Exhibit 10.11
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OPTION AGREEMENT
BETWEEN
The 44 BC REALTY LLC
OPTIONOR
AND
POLESTAR FORTY-FOURTH OPTIONEE LLC
OPTIONEE
Dated: as of February 9, 1998
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TABLE OF CONTENTS
Page
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1. GRANT OF OPTION..........................................................3
2. OPTION PAYMENTS. .......................................................3
3. TERM OF OPTION...........................................................3
4. EXERCISE OF OPTION/TRANSFER OF PROPERTY..................................4
5. OPTION EXERCISE PRICE; COSTS AND EXPENSES................................7
6. CERTAIN DEFINITIONS......................................................8
7. STATUS OF PROPERTY.......................................................8
8. TITLE INSURANCE; LIENS..................................................10
9. OPTIONEE COVENANTS, REPRESENTATIONS AND WARRANTIES......................12
10. OPTIONOR REPRESENTATIONS, WARRANTIES AND COVENANTS......................13
11. CONDITIONS PRECEDENT TO CLOSING.........................................19
12. DOCUMENTS AND OTHER ITEMS TO BE DELIVERED AT CLOSING....................20
13. DISCLAIMER; WAIVER OF CLAIMS............................................22
14. DAMAGE AND DESTRUCTION; CONDEMNATION....................................22
15. BROKERAGE...............................................................23
16. ASSIGNMENT BY OPTIONEE..................................................24
17. REMEDIES................................................................25
18. FURTHER ASSURANCES......................................................27
19. NOTICES.................................................................27
20. APPORTIONMENTS..........................................................29
21. BINDING EFFECT..........................................................29
22. RECORDING...............................................................29
23. CHOICE OF LAW...........................................................30
24. SURVIVAL................................................................30
25. COUNTERPARTS............................................................30
26. INVALIDITY OF PARTICULAR PROVISION......................................30
27. TERM OF AGREEMENT.......................................................31
Exhibits
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EXHIBIT A - Description of Land
EXHIBIT B - Memorandum of Option
EXHIBIT C - Xxxx of Sale
EXHIBIT D - Assignment of Included Property
EXHIBIT E - Assignment of Leases and Security Deposits
EXHIBIT F - Escrow Provisions
EXHIBIT G - Additional Permitted Encumbrances
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Schedules
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Schedule 1 - Leases, Security Deposits; Rent Roll
Schedule 2 - Contracts
Schedule 3 - Permits
Schedule 4 - Insurance Policies
Schedule A - Option Exercise Price Payments
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DEFINITION PAGE
Section
Term Number
---- ------
Additional Payments ............................................ 5(a)
Additional Property Rights ..................................... 4(b)(vi)
Agreement ...................................................... Introduction
Building ....................................................... Recitals
business days .................................................. 6
Closing ........................................................ 4(a)
Closing Date ................................................... 4(a)
Condemnation ................................................... 14(a)(i)
Contracts ...................................................... 4(b)(v)
Courier ........................................................ 19
Deed ........................................................... 12(a)(i)
family member .................................................. 10(b)
foreign person ................................................. 10(a)(vi)
44 LLC ......................................................... Recitals
44 Premises .................................................... Recitals
BC ............................................................. 2(a)
BC Expenses .................................................... 5(b)
Holidays ....................................................... 6
Included Property .............................................. 4(c)(vi)
Initial Option Termination Date ................................ 4(a)
Judmart ........................................................ 15(a)
Land ........................................................... Recitals
Landlord Deficiency Amount ..................................... 17(a)
Leases ......................................................... 4(b)(iv)
Loan ........................................................... Recitals
Loan Documents ................................................. Recitals
Master Lease ................................................... Recitals
Master Tenant .................................................. Recitals
Material Breach of a Representation ............................ 10(d)
NS Member ...................................................... Recitals
Operating Agreement ............................................ Recitals
Option ......................................................... 1(a)
Option Exercise Date ........................................... 4(a)
Option Exercise Price .......................................... 5(a)
Option Fee ..................................................... 2(a)(i)
Option Memoranda ............................................... 22
Option Notice .................................................. 4(b)
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Option Payments ................................................ 2(a)
Option Period .................................................. 4(a)
Option Termination Date ........................................ 4(b)
Optionee ....................................................... Introduction
Optionor ....................................................... Introduction
Permits ........................................................ 4(b)(vii)
Permitted Encumbrances ......................................... 7(a)
Person ......................................................... 6
Personalty ..................................................... 4(b)(iii)
Premises ....................................................... Recitals
Property ....................................................... 4(b)(vii)
Purchase Right ................................................. 2(a)
Reminder Notice ................................................ 4(b)
Reports ........................................................ 8(a)(i)
Security Deposits .............................................. 4(b)(iv)
Subsequent Title Report ........................................ 8(b)
Subtenants ..................................................... 7(a)(xi)
Title Company .................................................. 8(a)(i)
Title Objection ................................................ 8(b)
Title Objection Notice ......................................... 8(b)
Transfer ....................................................... 10(b)(i)
Violations ..................................................... 7(a)(viii)
West 44th St Option Agreement .................................. Recitals
West 44th St Transaction ....................................... Recitals
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OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement"), made as of the 9th day of
February, 1998, by and between The 44 BC REALTY LLC, a Delaware limited
liability company having an office c/o Prince Management Corp., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Optionor") and POLESTAR FORTY-FOURTH OPTIONEE
LLC, formerly known as NS 417/44 LLC, a Delaware limited liability company
having an office c/o NorthStar Capital Partners, LLC, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Optionee").
W I T N E S S E T H:
WHEREAS, Optionor is the owner in fee of a certain parcel of land (the
"Land") and improvements located thereon (said improvements together with any
future replacements thereof, collectively, the "Building"), which land and
improvements as described in Exhibit A are also known as 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx and are designated as Xxx 00, Xxxxx 0000 of the Tax Map of
the City of New York (the Land and the Building hereinafter, the "Premises");
and
WHEREAS, Optionee desires to acquire from Optionor an irrevocable option
to purchase the Property (as hereinafter defined) and, subject to the terms
hereof, Optionor is willing to grant to Optionee such option; and
WHEREAS, simultaneously herewith (i) Optionor, as landlord, and an
affiliate of Optionee, as tenant (the "Master Tenant"), are entering into a
lease (the "Master Lease")
with respect to the Premises; (ii) PoleStar Forty-Fourth Funding LLC, among
others, is making a loan(s) (as same may be modified, amended, supplemented
and/or refinanced as provided herein, subject to the limitations set forth in
Section 2 of that certain Agreement by and among FS (hereinafter defined), The
44th B.C. Realty Corp. and NS 417/44 LLC dated January 14, 1998, the "Loan") to
Optionor, which Loan will be evidenced by a note(s) and secured by, among other
things, a mortgage and assignment(s) of rents and leases encumbering the
Premises (such documents, together with any other documents evidencing and/or
securing the Loan(s), collectively, the "Loan Documents"); and (iii) PoleStar
Forty-Fourth Holding LLC, a Delaware limited liability company that is an
affiliate of Optionee (the "NS Member") has been admitted as a one (1%) percent
member of Optionor pursuant to the Amended and Restated Limited Liability
Company Agreement of Optionor dated of even date (the "Operating Agreement").
WHEREAS, The 44 BC Realty LLC ("44 LLC") and PoleStar Forty-Fourth
Optionee LLC are simultaneously entering into an option agreement (the "West
44th St Option Agreement") with respect to the land and building known as 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "44 Premises") on terms and conditions
substantially similar to the terms and conditions in this Agreement, except for
the amounts payable thereunder (the matters contemplated by such documents, the
"West 44th St Transaction").
NOW, THEREFORE, for good and valuable consideration and the mutual
agreements herein contained, the parties covenant and agree as follows:
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1. GRANT OF OPTION.
(a) In consideration for the payment of the Option Fee (as hereinafter
defined), Optionor hereby unconditionally grants to Optionee an exclusive and
irrevocable option (the "Option") to purchase the Property (hereinafter defined)
free and clear of all liens and encumbrances except as specifically provided
otherwise in this Agreement.
(b) The parties agree that all deed, documentary stamp, transfer and
similar taxes, if any, in connection with the grant of the Option, if any, and
the closing with respect thereto, shall be paid by Optionor.
2. OPTION PAYMENTS. Simultaneously with the execution of this Option
Agreement, (i) Optionee has paid to Optionor Five Hundred Thousand ($500,000)
Dollars as the Option Fee (the "Option Fee") as the initial consideration for
the Option granted pursuant to this Agreement and (ii) the NS Member has paid
Seven Million and Forty Seven Thousand and No/100 ($7,047,000) Dollars to The
44th B.C. Realty Corp. ("BC"), a New York corporation that is the 99% Managing
Member of Optionor as consideration for certain rights granted to the NS Member
pursuant to the Operating Agreement, including, without limitation, the Interest
Purchase Option as provided in Section 10.07 of the Operating Agreement (the
"Purchase Right"; the Option Fee and the amount paid by the NS Member,
collectively, the "Option Payments").
3. TERM OF OPTION.
(a) The Option and all rights and privileges granted to Optionee hereunder
shall be effective as of the date hereof and, unless Optionee has duly exercised
the Option prior to the Option Termination Date (as hereinafter defined) as
provided in this Agreement,
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unless such failure to so exercise is due to a default by Optionor hereunder,
the Option shall expire and be of no further force and effect, it being
understood that, as provided in Section 4(a) below, the Closing (as hereinafter
defined) may take place subsequent to the Option Termination Date, at Optionee's
option.
(b) Notwithstanding anything contained herein to the contrary, the Option
shall terminate and expire upon any valid and legal termination of the Master
Lease pursuant to the terms thereof prior to the Option Exercise Date and, if
such valid and legal termination is subsequent to the Option Exercise Date,
shall survive as provided in Article 45 of the Master Lease.
(c) If the Optionee fails to pay any of the Option Payments when the same
shall become due and payable, and such failure shall continue for ten (10)
business days after notice thereof from Optionor, the Option shall terminate and
expire.
4. EXERCISE OF OPTION/TRANSFER OF PROPERTY.
(a) Subject to Section 10(d) hereof, the Option may be exercised at any
time during the period (the "Option Period") commencing on March 1, 2008 (the
"Option Exercise Date") and expiring fifteen (15) years thereafter (the "Initial
Option Termination Date") by Optionee delivering to Optionor a written notice
stating that Optionee elects to exercise the Option pursuant to the terms of
this Agreement (the "Option Notice"). The Option Notice shall set forth the
closing date (the "Closing Date") for the closing of the purchase of the
Premises (the "Closing"), which Closing may take place subsequent to the Option
Termination Date, at the option of Optionee, and may be extended as provided in
this Agreement, provided, however, if Optionor is ready, willing and able to
perform its obligations pursuant
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to the terms of this Agreement, the Closing shall occur no later than
one-hundred and twenty (120) days after the delivery of the Option Notice. The
Option Exercise Date may be accelerated as contemplated by Sections 10(d) and 14
of this Agreement.
(b) Notwithstanding the foregoing, if Optionee shall fail to deliver the
Option Notice prior to the Initial Option Termination Date (such date as
extended as provided in this Section 4(b) by the Reminder Notice, the "Option
Termination Date"), Optionor shall notify Optionee in respect of such failure
(such notice, the "Reminder Notice"). If Optionee does not send an Option Notice
within thirty (30) days after Optionee's actual receipt of the Reminder Notice,
Optionee shall be deemed to have not exercised its right to acquire the Property
pursuant to the Option. Other than as provided for pursuant to the terms of this
Agreement, Optionee shall have no right or obligation to acquire the Property
(hereinafter defined).
(c) On the Closing Date, subject to the performance of Optionee's
obligations set forth herein, Optionor shall transfer the Property, subject to
the Permitted Encumbrances (hereinafter defined), to Optionee, together with all
of Optionor's right, title and interest in, to and under:
(i) all easements, rights of way, privileges, appurtenances, strips,
gores, air rights, development rights and other rights pertaining to the
Premises, if any;
(ii) any land lying in the bed of any street, road, avenue, open or
proposed, public or private, in front of or adjoining the Premises or any
portion thereof, to the center line thereof, and any award to be made in
lieu thereof and in and
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to any award for damage to the Premises by reason of change of grade of
any street occurring after the date of execution and delivery of this
Agreement;
(iii) all Building Equipment (as defined in the Master Lease),
fixtures, furniture, furnishings and any other personal property owned by
Optionor and used in connection with the Premises (the "Personalty");
(iv) all of Optionor's right, title and interest in and to all
leases, licenses, and other occupancy agreements for the leasing of space
at the Premises (collectively, the "Leases"), the Master Lease and all
security deposits under the Leases (collectively, the "Security
Deposits");
(v) all of Optionor's right, title and interest in and to any
service, supply, security, maintenance, employment, management and all
other agreements or contracts (collectively, the "Contracts");
(vi) all of Optionor's rights, title and interest in and to every
right, title or benefit (xxxxxx or inchoate) in respect of the Premises,
including, without limitation (A) any and all escrows held by any
Mortgagee (as defined in the Master Lease); (B) any receivables; (C) any
claims in favor of the owner of the Premises (including, without
limitation, any rights in respect of title or casualty insurance proceeds
and condemnation awards); (D) all copyrights, trademarks, service names
and other marks and trade or business names, good will and other
proprietary rights and intangible property relating to the ownership, use,
operation and management of the Premises; and (E) all warranties,
guaranties, contract rights and miscellaneous rights in respect of the
Premises (collectively, the "Included Property");
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(vii) all certificates of occupancy and other documents, permits,
warranties, guarantees and approvals pertaining to the occupancy, use and
operation of the Premises (collectively, the "Permits"); and
(viii) all architectural, mechanical, engineering and other plans
and specifications relating to the Premises (collectively, the "Plans")
(the Land, the Building, the Personalty, the Leases, the Contracts, the
Permits, the Plans and the Included Property being hereinafter
collectively called the "Property").
5. OPTION EXERCISE PRICE; COSTS AND EXPENSES.
(a) The option exercise price for the purchase of the Property (the
"Option Exercise Price") shall be as set forth on Schedule A annexed hereto and
Optionee shall take the Property subject to any fee mortgages affecting the
Property that were obtained on behalf of Optionor by the Master Tenant pursuant
to Article 34 of the Master Lease. After the Option Exercise Price is fully paid
as provided on Schedule A, no Additional Payments (as such term is defined in
Section 10.07(e) of the Operating Agreement) shall be due and payable.
(b) If the NS Member shall exercise its rights pursuant to the terms of
Section 4.02 of the Operating Agreement, and BC (or its successor or assignee)
shall fail to pay all closing costs, taxes and charges (collectively, the "BC
Expenses") as contemplated by said Section 4.02, Optionee may withhold an amount
equal to any reasonable BC Expenses from the amount payable as the Option
Exercise Price hereunder and pay same to the appropriate governmental entity.
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(c) Other than as specifically provided herein, each party shall be
responsible for its own costs and expenses in connection with this Agreement and
the transactions contemplated hereby.
6. CERTAIN DEFINITIONS.
As used in this Agreement, the terms: (i) "business days" shall mean
such Mondays, Tuesday, Wednesdays, Thursdays and Fridays that do not fall on
Holidays; (ii) "Holidays" shall mean the following Jewish Holidays: Rosh
Hashanah (both days), Yom Kippur, Succot (first 2 days), Shmini Atzeret, Simchat
Torah, Passover (first 2 days and last 2 days), Shavuot (both days), as well as
New Year's Day, Xxxxxx Xxxxxx Xxxx, Xx. Day, President's Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and
Christmas, and any other days on which there is no regular United States postal
service and the New York Stock Exchange (or any successor thereto) is closed;
and (iii) "Person" (whether or not the initial letter is capitalized) shall mean
a natural person or persons, a partnership, a limited liability company or
partnership, a corporation, and any other form of business or legal association
or entity.
7. STATUS OF PROPERTY.
(a) At the Closing, the Property shall be transferred, and conveyed by
Optionor to Optionee, and Optionee shall accept same, free and clear of all
liens, encumbrances, claims, security interests and demands, subject only to the
following matters (the "Permitted Encumbrances"):
(i) any state of facts which an updated survey of the Property would
disclose as of the date hereof, subject only to those matters not caused or
created by Landlord;
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(ii) [intentionally deleted];
(iii) real estate and other taxes, water and sewer charges and other
taxes and assessments affecting the Property including any assessments payable
for or allocable to any period after the date of the Master Lease;
(iv) building restrictions and regulations in resolutions or
ordinances adopted by the Board of Estimate and Apportionment of the City of New
York, or any successor body, and all the amendments and additions thereto, if
any;
(v) present and future zoning laws, ordinances, resolutions and
regulations of the City of New York and all present and future ordinances, laws,
regulations and orders of all boards, bureaus, commissions and bodies of any
municipal, county, state or federal sovereigns now or hereafter having or
acquiring jurisdiction of the Premises and the use and improvement thereof, if
any;
(vi) revocable nature of the right, if any, to maintain vaults,
vault spaces, tunnels, basements and sub-basement spaces, areas, structures,
marquees or signs, beyond the building lines;
(vii) the Master Lease, the Leases, this Agreement and the Loan
Documents;
(viii) violations of law, ordinances, orders or requirements
("Violations") issued by any federal, state or municipal departments or
authority having jurisdiction;
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(ix) any other matter or thing affecting the property which Optionee
agrees to take subject to or waives in writing pursuant to the provisions of
this Agreement;
(x) any matters permitted by, caused or created at the request or
with the consent of Optionee or the Master Tenant or the Master Sublessee;
(xi) any matters permitted or created by the subtenants under the
Leases (the "Subtenants"); and
(xii) any exception set forth in Exhibit G attached hereto (the
"Additional Permitted Encumbrances").
8. TITLE INSURANCE; LIENS.
(a) Prior to the date hereof, (i) Optionee has ordered a title insurance
report and commitment for an Owner's title insurance policy from a title
insurance company (the "Title Company") and a copy of all title documents listed
therein (such report, and any updates or revisions thereto, are hereinafter
referred to collectively as the "Report"), and (ii) has furnished to Optionor's
counsel a copy of the Report.
(b) Optionee shall have the right at any time after the date hereof to
order an additional or updated examination of title to the Property (the
"Subsequent Title Report"). In the event that the Subsequent Title Report shall
disclose any title matters other than the Permitted Encumbrances (a "Title
Objection"), Optionee shall give Optionor written notice (the "Title Objection
Notice") of such Title Objection within five (5) business days after receipt of
a copy of the Subsequent Title Report.
(c) Optionor covenants and agrees to use diligent efforts to eliminate
such Title Objection. If Optionor is unable to eliminate such Title Objections
(or any other Title
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Objections which are subsequently reported by the Title Company), Optionee shall
be entitled to the remedies set forth in Section 17.
(d) Notwithstanding the foregoing, if such Title Objections may be removed
by a payment of money, Optionor shall promptly satisfy or bond same upon request
to do so by Optionee, in all events at Optionor's sole cost and expense. If the
Subsequent Title Report was ordered in connection with the Closing, Optionor
may, in lieu of satisfying any of the foregoing Title Objections, direct
Optionee to apply a portion of the Purchase Price to the satisfaction of such
Title Objections or require that appropriate adjustment be made to the balance
of the Purchase Price at Closing, provided that Optionor shall deliver to the
Title Company, at Closing, instruments in recordable form, which, in the opinion
of Optionee's Title Company will be sufficient to satisfy the matters objected
to by Optionee, together with the cost of recording or filing any such
instruments. In the alternative, Optionor may place in escrow with the Title
Company any amount (as well as any affidavits and other documentation) deemed
necessary by the Title Company in order to enable the Title Company to omit such
objections from the title policies to be delivered to Optionee and any lender at
the Closing, but only if the lender, if any, is amenable to doing so. Optionee
shall, if request is made by not later than five (5) business days prior to the
Closing Date, provide Optionor, at the Closing, with separate unendorsed
certified or bank checks, payable as directed by Optionor, in an aggregate
amount not exceeding the Option Exercise Price, less adjustments, to facilitate
the satisfaction of any such liens or encumbrances.
(e) If the Report discloses judgments, bankruptcies or other proceedings
or encumbrances against other persons having names the same as, or similar to
that of Optionor,
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Optionor shall deliver to the Title Company affidavits satisfactory to the Title
Company showing that such judgments, bankruptcies or other proceedings or
encumbrances are not against Optionor. Additionally, Optionor will deliver any
affidavits reasonably required by (and reasonably satisfactory to) the Title
Company in respect of any construction, maintenance and/or tenant improvement
work at the Premises that could give rise to mechanics' or materialmens' liens,
(ii) any Section 255 and 275 affidavits (the affidavits required of Optionor by
this Article 8 and any other affidavits reasonably required by the Title
Company, and (iii) any affidavits which are substantively similar to the
affidavits required by this Section 8(e) or which are customary in sales of
commercial property in New York City at the time of Closing, (the foregoing
affidavits, collectively, the "Affidavits").
9. OPTIONEE COVENANTS, REPRESENTATIONS AND WARRANTIES.
(a) Optionee represents and warrants to Optionor that the following
representations and warranties are true and correct as of the date hereof and
shall remain and be true and correct at all times during the term of this
Agreement through and including the Closing Date with the same force and effect
as if made at those times:
(i) The execution and delivery of this Agreement and the
consummation by Optionee of the transactions contemplated hereby (A) have been
duly authorized pursuant to the terms of Optionee's organizational documents and
(B) will not conflict with, or result in a breach of, any of the terms,
conditions and provisions of its organizational documents or any contract,
agreement or instrument to which it is a party or by which it is bound, or to
which it or any portion of its property is subject;
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(ii) Optionee has full power and authority to enter into this
Agreement and to perform all of Optionee's obligations hereunder and no further
action, approval or consent will be required in order to constitute this
Agreement as a binding and enforceable obligation of Optionee and the Person
(hereinafter defined) executing on behalf of Optionee has full power and
authority to act for and bind Optionee in respect thereof; and
(iii) Optionee is validly existing and in good standing in its state
of formation.
10. OPTIONOR REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Optionor represents and warrants to Optionee that the following
representations and warranties are true and correct as of the date hereof and
shall remain and be true and correct at all times during the term of this
Agreement through and including the Closing Date with the same force and effect
as if made at that time:
(i) The execution and delivery of this Agreement and the
consummation by it of the transactions hereunder (A) have been duly authorized
pursuant to the terms of Optionor's organizational documents and (B) will not
conflict with, or result in a breach of, any of the terms, conditions and
provisions of its organizational documents or any contract, agreement or
instrument to which it is a party or by which it is bound, or to which it or any
portion of its property is subject;
(ii) Optionor has full power and authority to enter into this
Agreement and to perform all of Optionor's obligations hereunder and no further
action or approval will be required in order to constitute this Agreement as a
binding and enforceable
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obligation of Optionor and the Person (hereinafter defined) executing on behalf
of Optionor has full power and authority to act for and bind Optionor in respect
thereof;
(iii) Its sole business or activity is the ownership of the Property
and activities incidental thereto. It does not own any material assets other
than the Property. Its assets are not commingled with the assets of any other
person or entity. It has not incurred any debt, secured or unsecured, direct or
contingent, including guarantees of any obligations other than the Loan. It is
not insolvent. It maintains its books, records and bank accounts separate and
apart from those of any other person or entity. It does not hold itself out to
be responsible for the debts of any other person or entity. It holds itself out
to the public as a legal entity which is separate and distinct from any other
entity;
(iv) Optionor is validly existing and in good standing in the City
and State of New York and is duly formed under the laws of the State of its
formation;
(v) There are no actions, suits or proceedings pending or, to the
knowledge of Optionor, threatened against or affecting Optionor; and
(vi) Optionor is not a "foreign person" within the meaning of
section 1445 of the United States Internal Revenue Code of 1986, as amended, and
the regulations issued thereunder.
(b) Optionor covenants and agrees that (except as contemplated by Article
34 of the Master Lease) it shall in no event have any right to (i) sell,
transfer, convey, lease, assign, encumber, mortgage, pledge, hypothecate ,
encumber or dispose of (directly or indirectly) (voluntarily or by operation of
law) all or any portion of the Property or any interest therein or portion
thereof (a "Transfer") (other than as may be legally required
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pursuant to a condemnation of the Property, provided the proceeds thereof are
applied in accordance with Article 18 of the Master Lease), (ii) modify or amend
the Loan or the Loan Documents, or (iii) modify or amend the Operating Agreement
of Optionor or transfer any membership interests in the Optionor, without the
prior consent of Optionee which may be withheld in Optionee's sole discretion.
Notwithstanding the foregoing, the Property and/or this Agreement may be
transferred or conveyed, without Optionee's consent, to or by the holder of the
Loan (or such holder's nominee or designee), in connection with any foreclosure
or other sale or transfer to enforce the lien of the Loan Documents, or any
transfer in lieu thereof. For purposes of this Section 10(b), a Transfer shall
be deemed to include any change in the ownership interests of BC, provided that
inter vivos or testamentary transfers or issuance of capital stock in BC to one
or more family members of Xxxxx Xxxxxxx, or trusts in which all of the
beneficial interest is held by one or more of such family members or a
partnership or limited liability company in which all the capital and profits
interests are held by such family members shall not be deemed a Transfer. As
used herein, "family members" shall be limited to the spouse, parents, children
and grandchildren of Xxxxx Xxxxxxx and their respective spouses or any entity
owned or controlled by any of them. Any Transfer in violation of this Section
10(b) shall be void ab initio.
(c) Optionor agrees that, from and after the date hereof through the
Closing Date, Optionor shall:
(i) maintain its books and records and bank accounts separate from
those of any other Person;
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(ii) maintain its assets in such a manner that it is not costly or
difficult to segregate, identify or ascertain such assets;
(iii) hold regular meetings, as appropriate, to conduct the business
of Optionor, and observe all other limited liability company formalities;
(iv) hold itself out to creditors and the public as a legal entity
separate and distinct from any other entity;
(v) prepare separate tax returns and financial statements, or if
part of a consolidated group, then it will be shown as a separate member of such
group;
(vi) allocate and charge fairly and reasonably any common employee
or overhead shared with affiliates and maintain a sufficient number of employees
in light of its contemplated business operations;
(vii) transact all business with affiliates on an arms'-length basis
and pursuant to enforceable agreements;
(viii) conduct business in its own name, and use separate invoices
and checks;
(ix) not commingle its assets or funds with those of any other
Person;
(x) not assume, guarantee or pay the debts or obligations of any
other person;
(xi) pay its own liabilities out of its own funds or in any manner
whatsoever purchase the Loan or any interest therein;
(xii) not acquire obligations or securities of its members;
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(xiii) not pledge its assets for the benefit of any other entity or
make any loans or advances to any entity, other than in connection with the
Loan;
(xiv) correct any known misunderstanding regarding its separate
identity;
(xv) intend to maintain adequate capital in light of its
contemplated business operations;
(xvi) maintain all required qualifications to do business in New
York;
(xvii) not cause or consent, directly or indirectly, to any action
which would cause or result in Bankruptcy (as such term is defined in the
Operating Agreement);
(xviii) not engage in any business or activity other than the
ownership of the Property and activities incidental to the development thereof;
(xix) not own any assets other than the Property;
(xx) not merge into or consolidate with any other entity nor
dissolve or terminate or liquidate, transfer or otherwise dispose of all or
substantially all or any material portion of its assets unless such resulting
entity or transferee is a single purpose entity and complies with the other
provisions of this section;
(xxi) preserve its existence as a limited liability company duly
organized, validly existing and in good standing (if applicable) under the laws
of Delaware, and shall not amend, modify, terminate or fail to comply with the
provisions of such entities organizational documents, if such amendment,
modification, termination or failure to comply would adversely affect the
ability of Optionor to perform its obligations hereunder;
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(xxii) not own any subsidiary or make any investment in any person
or entity;
(xxiii) not incur any debt, secured or unsecured, direct or
contingent (including guaranteeing any obligation) other than in connection with
the Loan; and
(xxiv) not become insolvent or fail to pay its debts as the same
become due and payable or permit the total amount of its liabilities (including
contingent liabilities) to exceed the total fair saleable value of its assets or
fail to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations; however, the foregoing shall not apply where
the fair market value of the Property has diminished for reasons other than any
action or inaction of Optionor.
(d) BC hereby covenants and agrees that it will (i) comply with all of its
obligations and agreements under the Operating Agreement; (ii) as managing
member of Optionor, cause Optionor to comply with all of the provisions of
Section 10(c) above; (iii) pay any and all taxes payable by it in connection
with the execution of, and transactions contemplated by, this Agreement; (iv)
not purchase or allow any Affiliate (as defined in the Operating Agreement) to
purchase the Loan or any interest therein; and (v) without in any way limiting
the generality of the foregoing, not permit or cause Optionor to terminate the
Master Lease other than pursuant to the terms thereof. Any default by BC in
respect of the foregoing obligations and by Optionor under Section 10(c) above
shall be deemed a material default by Optionor hereunder, provided, however, if
there is a default in respect of clauses (iii), (v), (xiv) and (xvi) of Section
10(c) above, such default shall not be deemed a material default
-18-
hereunder unless and until Optionee shall have notified Optionor in respect of
such default and Optionor shall have failed to cure such default within ten (10)
business days of receipt of such notice (any material default as provided in
this sentence, a "Material Breach of a Representation"). If there is a default
by either BC or Optionor in respect of the obligations in clause (v) of this
Section 10(d) or in Section 10(b) above, Optionee shall be entitled, in addition
to the other remedies set forth in Section 17(a), at Optionee's option and in
its sole discretion and at any time thereafter, to accelerate its right to
exercise the Option. In such event, the Option Exercise Date shall be the date
of such early termination or the date of such violation of Section 10(b), as the
case may be, and the Option Termination Date shall be determined by Optionee in
its sole discretion.
(e) The representations, warranties and covenants of Optionor and of BC as
set forth in this Section 10 and in this Agreement shall survive until the
Closing Date. Except as provided in Section 10(d) above in respect of Optionor's
right to accelerate the Option, if Optionor is in material breach of a
representation, warranty or covenant, Optionee, in its sole discretion, shall be
entitled to the remedies set forth in Section 17(a).
11. CONDITIONS PRECEDENT TO CLOSING.
Optionor shall be obligated to close under this Agreement on the Closing
Date only if:
(a) all of the representations and warranties of Optionee contained in
this Agreement are true and correct in all material respects as of the Closing
Date;
(b) Optionee has delivered to Optionor, at Closing, the items referred to
in Section 12(b) of this Agreement;
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(c) there is no continuing Event of Default under the Master Lease in
respect of Fixed Annual Rent or Additional Rent thereunder;
(d) Optionee has made or will make any payments required of Optionee under
this Agreement; and
(e) there has not been a valid and legal termination of the Master Lease
pursuant to the terms thereof prior to the Option Exercise Date.
12. DOCUMENTS AND OTHER ITEMS TO BE DELIVERED AT CLOSING. If the Option is
exercised, the following shall occur at the Closing:
(a) Optionor shall deliver or cause to be delivered the following
documents to Optionee at Closing:
(i) A duly executed and acknowledged Bargain and Sale Deed with
covenants against Grantor's Act (the "Deed") in recordable form, conveying fee
simple title to the Property to Optionee, subject only to the Permitted
Encumbrances;
(ii) New York State and New York City Transfer Tax Returns duly
executed and completed;
(iii) A duly executed certification as to its non-foreign status;
(iv) A Xxxx of Sale in respect of the Personalty, substantially in
the form of Exhibit C annexed hereto (no part of the Purchase Price shall be
deemed as consideration for the transfer of the Personalty);
(v) An Assignment of the Included Property, substantially in the
form of Exhibit D annexed hereto;
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(vi) An Assignment of Leases and Security Deposits, substantially in
the form of Exhibit E annexed hereto;
(vii) evidence that Judmart (as hereinafter defined) has been paid
in full (or a waiver and full release from Judmart) in respect of any brokerage
commissions, fees or other compensation which may be due and payable to Judmart;
and
(viii) Such other documents and instruments as (A) may be reasonably
necessary or desirable to further carry out the purposes of this Agreement or
(B) are customarily delivered for commercial real estate transactions in New
York City at the time of the Closing by the seller thereunder.
(b) Optionee shall deliver or cause to be delivered to Optionor the
following items and documents at Closing:
(i) New York State and New York City Transfer Tax Returns duly
executed and completed;
(ii) A duly executed officer's (or member's, as applicable)
certificate;
(iii) The Purchase Price and any other amounts due Optionor pursuant
to the terms of this Agreement and as landlord under the Master Lease; and
(iv) Such other documents and instruments as (A) may be reasonably
necessary or desirable to further carry out the purposes of this Agreement or
(B) are customarily delivered for commercial real estate transactions in New
York City at the time of the Closing by the purchaser thereunder.
(c) Each party shall be responsible for its respective costs and expenses
(including, without limitation, legal fees and due diligence costs) in
connection with the
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purchase of the Property, except that all deed, documentary, stamp, transfer,
and similar taxes in connection with the purchase of the Property shall be paid
by Optionor and, if Optionor shall fail to pay any and all such taxes at
Closing, Optionee shall have the right to pay same and deduct such amount from
the Option Exercise Price. Without in any way limiting the generality of the
foregoing, Optionee, Optionor and BC each covenant and agree that each such
party shall also be responsible for payment of all municipal, state or federal
income, inheritance, estate, succession, transfer or gift taxes of such party or
any corporate, franchise or other similar taxes imposed upon such party on
account of the transactions occasioned or contemplated by this Agreement.
13. DISCLAIMER; WAIVER OF CLAIMS. PRIOR TO THE DATE HEREOF, OPTIONEE HAS
HAD AN OPPORTUNITY TO EXAMINE CONDITIONS RELATING TO THE PROPERTY. EXCEPT AS
OTHERWISE SPECIFICALLY STATED IN THIS AGREEMENT, THE GRANT OF THE OPTION AND
SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS, WHERE IS, WITH
ALL FAULTS" BASIS.
14. DAMAGE AND DESTRUCTION; CONDEMNATION.
(a) Subject to the provisions of the Master Lease, if at any time prior to
the Closing Date, the Property shall be damaged or destroyed by fire or other
casualty, this Agreement shall continue and the parties' rights and obligations
shall not be affected thereby.
(b) (i) If at any time prior to the Closing Date, title to "materially all
of the Premises" (as defined in the Master Lease) shall be taken by the exercise
of the right of condemnation or eminent domain (a "Condemnation"), the party
with knowledge of such event
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shall promptly notify the other party; and Optionee's right to exercise the
Option (as provided in this Agreement) shall be deemed accelerated, except that
the Option Period shall be deemed to be a period commencing on the date of
delivery of the Option Notice, and further provided that the date set for
Closing in respect of such option exercise shall be the date that the
condemnation award is actually delivered to the Master Tenant, and the
provisions of Article 18 of the Master Lease shall otherwise apply.
(ii) if title to less than "materially all of the Premises" shall be
affected by a Condemnation, this Agreement shall continue and the parties'
rights and obligations hereunder shall not be affected thereby and shall be
governed by the provisions of the Master Lease.
(c) The provisions hereof shall constitute an express agreement to the
contrary with respect to, and shall supersede the provisions of, Section 5-1311
of the New York General Obligations Law.
15. BROKERAGE.
(a) Optionee warrants and represents to Optionor that Optionee has not
dealt with any broker or finder in connection with this transaction other than
Judmart Realty Corp. ("Judmart"). Optionee hereby agrees to indemnify and hold
Optionor harmless from and against any and all claims, demands, causes of
action, loss, costs and expenses (including reasonable attorneys' fees and
disbursements), or other liability arising from or pertaining to any brokerage
commissions, fees, or other compensation, which may be due to any broker, finder
or persons arising from any inaccuracy in the foregoing representation, warranty
and agreement.
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(b) Optionor warrants and represents to Optionee that Optionor has not
dealt with any broker or finder in connection with this transaction except for
Judmart who will be paid in full by Owner pursuant to a separate agreement at
Closing. Optionor hereby agrees to indemnify and hold Optionee harmless from and
against any and all claims, demands, causes of action, loss, costs and expenses
(including reasonable attorneys' fees and disbursements) or other liability
arising from or pertaining to Judmart or any brokerage commissions, fees, or
other compensation which may be due to any broker, finder or persons arising
from any inaccuracy in Optionor's foregoing representation, warranty and
agreement.
(c) The provisions of this Section 15 shall survive the Closing or earlier
termination of this Agreement.
16. ASSIGNMENT BY OPTIONEE.
(a) Subject to the terms and provisions of the Loan Documents, Optionee
may freely assign all or a portion of its rights under (i) the Option and (ii)
this Agreement by assignment either before or after the exercise of the Option.
Upon any such assignment, the assignee shall have all the rights and obligations
of Optionee hereunder and Optionee shall thereupon, automatically and without
the execution of further instruments or documents, be relieved and released of
and from all of Optionee's obligations hereunder and under the Master Lease.
(b) A condition to the effectiveness of any assignment is that (i) the
assignee shall assume the obligations of the assignor under this Agreement and
(ii) the assigning party shall give the other party notice of such assignment,
together with a fully executed counterpart
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of the instrument of assignment and assumption executed by the assigning party
and its assignee.
17. REMEDIES.
(a) If at any time Optionor has failed to maintain the status of title
pursuant to the terms of this Agreement on account of Optionor's failure to cure
a Title Objection, Optionee shall have the right (as determined by Optionee in
its sole discretion) to either (I) seek injunctive relief or invoke the remedy
of specific performance of Optionor's obligations hereunder and/or (II) cause
the Master Tenant to exercise its right to the "Extension Term" pursuant to
Article 40 of the Master Lease, Optionor agreeing that Optionee has no adequate
remedy at law. In addition, Optionee shall be entitled to the following
remedies, as determined by Optionee in its sole discretion:
(i) If such default occurs prior to the date originally scheduled
for the Closing and if such default can be cured by the payment of money and
Optionor has not made or provided for such payment in compliance with its
obligations under Sections 8(c) and 8(d) hereof within thirty (30) days of its
receipt of the Title Objection Notice, Optionee shall have the option to satisfy
or procure the discharge of same by bonding. In such event, Optionee shall
notify the Master Tenant and the Master Tenant shall be entitled to exercise its
right to Set-Off, pursuant to the terms of Article 38 of the Master Lease;
(ii) If the default occurs in connection with the Closing, and if
such default can be cured by the payment of money and Optionor has not made or
provided for such payment in compliance with its obligations under Sections 8(c)
and 8(d) hereof within thirty (30) days of its receipt of the Title Objection
Notice, Optionee shall be entitled to satisfy or
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procure the discharge of same by bonding and shall be entitled to deduct such
amount from the Option Exercise Price;
(iii) Optionee shall have the right to terminate this Agreement,
whereupon neither party shall have any further obligations hereunder; or
(iv) If Optionee is unable to cure or otherwise satisfy the Title
Objection as provided above, Optionee shall be entitled to place all future
Additional Payments into escrow with Optionor's counsel pursuant to the
provisions of Exhibit F hereof; Optionor shall use such funds to cure or
otherwise satisfy the Title Objection and shall only be entitled to the release
of such escrowed funds when satisfactory evidence of such cure or satisfaction
is delivered to Optionee, as more specifically provided in Exhibit F.
The aforesaid remedies are the sole and exclusive remedies of Optionee in
the event of a default by Optionor hereunder.
(b) If Optionee exercises the Option and all conditions precedent to
closing hereunder have been satisfied or, if waivable hereunder, waived by
Optionee in writing, and Optionee thereafter fails or refuses to perform its
obligations upon closing either hereunder Optionor shall be entitled, as its
sole and exclusive remedy, to retain the Option Fee as liquidated damages and to
terminate the Master Lease. Optionor hereby specifically waives the right to
specific performance.
18. FURTHER ASSURANCES. From time to time, each party hereto shall, within
five (5) Business Days after a request therefor by the other party and at such
party's sole cost and expense, furnish such additional consents and other
instruments and information as may be reasonably required to implement the
provisions of this Agreement and the
-26-
intentions of the parties or to confirm or perfect any existing right or one
that is to be created or transferred hereunder.
19. NOTICES. Any notice, request, demand, statement, authorization,
approval or consent made hereunder shall be in writing and shall be hand
delivered or sent by Federal Express or other reputable national courier service
(a "Courier"), or by postage pre-paid registered or certified mail, return
receipt requested, and shall be deemed given (i) when received or refused at the
following addresses if hand delivered or sent by Federal Express, or other
reputable national courier service, and (ii) three (3) business days after being
postmarked and addressed as follows if sent by registered or certified mail,
return receipt requested:
If to Optionee:
PoleStar Forty-Fourth Optionee LLC
c/o NorthStar Capital Partners, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
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If to Optionor:
The 44 BC Realty LLC
c/o Prince Management Corp.
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxxx & Xxxxx, P.C.
000 Xxxxx-Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
Each party may change the address to which a notice must be sent or designate
additional parties to receive a copy of a notice, by notice to the other parties
given in the manner herein provided at least fifteen (15) days before such
change is to become effective. As a matter of convenience only, notices may be
sent by telecopier, provided a hard copy is delivered as stated above, but the
delivery by telecopy shall not accelerate the date delivery of a notice is
deemed to have been received.
20. APPORTIONMENTS. The parties acknowledge and agree that there shall be
no apportionment at Closing, except for the Fixed Annual Rent under the Master
Lease.
21. BINDING EFFECT. This Agreement may not be changed or terminated orally
nor shall any provision hereof be waived orally. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their successors and
permitted assigns.
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22. RECORDING.
(a) The parties shall, simultaneously with the execution hereof, execute a
memorandum of this Agreement substantially in the form attached hereto as
Exhibit B and Optionee may record same in the Office of the Register of the City
of New York, County of New York and appropriate UCC-1 financing statements.
Additionally, memoranda (the "Renewal Memoranda of Option") in the same form as
was executed upon the execution and delivery of this Agreement will be filed
from time to time following the date hereof such that record evidence of
Optionee's rights hereunder is continuously maintained until the termination of
this Agreement as provided in clause (i) of Section 27 hereof. In connection
therewith, the Renewal Memoranda of Option will be held in escrow pursuant to
the provisions of Exhibit F hereof by Optionee's counsel, placed of record as
may be necessary to preserve record notice in accordance with applicable law by
Optionee's counsel and returned to Optionee upon termination of this Agreement,
to the extent any remain unutilized. In addition, a memorandum of termination of
Option will also be held in escrow pursuant to the provisions of Exhibit F and
recorded upon the earlier to occur of (i) the valid and legal termination of
this Agreement pursuant to the terms hereof and (ii) delivery of title to the
Property to Optionee pursuant to the terms hereof.
(b) Optionor hereby constitutes and appoints Optionee as its true and
lawful representative and attorney-in-fact in its name, place and stead to make,
execute, sign, deliver and, if required, cause to be filed of record any other
document that may be required by applicable law in addition to, or in lieu of,
the Renewal Memoranda of Option in order to maintain and evidence of record
Optionee's rights hereunder.
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23. CHOICE OF LAW. This Agreement shall be governed by and construed under
the internal laws of the State of New York.
24. SURVIVAL. Except to the extent specifically provided herein, none of
the obligations under this Agreement shall survive the Closing.
25. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall constitute the same instrument.
26. INVALIDITY OF PARTICULAR PROVISION. If any term of this Agreement or
the application thereof to any person or circumstance 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 invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and be enforced to the fullest extent
permitted by law, with the parties hereto covenanting nonetheless to negotiate
in good faith, in order to agree the terms of a mutually satisfactory provision
to be substituted for the term or provision which is void or unenforceable.
27. TERM OF AGREEMENT. Notwithstanding anything herein to the contrary,
this Agreement will lapse and terminate, if not sooner lapsed or terminated in
its entirety in accordance with the terms of this Agreement, on the earlier to
occur of (i) one-hundred years from the date hereof and (ii) the twenty-first
(21st) anniversary of the date of the death of the last to die of the children
(whether natural or adopted) of Rabbi Xxxxxxx Xxxxxxxxxx alive on the date
hereof, their children's children (whether natural or adopted)
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alive on the date hereof and their children's children (whether natural or
adopted) alive on the date hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
OPTIONOR:
The 44 BC Realty LLC
By: The 44th B.C. Realty Corp.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Signature Page for Option Agreement to be continued
OPTIONEE:
POLESTAR FORTY-FOURTH
OPTIONEE LLC
By: /s/ W. Xxxxxx Xxxxxxx
-----------------------------
Name: W. Xxxxxx Xxxxxxx
Title: President
Additional Signature Page for Option Agreement
EXHIBIT A
Description of Land
EXHIBIT B
Memorandum of Option Terms and Provisions
shall include, without limitation:
1. Grant of Option
2. Term (including rights to accelerate Option)
3. Prohibition on Transfer
4. Remedies on Default
5. Separateness Covenants
6. Right to Record Extension
EXHIBIT C
Xxxx of Sale
EXHIBIT D
Form of Assignment of Included Property
The assignment will cover all of the tangible and intangible property in,
on, attached to, appurtenant to, or used in the operation or maintenance of the
Land or the Building and shall include, without limitation, the following:
1. the Permits in Optionor's possession and all of Optionor's right, title
and interest in and to all other Permits.
2. all Plans, Contracts and Records in Optionor's possession and all of
its right, title and interest in and to any other Plans, Contracts and Records.
3. all of Optionors' right, title and interest in and to all trademarks,
logos, trade and business names, good will and other proprietary rights and
intangible property relating to the ownership, use, operation and management of
the Property (collectively, the "Intangible Property").
EXHIBIT E
Assignment of Leases and Security Deposits
EXHIBIT F
Escrow Provisions
EXHIBIT G
Additional Permitted Encumbrances
Schedule B of the title policy issued by Lawyers Title Insurance
Corporation delivered to Optionee on the date hereof in respect of this
Agreement, which exceptions specifically relate to the title exceptions
affecting the Premises.
Schedule 1
Leases, Security Deposits; Rent Roll
Schedule 2
Contracts
Schedule 3
Permits
Schedule 4
Insurance Policies
Schedule A
Option Exercise Price Schedule
