively, the "Manager").
RECITALS:
A. Borrower and the REIT (hereinafter defined) by their
promissory note of even date herewith given to the Lender (such note,
together with all extensions, renewals, modifications, substitutions and
amendments thereof shall collectively be referred to herein as the "Note")
are indebted to the Lender in the principal sum of $275,000,000.00 in lawful
money of the United States of America, or so much as may be advanced and
unpaid pursuant to the terms of the Loan Agreement (hereinafter defined),
with interest from the date thereof at the rates set forth in the Note. The
indebtedness evidenced by the Note, together with such interest accrued
thereon, shall collectively be referred to as the "Loan". Principal and
interest under the Note shall be payable in accordance with the terms and
conditions provided in the Note.
B. The Loan is subject to the terms and conditions of that
certain Loan Agreement of even date herewith between Borrower, SL Green
Realty Corp. (the "REIT") and the Lender (the "Loan Agreement") and the terms
and conditions of that certain Agreement of Spreader, Consolidation and
Modification of Mortgage of even date herewith (the "Security Instrument")
which grants Lender a first lien on the property encumbered thereby
(individually and collectively, as the context may require, the "Property").
All and any of the documents other than the Note, the Security Instrument,
the Loan Agreement and this Assignment now or hereafter executed by Borrower,
the REIT and/or others and by or in favor of the Lender, which wholly or
partially secure or guarantee payment of the Note are referred to as the
"Other Loan Documents."
C. Pursuant to a certain management agreement dated ____________
between __________________________ and _______________ and that certain
management agreement dated ______________, between Borrower,
____________________ and __________ (collectively the "Management Agreement")
(a true and correct copy of each Management Agreement is attached hereto as
Exhibit A), Borrower employed Manager exclusively to rent, lease, operate and
- ---------
manage certain of the Property, and Manager is entitled to certain management
fees, other fees and commissions thereunder (the "Management Fees").
D. The Lender requires, as a condition to the making of the Loan
that Borrower assign the Management Agreement and that Manager subordinate
its interest in the Management Fees in lien and payment to the Loan Agreement
as set forth below.
E. All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.
AGREEMENT:
For good and valuable consideration the parties hereto agree as
follows:
1. Assignment of Management Agreement. As additional collateral
----------------------------------
security for the Loan, Borrower hereby conditionally transfers, sets over and
assigns to the Lender all of Borrower's right, title and interest in and to
the Management Agreement, said transfer and assignment to automatically
become a present, unconditional assignment, at the Lender's option, in the
event of a default by Borrower under the Note, the Loan Agreement, the
Security Instrument or any of the Other Loan Documents, including but not
limited to escrow agreements, and the failure of Borrower to cure such
default within any applicable grace period.
2. Subordination of Management Fees. The Management Fees and all
---------------------------------
rights and privileges of Manager to the Management Fees are hereby and shall
at all times continue to be subject and unconditionally subordinate in all
respects in lien and payment to the lien and payment of the Note, the
Security Instrument, the Loan Agreement, and the Other Loan Documents and to
any renewals, extensions, modifications, assignments, replacements, or
consolidations thereof and the rights, privileges, and powers of the Lender
thereunder, subject to the terms and conditions of this Assignment.
3. Termination. At such time as the Loan is paid in full and the
-----------
Security Instrument is released or assigned of record, this Assignment and
all of the Lender's right, title and interest hereunder shall terminate.
4. Estoppel. Manager represents and warrants that (a) the Management
---------
Agreement is in full force and effect and has not been modified, amended or
assigned with respect to the Property, (b) neither Manager nor Borrower is in
default under any of the terms, covenants or provisions of the Management
Agreement with respect to the Property and Manager knows of no event which,
but for the passage of time or the giving of notice or both, would constitute
an event of default under the Management Agreement with respect to the
Property, (c) neither Manager nor Borrower has commenced any action or given
or received any notice for the purpose of terminating the Management
Agreement with respect to the Property and (d) the Management Fees and all
other sums that are due and payable to the Manager under the Management
Agreement have been paid in full with respect to the Property.
5. Borrower's Covenants. Borrower hereby covenants with the Lender
--------------------
that during the term of this Assignment: (a) Borrower shall not transfer the
responsibility for the management of the Property from Manager to any other
person or entity without prior written notification to the Lender and the
prior written consent of the Lender, which consent shall not be unreasonably
withheld; (b) Borrower shall not terminate or amend any of the terms or
provisions of the Management Agreement other than in accordance with the
provisions of the Loan Agreement; and (c) Borrower shall, in the manner
provided for in this Assignment, give notice to the Lender of any notice or
information that Borrower receives which indicates that Manager is
terminating the Management Agreement or that Manager is otherwise
discontinuing its management of the Property.
6. Assignment by Borrower and Manager. Borrower and Manager hereby
----------------------------------
agree that in the event of a default by Borrower or the REIT (beyond any
required notice and applicable grace period) under the Note, the Loan
Agreement, the Security Instrument or any of the Other Loan Documents ("Event
of Default") during the term of this Assignment, at the option of the Lender
exercised by written notice to Borrower and Manager: (a) all rents, security
deposits, issues, proceeds and profits of the Property collected by Manager,
after payment of all costs and expenses of operating the Property (including,
without limitation, operating expenses, real estate taxes, insurance premiums
and repairs and maintenance), shall be applied in accordance with the
Lender's written directions to Manager; (b) Manager shall not collect or be
entitled to any Management Fees; and (c) the Lender may exercise its rights
under this Assignment and may immediately terminate the Management Agreement
and require Manager to transfer its responsibility for the management of the
Property to a management company selected by the Lender in accordance with
the provisions of the Loan Agreement.
7. The Lender's Right to Replace Manager. In addition to the
-------------------------------------
foregoing, in the event that Manager becomes insolvent, the Lender may
exercise its rights under this Assignment and direct Borrower to terminate
the Management Agreement and to replace Manager with a management company
pursuant to and in accordance with the provisions of the Loan Agreement.
8. Consent and Agreement by Manager. Manager hereby acknowledges and
--------------------------------
consents to this Assignment and agrees that Manager will act in conformity
with the provisions of this Assignment and the Lender's rights hereunder or
otherwise related to the Management Agreement. In the event that the
responsibility for the management of the Property is transferred from
Manager in accordance with the provisions hereof, Manager shall, and hereby
agrees to, fully cooperate in transferring its responsibility to a new
management company and effectuate such transfer no later than thirty (30)
days from the date the Management Agreement is terminated. Further, Manager
hereby agrees (a) not to contest or impede the exercise by the Lender of any
right it has under or in connection with this Assignment; and (b) that it
shall, in the manner provided for in this Assignment, give at least thirty
(30) days prior written notice to the Lender of its intention to terminate
the Management Agreement or otherwise discontinue its management of the
Property.
9. No Subcontracting. Notwithstanding anything in the Management
-----------------
Agreement or in this Assignment to the contrary, Manager shall not sub-
contract any or all of its management responsibilities under the Management
Agreement to a third party (other than a Subsidiary (as defined in the Loan
Agreement) of Manager) or an affiliate without the prior written consent of
the Lender, such consent not to be unreasonably withheld.
10. The Lender's Agreement. So long as no Event of Default has
----------------------
occurred and is continuing, the Lender agrees to permit any sums due to
Borrower or Manager under the Management Agreement to be paid directly to
Borrower or Manager, as the case may be.
11. Governing Law. This Assignment 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.
12. Notices. Except as otherwise expressly provided herein, all
-------
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five (5) days after being deposited in the United
States mail, certified or registered, postage prepaid, or, in the case of
telex notice, when sent, answerback received, or, in the case of facsimile
notice, when sent, answerback received, or, in the case of a nationally
recognized overnight courier service, one (1) Business Day after delivery to
such courier service, addressed, in the case of Borrower and Agent, at the
addresses specified below, or to such other addresses as may be designated by
any party in a written notice to the other parties hereto, provided that
notices and communications shall not be effective until received by Agent.
If to Borrower: SL Green Operating Partnership, L.P.
70 West 36/th/ 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
If to Lender: Lehman Brothers Holdings Inc.
d/b/a Lehman Capital, a division of
Lehman Brothers Holdings Inc.
Three World Financial Center, 8/th/ Floor
New York, New York 10285
Attention: Mr. David Juge
Facsimile No. (212) 526-7423
With a copy to: Hatfield Philips Inc.
285 Peachtree Center Avenue
Marquis Two Tower
Atlanta, Georgia 30303
Attention: Mr. Greg Winchester
Facsimile No. (404) 420-5610
If to Manager: SL Green Management LLC
70 West 36/th/ Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Facsimile No. (212) 594-0086
and
SL Green Management Corp.
70 West 36/th/ Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Facsimile No. (212) 594-0086
and
SL Green Leasing, Inc.
70 West 36/th/ Street
New York, New York 10018
Attention: Benjamin P. Feldman, Esq.
Facsimile No. (212) 594-0086
or addressed as such party may from time to time designate by written notice
to the other parties. For purposes of this Section 12, the term "Business
Day" shall mean a day on which commercial banks are not authorized or
required by law to close in New York, New York.
Any party by notice to the others may designate additional or
different addresses for subsequent notices or communications.
13. No Oral Change. This Assignment, 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 the 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.
14. Liability. If Borrower consists of more than one person, the
---------
obligations and liabilities of each such person hereunder shall be joint and
several. This Assignment shall be binding upon and inure to the benefit of
Borrower, the Manager, the Lender and their respective successors and assigns
forever.
15. Inapplicable Provisions. If any term, covenant or condition of
-----------------------
this Assignment is held to be invalid, illegal or unenforceable in any
respect, this Assignment shall be construed without such provision.
16. Headings, etc. The headings and captions of various paragraphs of
-------------
this Assignment 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.
17. Duplicate Originals; Counterparts. This Assignment may be executed
---------------------------------
in any number of duplicate originals and each duplicate original shall be
deemed to be an original. This Assignment 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 Assignment, or any
counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.
18. 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.
19. Miscellaneous. Wherever pursuant to this Assignment (i) the
-------------
Lender exercises any right given to it to approve or disapprove, (ii) any
arrangement or term is to be satisfactory to the Lender, or (iii) any other
decision or determination is to be made by the Lender, the decision of the
Lender to approve or disapprove, all determinations by the Lender as to
whether any arrangements or terms are satisfactory or not satisfactory and
all other decisions and determinations made by the Lender, shall be subject
to the provisions of the Loan Agreement and the Intercreditor Agreement and
shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
Wherever pursuant to this Assignment it is provided that
Borrower pay any costs and expenses, such costs and expenses shall
include, but not be limited to, legal fees and disbursements of the
Lender, whether retained firms, the reimbursement for the expenses
of in-house staff or otherwise.
IN WITNESS WHEREOF the undersigned has executed and delivered this
Assignment as of the date and year first written above.
SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: SL GREEN REALTY CORP., a Maryland corporation,
its general partner
By: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
SLG GRAYBAR LLC, a New York limited liability
company
By: SLG GRAYBAR 2 LLC, a New York limited liability
company, its managing member
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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
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: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
SL GREEN MANAGEMENT LLC, a New York limited
liability company
By: SL GREEN OPERATING LIMITED PARTNERS HIP, L.P.,
a Delaware limited partnership, its sole member
By: SL GREEN REALTY CORP., a Maryland
corporation, its general partner
By: _______________________
David J. Nettina
Chief Financial Officer
By: _______________________
Benjamin P. Feldman
Executive Vice President
SL GREEN MANAGEMENT CORP., a New York corporation
By: ________________________
Name:
Title:
LEHMAN BROTHERS HOLDINGS INC. D/B/A LEHMAN CAPITAL,
A DIVISION OF LEHMAN BROTHERS HOLDINGS INC., a
Delaware corporation, individually as a Co-Lender
and as Syndication Agent
By: __________________________
Name:
Title:
EXHIBIT A
---------
(EXHIBIT BEGINS ON NEXT PAGE)
EXHIBIT G
---------
(To be Attached)
EXHIBIT H
---------
COMPLIANCE CERTIFICATE
----------------------
This COMPLIANCE CERTIFICATE is delivered pursuant to that certain
Loan Agreement, dated as of March __, 1998 (the "Loan Agreement") among SL
GREEN REALTY CORP., (the "REIT") and SL GREEN OPERATING PARTNERSHIP, L.P.
(the "Borrower"), SLG Graybar LLC, SLG Graybar 2 LLC, New Green Realty 1140
LLC, SLG 17 Battery LLC (collectively, the "LLCs"), and LEHMAN BROTHERS
HOLDINGS INC., d/b/a LEHMAN CAPITAL, a division of LEHMAN BROTHERS HOLDINGS
INC., individually as Co-Lender and as Agent for one or more Co-Lenders (the
"Agent") and as syndication agent (the "Syndication Agent"). Capitalized
terms not defined herein shall have the same meanings ascribed thereto in the
Loan Agreement.
1. The REIT is the sole general partner of the Borrower.
2. The Borrower is the sole member of each of the LLCs.
3. The individual executing this Certificate is the duly
qualified (_______________) of the REIT and is executing this Certificate on
behalf of the REIT and the Borrower, provided, however, that such individual
shall incur no personal liability by reason of the execution of this
Certificate.
4. The undersigned has reviewed the terms of the Loan Agreement
and has made a review of the transactions, financial condition and other
affairs of the REIT, the Borrower, each other Loan Party and each of their
Subsidiaries as of _____________ __, 199___ and the undersigned has no
knowledge of the existence, as of the date hereof, of any condition or event
which (i) renders untrue or incorrect, in any material respect, any of the
representations and warranties contained in Section 4 of the Loan Agreement
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct only as of such specified date), or (ii) constitutes a Default or
Event of Default.
5. Schedule I attached hereto accurately and completely sets
forth the financial data, computations and other matters required to
establish compliance with the criteria set forth in each of the defined
terms, including without limitation, Total Value, Total Mortgaged Asset Value
and Permitted Investments, and the following Sections of the Loan Agreement:
a. Section 6.07 - Distributions; and
b. Section 6.08 - Tenant Concentration.
6. The representations and warranties contained in Section 4 of
the Loan Agreement and in each of the other Loan Documents are true and
correct in every material respect as though made on and as of the date hereof
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct only as of such specified date).
7. No Default or Event of Default has occurred and is continuing.
The Agent, the Co-Lenders and the Syndication Agent and their
respective successors and assigns may rely on the truth and accuracy of the
foregoing in connection with the extensions of credit to the Borrower and the
REIT pursuant to the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has executed this
Compliance Certificate on behalf of the REIT and Borrower this ____ day of
_________________, 199_.
SL GREEN REALTY CORP.
By: ___________________________________
Name:
Title:
SL GREEN OPERATING PARTNERSHIP, L.P.
By: SL GREEN REALTY CORP.
By: ______________________________
Name:
Title:
SCHEDULE I
The Certificate to which this Schedule 1 is attached is dated
____________________ and pertains to the period from ____________ to
______________. Capitalized terms used herein shall have the meanings set
forth in the Loan Agreement. Section references herein relate to the
sections to the Loan Agreement
20. Adjusted NOI calculation for Mortgaged Assets (other than
the Bar Building Property until such time as it is owned by
Borrower in fee) (as defined in the definition of Adjusted NOI)
_____________
a. Actual trailing 3 month Net Operating Income
from _______ to _______ (for the 17 Battery Place
property, including only the portion allocable to
Borrower) _____________
b. Less: Minimum Capital Expenditures Reserve
(for the 17 Battery Place property, including only
the portion allocable to Borrower) <____________>
((_________ sf x $____________)(divided by) 4)
c. Less: Minimum Management Fees
(for the 17 Battery Place property, including only
the portion allocable to Borrower)
(____% of total revenues) <____________>
d. Plus: Actual capital expenditure reserves
included in Line 1(a) above _____________
e. Plus: Actual management fees included in Line 1(a) _____________
f. Subtotal of a, b, c, d and e: _____________
g. Amount on Line 1(f) multiplied by 4 _____________
21 Adjusted NOI Calculation for the Bar Building Property until such time
as it owned by Borrower in fee (as defined in the definition of Adjusted
NOI).
a. Actual trailing 3 month Net Operating Income from
___________ to _________________ _____________
b. Less: Minimum Capital Expenditures Reserve <____________>
((_________ sf x $____________)(divided by) 4)
c. Less: Minimum Management Fees
(____% of total revenues) <____________>
d. Plus: Actual capital expenditure reserves
included in Line 2(a) above _____________
e. Plus: Actual management fees included in Line
2(a) above _____________
f Subtotal of a, b, c, d and e: _____________
g. Amount on Line 2(f) multiplied by 4 _____________
h. Actual trailing 3 month cash received and applied to
interest on the Bar Building Mortgage from ________
to _________ _____________
i. Less Minimum Capital Expenditure Reserves from Line
2(b) <____________>
j. Less Minimum Management Fees from Line 2(c) <____________>
k. Subtotal of h, i and j _____________
l. Amount on Line 2(k) multiplied by 4 _____________
m. Lesser of Amount on line 2(g) and Line 2(l) _____________
n. Amount on Line 1(g) plus amount on Line
2(m) ("Mortgaged Asset Adjusted NOI") _____________
22. Total Mortgaged Asset Value Calculation
(as defined in the definition of Total Mortgaged Asset Value)
a. Mortgaged Assets owned less than 3 months
1. Number of Properties _____________
2. Aggregate purchase price (excluding
17 Battery Place tenancy-in-common interest
and 110 E. 42/nd/ Street property) (attach
supporting schedule) _____________
3. If owned for less than 3 months, purchase price
for 17 Battery Place tenancy-in-common
allocable to Borrower (attach supporting schedule)____________
4. During the Appraisal Period, appraised value
of 110 E. 42/nd/ Street property based on
FIRREA appraisal.
5. Sum of amount in Line 3(a)(4), if applicable,
plus 95% of sum of amounts in Line 3(a)(2)
and, if applicable, Line 3(a)(3) ___________
b. Mortgaged Assets owned more than 3 months
1. Number of Properties _____________
2. Mortgaged Asset Adjusted NOI
(From Line 2(n), adjusted to exclude
Mortgaged Assets owned less than
3 months and to exclude 110 E. 42/nd/ Street
Property if calculation is based on Appraised
Value; attach supporting schedule
showing exclusions) ______________
3. Amount in Line 3(b)(2) divided by 0.10 ______________
c. Total Mortgaged Asset Value (sum
of amounts in Line 3(a)(5) and Line 3(b)(3)) ______________
4. Adjusted NOI Calculation (for all Real Property Assets)
a. Actual trailing 3 month Net Operating Income
from _____ to _____ for Real Property Assets
other than Mortgaged Assets _____________
b. Less: Minimum Capital Expenditures Reserve
<____________>((_________ sf x $____________)(divided by) 4)
c. Less: Minimum Management Fees
(__% of total revenues) <____________>
d. Plus: Actual capital expenditure reserves in
4(a) _____________
e. Plus: Actual management fees in 4(a)
_____________Subtotal of a, b, c, d and e: _____________
f. Amount on Line 4(f) multiplied by 4 _____________
g. Amount on Line 4(g) plus amount on Line
2(n) _____________
5. Total Value Calculation
a. Real Property Assets owned less than 3 months.
1. Number of Properties (other than
Mortgaged Assets) ______________
2. Aggregate purchase price (attach
supporting schedule) (other than
Mortgaged Assets) ______________
3. Sum of amount on Line 3(a)(5) plus
95% of amounts on Line 5(a)(2) ______________
b. Real Property Assets owned more than 3 months
1. Number of Properties (other than
Mortgaged Assets) ______________
2. Adjusted NOI (from Line 4(h)) (adjusted to
exclude Real Property Assets owned less than
3 months; attach supporting schedule showing
exclusions) ______________
3. Amount on Line 5(b)(2) divided by 0.10 ______________
c. Permitted Investments and Cash
1. Aggregate Book Value of Mortgage Receivables
(other than Bar Building) ______________
2. Aggregate Book Value of Joint Venture/
Partnership Investments ______________
3. Unrestricted Cash ______________
4. Subtotal of 1, 2 and 3 ______________
d. Total Value (sum of Lines 5(a)(3), 5(b)(3)
and 5(c)(4)) ______________
6. Maximum Payout Ratio (Section 6.07)
a. Borrower
1. FFO (for each trailing 12 month period or
such shorter period as may be applicable)
from _____ to _____ ______________
2. Multiplied by 0.95 during first loan year and
0.90 in second loan year and thereafter ______________
3. Actual distributions during period from
____ to ____ (must be less than amount
on Line 6(a)(2)) ______________
b. REIT
1. FFO (for each trailing 12 month period or
such shorter period as may be applicable)
from ______ to ______ ______________
2. Multiplied by 0.95 during first loan year and
0.90 in second loan year and thereafter ______________
3. Actual distributions during period from
______ to ______ (must be less than amount
on Line 6(b)(2)) ______________
7. Permitted Investment Limitation (as defined in the definition
of Permitted Investments)
a. Book Value of Investments in Mortgages
(excluding Bar Building) ______________
b. Book Value of Investments in Mortgages from
Line 7(a) divided by Total Value from line 5(d)
(must be less than 0.15 unless composed solely of the
17 `Battery Place mortgage) ______________
c. Book Value of Partnerships/Joint Ventures
(a) which are not majority owned by
Borrower, (b) in which Borrower is not sole
managing GP, or (c) of which Borrower, a wholly-owned
subsidiary or affiliate thereof is not the managing or
leasing agent ______________
d. 10% of Total Value from Line 5(d) (must be greater
than amount on Line 7(c)) ______________
e. Book Value of Partnership/Joint Ventures (a) which
are majority owned by Borrower, (b) in which Borrower
is sole managing GP, and (c) of which Borrower, a
wholly owned subsidiary or affiliate thereof is the managing
agent and leasing agent (must be less than 15% of Total Value
from Line 5(d) unless composed solely of Borrower's
tenancy-in-common interest in the 17 Battery Place
property). ______________
f. Total Permitted Investments; sum of a, c and e ______________
g. Total Permitted Investments from Line 7(f)
divided by Total Value from Line 5(d)
(must be less than 0.15, unless Permitted Investments
are composed solely of 17 Battery Place mortgage
and Borrower's tenancy-in-common interest in
the 17 Battery Place property) ______________
8. Other Covenants
a. Properties not located in Borough of Manhattan,
New York (as defined in the definition of Permitted
Investments) ______________
1. Number of office properties and other "Permitted
Investments" not located in Borough of
Manhattan, New York ______________
2. Total Value of such Assets (attach
supporting calculations) ______________
3. Amount in Line 8(a)(2) divided by Total
Value from Line 8(d) (must be
less than 0.15) ______________
b. Tenant Concentration Limit (Section 6.08)
1. Aggregate Net Rentable Square Feet ______________
2. Largest Tenant Concentration ______________
a. Non-investment Grade
Name: ______________________
(must be less than 5% of total net
rentable square feet) ______________
b. Investment Grade
Name: ______________________
(must be less than 10% of total net
rentable square feet) ______________
c. Long-Term Unsecured Debt Rating (Section 5.09) ______________
EXHIBIT I
New York, New York
As of ____________, ____
GUARANTY OF PAYMENT
FOR VALUE RECEIVED, and to induce 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, individually as a Co-
Lender and as Agent for one or more Co-Lenders ("Agent") and as Syndication
Agent (each collectively the other Co-Lenders, are hereinafter referred to
collectively as "Lender") to lend to SL GREEN OPERATING PARTNERSHIP, L.P.
(the "Partnership"), SLG GRAYBAR LLC (the "Graybar LLC"), SLG GRAYBAR 2 LLC
(the "Member LLC"), NEW GREEN 1140 REALTY LLC (the "New Green LLC"), SLG 17
BATTERY LLC (the "17 LLC") and SL GREEN REALTY CORP. (the "REIT"; the
Partnership, the Graybar LLC, the Member LLC, the 17 LLC and the REIT are
hereinafter referred to, individually and collectively, as the context
requires, as "Borrower") each having its principal place of business at 70
West 36/th/ Street, New York, New York, the principal sum of TWO HUNDRED
SEVENTY-FIVE MILLION AND 00/100 DOLLARS ($275,000,000.00) (the "Loan")
pursuant to that certain Loan Agreement dated as of the date hereof between
Borrower and Lender (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement") and evidenced by
the Note (as defined in the Loan Agreement) and secured by the Security
Instrument (as defined in the Loan Agreement) and by the other Loan Documents
(as defined in the Loan Agreement), the undersigned (the "Guarantor") hereby
absolutely and unconditionally guarantees to Lender the prompt and
unconditional payment of (i) said principal sum and the interest thereon, as
the same shall become due and payable under the Note, (ii) the Obligations
(as defined in the Loan Agreement), as the same may become due and payable
under the Loan Documents, and (iii) any and all other sums of money which, at
any time, may become due and payable under the provisions of the Note, the
Security Instrument, the Loan Agreement or the other Loan Documents
(collectively, the "Debt").
All capitalized words and phrases not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
It is expressly understood and agreed that this is a continuing
guaranty and that the obligations of Guarantor hereunder are and shall be
absolute under any and all circumstances, without regard to the validity or
enforceability of the Note, the Security Instrument, the Loan Agreement, or
the other Loan Documents, a true copy of each of said documents Guarantor
hereby acknowledges having received and reviewed.
Any indebtedness of Borrower to any Guarantor now or hereafter
existing (including, but not limited to, any rights of subrogation that any
Guarantor may have against Borrower or any other Guarantor as a result of any
payment by Guarantor under this Guaranty), together with any interest
thereon, shall be, and such indebtedness is, hereby deferred and postponed
until, and subordinated to, the prior payment in full of the Debt. Until
payment in full of the Debt (including interest accruing on the Note after
the commencement of a proceeding by or against Borrower under the Bankruptcy
Reform Act of 1978, as amended, 11 U.S.C. Sections 101 et seq., and the
-- ---
regulations adopted and promulgated pursuant thereto (collectively, the
"Bankruptcy Code") which interest the parties agree shall remain a claim that
is prior and superior to any claim of Guarantor notwithstanding any contrary
practice, custom or ruling in cases under the Bankruptcy Code generally),
Guarantor agrees not to accept any payment or satisfaction of any kind of
indebtedness of Borrower to Guarantor and hereby assigns such indebtedness to
Lender, including the right to file proof of claim and to vote thereon in
connection with any such proceeding under the Bankruptcy Code, including the
right to vote on any plan of reorganization. Further, if Guarantor shall
comprise more than one person, firm or corporation, Guarantor agrees that
until such payment in full of the Debt, (i) no one of them shall accept
payment from the others by way of contribution on account of any payment made
hereunder by such party to Lender, (ii) no one of them will take any action
to exercise or enforce any rights to such contribution, and (iii) if any
Guarantor should receive any payment, satisfaction or security for any
indebtedness of Borrower to any Guarantor or for any contribution by the
others of Guarantor for payment made hereunder by the recipient to Lender,
the same shall be delivered to Lender in the form received, endorsed or
cation on account of, or as security for, the Debt and until so delivered,
shall be held in trust for Lender as security for the Debt.
Any term or provision of this Guaranty, the Security Instrument,
the Loan Agreement or any other Loan Document to the contrary
notwithstanding, the maximum aggregate amount of the Debt for which Guarantor
shall be liable shall not exceed the lesser of (a) the sum of the assets of
Guarantor, at a fair valuation based upon appraisals or comparable valuations
minus the sum of the liabilities of Guarantor, and (b) the maximum amount for
which Guarantor can be liable without rendering this Guaranty, the Security
Instrument, the Loan Agreement or any other Loan Document, as it relates to
Guarantor, voidable under Section 548 of the Bankruptcy Code or any
comparable provision of any state law or any applicable law relating to
fraudulent conveyance or fraudulent transfer.
Guarantor agrees that, upon written notice from Agent or Lender,
Guarantor will reimburse Lender, to the extent that such reimbursement is not
made by Borrower, for all expenses (including counsel fees) incurred by
Lender in connection with the collection of the Debt or any portion thereof
or with the enforcement of this Guaranty.
All moneys available to Lender for application in payment or
reduction of the Debt may be applied by Lender in such manner and in such
amounts and at such time or times and in such order and priority as Lender
may elect.
Guarantor hereby waives notice of the acceptance hereof,
presentment, demand for payment, protest, notice of protest, or any and all
notice of non-payment, non-performance or non-observance, or other proof, or
notice or demand.
Guarantor further agrees that the validity of this Guaranty and the
obligations of Guarantor hereunder shall in no way be terminated, affected
or impaired (i) by reason of the assertion by Lender of any rights or
remedies which it may have under or with respect to either the Note, the
Security Instrument, the Loan Agreement or the other Loan Documents, against
any person obligated thereunder or against the owner of any Real Property
Asset covered by the Loan Agreement, or (ii) by reason of the release or
exchange of any Real Property Asset covered by the Loan Agreement or (iii) by
reason of Lender's failure to exercise, or delay in exercising, any such
right or remedy or any right or remedy Lender may have hereunder or in
respect to this Guaranty, or (iv) by reason of the commencement of a case
under the Bankruptcy Code by or against any person obligated under the Note,
the Loan Agreement or the other Loan Documents, or (v) by reason of any
payment made on the Debt or any other indebtedness arising under the Note,
the Loan Agreement or the other Loan Documents, whether made by Borrower, any
Guarantor or any other person, which is required to be refunded pursuant to
any bankruptcy or insolvency law; it being understood that no payment so
refunded shall be considered as a payment of any portion of the Debt, nor
shall it have the effect of reducing the liability of any Guarantor
hereunder. It is further understood, that if Borrower shall have taken
advantage of, or be subject to the protection of, any provision in the
Bankruptcy Code, the effect of which is to prevent or delay Lender from
taking any remedial action against Borrower, including the exercise of any
option Lender has to declare the Debt due and payable on the happening of any
default or event by which under the terms of the Note, the Security
Instrument, the Loan Agreement or the other Loan Documents, the Debt shall
become due and payable, Lender may, as against Guaranebt due and payable and
enforce any or all of its rights and remedies against Guarantor provided for
herein.
Guarantor further covenants that this Guaranty shall remain and
continue in full force and effect as to any modification, extension or
renewal of the Note, the Security Instrument, the Loan Agreement, or any of
the other Loan Documents, that Lender shall not be under a duty to protect,
secure or insure any Real Property Asset covered under the Loan Agreement,
and that other indulgences or forbearance may be granted under any or all of
such documents, all of which may be made, done or suffered without notice to,
or further consent of, Guarantor.
As a further inducement to Lender to make the Loan and in
consideration thereof, Guarantor further covenants and agrees (i) that in
any action or proceeding brought by Lender against any Guarantor on this
Guaranty, Guarantor shall and does hereby waive trial by jury, (ii) that the
Supreme Court of the State of New York for the County of New York, or, in a
case involving diversity of citizenship, the United States District Court for
the Southern District of New York, shall have jurisdiction of any such action
or proceeding, and (iii) that service of any summons and complaint or other
process in any such action or proceeding may be made by registered or
certified mail directed to Guarantor at Guarantor's address set forth below,
Guarantor hereby waiving personal service thereof.
This is a guaranty of payment and not of collection and upon any
default of Borrower under the Note, the Security Instrument, or the Loan
Agreement or of Borrower or any other Loan Party (as defined in the Loan
Agreement) under any other Loan Documents, Lender may, at its option, proceed
directly and at once, without notice, against Guarantor to collect and
recover the full amount of the liability hereunder or any portion thereof,
without proceeding against Borrower, or any other person, or foreclosing
upon, selling, or otherwise disposing of or collecting or applying against
any of the Real Property Assets or other collateral for the Loan.
Each reference herein to Lender shall be deemed to include its
successors and assigns, including without limitation, any Co-Lenders (as
defined in the Loan Agreement), to whose favor the provisions of this
Guaranty shall also inure. Each reference herein to Guarantor shall be
deemed to include the heirs, executors, administrators, legal
representatives, successors and assigns of Guarantor, all of whom shall be
bound by the provisions of this Guaranty.
If any party hereto shall be a partnership, the agreements and
obligations on the part of Guarantor herein contained shall remain in force
and application notwithstanding any changes in the individuals composing the
partnership and the term "Guarantor" shall include any altered or successive
partnerships but the predecessor partnerships and their partners shall not
thereby be released from any obligations or liability hereunder.
Guarantor has the full power, authority and legal right to execute
this Guaranty and to perform all its obligations under this Guaranty.
All understandings, representations and agreements heretofore had
with respect to this Guaranty are merged into this Guaranty which alone fully
and completely expresses the agreement of Guarantor and Lender.
This Guaranty may be executed in one or more counterparts by some
or all of the parties hereto, each of which counterparts shall be an original
and all of which together shall constitute a single agreement of Guaranty.
The failure of any party hereto to execute this Guaranty, or any counterpart
hereof, shall not relieve the other signatories from their obligations
hereunder.
This Guaranty may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure to act on
the part of Lender, Borrower, or any Loan Party 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.
This Guaranty shall be governed, construed and interpreted as to IN
WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date
first above set forth.
(SIGNATURE BLOCK TO BE ADDED)
SCHEDULE 1
Mortgaged Assets
----------------
<TABLE>
<CAPTION>
Property Owners
<S> <C>
1414 Avenue of the Americas
New York, New York SL Green Operating Partnership, L.P.
The Bar Building (Mortgagee)
36 West 44/th/ Street and 35 West 43/rd/ Street
New York, New York SL Green Operating Partnership, L.P.
70 West 36/th/ Street
New York, New York SL Green Operating Partnership, L.P.
1140 Avenue of the Americas
New York, New York New Green 1140 Realty LLC
17 Battery Place
New York, New York (tenancy-in-common interest) SLG 17 Battery LLC
17 Battery Place
New York, New York (Mortgagee) SL Green Operating Partnership, L.P.
1372 Broadway
New York, New York SL Green Operating Partnership, L.P.
The Graybar Building (Pledged Interest)
420 Lexington Avenue
New York, New York SLG Graybar LLC
1466 Broadway
New York, New York SL Green Operating Partnership, L.P.
110 East 42/nd/ Street
New York, New York SL Green Operating Partnership, L.P.
</TABLE>
SCHEDULE 2
Real Property Assets
--------------------
<TABLE>
<CAPTION>
<S> <C>
Property Owners
1414 Avenue of the Americas SL Green Operating Partnership, L.P.
New York, New York
The Bar Building
36 West 44/th/ Street and 35 West 43/rd/ Street SL Green Operating Partnership, L.P.
New York, New York (Mortgagee)
70 West 36/th/ Street SL Green Operating Partnership, L.P.
New York, New York
1140 Avenue of the Americas New Green 1140 Realty LLC
New York, New York
17 Battery Place SLG 17 Battery LLC
New York, New York (tenancy-in-common interest)
50 West 23/rd/ Street New Green 50W23 Realty LLC
New York, New York
110 East 42/nd/ Street SL Green Operating Partnership, L.P.
New York, New York
673 First Avenue SL Green Operating Partnership, L.P.
New York, New York
470 Park Avenue South SL Green Operating Partnership, L.P.
New York, New York
29 West 35/th/ Street SL Green Operating Partnership, L.P.
New York, New York
17 Battery Place
New York, New York (Mortgagee) SL Green Operating Partnership, L.P.
1372 Broadway
New York, New York SL Green Operating Partnership, L.P.
The Graybar Building (Pledged Interest)
420 Lexington Avenue
New York, New York SLG Graybar LLC
1466 Broadway
New York, New York SL Green Operating Partnership, L.P.
</TABLE>
SCHEDULE 3
Loan Parties and Subsidiaries
-----------------------------
New Green 1140 Realty LLC: Sole Member: SL Green Operating Partnership,
L.P.
New Green 50W23 Realty LLC: Sole Member: SL Green Operating Partnership,
L.P.
Green 673 Realty LLC: Sole Member: SL Green Operating Partnership, L.P.
SLG 17 Battery LLC: Sole Member: SL Green Operating Partnership, L.P.
Emerald City Construction Corp.: a) 100% of non-voting stock (95% equity)
owned by SL Green Operating Partnership, L.P., b) 100% of voting stock (5%
equity) owned by SL Green Service LLC
SL Green Management LLC: Sole Member: SL Green Operating Partnership, L.P.
SL Green Management Corp.: a) 100% of non-voting stock (95% equity) owned
by SL Green Operating Partnership, L.P., b) 100% of voting stock (5% equity)
owned by SL Green Service LLC
SL Green Leasing, Inc.: a) 100% of non-voting stock (95% equity) owned by
SL Green Operating Partnership, L.P., b) 100% of voting stock (5% equity)
owned by SL Green Service LLC
SLG Graybar LLC: Sole Member: SLG Graybar 2 LLC: Sole Member: SL Green
Operating Partnership, L.P.
SCHEDULE 4
Required Estoppel Certificates
------------------------------
Graybar Building
- ----------------
1. Precision Dynamics Corporation (now New York Graybar Lease L.P.), as
lessor, pursuant to that certain Operating Sublease dated June 1, 1964.
SCHEDULE 5
Litigation
----------
None
SCHEDULE 6
Employee Benefit Plans
----------------------
SL Green Realty Corp.'s 401(k) Plan
SL Green Realty Corp.'s Health Plan (Oxford Freedom Plan)
The Health, Pension and Annuity Plans of Local 32B-J and of Local 94.
SCHEDULE 7
Intentionally Deleted
---------------------
SCHEDULE 8
REIT Assets
-----------
None
SCHEDULE 9A
REIT Business Operations
------------------------
None
SCHEDULE 9B
Borrower Business Operations
----------------------------
The entities described on Schedule 3
SCHEDULE 10
Ground Leases
-------------
A. 1140 Avenue of the Americas
New York, New York
That certain ground lease (the "Ground Lease") dated October 1, 1951, by and
between Phoenix Mutual Life Insurance Company, and 67 West 44/th/ 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.
I. 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.
II. 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.
III. 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.
IV. 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.
V. 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.
VI. 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.
VII. 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.
VIII. 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.
IX. 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.
X. 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;
XI. 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.
XII. 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.
XIII. 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.
XIV. 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.
XV. 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.
XVI. 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.
XVII. 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.
XVIII. 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.
B. Bar Building Ground Leases:
--------------------------
36 West 44/th/ Street
---------------------
That certain Indenture of Lease dated March 3, 1982, by and between THE
ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK, as Lessor, and BAR BUILDING
ASSOCIATES JOINT VENTURE, as Lessee, recorded on March 11, 1982 in the Office
of the City Register, New York County, New York in Reel 672, Page 520.
35 West 43/rd/ Street
---------------------
That certain Indenture of Lease dated as of January 21, 1981 by and
between 35 WEST 43/RD/ STREET ASSOCIATES, as Lessor, and LAWPLAZA, INC., as
Lessee, dated as of January 21, 1981 and recorded in the Office of the City
Register, New York County on January 29, 1981 in Reel 552, Page 1531, as
amended by that certain First Amendment of Lease dated as of June 25, 1982
and recorded in the Office of the City Register, New York County on July 14,
1982 in Reel 630, Page 1608.
1. That certain Indenture of Sub-Lease dated as of July 16, 1997 by
and between LAWPLAZA, INC., as Sub-Landlord and R.A. 35 WEST 43/RD/
ENTERPRISES, INC., as Sub-Tenant, recorded in the Office of the
City Register, New York County.
C. 673 First Avenue Ground Lease
-----------------------------
Agreement and Lease dated April 28, 1988, between 673 First Avenue
Associates (landlord) and 673 First Realty Company (tenant), the tenant's
interest in which was assigned to SL Green Operating Partnership L.P. by an
assignment and assumption of ground lease dated August 20, 1997, and recorded
in the City Register, New York County, New York:
D. Graybar Building Ground Leases:
------------------------------
1. That certain Ground Lease dated July 30, 1925 recorded September
12, 1925 between New York State Realty and Terminal Company, as
lessor, (the lessor's interest thereunder is currently held by
Landgray Associates L.P.), and Eastern Offices, Inc., as lessee,
recorded in Liber 3496, cp 183, as modified, extended and
supplemented and assigned by numerous instruments.
2. That certain Ground Lease dated December 30, 1957, recorded
December 31, 1957 between Webb & Knapp Inc. and Graysler
Corporation, as lessors, (the lessor's interest thereunder is
currently held by Metropolitan Life Insurance Company L.P.), and
Mary J. Finnegan, as lessee, recorded in Liber 5024, cp 430, as
modified, extended and supplemented and assigned by numerous
instruments.
3. That certain Operating Lease dated December 30, 1957 recorded
December 31, 1957 between Mary Finnegan, as lessor, (the lessor's
interest thereunder is currently held by New York Graybar Building
Associates), and Rose Iacovone, as lessee, recorded in Liber 5024,
cp 523, as modified, extended and supplemented and assigned by
numerous instruments.
4. That certain Operating Sublease dated June 1, 1964, between
Precision Dynamics Corporation, as lessor, (the lessor's interest
thereunder is currently held by New York Graybar Lease L.P.), and
Graybar Building Company, as lessee, recorded in Liber 5293, cp 35,
as modified, extended and supplemented and assigned by numerous
instruments, the last of which assigns the lessee's interest
thereunder to SLG Graybar LLC by instrument dated the date hereof.
SCHEDULE 11
Mortgage Assets
---------------
Bar Building Mortgages
- ----------------------
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,
b. Mortgages 1 through 5 were consolidated to form a single lien in
the sum of $26,250,000.00.
c. 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.
d. 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.
e. 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.
f. 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.
g. 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
by Praedium 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.
Second Mortgage
- ---------------
Mortgage, dated June 28, 1996, in the principal sum of $3,000,000.00
given by Borrower and Lawplaza to The Travelers Insurance Company, and
recorded in the New York County Register's Office on July 10, 1996 in Reel
2342, Page 1125; and upon which $0 mortgage tax was duly paid and the note
secured thereby ("Second Mortgage").
1. The Second Mortgage was assigned pursuant to an Assignment of Mortgage,
dated September 30, 1996, made by The Travelers Insurance Company to Praedium
Bar, LLC, and recorded in the New York County Register's Office on October
11, 1996 in Reel 2380, Page 1854.
Which Second Mortgage and notes secured thereby, was further assigned by
Praedium 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.
17 Battery Place Mortgages
- --------------------------
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");
d. 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 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
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, were
assigned by Chase 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.
SCHEDULE 12
Exceptions to Representations and Warranties
--------------------------------------------
None
SCHEDULE 13
Permitted Investments
---------------------
17 Battery Place Mortgage
17 Battery Place Tenancy-in-Common Interest
The Real Property Assets listed in Schedule 2.
SCHEDULE 14
Guarantors
----------
None
SCHEDULE 15
Management Agreements
---------------------
1. 1414 Avenue of the Americas, 1140 Avenue of the Americas, 70 West 36/th/
------------------------------------------------------------------------
Street, 470 Park Avenue South, 29 West 35/th/ Street, 50 West 23/rd/
- --------------------------------------------------------------------
Street, 673 First Avenue, 1466 Broadway, 420 Lexington Avenue and 110
- ---------------------------------------------------------------------
East 42/nd/ Street
- ------------------
Management Agreement dated August 20, 1997, as amended, entered into
among SL GREEN OPERATING PARTNERSHIP, L.P., NEW GREEN 50W23 REALTY LLC, GREEN
673 REALTY LLC, SLG GRAYBAR LLC and NEW GREEN 1140 REALTY LLC (collectively,
"Owner") and SL GREEN MANAGEMENT LLC ("Agent").
2. 36 West 44/th/ Street/35 West 43/rd/ Street (the Bar Building)
-------------------------------------------
Management Agreement dated June 20, 1996 entered into by and between THE
TRAVELERS INSURANCE COMPANY and SL GREEN MANAGEMENT CORP.
3. 17 Battery Place
----------------
Management and Leasing Agreement dated December 19, 1997 between 17
Battery Upper Partners LLC and SLG 17 Battery Place LLC as tenants-in-common
and SL Green Management Corp. and SL Green Leasing, Inc.
SCHEDULE 16
Post-Closing Repairs
--------------------
(see attached pages)
(TO BE COMPLETED AFTER DILIGENCE COMPLETED)
SCHEDULE 17
Existing Mortgage Debt
----------------------
All those mortgages, existing as of the date hereof, which encumber
all or a portion of 673 First Avenue, 50 West 23/rd/ Street, 470
Park Avenue South or 29 West 35/th/ Street, all located in New
York, New York.
SCHEDULE 18
Graybar Leases
--------------
Graybar Building Ground Leases:
------------------------------
1. That certain Ground Lease dated July 30, 1925 recorded September
12, 1925 between New York State Realty and Terminal Company, as
lessor, and Eastern Offices, Inc., as lessee, recorded in Liber
3496, cp 183, as modified, extended and supplemented and assigned
by numerous instruments.
2. That certain Ground Lease dated December 30, 1957, recorded
December 31, 1957 between Webb & Knapp Inc. and Graysler
Corporation, as lessors, and Mary J. Finnegan, as lessee, recorded
in Liber 5024, cp 430, as modified, extended and supplemented and
assigned by numerous instruments.
3. That certain Operating Lease dated December 30, 1957 recorded
December 31, 1957 between Mary Finnegan, as lessor, and Rose
Iacovone, as lessee, recorded in Liber 5024, cp 523, as modified,
extended and supplemented and assigned by numerous instruments.
4. That certain Operating Sublease dated June 1, 1964, between
Precision Dynamics Corporation, as lessor, and Graybar Building
Company, as lessee, recorded in Liber 5293, cp 35, as modified,
extended and supplemented and assigned by numerous instruments, the
last of which assigns the lessee's interest thereunder to SLG
Graybar LLC by instrument dated the date hereof.
==============================================================================
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.
