UNITED STATES
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) April 25, 2000
Investment Properties Associates
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(Exact name of registrant as specified in its charter)
New York 0-5537 13-2647723
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
60 East 42nd Street, New York, New York 10165
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 687-6400
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 19, 2000, the Registrant signed a contract to sell 245 Fifth Avenue and
261 Fifth Avenue, New York, New York to a fund controlled by Koll Bren Schreiber
Realty Advisors Inc. at a purchase price of $135,000,000. The closing is
expected to occur within the next thirty-five days.
After the completion of the transaction accounting and establishment of
appropriate reserves, Registrant anticipates that it will make a special
distribution of the excess proceeds in accordance with the Registrant's
partnership agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
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Exhibit 10 Agreement, between Registrant and SM Brell II, L.P., a
California limited partnership, dated April 19, 2000
Exhibit 99 Press Release of Registrant, dated April 19, 2000
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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 hereunto duly authorized.
INVESTMENT PROPERTIES ASSOCIATES
BY: /s/ Irving Schneider
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Irving Schneider, General Partner
Date: April 25, 2000
AGREEMENT made this 19th day of April, 2000 ("Contract") between
INVESTMENT PROPERTIES ASSOCIATES, a Limited Partnership, a New York limited
partnership, having an office c/o Helmsley-Spear, Inc., 60 East 42nd Street, New
York, New York 10165, (the "Seller" or "IPA") and SM BRELL II, L.P., a
California limited partnership, having an office at 125 Summer Street, Suite
1640, Boston Massachusetts 02110 (hereinafter called "Purchaser").
W I T N E S S E T H :
In consideration 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:
1. Subject of Sale. Seller agrees to sell, and Purchaser agrees to
purchase, the following upon the terms and conditions set forth herein:
(a) Fee simple interest (subject to the provisions of Article 3 hereof) in
those certain plots, pieces or parcels of land described on Schedules A-1 and
A-2, annexed hereto and made a part hereof, in each case together with the
improvements erected thereon, which plots, pieces or parcels of land and the
improvements erected thereon are herein referred to, collectively, as the
"Premises" and from time to time as the "Properties" or, individually, as a
"Property" or as described by name, as "245 Fifth Avenue" and "261 Fifth Avenue"
on Schedules A-1 and A-2.
(b) All right, title and interest of Seller, if any, in and to (i) any
land lying in the bed of any streets, roads or avenues opened or proposed,
public or private, in
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front of or adjoining the Premises, to the center line thereof, (ii) all strips,
gores, easements, rights of way, air space or development rights, reservations,
privileges, appurtenances and all other rights pertaining to Seller's interest
in the Premises and (iii) any unpaid awards for any taking by condemnation or
any damage to the Premises by reason of a change of grade of any streets or
highways. Upon the Closing (as hereinafter defined), Seller shall execute and
deliver to Purchaser all proper instruments for the conveyance of such title and
the assignment and collection of any such awards.
(c) All right, title and interest of Seller, if any, in and to the
fixtures, equipment and other personal property attached to or appurtenant to
the Premises and owned by Seller, but no part of the "Purchase Price" (as
hereinafter defined) shall be deemed to be paid for such fixtures, equipment or
personal property.
2. Purchase Price.
(a) The purchase price for the Premises is One Hundred Thirty Five Million
and 00/100 Dollars ($135,000,000.00) (the "Purchase Price") payable by the
Purchaser as follows:
(i) Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00)
(the "Deposit") on the signing of this contract by electronic wire transfer to
the trust account of Stadtmauer Bailkin LLP ("Escrow Agent") simultaneously with
the execution and delivery of this Contract, pursuant to instructions which have
been provided to Purchaser and receipt of which Deposit will be acknowledged by
Escrow Agent upon receipt. In addition, Purchaser is depositing with Escrow
Agent a promissory note in the
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amount of Three Million Two Hundred Fifty Thousand and 00/100 Dollars
($3,250,000.00) in the form attached hereto as Exhibit 1 (the "Promissory
Note");
(ii) If Purchaser shall adjourn the Closing pursuant to the
provisions of Article 14 hereof, Seven Hundred Fifty Thousand and 00/100 Dollars
($750,000.00) (the "Additional Deposit") upon the exercise of Purchaser's
adjournment right by electronic wire transfer to the trust account of Escrow
Agent. In addition, in such event Purchaser shall deposit with Escrow Agent an
additional promissory note in the amount of Three Million Two Hundred Fifty
Thousand and 00/100 ($3,250,000.00) in the same form as Exhibit 1 (the
"Additional Promissory Note");
(ii) At the Closing, the Purchase Price minus the Deposit (and minus
the Additional Deposit, if applicable), subject to the apportionments pursuant
to Article 6 hereof, by electronic wire transfer as Seller may direct, in
accordance with the provisions of Section 2(c) below.
(c) The payment of any of the aforesaid sums shall be made by electronic
wire transfer pursuant to wiring instructions to be given to Purchaser or by
federal funds check allowing immediately available funds. Without limiting in
any manner the TIME OF THE ESSENCE provisions with respect to Purchaser's
closing obligations any funds delivered by electronic wire transfer must be
available to Seller prior to 4:00 p.m. on the date due; if said funds are not so
available when due, Purchaser shall pay interest on any amount not so available
at an annual rate equal to the prime rate of interest announced by
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Chase Manhattan Bank at that time, plus three percent (3%), through such time as
such amount is available to Seller.
3. "Subject To" Provisions.
The Premises are sold subject only to the matters set forth herein and the
matters referred to in Schedules B-1 and B-2, attached hereto and made a part
hereof (the "Permitted Exceptions").
4. Space Leases.
With respect to the leases of the tenants set forth on Schedule C-1 and
C-2 attached hereto and made a part hereof:
(a) Purchaser represents that it or its authorized agent has examined,
inspected and investigated, to the full satisfaction of the Purchaser, originals
or copies of such leases for such tenancies and occupancies (which leases are
collectively referred to herein as the "Space Leases" and the lessees thereunder
are herein called "Space Tenants"), and Purchaser or its authorized agent or
Purchaser's attorney has initialed the Space Leases. If there be any discrepancy
between Space Leases, as so examined and initialed, and the information
pertaining thereto as listed on Schedules C-1 and C-2, the Space Leases shall be
controlling and such discrepancy shall not prejudice Seller or affect any
liability of Purchaser hereunder. Without limiting the generality of the
immediately preceding sentence, Purchaser agrees that Seller is making no
representations with respect to Schedules C-1 and C-2 other than the identity
and location of each Space Tenant listed
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thereon. Purchaser hereby acknowledges that it is and shall be bound by all of
the acts and or omissions of its authorized agents.
(b) Purchaser acknowledges (i) that Seller has given Purchaser full access
to the files of Space Tenants at the Properties and at IPA's headquarters, (ii)
that Purchaser has, or Purchaser's authorized agents have, examined such files
to its or their satisfaction and (iii) that to the extent that the materials in
such files shall supplement or modify the provisions of the Space Leases,
Purchaser shall be charged with knowledge of such supplement or modification.
(c) Purchaser further acknowledges that no representation has been made
and no responsibility is assumed by Seller with respect to the continued
occupancy of the Premises, or any part thereof, by Space Tenants, or any of
them; it being understood that the foregoing clause of this subparagraph (c)
shall not diminish Seller's obligation to comply with the provisions of Articles
5 and 5A hereof. Seller does not undertake to ensure or guarantee that Space
Tenants, or any of them, will be in occupancy at the Closing. Prior to the
Closing, Seller has the right, but not the obligation, to enforce its rights
against Space Tenants, or any of them, in any manner, provided that Seller shall
not terminate any Space Lease unless the respective Space Tenant fails to pay
rent for more than one month. Purchaser agrees that the removal, prior to the
Closing, of any Space Tenants, of their own volition and without the consent of
Seller, or by summary proceedings or otherwise in each instance as permitted
herein, shall not be the basis for, nor give rise to any claim on the part of
Purchaser nor affect the obligations of Purchaser under this Contract in any
manner
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whatsoever, and Purchaser, at the Closing, in accordance with the terms of this
Contract, shall close title and accept delivery of the Deeds to each of the
Properties without such Space Tenants in possession and without any allowance or
reduction in the Purchase Price. Notwithstanding the foregoing, Seller hereby
agrees not to commence any summary proceedings or other eviction proceeding
against any Space Tenants without Purchaser's consent, which consent shall not
be unreasonably withheld or delayed. In the event that Seller commences any
summary proceedings or other eviction proceeding against any Space Tenants in
accordance with the previous sentence, Seller shall assign all of its interest
in such proceeding at the Closing.
5. Modification and Renewal of Space
Leases and New Space Leases.
(a) From and after the date hereof, Seller will not, without obtaining the
prior written consent of Purchaser, (i) make any modification of any Space
Lease(s) which affects any period from and after the Closing nor enter into any
new Space Lease or renewal of any existing Space Lease, except to the extent it
is required to do so under the terms of any such Space Lease, (ii) consent to
any assignment in connection with any Space Lease, except to the extent it is
required to do so under the terms of any such Space Lease, (iii) grant any new
concession or new rent abatement to any Space Tenant for any period following
the Closing, (iv) make any new commitment to do any work for any Space Tenant,
which would be binding upon Purchaser, and (v) grant any Space Tenant any new
option with respect to either of the Properties (collectively, clauses (i)
through (v), together with any brokerage agreements or modifications of
brokerage agreements
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relating thereto, being hereinafter referred to as the "Modifications"). If
Purchaser shall fail to notify Seller that it consents to or refuses to consent
to any Modification within five (5) business days after its receipt of Seller's
notice to Purchaser of such proposed Modification, then it shall be deemed that
Purchaser has given consent. The Modifications and new Space Leases listed on
Exhibit 2 are hereby consented to by Purchaser and Purchaser shall be
responsible for the Reletting Expenses (as hereinafter defined) associated with
such Modifications and new Space Leases, good faith estimates of which costs
have been previously provided to Purchaser by Seller.
(b) If Purchaser consents or is deemed to have consented to any such
Modification creating a new tenancy or extending an existing tenancy, then in
such event, Purchaser shall pay to Seller at the Closing, its pro rata share of
(i) the amount of brokerage commission paid or required to be paid by landlord,
(ii) reasonable out-of-pocket legal fees and disbursements incurred in
connection with the drafting and negotiation of such new lease or extension, and
(iii) the reasonable cost of decoration or other work required to be performed
by landlord to suit the subject premises to the tenant's occupancy under the
terms of any Modification or new Space Lease (collectively, the foregoing are
referred to hereinafter as "Reletting Expenses"), such Reletting Expenses to be
prorated between Seller and Purchaser in each case in proportion to the portion
of the term during which tenant pays rent pursuant to any such Modification
before and after the Closing (it being understood that any rent free period
shall not be taken into consideration in the apportioning of Reletting
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Expenses); provided, however, that in no event shall Purchaser's obligation
exceed the amounts agreed to by Purchaser when it consents to the applicable
Modification.
(c) From and after the date of this Contract until Closing, Seller
covenants as follows:
(i) Subject to the rights of any Space Tenants, Seller shall give
Purchaser and its authorized representatives access to both of the Properties
and make all books and records (including tenant files) relating to the
ownership, management and operation of the Properties available at reasonable
times and upon reasonable prior written notice to Seller;
(ii) The Properties shall be used, maintained and operated in a
manner consistent with Seller's recent past practices;
(iii) To the extent consistent with Seller's past practices with
respect to the billing of additional rents, Seller shall continue on a timely
basis to bill all Space Tenants for any rents and additional rents due and
payable by such Space Tenants and to enforce Space Leases and Service Contracts,
subject to Purchaser's right to consent to the commencement of enforcement
proceedings in the case of Space Leases.
5A. Service Contracts, Permits and Licenses, and Brokerage Agreements.
(a) Purchaser represents that it has examined, inspected and, investigated
to the full satisfaction of the Purchaser the written Service Contracts (as
hereinafter defined) attached hereto as part of Schedules D-1 and D-2. If there
be any discrepancy between said Service Contracts attached and the information
pertaining thereto as listed in Schedules D-1
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and D-2, the Service Contracts attached shall be controlling and the
discrepancy, if any there be in Schedules D-1 and D-2, shall not prejudice
Seller or affect any liability of Purchaser hereunder.
(b) From and after the date hereof, without obtaining the prior written
consent of Purchaser, which consent shall be given or withheld in Purchaser's
sole discretion, Seller will not voluntarily modify or terminate any Service
Contract(s) which affects any period from and after the Closing, nor enter into
any new Service Contracts or renewal of any existing Service Contract (except in
emergency situations), unless automatically renewed pursuant to the terms
thereof. Seller will terminate as of the Closing date any month-to-month Service
Contract(s) which Purchaser shall request in writing to be terminated within
five (5) days after the date hereof, provided that Purchaser agrees that it
shall be responsible for the costs due to any service provider under any such
terminated Service Contract which shall have accrued with respect to any period
after the Closing date, whether as a result of any such termination or
otherwise.
(c) From and after the date hereof, without obtaining the prior written
consent of Purchaser, which consent shall not be unreasonably withheld or
delayed, Seller will not voluntarily modify or terminate any permit, license,
authorization or approval applicable to either of the Properties, including
their respective certificates of occupancy (collectively, the "Licenses and
Permits"), which affects any period from and after the Closing, except for such
modifications as shall be required in order to comply with applicable law or the
use provisions of any existing or new Space Lease or any permitted
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Modification in order to use, maintain and operate the Properties in a manner
consistent with Seller's recent past practices.
(d) From and after the date hereof, Seller shall not modify any brokerage
agreements that would impact upon Buyer's obligations for commissions with
respect to renewals, expansions or extensions of any Space Lease.
6. Apportionments.
(a) The following are to be apportioned at the Closing as of 11:59 PM of
the day immediately preceding the Closing (except as otherwise provided for
herein, the apportionments shall be made in accordance with the customs in
respect to Title Closing Recommended by The Real Estate Board of New York,
Inc.):
(i) Rents and additional rents under the Space Leases, as and when
collected. As to any Space Lease(s) that provides for the payment of additional
rent based upon a percentage of the Space Tenant's business during a specified
annual period or other period, or provides for so-called "escalation rent" based
upon increases in real estate taxes or operating expenses or labor costs or cost
of living or porter's wages or otherwise (which such additional rent and
"escalation rent" are collectively called "Overage Rent"), if the Closing shall
occur prior to the time when any such Overage Rent is payable, then such Overage
Rent for the applicable accounting period in which the Closing occurs shall be
apportioned subsequent to the Closing; provided, however, in the case of Overage
Rent on account of increases in real estate taxes, since Seller is apportioning
real estate taxes as of June 30, 2000, the apportionment of such Overage Rent
shall be made as of June 30, 2000
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notwithstanding a date of Closing earlier than June 30, 2000. Purchaser agrees
that it will receive in trust and pay over to Seller the proportion of such
Overage Rent that the portion of such accounting period during which the Seller
owned the Premises bears to the entire such accounting period. As to any Overage
Rent in respect to an accounting period that shall have expired prior to the
Closing but which shall become payable after the Closing, Purchaser agrees that
it will receive and hold in trust such Overage Rent and pay the entire amount
over to Seller upon receipt thereof. Seller shall furnish to Purchaser all
information (including the form of the bill to be rendered) necessary for the
billing of such Overage Rent. Purchaser agrees that it shall promptly render
bills for and shall exercise reasonable due diligence in the collection of
Overage Rent (but shall not be obligated to institute proceedings to collect the
same) and shall, upon receipt thereof, promptly pay to Seller the amount to
which Seller is entitled as above provided. If, prior to the Closing, Seller
shall collect any sums on account of Overage Rent for a year or other period, or
any portion of such year or other period, beginning prior but ending subsequent
to the Closing, such sum shall be similarly apportioned at the Closing as of
11:59 PM of the day immediately preceding the Closing. At the request of either
party, both parties will join in a direction to the respective Space Tenants
under such Space Leases as to the division of Overage Rents in accordance with
the foregoing provisions hereof.
(ii) Real estate taxes, provided that in the case of real estate
taxes, Seller agrees to be responsible for all such taxes due through June 30,
2000.
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(iii) Water rates, water meter charges and sewer rents, if any, on
the basis of the fiscal period for which assessed which are not payable by the
Space Tenants. If there be a water meter or meters on the Premises (other than
meters under which charges are payable by a Space Tenant), the unfixed meter
charges and the unfixed sewer rent thereon based for the time intervening from
the date of the last reading shall be apportioned on the basis of such last
reading, and shall be appropriately readjusted after the Closing on the basis of
the next subsequent bills. As to any water charges and the accompanying sewer
rent charges, payable by Space Tenant(s) as aforementioned, if the Space
Tenant(s) shall have failed to pay such water charges and sewer rent, such
unpaid charges and rents, and the liens, if any, resulting therefrom, shall not
be objections to title, or be the basis of any claim whatsoever against Seller,
and (i) Purchaser shall close title and accept delivery of the Deeds subject to
such unpaid charges and rents and such liens without abatement or credit against
the Purchase Price and (ii) Seller shall assign its rights against such Space
Tenants to Purchaser. Seller agrees to cooperate with Purchaser in collecting
such unpaid charges and rents from Space Tenants.
(iv) The Reletting Expenses, if any.
(v) Wages, vacation pay, pension and welfare benefits and other
fringe benefits of the Union Employees (as defined in Article 31 hereof) that
Purchaser has agreed to employ after Closing, which Union Employees are referred
to on Schedules E-1 and E-2 attached hereto and made a part hereof, whose
employment shall not have been terminated at or prior to the Closing.
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(vi) Prepaid charges under any Service Contracts which are assigned
to Purchaser;
(vii) Dues paid, if any, to the Realty Advisory Board on Labor
Relations, Inc. provided the membership covered by such dues is transferable.
(viii) License and permit fees on Licenses and Permits.
(ix) Usable maintenance supplies in unopened containers based on
Seller's actual cost therefor including sales tax.
(x) Fuel, if any.
(xi) All other income from and expense relating to the Properties of
every type and nature as is customary with a closing of this type in the Borough
of Manhattan, City, County and State of New York.
(b) In connection with Section 6(a)(iii), Seller shall furnish readings of
the water, other than meters measuring the consumption of water which are the
direct responsibility of any Space Tenant, to a date not more than thirty (30)
days prior to the Closing and the unfixed water rates and charges, sewer taxes
and rents, if any, based thereon for the intervening time shall be apportioned
on the basis of such last readings. If such readings are not obtainable by the
Closing, then, at the Closing, any water rates and charges, sewer taxes and
rents which are based on such readings shall be prorated based upon the per diem
charges obtained by using the most recent period for which such readings shall
then be available in accordance with Section 6(a)(iii) above. Seller agrees to
indemnify Purchaser for any such water rates and charges, sewer taxes
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and rents which shall have accrued as of the date of Closing, other than those
that are the direct responsibility of Space Tenants, which indemnification shall
survive Closing for a period of nine (9) months; it being expressly agreed by
Purchaser that the existence or possible existence of water rates and charges,
sewer taxes and rents that shall have accrued as of Closing shall not constitute
objections to title on the part of Purchaser.
(c) If on the Closing either Property or any part thereof shall be or
shall have been affected by any special or general assessment or assessments of
real property taxes which are or may become payable in installments of which the
first installment is then a charge or lien and has become payable, Seller shall
pay or cause to be paid the unpaid installments of such assessments due which
relate to a period prior to the Closing, and Purchaser shall pay or cause to be
paid all installments which are either due or relate to a period on or after the
Closing. The current installments, if any, shall be apportioned at the Closing.
(d) In the event the apportionments in this Article 6 which are to be made
at the Closing result in a credit balance (i) to Purchaser, such sum shall be
paid at the Closing by giving Purchaser a credit against the balance of the
Purchase Price in the amount of such credit balance or (ii) to Seller, Purchaser
shall pay the amount thereof to Seller at the Closing by wire transfer of
immediately available funds to the account or accounts designated by Seller for
the balance of the Purchase Price.
(e) The obligations of the parties under this Article 6 shall survive the
Closing.
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7. Violations.
Purchaser has had an opportunity to order a violations search with respect
to the Premises. Purchaser agrees that Purchaser shall close title and accept
delivery of the Deeds subject to any and all notes or notices of violations of
law or municipal ordinances, order or requirements noted in or issued by any
governmental authority having jurisdiction, against or affecting the Premises,
without regard to the extent or the date of any such notes or notices; provided,
however, that Seller shall pay (or caused to be dismissed) at or prior to the
Closing any and all fines and penalties relating to such violations arising and
noted of record prior to March 29, 2000, except for the fines and penalties
relating to violations created by Space Tenants, which are the obligations of
such Space Tenants under their respective Space Leases. Without limiting the
generality of the foregoing, Purchaser acknowledges that Seller shall have no
liability with respect to any violations of Local Law 11 which may be noted
against the Premises prior to or after the Closing, and Purchaser shall accept
title to the Properties subject to the obligation to perform at its own expense
whatever work may be required to bring each of the Properties into compliance
with Local Law 11.
8. Pending Tax Proceedings.
(a) Seller shall not withdraw, settle or otherwise compromise any
proceedings, if any, then pending to review the real estate tax assessment of
either of the Properties applicable to the fiscal tax year in which the Closing
occurs or which directly affects such tax year or subsequent tax years without
the consent of Purchaser, which
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consent shall not be unreasonably withheld or delayed. In the event such
proceedings undertaken by Seller result in a refund of any real estate taxes
paid by the Seller in respect of such fiscal tax year, such refund, less
expenses, including without limitation reasonable attorneys' and appraisers'
fees (which fees shall be paid to Seller from the refund proceeds prior to any
apportionment), shall be apportioned between Seller and Purchaser as of July 1,
2000, and the corresponding amount shall be paid over by the party receiving the
same to the other promptly upon receipt thereof.
(b) Purchaser shall not withdraw, settle or otherwise compromise any
proceedings, if any, to review the real estate tax assessment of either of the
Properties applicable to the fiscal tax year in which the Closing occurs or
which directly affects such tax year or prior tax years without the consent of
Seller, which consent shall not be unreasonably withheld or delayed. In the
event such proceedings undertaken by Purchaser result in a refund of any real
estate taxes paid by Seller in respect of such fiscal tax year or (in lieu of
such a refund) a credit against future real estate taxes payable by Purchaser,
such refund or credit, less expenses, including without limitation reasonable
attorneys' and appraisers' fees (which fees shall be paid to Purchaser from the
refund proceeds prior to any apportionment), shall be apportioned between Seller
and Purchaser as of July 1, 2000 and the corresponding amount shall be paid over
by the party receiving same to the other promptly upon receipt thereof in the
case of a refund or upon the granting of a credit against future real estate
taxes in the case of such a credit in lieu of a refund.
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(c) If any refund of real property taxes shall, under the applicable Space
Leases, require a portion of such refund to be paid to the Space Tenants,
Purchaser to the extent Purchaser receives such refund shall be responsible and
liable for refunding such taxes to the Space Tenants, and shall pay to Seller
the net amount of such refund applicable to the period prior to the Closing.
(d) If, as a result of any proceedings to review the real estate tax
assessment of either of the Properties, the "base tax year" on which tax
escalation rent is charged to any Space Tenants, if applicable, is reduced such
that additional tax escalation rent is owed by the Space Tenant(s), then Seller
shall be entitled to receive all amounts as additional real estate tax
escalation rent paid by such Space Tenants with respect to the period prior to
the Closing and Purchaser shall be entitled to receive all amounts paid by such
Space Tenants with respect to the period following the Closing.
(e) Seller and Purchaser agree to act in good faith and diligently to
resolve any dispute arising under paragraphs (a)-(c) of this Article 8, so as to
fairly allocate the impact of any such withdrawal, settlement or compromise.
(f) The provisions of this Article 8 shall survive the Closing.
9. "As-Is".
Purchaser represents to Seller that (a) Purchaser has examined, inspected,
and investigated to the full satisfaction of Purchaser, the physical nature and
condition of each of the Properties, (b) neither Seller nor any agent, officer,
employee, or representative of Seller has made any representation whatsoever
regarding the subject matter of this
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Contract or any part thereof, including (without limiting the generality of the
foregoing) representations as to the physical nature or condition of the
Premises, or the Space Leases, or operating expenses or carrying charges
affecting the Premises, except as expressly set forth in this Contract, and (c)
Purchaser, in executing, delivering and performing this Contract, does not rely
upon any statement, information or representation to whomsoever made or given
whether to Purchaser or others, and whether directly or indirectly, verbally or
in writing, made by any person, firm or corporation except expressly and
specifically as set forth herein. Seller is not liable for, or in any way bound
by, any verbal or written agreements, representations, real estate brokers'
"set-ups" or for information pertaining to the Premises furnished by any real
estate broker, agent, employees, servant or other person, unless the same are
expressly and specifically set forth in this Contract. Without limiting the
foregoing, but in addition thereto, Purchaser shall take the Premises in their
"AS-IS" condition, subject to such reasonable use, wear, tear, natural
deterioration and damage and destruction as may occur between the date hereof
and the Closing subject to Article 12 hereof, and subject to the Violations as
provided in Article 7 hereof. Seller shall not be responsible for any latent,
patent or other defect or change in the condition of the Premises or personal
property, including without limitation the presence of asbestos, chlordane,
radon, PCB's urea formaldehyde, gasoline or diesel fuel or any other chemicals,
substances or materials whether or not such condition may cause or pose
hazardous health conditions or in any way diminish the value of the Premises.
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10. Security Deposits.
Space Tenants' securities deposited under Space Leases, and any interest
or other earnings accrued thereon (less any portion of such interest or other
earnings representing an administrative fee to which Seller, as landlord, shall
be entitled pursuant to the applicable Space Lease and applicable law),
including without limitation any letters of credit or any other non-cash
security (collectively, the "Security Deposits"), shall be turned over by Seller
to Purchaser at the Closing, with Seller and Purchaser paying equally for all
costs of transfer of any Security Deposits in the form of letters of credit. In
the event that the Security Deposits in the form of a letter of credit cannot be
transferred at the Closing, Seller agrees to cooperate with Purchaser in
implementing such transfer after the Closing and, if it cannot be achieved,
Seller will cooperate and assist Purchaser in presenting same for payment and
shall deliver the proceeds thereof to Purchaser; it being agreed that Seller's
obligations as set forth in this sentence shall survive the Closing; it being
further agreed, however, that Seller shall have no liability whatsoever with
respect to the failure of any issuing bank to honor or transfer any such letter
of credit. It is further agreed that nothing herein contained shall be deemed to
prevent Seller from applying security prior to the Closing in order to liquidate
any claim under any Space Lease or to compromise, adjust or settle any claim
against any Space Tenant by the application of such security, provided that
Seller so notifies Purchaser and such compromise, adjustment or settlement shall
not affect the Space Tenant's liability for rent or additional rent after the
Closing.
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11. Broker.
(a) Purchaser represents to Seller that no broker, finder or other person,
other than Helmsley-Spear, Inc. ("Helmsley-Spear") and Eastern Consolidated
("Eastern") brought about this transaction. Seller shall be responsible for any
commission or other compensation due to Helmsley-Spear in connection with this
transaction, and Purchaser shall be responsible for any commission of other
compensation due to Eastern in connection with this transaction. Purchaser shall
indemnify and hold Seller free and harmless from and against any damages, costs
or expenses (including, but not limited to, reasonable attorneys' fees and
disbursements) suffered by Seller arising from a claim by any broker or finder,
other than Helmsley-Spear, that such broker or finder has dealt with Purchaser
in connection with this transaction. Seller shall, after receipt of knowledge of
any such claim, notify Purchaser of such claim, and Purchaser shall have the
right to defend such claim by counsel of its choice and at the sole expense of
Purchaser.
(b) Seller represents to Purchaser that no broker, finder or other person,
other than Helmsley-Spear and Eastern brought about this transaction. Seller
shall indemnify and hold Purchaser free and harmless from and against any
damages, costs or expenses (including, but not limited to, reasonable attorneys'
fees and disbursements) suffered by Purchaser arising from a claim by any broker
or finder other than Eastern, that such broker or finder has dealt with Seller
in connection with this transaction other than a claim covered by the provisions
of Section 11(a) above. Purchaser shall, after receipt of
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knowledge of any such claim, notify Seller of such claim, and Seller shall have
the right to defend such claim by counsel of its choice and at the sole expense
of Seller.
(c) The provisions of this Article shall survive the Closing or
termination of this Contract.
12. Risk of Loss.
(a) Condemnation. If, between the date hereof and the Closing, any
condemnation or eminent domain proceedings are initiated which would result in
the taking of all or any material portion of the Property, then Purchaser may
elect to terminate this Contract by giving written notice of its election to
Seller within fifteen (15) days after receiving notice of such prospective
taking. For purposes of this Contract a condemnation or eminent domain
proceeding has been "initiated" if Seller has received a written notice from the
applicable governmental authority that all or any portion of the Property is to
be taken. If Purchaser shall so elect to terminate this Contract then (i)
Purchaser shall be entitled to the return of the Deposit (and the Additional
Deposit, if applicable) and the Promissory Note (and the Additional Promissory
Note, if applicable), and (ii) neither party hereto shall have any further
obligations or liabilities to the other under this Contract, except for those
which expressly survive the termination of this Contract. If Purchaser does not
elect to terminate this Contract, then the parties hereto shall proceed to the
Closing without reduction of or offset against the Purchase Price and Purchaser
shall have no other claim against Seller. In such event, all of Seller's right,
title and interest in and to any condemnation proceeds paid or payable in
connection therewith
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shall be assigned to Purchaser. For the purposes of this section, "material
portion" shall mean any taking that takes (1) more than fifteen percent (15%) of
the net rentable area of the Premises or (2) the lobby area in the Premises. If,
between the date hereof and the Closing, any condemnation or eminent domain
proceedings are initiated which would result in the taking of less than a
material portion of the Property, then neither Seller nor Purchaser may
terminate this Contract and the parties shall proceed to the Closing without
reduction of or offset against the Purchase Price and Purchaser shall have no
other claim against Seller. In such event, all of Seller's right, title and
interest in and to any condemnation proceeds paid or payable in connection
therewith shall be assigned to Purchaser.
(b) Destruction or Damage. In the event that either of the Properties
shall be damaged or destroyed by fire or any other casualty ("Casualty") prior
to the Closing, Seller shall give Purchaser written notice of such event, which
notice shall include a description of the Casualty in reasonable detail, an
estimate of the cost of repair or restoration thereof and a description of any
effect thereof upon any existing Space Leases. In the event the Premises shall
suffer a Casualty less than "substantial destruction", as defined below, this
Contract shall remain in full force and effect and on the Closing Seller shall
transfer and/or assign to Purchaser any and all monies and claims (including,
without limitation, Purchaser's share of any monies and claims relating to the
value of lost rentals) received by or accrued to Seller on account of such
Casualty, less such sums, if any, as shall have been expended by Seller (with
Purchaser's consent,
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except in cases of repairs to correct imminently dangerous conditions for which
no consent shall be required) in connection with the repair or restoration of
such Casualty, and there shall be credited towards the Purchase Price the amount
of any deductible under the insurance policy covering such Casualty. In the
event of substantial destruction of either of the Properties, Purchaser shall
have the option, exercisable by written notice to Seller not later than fifteen
(15) days after the later of (y) the giving of Seller's notice required pursuant
to the first sentence of this subparagraph (i), or (z) the determination of the
cost to repair or restore pursuant to the last sentence of this subparagraph
(i), to cancel this Contract. If Purchaser so elects to cancel this Contract,
the Deposit (and the Additional Deposit, if applicable) and the Promissory Note
(and the Additional Promissory Note, if applicable) shall be promptly returned
to Purchaser and this Contract shall be deemed cancelled and of no force and
effect and neither party shall have any further rights or liabilities against or
to the other. If Purchaser does not so elect to cancel this Contract, this
Contract shall remain in full force and effect and on the Closing Seller shall
transfer and/or assign to Purchaser any and all monies and claims (including,
without limitation, Purchaser's share of any monies and claims relating to the
value of lost rentals) received by or accrued to Seller on account of such
substantial destruction, less such sums, if any, that shall have been expended
by Seller (with Purchaser's consent, except in cases of repairs to correct
imminently dangerous conditions for which no consent shall be required) in
connection with the repair or restoration of such Casualty, and there shall be
credited towards the Purchase Price the amount of any deductible under
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the insurance policy covering such Casualty. As used herein, the term
"substantial destruction" shall mean a Casualty which shall require repairs to
or restoration of the Premises, the estimated cost of which shall exceed Six
Million and 00/100 ($6,000,000.00) Dollars. In case of any dispute as to the
estimated cost of repairs to or restoration of any Casualty, such dispute shall
be determined by a reputable, independent contractor selected by Seller and
approved by Purchaser (which approval Purchaser agrees not to unreasonably
withhold or delay) whose estimate of such cost shall be incorporated in a bid
irrevocable for a period of thirty (30) days and shall be binding upon Seller
and Purchaser and the Closing date shall be adjourned until such cost is
determined.
(ii) In the event of an uninsured casualty, Seller hereby agrees to
expend up to, but not more than, $500,000 in the aggregate, in order to repair
such casualty or grant Purchaser a credit against the Purchase Price in the
amount of the actual cost to cure or satisfy the same, but in no event shall
such credit be greater than $500,000. In the event that the cost to repair an
uninsured casualty exceeds the maximum amount to be expended and Seller elects
not to expend or give Purchaser a credit for more than such maximum amount to
repair the same, Seller shall give Purchaser notice of its election, and, in
such event Purchaser shall have the right to (i) cancel this Contract (in which
event the provisions of Section 26(b)(ii) shall apply), by sending written
notice to the Seller that it elects to cancel the Contract on or before the
fifth (5th) day after the Purchaser has received notice that the cost to repair
such uninsured casualty will exceed $500,000 and that Seller
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has elected not to expend such additional amount necessary to repair or (ii)
close title to the Premises with a credit against the Purchase Price in the
aggregate amount required to repair such uninsured casualty, but not to exceed
the sum of the aggregate maximum amount to be expended so to repair such
uninsured casualty as set forth above. If Seller shall be obligated or shall
elect to repair such uninsured casualty pursuant to this Section 12(b), Seller
shall be entitled to adjourn the Closing for up to sixty (60) days to effectuate
such cure.
(iii) Without limiting the generality of the provisions of this
Article, in the event there shall be a Casualty, and this Contract is not
cancelled by either Seller or Purchaser in accordance with the provisions of
this Article, as the case may be, and as a result of which Casualty, insurance
proceeds have been paid or are payable with respect to the value of lost
rentals, then in such event, said insurance proceeds shall be apportioned as and
when collected as of the Closing and Seller shall transfer and/or assign to
Purchaser at the Closing the right to receive the portion of such insurance
proceeds, if any, to which Purchaser is entitled pursuant to such apportionment.
(c) The provisions of this Article supersede the provisions of Section
5-1311 of the General Obligations Law of the State of New York.
(d) From the date hereof until the Closing, Seller shall continue to
carry, and shall keep in full force and effect, casualty insurance and rental
insurance each in an amount not less than, with a deductible not greater than,
and affording substantially the same coverage as, the casualty and rental
insurance policies covering the Properties as of the date hereof and as listed
on Schedules F-1 and F-2 attached hereto, to the extent
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such policies are reasonably obtainable from commercial sources at commercially
reasonable rates. If such policies are not obtainable at commercially reasonable
rates, Seller will give notice to Purchaser and use commercially reasonable
efforts to obtain as similar insurance coverage as possible in the circumstances
to the coverage shown on Schedules F-1 and F-2.
13. Status of Title.
Seller shall give, and Purchaser shall accept, fee simple title to the
Premises subject only to (a) the Permitted Exceptions as provided in Article 3
of this Contract, (b) the usual stipulations and conditions contained in, plus
the standard printed exclusions from coverage contained in, the standard form of
insuring agreement employed by Chicago Title Insurance Company, First American
Title Insurance Company and/or such other national title companies as Purchaser
shall elect to issue title insurance (collectively, the "Title Company") and (c)
such other exceptions as such Title Company shall be willing to omit as
exceptions to coverage or insure against collection out of, or enforcement
against, the Premises.
14. Closing.
(a) Subject to Purchaser's right to postpone or adjourn the date of
Closing, the Closing of title (the "Closing") shall take place on the later of
(i) the date which is sixteen (16) days after the date upon which Seller shall
have provided to Purchaser evidence of receipt of Tenant Estoppel Certificates
in the form and covering the minimum amount of leased space under Space Leases
set forth in Section 27(a)(xiv) hereof and
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Seller's commitment to deliver Seller's Substitute Estoppel Certificates
required to meet the requirements for Closing set forth in Section 27(a)(xiv) or
(ii) May 4, 2000, at the offices of Stadtmauer Bailkin LLP, attorneys for the
Seller, 850 Third Avenue, New York, New York 10022 or, if required by Purchaser,
at the offices of the attorneys of the Purchaser's lender located within the
City of New York, at 10:00 o'clock in the forenoon on that the applicable
Closing date, TIME BEING OF THE ESSENCE with respect to said applicable Closing
date, as to Purchaser only.
(b) Notwithstanding the foregoing, Purchaser shall have the right to
postpone the date of Closing for a period of up to fourteen (14) days, on the
condition that Purchaser delivers the Additional Deposit and the Additional
Promissory Note to the Escrow Agent not less than three (3) days prior to the
then scheduled Closing date, TIME BEING OF THE ESSENCE with respect to the
delivery of the Additional Deposit and the Additional Promissory Note; it being
expressly understood by Purchaser that failure to timely deliver the Additional
Deposit and the Additional Promissory Note shall be deemed to be a waiver of
Purchaser's right to adjourn the Closing beyond the then scheduled Closing date.
In the event of such adjournment, TIME SHALL BE OF THE ESSENCE, as to Purchaser
only, with respect to the adjourned date of Closing.
(c) On the day which is two (2) business days prior to the applicable date
of Closing, the parties hereto shall meet at the aforesaid location at 10:00
a.m. for a pre-closing (the "Pre-Closing") to (i) examine and approve, to the
extent practicable, all of the documents required to be delivered under this
Contract by each of the
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parties hereto, (ii) agree, to the extent practicable, upon the apportionments
pursuant to Section 6, and (iii) settle such other matters as are customarily
determined in advance of Closing.
15. Notices.
All notices hereunder by either party to the other shall be in writing and
shall be served by personal delivery, sent by registered or certified mail,
return receipt requested, or by overnight courier providing receipt of delivery,
and shall be addressed to Seller at the address given for Seller at the
beginning of this Contract to the attention of Mr. Irving Schneider, with a copy
of each such notice to Seller to be concurrently delivered in the same manner
to:
Stadtmauer Bailkin LLP
850 Third Avenue, 19th Floor
New York, NY 10022
Attention: Marshall J. Cohen, Esq.
and shall be addressed to Purchaser at the address given for Purchaser at the
beginning of this Contract to the attention of Charles Lindwall, with a copy of
each such notice to Purchaser to be concurrently delivered in the same manner
to:
Mayer Brown & Platt
1675 Broadway
New York, NY 10019
Attention: Robert Bressman, Esq.
Notices shall be deemed served and received three (3) days after the date
of registration with the postal authorities if sent by registered mail, three
(3) days after the date of mailing if sent by certified mail, or one (1) day
after sending by overnight courier
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or on the date of delivery if the overnight courier is instructed to deliver the
notice more than one day after the notice is placed in the hands of the
overnight courier. Notices on behalf of the respective parties may be given by
their attorneys and such notices shall have the same effect as if in fact
subscribed by the party on whose behalf it is given. Notices may be served by
personal delivery, if a signed receipt of delivery shall be obtained, and shall
be deemed served and received on the date indicated on such receipt of delivery
if delivered prior to 6:00 p.m., and on the next business day if delivered after
6:00 p.m.
16. Franchise Taxes.
Unpaid franchise taxes, dissolution taxes or any other similar taxes so
levied, of any corporation in the chain of title shall not be an objection to
title so long as the Title Company insures against collection of any such taxes
out of or enforcement against the Premises.
17. Title Report.
Purchaser has ordered and received updated title reports and surveys for
each of the Properties from the Title Company. Purchaser shall from time to time
promptly, after obtaining knowledge thereof, notify Seller of any defects,
encumbrances, encroachments or other objections to title not herein expressly
consented to by Purchaser or permitted hereunder.
18. Seller's Limit of Liability.
(a) If on the date set for the Closing in Article 14 hereof, it should
appear that either of the Properties is affected by any lien or encumbrance,
outstanding interest or
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question of title not a Permitted Exception, Seller's only obligation to satisfy
the same shall be as follows: (i) with respect to mortgages and any other liens
created by Seller by its voluntary acts, Seller shall be obligated to expend up
to the Purchase Price in order to cure or satisfy such mortgages and such
voluntary liens (other than mechanic's liens) created by Seller's acts
("Voluntary Objections"), (ii) with respect to mechanic liens (other than
mechanic's liens arising from the acts of any Space Tenant as to which Seller
shall have no obligation and shall not be the basis of a title objection on the
part of the Purchaser), Seller shall comply with the provisions of Section 18(b)
below, and (iii) with respect to (A) judgments and (B) all other liens,
encumbrances, outstanding interests or questions of title which can be removed
solely by the payment of a liquidated sum, but have not been created by Seller
by its voluntary acts ("Non-Voluntary Objections"), Seller shall use all
reasonable efforts to cause the Title Company to either omit such Non-Voluntary
Objection(s) or insure against collection against the Properties on account of
such Non-Voluntary Objection(s) and, in connection therewith, Seller hereby
agrees to expend up to, but not more than, $500,000 in the aggregate, in order
to cure or satisfy the Non-Voluntary Objections or grant Purchaser a credit
against the Purchase Price in the amount of the actual cost to cure or satisfy
the same, but in no event shall such credit be greater than $500,000. In the
event that the cost to cure or satisfy Non-Voluntary Objections exceeds the
maximum amount to be expended and Seller elects not to expend or give Purchaser
a credit for more than such maximum amount to cure or satisfy the same, Seller
shall give Purchaser notice of its election, and, in such event Purchaser shall
have the right to (i) cancel this Contract (in
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which event the provisions of Section 26(b)(ii) shall apply), by sending written
notice to the Seller that it elects to cancel the Contract on or before the
fifth (5th) day after the Purchaser has received notice that the cost to satisfy
or cure the Non-Voluntary Objections will exceed $500,000 and that Seller has
elected not to expend such additional amount necessary to obtain such cure or
(ii) close title to the Premises with a credit against the Purchase Price in the
aggregate amount required to cure or satisfy such Non-Voluntary Objections, but
not to exceed the sum of the aggregate maximum amount to be expended so to cure
or satisfy such Non-Voluntary Objections as set forth above. If Seller shall be
obligated or shall elect to cure any Title Objections pursuant to this Section
18(a), Seller shall be entitled to adjourn the Closing for up to sixty (60) days
to effectuate such cure.
(b) Notwithstanding anything to the contrary contained in Section 18(a)
hereof: Seller shall be deemed to have satisfied its obligations hereunder and
Purchaser shall have no right to raise any Title Objections or otherwise be
excused from its obligations to close title to the Premises, if the Title
Company shall omit such Voluntary or Non-Voluntary Objections as exceptions to
coverage or insure against collection out of, or enforcement against, the
Premises on account of any such Title Objections. With respect to any mechanics'
liens which may constitute a Title Objection as of the Closing date, Seller will
provide such customary and reasonable affidavits and indemnities so as to induce
the Title Company to insure against collection of such mechanics' liens out of
the Premises.
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(c) If Seller elects to adjourn the Closing as provided in this Article
18, this Contract shall remain in effect for the period or periods of
adjournment, in accordance with its terms.
(d) Except as expressly provided in Section 18(a) or Section 18(b) above,
nothing contained in this Article 18 shall be deemed to require Seller to take
or begin any action or proceeding or any other steps to remove any defect in or
objection to title or to expend any moneys therefor, nor shall Purchaser have
any right of action against Seller therefor, at law or in equity, for damages or
specific performance; however, Purchaser, if request is made within a reasonable
time prior to the Closing, agrees to provide at Closing separate certified
checks as requested, aggregating the amount of the balance of the Purchase
Price, to facilitate the payment of any sums which Seller may elect to expend to
clear title defects, if any.
(e) Notwithstanding the foregoing provisions of this Article 18, Purchaser
may at any time accept such title as Seller can convey, notwithstanding the
existence of any title defect not provided for in this Contract, without
reduction of the Purchase Price or any credit or allowance on account thereof or
any claim against Seller, except as provided in Section 18(a) above. The
acceptance of the Deeds shall be deemed to be full performance of, and discharge
of, every agreement and obligation on Seller's part to be performed under this
Contract, except for those which this Contract specifically provides shall
survive the Closing.
19. Vendee's Lien.
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(a) In case of default by Seller, the Deposit (and the Additional Deposit,
if applicable) then being held by Escrow Agent and the "net cost of title
examination" are hereby made liens upon the Premises but such liens shall not
continue after termination of this Contract by reason of Purchaser's default.
The term "net cost of title examination" is defined for purposes of this
Contract as the expense actually incurred by Purchaser for title examination,
without issuance of policy, plus the cost, if any, incurred by Purchaser in
updating any survey referred to in Schedules B-1 and B-2.
(b) If for any reason whatsoever Seller shall be unable to convey title to
both of the Properties subject to and in accordance with the terms of this
Contract, including without limitation Seller's obligation under Section 18(a)
above, and Purchaser elects not to accept the title to both Properties that
Seller can convey, then the sole obligation of Seller shall be to refund the
Deposit (and the Additional Deposit, if applicable) and to return the Promissory
Note (and the Additional Promissory Note, if applicable) then being held by
Escrow Agent and to reimburse Purchaser for the net cost of title examination,
and upon the making of such refund and reimbursement, this Contract shall become
void and of no further force or effect, neither party hereto shall have any
further claim against the other by reason of this Contract and the lien, if any,
of Purchaser against the Properties, individually and collectively, shall wholly
cease; it being understood and agreed that Purchaser has hereby obligated itself
to purchase both of the Properties and shall not have the right to buy one of
the Properties without purchasing the other, whatever the reason for Purchaser's
failure to buy one of the Properties.
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20. Discharge of Encumbrances.
The amount of any unpaid taxes, assessments, water charges and sewer rents
which Seller is obligated to pay and discharge, with the interest and penalties
thereon to a date not less than two (2) business days after the date of Closing,
may at the option of Seller be allowed to Purchaser out of the balance of the
Purchase Price, provided official bills therefor, with interest and penalties
thereon computed to said date are furnished by Seller at the Closing. If on the
date of Closing there are any other liens or encumbrances which Seller is
obligated to pay and discharge, Seller may use (but shall not be obligated to
use, unless otherwise provided herein) any portion of the balance of the
Purchase Price to satisfy the same, provided Seller shall deliver to Purchaser
at the Closing instruments in recordable form and sufficient to satisfy such
liens and encumbrances of record, together with the cost of recording or filing
said instruments. Purchaser, if request is made within a reasonable time prior
to the Closing, agrees to provide at the Closing separate certified checks as
requested to facilitate the satisfaction of any such liens or encumbrances. The
existence of any such taxes, assessments, water charges or sewer rents or other
liens or encumbrances shall not be deemed objections to title if Seller shall
comply with the foregoing requirements. If the Title Company is willing to
insure Purchaser that such taxes, assessments, water charges, sewer rents, liens
and encumbrances will not be collected out of or enforced against the Premises,
then Seller shall have the right, in lieu of payment and discharge, to deposit
with the Title Company such funds or assurances or to pay such special or
additional premiums as the Title Company may require in order so to insure. In
such case
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the taxes, assessments, water charges, sewer rents, liens and encumbrances with
respect to which the Title Company has agreed so to insure shall not be
considered objections to title.
21. Application of Past Due Rents.
(a) If at the Closing any past due base rentals are owing by any Space
Tenant not collected by Seller pursuant to Article 10, Purchaser agrees that the
first moneys received by Purchaser from any such Space Tenants shall be received
by Purchaser as trustee to be disbursed as follows:
(i) First, to Purchaser and Seller an amount equal to the then
rental due from such Space Tenants for the month in which the Closing occurs,
subject to adjustment as herein provided;
(ii) Next, to Purchaser all rentals due from time to time from such
Space Tenants for the period after the month in which the Closing occurs;
(iii) Next, to Seller an amount equal to such arrears applicable to
the month preceding the month in which the Closing occurs;
(iv) Next, to Seller an amount equal to all other past due rentals
owing by such Space Tenants to Seller; and
(v) The balance, if any, to Purchaser.
(b) Any sums received by Purchaser to which Seller is entitled shall be
held in trust for Seller on account of said past due Rents payable to Seller,
and Purchaser shall remit to Seller any such sums received by Purchaser to which
Seller is entitled
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within five (5) business days after receipt thereof. If Seller receives any
amounts after the Closing Date which are attributable, in whole or in part, to
any period after the day immediately preceding the Closing, Seller shall remit
to Purchaser that portion of the amounts so received by Seller to which
Purchaser is entitled within five (5) business days after receipt thereof.
Notwithstanding the foregoing, if any past due Rents are still uncollected six
(6) months after the Closing, Seller shall be entitled to take such steps,
including the right to file suit, as Seller in its sole and absolute discretion
deems necessary or appropriate to collect such sums, excepting only the right to
bring any summary dispossess, eviction or similar proceeding or to terminate any
Lease or to dispossess any tenant still in possession of its further right to
occupy the premises demised to it under the Lease or other occupancy agreement.
Purchaser agrees, at no cost to Purchaser, to cooperate with Seller in any
manner reasonably requested by Seller in connection with any such collection
efforts. The provisions of this subsection shall survive the Closing hereunder.
(c) If, on the day immediately preceding the Closing, there are any Rents
that have not been billed or have not been determined in accordance with the
provisions of the Leases, or if billed, have not been collected by Seller as of
the Closing Date, Purchaser shall (A) bill the same when billable, (B) cooperate
with the Seller to determine the correct amount of such Rents, and (C)
diligently pursue and use all reasonable efforts to achieve the collection of
the same; provided, however, Purchaser shall not be required to institute any
legal action or proceeding or incur any costs or
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expenses to collect same. Any amounts collected pursuant to this subsection
21(b)(ii) shall be apportioned and distributed in accordance with the provisions
of subsection 21(b)(i) above. If the final determination of such Rents in
accordance with the Leases shows that a net amount is owed by Purchaser to
Seller, Purchaser shall within five (5) business days after receipt thereof
remit such amount to Seller. Purchaser agrees to receive and hold any monies
received on account of such Rents in trust for Seller and to pay same promptly
to Seller as aforesaid.
(d) If, at the time of Closing, there is accrued but unpaid insurance
proceeds for loss of rents for a period during which the Closing occurs, such
insurance proceeds for loss of rents shall be prorated between Seller and
Purchaser as of the Closing in the same manner as provided herein for proration
of past due rents, if, as and when received.
22. Affidavit Regarding Judgments.
If a search of the title discloses judgments, bankruptcies or other
returns against other entities having names the same as or similar to that of
Seller or any general partner of Seller, Seller will on request deliver to
Purchaser and the Title Company at Closing an affidavit showing that such
judgments, bankruptcies or other returns are not against Seller, any general
partner as the case may be, and otherwise in such form and content that the
Title Company will remove such judgments, bankruptcies or other returns as
exceptions to title or will insure against collection of such judgments out of
the Premises.
23. Assignment of this Contract.
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This Contract may not be assigned by Purchaser without the prior written
consent of Seller, except Purchaser shall have the right to designate one or
more entities to take title to the Premises, provided that such entity or
entities shall be "affiliated" with Purchaser; it being understood for purposes
of this Article 23 that "affiliated" shall mean an entity which controls, is
controlled by or is under common control with, Purchaser.
24. Escrow Provisions.
With respect to the Deposit (and the Additional Deposit, if applicable),
Escrow Agent is instructed as follows:
(a) Upon the Closing, the Deposit (and the Additional Deposit, if
applicable) then being held shall be paid over to Seller and the Promissory Note
(and the Additional Promissory Note, if applicable) shall be returned to
Purchaser.
(b) Prior to the Closing or the Closing date set by Seller pursuant to
Article 18, Escrow Agent shall deliver the Deposit (and the Additional Deposit,
if applicable) and the Promissory Note (and the Additional Promissory Note, if
applicable) to the party(ies) designated in a joint written directive delivered
to Escrow Agent and signed by Purchaser and Seller (a "Joint Directive") or to a
party hereto requesting same in a writing delivered to Escrow Agent and
certifying therein that it is entitled to the Deposit (and the Additional
Deposit, if applicable) pursuant to this Contract (a "Party Letter"). If Escrow
Agent receives a Joint Directive, it promptly thereafter shall deliver the
Deposit (and the Additional Deposit, if applicable) and the Promissory Note (and
the Additional Promissory Note, if applicable) in accordance with the Joint
Directive. If the Escrow
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Agent receives a Party Letter, it promptly thereafter shall send a copy of the
Party Letter to the other party hereto and will not release the Deposit (and the
Additional Deposit, if applicable) and the Promissory Note (and the Additional
Promissory Note, if applicable) pursuant to such Party Letter until five (5)
business days after such delivery of a copy of the Party Letter to the other
party; provided, however, if within five (5) business days after its receipt of
a copy of the Party Letter, the other party objects in writing to the Escrow
Agent to such delivery of the Deposit (and the Additional Deposit, if
applicable), the Escrow Agent will hold the Deposit (and the Additional Deposit,
if applicable) and the Promissory Note (and the Additional Promissory Note, if
applicable) until it receives a Joint Directive or otherwise deal with the
Deposit (and the Additional Deposit, if applicable) and the Promissory Note (and
the Additional Promissory Note, if applicable) in accordance with the provisions
of paragraphs (e) or (f) below.
(c) For purposes of this Section 24, all deliveries must be delivered as
follows:
(i) Deliveries to Purchaser must be delivered to Purchaser,
Attention: Charles Lindwall, at the address of Purchaser as provided first
above, with copies to Mayer Brown & Platt in accordance with Article 15 hereof.
(ii) Deliveries to Seller must be delivered to Irving Schneider at
the address of Seller as provided first above with copies to Stadtmauer Bailkin
LLP in accordance with Article 15 hereof.
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(iii) Deliveries to the Escrow Agent shall be as provided in Section
15 hereof.
(d) Escrow Agent is hereby instructed by Seller and Purchaser to invest
the escrowed cash amount initially constituting the Deposit (and the Additional
Deposit, if applicable) in interest bearing accounts at Chase Manhattan Bank.
Any interest earned on the escrowed amount when received shall similarly be held
in escrow by Escrow Agent and (i) if the Deposit (and the Additional Deposit, if
applicable) under the terms of this Contract is to be paid over to Purchaser,
then such interest shall similarly be paid over to Purchaser or (ii) if the
Deposit (and the Additional Deposit, if applicable) is to be paid over to
Seller, then such interest shall similarly be paid over to Seller. The party
receiving such interest or the benefit of such interest shall pay the income
taxes thereon. The identification or social security numbers, as the case may
be, of the Seller and the Purchaser are listed on Schedule G attached hereto and
made a part hereof.
(e) Escrow Agent, by signing this Contract at the end hereof where
indicated, signifies its agreement to hold the Deposit (and the Additional
Deposit, if applicable) and the Promissory Note (and the Additional Promissory
Note, if applicable) for the purpose as provided in this Contract. In the event
of any dispute, Escrow Agent shall have the right, to the extent it has not
received a Joint Directive, to deposit the Deposit (and the Additonal Deposit,
if applicable) and the Promissory Note (and the Additional Promissory Note, if
applicable) in court to await the final, unappealable resolution of such
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dispute. In any event, Escrow Agent shall not be personally liable so long as it
acts in good faith.
(f) Escrow Agent shall not incur any liability by reason of any action or
non-action taken by it in good faith or pursuant to the judgment or order of a
court of competent jurisdiction. Escrow Agent shall have the right to rely upon
the genuineness of all certificates, notices and instruments delivered to it
pursuant hereto, and all the signatures thereto or to any other writing received
by Escrow Agent purporting to be signed by any party hereto, and upon the truth
of the contents thereof. Before making payment or delivery of any moneys or
documents held by Escrow Agent pursuant thereto, Escrow Agent shall have the
right to require delivery to it of an executed and acknowledged receipt for the
subject matter of the delivery to be made by him. In the event of any dispute
between the parties as to which party is entitled to the Deposit (and the
Additional Deposit, if applicable) or the Promissory Note (and the Additional
Promissory Note, if applicable), as the case may be, or as to any other material
fact, which in either case has been communicated in writing to the Escrow Agent,
Escrow Agent shall refrain from taking any further action with respect to the
subject matter of the escrow until it receives a Joint Directive or until action
by Escrow Agent is required by an order or judgment of a court of competent
jurisdiction. Escrow Agent shall be entitled to consult with other counsel in
connection with its duties hereunder. Seller and Purchaser jointly and severally
agree to reimburse Escrow Agent for its reasonable costs and expenses, including
attorneys' fees (either paid to retained attorneys or representing the fair
value of legal services rendered by Escrow Agent to itself) incurred
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as a result of any dispute or litigation arising hereunder; provided, however,
that Escrow Agent shall not otherwise charge any fee for acting as Escrow Agent
and carrying out its duties hereunder.
(g) The parties hereto acknowledge that Stadtmauer Bailkin LLP has
represented and continues to represent the Seller. In the event of a dispute
between the parties hereto regarding the disposition of the Deposit (and the
Additional Deposit, if applicable) and the Promissory Note (and the Additional
Promissory Note, if applicable), by litigation or otherwise, the Seller may be
represented by Stadtmauer Bailkin LLP, which also serves as Escrow Agent under
this Contract.
25. Transfer of Title.
(a) The deeds to the Premises (the "Deeds" and, individually, a "Deed")
shall in each instance be the equivalent of a New York Bargain and Sale Deed
without Covenants in proper statutory short form for recording (in the forms
attached hereto as Exhibit 3) and shall be duly executed and acknowledged so as
to convey to Purchaser the fee simple title to each of 245 Fifth Avenue and 261
Fifth Avenue, except as herein stated, and shall contain the covenant required
by subdivision 5 of Section 13 of the Lien Law.
(b) At the Closing Seller shall deliver:
(i) to the Title Company, a certified or bank check to the order of
the recording officer of New York County in which the Deeds are to be recorded
for the amount of the documentary stamps to be affixed to the Deeds in
accordance with Article 31 of the Tax Law, and a certified or bank check to the
order of the appropriate officer for any
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other tax payable by reason of the delivery of the Deeds (all such taxes being
the sole responsibility of Seller), and a return in respect of each of the
Deeds, if any be required, duly signed and sworn to by Seller. Purchaser agrees
to sign (and swear to, if appropriate) such returns (reasonably acceptable to
Purchaser) and request the Title Company to cause such check and such returns to
be delivered to the appropriate office promptly after the Closing; and
(ii) to the Title Company, a certified or bank check or checks to
the order of the Finance Administrator for the amount of the Real Property
Transfer Tax imposed by Title II of Chapter 46, as amended, of the
Administrative Code of the City of New York in respect of the Deeds and will
also deliver to the Purchaser the returns in respect of the Deeds required by
said statute and the regulations issued pursuant to the authority thereof, duly
signed and sworn to by Seller (all such taxes being the sole responsibility of
Seller). Purchaser agrees to sign and swear to such return(s) reasonably
acceptable to Purchaser and to request the Title Company to cause such check and
such return to be delivered to the City Register promptly after the Closing.
Nothing herein contained, including without limitation the allocation of the
Purchase Price for transfer tax purposes, shall imply a right of Purchaser, or
confer a right upon Purchaser, to acquire either of the Properties without the
other.
(c) Anything contained in subdivision (i) and (ii) of (b) above to the
contrary notwithstanding, Seller may, at its option, elect not to deliver said
checks and,
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instead, may direct Purchaser to deliver any or all of the said checks and allow
to Purchaser as a credit against the Purchase Price the amount of said checks
delivered by Purchaser.
(d) The provisions of Sections 25(b)(i) and (ii) hereof shall survive the
Closing.
26. Liquidated Damages; Remedies.
(a) If Purchaser fails to close title in accordance with the terms hereof
on or before the applicable TIME OF THE ESSENCE Closing date as provided in
Article 14, Seller may terminate this Contract. Purchaser acknowledges that if
Purchaser shall default under this Contract, Seller will suffer substantial
adverse financial consequences as a result thereof. Accordingly, Seller's sole
and exclusive remedies against Purchaser shall be (i) to receive the Deposit
(and the Additional Deposit, if applicable) and the Promissory Note and the
Additional Promissory Note, if applicable) from the Escrow Agent and (ii) to
retain the Deposit (and the Additional Deposit, if applicable) and demand and
collect all amounts due under the Promissory Note (and the Additional Promissory
Note, if applicable), as and for its liquidated damages, it being agreed that
Seller's damages will be difficult, if not impossible, to ascertain, and
Purchaser and Seller shall have no further rights or obligations under this
Contract, except those expressly provided herein to survive the termination
hereof.
(b) In the event that Seller defaults in its obligations hereunder and
Seller is unable or unwilling to cure such default within ten (10) days after
notice to Seller (or such longer period as elsewhere provided herein),
Purchaser's sole and
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exclusive remedy shall be either (i) to seek specific performance by Seller of
its obligations hereunder; provided, however, that Seller shall not be required
to take any actions or incur any expenses to cure such defaults beyond the
express requirements of this Contract, or (ii) to terminate this Contract and
upon termination Seller shall not have any further liability or obligation to
Purchaser hereunder nor shall Purchaser have any further liability or obligation
to Seller hereunder, except for such liabilities or obligations as are
specifically stated to survive the termination of this Contract, and except that
Seller shall cause the Deposit (and the Additional Deposit, if applicable) and
the Promissory Note (and the Additional Promissory Note, if applicable) to be
returned to Purchaser and shall reimburse Purchaser for the net cost of title
examination.
(c) It is understood and agreed that Purchaser has hereby obligated itself
to purchase both of the Properties and shall not have the right to buy one
without purchasing the other, whatever the reason for Purchaser's failure to buy
one of the Properties.
27. Seller's and Purchaser's Representations.
(a) Seller represents as of the date hereof as follows:
(i) Seller is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of New York.
(ii) Seller has all requisite power and authority to enter into and
perform all of the transactions contemplated by this Contract. This Contract is
a legal, valid and binding obligation of Seller.
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(iii) Seller has duly authorized the execution, delivery and
performance of this Contract and each agreement, document, or instrument
required to be executed and delivered by Seller pursuant to this Contract. The
execution, delivery or performance of this Contract or any other such document
will not violate any term of Seller's partnership agreement.
(iv) The execution and delivery by Seller of this Contract and all
documents associated therewith and the performance by Seller of its obligations
thereunder (i) do not constitute a violation of any provisions of law, any
order, regulation, or decree of any court or agency of government, or any
indenture, mortgage, deed, trust agreement, or any other instrument to which
Seller is a party or by which it or either of the Properties is subject to or
bound, and (ii) are not in conflict with nor will they result in a breach of or
constitute (with due notice and/or lapse of time) a default under any such
agreement or any other instrument.
(v) Seller has not received written notice of any pending or
threatened condemnation of all or any portion of either of the Properties.
(vi) Subject to the provisions of Section 4(b) above, the Space
Leases (subject to amendments and supplements, which have been delivered and
initialed by Purchaser or are permitted pursuant to Article 5 of this Contract)
constitute all of the leases and agreements relating to the right of use or
occupancy of any portion of the Properties, it being acknowledged by Purchaser
that Seller makes no representation with respect to subleases, licenses or other
forms of agreement (oral or written), the rights
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under which derive from the Space Leases or by the acts of a Space Tenant, as to
which Seller makes no representations. To Seller's actual knowledge, the Space
Leases which Purchaser has examined and initialed are true, correct and complete
in all material respects.
(vii) Except as specifically noted otherwise on Schedule C-3, to
Seller's actual knowledge, no written notice of a material default on the part
of the tenant under any of the Space Leases has been sent by Seller, other than
a default notice setting forth a default which, as of the date hereof, has been
cured. Except as specifically noted otherwise on Schedule C-4, to Seller's
actual knowledge, no written notice of a material default on the part of the
landlord under any of the Space Leases has been received by Seller from a Space
Tenant, other than a default notice setting forth a default which, as of the
date hereof, has been cured.
(viii) The service, maintenance, supply and management contracts
referred to on Schedules D-1 and D-2 (subject to amendments and supplements
permitted pursuant to Section 5A of this Contract, herein collectively the
"Service Contracts") constitute all Service Contracts affecting the Properties
in effect on the date hereof. To Seller's actual knowledge, the Service
Contracts which Purchaser has examined and initialled are true, correct and
complete in all material respects.
(ix) To the Seller's actual knowledge, Seller has not received any
written notice from any governmental authority, other than Violations covered
under
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Article 7 hereof, to the effect that it is missing any required Licenses and
Permits which, if not obtained, would have a material adverse effect on either
of the Properties.
(x) Except for suits, actions, litigation or proceedings (1) listed
on Schedule H-1 or (2) covered by insurance covering Seller and the Properties
(with those exceeding $250,000 listed on Schedule H-2) and except for routine
non-payment proceedings, to the best of Seller's knowledge, there is no suit,
action, litigation or proceeding pending or threatened, before any court or
governmental authority against or relating to, or would have a materially
adverse effect upon, either of the Properties or the transactions contemplated
by this Contract.
(xi) Seller has no employees employed at the Properties except as
listed on Schedules E-1 and E-2 and excluding summer or vacation replacements.
(xii) Annexed hereto as Schedules F-1 and F-2 and made a part hereof
is a list of all insurance policies presently affording coverage with respect to
the Properties and the information contained thereon is complete and accurate in
all material respects of the date hereof. The policies are in full force and
effect and Seller has received no notices denying coverage thereunder.
(xiii) To Seller's actual knowledge, the schedule of Space Tenant
work ("Space Tenant Work") and leasing commissions ("Leasing Commissions")
annexed hereto as Schedule I and made a part hereof sets forth all of the
outstanding Space Tenant Work to be performed and Leasing Commissions due and
payable or which may become payable after the date hereof with respect to the
Properties.
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(xiv) Seller shall use commercially reasonable efforts, prior to the
scheduled Closing Date, to obtain estoppel certificates signed by the Space
Tenants (a "Tenant Estoppel Certificate") either in the form contemplated by the
applicable lease or substantially in the form attached hereto as Exhibit 4 from
Space Tenants under Space Leases covering in the aggregate not less than seventy
five percent (75%) of all currently leased space under the Space Leases, it
being understood and agreed that (1) in the event that Seller obtains Tenant
Estoppel Certificates for less than 75% of all currently leased space under the
Space Leases, Seller may substitute its own estoppel certificate ("Seller's
Substitute Estoppel Certificates") for up to twenty five percent (25%) of all
currently leased space under the Space Leases, (2) in no event shall Purchaser
receive Tenant Estoppel Certificates from Space Tenants occupying less than 50%
of all currently leased space under the Space Leases, (3) Seller shall not be
obligated to incur any additional cost or expense to obtain any estoppel
certificates and (4) Seller shall not be obligated or compelled to bring any
action or institute any proceeding in furtherance of the foregoing; it being
agreed that Seller's liability with respect to any of Seller's Substitute
Estoppel Certificates shall survive the Closing for a period ending December 31,
2000. Without limiting the generality of the foregoing, Purchaser and Seller
agree that for purposes of determining the percentage of currently leased space
in the Premises, the square footage numbers in Schedules C-1 and C-2 shall be
deemed to be controlling. If Seller shall fail to obtain and deliver to
Purchaser at Closing Tenant Estoppel Certificates or Seller's Substitute
Estoppel Certificates satisfying the requirements set forth in the preceding
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sentence, Purchaser may, in its sole and absolute discretion, terminate this
Contract, whereupon the Deposit (and the Additional Deposit, if applicable)
(together with any interest earned thereon) and the Promissory Note (and the
Additional Promissory Note, if applicable) shall be returned to Purchaser and
this Contract shall be of no further force or effect, and neither party shall
have any further rights or liabilities against or to the other except as may
arise under any provision of this Contract which by its terms survives the
termination of this Contract.
(xv) There are no real property tax reduction proceedings affecting
or pending with respect to the Premises, except as disclosed on Schedule J.
(xvi) All Security Deposits (and the form thereof) held by Seller
under the existing Space Leases are set forth in Schedule K hereto.
Whenever a representation or warranty is made in this Contract on the basis of
the "actual knowledge" of Seller, such representation and warranty is made with
the exclusion of any facts disclosed in the written items, materials and other
information regarding the Properties furnished by or on behalf of Seller to
Purchaser on or prior to the Closing date, or otherwise known to Purchaser, and
is made solely on the basis of the actual (as distinguished from implied,
imputed, or constructive), current knowledge of Irving Schneider and Steven
Lambert, individuals having the principal responsibility for overseeing the
operation of the Properties, on the date on or as of which such representation
or warranty is made, without any duty to make any inquiry or investigation
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or to review any files or other materials, and without attribution to Seller or
any such named individual of facts or matters otherwise within the personal
knowledge of any other officers, employees or agents of Seller or any third
parties, including but not limited to tenants of the Properties or any property
manager or leasing agent for the Properties.
(b) Purchaser represents as of the date hereof and as of the date of
Closing as follows:
(i) Purchaser is a limited partnership duly organized and validly
existing under the laws of the State of California and in good standing under
the laws of the State of New York.
(ii) Purchaser has all requisite power and authority to enter into
and perform all of the transactions contemplated by this Contract. This Contract
is a legal, valid and binding obligation of Purchaser.
(iii) Purchaser has duly authorized the execution, delivery and
performance of this Contract and each agreement, document, or instrument
required to be executed and delivered by Purchaser pursuant to this Contract.
The execution, delivery or performance of this Contract or any other such
document will not violate any term of its operating agreement or any other
agreement, judicial decree, statute or regulation to which Purchaser is a party
or by which Purchaser may be bound or effected.
(iv) The execution and delivery by Purchaser of this Contract and
all documents associated therewith and the performance by Purchaser of its
obligations thereunder (i) do not constitute a violation of any provisions of
law, any
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order, regulation, or decree of any court or agency of government, or any
indenture, mortgage, deed, trust agreement, or any other instrument to which
Purchaser is a party or by which it or any of its property is subject to or
bound, and (ii) are not in conflict with nor will they result in a breach of or
constitute (with due notice and/or lapse of time) a default under any such
agreement or any other instrument.
(c) The representations made by Seller and Purchaser in Sections 27(a) and
(b) above shall survive the Closing for a period ending on December 31, 2000 and
any claims which Purchaser may have with respect to such representations shall
be made on or before December 31, 2000.
28. Closing Documents and Closing Conditions.
(a) Seller and/or Purchaser, as the case may be, shall, as indicated
below, execute, acknowledge and/or deliver at the Closing the following (the
items listed under subparagraphs (1) through (3) and (5) below being the
"Seller's Closing Documents" and the items listed under subparagraphs (4) and
(5) below being the "Purchaser's Closing Documents"):
(1) Seller shall execute, acknowledge, and deliver to Purchaser:
(i) the Deeds in accordance with Article 25 hereof.
(ii) a bill of sale, it being understood that no portion of the
Purchase Price is being allocated to any fixtures, equipment or personal
property; and it being further agreed that if any sales tax is assessed against
such fixtures, equipment or personal property, Purchaser shall be responsible
for such sales tax and that Purchaser's
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obligations with respect to such sales tax shall survive the Closing. Seller
agrees to cooperate with Purchaser at no cost or liability to Seller in
protesting any such sales tax.
(2) With respect to each of the Properties, as applicable, Seller shall
execute and deliver to Purchaser:
(i) an Assignment of Space Leases and new Space Leases, if any, and
the cash or other form of security being held as Security Deposits by Seller at
the Closing, which Assignment shall be in substantially the form marked Exhibit
5 annexed hereto and made a part hereof;
(ii) an Assignment of Service Contracts, which Assignment shall be
in substantially the form marked Exhibit 6 annexed hereto and made a part
hereof;
(iii) an Assignment of all Seller's right, title and interest in and
to all of the transferable Licenses and Permits , if any, and warranties and
guaranties (if assignable), then in effect, and pertaining to the appropriate
Property, which Assignment shall be in substantially the form marked Exhibit 7
annexed hereto and made a part hereof;
(iv) the checks and returns referred to in Article 25(b)(i) and (ii)
hereof; and
(v) the FIRPTA affidavit provided in Article 30 hereof;
(3) With respect to each of the Properties, as applicable, Seller shall
deliver to Purchaser:
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(i) duplicate originals, or if duplicate originals are not
available, true and complete copies of all of the Space Leases then in force and
any guarantees of the obligations of any of the Space Tenants, which documents
shall be delivered at the Closing or promptly thereafter by delivery of the
files which Purchaser has reviewed and initialled;
(ii) security deposits (and advance rents) under the Space Leases
and new Space Leases; and
(iii) duplicate originals or true and complete copies of all of the
Service Contracts then in force and, to the extent in Seller's possession, of
brokerage agreements;
(iv) to the extent the same are in Seller's possession or in its
reasonable control, a complete set of keys for the buildings on the Properties;
(v) an updated rent roll dated not more than thirty (30) days prior
to the Closing, it being understood that the delivery of such rent roll shall
not be deemed to constitute Seller's representation or certification of its
accuracy;
(vi) an Internal Revenue Service Form 1099;
(vii) All files, books and records at the Property held by or for
the account of Seller, including without limitation, plans and specifications,
lease files, brokerage agreements, keys and lease applications, as available
(but excluding all Proprietary Material). As used herein, "Proprietary Material"
shall mean any material (A) which, in Seller's good faith opinion, constitutes a
part of Seller's unrelated business
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operations or Seller's financial records, or is subject to attorney-client or
work product privilege or to confidentiality restrictions in favor of any
independent third party or imposed by applicable law, including without
limitation appraisals and other information concerning the valuation of the
Property, internal communications of Seller, communications with real estate
brokers or other third parties concerning the sale of the Property, and any loan
document executed in connection with any loan to Seller or Seller's predecessor
in interest; and (B) which is not required for the operation of the Improvements
following the Closing in the reasonable judgment of Seller. All such Proprietary
Material may be retained by and kept confidential by Seller.
(viii) Plans and specifications, technical manuals and similar
materials for the Building, to the extent in Seller's possession as of Closing.
(ix) All current certificates of occupancy (or copies thereof),
whether permanent or temporary, for all or any part of the Premises and
assignable permits and licenses pertaining to the Premises, to the extent in
Seller's possession as of Closing.
(x) Tenant Estoppel Certificates or Seller's Substitute Estoppel
Certificates with respect to the Space Leases to the extent required and as more
particularly described in Section 27(a)(xv) hereof, which Tenant Estoppel
Certificates or Seller's Substitute Estoppel Certificates shall be dated not
earlier than thirty (30) days prior to the initially scheduled Closing Date.
(xi) Such additional documents, consistent with the provisions of
this Contract, as shall be reasonably required to consummate the transaction
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contemplated by this Contract (at no additional cost or liability to Seller),
including without limitation an assignment of Seller's interest in any tax
certiorari protests or proceedings pending as of the date of Closing with
respect to the real estate tax year, 2000-2001.
(4) Purchaser shall execute and deliver to Seller:
(i) the Assignments of the Space Leases and new Space Leases
(Exhibit 5);
(ii) the Assignments of the Service Contracts (Exhibit 6); and
(iii) the returns referred to in Article 25(b)(i) and (ii) hereof.
(5) Seller and Purchaser shall execute a notice to the Space Tenants of
each Property stating in substance that Purchaser has succeeded to Seller's
interest as landlord under the Space Leases and that the security deposit (and
advance rents), if any, under such Space Tenant's Space Lease has been
transferred to Purchaser (except in the cases contemplated by Article 10
hereof). Such notice shall direct the Space Tenants to make all further payments
to Purchaser, or its designee, of all sums due or to become due under their
respective Space Leases, unless the last sentence of Section 6(a)(i) hereof
shall apply. Within five (5) days following the Closing, Purchaser shall prepare
the notices to Space Tenants and shall cause such notice to be mailed to the
Space Tenants by certified or registered mail and shall provide Seller with
copies thereof.
(b) The obligation of Seller to transfer the Properties to Purchaser and
to otherwise consummate the transaction contemplated hereby shall be subject to
the satisfaction of the following conditions precedent on and as of the Closing:
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(i) All representations and warranties of Purchaser contained in
this Contract shall have been true in all material respects when made and shall
be true in all material respects at and as of the Closing as if such
representations and warranties were made at and as of the Closing, and Purchaser
shall have performed and complied in all material respects with all covenants,
agreements and conditions required by this Contract to be performed or complied
with by Purchaser prior to or at the Closing;
(ii) Seller shall have received Purchaser's Closing Documents as set
forth under this Section; and
(iii) Seller shall have received payment of the Purchase Price in
accordance with Article 2 hereof and such other amounts as are due Seller
hereunder.
(c) The obligation of Purchaser to pay the Purchase Price, to purchase the
Properties and otherwise consummate the transactions contemplated hereby shall
be subject to the satisfaction of the following conditions precedent on and as
of the Closing:
(i) all representations and warranties of Seller contained in this
Contract shall have been true in all material respects when made and the
representations contained in the following subparagraphs of Section 27(a) shall
be true in all material respects at and as of the Closing as if such
representations and warranties were made at and as of the Closing: (i) through
(iv), (vi), (viii), (xi) and (xiii) (except for any Space Tenant Work or Leasing
Commissions which arise on account of new Space Leases or Modifications
permitted hereby); it being expressly agreed by Purchaser that in the event that
any such representations shall not be true in all material respects at and as of
the
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Closing, then Seller shall have the right, but not the obligation, to take
appropriate remedial action for the purpose of eliminating (except to a de
minimis extent) any adverse effect on the value of either of the Properties, if
any, that arises from such representations not being true at and as of the
Closing in a material respect, hereinafter referred to as "Remedial Action."
Purchaser and Seller agree to negotiate in good faith to determine the
appropriate Remedial Action to be undertaken by Seller, it being understood that
such Remedial Action is only necessary as a prerequisite to Closing if the
representation which is not true is material and causes an adverse effect (other
than to a di minimis extent) on the value of either of the Properties and it
being further understood that if the representation which is not true is
immaterial, then Purchaser shall be required to close title as if such condition
precedent to closing had been satisfied by Seller. If Seller performs the
Remedial Action agreed to by the Purchaser and Seller or as determined by
arbitration, then Purchaser shall be obligated to close title and the condition
precedent to Closing which gave rise to the need to take Remedial Action shall
be deemed satisfied. If Seller declines to perform the Remedial Action as
determined by arbitration, then Seller need not close title and the sole
obligation of Seller shall be to refund the Deposit (and the Additional Deposit,
if applicable) and to return the Promissory Note (and the Additional Promissory
Note, if applicable) then being held by the Escrow Agent and to reimburse
Purchaser for the net cost of title examination, and upon the making of such
refund and reimbursement, this Contract shall become void and of no further
force or effect, and neither party hereto shall have any further claim against
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the other by reason of this Contract and the lien, if any, of Purchaser against
the Properties;
(ii) Seller shall have performed and complied in all material
respects with all covenants, agreements and conditions required by this Contract
to be performed or complied with by Seller prior to or at the Closing;
(iii) Purchaser shall have received Seller's Closing Documents as
set forth under this Article 28;
(iv) The Promissory Note (and the Additional Promissory Note, if
applicable) shall be returned to the Purchaser;
(v) Purchaser shall have received title to the Properties pursuant
to Section 13 of this Contract;
(vi) Neither Seller nor any of the parties comprising Seller shall
have filed a voluntary petition or in bankruptcy or shall have had an
involuntary petition filed against it which has not been dismissed; and
29. Further Assurances.
The parties hereto each agree to act in good faith, to do such other and
further acts and things, and to execute and deliver such instruments and
documents (not creating any obligations additional to those otherwise imposed by
this Contract), and to correct such errors, omissions or mistakes made by either
party at or prior to the Closing and which may reasonably be requested from time
to time, whether at or after the Closing, in furtherance of the purposes of this
Contract, provided such documents are customarily
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delivered in real estate transactions in the City of New York, Borough of
Manhattan or are otherwise required due to circumstances involved in the
transactions contemplated hereunder and do not impose any material obligations
upon any party hereunder except as set forth in this Contract. The provisions of
this Article 29 shall survive the Closing.
30. FIRPTA.
(a) Seller represents that it is not a "foreign person", as that term is
defined for purposes of the Foreign Investment in Real Property Tax Act,
Internal Revenue Code, section 1445, as amended, and the regulations promulgated
thereunder (collectively "FIRPTA").
(b) At the closing, Seller shall deliver an affidavit to Purchaser, in a
form complying with the provisions of FIRPTA, stating that Seller is not a
foreign person for purposes of FIRPTA.
31. Union Agreements.
(a) Purchaser has been informed that Seller is or is obligated to become a
signatory to the 1999 Commercial Building Agreement between Local 32B-32J
Service Employees International Union, AFL-CIO and The Realty Advisory Board on
Labor Relations, Inc. (collectively, the "Union Agreement"). On the Closing,
Purchaser shall assume any and all obligations of Seller under the Union
Agreements accruing from and after Closing and Purchaser hereby agrees to
indemnify and hold harmless Seller, its constituent partners, employees, agents,
representatives and affiliates, from any and all claims, costs, debts, damages,
fees, wages or wage supplements incurred by Seller
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pursuant to the Union Agreement or otherwise in connection with the sale of the
Premises, arising from Purchaser's failure or refusal either to hire the
employees previously employed at the Premises or to adopt and assume the Union
Agreement. With respect to withdrawal liability, as the term is used under the
Multi-Employer Pension Plan Amendments Act of 1980 (the "Act"), Purchaser shall
indemnify and hold Seller free and harmless from and against all such withdrawal
liability whether accruing prior to, at or after the date of Closing. In
addition, Purchaser agrees within a reasonable time following the Closing that
it shall post a bond in an amount or place into escrow such sum of money with
the Building Service 32B-J Pension (the "Fund"), as may be required by the Act
or the Union Agreement with respect to any obligations accruing from and after
the Closing date. Seller shall and does hereby agree to indemnify, defend and
hold Purchaser harmless from and against any and all liability, claims, actions,
damages, judgments, penalties, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, accruing under the Union
Agreement prior to the Closing Date. Purchaser shall and does hereby agree to
indemnify, defend and hold Seller harmless from and against any and all
liability, claims, actions, damages, judgments, penalties, costs and expenses,
including, without limitation, reasonable attorneys' fees and expenses, accruing
under the Union Agreements on and after the Closing Date or arising out of a
claim that Purchaser has failed to comply with any obligations arising from and
after the Closing date under the Union Agreements.
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(b) Purchaser acknowledges that there are no non-union employees at the
Building and Seller presently employees certain union members to manage and
operate the Building (collectively, the "Union Employees"). Schedules E-1 and
E-2 annexed hereto contain a list of such Union Employees.
(c) The provisions of this Article 31 shall survive the Closing.
32. Miscellaneous.
(a) This Contract and the Schedules and Exhibits annexed hereto constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof, and all understanding and agreements heretofore or simultaneously
had between the parties hereto are merged in and are contained in this Contract
and said Schedules and Exhibits.
(b) No provision of this Contract may be waived, changed, modified or
discharged orally, except by an agreement in writing signed by both Purchaser
and Seller.
(c) The captions or Article titles contained in this Contract and the
Index are for convenience and reference only and shall not be deemed a part of
this context of this Contract.
(d) This Contract shall be governed by and construed in accordance with
the laws of the State of New York.
(e) The terms "hereof," "herein," and "hereunder," and words of similar
import, shall be construed to refer to this Contract as a whole, and not to any
particular article or provisions, unless expressly so stated.
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(f) The Schedules and Exhibits annexed hereto are hereby incorporated and
made a part of this Agreement. Purchaser agrees and acknowledges that the
inclusion of any disclosure item in any of the Schedules shall not be deemed an
admission or agreement of Seller that any such disclosure item is "material" as
such term is used in Section 28(c)(i) hereof.
(g) All words or terms used in this Contract, regardless of the number or
gender in which they are used, shall be deemed to include any other number and
any other gender as the context may require.
(h) This Contract shall be binding upon and shall inure to the benefit of
each of the parties hereto and their respective heirs, executors,
administrators, successors, and permitted assigns, if any, but nothing contained
herein shall be deemed a waiver of the provisions of Article 23 hereof, and each
party may enforce the provisions hereof against any or all of the other parties
hereto. None of the provisions of this Contract are intended to be, nor shall
they be construed to be, for the benefit of any third party.
(i) Purchaser covenants and agrees that in no event will Purchaser record
or cause to be recorded this Contract or any memorandum hereof and that
Purchaser's breach of this provision shall represent a default of the nature
governed by Article 26 hereof and Seller shall have all of the rights and
remedies provided under Article 26 including, without limitation, the option of
terminating this Contract and retaining the Deposit (and the Additional Deposit,
if applicable) and the proceeds of the
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Promissory Note (and the Additional Promissory Note, if applicable) as
liquidated damages.
(j) This Contract may be executed in counterparts, each counterpart for
all purposes being deemed an original, and all such counterparts shall together
constitute only one and the same agreement.
(k) If any term or provision of this Contract or the application thereof
to any persons or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Contract or the application of such term or
provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby, and each term and
provision of this Contract shall be valid and enforceable to the fullest extent
permitted by law.
(l) The failure of any party hereto to enforce at any time any of the
provisions of this Contract shall in no way be construed as a waiver of any of
such provisions, or the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Contract shall be held to be a
waiver of any other or subsequent breach.
(m) EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS CONTRACT OR THE
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TRANSACTIONS CONTEMPLATED HEREBY. The provisions of this Section 32(m) shall
survive the termination of this Contract and the Closing.
[This page intentionally ended here; signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Contract the day and year first above written.
SELLER:
INVESTMENT PROPERTIES ASSOCIATES,
A LIMITED PARTNERSHIP
By: /s/ Irving Schneider
----------------------------------------------
Irving Schneider, General Partner
By: MINLYN INC., General Partner
By: /s/ Irving Schneider
----------------------------------------
Irving Schneider, President
By: SCOGBELL AG, INC., General Partner
By: /s/ Irving Schneider
----------------------------------------
Name:
Title:
PURCHASER:
SM BRELL II, L.P.,
a California limited partnership
By: KBS INVESTORS II,
a California general partnership,
General Partner
By: SCHREIBER INVESTMENTS, LLC,
a California limited liability company,
a General Partner
By: /s/ Charles J. Schreiber, Jr.
-----------------------------------------------
Charles J. Schreiber, Jr., its Manager
The undersigned acknowledges receipt
of the Deposit and the Promissory Note
and agrees to act as Escrow Agent in
accordance with provisions of
this Contract:
STADTMAUER BAILKIN LLP
By: /s/ Marshall J. Cohen, Esq.
---------------------------------
Marshall J. Cohen, Esq., Partner
66
Investment Properties Associates Announces the
Sale of 245 Fifth Avenue and 261 Fifth Avenue, New York, N.Y.
New York, New York April 19, 2000...Investment Properties Associates (IPA)
announced today that it has signed a contract to sell 245 Fifth Avenue and 261
Fifth Avenue, New York, N.Y. for $135,000,000. The purchaser is a fund
controlled by Koll Bren Schreiber Realty Advisors Inc. The closing is expected
to occur within approximately 35 days.
The determination of the size of the special distribution from the sales
proceeds will be made subsequently, after the completion of the transaction
accounting and establishment of appropriate reserves. In accordance with IPA's
partnership agreement, one-half of the net proceeds will be distributed to the
general and special limited partners and one-half to the holders of its
participations of limited partnership interests.
Upon the consummation of this proposed transaction, IPA's remaining properties
consist of two undeveloped parcels in Houston, Texas and one vacant commercial
office building in Newark, New Jersey.
The sale of 245 Fifth Avenue and 261 Fifth Avenue, New York, N.Y. was approved
by all of the general partners of IPA including ScogBell AG, Inc., Irving
Schneider and Minlyn, Inc. Helmsley-Spear, Inc. represented IPA in this
transaction.
IPA was created in 1969 by Harry Helmsley and Irving Schneider. Irving Schneider
said that IPA was continuing to explore the possible sale of its remaining
properties, but there could be no assurances that any such sale will be
concluded.
Contact: Irving Schneider - (212) 880-0151
General Partner, Investment Properties Associates
Co-Chairman & Chief Operating Officer, Helmsley-Spear, Inc., Agent
Robert Hecht - (212) 880-0276
Chief Financial Officer, Investment Properties Associates
Vice President of Finance, Helmsley-Spear, Inc., Agent
