CONTRACT OF SALE
among
GARMENT CAPITOL ASSOCIATES,
Fee Owner,
4987 CORPORATION,
Net Lessee,
XXXXXX COMFORT & SONS, INC., as Agent,
and
TIRREM MANAGEMENT COMPANY, INC.
Dated: January ___, 1997
Property Location:
The Garment Capitol Building
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
TABLE OF CONTENTS
Page
ARTICLE 1 - THE PROPERTY; PURCHASE PRICE.....................1
SECTION 1.01. The Property...............................1
SECTION 1.02. Purchase Price.............................2
SECTION 1.03. Contingency................................3
ARTICLE 2 - THE CLOSING......................................3
SECTION 2.01. The Closing................................3
ARTICLE 3 - TITLE TO THE PROPERTY............................4
SECTION 3.01. Title to the Property......................4
SECTION 3.02. Utility Agreement..........................6
SECTION 3.03. Certain Mechanic's Lien....................6
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES...................7
SECTION 4.01. Representations and Warranties
by Fee Owner...............................7
SECTION 4.02. Representations and Warranties of
Net Lessee.................................8
SECTION 4.03. Purchaser's Representations and
Warranties................................12
SECTION 4.04. Certain Limitations on Seller's
Representations and Warranties............12
SECTION 4.05. Survival of Representations and
Warranties................................13
SECTION 4.06. No Other Representations or Warranties....13
SECTION 4.07 Purchaser's Due Diligence ................14
SECTION 4.08 Notice of Inspection .....................14
SECTION 4.09 Indemnification ..........................15
ARTICLE 5 - COVENANTS OF SELLER.............................15
SECTION 5.01. Covenants of Net Lessee...................15
SECTION 5.02. Covenants of Fee Owner....................16
SECTION 5.03. Union Contract............................16
ARTICLE 6 - COVENANTS OF PURCHASER..........................18
SECTION 6.01. Covenants of Purchaser....................18
ARTICLE 7 - CLOSING CONDITIONS AND DELIVERIES...............18
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SECTION 7.01. Conditions to Seller's Obligations........18
SECTION 7.02. Conditions to Purchaser's Obligations.....19
SECTION 7.03. Fee Owner's Closing Documents.............19
SECTION 7.04. Net Lessee's Closing Documents............20
SECTION 7.05. Purchaser's Closing Documents.............22
SECTION 7.06. Conditions Generally......................22
ARTICLE 8 - TAXES AND OTHER EXPENSES........................23
SECTION 8.01. Transfer Taxes............................23
SECTION 8.02. Title Examination Fees and Sales Taxes....23
SECTION 8.03. Survival..................................23
ARTICLE 9 - CLOSING APPORTIONMENTS..........................23
SECTION 9.01. Apportionments, Expense Allocations
and Payments..............................23
SECTION 9.02. Apportionment of Rents....................25
SECTION 9.03. Survival..................................26
ARTICLE 10 - CONDEMNATION AND DESTRUCTION; INSURANCE........26
SECTION 10.01. Condemnation.............................26
SECTION 10.02. Destruction..............................26
SECTION 10.03. Seller's Obligation to Maintain
Insurance................................27
ARTICLE 11 - INDEMNITIES....................................28
SECTION 11.01. Purchaser's Indemnity....................28
SECTION 11.02. Net Lessee's Indeminity..................28
SECTION 11.03. Indemnification Generally................28
SECTION 11.04. Survival.................................29
ARTICLE 12 - BROKER.........................................29
SECTION 12.01. Broker...................................29
ARTICLE 13 - REMEDIES.......................................29
SECTION 13.01. Purchaser's Default......................29
SECTION 13.02. Seller's Inability/Default...............30
SECTION 13.03. Effect or Other Provisions...............30
ARTICLE 14 - NOTICES........................................30
SECTION 14.01. Notices..................................30
ARTICLE 15 - ESCROW AGENT...................................32
SECTION 15.01...........................................32
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ARTICLE 16 - MISCELLANEOUS PROVISIONS.......................33
SECTION 16.01. Acceptance of the Premises...............33
SECTION 16.02. Press Releases...........................33
SECTION 16.03. Assignment...............................34
SECTION 16.04. Binding Effect...........................34
SECTION 16.05. Partial Invalidity.......................34
SECTION 16.06. Recordation of Agreement;
Waiver of Lis Pendens....................34
SECTION 16.07. Entire Agreement.........................34
SECTION 16.08. Further Assurances.......................34
SECTION 16.09. Enforcement..............................35
SECTION 16.10. Amendment................................35
SECTION 16.11. Governing Law............................35
SECTION 16.12. Exhibits.................................35
SECTION 16.13. No Waiver................................35
SECTION 16.14. Headings, Article, Section and
Exhibit References.......................35
SECTION 16.15. No Other Parties.........................35
SECTION 16.16. Capacity of Parties; Claims..............35
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CONTRACT OF SALE
AGREEMENT, dated January ___, 1997, among GARMENT CAPITOL
ASSOCIATES, a New York partnership, having an office c/o Wien &
Malkin LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Fee
Owner"), 4987 CORPORATION, a New York corporation, having an
office c/o Helmsley-Spear, Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 ("Net Lessee"), XXXXXX COMFORT & SONS, INC., as
Agent, a New York corporation having an office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Comfort") and TIRREM MANAGEMENT
COMPANY INC., A New York corporation, having an office c/o Loeb
Partners Realty, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000 ("Tirrem" and, together with Comfort, "Purchaser").
W I T N E S S E T H:
WHEREAS, Fee Owner is the owner in fee of that certain plot,
piece and parcel of land located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, as more particularly described on Exhibit A (the
"Land"), upon which is located the building and all improvements
located thereon and commonly known as The Garment Capitol Building
(collectively, the "Building").
WHEREAS, Net Lessee is the operating lessee of the Building
pursuant to a ground lease dated May 1, 1957 between Fee Owner, as
landlord, and 000 Xxxxxxx Xxxxxx Associates, as lessee, as
modified (the "Operating Lease"), the tenant's interest in which
was assigned to Net Lessee on December 29, 1995. As used herein,
the term "Seller" shall refer collectively to Fee Owner and Net
Lessee.
WHEREAS, Fee Owner desires to sell to Purchaser, and
Purchaser desires to purchase from Seller, the Property (defined
in Section 1.01) on the terms and conditions hereinafter set
forth.
WHEREAS, Fee Owner and Purchaser desire that Net Lessee join
in this Agreement for the purpose of (i) making certain
representations and agreeing to certain operating covenants, and
(ii) facilitating the conveyance of the Property free and clear of
the Operating Lease or, at the option of Purchaser, assigning Net
Lessee's interest in the Operating Lease as Purchaser may direct.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, and subject
to the terms and conditions hereof, Seller and Purchaser hereby
covenant and agree as follows:
ARTICLE 1
THE PROPERTY; PURCHASE PRICE
SECTION 1.01. The Property. (a) Seller shall sell, assign,
transfer and convey to Purchaser, and Purchaser shall purchase
from Seller, at the price and upon and subject to the terms and
conditions hereof, the Land, together with all of Seller's right,
title and interest in and to (i) all strips, gores, easements,
rights of way, privileges, appurtenances and other rights
pertaining to the Land, (ii) any land lying in the bed of any
street, road or avenue, opened or proposed, public or private, in
front of or adjoining the Land to the center line thereof, (iii)
the Building, (iv) all of the fixtures, machinery, life safety and
security systems, cleaning supplies and equipment, light bulbs and
ballasts, spare parts, and all other equipment owned by Seller and
used in connection with or attached to or now located in the
Building (collectively, the "Personal Property") and (v) all of
Seller's transferable right, title and interest (if any) in and to
the plans and specifications with respect to the Property and any
guarantees, warranties or other rights related to the use or
operation of the Building and the Personal Property, all
assignable governmental licenses, permits, consents,
authorizations, variances or waivers, and all intangibles
associated with the Property, including, without limitation, the
name of the Property ("Garment Capitol" Building), and the logo
therefor, if any. The Land, the Building, the Personal Property
and all other rights, improvements and property heretofore
mentioned is referred to collectively herein as the "Property".
Attached hereto as Exhibit B is a non-exclusive inventory of those
items of Personal Property, generally described in clause (iv)
above, that Seller shall sell, transfer and convey to Purchaser in
connection with the transaction contemplated by this Agreement
subject to depletion of supplies and ordinary wear and tear in
connection with Seller's normal operation of the Property.
Purchaser and Seller acknowledge that the description of the items
on Exhibit B was independently prepared by Purchaser's
representative and that Seller has performed no independent
investigation with respect thereto. In no event shall the
Purchase Price (defined in Section 1.02 herein) be reduced by
reason of the consumption of all or any portion of the Personal
Property or any damage or loss by whatever reason, absent the
willful misconduct of Seller.
(b) Purchaser acknowledges that each party comprising
Seller is to convey all of its right, title and interest in the
Property subject to the terms of this Agreement so as to convey to
Purchaser the full fee interest in the Property and (or free of)
the leasehold interest therein pursuant to the Operating Lease,
subject only to those matters set forth on Exhibit C hereto and in
accordance with and subject to the terms of this Agreement. Each
party comprising Seller acknowledges that Purchaser's obligations
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hereunder are contingent on performance by both the Fee Owner and
Net Lessee of their respective material obligations hereunder and
that Purchaser is relieved of its obligations if either Fee Owner
or Net Lessee fails to so perform.
SECTION 1.02. Purchase Price. (a) The purchase price for the
Property (the "Purchase Price") is Forty-two Million and 00/100
DOLLARS ($42,000,000.00), payable by Purchaser as follows:
(i) Five Hundred Thousand and 00/100 DOLLARS
($500,00.00) (the "Downpayment") payable, subject to the
provisions of Section 1.02(b), upon the execution and
delivery of this Agreement by Seller and Purchaser, by
delivering to Wien & Malkin LLP, as escrowee (the
"Escrow Agent"), Purchaser's unendorsed certified or
bank check drawn on a bank that is a member of the New
York Clearinghouse Association payable to the order of
"Wien & Malkin LLP, As Escrow Agent"; and
(ii) Forty-one Million Five Hundred Thousand and
00/100 DOLLARS ($41,500,000.00) (subject to (x)
reduction following the payment of additional amounts as
part of the Downpayment pursuant to Section 2.01 and (y)
increase pursuant to Section 5.03 hereof) payable on the
Closing Date by wire transfer of immediately available
federal funds to Wien & Malkin LLP on behalf of Seller
to an account or accounts to be designated by Seller
through complete wiring instructions provided at or
prior to the Pre-Closing (as defined in Section
2.01(b)).
(b) The Downpayment, together with any interest accrued
thereon, shall be held and paid by Escrow Agent in accordance with
the provisions of Article 15 of this Agreement. Purchaser
acknowledges that, if the closing shall occur, the Downpayment and
interest thereon and the amounts paid to Wien & Malkin LLP
pursuant to Section 1.02(ii), together with interest earned
thereon, are to be held and distributed pursuant to a separate
arrangement among Fee Owner, Net Lessee and Wien & Malkin LLP, and
Purchaser shall have no right or interest in or to such funds.
SECTION 1.03. Contingency. (a) The obligations of Purchaser
pursuant to this Agreement are contingent upon the issuance of a
"Loan Commitment" (as hereinafter defined) to Purchaser.
(b) The term "Loan Commitment" shall mean a commitment
for a loan to consummate the purchase hereunder in an amount not
less than $37,800,000, and on terms and conditions acceptable to
Purchaser from a commercial bank, savings bank, insurance company,
investment bank or similar institutional lender or fund
(individually the "Lending Institution").
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(c) If Purchaser shall not have received a Loan
Commitment on or before February 14, 1997 (time being of the
essence), then, and only in such event, shall Purchaser be
entitled to terminate this Agreement as herein provided.
(d) In the event that Purchaser shall be entitled to
terminate this Agreement pursuant to paragraph (c) above, any such
termination shall only be effective if written notice of the
election to terminate this Agreement is received by the other
party(ies) on or before February 21, 1997. In the event Seller
shall not receive notice of termination within the time period
prescribed herein (time being of the essence), Purchaser shall be
deemed to have elected to proceed with the transaction
contemplated in this Agreement as if this Section 1.03 did not
exist.
(e) In the event Purchaser shall terminate this
Agreement as hereinabove provided, then this Agreement shall be
deemed terminated and Escrow Agent shall, within five (5) days of
the effective date of the termination hereof, return to Purchaser
the Downpayment and any interest earned thereon. Thereafter,
neither Purchaser nor Seller shall have any rights or obligations
in favor of or against the other hereunder, except as to those
provisions hereof which specifically survive termination.
ARTICLE 2
THE CLOSING
SECTION 2.01. The Closing. (a) The closing of the sale and
purchase of the Property (the "Closing") shall take place at the
offices of Wien & Malkin LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx at 10:00 A.M. local time on March 14, 1997 (the "Designated
Closing Date"), or at such other place in the Borough of
Manhattan, City, County and State of New York, as Seller may
designate upon at least five (5) business days' written notice to
Purchaser. If Purchaser so requests in writing not less than five
(5) business days prior to the Designated Closing Date, the
Closing shall be held at the offices of Purchaser's lender or of
such lender's counsel.
(b) Purchaser shall have the right to adjourn the
Closing for one time only the period of which adjournment shall
not exceed fifteen (15) days from the Designated Closing Date
provided that TIME SHALL BE OF THE ESSENCE AS AGAINST PURCHASER AS
TO SUCH ADJOURNED DATE. Such adjournment right may only be
exercised by Purchaser's (i) giving written notice thereof to
Seller no later than five (5) business days prior to the
Designated Closing Date, time being of the essence, and (ii)
delivering to Escrow Agent, together with a copy of such notice as
and when delivered to Seller, an additional amount of $500,000, to
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be held by Escrow Agent in accordance with the terms of this
Agreement. From and after the date of such additional deposit,
the Downpayment shall be increased to include the amount so
deposited and Sections 1.02(a)(i) and (ii) shall be deemed
modified to reflect the increase in the amount of the Downpayment
(and the resulting decrease in the balance of the Purchase Price
to be paid by Purchaser at the Closing). The Designated Closing
Date, as the same may be adjourned in accordance with this
Agreement, is herein referred to as the "Closing Date."
(c) On the day which is two (2) business days prior to
the Closing Date, the parties shall meet at the aforesaid location
with a representative of the Title Company (as hereinafter
defined) and counsel to Purchaser's lending institution, if any,
at 10:00 A.M. for a pre-Closing (the "Pre-Closing") to (i) examine
and approve, to the extent practicable, all of Seller's Closing
Documents and all of Purchaser's Closing Documents, (ii) agree, to
the extent practicable, upon the apportionments and allocations
pursuant to Article 9, (iii) settle such other matters as are
customarily determined in advance of the closing of a transaction
of this nature, and (iv) clear or otherwise dispose of any title
objections as provided in this Agreement so as to permit the Title
Company to xxxx up its proposed policy of title insurance so that
it will reflect as exceptions to title thereunder only the
Permitted Exceptions (as hereinafter defined) and other matters
expressly permitted pursuant to this Agreement.
ARTICLE 3
TITLE TO THE PROPERTY
SECTION 3.01. Title to the Property. (a) Purchaser
acknowledges that it has been furnished with a title report dated
July 13, 1996 (Title No.: 135-NYNY-18225) issued by First American
Title Insurance Company of New York (the "Title Company").
Promptly following execution and delivery of this Agreement,
Purchaser shall instruct the Title Company to update title,
conduct departmental searches and to deliver copies thereof, as
well as any further continuations and supplements thereto,
directly to Seller (collectively, the "Title Report").
(b) Purchaser shall accept title to the Property
subject only to the matters set forth on Exhibit C (collectively,
the "Permitted Exceptions") and other matters expressly permitted
pursuant to this Agreement or otherwise approved by Purchaser in
writing .
(c) Seller shall be entitled to reasonable adjournments
of the Closing (not to exceed in the aggregate thirty (30) days
following the last day of any period of adjournment elected by
Purchaser pursuant to Section 2.01(b)) during which Seller may
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attempt to remove any liens or encumbrances affecting, or other
defects in or objections to, title to the Property disclosed by
the Title Report other than those that constitute Permitted
Exceptions ("Additional Exceptions"); provided, however, that,
except as set forth in the next succeeding sentence, Seller shall
not be required to bring any action or proceeding, or take any
steps, or otherwise incur any expense to remove any Additional
Exception. Seller shall have the obligation to cure those
Additional Exceptions that (i) constitute liens, mortgages,
judgments and similar encumbrances that can be removed of record
solely by the payment of a sum of money ("Monetary Additional
Exceptions"), but only so long as the aggregate amount to be
expended pursuant to this clause does not exceed eighty (80%)
percent of the Purchase Price, (ii) can be cured and removed of
record (or insured against collection) by the expenditure of sums
of money not to exceed, individually or in the aggregate, twenty
(20%) percent of the Purchase Price ("Non-Monetary Additional
Exceptions") or (iii) were otherwise caused by the affirmative act
of Fee Owner or Net Lessee ("Seller's Acts Exceptions"). Without
limiting the obligations of Seller as set forth in the immediately
preceding sentence, Purchaser shall notify Seller in writing of
the existence of any Additional Exception promptly after the
discovery thereof by Purchaser. If for any reason Seller is
unable or unwilling to remove any Additional Exceptions (other
than Monetary Additional Exceptions (so long as the aggregate
amount in respect thereof does not exceed eighty (80%) percent of
the Purchase Price) or Seller's Acts Exceptions, or Non-Monetary
Additional Exceptions by expending up to twenty (20%) percent of
the Purchase Price for such purpose) as of the Closing Date, as
such date may be adjourned pursuant to this Section 3.01(c),
Seller shall so notify Purchaser. If such notice is given by
Seller, Purchaser, at its option, shall elect either (i) to
terminate this Agreement by giving written notice to Seller, in
which event Seller shall be deemed unable to perform its
obligations hereunder and the provisions of Section 13.01(b) shall
apply, or (ii) to perform all of Purchaser's obligations hereunder
and accept title to the Property subject to such uncured
Additional Exceptions (other than Monetary Additional Exceptions
and Seller's Acts Exceptions, or Non-Monetary Additional
Exceptions by expending up to twenty (20%) of the Purchase Price
for such purpose) without any abatement of the Purchase Price or
liability on the part of Seller, in which event such Additional
Exceptions shall thereafter be deemed Permitted Exceptions;
provided, however, that, if the amount required to be expended by
Seller to cure Monetary Additional Exceptions shall exceed in the
aggregate eighty (80%) percent of the Purchase Price or to cure
Non-Monetary Additional Exceptions shall exceed in the aggregate
twenty (20%) percent of the Purchase Price, then Purchaser shall
be entitled to an abatement of the Purchase Price to the extent of
the amount by which Monetary Exceptions shall exceed eighty (80%)
percent of the Purchase Price or the cure of Non-Monetary
Exceptions shall exceed twenty (20%) percent of the Purchase Price
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(or both, except that the Purchase Price shall never be less than
zero) if Seller fails to cure such Exception(s) to the extent the
cost to cure exceeds the applicable amount(s). Purchaser shall
make its election between clauses (i) and (ii) of the immediately
preceding sentence by written notice to Seller given not later
than 5:00 P.M. on the tenth (10th) business day after the giving
of notice by Seller of its inability or unwillingness to remove
any such Additional Exception. If there are fewer than ten (10)
days between the date of Seller's notice and the Closing Date, the
Closing shall automatically be extended until such tenth (10th)
business day. If Purchaser shall fail to give such written notice
as aforesaid, Purchaser shall conclusively be deemed to have
elected clause (ii) above.
(d) Seller may direct Purchaser, by notice to Purchaser
not less than three (3) business days prior to the Closing, to pay
from the balance of the Purchase Price as much thereof as may be
necessary to satisfy any Monetary Additional Exception or Non-
Monetary Additional Exception; provided that Seller shall deliver
to Purchaser at the Closing instruments in recordable form
sufficient to satisfy such Exceptions, together with the cost of
recording or filing said instruments, and make arrangements with
the Title Company to issue its policy of title insurance either
free of such Exceptions or with insurance against enforcement of
the same against the Property. Purchaser agrees to provide at the
Closing separate certified checks, if so requested by Seller as
aforesaid, to facilitate the satisfaction of any such Exceptions.
At Purchaser's option, Seller will request that the mortgagee
under any mortgage encumbering the Property assign such mortgage
(without recourse) as Purchaser may direct in writing, and Seller
will at Purchaser's cost reasonably cooperate with Purchaser to
seek such mortgagee's cooperation to assign.
SECTION 3.02. Utility Agreement. (a) Seller hereby advises
Purchaser that Seller has initiated the termination of the Utility
Agreement (the "Utility Agreement"), dated as of May 1, 1957,
between 000 Xxxxxxx Xxxxxx Associates and 000-000 Xxxxxxx Xxxxxx
Associates as well as the associated closure of the tunnel
entrances, the removal, capping or other disposition of the
utility services within the tunnel and such additional work as may
be required by the terms of the Revocable Consent Agreement, dated
July 10, 1991, among 000 Xxxxxxx Xxxxxx Associates, 000-000
Xxxxxxx Xxxxxx Associates, and The City of New York (all of the
foregoing work being herein referred to as the "Tunnel Work");
provided, however, that the Tunnel Work shall not include the work
to bring into the Property feed lines for sprinklers in the
Property, installation of pumps or similar work on any system
within the Property to make its systems operable separate from
000-000 Xxxxxxx Xxxxxx and systems located therein; provided,
further, that Purchaser understands and acknowledges that, if the
Tunnel Work is performed pursuant to the plans therefor described
in paragraph 3.02(b) and approved (or deemed approved) by
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Purchaser, then the existing systems within the Building will not
need to be upgraded or altered to make them operable separate from
000-000 Xxxxxxx Xxxxxx and systems therein.
(b) The Tunnel Work shall be undertaken by
000-000 Xxxxxxx Xxxxxx Associates substantially in accordance with
applicable law, the Revocable Consent Agreement and the plans and
specifications therefor, such plans and specifications to be
subject to the approval thereof by Purchaser prior to commencement
of work, such approval not to be withheld or delayed unreasonably
and to be deemed given if no response to the plans and
specifications is provided by Purchaser within five (5) business
days following receipt thereof by Purchaser. Purchaser hereby
grants to 000-000 Xxxxxxx Xxxxxx Associates a right of entry upon
the Property to the extent necessary to perform the Tunnel Work.
(c) The cost of the Tunnel Work shall be apportioned
between Net Lessee and 000-000 Xxxxxxx Xxxxxx Associates so that
Net Lessee shall pay 44% of the total cost and 000-000 Xxxxxxx
Xxxxxx Associates shall pay 56% thereof. At Closing, Net Lessee
shall deposit with 000-000 Xxxxxxx Xxxxxx Associates Net Lessee's
share of the total cost of the Tunnel Work as reasonably estimated
by 000-000 Xxxxxxx Xxxxxx Associates and shall be responsible for
any shortfall. Purchaser shall, at Closing and thereafter,
execute and deliver such documents regarding the anticipated
closing of the tunnel as 000-000 Xxxxxxx Xxxxxx Associates may
reasonably require.
(d) Purchaser shall have no liability and shall incur
no expense in connection with the Tunnel Work.
(e) Purchaser and 000-000 Xxxxxxx Xxxxxx Associates
have today executed and delivered a letter agreement embodying the
obligations of 000-000 Xxxxxxx Xxxxxx Associates set forth above
and the agreements by Purchaser to cooperate with 000-000 Xxxxxxx
Xxxxxx Associates to allow it and its contractors, agents and
employees access to the Property, if Purchaser acquires title
thereto as contemplated hereby, to undertake and complete the
Tunnel Work. Net Lessee represents that 000-000 Xxxxxxx Xxxxxx
Associates is the net operating lessee of 500 and 000 Xxxxxxx
Xxxxxx.
(f) This Section 3.02 shall survive the Closing.
SECTION 3.03. Certain Mechanic's Lien. (a) Regarding each
lien or encumbrance which is solely the obligation of a Tenant
under a Space Lease to discharge cure or comply with, Purchaser
shall have the option to (i) elect to accept title subject
thereto, in which event Seller shall have no liability in respect
thereof, there shall be no abatement of or reduction in the
Purchase Price and such lien or encumbrance shall thereafter be
deemed to be a Permitted Exception or (ii) require Seller to bond
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(or otherwise cause the discharge of) such lien or encumbrance, in
which event (and assuming Seller does so bond or otherwise cause
such discharge), Seller and Purchaser will cooperate to pursue all
rights and remedies against the applicable Tenant. Seller and
Purchaser acknowledge that, if a Tenant which is then not in
default under its Space Lease assumes in writing for the benefit
of Purchaser and Seller the defense and payment of the lien or
encumbrance in question, then Purchaser shall be deemed to have
elected clause (i) above with respect to the lien or encumbrance
for which such Tenant is liable if such assumption by such Tenant
occurs prior to the Closing or Purchaser shall be deemed to have
complied with its obligation to Seller to pursue remedies against
such Tenant, as the case may be. If, within 90 days following the
date of the assumption by any such Tenant of the defense and
payment of such lien or encumbrance, either the lien in question
has not been removed or the bond arranged by Seller has not been
released, as the case may be, then either, as the case may be, (x)
Seller will bond the lien (or otherwise cause the discharge
thereof), in which event Purchaser will then be obligated to
cooperate with Seller to pursue all rights and remedies against
the Tenant as aforesaid, or (y) Purchaser shall be obligated to
cooperate with Seller to pursue rights and remedies as aforesaid
to cause the release of Seller's bond, but in either case the
delivery of another letter from the applicable Tenant as provided
in the preceding sentence shall not suffice.
(b) This Section 3.03 will survive the Closing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties By Fee Owner.
Fee Owner hereby represents and warrants to Purchaser, subject to
Sections 4.04 and 4.06, that:
(a) Fee Owner is a New York partnership duly formed and
validly existing in good standing under the laws of the State
of New York and has the requisite authority to enter into,
and to perform its obligations under, this Agreement.
(b) This Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary action on the part of Fee Owner and, upon the
assumption that this Agreement constitutes a legal, valid and
binding obligation of Purchaser, this Agreement constitutes a
legal, valid and binding obligation of Fee Owner.
(c) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by
Fee Owner do not and will not (i) violate or conflict with
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the partnership agreement of Fee Owner, (ii) violate or
conflict with any judgment, decree or order of any court
applicable to or affecting Fee Owner, or (iii) breach the
provisions of, or constitute a default under, any contract,
agreement, instrument or obligation to which Fee Owner is a
party or by which Fee Owner is bound.
(d) Fee Owner has not received written notice of, and
has no actual knowledge of, any pending or threatened
condemnation of all or any portion of the Property.
(e) Fee Owner has received no written notice, nor to
Fee Owner's actual knowledge, is there any pending or any
threatened litigation or administrative proceeding involving
the Property or the ownership, leasing, operation,
management, use or maintenance thereof, other than ordinary
litigation, the defense of which is covered by insurance and
as set forth in Exhibit D attached hereto.
(f) Fee Owner has not filed a petition in bankruptcy or
entered into an arrangement for reorganization pursuant to
the United States Bankruptcy Code or any similar state law,
and has not filed an answer or otherwise admitted in writing
insolvency or its inability to pay its debts as they become
due, or made an assignment for the benefit of creditors or
consented to an appointment of a receiver or trustee of all
or any part of its property.
(g) Set forth on Exhibit E is a list of all of the
documents comprising the Operating Lease and a true and
complete copy of each thereof has been delivered to
Purchaser.
(h) Fee Owner has not received a written notice of
violation from any governmental authority with respect to any
statute, law, regulation, rule, ordinance or order of any
kind, including, without being limited to, any health,
safety, pollution, environmental (including, without being
limited to, the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. 6901 et seq, the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et seq, the
Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. 9601 et seq, the Clean Water
Act, 42 U.S.C. 2610 et seq, the Clean Air Act, 42 U.S.C.
7401 et seq, the Americans with Disabilities Act of 1990,
or any similar applicable federal, state or local law, rule,
regulation or ordinance), subdivision and zoning statute,
law, code, ordinance, rule, regulation, approval or order or
urban redevelopment program requirement affecting the
Property or any part thereof.
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SECTION 4.02. Representations and Warranties of Net Lessee.
Net Lessee hereby represents and warrants to Purchaser, subject to
Sections 4.04 and 4.06 that:
(a) Net Lessee is a New York corporation duly formed
and validly existing in good standing under the laws of the
State of New York and has the requisite authority to enter
into, and to perform its obligations under, this Agreement.
(b) This Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary action on the part of Net Lessee and, upon the
assumption that this Agreement constitutes a legal, valid and
binding obligation of Purchaser, this Agreement constitutes a
legal, valid and binding obligation of Net Lessee.
(c) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by
Net Lessee do not and will not (i) violate or conflict with
the certificate of incorporation or by-laws of Net Lessee,
(ii) violate or conflict with any judgment, decree or order
of any court applicable to or affecting Net Lessee, or (iii)
breach the provisions of, or constitute a default under, any
contract, agreement, instrument or obligation to which Net
Lessee is a party or by which Net Lessee is bound.
(d) Net Lessee has not received written notice of and
has no actual knowledge of any pending or threatened
condemnation of all or any portion of the Property.
(e) The leases, including all amendments thereto and
modifications thereof, listed in Exhibit F constitute all of
the leases, licenses and occupancy agreements affecting the
Property (the "Space Leases") and subleases and assignments
to which Net Lessee has consented or otherwise has actual
knowledge, and, except as set forth on Exhibit F: (i) the
Space Leases have not been modified, amended, assigned or
extended, (ii) as of the date hereof, the Space Leases are in
full force and effect and Net Lessee has not (x) sent written
notice to any tenant under a Space Lease (a "Tenant")
claiming that the Tenant is in default under its Space Lease,
which default remains uncured or (y) received a notice from
any Tenant that alleges that Net Lessee is in default of its
obligations as landlord, (iii) Net Lessee does not have
actual knowledge of any dispute with any Tenant relating to
the performance by such Tenant of a material obligation under
its Space Lease, (iv) Net Lessee has delivered to Purchaser
true and complete copies of the Space Leases and all
subleases and assignments listed on said Exhibit F, (v) the
brokerage or commission agreements set forth on Exhibit G
constitute all of the brokerage or commission agreements
relating to the Space Leases and for which any commission
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remains to be paid, (vi) Net Lessee has not received any
notice of a claim for commission with respect to the Space
Leases other than in connection with such brokerage and
commission agreements (as to which Net Lessee has paid all
sums due and owing as of the date of this Agreement), (vii)
Net Lessee has delivered to the Purchaser true and complete
copies of such brokerage and commission agreements and all
amendments thereto, and (viii) Net Lessee has completed or
caused the completion of all work which Net Lessee is
obligated to complete under the Space Leases as of the date
hereof.
(f) Attached hereto as Exhibit H (the "Rent Roll") is a
true, complete and correct listing of: (i) the name of each
Tenant; (ii) base rent and escalations actually being
collected; (iii) expiration date and base year for
escalations; (iv) the square footage occupied by the Tenant;
(v) Security Deposits; (vi) written notices given by any
Tenant of an intention to vacate space in the future; and
(vii) whether any Tenants are in arrears for the payment of
rent for any month preceding the month of the date of this
Agreement. No security deposits have been paid to Net Lessee
by or on behalf of any of the Tenants except as set forth in
Exhibit H, and Net Lessee has not collected payments of rent
(other than Security Deposits) more than one month in
advance, except as set forth on the Rent Roll.
(g) Except as noted on Exhibit F: there are no written
arrangements which confer upon any Tenant any right pursuant
to any written agreement to any concession, rebate, offset,
allowance or free rent for any period, nor has any such claim
been asserted by any Tenant; there is no outstanding
counterclaim or offset against the payment of any rent or
other amount payable under any Space Lease; and none of the
Space Leases imposes on the landlord thereunder any
obligations with regard to so-called "takeover" leases or
obligations arising out of any sublease by a tenant back to
the landlord or obligations to pay to a tenant or any other
party (or offset against rent) any lump sum or periodic
amounts.
(h) Except as noted on Exhibit F: all work,
alterations, improvements or installations required to be
made for or on behalf of any Tenant by Net Lessee have in all
respects been substantially carried out, performed and
complied with; there is no written agreement with any Tenant
for the performance of any work to be done in the future; no
renewal or extension options or cancellation rights have been
granted to Tenants except as expressly provided in the Space
Leases; and no Tenant has an option to purchase any portion
of the Property.
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(i) No brokerage commission or compensation of any kind
is due or will be due in connection with the Space Lease
except as reflected on Exhibit G or with respect to any
renewals or options therein contained, except as noted in
Exhibit G.
(j) Attached hereto as Exhibit I is a list of all
service, maintenance, supply and management contracts
affecting the Property in effect on the date hereof (the
"Service Contracts"), and, except as set forth on Exhibit I
and Section 5.01(b): (i) the Service Contracts have not been
modified or amended and are in full force and effect, (ii)
Net Lessee has delivered to Purchaser true and complete
copies of those Service Contracts which are embodied in a
written instrument or agreement, (iii) Net Lessee has not
received or given a notice of default under any of the
Service Contracts and Net Lessee does not have actual
knowledge of any dispute with any vendor under any of the
Service Contracts, and (iv) as to Service Contracts not
embodied in a written agreement, each such Service Contract
may be terminated on no more than thirty (30) days notice
without penalty.
(k) Attached hereto as Exhibit J is a list of all
licenses and permits from governmental authorities held by
Net Lessee in connection with its leasehold interest in the
Property (collectively, the "Licenses and Permits"),
including the temporary certificate of occupancy covering the
Building and improvements. Net Lessee does not have actual
knowledge that any other licenses, permits or other
governmental certificates are required for the lawful use,
occupancy or operation of the Property. Net Lessee has
delivered to Purchaser true and complete copies of the
Licenses and Permits.
(l) Net Lessee has received no written notice of, nor
to Net Lessee's actual knowledge is there any pending or any
threatened, litigation, claim or action or any administrative
proceeding involving the Property or the ownership, leasing,
operation, management, use or maintenance thereof, other than
ordinary litigation, the defense of which is covered by
insurance, and as set forth in Exhibit D attached hereto.
Also set forth on said Exhibit D is a list of litigation
claims covered by insurance.
(m) Net Lessee has not filed a petition in bankruptcy
or entered into an arrangement for reorganization pursuant to
the United States Bankruptcy Code or any similar state law,
and has not filed an answer or otherwise admitted in writing
insolvency or its inability to pay its debts as they become
due, or made an assignment for the benefit of creditors or
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consented to an appointment of a receiver or trustee of all
or any part of its property.
(n) Net Lessee has not received a written notice of
violation from any governmental authority with respect to any
statute, law, regulation, rule, ordinance or order of any
kind, including, without being limited to, any health,
safety, pollution, environmental (including, without being
limited to, the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. 6901 et seq, the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et seq, the
Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. 9601 et seq, the Clean Water
Act, 42 U.S.C. 2610 et seq, the Clean Air Act, 42 U.S.C.
7401 et seq, the Americans with Disabilities Act of 1990,
or any similar applicable federal, state or local law, rule,
regulation or ordinance), subdivision and zoning statute,
law, code, ordinance, rule, regulation, approval or order or
urban redevelopment program requirement affecting the
Property or any part thereof (collectively, "Applicable
Laws"). To the best of Net Lessee's knowledge, the Property
has not been used at any time during the term of the
Operating Lease to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce, process or
in any manner deal with any "hazardous materials", "hazardous
substances" or "hazardous waste" (as such terms are defined
in the Applicable Laws and the regulations adopted thereun-
der), except (i) in compliance with the Applicable Laws, as
then in effect, and any permits required thereunder or other
applicable law (if any) regarding such matters as from time
to time in effect or (ii) as is customary in the operation of
a garment center and office building of the size and nature
of the Building.
(o) To the best of Net Lessee's knowledge, there are no
underground fuel storage tanks at the Property and during the
term of the Operating Lease none has been installed or
removed from the Property.
(p) There are no special or other assessments for
public improvements or otherwise now affecting the Property
nor does Net Lessee have actual knowledge of (i) any pending
or threatened special assessments affecting the Property, or
(ii) any contemplated improvements affecting the Property
that may result in special assessments affecting the
Property.
(q) Subject to Section 4.05(a), Net Lessee has
heretofore delivered to Purchaser (i) a rent roll for the
Property and (ii) unaudited statements of income and expense
relating to the operation of the Property, in each case
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prepared on behalf of Net Lessee in the form customarily used
by Net Lessee and prepared in the ordinary course of Net
Lessee's business for the period most recently ended prior to
the date of this Agreement but as to which Net Lessee has
performed no independent verification.
(r) There are no employees of Net Lessee at the
Property or any collective bargaining agreement, management
agreement or other employee agreement affecting the Property
other than as set forth on Exhibit K attached hereto or
affecting Tenants only. Exhibit K sets forth the names and
positions of all such employees, their salaries and years of
service.
(s) Net Lessee has not received any written notice from
any insurance company which has issued a policy with respect
to the Property requesting performance of any repairs or
alterations to the Property and no written notice has been
received from any such company stating in effect that such
policy will not be renewed or will be renewed at a higher
premium than is presently payable thereunder.
(t) Set forth on Exhibit E is a list of all of the
documents comprising the Operating Lease and a true and
complete copy of each thereof has been delivered to
Purchaser.
(u) There are no pending disputes with the City of New
York with respect to real estate tax assessments for any past
tax year or for the current tax year.
SECTION 4.03. Purchaser's Representations and Warranties.
Purchaser hereby represents and warrants to Seller that:
(a) (i) Comfort is a corporation duly organized and
validly existing under the laws of the State of New York and
is duly qualified to do business in the State of New York and
has the requisite authority to enter into, and to perform its
obligations under, this Agreement.
(ii) Tirrem is a corporation duly organized and
validly existing under the laws of the State of New York and
is duly qualified to do business in the State of New York and
has the requisite authority to enter into, and to perform its
obligations under, this Agreement.
(b) This Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by
all necessary action on the part of Purchaser and, upon the
assumption that this Agreement constitutes a legal, valid and
binding obligation of Seller, this Agreement constitutes a
legal, valid and binding obligation of Purchaser.
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(c) The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby do
not and will not (i) violate or conflict with the [agreement
of limited partnership, certificate of incorporation and
by-laws, operating agreement of Purchaser], (ii) violate or
conflict with any judgment, decree or order of any court
applicable to or affecting Purchaser, (iii) breach the
provisions of, or constitute a default under, any contract,
agreement, instrument or obligation to which Purchaser is a
party or by which Purchaser is bound, or (iv) violate or
conflict with any law or governmental regulation or permit
applicable to Purchaser.
SECTION 4.04. Certain Limitations on Seller's Representations
and Warranties. The representations and warranties of Fee Owner
and Net Lessee set forth in Sections 4.01 and 4.02 are subject to
the following express limitations:
(a) Seller does not represent or warrant that any
particular Space Lease or Service Contract will be in force
or effect as of the Closing or that the Tenants and the
parties, other than Seller, to the Service Contracts, will
not be in default under their respective Space Leases or
Service Contracts.
(b) The expiration of a Space Lease in accordance with
its terms, the termination of a Space Lease due to the
default of the Tenant thereunder (subject to the limitations
of Section 5.01(b)) or the termination of a Service Contract
shall not affect the obligations of Purchaser hereunder.
(c) Wherever any representation or warranty or other
statement or obligation set forth in this Agreement is stated
to be "with the actual knowledge" of Fee Owner or Net Lessee
or covers those matters as to which Fee Owner or Net Lessee
"has actual knowledge," Fee Owner or Net Lessee shall not be
deemed to have had or have knowledge unless in the case of
Fee Owner either (i) a current general partner of Fee Owner
had actual knowledge of the facts which are the subject of
such representation or warranty or (ii) such facts are set
forth in a written document in the possession of Fee Owner's
counsel or of any party described in the preceding clause
(i), or in the case of Net Lessee, either (i) a current
president or vice president of Net Lessee or senior executive
or the on-site property executive of Net Lessee's managing
agent who is actually involved in the ownership, management,
leasing or operation of the Property had actual knowledge of
the facts which are the subject of such representation or
warranty or (ii) such facts are set forth in a written
document in the possession of Net Lessee's counsel or of any
party described in the preceding clause (i).
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SECTION 4.05. Survival of Representations, Warranties and
Covenants. (a) The only representations, warranties and
agreements of Fee Owner or Net Lessee under this Agreement that
will survive the Closing are those that are specifically stated
herein to survive. The representations and warranties of (i) Fee
Owner contained in Section 4.01(a) through (c) and Section
12.01(a) and (ii) Net Lessee contained in Section 4.02(a) through
(c), Section 4.02(e) through (j), Section 4.02(l), Section 4.02(r)
and Section 12.01(a) and all covenants of Fee Owner, Net Lessee or
Seller, as the case may be, shall survive the Closing; provided
that any claim based upon any alleged breach thereof must be
asserted in writing within six (6) months after the Closing in
accordance with Section 4.05(c) hereof; and, provided, further,
that the covenants of Net Lessee in Section 5.01(a) shall not
survive the Closing, and those covenants hereunder which pursuant
to other provisions applicable thereto are to survive without
limitation are not subject to the foregoing limitation as to
duration or to the limitations of Section 4.05(c).
(b) All of the representations, warranties and
agreements of Purchaser set forth in this Agreement will survive
the Closing, provided that any claim based upon any alleged breach
thereof must be asserted in writing within six (6) months after
the Closing in accordance with Section 4.05(c) hereof.
(c) The amount of any claim based on breach of a
representation or warranty surviving the Closing as aforesaid, or
violation of a covenant so surviving and subject to the provisions
of this Section, may be asserted only against the party whose
representation and warranty or covenant is alleged to have been
breached and shall be reduced appropriately by the value, in the
light of all relevant circumstances, of any asset created in the
party asserting such claim (the "Claiming Party") as a result of
the event giving rise to such claim, including, without
limitation, any income tax benefit on account thereof. Any such
claim shall be subject to the following limitations: (i) the
total sum of all claims made by the party against whom the claims
are asserted (the "Defending Party") shall exceed $100,000 in the
aggregate before the Claiming Party shall be entitled to assert
claims hereunder, and then the Claiming Party shall be entitled to
protection only for all such claims which exceed $100,000, (ii)
the Claiming Party shall not be entitled to assert a claim with
respect to any individual claim that does not exceed $5,000 and
(iii) no claim may be asserted with respect to any matter relating
to a Space Lease if the Seller shall have delivered at the Closing
(or thereafter) a Tenant Estoppel (hereinafter defined) with
respect to such Space Lease to the extent covered by the Tenant
Estoppel.
SECTION 4.06. No Other Representations or Warranties. (a)
Purchaser represents, warrants and agrees that (i) Purchaser has
examined and inspected the Property and has commissioned such
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environmental, engineering, structural, feasibility and other
studies as Purchaser has deemed appropriate by Purchaser, its
agents, representatives or consultants selected and paid for by
Purchaser and Purchaser has had an adequate opportunity to become
familiar with the physical condition and affairs of the Property
and that Seller has afforded to Purchaser and its agents,
representatives and contractors full and complete access to all
portions of the Property, (ii) neither Seller nor any of the
employees, agents or attorneys of Seller have made any verbal or
written representations, warranties, promises or guaranties
whatsoever to Purchaser, whether express or implied, and, in
particular, that no such representations, warranties, promises or
guaranties have been made with respect to the physical condition
of the Property, the construction quality, or operation of
Property, environmental matters, the actual or projected revenue
and expenses of the Property, the zoning and other laws,
regulations and rules applicable to the Property or the compliance
of the Property therewith, including, without limitation, the
Americans With Disabilities Act, the quantity, quality or
condition of the articles of Personal Property and fixtures
included in the transactions contemplated hereby, the use or
occupancy of the Property or any part thereof or any other matter
or thing affecting or related to the Property or the transactions
contemplated hereby, except as, and solely to the extent, herein
specifically set forth, and (iii) except as expressly set forth in
this Agreement, Purchaser has entered into this Agreement after
having made and relied solely on its own independent
investigation, inspection, analysis, appraisal, examination and
evaluation of the facts and circumstances affecting the Property
relating to any and all of the foregoing and the express
provisions of this Agreement.
(b) Purchaser agrees to accept the Property "as is,
where is" in its present condition, subject to reasonable use,
wear and tear and normal deterioration of the Property between the
date hereof and the Closing Date, subject to all violations of law
or governmental ordinances, orders or requirements whether noted
or issued prior to the date of this Agreement or hereafter.
Purchaser further agrees that Seller shall not be liable for any
patent or latent defects in the Property.
SECTION 4.07. Purchaser's Due Diligence. Although
Purchaser's decision to purchase the Property shall be based on
its independent inspection of the Property, Seller shall, as an
accommodation and without any obligation or duty to Purchaser,
provide Purchaser access at reasonable times during ordinary
business hours to the documents, agreements, and other information
relating to the operation of the Property (excepting any
proprietary information as determined by Seller). Purchaser shall
have the right, at its expense, to make copies of any such
documents, agreements, and other information. Purchaser
acknowledges and agrees that, except as expressly provided in this
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Agreement, Seller makes no representation or warranty (express or
implied, oral or written) and provides no assurances regarding (a)
the accuracy, completeness, or reliability of such documents,
agreements, and other information, and (b) whether such documents,
agreements, and other information constitutes all of the
documents, agreements, and other information in the possession of
Seller relating to the Property. Purchaser acknowledges and
agrees that its decision to purchase the Property shall be based
on its independent inspection of the Property, and that it is not
basing its decision to purchase the Property on its review of any
such documents, agreements, and other information, except to the
extent relating to representation, warranties and covenants of
Seller hereunder (but without affecting the provisions of Section
4.05 hereof). Except for Seller's obligations under this
Contract, the Purchaser hereby releases, acquits, and forever
discharges the Seller and/or its and their current and former
affiliates and related business entities, agents, partners,
employees, officers, directors, successors, assigns, attorneys,
insurers, and representatives of every kind whatsoever, of and
from any and all claims, demands, damages, actions, causes of
action, debts, costs, loss of services, expenses, compensation,
liabilities, or controversies of any kind whatsoever, whether
known or unknown, latent, patent, non-existent at the present time
and that may arise in the future or are unanticipated at this time
that Purchaser, or Purchaser's successors or assigns, have had,
now have, or may have against the Seller, for any claims, whether
known or unknown, which relate in any way to any alleged act,
event, transaction, agreement, omission, misrepresentation, non-
disclosure, breach of warranty (express or implied, oral or
written), breach of contract (express or implied, oral or
written), negligence, gross negligence or reckless conduct arising
out of, in connection with, or in any way (directly or indirectly)
related to, the Property or the transactions contemplated by this
Agreement. The release in this Section shall survive the Closing
and any termination of this Agreement.
SECTION 4.08. Notice of Inspection. Purchaser shall give
Seller reasonable written notice of any inspection, and Seller or
its representatives shall have the right to accompany Purchaser
and its agents during any such inspection. Purchaser and its
agents shall conduct such inspections only during reasonable
times, subject to the terms of the applicable Space Leases.
During any such entry and inspection, Purchaser and its agents
shall use its reasonable efforts to minimize any inconvenience or
interference with the use and occupancy of demised premises by the
tenant or occupant thereof.
SECTION 4.09. Indemnification. To the maximum extent
permitted by applicable law, Purchaser shall hold harmless, defend
and indemnify Seller, its partners, officers, directors,
affiliates, employees and agents from and against all cost, loss,
damage, liability, and expense (including, but not limited to,
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reasonable attorneys' fees and court costs) resulting from the
conduct or exercise by Purchaser or its agents of the inspection
rights herein granted. Purchaser shall, at the option of Net
Lessee, (i) promptly repair any damage to the Property caused by
Purchaser and its agents to substantially the condition in which
it existed immediately before such damage, or (ii) pay to Net
Lessee the cost of such repair. In no event shall Purchaser be
entitled to any abatement of the Purchase Price by reason of, or
to raise as an objection or condition to closing, any damage to
the Property caused by Purchaser or its agents. Before entering
on the Property, Purchaser shall, at its expense, provide and
maintain workers' compensation insurance, to the extent required
under the Workers' Compensation Law of New York, and commercial
public liability insurance, all in form and with coverage limits,
including deductibles, reasonably satisfactory to Seller with
insurance companies authorized to do business in New York.
Purchaser's liability insurance shall specifically extend to and
include the indemnity agreement set forth herein. Before the
commencement of entry by Purchaser, Purchaser shall furnish
evidence of insurance to Seller (XXXXX Form), which certificates
will provide that such insurance will not be cancelled or changed
until at least ten (10) days' written notice is given to Seller.
Before Closing, all such policies of insurance will name Seller as
an additional insured.
ARTICLE 5
COVENANTS OF SELLER
SECTION 5.01. Covenants of Net Lessee. From and after the
date of this Agreement until the Closing Date, Net Lessee
covenants as follows:
(a) Between the date hereof and the Closing Date, Net
Lessee shall, subject to damage or destruction resulting from
fire or other casualty which is dealt with in Section 10.02
hereof, operate and maintain the Property in the same manner
as it has prior hereto pursuant to its normal course of
business, and shall perform all work required to be done
under the terms of any Space Lease and insurance policies
described in Section 10.03 hereof and shall timely make all
repairs, maintenance and replacements to keep the Property
and all fixtures and equipment thereon and therein in
substantially similar condition to the condition thereof on
the date hereof and shall keep supplies adequately stocked
pursuant to its normal course of business.
(b) At or prior to the Closing, Net Lessee shall
endeavor to obtain estoppel certificates from all Tenants
under the Space Leases (and all guarantors of the Space
Leases) substantially in the form annexed hereto as Exhibit L
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or other form accepted by Purchaser (each, a "Tenant
Estoppel"), dated not earlier than thirty (30) days prior to
the Closing Date or, if Purchaser exercises its option to
adjourn the closing pursuant to Section 2.01(b) hereof,
forty-five (45) days prior to the Closing Date, and
containing no adverse modifications or adverse additional
matters.
(c) Intentionally omitted.
(d) Without the prior consent of Purchaser, which
consent Purchaser agrees it shall not unreasonably withhold
or delay, (i) except for actions based on Space Lease
violations, no Space Lease shall be terminated, extended or
otherwise modified, (ii) no new leases, licenses or occupancy
agreements at the Property will be entered into by Net
Lessee, (iii) Net Lessee shall not consent to any assignment
or sublease in connection with any Space Lease and (iv) no
Service Contract shall be extended or otherwise modified nor
shall any new service, maintenance or operating agreement be
entered into by Net Lessee unless the same is, in Net
Lessee's judgment reasonably necessary for the normal
operation of the Property prior to the Closing Date and may
be terminated by Net Lessee (and, after the Closing Date, by
Purchaser) upon not more than thirty (30) days' written
notice without penalty. If Net Lessee is requested by a
Tenant or contractor under a Service Contract to consent to
any action described in clause (i), (iii) or (iv) above or
Net Lessee desires to engage in any action described in
clause (i) above or to execute and deliver a new lease or
leases where consent thereto by Purchaser is provided for
above, Net Lessee shall promptly deliver to Purchaser a
notice of such proposed action, stating, if applicable,
whether Net Lessee is willing to consent to such action and
setting forth the relevant information therefor and, if
applicable, the number of days within which Net Lessee must
respond to the proposed action under the terms of the
applicable Space Lease or Service Contract or request, or the
economic terms of any new lease, including brokerage
commission, and any other material information supplied to
Net Lessee as to the proposed action. Purchaser shall have
five (5) business days after delivery to it of such notice
and information to determine whether or not to approve such
action. If Purchaser shall not give notice of its
disapproval within such five (5) business day period, time
being of the essence, Purchaser shall be deemed to have
approved such action. If any Space Lease or Service Contract
requires that Seller's consent be given in the circumstances,
then Purchaser shall be deemed ipso facto to have approved
such action. If any Space Lease or Service Contract provides
Net Lessee with fewer than five (5) business days within
which to grant any such approval or disapproval, such five
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(5) business day period provided for above shall be reduced
to such fewer number of days less two (2) business days.
SECTION 5.02. Covenants of Fee Owner. Fee Owner covenants
that it will not enter into any leases or service contracts
between the date of this Agreement and the Closing Date.
SECTION 5.03. Union Contract. (a) Seller hereby advises
Purchaser that all employees of the Property except one are
members of Local 32B-32J of the Service Employees International
Union (the "32 Union") and that the Property is subject to the
1996 Commercial Building Agreement between the Union and Midtown
Realty Owners Association, Inc. (the "32 Union Contract"). The
other employee is a member of Local 30 (the "30 Union") and the
Property has an informal agreement with the 30 Union to abide by
the general terms of its standard agreement (the "30 Union
Contract"). Purchaser hereby advises Seller that Purchaser does
not intend to continue to employ the existing building employees
or to offer to any of them employment in the building at existing
wages, hours and working conditions.
(b) Seller and Purchaser shall cooperate generally
regarding the termination of the employment of the employees and,
prior to and at the Closing, Seller shall take such steps as
Purchaser shall approve to terminate the employment of all
building employees so that, as a result, there will be no
employees of Net Lessee or Fee Owner at the Property or any
collective bargaining agreement, management agreement or other
employee agreement affecting the Property as of the Closing Date
(excepting any relating to Tenants only); provided, however, that
Seller shall not be obligated to undertake any steps which it
believes in good faith, based on advice of counsel, could subject
it to liability not protected by the indemnity provided by
Purchaser as described in Section 5.03(d) hereof. At or prior to
the Closing, Seller may notify either Union, the Midtown Realty
Owners Association, Inc. or other parties as Seller may deem
appropriate regarding Purchaser's decisions relating to building
employees, but Seller shall not send any such notice prior to
Purchaser's review and approval thereof. Purchaser shall review
any such notice, and any other proposed action by Seller to
implement the terminations contemplated in this Section 5.03, and
advise of Purchaser's approval or disapproval thereof within five
(5) business days following its receipt of any such request from
Seller, such approval to be deemed given if disapproval, with the
reasons therefor, is not provided on or before the expiration of
such five (5) business day period.
(c) At the Closing, Purchaser shall pay to Seller, or
as Seller shall direct, as an increase in the Purchase Price the
amount of severance pay due to building employees by reason of the
fact that their employment has then been terminated.
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(d) So long as Seller shall take only those steps and
send only those notices which Purchaser has approved (or deemed
approved) or which Purchaser instructed Seller to take or give, as
the case may be, Purchaser shall indemnify, defend and hold
harmless Net Lessee, Fee Owner, any predecessor to either, the
agents comprising the partners in Fee Owner and the participants
in Fee Owner, the partners, shareholders, officers and directors
of Net Lessee and its predecessors, and the Managing Agent for the
Property (the "Covered Parties") from and against any and all
cost, liability, expense (including reasonable attorneys' fees and
disbursements) and claim brought by or on behalf of either Union
or the past, present and future employees of the Property in
connection with or in any way related to the termination of the
employment of employees of the Property, including, without
limitation, all severance payments, pension contributions and
withdrawal liability under either Unions' multi-employer pension
plan. At the Closing, Purchaser and Seller shall execute and
deliver an indemnity agreement in form and substance reasonably
satisfactory to Seller confirming the indemnity described herein.
(e) If, as and when Purchaser bonds any such pension or
similar liability as aforesaid or obtains a release with respect
to any such liability for the benefit of the Covered Parties, then
the indemnity described in Section 5.03(d) hereof (and any
separate indemnity delivered at the Closing) shall terminate as to
any future liability thereunder relating to the matters covered by
such bond or release.
(f) Promptly following execution and delivery hereof,
Purchaser shall seek, or, if Purchaser so requests, Seller shall
seek, letters from the actuaries engaged by the respective pension
plans for the Unions to advise of the amount of the withdrawal
liability (if any) resulting from the termination of employment of
the employees of the Property. If such withdrawal liability shall
exceed $100,000 in the aggregate or if Purchaser shall not have
received the required letters on or before February 14, 1997 (time
being of the essence), then Purchaser shall be entitled to
terminate this Agreement. In the event that Purchaser shall be
entitled to terminate this Agreement pursuant to this paragraph,
any such termination shall only be effective if written notice of
the election to terminate this Agreement is received by the other
party(ies) on or before February 21, 1997. In the event Seller
shall not receive notice of termination within the time period
prescribed herein (time being of the essence and whether or not
Purchaser shall have received the required letters), Purchaser
shall be deemed to have elected to proceed with the transaction
contemplated in this Agreement as if this Section 5.03(f) did not
exist. In the event Purchaser shall terminate this Agreement as
hereinabove provided, then this Agreement shall be deemed
terminated and Escrow Agent shall, within five (5) days of the
effective date of the termination hereof, return to Purchaser the
Downpayment and any interest earned thereon. Thereafter, neither
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Purchaser nor Seller shall have any rights or obligations in favor
of or against the other hereunder, except as to those provisions
hereof which specifically survive termination.
(g) The provisions of this Section 5.03 shall survive
the Closing.
ARTICLE 6
COVENANTS OF PURCHASER
SECTION 6.01. Covenants of Purchaser. Purchaser acknowledges
that all information in respect of the Property furnished to
Purchaser is and has been so furnished on the condition that
Purchaser maintain the confidentiality thereof. Accordingly,
Purchaser shall, and shall use reasonable efforts to cause its
then current and prospective directors, officers, general and
limited partners, attorneys, accountants, agents, prospective
lenders and their counsel, contractors and other personnel and
representatives ("Purchaser Personnel") to, hold in strict
confidence, and not disclose to any other party without the prior
written consent of Seller until the Closing shall have been
consummated, any of the information in respect of the Property
delivered to Purchaser by Seller or any of its agents,
representatives or employees or set forth in this Contract. In
the event the Closing does not occur and this Agreement is
terminated, Purchaser shall promptly return to Seller, and shall
use reasonable efforts to cause all Purchaser Personnel to return
to Seller, all copies of all such information without retaining
any copy thereof or extract therefrom. Notwithstanding anything
to the contrary hereinabove set forth, Purchaser may disclose such
information as may be required by law or court order or on a
need-to-know basis to Purchaser Personnel or members of
professional firms serving it in connection with this transaction
but only upon obtaining the written agreement of such persons or
firms to comply with the confidentiality provisions of this
Agreement.
ARTICLE 7
CLOSING CONDITIONS AND DELIVERIES
SECTION 7.01. Conditions to Seller's Obligations. The
obligation of Seller to transfer the Property to Purchaser in
accordance with this Agreement and to otherwise consummate the
transactions contemplated hereby shall be subject to the
satisfaction of the following conditions precedent on and as of
the Closing Date:
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(a) all representations and warranties of Purchaser
contained in this Agreement shall have been true when made
and shall be true in all material respects at and as of the
Closing Date as if such representations and warranties were
made at and as of the Closing Date, and Purchaser shall have
performed and complied in all material respects with all
covenants, agreements and conditions required by this
Agreement to be performed or complied with by Purchaser prior
to or at the Closing;
(b) Purchaser shall have tendered to Seller Purchaser's
Closing Documents; and
(c) Purchaser shall have tendered to Seller payment of
the balance of the Purchase Price in accordance with Section
1.02(a)(ii) and all other amounts due Seller hereunder.
SECTION 7.02. Conditions to Purchaser's Obligations.
Purchaser's obligation to pay the Purchase Price, to purchase the
Property and otherwise consummate the transactions contemplated
hereby shall be subject to the satisfaction of the following
conditions precedent on and as of the Closing Date:
(a) subject to Section 4.04 and Section 4.05, all
representations and warranties of Seller contained in this
Agreement shall have been true in all material respects when
made and shall be true in all material respects at and as of
the Closing Date as if such representations and warranties
were made at and as of the Closing Date and Seller shall have
performed and complied in all material respects with all
covenants, agreements and conditions required by this Agree-
ment to be performed or complied with by Seller prior to or
at the Closing Date; and
(b) Purchaser shall have received Fee Owner's Closing
Documents and Net Lessee's Closing Documents.
SECTION 7.03. Fee Owner's Closing Documents. At the Closing,
Fee Owner shall deliver to Purchaser the following documents duly
executed and, where appropriate, acknowledged, by Fee Owner and
the following other items (the documents and other items described
in this Section 7.03 being collectively referred to herein as "Fee
Owner's Closing Documents"):
(a) a Bargain and Sale Deed with covenants against
grantor's acts made by Fee Owner in favor of Purchaser;
(b) a Xxxx of Sale in the form annexed hereto as
Exhibit M with respect to the Personal Property;
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(c) a termination agreement with Net Lessee of the
Operating Lease or, if Purchaser so directs in writing not
less than two (2) business days prior to the Pre-Closing, an
Assignment and Assumption of Fee Owner's interest in the
Operating Lease in the form annexed hereto as Exhibit M;
(d) a certificate by a general partner of Fee Owner, or
an opinion letter from counsel to Fee Owner, with respect to
(i) the issuance of all necessary consents by the partners of
Fee Owner to the transactions contemplated hereby and (ii)
the authority of the person(s) executing this Agreement and
the other Closing documents on behalf of Fee Owner;
(e) an affidavit of Fee Owner pursuant to Section
1445(b)(2) of the Internal Revenue Code of 1986, as amended,
stating that Fee Owner is not a foreign person within the
meaning of such Section;
(f) all appropriate transfer tax returns of Fee Owner,
duly completed and executed, together with certified checks
payable to the appropriate governmental authorities in
payment of all transfer taxes payable in connection with this
transaction under Section 8.01;
(g) such customary affidavits as the Title Company may
reasonably request from Fee Owner in connection with the
omissions of exceptions to title to the Property, to the
extent Fee Owner is responsible for the removal of the same
pursuant to Section 3.01;
(h) a certificate of Fee Owner, dated as of the Closing
Date, restating the representations and warranties of Fee
Owner contained in this Agreement and certifying that such
representations and warranties are true in all material
respects at and as of the Closing Date, subject, however, to
the provisions of Section 4.04 and Section 4.05 hereof; and
(i) an indemnity in form and substance reasonably
satisfactory to Purchaser with respect to any pending
litigation described on Exhibit D hereto (as updated to the
Closing Date).
SECTION 7.04. Net Lessee's Closing Documents. At the
Closing, Net Lessee shall deliver to Purchaser the following
documents duly executed and, where appropriate, acknowledged, by
Net Lessee and the following other items (the documents and other
items described in this Section 7.04 being collectively referred
to herein as "Net Lessee's Closing Documents"):
(a) a termination agreement with Fee Owner of the
Operating Lease or, if Purchaser so directs in writing not
less than two (2) business days prior to the Pre-Closing, an
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Assignment and Assumption of Net Lessee's interest in the
Operating Lease in the form annexed hereto as Exhibit N;
(b) a Xxxx of Sale in the form annexed hereto as
Exhibit M with respect to the Personal Property;
(c) an Assignment and Assumption of the Space Leases in
the form annexed hereto as Exhibit O;
(d) an Assignment and Assumption of Service Contracts
in the form annexed hereto as Exhibit P;
(e) an Assignment and Assumption of Licenses and
Permits in the form annexed hereto as Exhibit Q;
(f) a certified or bank check, payable to the order of
Purchaser, in an amount equal to the total of all security
deposits paid to Net Lessee under any Space Leases existing
on the Closing Date (and any interest thereon to which the
Tenants are entitled) or otherwise held by Net Lessee on the
Closing Date in respect to the Property, or instructions to
the holder of such security deposits to transfer the same to
Purchaser or its designee;
(g) an original letter notice, signed by an authorized
officer of Net Lessee, to each of the Tenants in the form
annexed hereto as Exhibit R;
(h) a complete set of keys for the Property, to the
extent in the possession of Net Lessee;
(i) to the extent the same are in Net Lessee's
possession, all building plans, specifications and drawings
for the Property;
(j) to the extent the same are in Net Lessee's
possession, the original Licenses and Permits to be
transferred hereunder, except to the extent the same are
required to be and are affixed at the Property;
(k) original, executed counterparts of the Service
Contracts or, if unavailable, photocopies thereof certified
by Net Lessee as true and complete photocopies thereof;
(l) to the extent the same are in Net Lessee's
possession, original, executed counterparts of the Space
Leases or, if unavailable, photocopies thereof certified by
Net Lessee as true and complete photocopies thereof;
(m) a certificate by the secretary of Net Lessee with
respect to (i) the issuance of all necessary consents by the
shareholders and directors of Net Lessee to the transactions
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contemplated hereby and (ii) the authority of the person(s)
executing this Agreement and the other Closing documents on
behalf of Net Lessee;
(n) a certificate of Net Lessee, dated as of the
Closing Date, restating the representations and warranties of
Net Lessee contained in this Agreement and certifying that
such representations and warranties are true in all material
respects at and as of the Closing Date, subject, however, to
the provisions of Section 4.04 and Section 4.05 hereof;
(o) all certificates, permits, and licenses from any
governmental authority having jurisdiction over the Property
in Net Lessee's possession regarding the use and operation of
the buildings and improvements located on the Property;
(p) the real estate tax bills for the Property for the
then current real estate tax year;
(q) to the extent in the possession of Net Lessee or
its agent (including the managing agent of the Property) (i)
all lease summaries, lease files and other files and
correspondence relating to the maintenance and operation of
the Property and construction contracts entered into by or on
behalf of Net Lessee; (ii) all preliminary, final and
proposed construction and building plans and specifications
(including elevations, floor plans, schematic design
drawings, renderings, working drawings, "as-built" drawings
and structural calculations) respecting the buildings and
improvements; and (iii) all accounting, financial and similar
books and records maintained by or on behalf of Net Lessee,
including those which are necessary for the billing of any
estimated additional rental payments payable by the Space
Tenants;
(r) all keys and entrance cards to all of the doors to
the Property (not held by Tenants), which keys shall be
tagged for identification;
(s) an updated rent roll, dated as of the Closing Date,
in the form used in Exhibit E annexed hereto, certified by
Net Lessee to be true and correct in all material respects
(but which shall be subject to Section 4.04 and Section 4.05
hereof);
(t) Tenant Estoppel Certificates relating to: (i) at
least seven of the following Tenants: Modells, Xxxxx Xxxxxx,
Inc., 7th Avenue Auditorium, X.X. Xxxx, Easy Street, Inc.,
Ronet, Inc., Xxxxxxx, Inc., Vanavilla Fashion, Xxxxxx
Bouquet, Inc., Depeche Mode, X.X. Xxxxx; and (ii) of the
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remaining Tenants, not less than fifty (50%) percent of the
rented and occupied square footage of the Property occupied
by such Tenants; and
(u) any meter readings, in accordance with
Section 9.01(a) hereof; and
(v) an indemnity in form and substance reasonably
satisfactory to Purchaser with respect to any pending
litigation described on Exhibit D hereto (as updated to the
Closing Date).
SECTION 7.05. Purchaser's Closing Documents. At the Closing,
Purchaser shall deliver to Seller the following documents duly
executed and, where applicable, acknowledged by Purchaser (the
documents described in this Section 7.05 being collectively
referred to herein as "Purchaser's Closing Documents"):
(a) counterparts of the documents described in
Section 7.03(b), (c) and (f) and Section 7.04 (b), (c) and
(d);
(b) a receipt for the security deposits transferred to
Purchaser;
(c) a certificate of the respective secretaries of each
corporation comprising Purchaser with respect to (i) the
approval by the applicable board of directors of the
corporation for which such person is secretary approving the
transactions contemplated hereby on behalf of Purchaser and
(ii) the authority of the person(s) executing this Agreement
and the other Closing documents on behalf of such
corporation;
(d) appropriate transfer tax returns of Purchaser, duly
completed and executed on behalf of Purchaser;
(e) a certificate of Purchaser, dated as of the Closing
Date, restating the representations and warranties of
Purchaser contained in this Agreement and certifying that
such representations and warranties are true in all material
respects at and as of the Closing Date, subject, however, to
the provisions of Section 4.05 hereof;
(f) certified checks, payable to the order of the
appropriate governmental authorities and/or the Title Company
as may be directed by Seller, in payment of all amounts
payable under Section 8.01 (which shall be credited against
the Purchase Price); and
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(g) if Fee Owner and Net Lessee are directed by
Purchaser to execute an Assignment and Assumption of their
respective interests in the Operating Lease, a counterpart
thereof executed and delivered by Purchaser and by the other
party thereto (if any) designated by Purchaser in its notice
to Fee Owner and Net Lessee directing execution and delivery
of such Assignment and Assumption.
SECTION 7.06. Conditions Generally. The foregoing conditions
are for the benefit only of the party for whom they are specified
to be conditions precedent and such party may, in its sole
discretion, waive any or all of such conditions and close title
under this Agreement without any increase in, abatement of or
credit against the Purchase Price.
ARTICLE 8
TAXES AND OTHER EXPENSES
SECTION 8.01. Transfer Taxes. All state, city, county and
municipal transfer, documentary, stamp and other similar taxes and
charges payable in connection with the transfer of the Property to
Purchaser and the consummation of the transactions contemplated
hereby shall be paid by Seller at the Closing. All state, city,
county and municipal recording charges for recording the deed and
any mortgage assignment, and all other documents, instruments,
agreements and certificates relating to the deed or the mortgage
assignment shall be paid by Purchaser at the Closing.
SECTION 8.02. Title Examination Fees and Sales Taxes. All
premiums and fees for title examination and title insurance
obtained by Purchaser, if any, and all related charges and survey
costs in connection therewith and any sales tax that may be due in
connection with the sale of the Personal Property shall be paid at
the Closing by Purchaser.
SECTION 8.03. Survival. The provisions of this Article 8
shall survive the Closing.
ARTICLE 9
CLOSING APPORTIONMENTS
SECTION 9.01. Apportionments, Expense Allocations and
Payments. (a) The following shall be apportioned at the Closing
as of the close of business on the day immediately preceding the
Closing Date provided that Wien & Malkin LLP confirms receipt of
the wire transfer representing the balance of the purchase price
no later than 3:00 p.m. New York time; otherwise the day of
Closing shall belong to Seller and all apportionments shall be
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made as of the close of business on the Closing Date, which
apportionments will be made at the Closing in accordance with the
provisions of this Section 9.01:
(i) real property taxes, business improvement
district charges or any other special assessments on the
basis of the fiscal year for which assessed;
(ii) water rates and charges;
(iii) sewer taxes and rents;
(iv) annual license, permit and inspection fees, if
any;
(v) fuel, oil, steam, gas, electricity charges and
all other utilities which are supplied to the Property
(for which, to the extent relevant, Net Lessee will
arrange current meter readings);
(vi) rents and all other charges (including charges
for electricity and cost reimbursement payments) payable
under the Space Leases to the extent collected as of the
Closing Date; provided, however, that any unpaid amounts or
amounts that are subject to final computation under the Space
Leases shall be apportioned in the manner provided in Section
9.02;
(vii) all charges and payments under the Service
Contracts;
(viii) intentionally omitted; and
(ix) all other cash operating income from and cash
operating expenses relating to the Property of every type and
nature, to the extent that the same are subject to
apportionment on sale of the Property in accordance with
prevailing local custom.
(b) Seller and Purchaser shall cooperate with one
another to transfer all utility accounts into the name of
Purchaser, or its designee, as of the Closing Date and the cost of
such transfers, including any required deposits, etc., shall be
paid by Purchaser. To the extent that all or any of such utility
accounts are not so transferred, Seller shall furnish readings of
the water, gas and electric meters located on the Property, if
any, other than meters measuring the computation of utilities
which are the direct responsibility of any tenant, to a date not
more than ten (10) days prior to the Closing Date and the unfixed
water rates and charges, sewer taxes and rents and gas and
electricity charges, if any, based thereon for the intervening
time shall be apportioned on the basis of such last readings. If
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such readings are not obtainable by the Closing Date, then, at the
Closing, any water rates and charges, sewer taxes and rents and
gas and electricity charges 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 avail-
able. Upon the taking of subsequent actual readings, the
apportionment of such charges shall be recalculated and Seller or
Purchaser, as the case may be, promptly shall make a payment to
the other based upon such recalculation. Seller shall be entitled
to all existing utility deposits, if any.
(c) The amount of any unpaid real property taxes and
assessments, water rates and charges and sewer taxes and rents
which Seller is obligated to pay and discharge may, at the option
of Seller, be paid by Purchaser out of the cash balance of the
Purchase Price, provided that bills therefor, indicating the
interest and penalties, if any, thereon, are furnished by Seller
to Purchaser at the Closing.
(d) If any refund of real property taxes or assessments
shall be made after the Closing for any period prior to the
Closing Date, the same shall be held by Purchaser and shall first
be paid to any Tenant who is entitled to the same in accordance
with the provisions of the Space Lease and the balance, if any,
shall be paid to Seller. Any refund for the fiscal year in which
the Closing Date occurs shall, after deducting all reasonable
costs incurred in connection with such tax protest, be apportioned
between Seller and Purchaser consistent with the provisions of
this Section 9.01.
(e) If at the Closing Date the 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 at Closing the unpaid
installments of such assessments, including those payable
following the Closing Date.
(f) All brokerage commissions for current terms of
Space Leases entered into prior to the date of this Agreement
shall be paid by Seller. Any brokerage commission which relates
to or arises from any new lease or any extension or renewal of a
Space Lease, or any expansion of the Premises covered thereby
entered into after the date of this Agreement and approved (or
deemed approved) by Purchaser as provided in Section 5.01 hereof
and is referenced in the material provided to Purchaser seeking
its approval to the applicable transaction, or which relates to or
arises from renewals or extensions of the term of any existing
Space Leases based on existing terms thereof and commencing after
the date of this Agreement (including any brokerage commissions
due in respect of a tenant waiving or failing to exercise a
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cancellation right) or any expansions of the premises covered
thereby, based on existing terms thereof and commencing after the
date hereof and listed on Exhibit G hereto, shall be paid by
Purchaser if, as and when due and payable. Purchaser hereby
agrees to indemnify and hold Seller harmless from and against any
cost, expense, liability or claim (including reasonable attorneys'
fees and disbursements) arising from a breach of Purchaser's
obligations under this Section 9.01(f).
(g) In the event the apportionments hereinabove
provided which are to be made at the Closing result in a credit
balance (i) to Purchaser, such sum shall be paid at the Closing,
at the option of Seller, by either (A) payment to Purchaser by
check in an amount equal to such credit balance or (B) 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 check
(payable to Wien & Malkin LLP) if the credit balance is less than
$5,000 or otherwise by wire transfer of immediately available
federal funds to Wien & Malkin LLP to the same account as for the
balance of the Purchase Price.
(h) Nothing contained herein shall be deemed to
prohibit Seller (or Net Lessee, as applicable), at its own
expense, from instituting after the Closing Date any action or
proceeding in its own name against Tenants no longer in occupancy
in order to collect the amounts of any delinquencies due to Seller
(or Net Lessee, as applicable) from such Tenants; provided,
however, that in no event shall Seller (or Net Lessee, as
applicable) be entitled to seek to recover possession of its
leased premises. Regarding proceedings pending as of the Closing
Date against Tenants still in occupancy, either, as Purchaser may
direct in writing at the Closing as to each such proceeding, (i)
Seller (or Net Lessee, as applicable) will assign such proceedings
to Purchaser (without recourse) and any collections shall be
applied first to actual, verifiable out-of-pocket expenses and
legal fees of Purchaser and Seller (or Net Lessee, as applicable),
pro rata, and then to their respective claims in the applicable
proceeding, pro rata or (ii) Seller (or Net Lessee, as applicable)
will terminate such proceeding, in which event the provisions of
Section 9.02 hereof shall be applicable and, for purposes of
determining the amount of delinquent rentals, Seller's (or Net
Lessee's) actual, verifiable out-of-pocket expenses and legal fees
will be included to the extent such expenses and fees could have
been included in the judgment under the terms of the applicable
Space Lease or otherwise by law.
SECTION 9.02. Apportionment of Rents. (a) Any checks for
rental payments received after the Closing Date by Fee Owner, Net
Lessee or their respective agents shall be promptly endorsed to
Purchaser by the payee thereof (without recourse) and promptly
sent to Purchaser. If on the Closing Date there shall be any past
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due and unpaid rental payments under any Space Lease, then any
rental payment received after the Closing Date by Purchaser or its
agents or Fee Owner, Net Lessee or their respective agents for
such Space Lease shall be applied first to pay the current portion
of any rental payments due Purchaser under such Space Lease and
the remaining portion of the rental payment shall be remitted
promptly by Purchaser to Seller to pay unpaid and other sums due.
Purchaser shall xxxx for past due rental payments provided Net
Lessee provides the requisite information as Purchaser may
reasonably require, and Purchaser shall not agree to any waiver,
reduction, deferral, extension, or any other compromise of any
delinquent rental payment without the prior written consent of
Seller unless in connection therewith Seller nevertheless then
receives all past due rents and other sums to which it would have
been entitled pursuant to this Paragraph as if no such waiver,
reduction, deferral, extension or other compromise had been agreed
to by Purchaser. Any such purported agreement in violation of the
immediately preceding sentence shall be void as against Seller,
and Seller (or Net Lessee, as applicable) shall thereupon be
permitted to institute any action or proceeding against such
Tenant; provided, however, that in no event shall Seller (or Net
Lessee, as applicable) be entitled to seek to evict any Tenant or
recover possession of its leased premises. Except as provided in
the immediately preceding sentence, Seller will not commence
litigation against any Tenant in occupancy for rent, additional
rent or other sums payable in respect of occupancy costs under the
Space Leases. Purchaser shall be entitled to deduct from any
rental payment more than thirty (30) days past due as of the
Closing the actual, verifiable out-of-pocket expenses and legal
fees incurred by Purchaser in connection with such past due amount
but any such deducted amounts then or thereafter collected by
Purchaser shall be repaid to Seller as if a rental payment to be
applied hereunder. Purchaser shall promptly provide Seller with a
reasonably detailed accounting of such amounts.
(b) If any rents (including cost reimbursement payments
or other items of additional rent) are payable or accruable under
the Space Leases on the basis of estimates or formulae and/or are
subject to recomputation after the Closing Date, such rents shall
be apportioned as of the Closing Date to the extent collected on
the basis of the then current charges or accruals, as applicable,
and shall be subject to reapportionment between Seller and
Purchaser on the basis of the amounts as finally determined to be
owing under the Space Leases and on the basis of a 365 day year
and the actual number of days elapsed (or such past year as may be
relevant as to Space Leases as to which Closing Date occurs during
initial or final year of the term thereof). Within a reasonable
time after Purchaser has made its calculations of the final cost
reimbursement payments in respect of the pertinent fiscal periods
and prior to billing tenants therefor, Purchaser shall prepare and
submit to Seller a final calculation of the amounts and other
items to be apportioned pursuant to this Agreement as of the
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Closing Date (the "Final Report"). Seller shall raise any
objections it has to the Final Report within forty-five (45) days
after the submission thereof by written notice to Purchaser given
within said forty-five (45) day period and stating in reasonable
detail Seller's objections, and Purchaser shall allow Seller and
its authorized representatives reasonable access during business
hours to its books and records pertinent to the Property to permit
Seller to review the Final Report and to ascertain its accuracy.
If Seller shall raise any objections to the Final Report as
provided above, the parties shall meet to resolve such objections
and the Final Report shall be amended accordingly and, within ten
(10) days after such agreement or other affirmative approval by
Seller (or, if Seller raises no objections to the Final Report,
the expiration of the forty-five (45) day objection period),
Purchaser shall xxxx the Tenants therefor. Thereafter Purchaser
shall pay to Seller promptly upon collection the amount determined
to be due from such tenant to the other in accordance with this
Article 9 based upon the Final Report, as the same may have been
amended.
SECTION 9.03. Survival. The obligations of the parties under
this Article 9 shall survive the Closing. Payment due to Seller
or Net Lessee pursuant to this Article shall be paid to Wien &
Malkin LLP.
ARTICLE 10
CONDEMNATION AND DESTRUCTION; INSURANCE
SECTION 10.01. Condemnation. If, prior to the Closing Date,
all or any portion of the building on the Property is taken by
eminent domain (or is the subject of a pending taking which has
not yet been consummated), Seller shall notify Purchaser of such
fact promptly after obtaining knowledge thereof and either
Purchaser or Seller shall have the right to terminate this
Agreement by giving notice to Seller not later than twenty (20)
days after the giving of Seller's notice. If Purchaser elects to
terminate this Agreement as aforesaid, Seller shall be deemed
unable to perform its obligations hereunder, this Agreement shall
terminate effective as of the date of delivery of the termination
notice, and Escrow Agent shall deliver the Downpayment, together
with any interest accrued thereon, to Purchaser. Upon the return
of the Downpayment to Purchaser, this Agreement shall be deemed
terminated and 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 in
each case for such liabilities or obligations as are specifically
stated to survive the termination of this Agreement. If neither
Purchaser nor Seller does elect to terminate this Agreement as
aforesaid or otherwise fails to give timely notice of termination
as herein provided, time being of the essence as to the giving of
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such notice, then Purchaser shall be obligated to close title,
there shall be no abatement of the Purchase Price and Seller shall
assign to Purchaser (without recourse) at the Closing the rights
of Seller to the awards, if any, for the taking, and Purchaser
shall be entitled to receive and keep all awards for the taking of
the Property or such portion thereof. In no event shall Seller be
under any obligation to restore all or any portion of the Property
in connection with any condemnation or other taking.
SECTION 10.02. Destruction. If, prior to the Closing Date, a
material part (as defined in this Section 10.02) of the Property
is destroyed or damaged by fire or other casualty, Seller shall
promptly notify Purchaser of such fact and Purchaser shall have
the right to terminate this Agreement by giving notice to Seller
not later than twenty (20) days after the giving of Seller's
notice. For the purposes hereof, a "material part" of the Property
shall mean the cost of repairing or restoring which would exceed
Two Million Five Hundred Thousand Dollars ($2,500,000), as
determined by an independent architect designated by Seller and
approved by Purchaser. If Purchaser elects to terminate this
Agreement as aforesaid, Seller shall be deemed unable to perform
its obligations hereunder, this Agreement shall terminate
effective as of the date of delivery of the termination notice,
and Escrow Agent shall deliver the Downpayment, together with any
interest accrued thereon, to Purchaser. Upon the return of the
Downpayment to Purchaser, this Agreement shall be deemed
terminated and Seller shall not have any further liability or
obligations to Purchaser hereunder nor shall Purchaser have any
further liability or obligation to Seller hereunder, except in
each case, for such liabilities or obligations as are specifically
stated to survive the termination of this Agreement. If Purchaser
does not elect to terminate this Agreement or otherwise fails to
give timely notice of termination as herein provided, time being
of the essence as to the giving of such notice, or if there is
damage to or destruction of an "immaterial part" (i.e., anything
other than a material part) of the Property by fire or other
casualty, then in any of such events, Purchaser shall be obligated
to close title, there shall be no abatement of the Purchase Price
(except to the extent of any deductible) and Seller shall assign
to Purchaser (without recourse) at the Closing the rights of
Seller to the proceeds, if any, under Seller's insurance policies,
including rental insurance relating to periods following the
Closing, covering the Property with respect to such damage or
destruction (but not in an amount greater than the Purchase Price,
and Purchaser shall be entitled to receive and retain any monies
received from such insurance policies in an amount not to exceed
the Purchase Price, and any excess proceeds shall belong to
Seller. If the amount of casualty or rent loss insurance proceeds
is not settled by the date of Closing, Seller shall execute at
Closing all proofs of loss, assignments of claim and other similar
instruments (all without recourse) so that the Purchaser receive
all of Seller's right, title and interest in and under said
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insurance policy and any proceeds thereof as herein provided and
the Purchaser shall be fully credited at Closing with the amount
of the deductible.
SECTION 10.03. Seller's Obligation to Maintain Insurance.
Net Lessee represents and Purchaser acknowledges that the Property
currently is insured under blanket policies of insurance and that
such policies will not be transferred hereunder at the Closing.
From the date hereof until the Closing Date, Seller shall continue
to carry, and shall keep in full force and effect, casualty
insurance in an amount not less than, with a deductible not
greater than, and affording substantially the same coverage as,
the casualty insurance policies covering the Property as of the
date hereof, a description of which coverage is set forth on
Exhibit S attached hereto, to the extent such policies are, as
determined by Seller, reasonably obtainable from commercial
sources at commercially reasonable rates.
ARTICLE 11
INDEMNITIES
SECTION 11.01. Purchaser's Indemnity. Purchaser hereby
agrees to indemnify and hold harmless Fee Owner and Net Lessee and
their respective agents, employees, contractors and
representatives, and the employees, contractors and
representatives of their respective agents, of and from any claim,
loss, liability or expense (including reasonable attorney's fees
and disbursements) arising or resulting from any act or omission
by Purchaser or its agents, contractors, employees or
representatives from and after the Closing Date at, around,
involving or affecting in any way the Property, the Space Leases,
the Tenants, the Service Contracts and the parties thereto other
than Fee Owner and Net Lessee.
SECTION 11.02. Net Lessee's Indemnity. Net Lessee hereby
agrees to indemnify and hold harmless Purchaser and its agents,
employees, contractors and representatives, and the employees,
contractors and representatives of its agents, of and from any
claim, loss, liability or expense (including reasonable attorney's
fees and disbursements) arising or resulting from any act or
omission by Net Lessee or its agents, contractors, employees or
representatives prior to the Closing Date at, around, involving or
affecting in any way the Property, the Space Leases, the Tenants,
the Service Contracts and the parties thereto other than Fee Owner
or Purchaser, except that this indemnity shall not relate to
matters described in or covered by the representations or
warranties of Net Lessee or Fee Owner in this Agreement or any
matter affecting or relating to a Space Lease or Tenant in respect
of or from which a Tenant Estoppel was delivered at the Closing.
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SECTION 11.03. Indemnification Generally. (a) Wherever it is
provided in this Agreement or in any agreement or document
delivered pursuant hereto that a party shall indemnify another
party hereunder against liability or damages, such phrase, and
words of similar import, shall mean that the indemnifying party
hereby agrees to and does indemnify, defend and hold harmless the
indemnified party and such party's direct and indirect
shareholders or partners and their respective past, present and
future officers, directors, employees, general and limited
partners and agents from and against any and all claims, damages,
losses, liabilities and expenses (including, without being limited
to, reasonable attorneys' fees and disbursements) to which they or
any of them may become subject or which may be incurred by or
asserted against any or all of them attributable to, arising out
of or in connection with the matters provided for in such
provision.
(b) If any action, suit or proceeding is commenced, or
if any claim, demand or assessment is asserted in respect of which
a party is indemnified hereunder or under any agreement or
document delivered pursuant hereto, the indemnified party shall
give notice thereof to the indemnifying party and the indemnifying
party shall be entitled to control the defense, compromise or
settlement thereof, at its own cost and expense, with counsel
reasonably satisfactory to the indemnified party, and the
indemnified party shall cooperate fully and make available to the
indemnifying party such information under its control or in its
possession relating thereto and may, at its own cost and expense,
participate in such defense, subject to the direction of the
indemnifying party. The indemnified party shall not effect a
settlement of any such claim or proceeding without the prior
written consent of the indemnifying party if the indemnifying
party shall have irrevocably acknowledged in writing its
obligation to indemnify the indemnified party with respect to such
claim or proceeding pursuant to this Agreement, and
indemnification provisions of this Agreement shall cease to be in
effect with respect to a given claim or proceeding if the party
seeking to be indemnified shall have settled the matter at issue
without consent of or prior notice to the party from whom
indemnity is due.
SECTION 11.04. Survival. This Article 11 shall survive the
Closing.
ARTICLE 12
BROKER
SECTION 12.01. Broker. (a) Purchaser understands that
Xxxxxxx & Xxxxxxxxx, Inc. ("C&W") is acting as Seller's
representative in this transaction and not as a real estate
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broker. Seller shall pay a fee to C&W pursuant to a separate
agreement between Seller and C&W. Seller represents and warrants
to Purchaser that Seller has not hired, retained or dealt with any
broker, finder, consultant or intermediary in connection with the
negotiation, execution or delivery of this Agreement or the
transactions contemplated hereby. Seller will indemnify Purchaser
against liability arising out of any claim that the aforesaid
representation and warranty is untrue.
(b) Purchaser represents and warrants to Seller that
(i) Purchaser has not hired, retained or dealt with any broker,
finder, consultant or intermediary in connection with the
negotiation, execution or delivery of this Agreement or the
transactions contemplated hereby other than Xxxxxxx & Wakefield
Management ("Broker") and (ii) a true and complete copy of the
brokerage/consulting agreement between Purchaser and Broker is
annexed hereto as Exhibit T. Purchaser shall pay all fees and
commissions due to Broker whether pursuant to the terms of the
agreement reproduced in Exhibit T or otherwise. Purchaser will
indemnify Seller against liability arising out of any claim that
the aforesaid representation and warranty is untrue.
(c) The provisions of this Section shall survive the
Closing and any termination of this Agreement.
ARTICLE 13
REMEDIES
SECTION 13.01. Purchaser's Default. In the event that
Purchaser shall default under this Agreement, the parties hereto
agree that the damages that Seller shall sustain as a result
thereof shall be substantial but shall be difficult to ascertain.
The parties hereto therefore agree that in the event that
Purchaser fails to perform all of the terms, covenants, conditions
and agreements to be performed by it hereunder, whether at or
prior to the Closing, Seller shall be entitled to retain the
Downpayment, together with any interest accrued thereon and Escrow
Agent shall promptly deliver said funds to Seller, as and for its
sole remedy hereunder, as Seller's liquidated damages, and Seller
thereafter 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 which are specifically stated to survive the
termination of this Agreement.
SECTION 13.02. Seller's Inability/Default. In the event
that, on the Closing Date, Seller shall be unable to perform its
obligations or to satisfy any condition applicable to Seller
hereunder in accordance with the provisions of this Agreement and
this Agreement shall be terminated in accordance with its terms as
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a result thereof, Purchaser shall be entitled to the return of the
Downpayment and Escrow Agent shall promptly return the
Downpayment, together with any interest accrued thereon, to
Purchaser as and for its sole remedy hereunder if Purchaser so
elects not to close; provided, however, that, if the aggregate
amount of the claims which Purchaser could successfully have
asserted against Net Lessee or Fee Owner (or both) had Purchaser
elected to close and assert such claims pursuant to Section 4.05
of this Agreement would have exceeded $100,000 (computed as
provided in Section 4.05(c)), then Seller shall also be liable to
Purchaser for the reasonable out-of-pocket costs and expenses,
including, without limitation, reasonable legal fees and
disbursements, incurred by Purchaser in connection with its
decision to purchase the Property and to execute and deliver this
Agreement, such obligation to survive termination hereof. In the
event Seller shall on the Closing Date fail or refuse to close
other than by reason of its inability so to perform its
obligations or so to satisfy any condition as aforesaid, Purchaser
shall be entitled to (i) institute an action for specific
performance or (ii) receive the return the Downpayment, together
with any interest accrued thereon, and reimbursement of
Purchaser's costs and expenses as described in and pursuant to the
conditions of the immediately preceding sentence. Should
Purchaser make the election provided in the preceding clause (ii),
Escrow Agent shall promptly return the Downpayment, together with
any interest accrued thereon, to Purchaser, and, if applicable,
Seller shall promptly reimburse Purchaser for such expenses as
described above. Upon the return of the Downpayment to Purchaser
under either of the circumstances described above in this Section
13.02 and, if applicable, reimbursement to Purchaser of its
expenses, this Agreement shall be deemed terminated and 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 in each case for such
liabilities or obligations as are specifically stated to survive
the termination of this Agreement.
SECTION 13.03. Effect or Other Provisions. Nothing in this
Article 13 shall affect or otherwise limit the rights of the
parties pursuant to any other provision of this Agreement,
including, without limitation, Purchaser's rights to bring one or
more claims based upon a breach, as of or subsequent to the
Closing, of one or more representations, warranties or covenants
of Seller made under this Contract, subject to the limitations,
and in accordance with the provisions contained in Section 4.05 of
this Contract.
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ARTICLE 14
NOTICES
SECTION 14.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered (which shall include delivering
by recognized overnight courier service) with proof of delivery
thereof (any notice or communications so delivered being deemed to
have been received at the time delivered), or sent by United
States registered or certified mail, postage prepaid and return-
receipt requested (any notice or communication so sent being
deemed to have been received two (2) business days after mailing
in the United States), addressed to the respective parties as
follows:
if to Comfort:
Xxxxxx Comfort & Sons, Inc., as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxx Xxxxxx, President
with a copy to:
Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
if to Tirrem:
Tirrem Management Company Inc.
c/o Loeb Partners Realty
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxx Xxxx, Esq.
Loeb Partners Realty
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
if to Fee Owner: If to Net Lessee:
Garment Capitol Associates 4987 Corporation
c/o Wien & Malkin LLP c/o Helmsley-Spear,
Inc.
00 Xxxx 00xx Xxxxxx 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Xx., Esq. Attn:
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with a copy to:
Wien & Malkin LLP Wien & Malkin LLP
00 Xxxx 00xx Xxxxxx 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq. Attn: Xxxxxx X.
Xxxxxx, Esq.
if to Escrow Agent:
Wien & Malkin LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
or to such other address or party as either party may have
furnished to the other in writing in accordance herewith, except
that notices of change of address or addresses shall only be
effective upon receipt. Notices to Purchaser shall be sent to
both Comfort and Tirrem; notices to Seller shall be sent to both
Fee Owner and Net Lessee.
ARTICLE 15
ESCROW AGREEMENT
SECTION 15.01. Escrow Agreement. Supplementing the
provisions of Sections 1.02(i) hereof, the Downpayment shall be
paid to Escrow Agent and held in accordance with the following
terms:
(a) Escrow Agent shall deposit the funds in the Xxxxx-
ity U.S. Treasury Income Portfolio. Escrow Agent shall have no
responsibility or liability for the loss or diminishment of the
funds arising out of the insolvency or failure of the depository
institution with which the funds are deposited. The rate of in-
terest or yield need not be the maximum available, and deposits,
withdrawals, purchases and sales shall be made in accordance with
this Contract. Any out-of-pocket transaction costs or bank fees
incurred by Escrow Agent shall be deducted by Escrow Agent from
any interest earned on the funds.
(b) At Closing, or if Purchaser shall default, Escrow
Agent shall disburse the Downpayment to Wien & Malkin LLP on
behalf of Seller pursuant to the provisions of Section 1.02(b).
If Seller shall default hereunder, Escrow Agent shall disburse the
Downpayment to Purchaser. In connection with any disbursement of
the Downpayment, other than in connection with the Closing, Escrow
Agent will give written notice to Seller and Purchaser of any
proposed disbursement at least fifteen (15) days prior to the
disbursement thereof. If either party shall object in a writing
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received by Escrow Agent within such 15-day period, Escrow Agent
shall continue to hold the Downpayment and shall not release the
same, except as herein provided.
(c) If a dispute shall arise as to the disposition of
the funds, or if Escrow Agent shall be uncertain as to its duties
or rights hereunder, Escrow Agent shall have the right, at its
sole option, to (i) continue to hold the same, or (ii) deposit the
same with a court of competent jurisdiction, or (iii) disburse the
funds in accordance with the written instructions of both parties.
Upon disposition pursuant to subsections (ii) or (iii), Escrow
Agent shall be relieved of any further responsibility or liability
hereunder.
(d) The parties acknowledge and agree that Escrow Agent
(i) is holding the funds as an accommodation to them and as a
stakeholder, (ii) shall not be deemed to be the agent of either
party with regard to the funds, (iii) shall be under no responsi-
bility in respect of the funds other than to honor the provisions
of its undertaking as described herein, (iv) shall have no li-
ability arising out of or in connection with its activity as Es-
crow Agent except for bad faith or willful neglect, and (v) shall
not be required to institute legal proceedings of any kind.
Seller and Purchaser hereby (i) release Escrow Agent from any act
done or omitted in the performance of its duties hereunder, except
for bad faith or willful neglect.
(e) Escrow Agent shall be entitled to rely upon (i) any
judgment, order, certification, demand or other writing delivered
to Escrow Agent, without being required to determine the authen-
ticity or the correctness of any fact stated therein, the propri-
ety or validity thereof, or the jurisdiction of a court issuing
any such judgment, (ii) any instrument or signature believed by
Escrow Agent to be genuine and duly authorized, and (iii) advice
of counsel in reference to any matter or matters connected here-
with.
(f) Escrow Agent may represent Fee Owner and Net Lessee
(or any or all principals thereof) in connection with the Contract
and/or the transaction contemplated hereby and any dispute arising
with respect to the funds and/or the Contract. Escrow Agent, in
its capacity as a law firm, may represent itself with respect to
the provisions of this Article 15, in which event the term "rea-
sonable attorney's fees and disbursements" as used in this
Article 15 shall expressly include the value of Escrow Agent's le-
gal services to itself.
(g) Any notice, demand or other communication hereunder
shall be in writing and transmitted in accordance with Article 14.
(h) The provisions of this Article 15 (i) constitute
the entire agreement among all the parties hereto with respect to
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the subject matter hereof and supersedes all prior understandings
and agreements (written, oral or implied) of the parties in con-
nection herewith, (ii) shall be governed by and construed in ac-
cordance with the laws of the State of New York, (iii) shall inure
to the benefit of and be binding upon the parties hereto and their
respective heirs, distributees, legal representatives, successors
and permitted assigns, and (iv) cannot be modified or cancelled
unless by written agreement of all parties.
(i) The terms and provisions of this Article 15 shall
create no right in any person, firm, corporation or other entity
other than the parties hereto and their respective successors and
permitted assigns, and no third party shall have the rights to
enforce or benefit from the terms hereof.
(j) Notwithstanding anything herein to the contrary,
Escrow Agent may at any time resign from its responsibilities
hereunder upon at least five (5) business days' prior written no-
xxxx to the other parties hereto. Upon the effective date of such
resignation, the funds shall be delivered by Escrow Agent to such
person as may be designated in writing by the other parties
hereto. Upon such delivery and receipt, all obligations and li-
ability of the Escrow Agent hereunder shall cease and terminate.
If no such person shall have been designated by such date, all
obligations of the Escrow Agent hereunder shall, nevertheless,
cease and terminate. Thereafter, its sole responsibility shall be
to keep safely all property then held by it and to deliver the
same to a person designated by all other parties hereto or in ac-
cordance with the directions of a final, unappealable order or
judgment of a court of competent jurisdiction.
ARTICLE 16
MISCELLANEOUS PROVISIONS
SECTION 16.01. Acceptance of the Premises. The acceptance
of the deed to the Property by Purchaser shall be deemed an
acknowledgment by Purchaser that Seller has fully complied with
all of its obligations hereunder and that Seller is discharged
therefrom and that Seller shall have no further obligation or
liability with respect to any of the agreements made by Seller in
this Agreement, except for those provisions of this Agreement
which expressly provide that any obligation of Seller shall
survive the Closing.
SECTION 16.02. Press Releases. Seller and Purchaser agree to
jointly issue the press release attached hereto as Exhibit U
promptly following the execution of this Agreement. Seller (for
itself and on behalf of Broker) and Purchaser (for itself and on
behalf of C&W) each agree that none of Seller, Purchaser, Broker
or C&W will issue any additional or other press release,
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advertisement or other public communication with respect to this
Agreement or the transactions contemplated hereby prior to the
Closing without the prior written consent of the other party
hereto, except to the extent required by law. If Seller or
Purchaser is required by law to issue such a press release or
other public communication at least three (3) business day prior
to the issuance of the same such party shall deliver a copy of the
proposed press release or other public communication to the other
party hereto for its review.
SECTION 16.03. Assignment. Purchaser may not assign its
rights and obligations hereunder, in whole or in part, without the
prior written consent of Fee Owner. Any assignment without such
prior written consent shall be void. The consent of Fee Owner
shall be provided in connection with an assignment by either or
both (whether separately or jointly) of Comfort or Tirrem of their
respective interest hereunder for no or nominal consideration to
an entity directly or indirectly owned or controlled by principals
of Xxxxxx Comfort & Sons, Inc. or Loeb Partners Realty or
principal of both those firms, but such consent does not affect
the obligation of Purchaser to seek consent, or a waiver by Fee
Owner of the foregoing provisions, as to any other assignment by
Purchaser. Subject to and without limiting the provisions of this
Section, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.
SECTION 16.04. Binding Effect. This Agreement does not
constitute an offer to sell and shall not bind Seller unless and
until Seller elects to be bound hereby by executing and delivering
to Purchaser an executed original counterpart hereof.
SECTION 16.05. Partial Invalidity. If any term or provision
of this Agreement or the application thereof to any persons or
circumstances shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement 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 Agreement shall be valid and
enforceable to the fullest extent permitted by law.
SECTION 16.06. Recordation of Agreement: Waiver of Lis
Pendens. Neither Seller nor Purchaser may record this Agreement.
Purchaser hereby waives, to the extent permitted by law, any right
to file a lis pendens or other form of attachment against the
Property in connection with this Agreement or the transactions
contemplated hereby, other than a lis pendens or other such form
of attachment that may be filed by Purchaser contemporaneously
with the commencement by Purchaser of an action for specific
performance under Section 13.02. To the extent that any such
filing is made in violation of the Agreement, Purchaser shall
indemnify Seller against any damages incurred by Seller in
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connection therewith. In the event Purchaser shall be
unsuccessful in an action for specific performance, it shall,
immediately upon demand from Seller, cause any lis pendens or
other such form of attachment to be cancelled and removed from the
public record. The provisions of this Section 16.06 shall survive
the termination of this Agreement.
SECTION 16.07. Entire Agreement. This Agreement, together
with the exhibits hereto, constitutes the entire agreement of the
parties regarding the sale by Seller of the Property and all prior
or contemporaneous agreements, understandings, representations and
statements, oral or written, are hereby merged herein.
SECTION 16.08. Further Assurances. The parties agree to
mutually execute and deliver to each other, at the Closing, such
other and further documents as may be reasonably required by
counsel for the parties to carry into effect the purposes and
intents of this Agreement, provided such documents are customarily
delivered in real estate transactions in the City of New York and
do not impose any material obligations upon any party hereunder
except as set forth in this Agreement.
SECTION 16.09. Enforcement. In the event either party hereto
fails to perform any of its obligations under this Agreement or in
the event a dispute arises concerning the meaning or
interpretation of any provision of this Agreement, the defaulting
party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses reasonably incurred
by the other party in enforcing or establishing its rights
hereunder, including, without being limited to, court costs and
reasonable attorneys' fees.
SECTION 16.10. Amendment. This Agreement may not be
modified, amended, altered or supplemented except by written
agreement executed and delivered by Purchaser and Seller.
SECTION 16.11. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York applicable to agreements made and to be performed
wholly within said State.
SECTION 16.12. Exhibits. All Exhibits referred to in this
Agreement are incorporated herein and made a part hereof as fully
as if set forth herein.
SECTION 16.13. No Waiver. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement 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 Agreement shall be
held to be a waiver of any other or subsequent breach.
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SECTION 16.14. Headings, Article, Section and Exhibit
References. The Article and Section headings used herein are for
reference purposes only and do not control or affect the meaning
or interpretation of any term or provision hereof. All references
in this Agreement to Articles, Sections and Exhibits are to the
Articles and Sections hereof and the Exhibits annexed hereto.
SECTION 16.15. No Other Parties. The representations,
warranties and agreements of the parties contained herein are
intended solely for the benefit of the parties to whom such
representation, warranties or agreements are made, shall confer no
rights hereunder, whether legal or equitable, in any other party,
and no other party shall be entitled to rely thereon.
SECTION 16.16. Capacity of Parties; Claims. Purchaser
acknowledges that claims hereunder by Purchaser are limited to
rights against the Property or the Downpayment only, as herein
provided, and no recourse may be had against any principal,
officer, director, partner, participant, stockholder, member,
agent or other representative of Fee Owner or Net Lessee or of any
predecessor owner of the Property or of the lessee's interest in
the Net Lease.
SECTION 16.17. Counterparts. This Agreement may be signed in
counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first set forth above.
FEE OWNER:
GARMENT CAPITOL ASSOCIATES
By:______________________________
Name: Xxxxx X. Xxxxxx
Title: General Partner
NET LESSEE:
4987 CORPORATION
By:______________________________
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
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PURCHASER:
XXXXXX COMFORT & SONS, INC., as agent
By:______________________________
Name:
Title:
TIRREM MANAGEMENT COMPANY, INC.
BY:_____________________________
Name:
Title:
Provisions of Article 15 agreed to and
Receipt of Downpayment acknowledged
this _____ day of January, 1997
WIEN & MALKIN LLP
By:_____________________________________
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