-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VvAN1mKSGYYrBdNpZMdimivhblLGSkqynFC2z/hrWewPbVVn5gAXnDB/ceU8gn+Z L91Tdq9UlQOJMEJvAkrGtw== 0000905148-00-000122.txt : 20000202 0000905148-00-000122.hdr.sgml : 20000202 ACCESSION NUMBER: 0000905148-00-000122 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000114 ITEM INFORMATION: FILED AS OF DATE: 20000114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RECKSON ASSOCIATES REALTY CORP CENTRAL INDEX KEY: 0000930548 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 113233650 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13762 FILM NUMBER: 508108 BUSINESS ADDRESS: STREET 1: 225 BROADHOLLOW RD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 5166946900 MAIL ADDRESS: STREET 1: 225 BROADHOLLOW RD CITY: MELVILLE STATE: NY ZIP: 11747 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT ------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 14, 2000 RECKSON ASSOCIATES REALTY CORP. and RECKSON OPERATING PARTNERSHIP, L.P. (EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS CHARTER) Reckson Associates Realty Corp. Reckson Associates Realty Corp. Maryland 11-3233650 Reckson Operating Partnership, L.P. Reckson Operating Partnership, L.P. Delaware 11-3233647 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER ID NUMBER) INCORPORATION OR ORGANIZATION) 1-13762 (COMMISSION FILE NUMBER) 225 Broadhollow Road 11747 Melville, New York (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (516) 694-6900 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. This Current Report on Form 8-K is being filed to refile certain exhibits previously filed as exhibits to the Company's Current Reports on Form 8-K, filed June 25, 1999 and October 25, 1999. (C) EXHIBITS 10.1 Contract of Sale between 54-55 Street Company and Reckson Operating Partnership, L.P. 10.2 Agreement of Purchase and Sale between NBBRE-919 Third Avenue Associates, L.P. and Reckson Operating Partnership, L.P. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RECKSON ASSOCIATES REALTY CORP. By: /s/ Michael Maturo --------------------------- Michael Maturo Executive Vice President and Chief Financial Officer RECKSON OPERATING PARTNERSHIP, L.P. By: Reckson Associates Realty Corp., its General Partner By: /s/ Michael Maturo --------------------------- Michael Maturo Executive Vice President and Chief Financial Officer Date: January 14, 2000 EX-10.1 2 Exhibit 10.1 CONTRACT OF SALE BETWEEN 54-55 STREET COMPANY, AS SELLER, AND RECKSON OPERATING PARTNERSHIP, L.P., AS PURCHASER DATED AS OF OCTOBER 15, 1999 TABLE OF CONTENTS ----------------- Page ---- GLOSSARY...................................................................iii SECTION 1. Purchase and Sale of Premises..................................1 SECTION 2. Purchase Price; Downpayment....................................1 SECTION 3. Closing........................................................5 SECTION 4. Termination Option.............................................5 SECTION 5. Title Exceptions...............................................6 SECTION 6. Failure of Seller or Purchaser to Perform......................7 SECTION 7. Representations and Warranties of Seller and Purchaser.........8 SECTION 8. Inspection of the Premises....................................21 SECTION 9. Violations Affecting the Premises.............................22 SECTION 10. Destruction, Damage or Condemnation Affecting the Premises....23 SECTION 11. Seller's Closing Obligations..................................25 SECTION 12. Purchaser's Closing Obligations...............................28 SECTION 13. Apportionments and Adjustments; Closing Costs.................30 SECTION 14. Operation of Premises.........................................35 SECTION 15. Broker........................................................38 SECTION 16. Notices.......................................................38 SECTION 17. Limitation on Survival of Representations, Warranties and Obligations...................................................40 SECTION 18. Prohibition of Recording......................................40 SECTION 19. Miscellaneous.................................................40 EXHIBITS -------- Exhibit "A" Legal Description of Land Exhibit "B" Certain Permitted Exceptions Exhibit "B-1" Title Letter Exhibit "C" Leases Exhibit "D" Minskoff Lease Exhibit "E" Lease Defaults, Delinquencies and Rent Roll Exhibit "F" Security Deposits Exhibit "G" Tenant Work Exhibit "H" Personal Property and Security Agreements Exhibit "I" Brokerage Agreements and Mendik Management Agreement Exhibit "J" Curtain Wall Agreement and Sidewalk Bridge Agreement Exhibit "K" Litigation Exhibit "L" Environmental Exhibit "M" Building Employees Exhibit "M-2" Union Employees Exhibit "N" Pending Tax Proceedings Exhibit "O" Form of Deed Exhibit "P" Form of Bill of Sale Exhibit "Q" Form of Assignment and Assumption Agreement Exhibit "R Form of General Assignment and Assumption Agreement Exhibit "S" Form of Tenant Notice Exhibit "T" Non-Foreign Status Affidavit Exhibit "U" Form of Tenant Estoppel Exhibit "U-1" Form of MTA Estoppel Exhibit "V" Service Contracts Exhibit "W" Form of Hearst Letter of Credit Exhibit "X" The License Agreement Exhibit "Y" Mendik Commission Agreement Exhibit "Z" Tax Escrow Agreement Exhibit "ZZ" Commencement Date Schedule Exhibit "ZZZ" Lease Clarification Agreement (Burberry) Schedule "1" Chase Monthly Rent Schedule "2" Form of Legal Opinion Schedule "3" Curtain Wall Consent Letter Schedule "4" Operating Units Representations Schedule "5" Mannor Corp./Threadtex Rider Schedule "6" New York Life Insurance Company Letter GLOSSARY -------- Page ---- ADA.........................................................................12 Agreement....................................................................1 Arrearages and Unpaid Escalations Statement.................................25 Authorized Representatives..................................................21 Broker......................................................................15 C&W.........................................................................21 Casualty Termination Notice.................................................23 Chase.......................................................................19 Chase Funds.................................................................19 Chase Monthly Rent..........................................................19 Closing......................................................................5 Closing Date.................................................................5 Commencement Date...........................................................36 Cured Estoppels.............................................................26 Deed........................................................................25 Demand.......................................................................4 Downpayment..................................................................1 Environmental Laws..........................................................13 Escrow Account...............................................................2 Escrow Funds.................................................................2 Escrow Holding Account.......................................................1 Escrowee.....................................................................2 Excluded Tenants............................................................26 General Assignment and Assumption...........................................25 Hazardous Materials.........................................................13 Hearst Tenant................................................................2 Holdback Deductible.........................................................16 Improvements.................................................................1 Indemnify...................................................................22 Land.........................................................................1 Lease Assignment and Assumption.............................................25 Losses......................................................................22 New Lease...................................................................35 New Lease Expenses..........................................................35 Non-Termination Commission..................................................34 Non-Voluntary Liens..........................................................6 Notice......................................................................44 Overage Rent................................................................32 Permitted Exceptions.........................................................6 Premises.....................................................................1 Purchase Price...............................................................1 Purchaser....................................................................1 Purchaser's Demand...........................................................4 Renewal and Expansion Commissions...........................................34 rental......................................................................30 rents.......................................................................30 Representations and Warranties Holdback.....................................15 Restoration Cost............................................................23 Satisfactory Tenant Estoppel................................................26 Scheduled Closing Date.......................................................5 Section 7 Cure..............................................................14 Section 7 Cure Period.......................................................14 Security Deposits...........................................................25 Seller.......................................................................1 Seller and its Representatives..............................................13 Seller's Breach.............................................................14 Seller's Demand..............................................................3 Seller's Estoppel...........................................................26 Seller's Principal..........................................................41 Seller's Section 7 Cure Notice..............................................14 Service Contracts...........................................................36 SPE.........................................................................43 Suite 1802 Tenant...........................................................32 Surrender Agreements.........................................................2 Surrender Period.............................................................2 Taking......................................................................24 Tenant Estoppel.............................................................26 Termination Option...........................................................5 Unit Election...............................................................43 Violations..................................................................22 Voluntary Liens..............................................................6 Warranties Holdback Account.................................................16 Warranties Holdback Funds...................................................16 Warranties Holdback Termination Date........................................18 CONTRACT OF SALE CONTRACT OF SALE (the "Agreement"), dated as of October 15, 1999, between 54-55 STREET COMPANY, a joint venture organized under the laws of the State of New York, having an address at 1350 Avenue of the Americas, New York, New York 10019 ("Seller"), and RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited partnership having an address at c/o Reckson Associates Realty Corp., 10 East 50th Street, 29th Floor, New York, New York 10022 ("Purchaser"). W I T N E S S E T H : - - - - - - - - - - WHEREAS, Seller desires to sell the Premises (as hereinafter defined) to Purchaser, and Purchaser desires to purchase the Premises from Seller, upon the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. PURCHASE AND SALE OF PREMISES. Subject to and in accordance ----------------------------- with the provisions of this Agreement, Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, all of Seller's right, title and interest in and to the following: (a) the real property described on Exhibit "A" annexed hereto and made a part hereof (the "Land"), (b) the building and other improvements situated on the Land (collectively, the "Improvements"), (c) any land lying in the bed of any street or highway in front of or adjoining the Land to the center line thereof, (d) any appurtenances to the Land or the Improvements, and (e) to the extent owned by Seller, the fixtures, equipment and other personal property attached or appurtenant to the Improvements on the date hereof and/or to the extent located on the Premises, used in connection with the ownership, operation and management of the Premises (the items enumerated in clauses (a)-(e) above being hereinafter collectively referred to as the "Premises"). SECTION 2. PURCHASE PRICE; DOWNPAYMENT. --------------------------- 2.1. The aggregate purchase price to be paid by Purchaser to Seller for the Premises (the "Purchase Price") is ONE HUNDRED TWENTY-SIX MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($126,500,000.00), subject to adjustment as provided in Section 2.2(d), which amount shall be payable in accordance with the further provisions of this Section 2. 2.2. (a) Simultaneously with the execution and delivery of this Agreement, Purchaser shall deliver to Escrowee (as hereinafter defined), by wire transfer in immediately available federal funds to Citibank, N.A., 153 East 53rd Street, New York, New York 10043, Account Name - Gibson, Dunn & Crutcher LLP, Account Number - 43355282, ABA Number 021-000-089 (the "Escrow Holding Account"), the amount of SIX MILLION AND 00/100 DOLLARS ($6,000,000.00) as a downpayment (the "Downpayment") on account of the Purchase Price. (b) The Downpayment, together with all interest earned thereon, hereinafter collectively shall be referred to as the "Escrow Funds." Escrowee shall transfer and deposit all Escrow Funds from the Escrow Holding Account to the separate escrow account ("Escrow Account") referred to below and shall thereafter hold and disburse the Escrow Funds in accordance with the provisions of Section 2.3 hereof. As used in this Agreement, the term "Escrowee" shall mean and refer to Gibson, Dunn & Crutcher LLP. (c) At the Closing, Purchaser shall (i) pay to Seller the amount of ONE HUNDRED TWENTY-FOUR MILLION and 00/100 DOLLARS ($124,000,000.00), plus any Additional Purchase Price which is payable pursuant to Section 2.2(d), less the amount of the Downpayment actually delivered by Purchaser to Escrowee (less any funds used by Seller for restoration and not replaced by Purchaser pursuant to Section 2.3(d) hereof), and less the amount of the holdback provided for in Section 7.7 hereof, further subject to apportionments and other adjustments made in accordance with the terms of Section 13 and Section 14 hereof, (ii) pay the amount of the holdback provided for in Section 7.6 hereof to the Warranties Holdback Escrowee, which subject to the terms and conditions set forth in Section 7.6 hereof, shall be paid to Seller on account of the balance of the Purchase Price not later than nine (9) months after the Closing (except for the Remy Amerique Commission Funds (as defined herein) which subject to the terms and conditions set forth in Section 7.6 hereof, shall be paid to Seller not later than December 31, 2000 as provided below), and (iii) direct Escrowee to deliver to Seller the Escrow Funds. (d) The Purchase Price shall be increased above the amount of $126,500,000.00 in the amount hereinafter set forth (the "Additional Purchase Price") at such time as Seller delivers to Purchaser, or Purchaser obtains, at or prior to Closing or within one (1) year after the Closing ("Surrender Period"), one or more written agreements ("Surrender Agreements") by the current tenant ("Hearst Tenant") under that certain Lease Agreement dated as of August 7, 1990 between Seller as Landlord and the Hearst Corporation as tenant (as amended from time to time, the "Hearst Lease") in which the Hearst Tenant unconditionally agrees to surrender within the Surrender Period, subject to postponements for force majeure, some or all of the space ("Hearst Space") occupied by the Hearst Tenant (but not less than one-half (1/2) of a floor nor more than two (2) full floors without Purchaser's prior written consent to be granted or withheld in Purchaser's sole and absolute discretion). The Additional Purchase Price shall be in the amount of ONE MILLION DOLLARS ($1,000,000.00) for each full floor (pro rata for portions of a floor as aforesaid), as specified in the Surrender Agreements, up to and including a maximum Additional Purchase Price of Two Million Dollars ($2,000,000.00). At Closing, Purchaser shall pay the amount of that portion of the Additional Purchase Price (if any) required hereunder with respect to all Surrender Agreements delivered at that time (if any), and Purchaser shall deliver to Seller at the Closing as security for Purchaser's obligation to pay any Additional Purchase Price as the same may become due an irrevocable letter of credit ("Hearst LOC") in the amount of (i) $2,000,000.00 less (ii) that portion of the Additional Purchase Price paid at the Closing (if any). The Hearst LOC shall be in the form of Exhibit W annexed hereto and made a part hereof, and shall comply with the following: (A) The term of the Hearst LOC shall be six (6) months from and after the date of Closing. The LOC shall be issued by and drawn on The Chase Manhattan Bank or other bank reasonably acceptable to Seller and shall be presentable for payment in New York City. (B) It shall be payable at sight in increments of $1,000,000 for each full floor (pro rata for portions of a floor as aforesaid) of the Hearst Space required to be surrendered, upon presentation of (I) Seller's sworn affidavit that Seller is entitled to the amount set forth therein, and (II) specifying the portion of the Hearst Space to be surrendered pursuant to the attached executed Surrender Agreement (showing copies delivered simultaneously to Purchaser). Notwithstanding any expiration of or failure to draw on the Hearst LOC, Purchaser shall remain obligated to pay the Additional Purchase Price as provided herein. At all times from and after the date hereof through the Surrender Period, to the extent Hearst desires to surrender any of the Hearst Space, Seller and Purchaser shall jointly negotiate with Hearst to obtain a surrender of the Hearst Space to maximize the space to be surrendered, and neither Seller nor Purchaser shall contact or communicate with the Hearst Tenant (or any parent or affiliate) or any agent or representative thereof ("Hearst Party"), directly or indirectly, concerning (x) any extension, renewal, termination or surrender of the Hearst Lease, or (y) any amendment or modification of the Hearst Lease related to or which might materially and adversely affect the surrender of any Hearst Space, without the prior written consent of the other. If either Seller or Purchaser shall receive any communication from any Hearst Party concerning the Hearst Space or Hearst Lease during the Surrender Period, it shall promptly make full disclosure thereof to the other party. (e) Except as otherwise provided for in this Agreement, all monies payable to Seller by Purchaser pursuant to this Agreement, shall be paid by wire transfer in immediately available federal funds to an account or accounts designated in writing from time to time by Seller. 2.3. (a) Escrowee shall hold the Escrow Funds in escrow in an interest-bearing account (or as otherwise agreed in writing by Seller, Purchaser and Escrowee) in a New York Clearing House Bank or in a nationally recognized "money fund" (the "Escrow Account") until the Closing or sooner termination of this Agreement and shall pay over or apply the Escrow Funds in accordance with the further provisions of this Section 2.3. The party which receives the interest earned on the Downpayment shall pay all income taxes owed in connection therewith. The employer identification numbers of Seller and Purchaser are set forth on the signature page hereof Escrowee shall not be liable to Purchaser or Seller for any loss occasioned by any deposit of the Escrow Funds made in accordance with this Section 2.3. (b) At the Closing, the Escrow Funds shall be paid by Escrowee to Seller and Purchaser shall receive a credit against the Purchase Price equal to the sum of the Escrow Funds. (c) Subject to, and following in compliance with, the provisions of Section 2.3(e) hereof, Escrowee shall deliver to Seller the Escrow Funds at the expiration of ten (10) business days following Escrowee's receipt of Seller's written demand ("Seller's Demand") for the Escrow Funds stating that Purchaser has defaulted in the performance of Purchaser's obligations under this Agreement and specifying such default in reasonable detail or that Seller is entitled to use the Escrow Funds to restore the Premises as provided in Section 8.2(b) hereof (it being understood and agreed that (i) Seller shall have no obligation to restore the Premises, and (ii) to the extent Seller uses all or any portion of the Escrow Funds to restore the Premises, Purchaser shall promptly pay to Escrowee an amount equal to the Escrow Funds used to restore the Premises). Simultaneously with Seller's delivery of Seller's Demand to Escrowee, Seller shall deliver a copy of Seller's Demand to Purchaser. (d) Subject to, and following in compliance with, the provisions of Section 2.3(e) hereof, Escrowee shall deliver to Purchaser the Escrow Funds at the expiration of ten (10) business days following Escrowee's receipt of Purchaser's written demand ("Purchaser's Demand") therefor stating in reasonable detail that (i) the Closing did not occur on the Scheduled Closing Date (as hereinafter defined), or on such later date to which the Closing shall have been adjourned, as a result of Seller's inability or refusal to convey title to the Premises in accordance with the provisions of this Agreement, or (ii) Purchaser has properly terminated this Agreement in accordance with the provisions hereof. Simultaneously with Purchaser's delivery of Purchaser's Demand to Escrowee, Purchaser shall deliver a copy of Purchaser's Demand to Seller. (e) If Escrowee receives either Seller's Demand or Purchaser's Demand (individually, a "Demand") pursuant to and in accordance with Section 2.3(c) or (d) hereof, as the case may be, then, in such event, prior to releasing the Escrow Funds, Escrowee shall deliver a copy of Seller's Demand or Purchaser's Demand, as the case may be, to the non-demanding party within five (5) business days after receipt thereof by Escrowee. If Escrowee shall not have received a written objection to the proposed payment by the close of business on the tenth (10th) business day following the date of Seller's Demand or Purchaser's Demand, as the case may be, then, in such event, Escrowee is hereby authorized and directed to make the payment set forth in such Demand on the eleventh (11th) business day following the date of such Demand. If Escrowee shall have received a written objection from either party before such payment, then, in such event, Escrowee shall continue to hold the Escrow Funds until otherwise directed by written instructions from both of the parties hereto or by a final unappealable judgment of a court of competent jurisdiction; provided, however, that Escrowee shall have the right, at any time, to deposit the Escrow Funds with any court of competent jurisdiction and thereby be relieved and discharged of any further obligations or liability under this Agreement. Escrowee shall give written notice of any such deposit to Seller and Purchaser. Escrowee shall be entitled to rely upon the authenticity of any signature and/or the validity of any writing received by Escrowee pursuant to, or otherwise relating to, this Agreement. Any writing signed by any two (2) of the "parties of the first part" of Seller, on behalf of Seller, shall be sufficient to bind Seller, and Escrowee shall be entitled to rely thereon. The "parties of the first part" of Seller are Marjorie Minskoff Schleifer (whose official successor as such party of the first part is Jean Minskoff Grant), Myron A. Minskoff (whose official successor as such party of the first part is Sara Minskoff Grant), and the Estate of Jerome Minskoff (whose co-executors are Patricia Minskoff and United States Trust Company of New York). (f) The parties acknowledge and agree that (i) Escrowee, in its capacity as the holder of the Escrow Funds hereunder, is acting solely as a stakeholder at the parties' request and for their convenience; (ii) although Escrowee, in its capacity as attorney, acts as the attorney for Seller in connection with the transactions contemplated herein, Escrowee shall not be deemed to be the agent of either of the parties hereto as holder of the Escrow Funds (provided, however, that the parties hereto acknowledge and agree that (x) Purchaser, by its execution and delivery of this Agreement, has pledged to Seller the Escrow Funds as security for Purchaser's obligations hereunder, (y) Purchaser hereby grants to Seller a first priority lien on, and security interest in, the Escrow Funds, and (z) Escrowee shall be deemed to be Seller's agent for the purposes of such pledge and grant of security interest); (iii) any conflict of interest that may exist because of Escrowee's representation of Seller hereunder as attorney and/or acting as agent with respect to said pledge and grant of security interest is hereby waived; and (iv) Escrowee shall not be liable to either of the parties hereto or to any third-party for any act or omission on its part as Escrowee unless due to Escrowee's gross negligence or willful misconduct. Seller and Purchaser, jointly and severally, shall indemnify, defend and hold harmless Escrowee from and against any and all losses, liabilities, costs, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) which may be incurred or suffered by Escrowee in connection with the performance of Escrowee's duties hereunder, excepting Escrowee's gross negligence or willful misconduct. As between Seller and Purchaser, the party responsible for the acts or omissions giving rise to the foregoing indemnity obligation, shall be liable to the other party for contribution or reimbursement. SECTION 3. CLOSING. ------- 3.1. (a) The closing of the transaction contemplated by this Agreement (the "Closing") shall occur on November 30, 1999 (the "Scheduled Closing Date"), or on such earlier date as Purchaser and Seller shall mutually agree upon, subject to adjournment as hereafter provided; provided, however, notwithstanding any provision of this Agreement to the contrary, in no event shall the Closing be adjourned under any provision of this Agreement to a date later than January 31, 2000. The Closing shall occur at the offices of Seller's attorney, Gibson, Dunn & Crutcher, LLP, at 200 Park Avenue, New York, New York 10166 at 10:00 a.m. on the Scheduled Closing Date or at such other time or place as shall be agreed upon by the parties. The date on which the Closing shall actually occur is referred to herein as the "Closing Date". (b) In addition to Seller's rights to adjourn the Closing set forth elsewhere in this Agreement, each party hereto shall have the one-time right to adjourn the Scheduled Closing Date (as theretofore adjourned) for up to seven (7) days in the aggregate. (c) Provided that Seller has delivered to New York Life Insurance Company ("New York Life") the letter with the same substance as the form attached hereto as Schedule 6 on or before October 22, 1999, Seller shall have the right to postpone the Closing Date up to the date (the "60-Day Date") that is 60 days after the delivery to New York Life of such letter, if so required by New York Life, provided that the Closing Date shall not be extended beyond the 60-Day Date as a result of this Section 3.1(c). SECTION 4. TERMINATION OPTION. ------------------ 4.1. For the purposes of this Agreement, the term "Termination Option" shall mean the termination of this Agreement by Purchaser pursuant to any express right of termination granted to Purchaser herein, which Termination Option shall be exercised by the giving of a written notice of termination from Purchaser to Escrowee as provided in the applicable provisions of this Agreement. Upon the proper exercise of the Termination Option by Purchaser, Purchaser shall be entitled to the Escrow Funds, subject to the provisions of Section 2.3 and Section 8.2 hereof, and this Agreement shall be deemed terminated automatically and of no further force or effect and neither party hereto shall have any further rights or obligations hereunder, without the necessity for any further notice, instrument or document or action by or between either of the parties; provided, however, that the indemnities contained in Section 8.2 and Section 15 hereof shall survive any such termination, together with all other indemnities, representations, warranties and obligations which are specifically provided herein to survive any such termination, in each case for a period of 9 months from the date of termination. SECTION 5. TITLE EXCEPTIONS. ---------------- 5.1. At the Closing, provided that neither Purchaser nor Seller has terminated this Agreement pursuant to the terms hereof, Seller shall transfer title to the Premises to Purchaser pursuant to the Deed (as hereinafter defined), subject only to the following (the "Permitted Exceptions"): (a) the list of items designated in the pro forma title policy issued by Commonwealth Land Title Insurance Company ("Commonwealth") which are set forth on Exhibit "B" annexed hereto and made a part hereof (provided that the actual title policy may be issued by Commonwealth, First American Title Insurance Company, or Chicago Title Insurance Company) [collectively, the "Title Insurer"]; (b) the Violations, if any, referred to in Section 9 hereof; and (c) all leases and tenancies (as tenants only) affecting the Premises described on Exhibit "C" annexed hereto and made a part hereof. 5.2. Seller shall, on or prior to the Closing, pay, discharge or remove of record or cause to be paid, discharged or removed of record, at Seller's expense, all of the following items: (a) the items listed in the letter (the "Title Letter") addressed to Seller from Title Insurer set forth on Exhibit "B-1; (b) any encumbrances ("Voluntary Liens") which Seller has granted, suffered or allowed to be placed upon the Premises, including without limitation mechanics' liens and federal, state and municipal tax liens against the Seller which are other than Permitted Exceptions (other than those permitted to be created by tenants under their leases); provided, however, that a lien or encumbrance created by a tenant that is not permitted under its respective lease shall not be deemed a Voluntary Lien; and (c) any other encumbrances ("Non-Voluntary Liens") placed on the Premises which are not (I) Voluntary Liens or (II) Permitted Exceptions or (III) items listed in the letter referred to in Section 5.2(a); provided that Seller shall not be obligated to spend more than the aggregate amount of $250,000.00 to omit or satisfy or discharge (or provide a credit for the funds necessary to accomplish the same) Non-Voluntary Liens. Without limiting the foregoing, Seller shall use its best efforts to cause the holder of any mortgages encumbering the Premises to assign said mortgages to Purchaser's designee or Lender without charge to Purchaser, provided that Seller shall not be required to incur any costs, fees or expenses nor to commence any proceedings or litigation in connection therewith, and in no event shall delivery of such assignment(s) constitute a condition to the Closing. 5.3. Notwithstanding any provision contained herein to the contrary, no defect or exception to title shall be deemed a failure of Seller's obligations entitling Purchaser to exercise the Termination Option which Seller shall, at its discretion, (a) elect to cure by notice to Purchaser, and which shall have been cured at or before the Closing or (b) cause the Title Insurer to omit from the final title insurance policy. Seller shall have no obligation to expend any funds or otherwise to cure any title defects, except in each case as set forth in Section 5.2. SECTION 6. FAILURE OF SELLER OR PURCHASER TO PERFORM. ----------------------------------------- 6.1. (a) If Seller shall be unable to convey title to the Premises to Purchaser in accordance with this Agreement for reasons other than default by Seller under this Agreement, then, in such event, as its sole and exclusive remedies hereunder, Purchaser shall be entitled either (i) to accept such title as Seller is able to convey, without any credit, reduction, adjustment or abatement in, to or of the Purchase Price (except as otherwise provided for specifically herein), or (ii) to terminate this Agreement by exercise of the Termination Option on or before the Closing Date, it being the intention of the parties that Purchaser hereby knowingly and with the advice of counsel waives and relinquishes any and all other rights and remedies at law or in equity, including, but not limited to, damages or specific performance. (b) If Seller shall default in the performance of its obligations hereunder, subject to Seller's rights to cure such default as provided in this Agreement (it being understood and agreed that such right to cure shall not extend past January 31, 2000 as set forth in Section 3.1(a) hereof), then in such event, as the sole and exclusive remedies of Purchaser hereunder (other than the remedies of Section 6.1(a)(i), which shall remain available to Purchaser), Purchaser shall be entitled either (i) to terminate this Agreement by exercise of the Termination Option on or before the Closing Date, or (ii) to bring an action for specific performance of the terms of this Agreement for conveyance of the Premises in accordance with the terms of this Agreement, it being the intention of the parties that Purchaser knowingly and with the advice of counsel hereby waives and relinquishes any and all other rights and remedies at law or in equity, including, without limitation, any claim for damages. Notwithstanding the foregoing, the indemnity of Seller contained in Section 15 hereof shall survive any termination of this Agreement pursuant to Sections 6.1(a) and 6.1(b) for a period of nine (9) months from the date of the Closing. 6.2. Provided that Purchaser is obligated to close hereunder and Seller is ready, willing and able to consummate the transactions contemplated hereby, if Purchaser shall materially default in the performance of any of its obligations hereunder, then, in such event, as its sole and exclusive remedy hereunder, Seller shall be entitled to terminate this Agreement and retain the Escrow Funds as liquidated and agreed damages for Purchaser's default (excluding all indemnities of Purchaser herein, for which the Escrow Funds may be subject to Seller's claims for actual Losses as provided herein), it being agreed by the parties, each knowingly and with the advice of separate counsel, that it would be difficult to calculate precisely Seller's actual damages in the event of such a default by Purchaser and that the liquidated damages set forth herein represent a fair and reasonable estimate by Seller and Purchaser of the damages (direct, indirect and consequential) which would be suffered by Seller as a result of Purchaser's default hereunder (excluding Purchaser's indemnities as aforesaid). If Seller shall elect to terminate this Agreement pursuant to this Section 6.2, then, in such event, upon Seller's receipt of the Escrow Funds, this Agreement shall terminate automatically and be of no further force or effect and neither party hereto shall have any further rights or obligations hereunder or thereunder without the necessity for any further notice, instrument, document or action by or between any of the parties; provided, however, that the indemnities contained in Section 8.2 and Section 15 hereof and all other indemnities of Purchaser provided in this Agreement shall survive any such termination for a period of nine (9) months from the date of the Closing and shall be separately and additionally enforceable and/or recoverable by the non-indemnifying party. SECTION 7. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER. ------------------------------------------------------ 7.1. Seller hereby represents and warrants to Purchaser as follows as of the date hereof: (a) Seller is a valid and existing joint venture which is treated as a general partnership under the laws of the State of New York. (b) Seller has the full power and authority to enter into and consummate all transactions contemplated by this Agreement on its part to be performed, has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby on its part to be performed, and has duly executed and delivered this Agreement, and all of the obligations of Seller hereunder constitute and, upon the execution and delivery by Seller of the other documents and instruments to be executed and delivered by Seller pursuant hereto, all obligations of Seller thereunder will constitute the legal, valid and binding obligations of Seller, enforceable against it in accordance with their respective terms subject to: (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the enforcement of creditors' rights generally (including without limitation, the effect of statutory or other laws regarding fraudulent transfers or preferential transfers), (ii) general principles of equity, including without limitation, standards of due process, materiality, good faith, reasonableness and fair dealing, and (iii) the extent to which any provisions may be deemed unenforceable as contrary to public policy. (c) The execution, delivery and performance of this Agreement, and all other agreements, documents and instruments to be executed by Seller pursuant to this Agreement, when duly executed and delivered by Seller, will each constitute the binding obligation of Seller; and such execution and consummation of the transaction contemplated hereby does not (i) breach or violate any organizational documents of Seller, (ii) to Seller's knowledge, conflict with or violate or result in a breach of any of the provisions of, or constitute a default under, any agreement or instrument to which Seller is a party or by which it or any of its property is bound, (iii) conflict with or violate any judgment, order, writ, injunction or decree binding on Seller or any of its property or (iv) to Seller's knowledge (without inquiry), conflict with or violate any law, rule, regulation or ordinance applicable to Seller or any of its property. (d) No approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or regulatory body is required in connection with the execution and delivery by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby, other than filing and paying New York State and New York City transfer tax returns and taxes, respectively. (e) Seller is solvent and has not filed, nor has there been filed against it, nor do grounds exist for the filing of, any voluntary or involuntary petition in bankruptcy or insolvency and no receiver or trustee or similar custodian has been appointed with respect to any of Seller's property, and Seller has not received written notice from any bankruptcy court that any partner of Seller is subject to any voluntary or involuntary bankruptcy or insolvency proceeding. (f) To Seller's knowledge, except for the Leases, true and complete copies of which have, to Seller's knowledge, been delivered to Purchaser, there are no leases, tenancies, rental agreements, occupancy rights or possessory rights, and to Seller's knowledge, there are no subtenancies which Seller has consented to in writing (other than with respect to Suite 1802), in each case affecting any portion of the Premises as of the date hereof. Suite 2305 is leased to Myron A. Minskoff, Inc. pursuant to the lease ("Minskoff Lease"), an executed copy of which is annexed hereto as Exhibit "D" and made a part hereof With respect to the Leases, to Seller's knowledge, except as set forth on Exhibit "E" annexed hereto and made a part hereof: (i) all of the Leases are in full force and effect and none of the Leases has been modified, amended or extended; (ii) there are no pending summary proceedings for the eviction of any tenant under the Leases, there are no pending proceedings or pending written claims by any tenant against Seller for offsets against rent or additional rent or for damages or other redress, and no tenant has delivered written notice to Seller that such tenant is disputing (x) the amount of additional rent or escalation payments due pursuant to such tenant's Lease or (y) the commencement date or the rent commencement date under its Lease which dispute remains unresolved; (iii) Seller has not received any written notice from any tenant claiming that Seller is in default of any of its obligations under any Lease, which default has not been cured; (iv) Seller has not sent any written notice, except as set forth on Exhibit "E", to any tenant claiming that such tenant is in default of any of its obligations under any Lease, which default remains uncured; (v) except as set forth on Exhibit "E" there are no delinquencies in any rental payments due under any of the Leases; (vi) Exhibit "F" attached hereto constitutes a true, correct and complete list of the security deposits held by Seller with respect to the Leases (the "Security Deposits"), and the bank(s) and account number(s) where such security deposits are maintained and, in the case of each Letter of Credit, the current expiration date thereof; (vii) no renewal or extension options have been granted to any tenant other than those set forth in the Leases; (viii) no tenant or other person has the option to purchase the Premises or a right of first offer or refusal to do so; (ix) no brokerage commission or other similar compensation is now or hereafter will become due or payable with respect to or on account of any of the Leases other than (A) the brokerage commissions set forth on Exhibit "I" and (B) any such amounts which may become due and payable as a result of the exercise of any expansion or renewal option following the date hereof or as set forth in the Mendik Management Agreement attached hereto as Exhibit "I"; (xi) no tenant has delivered written notice of its termination of its Lease (or the surrender of any space demised thereunder) or of its intention to so terminate its Lease or surrender any space; (xii) except for collateral assignments of leases and rents given to any existing mortgage holder of the Property (which Seller will use its best efforts, subject to the limitations of Section 5.2 hereof, to cause to be assigned to Purchaser at Closing or, if not so assigned, which Seller will cause to be released of record), Seller has not given any other assignment, pledge or encumbrance of its interest in the Leases or the rents payable thereunder; (xiii) all tenant work, free rent and any other tenant inducement obligations under the Leases have been satisfied by Seller, except as set forth on Exhibit "G" attached hereto; (xiv) attached as Exhibit "E" is a copy of the rent roll with respect to the Leases which is true, correct and complete; (xv) the dates set forth on the attached "Exhibit "ZZ" as the "commencement date" and the "rent commencement date" (to the extent Seller has such information) and the dates set forth on the attached rent roll as the "expiration date" accurately reflect the applicable tenant's commencement date, rent commencement date and expiration date under its Lease; and (xvi) Seller has not received written notice of the non-renewal of any Letter of Credit posted as a Security Deposit under the Leases. (g) All furnishings, fixtures, machinery, equipment, supplies, tools and other items of personal property owned by Seller and located at and used in connection with the Premises as listed on Exhibit "H" annexed hereto and made a part hereof, are free and clear of all security interests, conditional sales agreements and title retention agreements other than those described on Exhibit "H". (h) Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code, as amended. (i) To Seller's knowledge, Seller has not received written notice of any condemnation or eminent domain proceeding pending or threatened, in writing, against the Premises or any part thereof. (j) To Seller's knowledge, Exhibit "I" annexed hereto and made a part hereof is a list of all written agreements affecting the Premises as of the date hereof to which Seller is a party with respect to brokerage commissions, finder's fees or real estate agent's fees for the execution of the Leases. (k) Except for the Service Contracts, and except for the Curtain Wall Agreement and Sidewalk Bridge Agreement (the Curtain Wall Agreement and Sidewalk Bridge Agreement are hereinafter collectively referred to as the "Exterior Agreements"), true copies of which are annexed hereto as Exhibit "J", to Seller's knowledge Seller is not a party to any written contracts (including, without limitation, any architect's or engineering agreement) which remain to be performed with respect to any improvements to the Premises, and the Service Contracts, the Curtain Wall Agreement and the Sidewalk Bridge Agreement are in full force and effect, without written notice of default to or by any party. Except as set forth in the next sentence, no additional amounts shall be payable with respect to the Exterior Agreements. The work contemplated by the Exterior Agreements is intended to be completed on or before the Closing, but if it is not so completed, Seller shall at the Closing (i) use its best efforts (without Seller being required to incur any fees, costs or expenses nor to commence any proceeding or litigation in connection therewith), to deliver to Purchaser a consent to the assignment of the Exterior Agreements to Purchaser from the other parties to the Exterior Agreements (it being agreed that in no event shall delivery of such consent constitute a condition to Closing), and in the event of such consent, (ii) assign the Exterior Agreements to Purchaser and the same shall be assumed by Purchaser by inclusion in Exhibit "R" annexed hereto and made a part hereof, and (iii) Seller shall give Purchaser a credit against the Purchase Price for the balance of the stated cost of completion. If consent to such assignment shall not be obtained, Seller agrees at Purchaser's request and at Purchaser's expense, to enforce any applicable provision of the Exterior Agreements after the Closing for the benefit of Purchaser. The preceding sentence shall survive the Closing. Attached hereto as Schedule 3 is a consent to the transfer of the warranties under the Curtain Wall Agreement, which is approved by Purchaser, and which warranties shall in all events be assigned to Purchaser at Closing by inclusion in Exhibit "R" attached hereto. (l) To Seller's knowledge, there is no litigation, claim, action or proceeding pending or threatened against Seller or the Premises, that, if determined adversely to Seller, would result in any material adverse change in the business, operation, affairs or condition of the Premises, in any case which is uninsured or would materially and adversely affect the enforceability of this Agreement or any other document or instrument executed or to be executed in connection herewith or the ability of Seller to perform its obligations hereunder or consummate the transactions contemplated hereby. No written material dispute currently exists under the Exterior Agreements or any of the Service Contracts to Seller's knowledge. To Seller's knowledge, Exhibit "K" annexed hereto and made a part hereof, sets forth all litigation, claims, actions or proceedings currently affecting Seller or the Premises (including, without limitation, litigation with building employees and tenants). (m) To Seller's knowledge, except as disclosed on Exhibit "L" hereto, (i) Seller has not received any written notice, demand, letter, claim or request for information regarding the presence of Hazardous Substances or liability under any Environmental Law with respect to the Premises; and (ii) Seller has not received any written notice (the subject of which has not been fully cured) that the Premises is currently subject to any orders, decrees, injunctions or any other proceedings or requirements imposed by any governmental authority or third party pursuant to any Environmental Law. (n) To Seller's knowledge, the insurance policies maintained by Seller covering the Premises have limits of coverage, deductible amounts and expiration dates (and such insurance policies are in full force and effect) sufficient to cover Seller's financial obligations to restore the Premises or credit Purchaser pursuant to Section 10. (o) To Seller's knowledge: Subject to the provisions of Section 14.4, Exhibit "M" is a true correct and complete list of all employees at the Building and their wages, and a list of all employment, union or other similar agreements or any pension, profit-sharing, insurance or other employee benefit plans to which Seller is a party and relating to the Premises or the employees; and Seller has not received any written notice claiming a default by Seller under any of the aforementioned employee agreements. (p) To Seller's knowledge, Exhibit "N" sets forth a true, correct and complete list of all pending tax certiorari proceedings, the name of the counsel representing Seller with respect thereto and the status of such proceedings. (q) To Seller's knowledge, Seller has not received written notice of any insolvency or bankruptcy proceeding involving any tenant, licensee or occupant (or guarantor of the same) under any Lease. As used in this Agreement, the words "to Seller's knowledge" or words of similar import shall be deemed to mean, and shall be limited to, the actual (as distinguished from implied, imputed or constructive) knowledge of any one or more of (1) Jean Minskoff Grant, (2) Robb Aley Allan, (3) Steven Scott Kirkpatrick of United States Trust Company of New York, Co-Executor of the Estate of Jerome Minskoff and (4) Patricia Minskoff , Co-Executor of the Estate of Jerome Minskoff (collectively, "Seller's Knowledge Persons"), which with respect to 1-4 above includes (i) making inquiry of Mendik Management Company, Inc., the current manager of the Building, and (ii) making general inquiry of Myron A. Minskoff and Marjorie Minskoff Schleifer as to such persons' knowledge of any matters which materially and adversely affect Seller's warranties and representations, but (iii) without Seller's Knowledge Persons or any of them having any obligation to make any other independent inquiry or investigation. 7.2. Except as set forth in Section 7.1 hereof or in other express provisions of this Agreement, Seller makes no representation, warranty or covenant of any kind with respect to: the Premises; any environmental conditions at, or with respect to, the Premises; the compliance or non-compliance of the Premises or any tenant-occupied space with the provisions of any applicable local, municipal, state or federal statute, law, ordinance, rule or regulation (including administrative rules and regulations), including without limitation the zoning regulations or other governmental requirements applicable to, or with respect to, the Premises or the Americans With Disabilities Act ("ADA"); the site or physical conditions applicable to, or with respect to, the Premises; the Leases; or any other matters whatsoever affecting the title, use, enjoyment, occupancy, operation, management, leasing, or condition to, of or with respect to the Premises or any part thereof. 7.3. Purchaser hereby represents and warrants to Seller as follows: (a) Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware. (b) Purchaser has the full power and authority to enter into and consummate all transactions contemplated by this Agreement on its part to be performed, has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby on its part to be performed, and has duly executed and delivered this Agreement, and all of the obligations of Purchaser hereunder constitute and, upon the execution and delivery by Purchaser of the other documents and instruments to be executed and delivered by Purchaser pursuant hereto, all obligations of Purchaser thereunder will constitute the legal, valid and binding obligations of Purchaser, enforceable against it in accordance with their respective terms subject to (i) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the enforcement of creditors' rights generally (including without limitation, the effect of statutory or other laws regarding fraudulent transfers or preferential transfers), (ii) general principals of equity, including without limitation, standards of due process, materiality, good faith, reasonableness and fair dealing, and (iii) the extent to which any provisions hereof may be deemed unenforceable as contrary to public policy. (c) The execution, delivery and performance of this Agreement, and all other agreements, documents and instruments to be executed by Purchaser pursuant to this Agreement, when duly executed and delivered by Purchaser, will each constitute the binding obligation of Purchaser, and such execution and consummation of the transaction contemplated hereby does not (i) contravene the operating or partnership agreement of Purchaser or breach or violate any organizational documents of Purchaser, (ii) to Purchaser's knowledge, conflict with or violate or result in a breach of any of the provisions of, or constitute a default under, any agreement or instrument to which Purchaser is a party or by which it or any of its property is bound, (iii) conflict with or violate any judgment, order, writ, injunction or decree binding on Purchaser or any of its property or (iv) to Purchaser's knowledge (without inquiry), conflict with or violate any law, rule, regulation or ordinance applicable to Purchaser or any of its property. (d) As of the Closing Date, Purchaser shall have inspected the Premises and, as a result of such inspection, shall be fully familiar with the access to and from the Premises, the present physical and financial condition of the Premises and the present state of repair of the Premises. Subject to the provisions of this Agreement, at the Closing, Purchaser shall accept the Premises "AS IS", "WHERE IS" and "WITH ALL FAULTS" (whether latent, patent or detectable or not) on the Closing Date, without any reduction in the Purchase Price for any change in the physical or financial condition occurring from and after the date hereof Purchaser acknowledges and agrees that (i) except as otherwise specifically set forth in this Agreement, neither Seller nor any of its direct or indirect principals, members, joint venturers, partners or affiliates, nor its or their employees, agents, brokers and representatives (collectively, "Seller and its Representatives") nor any other person, has made any representation, warranty, promise or covenant, express or implied, with respect to the Premises, the fitness, merchantability, suitability or adequacy of the Premises for any particular purpose, any environmental condition at or with respect to the Premises, the compliance or non-compliance of the Premises or any tenant-occupied space under the provisions of the ADA, the site or physical conditions applicable to or with respect to the Premises, the zoning regulations or other governmental requirements applicable to or with respect to the Premises, the Leases, or any other matters whatsoever affecting the title, use, enjoyment, occupancy, operation, management, leasing, ownership or condition to, of or with respect to the Premises, or any part thereof, and (ii) neither Seller nor any of its Representatives nor any other person will have, or be subject to, any liability to Purchaser or any other person resulting from the distribution to Purchaser, or Purchaser's use of, any information pertaining to the Premises which is not specifically set forth in this Agreement. Without limiting the generality of the foregoing, Purchaser further acknowledges and agrees that, except as otherwise specifically set forth in Section 7.1(m) hereof (subject to the limitations of Sections 7.5 and 19.10), no representation, warranty, covenant or indemnity has been made or will be given to Purchaser or any other person in respect of any environmental liability with respect to any dangerous, toxic or hazardous wastes, materials, pollutants or substances ("Hazardous Materials"), as such terms are defined in federal, state and local environmental laws and regulations, including, without limitation, the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (collectively, "Environmental Laws"). Purchaser also acknowledges and agrees that, except as otherwise specifically set forth in Section 7.1(m) hereof (subject to the limitations of Section 7.5 and Section 19.10), in no event whatsoever shall Seller or its Representatives have any liability to Purchaser, or otherwise, with respect to Hazardous Materials affecting the Premises or Environmental Laws. Purchaser also represents that, at the Closing, Purchaser will have had sufficient opportunity to conduct such investigations of and with respect to the Premises as it has deemed necessary and advisable. Purchaser's representations, warranties, acknowledgments and agreements set forth in this Section 7.3(d) shall survive the Closing. (e) No approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or regulatory body is required in connection with the execution and delivery by Purchaser of this Agreement or the consummation by Purchaser of the transactions contemplated hereby. (f) There is no litigation, claim or proceeding pending or, to Purchaser's knowledge, threatened in writing against Purchaser in any court or before any governmental agency or instrumentality that, if determined adversely to Purchaser, would materially and adversely affect the enforceability of this Agreement or any other document or instrument executed or to be executed in connection herewith or the ability of Purchaser to perform its obligations hereunder or consummate the transactions contemplated hereby. (g) Purchaser is solvent and has not filed, nor has there been filed against it, nor do grounds exist for the filing of, any voluntary or involuntary petition in bankruptcy or insolvency and no receiver or trustee or similar custodian has been appointed with respect to its property or any material portion thereof. (h) As of the date hereof, Purchaser has available to it sufficient funds with which to pay the Purchase Price and to meet its other financial obligations to Seller under this Agreement. The obligations of Purchaser hereunder are not subject to any contingency for the benefit of Purchaser regarding the availability of financing (whether secured or unsecured) to provide funds to Purchaser to consummate the transactions contemplated hereby. (i) Except as specifically set forth in this Agreement, Purchaser has not been induced by, and has not relied upon, any representation, warranty, promise or statement made by Seller or any of its Representatives. Purchaser's representations set forth in this Section 7.3(i) shall survive the Closing. 7.4. If at or before the Closing Purchaser becomes aware that any representation made by Seller in this Section 7 is materially inaccurate, Purchaser shall promptly send written notice thereof to Seller. In such event, prior to or at the Closing, at Seller's option the Closing shall be adjourned for five (5) business days, during which time Seller shall have the right to give notice to Purchaser ("Seller's Section 7 Cure Notice") that it elects to take such action as is necessary to cause such representation to be true ("Section 7 Cure") within thirty (30) days following Seller's Section 7 Cure Notice ("Section 7 Cure Period") (it being understood that Seller shall have no obligation to do so), and in such event the Closing shall be adjourned for up to "an additional thirty (30) days (or any shorter period which Seller may specify in Seller's Section 7 Cure Notice). If Seller does not timely give a Seller's Section 7 Cure Notice, or effect such Section 7 Cure within such 30-day period, Purchaser shall either (x) terminate this Agreement by exercise of its Termination Option on or before the Closing Date or (y) waive (or be deemed to waive) objection to such misrepresentation and close this transaction without (i) abatement of the Purchase Price, (ii) credit or allowance of any kind or (iii) any claim or right of action against Seller for damages or otherwise in connection therewith. As used in this Agreement, the words "to Purchaser's knowledge" or words of similar import shall be deemed to mean, and shall be limited to, the actual (as distinguished from implied, imputed or constructive) knowledge of any one or more of Philip M. Waterman III, Richard Conniff and Jason Barnett. 7.5. Seller's representations and warranties set forth in this Section 7 shall survive the Closing for a period of nine (9) months following the Closing; provided, however, that any claim that there has been a breach of such representations and warranties ("Seller's Breach") shall be deemed forever waived by Purchaser if (a) such breach is actually known to Purchaser on or before the Closing and not disclosed to Seller in writing (subject to Section 7.4), and (b) if such breach is not actually known by Purchaser on or before the Closing and a claim is not made in writing by Purchaser within nine (9) months following the Closing Date. In no event shall Purchaser have any right or claim to rescind the purchase of the Premises after the Closing by reason of any Seller's Breach, but Purchaser shall be limited solely to recover damages (excluding punitive or consequential damages), which shall be paid solely from the Representations and Warranties Holdback (as hereinafter defined). 7.6. Holdback for Survival of Seller's Representations, Warranties and ----------------------------------------------------------------- Indemnities. - ----------- (a) At the Closing, Purchaser shall deliver the sum of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00) (the "Representations and Warranties Holdback") to Warranties Holdback Escrowee (as hereafter defined), by wire transfer, in immediately available funds to Citibank, 120 Broadway, New York, NY, 10043, ABA #021000089, Attention: Rose DiGiorgio, Private Banking Division, For the Account of Fried, Frank, Harris, Shriver & Jacobson, Account Number: 37029464, Reference: Reckson Warranties Holdback, on account of the balance of the Purchase Price which, subject to the terms and conditions set forth in this Section 7.6, is to be delivered not later than nine (9) months after the Closing, except for the Remy Amerique Commission Funds (as defined herein), which, subject to the terms and conditions set forth herein, is to be paid to Seller, not later than December 31, 2000 (together with all interest as provided below). The Representations and Warranties Holdback shall be held by Warranties Holdback Escrowee to secure the payment of the Surviving Warranties (as hereinafter defined). "Surviving Warranties" means (i) any breach of the representations, warranties, covenants and indemnities of Seller contained in Section 7 (provided, however, in no event shall any claim be asserted under this Paragraph 7.6 with respect to any physical matter or physical condition of or relating to the Premises), Section 14.1, Section 14.2(a), Section 15 and Exhibits "Q" and "R" annexed hereto and made a part hereof which expressly survive the Closing, (ii) the payment by Seller of one half (1/2) of that certain brokerage commission (the "Remy Amerique Commission"), which is payable to Braun Associates LLC (the "Broker") in connection with that certain First Amendment to Lease (the "Remy Amerique Expansion Agreement"), dated as of September 1999, between Seller, as Landlord and Remy Cointreau Amerique, Inc., as tenant (the "Remy Amerique Tenant"), such one-half (1/2) commission being in the amount of Nine Thousand Two Hundred Twenty Six Dollars and 72/00 ($9,226.72) (the "Remy Amerique Commission Funds"), but only if, as and when such Remy Amerique Commission becomes payable to Broker by reason of the failure by the Remy Amerique Tenant to exercise, on or before November 30, 2000 (the "Remy Payment Date"), (ii) the Remy Amerique Tenant's right to cancel its lease at the Building as set forth in such lease as of the date of this Agreement (the "Remy Cancellation Right"), and (iii) any adjustments due to Purchaser after Closing pursuant to Section 13 hereof (all of the items described in clauses (i) through (iii) are collectively, the "Surviving Warranties"), and which Surviving Warranties result in an aggregate amount of damages or other amounts payable to Purchaser in excess of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) (the "Warranties Holdback Deductible"), provided, however, that the payment of the Remy Amerique Commission in accordance with the further terms and conditions of this Section 7.6 shall not be subject to the Warranties Holdback Deductible. As used in this Section 7.6, the term Warranties Holdback Escrowee shall mean and refer to Fried, Frank, Harris, Shriver & Jacobson. (b) Warranties Holdback Escrowee shall hold the Representations and Warranties Holdback funds (the "Warranties Holdback Funds") in escrow in any "Permitted Investment" (as hereinafter defined) designated by Seller in writing from time to time, or, if Seller does not designate a Permitted Investment, in an interest-bearing account in a New York Clearing House Bank or in some other Permitted Investment agreed to in writing by the Seller and Purchaser and acceptable to Warranties Holdback Escrowee (the "Warranties Holdback Account") until the Warranties Holdback Termination Date (as hereinafter defined), and shall pay over or apply the Warranties Holdback Funds in accordance with the further provisions of this Section 7.6; provided, however, that Purchaser agrees that any and all interest earned on the Warranties Holdback Funds shall be paid to the Seller at the Warranties Holdback Termination Date and that Purchaser shall not be entitled to make any claim for or against such interest in connection with a breach by Seller of any of the Surviving Warranties or otherwise. If Seller receives such interest, Seller shall pay all income taxes owed in connection therewith. The employer identification number of Seller set forth on the signature page hereof. Warranties Holdback Escrowee shall not be liable to Purchaser or Seller for any loss occasioned by any deposit of the Warranties Holdback Funds made in accordance with this Section 7.6(b). The term "Permitted Investment" shall mean any of the following: (i) Institutional Service Shares of Federated New York Municipal Cash Trust or other New York triple tax-free money market funds of comparable quality, (ii) short-term New York triple tax-free investments rated not less than A-1 by Standard & Poor's Ratings Services or P-1 by Moody's Investors Service, Inc., or (iii) short-term United States Treasury Bills or other obligations of or guaranteed by the United States government. (c) Subject to, and following in compliance with, the provisions of Section 7.6(d) hereof, Warranties Holdback Escrowee shall deliver to Purchaser the Warranties Holdback Funds (excluding interest thereon) only to the extent that the amount of damages or other amounts due to Purchaser as provided hereunder and as set forth in all Purchaser's Warranties Demands (as hereinafter defined) exceed the Warranties Holdback Deductible, at the expiration of ten (10) business days following Warranties Holdback Escrowee's receipt of Purchaser's written demand ("Purchaser's Warranties Demand") therefor from Purchaser or Purchaser's attorneys stating in reasonable detail that Seller has breached any of the Surviving Warranties and/or otherwise owes money to Purchaser in connection with the Remy Amerique Commission (and, in the case of the Remy Amerique Tenant, stating that the Remy Amerique, Tenant has not timely exercised the Remy Cancellation Right) and/or pursuant to the Surviving Warranties after the Closing, in accordance with Section 13 hereof (but neither the inclusion of, or reference to, nor any payment in connection with Section 13 hereof, shall extend the Warranties Holdback Termination Date), and specifying the amount Purchaser is entitled to as a result thereof in reasonable detail, and Warranties Holdback Escrowee shall deliver all accrued interest with respect to the funds, so disbursed to Seller. Simultaneously with Purchaser's delivery of Purchaser's Warranties Demand to Warranties Holdback Escrowee, Purchaser shall deliver a copy of Purchaser's Warranties Demand to Seller. (d) Subject to the provisions of Section 7.6(f) and Section 7.6(g) hereof, if Warranties Holdback Escrowee receives Purchaser's Warranties Demand pursuant to and in accordance with Section 7.6(c) hereof, then, in such event, prior to releasing any Warranties Holdback Funds, Warranties Holdback Escrowee shall deliver a copy of Purchaser's Warranties Demand to the Seller within five (5) business days after receipt thereof by Warranties Holdback Escrowee. If Warranties Holdback Escrowee shall not have received a written objection by Seller or Seller's attorneys to the proposed payment by the close of business on the tenth (10th) business day following the date of Purchaser's Warranties Demand, then, in such event, Warranties Holdback Escrowee is hereby authorized and directed to make the payment set forth in such Purchaser's Warranties Demand in excess of the Holdback Deductible on or after the eleventh (11th) business day following the date of such Purchaser's Warranties Demand. If Warranties Holdback Escrowee shall have received a written objection from either party or their attorneys before such payment, then, in such event, Warranties Holdback Escrowee shall continue to hold the Warranties Holdback Funds until otherwise directed by written instructions from both of the parties hereto or by a final unappealable judgment of a court of competent jurisdiction; provided, however, that Warranties Holdback Escrowee shall have the right, at any time, to deposit the Warranties Holdback Funds with any court of competent jurisdiction and thereby be relieved and discharged of any further obligations or liability under this Agreement. Warranties Holdback Escrowee shall give written notice of any such deposit to Seller and Purchaser. Warranties Holdback Escrowee shall be entitled to rely upon the authenticity of any signature and/or the validity of any writing received by Warranties Holdback Escrowee pursuant to, or otherwise relating to, this Agreement. Any writing signed by any two (2) of the "parties of the first part" of Seller, on behalf of Seller, shall be sufficient to bind Seller, and Escrowee shall be entitled to rely thereon. The "parties of the first part" of Seller are Marjorie Minskoff Schleifer (whose official successor as such party of the first part is Jean Minskoff Grant), Myron A. Minskoff (whose official successor as such party of the first part is Sara Minskoff Allan), and the Estate of Jerome Minskoff (whose co-executors are Patricia Minskoff and United States Trust Company of New York). (e) The parties acknowledge and agree that (i) Warranties Holdback Escrowee, in its capacity as the holder of the Warranties Holdback Funds hereunder, is acting solely as a stakeholder at the parties' request and for their convenience; (ii) although Warranties Holdback Escrowee, in its capacity as attorney, acts as the attorney for Purchaser in connection with the transactions contemplated herein, Warranties Holdback Escrowee shall not be deemed to be the agent of either of the parties hereto as holder of the Warranties Holdback Funds, (iii) any conflict of interest that may exist because of Escrowee's representation of Purchaser hereunder as attorney is hereby waived; (iv) Warranties Holdback Escrowee shall not be liable to either of the parties hereto or to any third-party for any act or omission on its part as Warranties Holdback Escrowee unless due to Warranties Holdback Escrowee's gross negligence or willful misconduct and (v) Warranties Holdback Escrowee or any of its members or employees shall be permitted to act as counsel for Purchaser in any dispute or question as to the disbursement of the Warranties Holdback Funds or any other matter arising under this Agreement. Seller and Purchaser, jointly and severally, shall indemnify, defend and hold harmless Warranties Holdback Escrowee from and against any and all losses, liabilities, costs, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) which may be incurred or suffered by Warranties Holdback Escrowee in connection with the performance of Warranties Holdback Escrowee's duties hereunder, excepting Warranties Holdback Escrowee's gross negligence or willful misconduct. As between Seller and Purchaser, the party responsible for the acts or omissions giving rise to the foregoing indemnity obligation, shall be liable to the other party for contribution or reimbursement. (f) At such time (at or subsequent to the Closing) as Seller has delivered to Purchaser (with copies to Warranties Holdback Escrowee) Satisfactory Tenant Estoppels (as hereinafter defined) from tenants occupying at least 80% of the net leasable space under lease at the Premises as of the date hereof (excluding the space leased by Chase, Suite 1802 and the space leased pursuant to the Minskoff Lease but including Hearst, MGM and MTA), Seller shall be entitled to the immediate release and the Warranties Holdback Escrowee shall pay to Seller, to the extent then held in escrow, the sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) from the Warranties Holdback Funds (together with interest thereon) less the amount by which all Warranties Demands previously made by Purchaser (if any) exceed $250,000.00 (e.g., if Purchaser had made several Warranties Demands the aggregate value of which is $500,000.00, only $250,000 would be released to Seller). For purpose of clarification, Seller's Estoppels do not count in computing the 80% threshold. (g) Except to the extent a Purchaser's Warranties Demand was delivered in accordance with the terms hereof, and has not been resolved by the mutual agreement in writing by Seller and Purchaser, and except for the Remy Amerique Commission Funds (in the amount of Nine Thousand Two Hundred Twenty Six Dollars and 72/00 ($9,226.72) which shall continue to be held by Warranties Holdback Escrow Agent to secure payment of the Remy Amerique Commission until December 31, 2000 (the "Remy Amerique Termination Date"), at the expiration of nine (9) months from the Closing ("Warranties Holdback Termination Date"), Warranties Holdback Escrow Agent shall deliver all remaining Warranties Holdback Funds [excluding the Remy Amerique Commission Funds, unless such funds have previously been released in accordance with the terms hereof] (with all earned interest thereon not previously disbursed to Seller) to Seller, less the amount by which all Warranties Demands exceed $250,000.00. If at any time that the Remy Amerique Funds would otherwise be payable to Purchaser, there shall not be sufficient funds therefor in the Warranties Holdback Funds, Seller shall promptly pay the same to Purchaser upon Purchaser's delivery of its demand and all other required evidence as provided in subparagraph (c) above. Anything contained in this Agreement to the contrary notwithstanding, Purchaser shall have no obligation to pay to Seller the amount of any Warranties Holdback Funds that have been disbursed to Purchaser in accordance with this Section 7.6 in respect of Warranties Demands. (h) Purchaser agrees that to the extent Warranties Holdback Funds, together with any earned interest thereon, are released (the "Released Funds") to Seller in accordance with Section 7.6(f) or Section 7.6(g), Purchaser shall not be entitled to make any claim for or against any of the Released Funds in the possession of Seller or any Seller's Principal (as hereinafter defined) in connection with a breach by Seller of any of the Surviving Warranties or otherwise. (i) Anything contained in this Section 7.6 to the contrary notwithstanding, if (A) on or before the Warranties Holdback Termination Date, the Remy Amerique Tenant shall exercise the Remy Cancellation Right, then the Remy Amerique Funds shall continue to be held by the Warranties Holdback Escrowee as part of the Warranties Holdback Funds as if all references in this Section 7.6 to the Remy Amerique Commission were omitted herefrom, (B) after the Warranties Holdback Termination Date and on or before the Remy Payment Date, the Remy Amerique Tenant shall exercise the Remy Cancellation Right, then the Remy Amerique Funds shall be released to Seller (and Purchaser shall have no right to object to such release to Seller), and (C) as of the Remy Payment Date, the Remy Amerique Tenant shall have failed to exercise the Remy Cancellation Right, then the Remy Amerique Funds shall be released to Purchaser (and Seller shall have no right to object to such release to Purchaser). (j) The provisions of this Section 7.6 shall survive the Closing. 7.7. Chase Holdback. -------------- (a) At the Closing, Purchaser shall deliver from the proceeds of the Purchase Price payable to Seller the sum of (i) the rent payable by The Chase Manhattan Bank ("Chase") pursuant to that certain lease dated as of July 29, 1965 between Seller, as landlord, and Chase, as tenant (as same has been amended from time to time, the "Chase Lease"), from the first day of the month following the month in which the Closing occurs through July 31, 2000 as shown on Schedule 1 attached hereto and made a part hereof (each monthly installment shown on Schedule 1 being referred to as "Chase Monthly Rent"), plus the amount of (ii) THREE HUNDRED THOUSAND DOLLARS ($300,000.00) (collectively, the "Chase Holdback") to Chase Holdback Escrowee by wire transfer in immediately available funds to Citibank, 120 Broadway, New York, NY, 10043, ABA #021000089, Attention: Rose DiGiorgio, Private Banking Division, For the Account of Fried, Frank, Harris, Shriver & Jacobson, Account Number: 37029464, Reference: Reckson Chase Holdback. The term Chase Holdback Escrowee in this Section 7.7 shall mean Fried, Frank, Harris, Shriver & Jacobson. (b) At the Closing, separate and apart from the Chase Holdback, Purchaser shall receive a credit against the Purchase Price equal to the prorated portion of the Chase Monthly Rent for the period from and after the Closing through the end of the month in which the Closing occurs. On the first day of each month after the Closing, Chase Holdback Escrowee shall pay to Purchaser from the Chase Holdback an amount equal to the Chase Monthly Rent for such month, with the final sum of $300,000.00 (together with all interest or other investment income earned on the Chase Holdback) payable to Purchaser on July 31, 2000. Disbursement of the Chase Holdback funds (the "Chase Funds") shall otherwise be automatic and unconditional. Seller hereby waives any right to object to any such disbursement and the Chase Holdback Escrowee is hereby authorized to disregard any objection of Seller with respect to the disbursement of the Chase Funds. All payments by Chase Holdback Escrowee shall be accompanied by Chase Holdback Escrowee's written notice thereof to both parties. (c) Chase Holdback Escrowee shall hold the Chase Funds in escrow for investment in any Permitted Investment designated by Purchaser in writing from time to time, or, if Purchaser has not designated a Permitted Investment, in an interest-bearing account in a New York Clearing House Bank or in some other investment acceptable to Chase Holdback Escrowee and Purchaser ("Chase Holdback Account"), and shall pay over or apply the Chase Funds in accordance with the provisions of this Section 7.7. The Purchaser shall pay all income taxes owed in connection with all interest. The employer identification numbers of Seller and Purchaser are set forth on the signature page hereof. Chase Holdback Escrowee shall not be liable to Purchaser or Seller for any loss occasioned by any deposit of the Chase Funds made in accordance with this Section 7.7(c). (d) The parties acknowledge and agree that (i) Chase Holdback Escrowee, in its capacity as holder of the Chase Funds hereunder, is acting solely as a stakeholder at the parties' request and for their convenience; and (ii) although Chase Holdback Escrowee, in its capacity as attorney, acts as the attorney for Purchaser in connection with the transactions contemplated herein, Chase Holdback Escrowee shall not be deemed to be the agent of either of the parties hereto as holder of the Chase Funds, (iii) any conflict of interest that may exist because of Escrowee's representation of Purchaser hereunder as attorney is hereby waived (iv) Chase Holdback Escrowee shall not be liable to either of the parties hereto or to any third-party for any act or omission on its part as Chase Holdback Escrowee unless due to Chase Holdback Escrowee's gross negligence or willful misconduct; and (v) Chase Holdback Escrowee or any of its members or employees shall be permitted to act as counsel for Purchaser in any dispute or question as to the disbursement of the Chase Holdback Funds or any other matter arising under this Agreement. Seller and Purchaser, jointly and severally, shall indemnify, defend and hold harmless Chase Holdback Escrowee from and against any and all losses, liabilities, costs, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) which may be incurred or suffered by Chase Holdback Escrowee in connection with the performance of Chase Holdback Escrowee's duties hereunder, excepting Chase Holdback Escrowee's gross negligence or willful misconduct. As between Seller and Purchaser, the party responsible for the acts or omissions giving rise to the foregoing indemnity obligation, shall be liable to the other party for contribution or reimbursement. (e) Except for the proration of monthly rent for the month of the Closing as provided in Section 7.7(b), there shall be no adjustment between Seller and Purchaser for arrearages or any other matters with respect to the Chase Lease. Except as hereinafter expressly set forth, Seller shall, at all times prior to and after the Closing, have the sole management and control of all aspects of the pending Chase litigation (Index No. 112750199, Supreme Court of the State of New York, County of New York, and related proceedings), including all arbitration proceedings and settlement negotiations, and all appeals (collectively, "Chase Litigation"), and Purchaser shall cooperate with Seller in connection therewith and, at Seller's request, shall participate in Seller's settlement negotiations. From and after the Closing, Purchaser hereby irrevocably designates and authorizes Seller, its successor and assigns and its and their attorneys to continue, conduct and settle the Chase Litigation in Seller's name, and/or Purchaser's name, place and stead (as the then owner of the Premises and the successor to Landlord under the Chase Lease), as Seller shall determine, and Purchaser irrevocably assigns and sets over to Seller, its successors and assigns all right, title and interest in any and all rights, remedies, privileges, rents (including all fixed, minimum, additional, operating and tax escalation, and "pass-through" rent), issues, profits, security deposits, proceeds, claims, actions, proceedings, awards, settlements and recoveries whatsoever under or arising out of the Chase Lease and/or Chase Litigation, with full power and authority to execute, acknowledge and deliver any and all settlement agreements, stipulations, dismissals, releases, lease terminations and surrenders and all other instruments and documents in connection with the Chase Lease and Chase Litigation as Seller shall elect in its sole and absolute discretion, and Purchaser shall join in any of the same at Seller's request (so long as Purchaser shall incur no liability thereunder); provided, however, any settlement or agreement with Chase which does not require termination by Chase of occupancy of the entire premises under the Chase Lease on or before July 31, 2000 shall require Purchaser's prior written consent. Seller shall be responsible for all costs, fees and expenses of the Chase Litigation, including any adverse judgments, except with respect to any acts or omissions of Purchaser, its agents and representatives, and its and their successors and assigns, from and after the Closing. (f) The provisions of this Section 7.7 shall survive the Closing. SECTION 8. INSPECTION OF THE PREMISES. -------------------------- 8.1. At all times prior to the Closing Date (unless this Agreement is terminated prior to such date), upon reasonable notice to Seller or its representatives (including without limitation, Cushman & Wakefield, Inc. ("C&W")), Purchaser and such agents and representatives of Purchaser ("Authorized Representatives") as shall have been identified to Seller, shall have the right, subject to the rights of tenants and other occupants at the Premises (including, without limitation, subject to and in accordance with the terms of the Leases), to enter upon the Premises to inspect and examine the same, subject to the further provisions hereof; provided, however, that (a) Purchaser shall take all measures to minimize any interference or inconvenience with Seller's or any tenant's or occupant's use or operation of the Premises, including conducting inspections and tests after normal business hours; (b) all inspections shall be accomplished in an expeditious, safe and businesslike manner in accordance with all applicable law; (c) Seller, any tenant and/or their representatives or employees may, at Seller's option, accompany Purchaser or any Authorized Representatives; (d) Purchaser shall not alter or destroy the Premises in any manner whatsoever; (e) Purchaser shall promptly deliver to Seller copies of all data, information, tests, studies and reports generated by or for Purchaser relating to the results of such inspections if this Agreement is terminated; and (f) subject to Seller's prior written consent, as a further condition precedent to making any physically intrusive inspection or examination of the Premises or to bringing any equipment or materials on the Premises, Purchaser and all contractors engaged by Purchaser shall obtain and maintain at all times at their sole cost and expense (i) liability insurance in the amount of $2,000,000 for property damage coverage and in the amount of $5,000,000 for personal and bodily injury coverage, which insurance shall name Seller (and, at its option, its constituent joint venturers or partners) as additional insured parties, and (ii) with respect to any Authorized Representatives (and all of their employees and agents), workers' compensation and disability insurance, as required by law. Purchaser and the Authorized Representatives shall have the right from time to time, upon reasonable notice, to examine the books, records, accounts and other material information with respect to the Premises only. Purchaser shall provide to Seller certificates of insurance evidencing such coverage prior to entering upon the Premises as aforesaid for the purpose of making any such physically intrusive investigation, such certificates to provide that the insurance evidenced thereby may not be changed or canceled except upon thirty (30) days' written notice to Seller. It is understood and agreed that except as set forth in Section 4.1 hereof, Purchaser's satisfaction with such inspection shall not constitute or be deemed to constitute a condition to Purchaser's obligations hereunder. Without limiting the foregoing, the following shall apply to any communications with tenants, property managers or employees of or at the Premises: (A) From and after the date hereof, Purchaser shall be entitled to communicate questions or requests for information to and from (I) "New York Life" or (II) tenants of the Premises, and the Premises' managers and employees, as reasonably required by Purchaser, in any case only upon prior notice to Seller and in the presence of one or more representatives of Seller (as Seller shall determine from time to time, which may be C&W), provided that Seller or its representative(s) is available to be present within (two) 2 business days of any such request, unless Seller has waived the right to be present in writing in a specific case. Notwithstanding any provisions contained herein to the contrary, Purchaser covenants and agrees that it will not enter into a deal with New York Life with respect to a new loan secured by the Premises or to assume, refinance, amend, recast, add to, or otherwise modify Seller's existing loan or mortgage secured by the Premises with or from New York Life nor will it obtain any such loan or submit or sign a proposal, a term sheet or commitment on or before the Closing Date and for a period of sixty (60) days after the Closing Date. The provisions of the immediately preceding sentence shall survive the Closing. (B) Purchaser shall indemnify Seller and its Representatives from and against all Losses (as hereinafter defined) in connection with or arising out of any breach or violation of any of the provisions of subdivision (A) above, specifically excluding consequential damages. 8.2. (a) Any work performed by Purchaser or its Authorized Representatives in connection with any inspection of the Premises shall be at Purchaser's sole cost and expense. Purchaser covenants and agrees to pay in full all persons who perform labor upon the Premises, and not to permit or suffer any mechanic's or materialman's lien of any kind or nature to be asserted or enforced against the Premises for any work done or materials furnished thereon at the instance or request or on behalf of Purchaser. (b) Purchaser shall indemnify, defend and hold harmless Seller and its Representatives (collectively, to "Indemnify") from and against any and all losses, costs, liabilities, claims, damages or expenses (including, without limitation, reasonable attorney's fees and costs) [collectively, "Losses"] arising out of or as a result of any inspection of, or access to, the Premises and work in connection therewith by Purchaser or its Authorized Representatives (and any agents, employees, independent contractors and representatives thereof). Purchaser, at its sole cost and expense, shall promptly restore the Premises to its condition immediately prior to the performance of such investigation by Purchaser pursuant to this Section 8 and shall repair any and all damage caused by Purchaser or its Authorized Representatives and their employees, representatives, agents or independent contractors. Purchaser acknowledges and agrees that Seller shall have the right to use the Escrow Funds to restore the Premises if Purchaser shall fail to comply with this Section 8.2 within seven (7) business days after notice from Seller of such damage. 8.3. All indemnities of Purchaser in this Section 8 shall survive the Closing or any termination of this Agreement. SECTION 9. VIOLATIONS AFFECTING THE PREMISES. --------------------------------- Purchaser shall accept title to the Premises subject to all violations of law or governmental ordinances, orders or requirements by any governmental department, agency or bureau having jurisdiction as to conditions affecting the Premises ("Violations"), and Seller shall have no obligation to remove or cure any such Violation; provided, however, that to the extent any Violations remain uncured as of the Closing, Purchaser shall receive a credit at Closing for the reasonable cost of curing said Violations, not to exceed under any circumstances the aggregate amount of $300,000.00; provided, however, that if the cost of curing said violations is reasonably anticipated to exceed the aggregate amount of $300,000.00, Purchaser shall be entitled to exercise the Termination Option at or prior to the Closing. SECTION 10. DESTRUCTION, DAMAGE OR CONDEMNATION AFFECTING THE PREMISES. ---------------------------------------------------------- 10.1. (a) Seller and Purchaser waive the provisions of all applicable laws (including General Obligations Law Section 5-1311) relating to the occurrence of a casualty between the date hereof and the Closing, and Seller and Purchaser agree that the following provisions with respect thereto shall govern. Seller agrees to notify Purchaser promptly if the Premises shall be destroyed or damaged in whole or in part by fire or other casualty prior to the Closing. (b) If the Premises or any portion thereof shall be damaged by fire or other casualty between the date of this Agreement and the Closing and (I) the cost of restoring and repairing the portion of the Premises so damaged to substantially its present condition (the "Restoration Cost") is less than Six Million ($6,000,000) Dollars as reasonably estimated by an architect or engineer selected by Seller and reasonably satisfactory to Purchaser and (II) such casualty will not result in tenants occupying an aggregate of more than 50,000 square feet to be entitled to cancel their Leases, then Purchaser shall have no right to terminate this Agreement and shall purchase the Premises in its damaged condition and assume full responsibility for repair thereto, without reduction of the Purchase Price or any other claim or offset. Seller shall (i) credit to Purchaser against the Purchase Price the amount of any remaining insurance proceeds theretofore received by Seller in connection with any such destruction by fire or other casualty (except that all business interruption insurance theretofore paid and received, if any, and applicable to periods prior to Closing shall be retained by Seller), less Seller's reasonable out-of-pocket costs incurred in connection with its attempts to seek collection of any such insurance proceeds, and (ii) assign to Purchaser by written assignment in form and substance reasonably satisfactory to Seller and Purchaser, at the Closing, all of Seller's right, title and interest in and to any insurance proceeds thereafter payable in connection with any such destruction by fire or casualty (except that business interruption insurance thereafter paid and received, if any, shall be apportioned as of the Closing Date, with that portion of the proceeds of such insurance attributable to the period prior to the Closing Date to be retained by or paid to Seller); provided, further, the amount of any credit under clause (ii) above shall not exceed the excess of the Restoration Cost for all restoration work remaining to be performed over the amount of insurance proceeds assigned. Purchaser shall receive credit for any insurance deductible. The Closing shall be adjourned until the Restoration Cost has been determined, unless Seller has given Purchaser notice that the Restoration Cost is reasonably expected to exceed $6,000,000.00 (in which event Purchaser shall proceed as provided in subparagraph (c) below). (c) Subject to the provisions of Section 10.1(d), if the Premises or any portion thereof shall be damaged by fire or other casualty between the date of this Agreement and the Closing and (I) the Restoration Cost is more than Six Million ($6,000,000) Dollars as reasonably estimated by an architect or engineer selected by Seller and reasonably satisfactory to Purchaser or (II) one or more tenants occupying an aggregate of more than 50,000 square feet shall be entitled to terminate their Leases, then Purchaser shall have the option, to be exercised within fifteen (15) days from the date of delivery of a written estimate of the Restoration Cost, to terminate this Agreement by written notice to the other party (a "Casualty Termination Notice") [in case of such termination by Purchaser, the same shall constitute an exercise of Purchaser's Termination Option]. If Purchaser terminates, neither party hereto shall have any further duties, obligations or liabilities to the other hereunder, except that Purchaser shall be entitled to the return of the Escrow Funds, and except for those obligations specifically provided for in this Agreement to survive the termination of this Agreement. If Purchaser shall not elect to terminate this Agreement as provided above, then this Agreement shall remain in full force and effect and the provisions of Section 10.1(b) shall apply to such damage and restoration and any insurance proceeds payable in connection therewith. (d) If a determination of the Restoration Cost by the architect or engineer required to in Sections 10.1(b) and (c) above shall not have been delivered to Purchaser within sixty (60) days following the date of casualty, Purchaser shall be entitled to exercise the Termination Option. 10.2. (a) Seller and Purchaser hereby waive the provisions of all applicable laws (including General Obligations Law Section 5-1311) relating to the occurrence of a condemnation between the date hereof and the Closing, and Seller and Purchaser agree that the following provisions with respect thereto shall govern. Seller agrees to notify Purchaser promptly if the Premises shall be taken in whole or in part by right of eminent domain or condemnation prior to the Closing (a "Taking"). (b) If the Taking will so affect the Premises as to (i) allow one or more tenants occupying an aggregate of more than 50,000 square feet to cancel their Leases, (ii) cause the Premises to not comply with applicable laws, codes and regulations concerning zoning and land use, (iii) prevent the use of the Premises for its current purposes, or (iv) cause damages in excess of Six Million ($6,000,000) Dollars as reasonably estimated by an architect or engineer selected by Seller and reasonably satisfactory to Purchaser, then Purchaser shall have the right to terminate this Agreement and to exercise its Termination Option by giving written notice to Seller within fifteen (15) days of the date Seller sends written notice to Purchaser of the Taking. If Purchaser does not so terminate this Agreement, or shall have no right to terminate this Agreement, then (x) this Agreement shall remain in full force and effect notwithstanding such Taking, (y) Purchaser shall purchase the Premises in its then condition without reduction of the Purchase Price or any adjustment or other claim or offset and (z) Seller shall assign to Purchaser the right to receive any condemnation award payable to Seller as a result of the Taking, net of (A) any reasonable, actual costs of litigating or negotiating the amount of, or collecting, the award and (B) any sums expended by Seller to restore or protect the Premises as a result of the Taking. 10.3. Notwithstanding anything set forth herein to the contrary, Purchaser shall have no right to terminate this Agreement, receive any credit against the Purchase Price or other adjustment or receive any insurance proceeds payable to Seller by reason of any damage or destruction to the Premises that occurs as a result of any act, omission or negligence of Purchaser or any of its employees, contractors or agents. 10.4. Seller shall have complete control of all condemnation proceedings; provided however, that if Purchaser disagrees with Seller's conduct thereof, it may give Seller thirty (30) days' notice of the reasons for such disagreement and exercising as Termination Option within 30-days thereafter unless Seller agrees with Purchaser's position within said 30-day period. SECTION 11. SELLER'S CLOSING OBLIGATIONS. ---------------------------- At the Closing, Seller shall execute and (where the document so provides) acknowledge and deliver the following items to Purchaser (with respect to any and all documents requiring execution by Seller, at or prior to Closing, the signatures of any two (2) "parties of the first part" of Seller shall be sufficient, but only if the opinion delivered pursuant to Section 11(m) below so provides or Purchaser is otherwise satisfied as to due execution): (a) A Bargain and Sale deed (the "Deed"), properly executed and acknowledged in the form annexed hereto and made a part hereof as Exhibit "O"; (b) A bill of sale with respect to the personal property in the form annexed hereto and made a part hereof as Exhibit "P"; (c) An assignment and assumption agreement with respect to the Leases in the form annexed hereto and made a part hereof as Exhibit "Q" (the "Lease Assignment and Assumption"); (d) A general assignment and assumption agreement in the form annexed hereto and made a part hereof as Exhibit "R" (the "General Assignment and Assumption"); (e) A schedule, certified to the knowledge of Seller to be true, correct and complete, setting forth all tenant arrearages and accrued but unpaid minimum and additional rents, expense escalations, tax and other adjustments and charges under the Leases attributable to the period prior to the Closing Date (the "Arrearages and Unpaid Escalations Statement"); (f) The Curtain Wall Agreement and Sidewalk Bridge Agreement, and [if such parties have so consented and delivered same to Seller,] consents by the other parties to such agreements to the assignment thereof (but such consents not being a condition to the Closing), and originals (or copies if originals are not available) of any other Service Contracts; (g) Keys to all building entrance doors to, and all equipment and utility rooms located in, the Premises, which keys shall be properly tagged for identification; (h) A schedule, certified to the knowledge of Seller to be true, correct and complete, of all cash, letters of credit and other items of value required as security under the Leases at the time of Closing ("Security Deposits"). All Security Deposits shall be adjusted as provided in Section 13.4(e); (i) One original letter, in the form of Exhibit "S" annexed hereto and made a part hereof, executed by Seller, advising tenants at the Premises that the Premises have been sold to Purchaser and directing that all future rents and other correspondence should thereafter be sent to Purchaser or as Purchaser may direct; (j) A non-foreign status affidavit in the form annexed hereto and made a part hereof as Exhibit "T"; (k) Promptly after the execution and delivery of this Agreement, Seller shall request that each of the tenants at the Premises execute and deliver a tenant estoppel letter (a "Tenant Estoppel") in the form of Exhibit "U" annexed hereto and made a part hereof (except that the Tenant Estoppel for the tenant under the MTA Lease shall be in the form of Exhibit "U-1" annexed hereto and made a part hereof); provided, however, that if Seller has made such a request, Seller may satisfy its obligations hereunder by the delivery of a tenant estoppel letter (a "Minimum Tenant Estoppel") containing at a minimum the information which is expressly required to be provided by a tenant pursuant to the specific terms of each tenant's respective Lease (excluding any information which is not contained in the Tenant Estoppel, and excluding any other information which may be requested pursuant to any Lease provision which provides for "information which may reasonably be requested," or words to similar effect). Seller shall use reasonable efforts to obtain the Tenant Estoppels but shall have no obligation to bring any action or proceeding or to incur any costs or expenses, other than DE MINIMIS amounts, in connection therewith. Notwithstanding the foregoing to the contrary, Seller's delivery of Tenant Estoppels or Minimum Tenant Estoppels which contain information which is consistent in all material respects with the warranties and representations made by Seller herein (collectively, "Satisfactory Tenant Estoppels"), for all primary tenants occupying space in the Premises (i.e., specifically excluding subtenants or other occupants other than the primary tenant under any Lease, and also excluding Chase Manhattan Bank, the tenants or occupants of Suite 1802 and Suite 2305) [collectively, "Excluded Tenants"] shall be a condition to Purchaser's obligation to close hereunder; provided, however, if Seller delivers Satisfactory Tenant Estoppels to Purchaser from (i) tenants occupying 65% or more of the net leasable square footage in the Premises under lease as of the date hereof (excluding all Excluded Tenants), which 65% shall include (ii) a Satisfactory Tenant Estoppel from each of the tenants under the Hearst, MGM and MTA Leases, then Seller may, in its sole discretion, deliver its own estoppel letter to Purchaser (collectively, the "Seller's Estoppels") for the remaining tenants (other than the foregoing 65%) of the Premises containing the information otherwise required in the respective Minimum Tenant Estoppel, provided such information is consistent in all material respects with Seller's representations and warranties made herein and such Seller's Estoppels shall satisfy Seller's obligations hereunder to deliver estoppels for primary tenants occupying space in the Premises and such condition to the Closing. If any Tenant Estoppel or Minimum Tenant Estoppel is not a Satisfactory Tenant Estoppel, or if any Seller's Estoppel is inconsistent in any material respect with Seller's representations and warranties made herein, Seller shall have the right (A) to continue to try to obtain the same (subject to Seller's right to provide a Seller's Estoppel), and/or (B) to cure or correct the same prior to the Closing, and/or to pay to Purchaser at Closing an amount in cash satisfactory to Purchaser to cure the same and/or to provide to Purchaser at Closing other collateral reasonably satisfactory to Purchaser to cure the same (collectively, "Cured Estoppels"), and if Seller obtains, corrects or cures the same or pays such amount or provides such collateral, each of the Cured Estoppels which is a Tenant Estoppel or a Minimum Tenant Estoppel shall be deemed Satisfactory Tenant Estoppels and each Cured Estoppel which is a Seller's Estoppel shall be deemed satisfactory hereunder in meeting Seller's obligation to deliver required estoppels hereunder as aforesaid; provided, however, that the amount necessary to correct or cure any estoppel as aforesaid shall not exceed $100,000 for any one Cured Estoppel or $500,000 in the aggregate for all Cured Estoppels. Seller shall have the right to adjourn the Closing Date for the purpose of obtaining Satisfactory Tenant Estoppels, including Cured Estoppels, up to and including November 22, 1999; provided further, however, if Seller has obtained Satisfactory Tenant Estoppels (including Cured Estoppels) from tenants occupying at least 50% of the net leasable square footage in the Premises under lease (excluding Excluded Tenants, but including the Hearst, MGM and MTA tenants) by November 22, 1999, the Seller may further adjourn the Closing Date up to and including December 8, 1999. Purchaser agrees that Seller's failure to deliver any Tenant Estoppel, any Minimum Tenant Estoppel, any Seller's Estoppel or any Satisfactory Tenant Estoppel, or any Cured Estoppel, shall not constitute a default under this Agreement, and that Purchaser's sole and exclusive remedy for such failure shall be the Termination Option. (l) A New York City Real Property Transfer Tax Return and New York State Combined Real Estate Transfer Tax Return and Credit Line Mortgage Certificate with payment in the form reasonably required by the title company and/or the recording office; (m) An opinion of Winick & Rich, P.C., as to the due execution and authority of Seller with respect to the documents to be delivered by Seller at the Closing, in substantially the form set forth in Schedule "2" annexed hereto and made a part hereof (provided, however, that if there are any changes other than the insertion or change in date(s) and/or reference(s) to documents or events, all changes must be satisfactory to Purchaser in Purchaser's discretion); (n) Originals (or if originals are not available, copies certified by Seller, to Seller's knowledge, to be true, correct and complete) of all Leases; (o) Any items in the Title Letter and any other customary affidavits and other items reasonably required by the Title Insurer, which does not require Seller to assume any additional liability than is provided in this Agreement; (p) Copy of notice of termination (conditional upon and effective at the Closing) and Seller's certificate or other evidence that said notice has been sent, of the leasing/management agreement with current managing agent and any other exclusive agency or leasing agreement in existence on the date of the Closing; (q) A certificate dated as of the date of the Closing, stating that to Seller's knowledge the representations and warranties of Seller in the form and manner made herein, are true and correct in all material respects and with the same limitations and qualifications, if any, made herein as if made as of the date of the Closing, provided, however, that Seller may update any representations or warranties that have changed between the date hereof and the Closing, provided, however, that in such event, Purchaser may, in its sole discretion, exercise the Termination Option if any changes have a material and adverse effect on Purchaser or the Premises; (r) A Closing Statement; (s) Notice of termination of the Service Contracts (excluding the "Excluded Service Contracts", as hereinafter defined) [conditional on and effective at the Closing] and Seller's certificate or other evidence that the notices have been sent; (t) A rent roll certified to the knowledge of Seller to be true, correct and complete; (u) If the holder thereof has consented thereto and allowed same to Seller, assignment of mortgage to Purchaser's designee (not a condition to the Closing); (v) Prior to the Closing, Seller shall deliver to the Building management office, all tenant files, financial statements, building plans, warranties, guaranties, reports, bills and any other items in Seller's control or possession or in the Building manager's control or possession and reasonably required to operate the Premises. Purchaser agrees to cooperate with Seller and to allow Seller and its representatives to have continued reasonable access to and the right to makes copies of the foregoing materials after the Closing. The provisions of the immediately preceding sentence of this subparagraph (v) shall survive the Closing; (w) The License Agreement in the form annexed hereto as Exhibit "X". (x) The Lease Clarification Agreement with Burberry's Wholesale Limited containing the same substance as the form of Exhibit "ZZZ" annexed hereto and made a part hereof and (y) All other instruments and documents consistent with this Agreement which may be reasonably and customarily required to effect the transaction contemplated herein and within Seller's control, provided that such instruments or documents may be delivered without additional cost or liability to Seller (other than DE MINIMIS amounts). SECTION 12. PURCHASER'S CLOSING OBLIGATIONS. ------------------------------- 12.1. At the Closing, Purchaser shall execute and (where the document so provides) acknowledge and deliver the following items to Seller (or the designated Holdback Escrowee, if specifically so provided herein below): (a) The balance of the Purchase Price to be delivered at the Closing (after application of the Downpayment), including any Additional Purchase Price, as adjusted for apportionments under Section 13 and Section 14 hereof, and less the amounts of the Representations and Warranties Holdback and the Chase Holdback which shall be delivered by Purchaser to the Warranties Holdback Escrowee and the Chase Holdback Escrowee as provided herein; (b) The Lease Assignment and Assumption; (c) The General Assignment and Assumption; (d) A New York City Real Property Transfer Tax Return and New York State Combined Real Estate Transfer Tax Return and Credit Line Mortgage Certificate; (e) The Hearst LOC; (f) All other instruments and documents consistent with this Agreement which may be reasonably and customarily required to effect the transaction contemplated herein and within Purchaser's control, provided that such instruments or documents may be delivered without additional cost or liability to Purchaser (other than DE MINIMIS amounts); (g) The Warranties Holdback Funds to Warranties Holdback Escrowee to be paid to Seller, subject to the terms and conditions set forth in Section 7.6 hereof, on account of the balance of the Purchase Price not later than nine (9) months after the Closing, except for the Remy Amerique Commission Funds which subject to the terms and conditions set forth in Section 7.6 hereof shall be paid to Seller not later than December 31, 2000; (h) The Chase Funds to the Chase Holdback Escrowee; and (i) The Mendik Commission Agreement. If the Mendik Commission Agreement is not executed and delivered by Mendik, the condition shall be waived and Purchaser shall be obligated, as between Seller and Purchaser, to pay the amount of the commissions as provided for in the Mendik Commission Agreement when due and payable and shall Indemnify Seller therefor. The provisions of this subdivision (i) shall survive the Closing. 12.2. Notwithstanding anything to the contrary contained herein, the obligation of Seller to close title in accordance with this Agreement is expressly conditioned upon the fulfillment by and as of the time of Closing of each of the conditions listed below, each of which may be waived in whole or in part by Seller upon notice to Purchaser; (a) Purchaser shall have executed and delivered to Seller all of the documents, shall have paid all sums of money and shall have taken or caused to be taken all of the other action required of Purchaser in this Agreement. (b) All representations and warranties made by Purchaser in this Agreement shall be true and correct in all material respects with same limitations, if any, as contained herein as of the date of the Closing. 12.3. Notwithstanding anything to the contrary contained herein, the obligation of Purchaser to close title and pay the Purchase Price in accordance with this Agreement is expressly conditioned upon the fulfillment by and as of the time of Closing of each of the conditions listed below, each of which may be waived in whole or in part by Purchaser upon notice to Seller. (a) Seller shall have executed and delivered to Purchaser all of the documents, complied with all covenants and shall have taken or caused to be taken all of the other action required of Seller under this Agreement. (b) All representations and warranties made by Seller in the form and manner made in this Agreement shall be true and correct in all material respects and with the same limitations, if any, as contained herein, as if made on and as of the Closing Date, provided, however, that for the purposes of this Section 12, Seller shall not be deemed in breach of any warranty or representation herein (and Purchaser shall remain obligated to Close) unless such breach has a material and adverse effect on Purchaser or the Premises. (c) The Title Insurer shall be willing to insure title to the Premises pursuant to an ALTA 1992 Owner's Policy of Title Insurance in the amount of the Purchase Price at regular rates and without additional premium (which shall be deemed to include the cost of any customary endorsements to title requested by Purchaser), subject only to the Permitted Exceptions set forth on Exhibit "B". (d) Purchaser shall have received Satisfactory Tenant Estoppels or, to the extent permitted under the terms of Section 11.1(k) of this Agreement, Cured Estoppels and/or Seller's Estoppels, with respect to every Lease (other than the Excluded Tenants). (e) None of Hearst, MGM or MTA shall be involved in any voluntary or involuntary bankruptcy proceedings, and no monetary default in an amount in excess of 60 days of rent under the respective Lease, shall exist under any of the Leases with Hearst, MGM or MTA. (f) Any letter of credit described on Exhibit F which has expired shall have been renewed or replaced. SECTION 13. APPORTIONMENTS AND ADJUSTMENTS; CLOSING COSTS. --------------------------------------------- 13.1. Except as otherwise specifically provided herein, Purchaser and Seller shall adjust as of 11:59 p.m. of the day preceding the Closing the items hereinafter set forth. If any such items are not determinable at the Closing, the adjustment shall be made subsequent to the Closing when the amount is determined. Any errors or omissions in computing adjustments at the Closing shall be promptly corrected. The obligations set forth in this Section 13 shall survive the Closing. Except as otherwise specifically provided for herein, all adjustments shall be made in the manner recommended by the Customs in Respect to Title Closings of the Real Estate Board of New York, Inc., and there shall be no other adjustments. Subject to the further provisions of this Section 13 and Section 14, the items to be adjusted are: (a) Subject to Section 13.4, rents (as used in this Agreement "rents" or "rental" includes all items of additional rent) under Leases which are (x) collected prior to the Closing and (y) applicable to the month in which the Closing occurs. At Closing, Seller shall credit against the Purchase Price the amount of any rents which have been paid to Seller prior to Closing by tenants which rents are attributable to any period from and after the date of Closing. Reference is made to Section 13.4 below for treatment of delinquent rents in the month of the Closing and of post-Closing rental payments and receipts. (b) Real estate taxes on the basis of the fiscal period for which assessed. If the Closing shall occur before the tax rate is fixed, the apportionment of taxes shall be upon the basis of the tax rate for the next preceding fiscal period applied to the latest assessed valuation. Promptly after the new tax rate is fixed, the apportionment of real estate taxes shall be recomputed. If Seller has made an overpayment of real estate taxes for New York City fiscal year 1998-99 or any earlier fiscal year and any portion of the overpayment is credited towards payment of 1999-2000 (or later) real estate taxes for the Land and Improvements rather than being refunded to Seller, an appropriate adjustment shall be made at Closing (and thereafter as otherwise provided herein) in favor of Seller for its right, title and interest in such credit. Seller shall retain all rights to contest, protest or seek tax reductions for all periods prior to and including tax year 1998-1999, as provided in Section 19.14, and Purchaser shall have full control to contest, protest or seek tax deductions for the tax years after and including 1999-2000. (c) Water rates, water meter charges, sewer rents, vault charges and Business Improvement District Charges, if any, on the basis of the fiscal period for which assessed. If there is a water meter or meters on the Premises, the unfixed meter charges and the unfixed sewer rent thereon shall be apportioned on the basis of the last reading, and shall be appropriately readjusted after the Closing on the basis of the next subsequent bills. As to any unpaid water charges or sewer rents payable by tenants, Purchaser shall close title and accept the delivery of the deed subject to such unpaid charges and rents and any lien resulting therefrom, without abatement against the Purchase Price, credit or allowance of any kind or any claim or right of action against Seller for damages or otherwise. (d) Fuel, if any, on the basis of Seller's last cost therefor, including sales tax, as evidenced by a written statement of Seller's fuel oil supplier dated within thirty (30) days of the Closing, which statement shall be conclusive as to quantity and cost. (e) Charges under all Service Contracts which have not been terminated pursuant to Section 14.3 hereof. (f) License and permit fees on assignable licenses and permits. (g) Maintenance supplies in unopened containers based on Seller's actual cost therefor, including sales tax. (h) Administrative fees allowable by law on tenant security deposits if expressly provided for in the Leases. (i) New Lease Expenses (as defined and subject to the provisions of Section 14). (j) Any other item of cost or expense incurred or payable with respect to the ownership, use or operation of the Premises, customary in connection with the sale of a comparable New York City office building, apportioned on the basis of documentary evidence of payments made or due for goods, services and obligations therefor, based on documentary basis of payment or incurring of costs or expenses; provided, however, that in no event shall all such adjustments exceed the aggregate amount of $10,000. (k) Purchaser shall receive a credit of $76,500 in respect of the cost of completing the ongoing work with respect to the HVAC Building Management System. (l) Any other item which, under the terms of this Agreement, is to be apportioned at the Closing. 13.2. At the Closing, the net adjustment pursuant to this Section 13 shall be paid (i) if in favor of Seller, in the same manner as set forth in Section 2 of this Agreement or (ii) if in favor of Purchaser, as a credit against the Purchase Price payable pursuant to Section 2 of this Agreement. 13.3. Purchaser and Seller hereby agree to make, and the Closing Statement prepared at the Closing shall provide to be made, such adjustments and prorations as and when discovered after Closing. 13.4. (a) Rental from tenants and other receipts derived from the operation of the Premises shall belong to Seller to the extent that they relate, or are attributable, to the period up to but not including the date of Closing, and shall belong to Purchaser to the extent that they relate, or are attributable, to the period from and after the date of Closing. Any and all amounts received by Purchaser following Closing for rents due to Seller prior to Closing (including an amount equal to Seller's share of rents receivable for the month in which the Closing occurs) shall be paid to Seller when received. If at the time of Closing any tenants are delinquent in the payment of rental then any rent received from any such tenant after the Closing shall be applied to the month during which such rent shall have been received and thereafter in the following order of priority: (i) first, to rent arrearages with respect to the month in which the Closing shall have occurred (subject to apportionment pursuant to Section 13.1(a) above), (ii) second, to rent arrearages with respect to the month preceding the month in which the Closing shall have occurred (which shall be paid to Seller), (iii) third, to rent arrearages with respect to the period following the month in which the Closing shall have occurred and, (iv) fourth, to any other rent arrearages with respect to the period preceding the month in which the Closing shall have occurred (which shall be paid to Seller). Any amounts so payable to Seller after the Closing, shall be paid over by Purchaser to Seller within five (5) business days of receipt by Purchaser. Purchaser shall account to Seller monthly with respect to same. In the event of a rental check received by Seller before Closing, notice of the dishonor of which is received by Seller after Closing, Seller shall immediately notify Purchaser of such dishonor and the same shall be treated as an arrearage in accordance herewith. Seller hereby reserves and shall retain the right to enforce the collection of moneys greater than $25,000 due Seller at or prior to Closing from any of the tenants of the Premises, provided that Seller shall not bring any action or proceeding to dispossess or evict any tenant. The parties agree that at or prior to the Closing Seller shall give the tenant under the Lease for Suite 1802 ("Suite 1802 Tenant") a 3-day eviction notice and Seller shall be entitled to retain as its sole property the security deposit of the Suite 1802 Tenant but not in excess of $25,000 and only if permitted by the terms of the Lease. Thereafter, Purchaser shall have sole control and responsibility to evict the Suite 1802 Tenant after the Closing and Purchaser shall be entitled to all recovery of rents from the Suite 1802 Tenant. Seller will promptly send any checks for rent received after the Closing to Purchaser. (b) As to rental payments for fuel pass-alongs, so-called escalation rent, percentage rent, or charges based upon real estate taxes, operating expenses, labor costs, "porter's wage rate," cost of living increases or otherwise (such pass-alongs, escalation rent and charges being collectively called "Overage Rent"), for the applicable accounting period in which the Closing occurs, if the Closing shall occur prior to the time when any such Overage Rent is payable, then such Overage Rent shall be apportioned subsequent to the Closing. Purchaser agrees that it will receive in trust and pay over to Seller a pro-rated amount of such Overage Rent at the end of the calendar year in which the Closing occurs. As to any Overage Rent payable subsequent to the Closing with respect to an accounting period which occurs prior to the Closing, Purchaser agrees that it will receive and hold such Overage Rent in trust for Seller and pay the entire amount to Seller within thirty (30) days of receipt thereof. Seller shall furnish to Purchaser all information with respect to the accounting period in which the Closing occurs which is reasonably necessary for the billing of such Overage Rent. If, prior to the Closing, Seller shall collect any sums on account of Overage Rent or fixed rent for a year or other period, or any portion of such year or other period, beginning prior to but ending subsequent to the Closing, such sum shall be apportioned at the Closing. At the Closing, as part of the Arrearages and Unpaid Escalations Schedule, the parties shall agree to reconcile estimates of payments of expense escalations (and other similar additional rent) under the Leases with actual expense escalations (and other similar additional rent), when such amounts are actually determined by Purchaser after the Closing. Purchaser shall provide to Seller an accounting of all such amounts. (c) Subsequent to the Closing, Purchaser agrees that it shall promptly render bills for and shall exercise the same diligence in the collection of any fixed rent and Overage Rent due to Seller pursuant to this Agreement as it does in the collection of then current rentals due to Purchaser. Nothing herein contained shall preclude Seller from asserting separate and independent claims against such tenants, including, but not limited to, the institution of such actions or proceedings as Seller shall deem necessary or advisable for the purpose of collecting such past due fixed rent and Overage Rent; provided, however, that subsequent to the Closing no such action or proceeding may affect such tenant's possession and provided that such claims exceed $25,000. (d) Except as specifically set forth in this Agreement, Purchaser acknowledges and agrees that no representation has been made and no responsibility is assumed by Seller with respect to the continued occupancy of any portion of the Premises by any tenant and Seller does not guarantee or undertake to insure that any tenant will be in occupancy at the Closing, and Purchaser agrees that the abandonment, vacation or removal of any tenant(s) prior to the Closing shall not be the basis for any claim on the part of Purchaser or right of action against Seller for damages or otherwise; provided, however, that nothing herein shall be deemed to limit or impair Purchaser's right to exercise the Termination Option. (e) All Security Deposits, together with accrued interest thereon, if any, and less Seller's proportional share of administrative fees, if any, expressly set forth in the Leases, shall be turned over by Seller to Purchaser at the Closing. Amounts held in the form of cash shall be turned over, at Seller's option, by (i) payment of the amount thereof to Purchaser, or (ii) a credit to Purchaser against the Purchase Price. Any Security Deposit in a form other than cash shall be transferred to Purchaser by way of appropriate instruments of assignment or transfer. If any such non-cash Security Deposits shall not be transferable at Closing, Seller shall nevertheless turn over such Security Deposits to the possession of Purchaser at Closing and shall cooperate with Purchaser's efforts to effect such transfer. Seller hereby designates Purchaser as Seller's agent to act, from and after the Closing, in the name of Seller (but for the benefit of Purchaser) with respect to any such non-cash Security Deposits which remain in the name of Seller after the Closing. Upon request of Purchaser, Seller shall execute powers-of-attorney in favor of Purchaser in furtherance of the foregoing. All costs of transferring non-cash Security Deposits shall be for Seller's account. Purchaser hereby agrees to Indemnify Seller and its Representatives from all losses from any wrongful acts or improper drawings or misapplication of proceeds under any non-cash Security Deposits. Between the date of this Agreement and the Closing, Seller shall not draw on or apply any Security Deposit without the prior written consent of Purchaser. Notwithstanding the foregoing or any other provisions herein to the contrary, except as provided in Section 7.7 (with respect to the Chase Lease) and Section 13.4(a) (with respect to Suite 1802), there shall be no transfers, adjustments or apportionments of any kind with respect to the Chase Lease, Suite 1802 or Suite 2305. The provisions of this Section 13.4(e), shall survive the Closing. (f) Purchaser acknowledges that the brokerage agreements and the Mendik Management Agreement listed on Exhibit "I" attached hereto and made a part hereof may require the payment of fees and commissions upon the renewal or extension or the failure to exercise a right of lease termination ("Non-Termination Commission"), after the date of this Agreement, of the current terms of existing leases by the tenants described in such brokerage agreements, or upon the expansion, after the date of this Agreement, by such tenants into additional space, (collectively, "Renewal and Expansion Commissions"). Purchaser shall assume in writing the obligation to pay all Renewal and Expansion Commissions excluding those payable to Mendik Management Company, Inc. and excluding any Non-Termination Commissions, (i) agree in writing (the "Mendik Commission Agreement") to pay directly to Mendik those Renewal and Expansion Commissions expressly set forth in the Mendik Commission Agreement and (ii) agree to pay one half of the Remy Amerique Commission. The Mendik Commission Agreement, and the Renewal and Expansion Commissions payable by Purchaser thereunder, shall contain the same substance as the form of Exhibit "Y" annexed hereto and shall be executed and delivered by Purchaser at the Closing. Except as set forth in the Mendik Commission Agreement, Purchaser shall have no liability or obligation under or with respect to the Mendik Management Agreement. At the Closing, Seller shall receive a credit for the entire amount of any Renewal and Expansion Commissions paid by Seller after the date of this Agreement but before the Closing, upon Seller's furnishing of evidence to Purchaser that such payment has been paid and that such payment was due under the applicable agreement set forth on Exhibit "I". Purchaser shall pay, and shall defend, hold harmless and indemnify Seller against any claims which may hereafter be made against Seller for, any such fees or commissions which first accrue on or after the date of the Closing. The provisions of this Section 14(f) shall survive the Closing. (g) Seller shall credit Purchaser at Closing for (i) except as set forth in the last sentence of this Section 13.4(g), any unpaid leasing inducement cost (including, without limitation, any work allowance and the value of any work to be performed at the expense of Landlord (payable by Seller) in respect of the initial term of any Leases executed and delivered before the date of this Agreement, (ii) any commissions which have not been paid to brokers and which are payable by Seller in respect of the initial term of any Leases executed and delivered before the date of this Agreement including any payments to existing and prior managing or leasing agents, (iii) all unpaid leasing inducement costs and brokerage commissions payable in respect of the Remy Amerique Expansion Agreement, but expressly excluding (iv) the Renewal and Expansion Commissions. Notwithstanding clauses (i) and (iii) above, (A) Purchaser shall not receive any credit at Closing (and Purchaser shall be fully responsible under the respective Leases) in respect of any work that may be required to be performed by the landlord under the Menswear Group Leases in respect of the 3,558 rentable square feet on the 35th floor of the Building that was to be built out by landlord, and (B) Purchaser and Seller shall, at such time as the same may become due and payable, each pay one-half (1/2) of the Remy Amerique Commission. The provisions of this Section 13.4(g) shall survive the Closing. (h) Purchaser agrees to pay to Seller the amounts set forth on Schedule "4" annexed hereto and made a part hereof, subject to the terms and conditions set forth on Schedule "4", in connection with the Mannor Space and the Threadtex Space (both as defined therein). The provisions of this Section 13.4(h) shall survive the Closing. 13.5. Without limiting any of the provisions of this Section 13, (a) Purchaser shall pay its attorneys' fees and expenses, recording fees and charges, the cost of the Title Commitment, any and all premiums of any title insurance and endorsements, the cost to obtain a survey of the Land, and (b) Seller shall pay its attorneys' fees and expenses, and the New York State Conveyance Tax in accordance with Article 31 of the New York State Tax Law and the New York City Real Property Transfer Tax in accordance with Title 11 of Chapter 46 of the Administrative Code of the City of New York and all other transfer, documentary, stamp, deed and similar taxes and recordation taxes and filing fees in connection with the execution and delivery of the Deed. 13.6. Any calculation made in computing any apportionment made pursuant to this Section 13 may be reconfirmed following the Closing, and any errors thereto shall be corrected immediately upon notice from the other party that such error(s) exist. The provisions of this Section 13 shall survive the Closing for twelve (12) months. SECTION 14. OPERATION OF PREMISES. --------------------- 14.1. Subject to the further terms of this Section 14, until the Closing, Seller shall operate the Premises in the ordinary course of business and shall maintain the Premises in substantially the same manner as it is currently being maintained (normal wear and tear excepted); provided, however, that Seller shall not be required to make any capital expenditures with respect to the Premises. If Seller shall make any capital expenditures which (a) are required as a result of an emergency (other than casualty) with notice to and consultation with the Purchaser if reasonable under the circumstances, or (b) are consented to by Purchaser, Seller shall be entitled to a credit for the cost thereof at the Closing equivalent to the period of time from and after the Closing bears to the estimated useful life of the capital expenditure. 14.2. (a) Prior to the Closing, Seller shall not modify, extend, renew, cancel or permit the surrender of any Lease or enter into any new Lease of all or any portion of the Premises without Purchaser's prior written consent. If the Closing has not occurred within 75 days of the Scheduled Closing Date, the Seller, in its sole discretion, may extend, renew, or enter into any new Lease of all or any portion of the Premises, without Purchaser's consent, provided Seller continues to act in accordance with the standards and practices currently employed by Seller at the Premises. (b) If Seller enters into any new Leases pursuant to this Section 14, or if there is any extension or renewal of any Leases after the date hereof, whether or not such Leases provide for their extension or renewal, or any expansion or modification of any Leases (each, a "New Lease"), Seller shall keep accurate records of all reasonable expenses (collectively, "New Lease Expenses") incurred in connection with each New Lease, including, without limitation, all expenses, or reimbursements to tenants for the following: (i) brokerage commissions and fees, (ii) expenses incurred for repairs and improvements to satisfy the tenant's requirements, (iii) the cost of removal and/or abatement of asbestos, and (iv) legal fees. Notwithstanding the foregoing, all such expenses (other than Non-Termination Commissions) payable in respect of the Remy Amerique Expansion Agreement shall not constitute "New Lease Expenses", but shall be paid by Seller or, to the extent not paid on or before the Closing Date, credited against the Purchase Price. (c) The New Lease Expenses for each New Lease allocable to and payable by Seller shall be determined by multiplying the amount of such New Lease Expenses by a fraction, the numerator of which shall be the number of days contained in that portion, if any, of the term of such New Lease commencing on the commencement date thereof ("Commencement Date") and expiring on the date immediately preceding the Closing Date, and the denominator of which shall be the total number of days contained in the period commencing on the Commencement Date and expiring on the date of the scheduled expiration of the term of such New Lease, and the remaining balance of the New Lease Expenses for each New Lease shall be allocable to and payable by Purchaser. 14.3. To Seller's knowledge, Exhibit "V" annexed hereto and made a part hereof contains a true and correct list of all service agreements, maintenance contracts, contracts for the purchase or delivery of labor, services, utilities, materials, goods, inventory or supplies, cleaning contracts, equipment rental agreements or leases ("Service Contracts") affecting the Premises. Seller shall not at any time following the date hereof, without Purchaser's prior written consent, enter into any new Service Contract (or renew or extend any existing Service Contracts) which shall not be cancelable immediately without cost. Within 5 business days after the execution and delivery of this Agreement, Seller shall give notice of termination (or cause such notice to be given) for all the Service Contracts (except as set forth below), each such termination to be conditional on the Closing and effective on the later of (a) the Closing Date and (b) the earliest date permitted under the respective Service Contract, and, if the Closing Date shall occur before the earliest date permitted for the termination of any Service Contract, Purchaser shall assume and remain obligated thereunder for the period from the Closing to the date of termination of such Service Contract pursuant to Exhibit "R". Notwithstanding the foregoing, Purchaser acknowledges and agrees that the Service Contracts with Xerox and AFA Fire Protection (collectively, "Excluded Service Contracts") shall not be terminated by Seller, but shall be assigned by Seller and assumed by Purchaser, pursuant to Exhibit "R" as aforesaid. The provisions of this Section 14.3 shall survive the Closing. 14.4. Purchaser advises Seller that, effective as of the Closing Date, all employees of: (a) Seller (or Seller's managing agent) employed at the Building; and (b) Seller's building services, engineering, cleaning and security contractor(s) employed at the Building may not be offered the same employment by Purchaser (or by the property manager to be engaged by Purchaser) under the current employment contracts, agreements and/or terms and conditions of employment, including any collective bargaining agreements or other union contracts. In connection therewith, Purchaser has required that Seller terminate and Seller has agreed to terminate, effective as of the Closing Date: (i) any agreements for building services, engineering, cleaning and security services, including without limitation the Real Estate Management Agreement, dated February 1, 1995, between 54-55 Street Company and Mendik Management 00 Company, Inc. ("Mendik"), and the Building Services Agreement, dated March 1, 1995, between 54-55 Street Company and Building Maintenance Service Corp. ("BMSC") (the "Cleaning Contract"), or (ii) in the event the Cleaning Contract is not in effect on the Closing Date, any contractor or employee(s) who is then performing the cleaning and security services at the Building on the date of this Agreement; and (iii) all other employees employed at the Building, including without limitation employees employed at the Building by Seller and/or BMSC and/or Mendik covered by the 1998 Engineer Agreement between the Realty Advisory Board on Labor Relations, Incorporated and Local 94-94A-94B, International Union of Operating Engineers, AFL-CIO ("Local 94"), effective January 1, 1998 to December 31, 2000 and the 1999 Commercial Building Agreement between Local 32B-32J, Service Employees International Union, AFL-CIO ("Local 32B-32J") and the Realty Advisory Board on Labor Relations, Inc., effective January 1, 1998 to December 31, 2000 (together, the "Union Contracts"). Purchaser acknowledges that Seller may incur liability for severance payments, termination pay, other benefits (including, without limitation, welfare fund, pension fund, training fund, annuity fund and legal fund payments) and/or other amounts due to any employee, union or pension fund arising out of or relating to the termination of the employees employed at the Building covered by the Union Contracts (including, without limitation, any amounts due and/or payable to a multi-employer pension plan for withdrawal liability under the Employee Retirement Income Security Act and the Multiemployer Pension Plan Amendments Act of 1980) and/or for the reimbursement of such amounts payable by BMSC and/or Mendik to the employees employed at the Building covered by the Union Contracts (collectively, "Termination Payments") as a result of the termination by Seller and/or BMSC and/or Mendik of (A) those employees who are covered by the Union Contracts and whose names are set forth on Exhibit M-2 annexed hereto and (B) any new persons hired prior to the Closing Date to replace any of the persons described in clause (A); provided, however, that Purchaser shall have no obligation under this Section 14.4 in respect of any person who (x) was so replaced (the persons described in clauses (A) and (B), other than any person who was replaced as described in clause (B), are collectively called the "Union Employees"); or (y) is not a Union Employee. Purchaser agrees that it shall be liable for the payment of all such Termination Payments (including, without limitation, all penalties and interest, if any) which are or may become due and owing and hereby agrees to indemnify, defend and hold harmless Seller and Seller's Principal(s) from and against all such Termination Payments and all other claims, actions, proceedings, awards, losses, costs, damages, liabilities and expenses (including, without limitation, reasonable attorneys' fees and disbursements, including on appeal) incurred by Seller or Seller's Principal(s), including without limitation any of the same arising from or by reason of any claim made by any Union Employee, Local 94, Local 32B-32J, BMSC, Mendik and/or any other contractor of Seller performing services of the type covered by the Cleaning Contract (if the Cleaning Contract is not in effect on the Closing Date), in each case relating to or arising out of the termination of the Union Employees, Purchaser's and/or Seller's failure to pay any Termination Payments as and when due and payable, Purchaser's failure to hire any or all of the Union Employees and/or Purchaser's failure to assume or become subject to the Union Contracts. Purchaser shall defend all such claims, actions and proceedings with counsel selected by Purchaser with the approval of Seller, which approval shall not be unreasonably withheld or delayed, and Seller shall have the right to fully participate in the defense of any or all claims, at its option, with counsel selected by Seller at Seller's expense; provided, u, that Purchaser shall have full control of any negotiations with any employees and/or unions concerning hiring by and/or continuation of employment with Purchaser of any employees at the Building and the amount of any Termination Payments to be paid to Union Employees who are not hired by and/or offered continued employment with Purchaser, and Seller shall have no right to participate in such negotiations; provided, further, however, that Seller shall have the right to participate in such negotiations in the event any claims, actions or proceedings referred to herein are initiated against Seller or Seller's Principals and such negotiations relate to said claims, actions or proceedings. 14.5. Within 5 business days after the execution and delivery of this Agreement, Purchaser shall give Mendik notice of the termination of the Mendik Agreement, effective upon the later of (a) the Closing and (b) the earliest date permitted under the Mendik Management Agreement for such termination, in which case, if the Closing Date shall occur before the earliest date permitted for such termination, Purchaser shall remain obligated to pay all management fees and expenses payable thereunder to Mendik, for the period from the Closing to the date of termination of the Mendik Agreement. The provisions of this Section 14.5 shall survive the Closing. SECTION 15. BROKER. ------ 15.1. Each of Seller and Purchaser represents and warrants to the other that it has dealt with no broker, finder or other person who is entitled, by reason of dealing with the indemnifying party, to any fee, commission or other similar compensation in connection with the transaction contemplated by this Agreement other than Cushman & Wakefield, Inc. (the "Broker") Seller represents and warrants that it shall be solely responsible for the payment of any and all fees, commissions or other compensation due to the Broker in connection with this transaction pursuant to a separate agreement previously entered into between Seller and Broker. 15.2. Purchaser shall indemnify, defend and hold harmless Seller, its agents, employees and representatives from and against any and all losses, costs, liabilities, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of the breach of Purchaser's representations or warranties contained in this Section 15. 15.3. Seller shall indemnify, defend and hold harmless Purchaser, its agents, employees and representatives from and against any and all losses, costs, liabilities, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of the breach of Seller's representations or warranties contained in this Section 15. 15.4. The representations, warranties and indemnities contained in this Section 15 shall survive the Closing or, if the Closing does not occur, the termination of this Agreement, for a period of nine (9) months. SECTION 16. NOTICES. ------- 16.1. All notices under this Agreement shall be in writing, shall refer to this Agreement and shall be (a) delivered personally, (b) sent by registered or certified mail, postage prepaid, return receipt requested, or (c) sent by a nationally recognized overnight courier. Notices shall be deemed given on the first business day on or after receipt or refusal thereof. Except as otherwise expressly provided in this Agreement, all notices shall be given in accordance with the above as follows: If to Seller: Myron A. Minskoff c/o Myron A. Minskoff, Inc. 1350 Avenue of Americas, 23rd Floor New York, New York 10019 Attention: Robb Aley Allan Marjorie Minskoff Schleifer c/o Minskoff Grant Realty & Management Corp. 1350 Avenue of Americas, 32nd Floor New York, New York 10019 Attention: Jean Minskoff Grant Estate of Jerome Minskoff c/o United States Trust Company of New York, Co-Executor 114 West 47th Street New York, New York 10036 Attention: Steven Scott Kirkpatrick and c/o Michael Breede, Esq. Rogers & Wells 200 Park Avenue, 54th Floor New York, New York 10 166 with a copy to: Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, New York 10 166 Attention: Andrew H. Levy, Esq. Telephone No.: 212-351-4037 Fax No.: 212-351-4035 If to Purchaser: c/o Reckson Associates Realty Corp. 10 East 50th Street New York, New York 10022 Attention: Philip M. Waterman III Jason Barnett, Esq. Telephone No.: 212-715-6522 Fax No.: 212-715-6535 with a copy to: Fried, Frank Harris Shriver & Jacobson One New York Plaza New York, New York 10004-1980 Attention: Joshua Mermelstein, Esq. Telephone No.: 212-859-8137 Fax No.: 212-859-4000 16.2. Any counsel designated above or any replacement counsel which may be designated by Purchaser and/or Seller by written notice to the other party is hereby authorized to give notices hereunder on behalf of its respective client. SECTION 17. LIMITATION ON SURVIVAL OF REPRESENTATIONS, WARRANTIES AND --------------------------------------------------------- OBLIGATIONS. - ----------- 17.1. Except as expressly set forth herein to the contrary, no representations, warranties or obligations of Seller or Purchaser set forth in this Agreement shall survive the Closing or earlier termination of this Agreement. 17.2. The delivery of the Deed by Seller and the acceptance thereof by Purchaser and the delivery by Purchaser of the consideration required of Purchaser to Seller hereunder shall be deemed the full performance and discharge of every obligation on the part of such party to be performed hereunder, except those obligations of Seller and Purchaser, respectively, which are expressly stated in this Agreement to survive the Closing. SECTION 18. PROHIBITION OF RECORDING. ------------------------ Neither Seller nor Purchaser shall record, or arrange to record, this Agreement or any memorandum thereof with any filing office in any jurisdiction. SECTION 19. MISCELLANEOUS. ------------- 19.1. Purchaser shall not sell, assign, convey or otherwise transfer all or any portion of its rights or interest under this Agreement without the prior written consent of Seller, which consent may be arbitrarily withheld by Seller for any reason or no reason, provided, however, that Purchaser shall be permitted to assign its rights under this Agreement without the consent of Seller only at and conditioned upon the Closing to an Affiliate of the Purchaser. Affiliate shall mean an entity which is owned, directly or indirectly, at least 5 1 % by the Purchaser. If said assignee does not have a net worth of at least $500 million dollars then Purchaser shall deliver to Seller at the Closing an unconditional, primary guarantee from Purchaser or an Affiliate of Purchaser which has a net worth of at least $500 million dollars, in form satisfactory to Seller ("Guarantor"), with respect to all post-closing obligations of said assignee. At the Closing, Purchaser shall provide a current balance sheet or other evidence reasonably satisfactory to Seller, certified in writing by Purchaser, which establishes that assignee's or Guarantor's net worth, as the case may be, is at least $500 million dollars. 19.2. This Agreement shall be governed solely by, and construed solely in accordance with, the internal laws of the State of New York. 19.3. The captions contained in this Agreement were inserted for convenience of reference only and shall in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. 19.4. This Agreement shall be binding upon, and shall inure to the benefit of, the successors and permitted assigns of the parties hereto. 19.5. Time shall be of the essence as to each party's performance of all of its obligations under this Agreement; provided, however, that neither party shall be deemed in breach of its obligations hereunder (other than those contained in Section 2 or those required to be performed at the Closing) if such party shall fully perform its obligations within two (2) business days of the date otherwise specified for performance. 19.6. Nothing contained in this Agreement is intended to confer upon any person, other than the parties hereto and their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under, or by reason of, this Agreement. 19.7. This Agreement is a contract for the sale of the Premises only and is not intended to be, and should not be construed as, an agreement of lease for the Premises, an installment sales contract, or a contract for deed. 19.8. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument, with the same effect as if each party had executed all counterparts. 19.9. The parties agree that prior to the Closing Date no party nor any Affiliate shall, with respect to this Agreement and the transactions contemplated hereby, contact or conduct negotiations with public officials, make any public pronouncements, issue press releases or otherwise furnish information regarding this Agreement or the transactions contemplated hereby to any third party (other than Broker, attorneys, accountants, prospective title insurers or any lending institution having a lien or intending to have a lien on the Premises or as required by law), without the consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned it being agreed that the parties may respond to inquiries from the press so long as they do not disclose any economic or other material terms of this Agreement which have not been previously disclosed as permitted hereunder. 19.10. Purchaser agrees that, notwithstanding any contrary provisions of this Agreement, Purchaser shall look only to the Seller's estate and interest in the Premises and the holdback provided for in Section 7.6 (to the extent not released to Seller pursuant to Section 7.6(g) hereof) for the collection of a judgment (or other judicial process) requiring the payment of money by Seller, and no other property or assets of the Seller or any direct or indirect partner, joint venturer, member, officer, or representative or any affiliate thereof, disclosed or undisclosed (collectively, "Seller's Principal"), shall be subject to levy, execution or other enforcement procedure for the satisfaction of any judgment against Seller. Purchaser shall not name any Seller's Principal as a defendant in any legal action relating to this Agreement. Without limiting the foregoing, Purchaser shall not look to or make any claim whatsoever against any proceeds of the Purchase Price (other than any holdbacks or escrows provided for in this Agreement), any prorations or adjustments which are required to be made in favor of or paid to Seller by Purchaser after the Closing, or any other monies released or distributed to or in the possession of the Seller or any Seller's Principal (including monies released from holdbacks or escrows). The provisions of this Section 19.10 shall survive the Closing. 19.11. Submission of drafts of this Agreement for examination or execution by Purchaser shall not bind Seller in any manner or be construed as an offer to sell, and no contract or obligation of Seller shall arise until this instrument is executed and delivered by both Seller and Purchaser and the Downpayment has been received by the Escrowee. 19.12. Any sums due after the Closing by either party hereto to the other, if not paid within thirty (30) days after the obligation to pay arises, shall bear interest at the lesser of (a) 2% over the Chase prime rate in effect from time to time in New York City per annum or (b) the maximum rate permitted by law from the time such obligation arises until payment. The provisions of this Section 19.12 shall survive the Closing. 19.13. The parties hereto agree that no part of the Purchase Price shall be deemed to have been paid by Purchaser for any Personal Property transferred hereunder. Sales or use taxes, if any, payable by reason of the sale of any of the Personal Property shall be the sole responsibility of and shall be paid by Purchaser, and Purchaser shall Indemnify Seller and its Representatives with respect thereto. The indemnity set forth in the preceding sentence shall survive Closing. 19.14. Seller shall in Seller's discretion commence or continue any proceeding for the reduction of the assessed valuation of the Premises for tax years prior to, but not including, the New York City fiscal year 1999-2000. Purchaser shall in Purchaser's discretion commence or continue any proceeding for the reduction of the assessed valuation of the Premises for New York City fiscal year 1999-2000 and all subsequent tax years, provided, however, that the net refund or credit of taxes, if any, for the 1999-2000 tax year shall be divided between Seller and Purchaser in accordance with the proportion which the period covered by such refund or credit in which the Premises was owned by Seller bears to the entire period covered, after deducting therefrom a pro rata share of all expenses, including counsel fees, incurred in obtaining such refund or credit (the allocation of such expenses to be based upon the total refund or credit obtained in the proceeding and in any other proceeding simultaneously involved in the trial or settlement). Purchaser shall deliver to Seller, upon demand, receipted tax bills and canceled checks used in payment of such taxes and shall execute any and all consents or other documents, and do any act or thing necessary for the collection of such refund or credit by Seller. With respect to real estate tax refunds or credits with respect to the Premises relating to fiscal years prior to the Closing which may be required to be reimbursed to tenants at the Premises Purchaser and Seller shall enter into an escrow arrangement in the form attached hereto as Exhibit "Z" and made a part hereof, on or prior to the Closing Date, for the deposit of such refunds into escrow pending the payment of such reimbursement to the tenants, and returning all excess funds to Seller for all years prior to 1999-2000, and for an equitable apportionment of the excess funds between Seller and Purchaser for the year 1999-2000. The provisions of this Section 19.4 shall survive the Closing. 19.15. This Agreement cannot be modified, changed or discharged except by an agreement in writing, signed by the party or parties against whom enforcement of such modification, change or discharge is sought (and, in the case of Seller, which Seller intends to have executed by any two (2) of the "parties of the first part" of Seller, on behalf of Seller, who have authority to execute such documents). 19.16. If Seller intends to make a Unit Election (as defined below), and provided that Seller and Purchaser are able to agree on the terms (including, but not limited to, the valuation of units) of the Unit Election as hereinafter set forth, then immediately prior to the Closing, Seller may transfer the Premises to a special purpose limited liability company ("SPE") and may distribute its membership interests in the SPE to the present joint venture members of Seller, subject to the rights and obligations provided for under this Agreement. In such a case, (a) this Agreement shall automatically become an agreement by Purchaser to purchase, and an agreement by the SPE members to sell or exchange, all of the SPE membership interests for consideration equal to the Purchase Price consisting of cash and Units, as described and based upon the terms and conditions set forth herein and (b) Seller shall indemnify and hold Purchaser harmless (which indemnity shall survive the Closing) from and against any and all liabilities or obligation of the SPE which accrue prior to the Closing. Upon written notice (the "Unit Election Notice") given to Purchaser not less than 10 days prior to the Closing, not more than 20 of the members of Seller shall have the option to take a portion, but in no event less than $10,000,000.00 in the aggregate, of the Purchase Price in the form of common units of Reckson Operating Partnership, L.P. ("Units"); provided, that each of Seller's members that makes the election to receive a portion of the Purchase Price in the form of Units (the "Unit Election") shall agree to those representations, warranties and restrictions as set forth on Schedule "4" annexed hereto and any other terms which Purchaser shall reasonably require. The Unit Election Notice shall describe the amount of cash and the Units to be received by each such member in exchange for its membership interest in the SPE. If Purchaser and Seller agree to the terms provided for in the Unit Election, any amendments to this Agreement as may be necessary to permit the Unit Election and to permit the members of Seller to receive such Units shall be made without any increase in the respective obligations or liabilities or any decrease in the respective rights of the parties (except as may be required hereunder to permits the Units to be used as consideration for the sale). Such amendments may include, without limitation, at Seller's option, Seller's appointment of an administrator or custodian to receive and disburse, on behalf of all SPE members, the balance of the Purchase Price and all prorations, adjustments and refunds which are payable after the Closing. If Purchaser and Seller do not, on or before the Closing Date, agree, in each party's sole discretion, to the terms provided for in the Unit Election, then the Unit Election shall be deemed null and void, Seller shall not transfer the Premises to the SPE and Seller and Purchaser shall proceed with the sale of the Premises in accordance with this Agreement as if the Unit Election Notice had never been given. It is expressly acknowledged and agreed that if, for any reason or no reason, the Unit Election does not occur, or if the Unit Election has occurred but if for any reason any SPE member who was to receive Units in accordance with the Unit Election does not accept the Units, this Agreement shall remain in full force and effect and the parties' obligations to each other shall not be affected thereby. In such latter case, the portion of the Purchase Price allocated to the Units that are not accepted shall be paid in cash at the Closing. The parties intend that any exchange of SPE membership interests for Units qualify as a tax-free exchange under Section 721 of the Internal Revenue Code. In no event shall any transfer of the Premises by Seller to an SPE or any resulting transfer of this Agreement, operate to release Seller from any and all obligations or liabilities under this Agreement. 19.17. Other than that certain confidentiality letter, dated as of August 24, 1999, from Purchaser to Seller and to Cushman & Wakefield, Inc. (the "Confidentiality Agreement") [but excluding paragraph 5 of the Confidentiality Agreement, which paragraph 5 is superseded by this Agreement], this Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and no representations, inducements, promises or agreements, oral or otherwise, between the parties not contained herein shall be of any force or effect, all of the same being superseded, revoked and merged herein. 19.18. Purchaser acknowledges and agrees that, except as set forth expressly in this Agreement, Seller does not make any representation or warranty with respect to the accuracy or completeness of any of material, data and information (the "Due Diligence Materials") provided by Seller and its representatives, to Purchaser or its affiliates, that Purchaser has reviewed, and agrees that Seller shall not have any liability to Purchaser resulting from the use of or reliance on the Due Diligence Materials. Purchaser agrees that, except as otherwise expressly set forth in this Agreement, it is responsible for and is relying solely upon its own due diligence investigations of the Property, including without limitation, its investigations of any structural, mechanical, and/or environmental conditions. 19.19. Purchaser and Seller hereby agree to reasonably cooperate and assist each other with respect to any post-closing matter (including, without limitation, providing reasonable access to the records of the Building and the tenants, and providing information relating to the operation of the Building), upon the request of the other, so long as the same is without cost or expense to the requested party (other than DE MINIMIS amounts), and so long as neither the rights and privileges are reduced, nor the obligations or liabilities increased, of the requested party. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. SELLER: 54-55 STREET COMPANY Federal Employer Identification By:/s/ Myron A. Minskoff ------------------------------------ Number # B-13-1891134-5 Myron A. Minskoff, Partner By:/s/ Marjorie Minskoff Schleifer ------------------------------------ Marjorie Minskoff Schleifer, Partner By: Estate of Jerome Minskoff, Partner By:/s/ Patricia Minskoff -------------------------------- Patricia Minskoff, Co-Executor By: The United States Trust Company of New York, Co-Executor By:/s/ Steven Scott Kirkpatrick ---------------------------- Steven Scott Kirkpatrick Vice President PURCHASER: RECKSON OPERATING PARTNERSHIP, L.P. Federal Employer Identification By: Reckson Associates Realty Corp., its Number # 11-3233647 General Partner By:/s/ Jason Barnett ------------------------------------- Name: Jason Barnett Title: Executive Vice President THE UNDERSIGNED JOINS IN THE EXECUTION HEREOF SOLELY FOR THE PURPOSE OF AGREEING TO ACT AS "ESCROWEE" PURSUANT TO THE PROVISIONS OF THIS AGREEMENT RELATING TO THE ESCROW OF THE ESCROW FUNDS. GIBSON, DUNN & CRUTCHER LLP By:/s/ Richard M. Ross ------------------------ Name: Richard M. Ross THE UNDERSIGNED JOINS IN THE EXECUTION HEREOF SOLELY FOR THE PURPOSE OF AGREEING TO ACT AS "WARRANTIES HOLDBACK ESCROWEE" AND "CHASE HOLDBACK ESCROWEE", RESPECTIVELY, PURSUANT TO THE TERMS OF THIS AGREEMENT RELATING TO THE ESCROW OF THE WARRANTIES HOLDBACK FUNDS AND THE CHASE HOLDBACK FUNDS. FRIED FRANK HARRIS SHRIVER & JACOBSON By:/s/ Eric Feuerstein ------------------------ Name: Eric Feuerstein EX-10.2 3 Exhibit 10.2 AGREEMENT OF PURCHASE AND SALE BETWEEN NBBRE-919 THIRD AVENUE ASSOCIATES, L.P. AS SELLER, AND RECKSON OPERATING PARTNERSHIP, L.P. AS PURCHASER DATED AS OF MAY 10, 1999 TABLE OF CONTENTS ----------------- Page ---- ARTICLE I PURCHASE AND SALE; PURCHASE PRICE........................1 1.1. Purchase and Sale............................................1 1.2. Purchase Price...............................................2 1.3. Escrow Provisions............................................2 ARTICLE II CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.........4 2.1. Conditions Precedent for Purchaser's Obligations.............4 2.2. Termination Option...........................................5 2.3. Waiver of Conditions.........................................5 ARTICLE III CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER............5 3.1. Conditions Precedent for Seller's Obligations................5 3.2. Waiver of Conditions.........................................6 ARTICLE IV PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS....6 4.1. Purchaser's Representations and Warranties...................6 4.2. Covenants of Purchaser.......................................9 ARTICLE V SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.......9 5.1. Seller's Representations and Warranties......................9 5.2. Breaches of Representations and Warranties..................14 5.3. Covenants of Seller as to the Real Property and Loan........15 5.4. Survival of Representations and Warranties; Holdback........16 ARTICLE VI CLOSING; EXPENSES AND APPORTIONMENTS....................18 6.1. Place of Closing............................................18 6.2. Items to Be Executed or Delivered by Seller.................18 6.3. Items to Be Delivered or Executed by Purchaser..............21 6.4. Taxes; Title Expenses.......................................22 6.5. Apportionments..............................................22 ARTICLE VII DEFAULTS................................................26 7.1. Purchaser Default...........................................26 7.2. Seller Default..............................................26 ARTICLE VIII INSPECTIONS; DUE DILIGENCE..............................26 8.1. Inspection of the Real Property.............................26 8.2. Purchaser's Work............................................27 8.3. Due Diligence...............................................27 ARTICLE IX INDEMNIFICATION.........................................29 9.1. Indemnification.............................................29 9.2. Release.....................................................30 ARTICLE X CASUALTY AND CONDEMNATION...............................30 10.1. Casualty....................................................30 10.2. Condemnation................................................31 ARTICLE XI MISCELLANEOUS...........................................31 11.1. No Third-Party Beneficiaries................................31 11.2. Broker......................................................31 11.3. [Intentionally Blank.]......................................32 11.4. Assignment..................................................32 11.5. Waiver of Jury Trial........................................32 11.6. Waiver......................................................32 11.7. Captions....................................................33 11.8. Prevailing Party............................................33 11.9. Counterparts................................................33 11.10. Exhibits and Schedules......................................33 11.11. Notices.....................................................33 11.12. Construction................................................34 11.13. Amendment...................................................34 11.14. Entire Agreement............................................35 11.15. Governing Law...............................................35 11.16. Monetary Amounts............................................35 11.17. Time of the Essence.........................................35 11.18. Confidentiality.............................................35 11.19. No Recording................................................35 11.20. Review Materials............................................35 11.21. Consent to Jurisdiction.....................................35 11.22. Acquisition of Partnership Interests........................36 LIST OF EXHIBITS AND SCHEDULES - ------------------------------ Exhibit "A"- List of Collateral Agreements Exhibit "A-1" List of Ancillary Documents Exhibit "A-2" Approved Budget Approval Exhibit "B"- Form of Borrower Estoppel Exhibit "C"- Form of Assignment and Assumption of Mortgage Exhibit "D"- Form of Endorsement of Note Exhibit "D-1" List of Original Notes Exhibit "E"- Form of Assignment and Assumption of Collateral Agreements Exhibit "F"- List of Tenants Exhibit "G"- Non-Foreign Status Affidavit Exhibit "H"- Form of Assignment and Assumption of Share Exhibit "H-1"- Form of Stock Power Exhibit "H-2"- Share Documents Schedule "1"- Representations and Warranties Exception Schedule Schedule "2"- List of Cash Collateral Accounts Schedule "3"- Approved Budget Schedule "4"- List of Leases; Arrearage Schedule; Leasing Commissions; Security Deposits Schedule "5"- List of Service Agreements, Construction Agreements and Construction Contract Information Schedule "6"- Covenants Exception Schedule Schedule "7"- Pre-Closing Expenditures Schedule "8"- List of Insurance Policies Schedule "9"- List of Borrower Affiliates Schedule "10"- Review Materials Schedule "11"- ESG Information Book Schedule "12"- Title Letter AGREEMENT OF PURCHASE AND SALE ------------------------------ AGREEMENT OF PURCHASE AND SALE (this "Agreement"), dated as of May 10, 1999, by and between NBBRE-919 THIRD AVENUE ASSOCIATES, L.P., a Delaware limited partnership, having an office c/o NBB Real Estate, Inc., 530 Fifth Avenue, Ninth Floor, New York, New York 10036 ("Seller"), and RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an office c/o Reckson Associates Realty Corp., 10 East 50th Street, 27th Floor, New York, New York 10022 ("Purchaser"). WITNESSETH: ----------- WHEREAS, Seller is the owner and holder of that certain mortgage loan (the "Loan") (a) evidenced by that certain Consolidated, Amended and Restated Fee and Leasehold Mortgage Note, dated as of September, 21 1993, in the principal amount of $325,000,000 (the "Note"), made by 919 Fee Associates L.P. and 919 Third Avenue Associates L.P., each a New York limited partnership (collectively, the "Borrower"), jointly and severally, in favor of Seller, and (b) secured by, among other things, that certain Consolidated, Amended and Restated Fee and Leasehold Mortgage, dated as of September, 21 1993, made by the Borrower, as mortgagor, to Seller, as mortgagee, recorded on September 23, 1993 in the Office of the City Register, New York County, in Reel 2010, Page 0041 (the "Mortgage") and encumbering the improved real property (the "Real Property") more particularly described therein; and WHEREAS, upon and subject to the terms and conditions hereinafter set forth, Seller desires to sell and Purchaser desires to purchase the Loan and the interest of Seller in, to and under the Note, the Mortgage and all instruments, documents and title insurance policies relating to or executed in connection with or pursuant to the Loan as more particularly described on Exhibit "A" annexed hereto and made a part hereof (collectively, the "Collateral Agreements") (the Note, the Mortgage and the Collateral Agreements hereinafter are referred to collectively as the "Loan Documents"). NOW, THEREFORE, in consideration of One Hundred Dollars ($100) and the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows: ARTICLE I PURCHASE AND SALE; PURCHASE PRICE 1.1. Purchase and Sale. Subject to and in accordance with the terms and conditions set forth herein, Seller shall sell, assign and transfer the Loan to Purchaser, and Purchaser shall purchase and accept the Loan from Seller, "AS IS", "WHERE IS", "WITH ALL FAULTS", without recourse to Seller and without representation or warranty, express or implied, by Seller, except as specifically set forth herein. 1.2. Purchase Price. (a) The purchase price for the Loan is Two Hundred Seventy-Seven Million Five Hundred and Forty-Eight Thousand Dollars ($277,548,000) (the "Purchase Price") which shall be payable in accordance with the further terms of this Section 1.2. (b) The Purchase Price shall be paid as follows: (i) (A) Simultaneously with the execution and delivery of this Agreement, Purchaser shall deliver to Gibson, Dunn & Crutcher LLP ("Escrow Agent"), by wire transfer in immediately available federal funds, the amount of Ten Million Dollars ($10,000,000) as a deposit (the "Initial Deposit") on account of the Purchase Price. (B) Unless Purchaser has previously exercised any Termination Option, on or before the Due Diligence Expiration Date (as hereinafter defined) or such later date as may be set forth in Section 8.3(c) hereof, Purchaser shall deliver to Escrow Agent, by wire transfer in immediately available federal funds, the amount of Five Million Dollars ($5,000,000) as an additional deposit (the "Additional Deposit") on account of the Purchase Price. Purchaser acknowledges and agrees that upon Purchaser's payment of the Additional Deposit, Purchaser shall be deemed to have forever waived the right to exercise any rights under the terms of Section 8.3 hereof (other than the right to the reduction of the Purchase Price, if applicable). If Purchaser waives or is deemed to have waived it rights under the terms of Section 8.3 hereof and Purchaser fails to pay the Additional Deposit as provided in the first sentence of this clause (B), then, in such event, Purchaser shall be deemed to be in material default of its monetary obligations under this Agreement and Seller shall be entitled to terminate this Agreement and retain the Initial Deposit (and any interest thereon) as provided in Section 7.1 hereof (without regard to any conditions set forth in Section 7.1 hereof). (C) The Initial Deposit and the Additional Deposit, together with all accrued interest thereon shall hereinafter collectively shall be referred to as the "Escrow Funds". The Escrow Funds shall be held in escrow in accordance with the provisions of Section 1.3 hereof. Any interest earned on the Initial Deposit and the Additional Deposit shall be in addition to, and not a credit against, the Purchase Price. (ii) At the Closing, Purchaser shall (A) pay to Seller (or as directed in writing by Seller) the balance of the Purchase Price, in the amount of Two Hundred Sixty-Two Million Five Hundred and Forty-Eight Thousand Dollars ($262,548,000), subject to any apportionments and adjustments for which provision is herein made, and (B) direct the Escrow Agent to deliver to Seller the Escrow Funds. 1.3. Escrow Provisions. (a) Escrow Agent shall hold the Escrow Funds in escrow in an interest-bearing account (or as otherwise agreed in writing by Seller, Purchaser and Escrow Agent) in a New York Clearing House Bank or in a nationally recognized "money-market fund" until the Closing or sooner termination of this Agreement and shall pay over or apply the Escrow Funds in accordance with the further provisions of this Section 1.3. If Purchaser shall receive the interest earned on the Deposit, Purchaser shall pay all income taxes owed in connection therewith. The employer identification number of Purchaser is set forth on the signature page hereof. Escrow Agent shall not be liable to Purchaser or Seller for loss occasioned by any deposit of the Escrow Funds made in accordance with this Section 1.3. (b) At the Closing, the Escrow Funds shall be paid by Escrow Agent to Seller. (c) Subject to, and following in compliance with, the provisions of Section 1.3(e) below, Escrow Agent shall deliver to Seller the Escrow Funds within ten (10) business days following Escrow Agent's receipt of Seller's written demand ("Seller's Demand") for the Escrow Funds stating that Purchaser has defaulted in the performance of Purchaser's obligation to purchase the Loan under this Agreement or that Seller is entitled to use the Escrow Funds to restore the Real Property as provided in Section 8.2(b) hereof (it being understood and agreed that (i) Seller shall have no obligation to restore the Real Property, and (ii) to the extent Seller uses all or any portion of the Escrow Funds to restore the Real Property, Purchaser shall promptly pay to Escrow Agent an amount equal to the Escrow Funds used to restore the Real Property.) Simultaneously with Seller's delivery of Seller's Demand to Escrow Agent, Seller shall deliver a copy of Seller's Demand to Purchaser. (d) Subject to, and following in compliance with, the provisions of Section 1.3(e) hereof, Escrow Agent shall deliver to Purchaser the Escrow Funds within ten (10) business days following Escrow Agent's receipt of Purchaser's written demand ("Purchaser's Demand") therefor stating that (i) the Closing did not occur on the Scheduled Closing Date or on such later date to which the Closing shall have been adjourned, as a result of Seller's inability to transfer the Loan in accordance with the provisions of this Agreement, or (ii) Seller is otherwise in material breach under this Agreement. Simultaneously with Purchaser's delivery of Purchaser's Demand to Escrow Agent, Purchaser shall deliver a copy of Purchaser's Demand to Seller. (e) If Escrow Agent receives either Seller's Demand or Purchaser's Demand pursuant to and in accordance with Section 1.3 (c) or (d) hereof, as the case may be, then, in such event, prior to releasing the Escrow Funds, Escrow Agent shall deliver a copy of Seller's Demand or Purchaser's Demand, as the case may be, to the non-demanding party within five (5) business days after receipt thereof by Escrow Agent. If Escrow Agent shall have complied with the preceding sentence and shall not have received a written objection to the proposed payment before the tenth (10th) business day following the date of Seller's Demand or Purchaser's Demand, as the case may be, then, in such event, Escrow Agent is hereby authorized and directed to make the payment set forth in such demand. If Escrow Agent shall have received a written objection from either party before such payment, then, in such event, Escrow Agent shall continue to hold the Escrow Funds until otherwise directed by written instructions from both of the parties hereto or by a final judgment of a court of competent jurisdiction; provided, however, that Escrow Agent shall have the right, at any time, to deposit the Escrow Funds with any court of competent jurisdiction and thereby be relieved and discharged of any further obligations under this Agreement. Escrow Agent shall give written notice of any such deposit to Seller and Purchaser. Escrow Agent shall be entitled to rely upon the authenticity of any signature and/or the validity of any writing received by Escrow Agent pursuant to, or otherwise relating to, this Agreement. (f) The parties acknowledge and agree that (4) Escrow Agent is acting solely as a stakeholder at their request and for their convenience, (ii) Escrow Agent shall not be deemed to be the agent of either of the parties hereto (provided, however, that the parties hereto acknowledge and agree that (x) Purchaser, by its execution and delivery of this Agreement, has pledged to Seller the Escrow Funds as security for Purchaser's obligations hereunder, (y) Purchaser hereby grants to Seller a first priority lien on, and security interest in, the Escrow Funds, and (z) Escrow Agent shall be deemed to be Seller's agent for the purposes of such pledge and grant of security interest, (iii) any conflict of interest that may exist because of the Escrow Agent's representation of Seller hereunder is hereby waived, and (iv) Escrow Agent shall not be liable to either of the parties hereto for any act or omission on its part as Escrow Agent. Seller and Purchaser, jointly and severally, shall indemnify, defend and hold harmless Escrow Agent from and against any and all losses, liabilities, costs, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) which may be incurred or suffered by Escrow Agent in connection with the performance of Escrow Agent's duties hereunder other than on account of Escrow Agent's own direct gross negligence or willful misconduct. ARTICLE II CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER 2.1. Conditions Precedent for Purchaser's Obligations. The following are conditions precedent to Purchaser's obligation to purchase the Loan pursuant to the terms of this Agreement: (a) Subject to the terms of Section 5.2 hereof, on the Closing Date (as hereinafter defined), the representations, covenants and warranties of Seller set forth in Section 5.1 hereof shall be true, accurate and complete in all material respects as of the date hereof and as of the Closing Date as though repeated and made anew as of the Closing Date (except that the representation in Section 5.1(j) hereof, shall not be deemed repeated and made anew as of the Closing Date); provided, however, that (i) if any fact and/or information is the subject of or described in Purchaser's Preliminary Notice (as defined in Section 8.3 hereof), then, in such event, Seller shall not be deemed to be in breach (for any purpose under this Agreement) of its representations, covenants and warranties set forth in Section 5.1 hereof if any such fact and/or information would form the basis of such a breach, (ii) if any act or omission of the Borrower (or its direct or indirect partners or their respective affiliates) or condition with respect to the Borrower (or its direct or indirect partners or their respective affiliates), in either case not at the direction or consent of JPMIM or Seller, would result in any breach of any of the representations, covenants or warranties of Seller set forth in Section 5.1 hereof when repeated and made anew as of the Closing Date, then, in such event, Seller shall not be deemed in breach (for any purpose under this Agreement) of its representations, covenants and warranties set forth in Section 5.1 hereof, and/or (iii) if after the date of this Agreement Seller takes any action which is expressly permitted by the terms of this Agreement (other than a general provision to act in accordance with past practices) and such action would result in any breach of the representations, covenants or warranties of Seller set forth in Section 5.1 hereof when repeated and made a new as of the Closing Date, then, in such event, Seller shall not be deemed in breach (for any purpose under this Agreement) of such representations, covenants and warranties set forth in Section 5.1 hereof by reason of such action; (b) Seller shall have materially performed and observed all of its obligations under this Agreement; and (c) At the Closing, Seller shall execute and deliver, or cause to be executed and delivered, the documents and other agreements and instruments required to be delivered by or on behalf of Seller pursuant to the terms of this Agreement. 2.2. Termination Option. For the purposes of this Agreement, the term "Termination Option" shall mean the termination of this Agreement by Purchaser pursuant to the terms of Section 6.2(f) hereof, Section 7.2, Section 8.3 or Section 10.1 hereof, which Termination Option shall be exercised by the giving of a written notice of termination from Purchaser to Seller and Escrow Agent. Upon the exercise of the Termination Option by Purchaser, Purchaser shall be entitled to the Escrow Funds, subject to the provisions of Section 1.3 hereof and Section 8.2 hereof, and this Agreement shall be deemed terminated and of no further force or effect and neither party hereto shall have any further rights or obligations hereunder or thereunder, provided, however, that (i) the indemnities contained in Section 4.2, Section 8.2 and Section 11.2 hereof, and (ii) the terms of the Confidentiality Agreement (as hereinafter defined), shall survive any such termination. 2.3. Waiver of Conditions. The foregoing conditions are for the benefit only of Purchaser and Purchaser may, in its sole discretion, waive in writing any or all of such conditions and close under this Agreement without any abatement of, or credit against, the Purchase Price. In addition, any act or omission of Purchaser which causes a condition to the performance of Purchaser's obligations hereunder not to be fulfilled shall not constitute the non-fulfillment of such condition. ARTICLE III CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER 3.1. Conditions Precedent for Seller's Obligations. The following are conditions precedent to Seller's obligation to sell the Loan pursuant to the terms of this Agreement: (a) Purchaser shall have paid in full the Purchase Price and otherwise performed, in all but immaterial respects, all of its covenants and agreements contained herein which are required to be performed by it on or prior to the Closing; (b) On the Closing Date, the representations, covenants and warranties of Purchaser set forth in Section 4.1 hereof shall be true, accurate and complete in all material respects as of the date hereof and as of the Closing Date, as though repeated and made anew as of the Closing Date; and (c) At the Closing, Purchaser shall execute and deliver, or cause to be executed and delivered, the documents and other agreements and instruments required to be delivered by or on behalf of Purchaser pursuant to the terms of this Agreement. 3.2. Waiver of Conditions. The foregoing conditions are for the benefit only of Seller and Seller may, in its sole discretion, waive in writing any or all of such conditions and close under this Agreement without any increase in the Purchase Price. In addition, any act or omission of Seller which causes a condition to the performance of Seller's obligations hereunder not to be fulfilled shall not constitute the non-fulfillment of such condition. ARTICLE IV PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS 4.1. Purchaser's Representations and Warranties. Purchaser represents, warrants, covenants and agrees with Seller as follows: (a) Purchaser is a limited partnership, duly organized, validly existing and in good standing under the laws of the state of Delaware. (b) Purchaser has the full power and authority to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and has duly executed and delivered this Agreement, and all of the obligations of Purchaser hereunder constitute, and, upon execution and delivery by Purchaser of the other documents and instruments to be executed and delivered by Purchaser pursuant hereto, all the obligations of Purchaser thereunder will constitute, legal, valid and binding obligations of Purchaser, enforceable against it in accordance with their respective terms. (c) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and the performance of or compliance by Purchaser with the terms and conditions of this Agreement will not (i) conflict with or violate any provisions of Purchaser's organizational documents, (ii) conflict with or violate or result in a breach of any of the provisions of, or constitute a default under, any agreement or instrument to which Purchaser is a party or by which it or any of its property is bound, (iii) conflict with or violate any judgment, order, writ, injunction or decree binding on Purchaser or any of its property, or (iv) conflict with or violate any law, rule, regulation or ordinance applicable to Purchaser or any of its property. (d) No approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or regulatory body is required in connection with the execution and delivery by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby. (e) There is no litigation, claim or proceeding pending or, to Purchaser's knowledge, threatened in writing against Purchaser in any court or before any governmental agency or instrumentality that, if determined adversely to Purchaser, would materially and adversely affect the enforceability of this Agreement or any other document or instrument executed or to be executed in connection herewith or the ability of Purchaser to perform its obligations hereunder or consummate the transactions contemplated hereby. (f) Purchaser is solvent and has not filed, nor has there been filed against it, nor do grounds exist for the filing of, any voluntary or involuntary petition in bankruptcy or insolvency and no receiver or trustee or similar custodian has been appointed with respect to its property. (g) Purchaser (i) has available to it sufficient funds with which to pay the Purchase Price and to meet its other financial obligations to Seller under this Agreement, and (ii) is not in default under the terms of that certain Credit Agreement, dated as of July 23, 1998, among Purchaser, Reckson Morris Operating Partnership, L.P., the Institutions from time to time party to the Credit Agreement as Lenders and The Chase Manhattan Bank, as Arranger, Book Manager and Administrative Agent, UBS AG, New York Branch as Arranger, Book Manager and Syndication Agent, and PNC Bank, National Association as Documentation Agent. The obligations of Purchaser hereunder are not subject to any contingency for the benefit of Purchaser regarding the availability of financing (whether secured or unsecured) to provide funds to Purchaser to consummate the transactions contemplated hereby. (h) Purchaser is a sophisticated investor and has made its own decision to purchase the Loan in accordance with and subject to the terms and conditions of this Agreement. Purchaser has adequate information concerning the business and financial condition of the Borrower and the Real Property to make an informed decision regarding the purchase of the Loan and has independently and without reliance upon Seller, and based on such information as Purchaser has deemed appropriate, made its own analysis and decision to enter into this Agreement. Purchaser acknowledges that the consideration paid pursuant hereto for the purchase of the Loan may differ both in kind and amount from any payments or distributions which may ultimately be received with respect to the Loan. Purchaser acknowledges that the Loan may have limited or no liquidity and that it has the financial wherewithal to own the Loan for an indefinite period of time and that it is assuming and bearing the credit risk of full or partial loss of all amounts hereunder and all other credit risk which is inherent in the Loan, and all collectibility risks associated therewith. Purchaser represents and warrants that Purchaser has made its own independent evaluation and investigation of the business and financial condition of the Borrower (and its direct and indirect partners and their respective affiliates) and the organizational structure of the Borrower (and its direct and indirect partners and their respective affiliates) and acknowledges and agrees that Purchaser's satisfaction with such matters shall not constitute or be deemed to constitute a condition to Purchaser's obligations hereunder. Purchaser further acknowledges and agrees that if, at any time, the Borrower (or its direct or indirect partners or their respective affiliates) commences or institutes any case, proceeding or other action (i) seeking relief on the Borrower's behalf as debtor, or to adjudicate the Borrower a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to the Borrower or its debts under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for the Borrower or for all or any substantial part of its property (or any such case, proceeding or action referred to in clause (i) and/or clause (ii) is commenced or instituted against the Borrower), then, in any such event, such matter or fact shall not constitute or be deemed to constitute a condition to Purchaser's obligations hereunder. (i) As of the Closing Date, Purchaser shall have inspected the Loan Documents and the Real Property and, as a result of such inspection, shall be fully familiar with the Loan Documents and the Real Property, the present physical and financial condition of the Real Property, the present state of repair of the Real Property and title to the Real Property. Subject to the terms of this Agreement, at the Closing, Purchaser shall accept the Loan, the Loan Documents and the Real Property "AS IS", "WHERE IS" AND "WITH ALL FAULTS" on the Closing Date, without any reduction in the Purchase Price for any change in the physical or financial condition occurring from and after the date hereof. Purchaser acknowledges and agrees that (i) neither Seller's Partners (as hereinafter defined), J.P. Morgan Investment Management Inc. ("JPMIM"), Insignia/ESG, Inc. ("ESG"), NBB Real Estate, Inc. ("NBB") and their respective officers, directors, shareholders, direct or indirect partners, employees, agents, brokers, representatives and affiliates of any of the foregoing (collectively, the "Seller Parties") nor any other person (other than Seller as expressly set forth and limited herein) has made any representation, warranty or covenant, express or implied, with respect to Loan, the Borrower, the Loan Documents or the Real Property, the fitness, merchantability, suitability or adequacy of the Real Property for any particular purpose, any environmental condition at or with respect to the Real Property, the site or physical conditions applicable to or with respect to the Real Property, the zoning regulations or other governmental requirements applicable to or with respect to the Real Property, the Leases (as hereinafter defined), title to the Real Property or any other matters affecting the Loan or the use, occupancy, operation, ownership or condition of or with respect to the Real Property, and (ii) neither the Seller Parties nor any other person will have, or be subject to, any liability to Purchaser or any other person resulting from the distribution to Purchaser, or Purchaser's use of, any information pertaining to the Loan which is not specifically set forth in this Agreement. Without limiting the generality of the foregoing, Purchaser further acknowledges and agrees that (x) Purchaser has reviewed and it is fully familiar with the current state of title of the Real Property and no representation, warranty, covenant or indemnity has been made with respect thereto, and (y), except as expressly set forth herein, no representation, warranty, covenant or indemnity has been made or will be given to Purchaser or any other person in respect of any environmental liability with respect to any dangerous, toxic or hazardous wastes, materials, pollutants or substances ("Hazardous Materials"), as such terms are defined in federal, state and/or local environmental laws and regulations, including, without limitation, the United States Comprehensive Environmental Response, Compensation and Liability Act 1980, as amended (collectively, "Environmental Laws"). Purchaser also acknowledges and agrees that in no event whatsoever shall any Seller Parties have any liability to Purchaser, or otherwise, with respect to Hazardous Materials affecting the Real Property or Environmental Laws. Purchaser also acknowledges that as of the Closing Date Purchaser shall have had sufficient opportunity to conduct such investigations of and with respect to the Loan as it has deemed necessary and advisable. Purchaser's representations set forth in this clause (i) shall survive the Closing. (j) Except as specifically set forth in this Agreement, Purchaser has not been induced by, and has not relied upon, any representations, warranty or statement made by any Seller Parties or any person representing any Seller Parties. Purchaser's representations set forth in this clause (j) shall survive the Closing. (k) For the purposes of this Agreement, the term "Seller's Partners" shall mean any partner in Seller or any partner in or shareholder of any such partner or any other direct or indirect partner or shareholder which is an owner of any direct or indirect legal or beneficial interest in the Seller or any affiliate of any of the foregoing, whether such person or entity is, was or shall be one of the Seller's Partners (and its or his successors and assigns), or whether such person is known, unknown, disclosed or undisclosed, or is, was or shall be a direct or indirect partner, former partner, employee, officer, director, attorney-in-fact or agent of Seller or any of Seller's Partners (and each of his or its successors and assigns), or who or which has, had or shall have a direct interest in Seller or any of Seller's Partners, in each case only to the extent relating to the transactions contemplated by the Loan Documents. 4.2. Covenants of Purchaser. From and after the date hereof until the Closing, Purchaser shall (i) not take any action, grant any waiver or release, or expressly consent to or approve any action, with respect to the Loan, the Borrower or the Loan Documents or any of the other documents held by Seller in connection therewith or in connection with the Real Property which would have the effect of impairing or diminishing the value thereof or the validity, enforceability, perfection or priority of the liens of any Loan Document (it being understood and agreed that Purchaser shall indemnify, defend and hold harmless Seller and the Seller Parties from and against any and all Liabilities (as hereinafter defined) arising out of any breach by Purchaser of the terms of this Section 4.2(i), which indemnity, defense and hold harmless shall survive the Closing or earlier termination of this Agreement), (ii) deliver to Seller copies of all notices given or received by Purchaser in connection with the Real Property and/or the Loan, and (iii) be entitled to contact any contractor, subcontractor, materialman, architect, engineer or consultant providing services or otherwise performing work on the Real Property, provided that each and every such contact shall have been coordinated in advance with Seller's representative, Ray Quartararo. ARTICLE V SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS 5.1. Seller's Representations and Warranties. Except as set forth on Schedule "1" annexed hereto and made a part hereof, Seller, hereby represents, warrants, covenants and agrees with Purchaser as follows: (a) Seller is a limited partnership, duly organized, validly existing and in good standing under the laws of the State of Delaware. (b) Seller has the full power and authority to enter into and consummate all transactions contemplated by this Agreement, has duly authorized the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and has duly executed and delivered this Agreement, and all of the obligations of Seller hereunder constitute, and, upon execution and delivery by Seller of the other documents and instruments to be executed and delivered by Seller pursuant hereto, all the obligations of Seller thereunder will constitute, legal, valid and binding obligations of Seller, enforceable against it in accordance with their respective terms. (c) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and the performance of or compliance by Seller with the terms and conditions of this Agreement will not (i) conflict with or violate any provisions of Seller's organizational documents, (ii) conflict with or violate or result in a breach of any of the provisions of, or constitute a default under, any agreement or instrument to which Seller is a party or by which it or any of its property is bound, (iii) conflict with or violate any judgment, order, writ, injunction or decree binding on Seller or any of its property, or (iv) conflict with or violate any law, rule, regulation or ordinance applicable to Seller or any of its property. (d) No approval, authorization, order, license or consent of, or registration or filing with, any governmental authority or regulatory body is required in connection with the execution and delivery by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby. (e) There is no litigation, claim or proceeding pending or, to Seller's knowledge threatened in writing against Seller in any court or before any governmental agency or instrumentality that, if determined adversely to Seller, would materially and adversely affect the enforceability of this Agreement or any other document or instrument executed or to be executed in connection herewith or the ability of Seller to perform its obligations hereunder or consummate the transactions contemplated hereby. (f) Seller is solvent and has not filed, nor has there been filed against it, nor do grounds exist for the filing of, any voluntary or involuntary petition in bankruptcy or insolvency and no receiver or trustee or similar custodian has been appointed with respect to its property. (g) Seller heretofore has made available for Purchaser's inspection the Loan Documents and certain other documents and instruments executed and delivered from time to time in connection with the Loan as more particularly described on Exhibit "A-1" annexed hereto and made a part hereof (collectively, the "Ancillary Documents"). (h) Seller has made available for Purchaser's inspection true, correct and complete copies of the Loan Documents and the Ancillary Documents. Except as set forth on Exhibit "A" and "A-1" and except as provided in the Loan Documents and/or the Ancillary Documents, the Loan Documents and the Ancillary Documents have not been amended, modified or otherwise changed in writing by Seller, and there are no other written documents, instruments or agreements material to the understanding of the current status of the Loan which (i) were signed by or on behalf of Seller, (ii) are binding on Seller, and (iii) affects the Borrower's rights and obligations under the Loan. Annexed hereto and made a part hereof as Exhibit "A-2" is a true, correct and complete copy of Seller's approval of the Approved Budget in effect as of the date hereof for 1999. The Mortgage has not been satisfied, or, to Seller's knowledge, subordinated in writing by Seller. Seller has not waived in writing any of its material rights under, or otherwise consented in writing to any material departure from, the terms of the Loan Documents or the Ancillary Documents. (i) Seller is the sole legal and beneficial owner of the Loan, free and clear of any lien, claim, security interest, option, equity or other charge or encumbrance of any nature whatsoever. Seller has not endorsed, granted, assigned, transferred or otherwise pledged, encumbered or set over the Note to any other person. (j) To Seller's knowledge, Seller has not received from Borrower written notice of any setoff, counterclaim, lender liability claim or defense, or any right of rescission with respect to the Loan. To Seller's knowledge, Seller has not received from Borrower written notice of any adverse claims asserted with respect to the enforceability or priority of the Loan Documents or the Ancillary Documents. (k) No claims have been made by Seller under its lender's title insurance policies listed on Exhibit "A-1" hereto (collectively, "Lender's Title Policy"). Seller is the owner of Lender's Title Policy. To Seller's knowledge, Seller has not received written notice of any defenses by any title insurer under Lender's Title Policy. (l) The outstanding principal amount under the Note as of the date hereof is $ 325,000,000 (the "Outstanding Principal Balance") and Outstanding Debt Service Shortfalls (as defined in the Note) as of April 30, 1999 was $88,214,754.06 (including the OID Amount). No Additional Interest (as defined in the Note) has been paid. The OID Amount (as defined in the Note) as of the date hereof is $26,764,990. Except for the accounts listed on Schedule "2" annexed hereto and made a part hereof (collectively, the "Cash Collateral Accounts") established pursuant to the Collateral Account Agreement listed on Exhibit "A" hereto, there are no escrows or other deposits held by Seller under the Loan Documents. The total balance in the Cash Collateral Accounts as of March 31, 1999 was approximately $14,725,000. (m) Annexed hereto and made a part hereof on Schedule "3" is a true, complete and correct copy of the Approved Budget in effect as of the date hereof for 1999. (n) To Seller's knowledge, annexed hereto and made a part hereof on Schedule "4" is a true, complete and correct list of all of the leases, together with all amendments, modifications and supplements thereto and guarantees thereof as of the date hereof (collectively and as amended, modified and supplemented, the "Leases") for space at the Real Property (other than subtenancies, if any, under the Leases) and true, correct and complete copies of the Leases have been made available to Purchaser. To Seller's knowledge, Schedule "4" annexed hereto and made a part hereof is a true, correct and complete list of the security deposits held by the Borrower with respect to the Leases, and the bank(s) and account number(s) where such security deposits are maintained. (o) To Seller's knowledge, all of the Leases are in full force and effect (although Purchaser acknowledges and understands that certain Leases have not commenced) and none of the Leases has been further modified, amended or supplemented. (p) To Seller's knowledge, (i) there are no pending summary proceedings for the eviction of any tenant, (ii) there are no pending proceedings or pending written claims by any tenant for offsets against rent or additional rent or for damages or other redress, and (iii) no tenant has delivered written notice to the Borrower, JPMIM or ESG for which such tenant is currently disputing the amount of additional rent or escalation payments due pursuant to such tenant's Lease. (q) To Seller's knowledge, neither the Borrower, ESG nor JPMIM has received written notice from any tenant claiming that the Borrower is in default of any of its obligations under any Lease, which default has not been cured. (r) To Seller's knowledge, (i) neither JPMIM, ESG nor the Borrower has sent any written notice to any tenant claiming that such tenant is in default, which default remains uncured, and (ii) except as set forth on Schedule "4" hereto, no tenant is (x) in default of the payment of monthly base rent, or (y) otherwise in material breach of a material term of its Lease to such an extent that a prudent landlord of a first class building similar to the Real Property would seek to terminate such Lease as a result of such material breach. (s) To Seller's knowledge, except as set forth on Schedule "4" hereto, there are no delinquencies in any rental payments due under any of the Leases. (t) To Seller's knowledge, Schedule "4" hereto includes a list of all brokerage commissions, finder's fees or real estate agent's fees applicable to the "Debevoise Lease", the "Schulte Lease", the "BNP Lease", the "Kramer Lease" and the "Draft Worldwide Lease" (as such Leases are defined in Schedule "4" hereto). To Seller's knowledge, Schedule "4" hereto includes a true, correct and complete list of all brokerage agreements regarding the payment of brokerage commissions, finder's fees or agent's fees applicable to the Leases for which payment has not been made, and true, correct and complete copies of such brokerage agreements have been made available to Purchaser. (u) Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code, as amended. (v) To Seller's knowledge, neither Seller nor the Borrower has received notice of any condemnation or eminent domain proceeding pending or threatened, in writing, against the Real Property or any part thereof. (w) To Seller's knowledge, (i) Schedule "5" annexed hereto and made a part hereof is a true, correct and complete list of all material service, utility and maintenance contracts, together with all amendments, modifications and supplements thereto (collectively and as amended, modified and supplemented, the "Service Agreements"), and all construction contracts and architect's and engineer's agreements (together with all amendments, modifications and supplements thereto) relating to work being performed by the Borrower at the Real Property (collectively and as amended, modified and supplemented, the "Construction Agreements"), (ii) the Service Agreements and the Construction Agreements are in full force and effect, without material default by (or notice of material default to) any party, and (iii) true, correct and complete copies of the Service Agreements and the Construction Agreements have been made available to Purchaser. Schedule "5" hereto sets forth, to Seller's knowledge, the percentage of completion of work under the Construction Contracts, amounts paid and balance due thereunder and any retainages with respect thereto, all as of the date hereof. (x) To Seller's knowledge, Seller has provided to Purchaser a copy of all environmental reports with respect to the Real Property which are in the possession or control of Seller (collectively, the "Environmental Reports"), excluding, however, those Environmental Reports restricted by confidentiality arrangements (and Seller shall notify Purchaser of the date and company which prepared any such reports as long as such information is not confidential). (Purchaser acknowledges and agrees that Purchaser, its affiliates, agents, employees, representatives, contractors and/or its consultants shall not use or rely on the Environmental Reports except as expressly permitted therein). To Seller's knowledge, except as set forth in the Environmental Reports neither Seller, JPMIM nor ESG has received any written notice from any governmental or quasi-governmental authority of any material violation or liability against the Real Property under Environmental Laws. (y) To Seller's knowledge, Schedule "8" annexed hereto and made a part hereof sets forth all insurance policies maintained by the Borrower for the benefit of Seller covering the Real Property, the limits of coverage, deductible amounts and expiration dates of such policies, and such insurance policies are in full force and effect. (z) To Seller's knowledge, except as set forth in the Loan Documents or the Ancillary Documents, neither Seller, JPMIM nor ESG has made any written arrangements on behalf of Seller with the Borrower or any person listed on Schedule "9" annexed hereto and made a part hereof (the "Borrower Affiliates") to pay the Borrower or any Borrower Affiliates any fees, commissions or other sums, which have not been paid . (aa) To Seller's knowledge, (i) a true, correct and complete copy of the Rosman Ground Lease (as defined in Schedule "10" annexed hereto and made a part hereof) has been made available to Purchaser, (ii) the Rosman Ground Lease is in full force and effect, and (iii) no written notice has been sent to Seller or the Borrower claiming that the Borrower is in default under the Rosman Ground Lease, which default remains uncured. Seller shall request that the landlord under the Rosman Ground Lease execute an estoppel certificate in the form required under the Rosman Ground Lease (a "Rosman Estoppel"), it being understood and agreed that (A) Seller shall use reasonable efforts to obtain the Rosman Estoppel (provided, however, that Seller shall have no obligation to commence any action or proceeding or to expend any amounts (other than de minimis amounts) to obtain a Rosman Estoppel), (B) the execution and/or delivery of a Rosman Estoppel shall not be a condition to the Closing, (C) if as of the Closing Date, Seller is unable to obtain a Rosman Estoppel, dated within 37 days of the Scheduled Closing Date, as adjourned by Seller, which is not inconsistent, in any material respect, with the representations and warranties set forth in subclauses (i) (ii) and (iii) of this clause (aa) (a "Qualified Rosman Estoppel"), then, in such event, (x) Seller shall have the right, at its option, to adjourn the Closing for up to 45 days in the aggregate (within the 45-day period referred to in section 6.2(f) below) to obtain a Rosman Estoppel, and (y) if Seller has not obtained a Qualified Rosman Estoppel prior to the Closing, as may be adjourned, Purchaser and Seller shall consummate the transaction contemplated hereby subject to and in accordance with the terms of this Agreement, including, without limitation Seller's obligation to make the delivery in Section 6.2(o) hereof; provided, however, that if and so long as after the Closing Date (I) Purchaser is using reasonable commercial efforts to obtain a Qualified Rosman Estoppel, and (II) Purchaser has expended $250,000 of its own funds to obtain a Qualified Rosman Estoppel, then, in such event, Purchaser shall have the right, from time to time until the first anniversary of the Closing Date, by written notice to Seller and Escrow Agent, to make a claim against the Closing Escrow Fund for up to $500,000 (the "Rosman Estoppel Amount") in the aggregate to fund the cost of obtaining a Qualified Rosman Estoppel; provided, further, that Purchaser shall have no further claim for any portion of the Rosman Estoppel Amount if Purchaser (or its Affiliate) obtains a Qualified Rosman Estoppel or obtains non-recourse financing secured by either its interest in the Loan or the Real Property and if, on such first anniversary, Purchaser shall not have obtained a Qualified Rosman Estoppel and is continuing to use reasonable commercial efforts to obtain a Qualified Rosman Estoppel, then the remaining Rosman Estoppel Amount shall be released from the Closing Escrow Fund to Purchaser, otherwise the remaining Rosman Estoppel Amount shall be released in accordance with the terms of Section 5.4 hereof. (bb) To Seller's knowledge, (i) Takeshi Saeki is the owner of the Share (as hereinafter defined) by assignment from Akira Osawa, and (ii) annexed hereto and made a part hereof as Exhibit "H-2" is a true, correct and complete copy of (x) the Certificate of Amendment of the Certificate of Incorporation of 919T Corp. relating to the Share, (y) the Subscription Agreement relating to the Share executed by Akira Osawa, and (z) the By-Laws of 919T Corp. as in effect on September 21, 1993, and to Seller's knowledge, such Subscription Agreement and By-Laws have not been amended, modified or supplemented in any material respect. As used in this Agreement, the words "Seller's knowledge" or words of similar import shall be deemed to mean, and shall be limited to, the actual (as distinguished from implied, imputed or constructive) knowledge of Donald Rederscheid or Kazuyuki Nishiura, individuals who have been charged with management responsibility for Seller with respect to the Loan, the Loan Documents and the Real Property without such person having any obligation to make an independent inquiry or investigation, it being understood and agreed that neither individual shall have any liability or obligation hereunder whatsoever. 5.2. Breaches of Representations and Warranties. Notwithstanding anything contained herein to the contrary, if the Closing occurs, any claim that Purchaser may have that there has been a breach of any representation or warranty contained herein shall be deemed forever waived by Purchaser (and shall be deemed waived for the purposes of Section 2.1(a) hereof and Section 5.4 hereof) if such breach is known to Purchaser on or before the Closing and an allegation of such breach is not given to Seller in writing on or prior to the Closing Date. For purposes of this Agreement, a breach shall be "known" to Purchaser only if Richard Conniff, Todd Rechler, Gregg Rechler, Jason Barnett, Tod Waterman (collectively, the "Knowledge Persons" and individually, a "Knowledge Person") shall have (x) actual knowledge of such breach, and/or (y) actual knowledge of any information which is the basis of such breach; it being understood and agreed that supplementing the foregoing, each of Knowledge Person shall be deemed to have actual knowledge of (A) all of the documents, instruments, agreements or other materials set forth on Schedule "10" hereto (collectively and, subject to the terms of Section 11.20 hereof, as the same may be amended, modified or supplemented from time to time prior to the Closing, the "Review Materials" and all information contained therein) to the extent held as contemplated by the terms of Section 11.20 hereof, and (B) all written reports or other written materials prepared by Fried, Frank, Harris, Shriver & Jacobson LLP or Ernst & Young LLP and furnished to Purchaser or its affiliates relating to the Loan, the Real Property and/or the transactions contemplated hereby, and all information contained therein. The parties hereto acknowledge and agree that no Knowledge Person shall have any liability hereunder whatsoever. 5.3. Covenants of Seller as to the Real Property and Loan. (a) Except as set forth on Schedule "6" annexed hereto and made a part hereof (which sets forth actions Seller shall be entitled to take notwithstanding any limitations set forth in this Agreement) or as may be expressly permitted hereby, so long as Purchaser is not in default of any of the terms, covenants or conditions on Purchaser's part to be observed or performed, Seller shall not, at any time after the date hereof and prior to the Closing, without Purchaser's prior written consent, which consent, in the case of clauses (i), (iii), (iv), (vi) and (viii) below, shall not be unreasonably withheld, delayed or conditioned, (i) consent to the Borrower entering into any new service contracts which cannot be cancelled, without cost to the Borrower (other than de minimis amounts) on not more than thirty (30) days notice or construction agreements, (ii) release the Borrower or any portion of the Real Property from the lien of the Mortgage, (iii) consent to the Borrower amending, modifying, terminating or supplementing any Lease, (iv) consent to the Borrower amending, modifying or supplementing any Service Agreement or Construction Agreement in any material respect, (v) forgive, waive, reduce or compromise any of the indebtedness evidenced or secured by the Loan Documents, nor grant any waiver with respect to any obligation thereunder or under the Ancillary Documents, (vi) modify, amend or supplement the Approved Budget, (vii) terminate, cancel, modify, amend, rescind or supplement the Loan Documents or the Ancillary Documents, or (viii) consent to the Borrower entering into any new lease of any portion of the Real Property; provided, however, that notwithstanding the foregoing to the contrary, Seller's covenants set forth in Section 5.3 hereof shall terminate and shall be of no further force or effect as of the Covenant Termination Date (as hereinafter defined), but following the Covenant Termination Date, Seller shall continue to service and deal with the Loan, the Real Property and the Borrower in accordance with the Approved Budget and otherwise in a reasonably prudent manner in accordance with past practices, it being understood and agreed that supplementing the foregoing proviso, following the Covenant Termination Date and prior to the Closing, Seller (or JPMIM on Seller's or the Borrower's behalf) shall have the right (but not the obligation) to take any action (including, without limitation, make any expenditure or modify the Approved Budget) or refrain from taking any action in the case of an emergency or which, in Seller's reasonable judgment, either would increase the value of the Loan and/or the Real Property. For the purposes of this Agreement, the term "Covenant Termination Date" shall be (I) with respect to the covenants in clauses (i), (iii), (iv), (vi) and (viii) above, 60 days, and (II) with respect to the covenants in clauses (ii), (v) and (vii) above, 120 days, in either case, following the later to occur of (x) the Scheduled Closing Date (as hereinafter defined), or (y) such later date as Seller shall have adjourned the Closing pursuant to the terms of this Agreement. (b) Between the date hereof and the Closing Date, so long as Purchaser is not in default of any of the terms, covenants or conditions on Purchaser's part to be observed or performed, Seller shall promptly deliver to Purchaser copies of all material notices given or received by Seller with respect to the Loan and the Real Property, including, without limitation, any notice from the Borrower (and Seller shall request, within two (2) business days following the date hereof, that JPMIM and ESG forward to Seller any such notices received by them). (c) Subject to the terms of Section 5.3(a) hereof, between the date hereof and the Closing Date, Seller shall continue to service and deal with the Loan and the Borrower in accordance with the Approved Budget and otherwise in accordance with its prior practices. (d) Seller represents to Purchaser that Seller has been advised by JPMIM and ESG that each such party shall be available to be retained by Purchaser in their respective capacities as asset manager and managing and leasing agent for a period of at least thirty days following the Closing, subject to the reasonable negotiation of market terms for providing such services. (e) Seller shall request that the Borrower execute and deliver on or before the Closing an estoppel certificate in the form annexed hereto and made a part hereof as Exhibit "B", it being understood and agreed that the execution and delivery by Borrower of an estoppel certificate shall not constitute or be deemed to constitute a condition to Purchaser's obligations hereunder. (f) Without limiting the generality of the foregoing, until the Closing, Seller shall cause the insurance policies and the insurance coverages set forth on Schedule "8" hereto (or policies and coverages substantially similar thereto) to remain in full force and effect. 5.4. Survival of Representations and Warranties; Holdback. The representations, warranties and covenants of Seller set forth in Section 5.1 hereof shall not merge into any instrument of assignment or transfer delivered at the Closing, and shall survive the Closing for a period of one (1) year (the "Survival Expiration Date"); provided, however, that notwithstanding anything contained herein to the contrary, (a) any allegation of a breach of any representation, warranty or covenant shall be subject to and limited by the terms of Section 5.2 hereof, (b) subject to and limited by the terms of this Section 5.4 and Section 5.2 hereof, Purchaser shall not be entitled to obtain any recovery on account of any breach of any representation, warranty or covenant until the aggregate losses (excluding consequential damages but including any net diminution in the value of the Loan (or, after Closing, the Real Property if Purchaser or its Affiliate (as hereinafter defined) acquires the Real Property)) incurred by Purchaser on account of all breaches of representations and warranties by Seller under Section 5.1 hereof exceeds an amount (the "Representations Threshold Amount") equal to Two Hundred and Fifty Thousand Dollars ($250,000), less any amounts expended by Purchaser from its own funds pursuant to the terms of clause (II) in Section 5.1(aa) hereof, and (c) subject to and limited by the terms of Section 5.4 and Section 5.2 hereof, Seller's liability at any time with respect to any breach of any representation or warranty shall be limited to the amount of the Closing Escrow Fund (as hereinafter defined) then being held by Escrow Agent. At the Closing, a portion of the Purchase Price, in the amount of Ten Million Dollars ($10,000,000), shall be retained by the Escrow Agent (as such amount may be reduced from time to time, the "Closing Escrow Fund"), to be held by Escrow Agent in escrow subject to and in accordance with the terms of this Section 5.4 and subject to the terms of Section 1.3(f) hereof. Escrow Agent shall hold the Closing Escrow Fund in an interest-bearing account (or as otherwise agreed in writing by Seller, Purchaser and Escrow Agent) in a New York Clearing House Bank or in a nationally recognized "money-market fund." If prior to the sixth (6th) month anniversary of the Closing Date, Purchaser has not given to Seller and Escrow Agent written notice of losses (excluding consequential damages but including any net diminution in the value of the Loan (or, after the Closing, the Real Property if Purchaser or its Affiliate acquires the Real Property)) incurred by Purchaser in excess of the Representations Threshold Amount on account of breaches by Seller of representations and warranties under Section 5.1 hereof or any of the other covenants and agreements of Seller under this Agreement which survive the Closing, then, in such event, on the sixth (6th) month anniversary of the Closing Date, Escrow Agent shall pay to Seller (without any notice to Purchaser being required) the amount of Five Million Dollars ($5,000,000). If prior to the Survival Expiration Date, Purchaser has not given to Seller and Escrow Agent written notice of losses (excluding consequential damages but including any net diminution in value of the Loan (or, after Closing, the Real Property if Purchaser (or its Affiliate acquires the Real Property)) incurred by Purchaser in excess of the Representations Threshold Amount on account of breaches by Seller of representations and warranties under Section 5.1 hereof or any of the other covenants and agreements of Seller under this Agreement which survive the Closing, then, in such event, on the Survival Expiration Date, Escrow Agent shall pay to Seller (without any notice to Purchaser being required) the balance of the Closing Escrow Fund. If at any time prior to the Survival Expiration Date, (a) Purchaser has given to Seller and Escrow Agent written notice (which notice Escrow Agent shall confirm receipt of by written notice to Purchaser given within three (3) business days of receipt) of losses (excluding consequential damages but including any net diminution in the value of the Loan (or, after Closing, the Real Property if Purchaser or its Affiliate acquires the Real Property) incurred by Purchaser in excess of the Representations Threshold Amount on account of breaches by Seller of representations and warranties under Section 5.1 hereof or any of the other covenants and agreements of Seller under this Agreement which survive the Closing (which notice from Purchaser shall include in reasonable detail the basis for Purchaser's allegation and the calculation of Purchaser's losses), and (b) within thirty-days after such notice, Purchaser shall have commenced an action in a court of competent jurisdiction asserting a claim under this Section 5.4, then, in such event, (x) if the Representations Threshold Amount has been exceeded, with respect to each such claim by Purchaser, Escrow Agent shall retain an amount (the "Escrow Retention Amount") equal to 120% of the lesser of (A) the amount set forth in Purchaser's notice, or (B) the amount of Purchaser's claim in Purchaser's action described in clause (b) of this sentence, until the receipt of joint written instructions from Seller and Purchaser directing the release of the Escrow Retention Amount or Escrow Agent is otherwise directed by a court of competent jurisdiction to release the Escrow Retention Amount, and (y) Escrow Agent shall pay to Seller the remaining Closing Escrow Fund in excess of the Escrow Retention Amount in accordance with, and at the times set forth in, the immediately preceding sentences as if Purchaser had not given to Seller and Escrow Agent any written notice under this Section 5.4 (without any notice to Purchaser being required). Escrow Agent shall have the right, at any time, to deposit all or any portion of the Closing Escrow Fund with a court of competent jurisdiction and thereby be relieved and discharged of any further obligations under this Section 5.4. Escrow Agent shall give written notice of any such deposit to Purchaser and Seller. The provisions of this Section 5.4 shall survive the Closing. For the purposes of this Section 5.4, the term "net diminution in value in the Loan" (or, after Closing, the Real Property if Purchaser or its Affiliate acquires the Real Property) shall be based on the facts and information known to Purchaser (as defined in Section 5.2 hereof) as of the Closing compared with the actual facts and information which result in the breach. For the purposes of the foregoing, Seller and Purchaser acknowledge and agree that there is no need to determine the actual value of the Loan (or the Real Property, as the case may be) as of any point in time, but only the net reduction, if any, in value. The Purchaser and Seller acknowledge and agree that the Closing Escrow Fund may be also used for the breach of any covenants of Seller which survive the Closing, or the purposes set forth in Section 5.1(aa), in each case, without regard to the Representations Threshold Amount. ARTICLE VI CLOSING; EXPENSES AND APPORTIONMENTS 6.1. Place of Closing. (a) The consummation of the sale and purchase contemplated in this Agreement (the "Closing") shall take place at the offices of Gibson, Dunn & Crutcher LLP 200 Park Avenue, New York, New York 10166 at 10:00 A.M. on the tenth (10th) business day following the Due Diligence Expiration Date (as hereinafter defined), (the "Scheduled Closing Date", the date the Closing actually occurs being the "Closing Date"). (b) Subject to Seller's right to adjourn the Closing set forth in this Agreement, each party hereto shall have the one-time right, upon written notice to the other no later than two (2) business days prior to the Scheduled Closing Date, to adjourn the Scheduled Closing Date for up to seven (7) days in the aggregate. 6.2. Items to Be Executed or Delivered by Seller. At the Closing, Seller shall execute, acknowledge (where appropriate) and deliver, or cause to be executed, acknowledged (where appropriate) and delivered, the following: (a) The Assignment and Assumption of Mortgage and section 275 Affidavit in the form of Exhibit "C" annexed hereto and made a part hereof. (b) The original executed Note endorsed to Purchaser with the form of endorsement set forth on Exhibit "D" annexed hereto and made a part hereof (at the Closing, the Note also shall be registered in accordance with the terms of Paragraph 17(q) of the Note); together with all original notes listed on Exhibit "D-1" annexed hereto and made a part hereof. (c) The Assignment and Assumption of Collateral Agreements in the form of Exhibit "E" annexed hereto and made a part hereof. (d) UCC-3 Financing Statements with respect to each UCC-1 Financing Statements listed on Exhibit "A" hereto. (e) An updated title report showing any title matters since the date of Lender's Title Policy (it being understood and agreed that Purchaser's satisfaction with such title report shall not constitute or be deemed to constitute a condition to Purchaser's obligations hereunder). (f) Promptly after the date hereof, Seller shall deliver to tenants and Seller shall use its reasonable efforts to obtain an executed tenant estoppel letter (a "Tenant Estoppel") from each of the tenants under the Leases in the form which has been separately approved in writing by the parties hereto; provided, however, that Seller shall have no obligation to bring any action or proceeding or to incur any costs or expenses, other than de minimis amounts, in connection therewith. Each Tenant Estoppel shall be dated within thirty-seven (37) days of the Scheduled Closing Date, as adjourned by Seller. Notwithstanding the foregoing to the contrary, Seller's obligation to deliver Tenant Estoppels shall not be a condition to Closing hereunder and Seller's failure to deliver any Tenant Estoppels shall not diminish or otherwise affect Purchaser's obligations hereunder, except that Seller's obligation to obtain Tenant Estoppels from the tenants listed on Exhibit "F" annexed hereto and made a part hereof shall be a condition to Purchaser's obligations hereunder; provided, however, that in the event that Seller is unable to obtain such Tenant Estoppels, then, in such event, Seller shall have the right, at its sole option, to adjourn the Closing for up to 45 days in the aggregate (without duplication of the 45 day period referred to in Section 5.11(aa)) to obtain such Tenant Estoppels. If the Seller shall have failed to obtain the required Tenant Estoppels which are a condition to the Closing hereunder at or prior to Closing (as the same may be adjourned by Seller hereunder), then, in such event, Purchaser, in its sole discretion, shall have the right, exercised no later than the Scheduled Closing Date (as the same may be adjourned by Seller or Purchaser as permitted hereunder), either to (i) waive such condition with respect to Tenant Estoppels, accept the Loan and consummate the Closing without abatement of, or credit against, the Purchase Price and without liability on the part of Seller, or (ii) exercise the Termination Option. To the extent that (i) any Tenant Estoppel obtained from a tenant contains information which has been represented by Seller in Seller's representations in Section 5.1 hereof and such Tenant Estoppel is contrary to, in any material respects, such representations, then, in such event, Seller shall be deemed to have breached such representations but Seller shall be deemed to have satisfied all of the conditions with respect to such Tenant Estoppel set forth in this Section 6.2(f) notwithstanding such disagreement, or (ii) any Tenant Estoppel obtained from the tenant does not contain information described in the preceding subclause (i) and otherwise disagrees with any information set forth in such Tenant Estoppel in the form sent to such tenant (or otherwise sets forth additional information) Seller shall be deemed to have satisfied all of the conditions with respect to such Tenant Estoppel as set forth in this section 6.2(f) notwithstanding such facts or information. (g) A closing statement reflecting all of the financial aspects of the transaction (the "Closing Statement") initialed by Seller. (h) A non-foreign status affidavit in the form annexed hereto and made a part hereof as Exhibit "G". (i) The Assignment and Assumption of Share in the form of Exhibit "H" annexed hereto and made a part hereof with respect to the share (the "Share") of 919T Corp. held by Takeshi Saeki, together with (A) the original Share, and (B) an executed stock power in the form of Exhibit "H-1" hereto. (j) Any and all documents and/or instruments reasonably necessary to change (i) the name of any Cash Collateral Account from the name of Seller to Purchaser, and (ii) the signatures of any Cash Collateral Account. (k) An original of each Loan Document to the extent in Seller's possession. (l) A copy of each Lease (together with a copy of such information related to the Leases which is reasonably necessary for an owner of the Real Property to administer the Leases) to the extent in Seller's possession. (m) A certificate, dated as of the Closing Date, stating that the representations and warranties of Seller set forth in Section 5.1 hereof are true and correct in all material respects as of the Closing Date (with appropriate modifications of such representations and warranties to reflect any changes therein, including, without limitation, any changes resulting from actions under Section 5.3 hereof) or identifying any representation or warranty which is not, or no longer is, true and correct in all material respects. (n) Either (i) an opinion of Seller's outside counsel as to due authorization, execution and delivery in customary form and subject to customary exceptions, assumptions and qualifications, or (ii) if Purchaser's counsel and Seller's counsel are unable to agree on the form of the opinion referred to in clause (i) of this sentence, then, in such event, (I) a certificate ("Seller's Authority Certificate") from Seller, executed by the general partner in Seller and the limited partners in Seller owning more than a majority-in-interest in Seller, consenting, without condition, to the transactions contemplated by this Agreement, together with (x) a certified copy of Seller's existing agreement of limited partnership, which agreement of limited partnership shall be in such a form that the consents, as provided herein, are sufficient to authorize Seller to enter into the transactions contemplated by this Agreement and consummate the transactions contemplated by this Agreement, and (y) a legal opinion from Japanese counsel (or counsel from such other jurisdiction which the limited partners are organized under, if not Japan) as to due authorization, execution and delivery of Seller's Authority Certificate by any limited partners in customary form and subject to customary exceptions, assumptions and qualifications; and (II) a Secretary's Certificate from an officer of the general partner in Seller certifying to the adoption and non-revocation of resolutions duly authorizing the transactions contemplated by this Agreement, together with a certified copy of the general partner's certificate of incorporation and bylaws and an incumbency certificate for the natural person signing on behalf of the general partner. (o) If Seller is unable to obtain a Qualified Rosman Estoppel as provided in Section 5.1(aa) hereof, then, in such event, the letter in the form annexed hereto and made a part hereof as Schedule "12". (p) All other instruments and documents which may be reasonably required to effect the transaction contemplated by this Agreement and within Seller's control, provided that such instruments or documents may be delivered without additional cost or liability to Seller (other than de minimis amounts). 6.3. Items to Be Delivered or Executed by Purchaser. At the Closing, Purchaser shall: (a) Pay to Seller the Purchase Price, subject to the apportionments and adjustments set forth herein, in the manner set forth in Section 1.2 hereof. (b) Execute, acknowledge (where appropriate) and deliver, or cause to be executed, acknowledged (where appropriate) and delivered, the following: (i) The Assignment and Assumption of Mortgage in the form of Exhibit "D" hereto. (ii) The Assignment and Assumption of Collateral Agreement in the form of Exhibit "E" hereto. (iii) The Assignment and Assumption of Share in the form of Exhibit "H" hereto. (iv) Any and all documents and/or instruments reasonably necessary to change (A) the name of any Cash Collateral Account from the name of Seller to Purchaser, and (B) the signatures of any Cash Collateral Account. (v) The Closing Statement initialed by Purchaser. (vi) All other instruments and documents which may be reasonably requested to effect the transaction contemplated by this Agreement and within Purchaser's control, provided that such instruments or documents may be delivered without additional cost or liability to Purchaser (other than de minimis amounts). (c) An opinion of Purchaser's outside counsel as to due authorization, execution and delivery in customary form and subject to customary exceptions, assumptions and qualifications. 6.4. Taxes; Title Expenses. (a) Any transfer, documentary, stamp, gains and similar taxes and any filing fees (collectively, "Taxes") imposed in connection with the transfer of the Loan or recording any document or instrument contemplated hereby shall be paid by Purchaser, and all reports, returns and related materials required to be submitted in connection therewith shall be submitted by Seller at or prior to the Closing and evidence of the same shall be submitted to Purchaser at the Closing. (b) All premiums and fees or other costs for title examination and title insurance or associated with any update of or endorsement to the Lender's Title Policies, or any other report, study, survey or diligence research obtained by Purchaser, if any, and all related charges in connection therewith shall be paid by Purchaser. 6.5. Apportionments. (a) At the Closing, Purchaser shall pay to Seller an amount (the "Collateral Account Closing Amount"), equal to all of the funds in the Cash Collateral Account as of the Closing Date (as set forth on account statements for such accounts as of the Closing Date), which amount shall not exceed $18,000,000, it being understood and agreed that (i) there shall be no prorations with respect to the Collateral Account Closing Amount, and (ii) all credits and debits determined as a result of any apportionments and adjustments under this Agreement shall only be to or against the Purchase Price. (b) To the extent that on or before the Closing Date, Seller has not paid or caused to be paid by the Borrower (or any other person) the amounts set forth on Schedule "7" annexed hereto and made a part hereof on account of capital expenditures, leasing expenses and commissions and tenant improvement work related to the Real Property for which Schedule "7" hereto states Seller is responsible, Purchaser shall receive a credit against the Purchase Price. The failure to make or caused to be made the payments described in the immediately preceding sentence shall not be deemed to result in a "net diminution in value of the Loan" for purposes of Section 8.3 hereof (because Purchaser shall receive a credit against the Purchase Price for such unpaid item as set forth in the preceding sentence), except to the extent the delay in payment as opposed to the non-payment itself has resulted in a "net diminution in value of the Loan" for the purposes of Section 8.3. Nothing contained in the preceding sentence shall be construed to affect a "net diminution in value of the Loan" for the purposes of Section 8.3 arising out of the status of the work paid or caused to be paid by Seller or credited to Purchaser as set forth in this Section 6.5(b). With respect to the items of capital expenditures, leasing expenses and commissions, tenant improvement work related to the Real Property described on Schedule "7" hereto, Seller shall not have any further requirements to make any payments. Nothing in this clause (b) shall be in derogation of Purchaser's rights with respect to breaches of representations set forth in Section 5.1 hereof (after taking into account the apportionments made or to be made under this Section 6.5(b)). (c) All operating expenses with respect to the Real Property will be apportioned between the parties on and as of the Closing Date based upon documentary evidence of payments made or due for such operating expenses. (d) (i) Except as set forth in clause (ii) below, minimum rent, additional rent, expense escalations and other adjustments and charges under, or in respect of, the Leases shall be apportioned as of the Closing Date as, when and to the extent actually collected. (ii) If, as of the Closing Date, any tenant or occupant of the Real Property shall be in arrears in the payment of minimum or additional rent, expense escalations or other adjustments, then, in such event payments received from such tenants or occupants after the Closing shall be paid and applied in the following order of priority: (I) first, apportioned between Purchaser and Seller on account of the month in which the Closing occurred; (II) second, to Seller on account of the month preceding the Closing; (III) third, to Purchaser on account of any month or months following the Closing; and (IV) fourth, to Seller on account of any month or months preceding the month in which the Closing occurred; (iii) After the Closing, Purchaser shall (I) use its reasonable efforts to collect, on behalf of Seller, all accrued minimum and additional rent, expense escalations, tax and other adjustments, and other charges in which Seller has an interest which have not been collected prior thereto, and (II) subject to clause (ii) above, deliver to Seller all such amounts collected (less any reasonable expenses incurred by Purchaser in collecting such amounts), together with a reasonably detailed accounting of the amounts paid by tenants and the amounts due to Seller from Purchaser. Notwithstanding the foregoing to the contrary (x) Purchaser shall have no obligation to commence (and Seller shall not commence) any action or proceeding to collect any arrearages which may be due Seller, and (y) Purchaser's obligations under clause (I) shall expire on the first anniversary of the Closing Date with respect to arrearages of minimum rent, and shall expire on the first anniversary of the date after the Closing Date on which arrearages of additional rent, expense escalations, tax or other adjustments are determined. (iv) (A) If, prior to the Closing, Seller shall receive any installments of additional rent, expense escalations, tax or other adjustments from any tenant attributable to periods after the Closing Date, then, Purchaser shall receive a credit against the Purchase Price in the amount of such installments. In addition, to the extent that tenants' additional rent, expense escalations, tax or other adjustments for the period prior to the Closing have been paid by tenants based on estimates, Seller shall promptly refund to the applicable tenant any overpayments of additional rent, expense escalations, tax or other adjustments which is determined to be owed to such tenant subsequent to the Closing, it being understood and agreed that if Seller shall fail to promptly pay any amount determined to be so owed, then, in such event, upon written notice to Seller, Purchaser may pay such amounts directly to the applicable tenant and obtain reimbursement therefor from the Closing Escrow Fund. The provisions of this clause (A) shall survive the Closing. (B) To the extent that tenants' additional rent, expense escalations and/or tax or other adjustments for the period prior to the Closing have been paid by tenants based on estimates, subject to the terms of clause (ii) above, Purchaser shall promptly pay to Seller any underpayments of additional rent, expense escalations and/or tax or other adjustments which are actually paid by the tenants to Purchaser and determined to be owed to Seller subsequent to the Closing. The terms of this clause (B) shall survive the Closing. (e) (i) Real estate taxes shall be apportioned between Seller and Purchaser at the Closing on the basis of the fiscal year for which assessed. If the Closing shall occur before a new tax rate is fixed, the apportionment of real estate taxes at the Closing shall be based upon the tax rate for the immediately preceding fiscal period applied to the latest assessed valuation of the Real Property. Promptly after the new tax rate has been fixed, the apportionment of real estate taxes made at the Closing shall be recomputed. Any installment of any assessment levied against the Real Property which is due prior to the Closing Date shall be paid in full by Seller or the Borrower, and Purchaser shall be responsible for any remaining installments which are due and payable after the Closing Date. (ii) Any real estate tax refunds or credits with respect to the Real Property which are attributable to the fiscal period in which the Closing occurs shall be apportioned between Seller and Purchaser based upon the time period in which the refunds or credits relate, after deducting all costs and expenses of collecting same. Any real estate tax refunds or credits with respect to the Real Property which are received after the Closing Date and which are attributable to any fiscal period prior to the fiscal period in which the Closing occurs shall belong solely to Seller. Seller, or its agents, on behalf of the Borrower may withdraw, settle or otherwise compromise any protest or reduction proceeding effecting real estate taxes assessed against the Real Property for any fiscal period prior to the Closing with Purchaser's consent, which consent shall not be unreasonably withheld, delayed or conditioned. Neither Purchaser nor its agents, on behalf of the Borrower or otherwise, shall withdraw, settle, or otherwise compromise any protest or reduction proceeding effecting real estate taxes assessed against the Real Property for the fiscal period in which the Closing occurs without the prior written consent of Seller, which consent shall not be unreasonably withheld, delayed or conditioned. With respect to real estate tax refunds or credits with respect to the Real Property relating to the fiscal year in which the Closing occurs or relating to prior fiscal years which may be required to be reimbursed to tenants at the Real Property, Purchaser and Seller shall enter into an escrow arrangement on or prior to the Due Diligence Expiration Date, in form and substance reasonably satisfactory to Purchaser and Seller, for the payment of such reimbursements (it being understood and agreed that the parties hereto hereby approve Pottish Freyberg Marcus & Velazquez, LLP as escrow agent for the purposes of such escrow arrangement). The terms of this Section 6.5(d) shall survive the Closing. (f) All insurance policies currently maintained by the Borrower covering the Real Property shall be terminated on the Closing Date, consequently there shall be no apportionment of any insurance premiums. (g) (I) If after the date hereof, the Borrower enters into any Lease or if there is any extension or renewal of any Leases, whether or not such Leases provide for their extension or renewal, or any expansion or modification of any Leases (each, a "New Lease"), in each case to the extent entered into in accordance with this Agreement, Seller shall keep accurate records of all expenses (collectively, "New Lease Expenses") incurred in connection with each New Lease, including, without limitation, the following: (i) brokerage commissions and fees relating to such leasing transaction, (ii) expenses incurred for repairs, improvements, equipment, painting, decorating, partitioning and other items to satisfy the tenant's requirements with regard to such leasing transaction, (iii) the cost of removal and/or abatement of asbestos or other hazardous or toxic substances located in the demised space, (iv) reimbursements to the tenant for the cost of any of the items described in the preceding clauses (ii) and (iii), (v) legal fees for services in connection with the preparation of documents and other services rendered in connection with the effectuation of the leasing transaction, (vi) rent concessions relating to the demised space provided the tenant has the right to take possession of such demised space during the period of such rent concessions, and (vii) expenses incurred for the purpose of satisfying or terminating the obligations of a tenant under a New Lease to the landlord under another lease (whether or not such other lease covers space in the Real Property). (II) The New Lease Expenses for each New Lease allocable to Seller shall be determined by multiplying the amount of such New Lease Expenses by a fraction, the numerator of which shall be the number of days contained in that portion, if any, of the term of such New Lease commencing on the date on which the tenant thereunder shall commenced to pay fixed rent ("Commencement Date") and expiring on the date immediately preceding the Closing Date, and the denominator of which shall be the total number of days contained in the period commencing on the Commencement Date and expiring on the date of the scheduled expiration of the term of such New Lease, and the remaining balance of the New Lease Expenses for each New Lease shall be allocable to and the responsibility of Purchaser. For purposes of this clause (II), the Commencement Date under a renewal, extension, expansion or modification of a Lease shall be deemed to be (i) in the case of a renewal or extension (whether effective prior to or after the Closing, or in the form of an option exercisable in the future), the first date during such renewal or extension period after the originally scheduled expiration of the term of such Lease on which the tenant under such Lease commences to pay fixed rent, (ii) in the case of an expansion (whether effective prior to or after the Closing, or in the form of an option exercisable in the future), the date on which the tenant under such Lease commences to pay fixed rent for the additional space, and (iii) in the case of a modification not also involving a renewal, extension or expansion of such Lease, the effective date of such modification agreement. At the Closing, Purchaser shall reimburse Seller for all New Lease Expenses theretofore paid by Seller or the Borrower, if any, in excess of the portion of the New Lease Expenses allocated to Seller pursuant to the provisions of the preceding sentence. (h) All apportionments shall be computed as of the close of business on the day immediately preceding the Closing Date and such apportionments shall be calculated in accordance with the "customs in respect of title closings" of the Real Estate Board of New York on the Closing Date. Any calculation made in computing any apportionment made pursuant to this Section 6.5 may be reconfirmed following the Closing, and any errors thereto shall be corrected immediately upon notice from the other party that such error(s) exist. If it is determined that Seller failed to cause the Borrower to pay any expense with respect to the Real Property not apportioned hereunder for any period prior to the Closing Date, which expense was incurred through the act, with the consent or at the direction of JPMIM, then, Seller shall pay or cause to be paid such expense; it being understood and agreed that (i) the terms of this sentence shall not apply to any matter described on Schedule "7" hereto, (ii) Seller shall be entitled to use the Closing Escrow Fund to satisfy its obligations under this sentence, and (iii) Seller's liability under this sentence shall be limited to the then existing amount of Closing Escrow Fund. The provisions of this Section 6.5 shall survive the Closing for six (6) months. ARTICLE VII DEFAULTS 7.1. Purchaser Default. Provided that Seller is (i) not in material default of its non-monetary obligations hereunder, (ii) not in default, in any respect, of its monetary obligations hereunder, and (iii) is otherwise ready, willing and able to consummate the transactions contemplated hereby, in the event Purchaser shall default in the performance of its obligation to purchase the Loan in breach of its obligations under this Agreement, Seller shall be entitled to terminate this Agreement and the sole remedy of Seller shall be to retain the Escrow Funds as liquidated damages for all loss, damage and expense suffered by Seller on account thereof, it being acknowledged by Purchaser and Seller that in such event Seller will suffer substantial damages but such damages are incapable of exact ascertainment. After payment to Seller of the Escrow Funds, neither Seller nor Purchaser shall have any further rights or obligations hereunder; provided, however, (a) that the indemnities contained in Section 8.2(b) and Section 11.2 hereof, and (ii) the terms of the Confidentiality Agreement, shall survive any such termination. Notwithstanding anything to the contrary herein contained, if subsequent to the Closing Purchaser shall fail to comply with its obligations contained herein which survive Closing, Seller in addition to any rights and remedies provided herein, shall be entitled to any and all remedies available at law, in equity or otherwise. 7.2. Seller Default. (a) Provided that Purchaser is (i) not in material default of its non-monetary obligations hereunder, (ii) not in default, in any respect, of its monetary obligations hereunder, and (iii) is otherwise ready, willing and able to consummate the transactions contemplated hereby, in the event that on the Closing Date Seller shall be unable to perform or is prohibited by court order from performing its obligations or to satisfy any condition applicable to Seller hereunder in accordance with the provisions of this Agreement, the sole remedy of Purchaser shall be to exercise the Termination Option. (b) Provided that Purchaser is (i) not in material default of its non-monetary obligations hereunder, (ii) not in default, in any respect, of its monetary obligations hereunder, and (iii) is otherwise ready, willing and able to consummate the transactions contemplated hereby, in the event that Seller willfully defaults in its obligation to transfer the Loan hereunder, Purchaser shall be entitled to such remedies against Seller as are available at law or in equity, including, without limitation, specific performance. Notwithstanding anything to the contrary herein contained, if subsequent to the Closing Seller shall fail to comply with its obligations contained herein which survive Closing, Purchaser in addition to any rights and remedies provided herein, shall be entitled to any and all remedies available at law, in equity or otherwise. ARTICLE VIII INSPECTIONS; DUE DILIGENCE 8.1. Inspection of the Real Property. At all times prior to Closing or the earlier termination of this Agreement, upon reasonable written notice to Seller, Purchaser and such agents and representatives of Purchaser ("Authorized Representatives") as shall have been identified to JPMIM in writing, shall have the right, subject to the rights of tenants, the Borrower and other occupants at the Real Property, to enter upon the Real Property to inspect and examine the same; provided, however, that (a) Purchaser shall not unreasonably interfere with the Borrower's use or operation of the Real Property, (b) Seller, JPMIM or their representatives or employees shall accompany Purchaser or any Authorized Representatives, (c) Purchaser shall not invade, alter or destroy the Real Property in any manner whatsoever, and (d) as a condition precedent to making any physical inspection of the Real Property, Purchaser shall obtain and maintain (i) liability insurance in the amount of $2,000,000 for property damage coverage and in the amount of $5,000,000 for personal injury coverage, which insurance shall name Seller, JPMIM and ESG as additional insured parties, and (ii) with respect to any Authorized Representatives, workers' compensation and disability insurance, as required by law. Purchaser shall provide to JPMIM certificates of insurance evidencing such coverage prior to entering upon the Real Property for the purpose of making any such physical investigation. Purchaser and the Authorized Representatives shall have the right, from time to time, upon reasonable written notice to and during normal business hours, to examine the books, records and accounts with respect to the Real Property at such reasonable location as JPMIM shall designate. It is understood and agreed that Purchaser's satisfaction with such inspection shall not constitute or be deemed to constitute a condition to Purchaser's obligations hereunder. 8.2. Purchaser's Work. (a) Any work performed by Purchaser or its agents in connection with any inspection of the Real Property shall be at Purchaser's sole cost and expense. Purchaser covenants and agrees to pay in full all persons who perform labor upon the Real Property, and not to permit or suffer any mechanic's or materialmen's lien of any kind or nature to be asserted or enforced against the Real Property for any work done or materials furnished thereon at the instance or request or on behalf of Purchaser. (b) Purchaser shall indemnify, defend and hold harmless Seller, the Borrower, and the Seller Parties from and against any and all losses, costs, liabilities, claims, damages or expenses (including, without limitation, reasonable attorney's fees and costs) arising out of any inspection of, or access to, the Real Property by Purchaser or its Authorized Representatives. Purchaser, at its sole cost and expense, shall promptly restore the Real Property to its condition immediately prior to the performance of such investigation by Purchaser pursuant to this Article VIII and shall repair any and all damage caused by Purchaser or Purchaser's employees, representatives or agents. Purchaser acknowledges and agrees that Seller shall have the right (but not the obligation) to use the Escrow Funds to restore the Real Property if Purchaser shall fail to comply with this Section 8.2. The terms of this Section 8.2 shall survive the Closing or earlier termination of this Agreement. 8.3. Due Diligence. (a) Within one (1) day after the date hereof, Seller shall deliver or make available to Purchaser the Review Materials existing as of the date hereof. Subject to and in accordance with the terms of Section 8.1 hereof and Section 8.2 hereof, Purchaser shall have access to the Real Property and information relating to the Real Property. (b) Subject to and in accordance with the terms of this Section 8.3, Purchaser shall have the right to exercise the Termination Option if (i) Purchaser's due diligence reveals any fact (a "Diligence Fact") relating to the Loan or the Real Property (but not relating to (x) the business or financial condition of the Borrower (or its direct or indirect partners or their respective affiliates) or the organizational structure of the Borrower (or its direct or indirect partners or their respective affiliates), or (y) the general real estate or financial markets) which was not previously disclosed in Schedule "1" hereto, Schedule "6" hereto or the written information prepared by ESG annexed hereto and made a part hereof as Schedule "11" and/or the PRO-JECT Financial Analysis Disk accompanying such written information (the "ESG Information Book"), and the failure to cure or remediate such Diligence Fact would result in the net diminution in value of the Loan, and (ii) the aggregate amount (the "Diminution Amount") determined under clause (i) of this sentence is in excess of Two Million ($2,000,000) Dollars (the "Threshold Amount"). Notwithstanding the foregoing to the contrary but subject to the terms of clause (d) below, if (i) the Diminution Amount, in the aggregate, does not exceed Twenty-Five Million Dollars ($25,000,000) (the "Cap Amount"), and (ii) Seller (in its sole discretion and within five (5) business days after Seller's receipt of Purchaser's notice setting forth in reasonable detail each Diligence Fact and each related Diminution Amount ("Purchaser's Preliminary Notice")) shall agree to a reduction of the Purchase Price by an amount (the "Reduction Amount") equal to the aggregate Diminution Amount in excess of the Threshold Amount, up to the Cap Amount, then, in such event, (A) Purchaser shall be deemed not have the right to terminate this Agreement as provided in this Section 8.3, and (B) the Purchase Price shall be deemed to be equal to the original Purchase Price, reduced by the Reduction Amount as provided herein, for all purposes in this Agreement; provided, however, that Seller shall have the right to extend such 5-business day period for an aggregate of fifteen (15) days. For the purposes of this Section 8.3, the term "net diminution of value" shall mean a net decrease in the value of the Loan resulting from actual facts and information (other than facts and information relating to (x) the business or financial condition of the Borrower (or its direct or indirect partners of their respective affiliates), or (y) the general real estate or financial markets not previously disclosed in Schedule "1", Schedule "6" or the ESG Information Book. For the purposes of the foregoing, Seller and Purchaser acknowledge and agree that there is no need to determine the actual value of the Loan as of any point in time, but only the net reduction, if any, in value. (c) Purchaser's right to exercise the Termination Option under this Section 8.3 shall be exercisable only by delivery to Seller and Escrow Agent of the Purchaser's Preliminary Notice at any time during the period commencing on the date of this Agreement and continuing up to but no later than 5:00 p.m. on May 24, 1999 (such date, as the same may be extended pursuant to this Section 8.3(c), being the "Due Diligence Expiration Date"); provided, however, that if Seller fails to respond to Purchaser's Preliminary Notice prior to the Due Diligence Expiration Date, Purchaser's right to terminate this Agreement as provided in this Section 8.3 shall be preserved (and the Due Diligence Expiration Date shall be deemed extended) until Purchaser's receipt of Seller's notice stating whether or not Seller agrees to such reduction in the Purchase Price; provided, further, however, that (I) Purchaser shall have no right to deliver any supplement or addition to Purchaser's Preliminary Notice after the Due Diligence Expiration Date and the Due Diligence Expiration Date shall not be deemed extended for that purpose, (II) if Seller notifies Purchaser of its refusal to so reduce the Purchase Price by the Reduction Amount then, in such event, Purchaser shall have the right, by written notice to Seller within one (1) business day following receipt of Seller's notice of its refusal to reduce the Purchase Price, to (i) exercise the Termination Option, or (ii) waive its rights to terminate this Agreement under this Section 8.3 and accept the Loan and consummate the Closing subject to and in accordance with the terms of this Agreement without any abatement of, or credit against, the Purchase Price and Purchaser shall have one (1) additional business day to deliver the Additional Deposit to Escrow Agent, and (III) if Seller notifies Purchaser that Seller agrees to reduce the Purchase Price by the Reduction Amount, then, in such event, Purchaser shall have two (2) business days to deliver the Additional Deposit to Escrow Agent. Notwithstanding anything contained herein to the contrary, (x) if Purchaser fails to deliver a Purchaser's Preliminary Notice by the Due Diligence Expiration Date, then Purchaser shall be deemed to have forever waived its right to terminate this Agreement pursuant to this Section 8.3, it being understood and agreed that Purchaser shall have no right to deliver a Purchaser's Preliminary Notice after the Due Diligence Expiration Date, or (y) if prior to the date which is two (2) business days prior to the Due Diligence Expiration Date Seller gives any of the Knowledge Persons written notice of any fact and/or information which results in a "net diminution value" (as defined in Section 8.3(b) above) and Purchaser does not include any such fact and/or information in Purchaser's Preliminary Notice, then Purchaser shall be deemed to have forever waived its right to assert any rights under this Agreement with respect to any such fact and/or information. ARTICLE IX INDEMNIFICATION 9.1. Indemnification. (a) Effective upon the consummation of the Closing, Purchaser shall indemnify, defend and hold harmless Seller and the Seller Parties (collectively, "Indemnitees") from and against any and all Liabilities (as hereinafter defined), which any Indemnitee may suffer, incur or payout, or which may be asserted against any Indemnitee, in whole or in part, by reason of or in connection with, or arising out of the Loan, the Loan Documents or the Real Property (including, without limitation, any claims of third parties, tenants under the Leases (or under any subordination, nondisturbance and attornment agreement entered into in connection with any such Lease), or the Borrower) (i) arising after the Closing Date with respect to events and/or conditions (including, without limitation, acts or omissions) occurring after the Closing Date, or (ii) arising in connection with or out of any enforcement claim, proceeding, suit or other action whatsoever with respect to the Loan taken by Purchaser (or any Affiliate of Purchaser) against the Borrower or its direct or indirect partners or their respective affiliates, it being understood and agreed that in connection with any agreement or other arrangement by and between Purchaser (or its Affiliate) and the Borrower (or its direct or indirect partners or their respective affiliates), Purchaser (or its Affiliate) shall use all commercially reasonable and good faith efforts to obtain a full, unconditional and irrevocable release of Indemnitees with respect to the Loan (and Purchaser (or its Affiliate) upon Seller's (or its representative's) request, shall keep Seller reasonably informed of the status of the negotiation of any such release, but, without request, Purchaser (or its Affiliate) shall inform Seller if it has obtained such release or if it is unable to obtain such a release). The terms of this Section 9.1 shall survive the Closing. (b) For the purposes of this Agreement, the term "Liability" shall mean any liability, obligation, loss, costs, damage, penalty, claim, lien, charge and/or expense (including, without limitation, attorneys' and other professionals' fees and expenses). 9.2. Release. Except for Seller's obligations hereunder which survive Closing, effective as of the consummation of the Closing, to the fullest extent permitted by law, Purchaser hereby releases, discharges and forever acquit each Indemnitee from all matters, claims, liabilities, demands, causes of action, debts, obligations, promises, acts, agreements, interests, damages of whatever kind or nature, and any attorneys' fees and expenses that may be related thereto, whether known or unknown which Purchaser has or may hereafter incur or acquire against any Indemnitee by reason of or relating to this Agreement, the Loan, the Loan Documents or the Real Property. The terms of this Section 9.2 shall survive the Closing. ARTICLE X CASUALTY AND CONDEMNATION 10.1. Casualty. If, prior to the Closing Date, any damage or destruction (a "Casualty") of any part of the Real Property as a result of any fire or other casualty occurs, Seller shall notify Purchaser of such Casualty. If prior to the Closing Date a Non-Material Casualty (as hereinafter defined) occurs, then, in such event, (a) this Agreement shall remain in full force and effect, and (b) Seller shall (i) credit to Purchaser against the Purchase Price the amount of any insurance proceeds theretofore received by Seller in connection with any such Casualty, less Seller's out-of-pocket cost incurred in connection with its attempts to seek collection of any such insurance proceeds, and credit to Purchaser against the Purchase Price an amount equal to the deductible amount under the Borrower's insurance policies, and (ii) assign to Purchaser by written assignment in form and substances satisfactory to Seller and Purchaser, at the Closing, all of Seller's right, title and interest in and to any insurance proceeds payable in connection with such Casualty. In the event of an occurrence of a Casualty referred to in the immediately preceding sentence prior to the Closing Date, Purchaser shall have the right to participate, in a reasonable manner, in the negotiations and settlement of any insurance claim and any decision regarding the reconstruction or renovation of any improvement on the Real Property, it being understood and agreed that Seller shall not settle any insurance claim or consent to any application of any insurance proceeds to the restoration of the Real Property without Purchaser's prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. If prior to the Closing Date, a Material Casualty (as hereinafter defined) occurs, Purchaser shall have the right, without duplication of its rights under Section 8.3 hereof, to exercise the Termination Option upon notice to Seller given upon the earlier to occur of (x) ten (10) days after written notice is given to Purchaser of the Casualty, or (y) the Closing Date. If Purchaser elects not to exercise the Termination Option, the Material Casualty shall be deemed to be a "Non-Material Casualty" for all purposes hereunder and Purchaser and Seller shall proceed to Closing, subject to satisfaction of the provisions herein with respect to a Non-Material Casualty. Except as otherwise provided in this Section 10.1, Purchaser shall not be entitled to any reduction of, or credit against, the Purchase Price in the event of any Casualty, and Purchaser shall be obligated to close hereunder notwithstanding the occurrence of any such event. Seller shall in no event have any obligation to Purchaser to repair, restore or replace any portion of the Real Property affected by any Casualty. As used herein, the term "Material Casualty" shall mean any Casualty (i) the cost of which to repair is in excess of $25,000,000, or (ii) which will allow the tenant under the Debevoise Lease, the Schulte Lease, the BNP Lease or the Kramer Lease to terminate their Leases. As used herein, the term "Non-Material Casualty" shall mean a Casualty which is not a Material Casualty. 10.2. Condemnation. If, prior to the Closing Date, any taking by condemnation or eminent domain (a "Condemnation") of any part of the Real Property occurs, Seller shall notify Purchaser of such Condemnation. If, prior to the Closing Date, a Condemnation occurs, then, in such event, (a) this Agreement shall remain in full force and effect, and (b) Seller shall (i) credit to Purchaser against the Purchase Price the amount of any award theretofore received by Seller in connection with any such Condemnation, less Seller's out-of-pocket cost incurred in connection with its attempts to seek collection of any such awards, and (ii) assign to Purchaser by written assignment in form and substances satisfactory to Seller and Purchaser, at the Closing all of Seller's right, title and interest in and to any award payable in connection with such Condemnation. Prior to the Closing Date, Purchaser shall have the right to participate, in a reasonable manner, in the negotiations and settlement of any Condemnation award and any decision regarding the reconstruction or renovation of any improvement on the Real Property, it being understood and agreed that Seller shall not settle any Condemnation award or consent to any application of any Condemnation award to the restoration of the Real Property without Purchaser's prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Except as otherwise provided in this Section 10.2, Purchaser shall not be entitled to any reduction of, or credit against, the Purchase Price in the event of any Condemnation, and Purchaser shall be obligated to close hereunder notwithstanding the occurrence of any such event. Seller shall in no event have any obligation to Purchaser to repair, restore or replace any portion of the Real Property affected by any Condemnation. ARTICLE XI MISCELLANEOUS 11.1. No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer upon any person, other than the parties hereto and their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under, or by reason of, this Agreement. 11.2 Broker. (a) Each of Seller and Purchaser represents and warrants to the other that it knows of no broker or finder with whom it has dealt or who has claimed or who may have the right to claim any fee, commission or other similar compensation in connection with the transaction contemplated by this Agreement other than ESG (the "Broker"). Seller represents and warrants that it shall be solely responsible for the payment of any and all fees, commissions or other compensation due to the Broker in connection with this transaction pursuant to a separate agreement previously entered into between Seller and Broker. (b) Purchaser shall indemnify, defend and hold harmless Seller, its agents, employees and representatives from and against any and all losses, costs, liabilities, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of the breach of Purchaser's representations or warranties contained in this Section 11.2. (c) Seller shall indemnify, defend and hold harmless Purchaser, its agents, employees and representatives from and against any and all losses, costs, liabilities, claims, damages or expenses (including, without limitation, reasonable attorneys' fees and costs) arising out of the breach of Seller's representations or warranties contained in this Section 11.2. (d) The representations, warranties and indemnities contained in this Section 11.2 shall survive the Closing or, if the Closing does not occur, the termination of this Agreement. 11.3 [INTENTIONALLY BLANK.] 11.4. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and permitted assigns; provided, however, that Purchaser shall not sell, assign, transfer or otherwise convey its rights or obligations under this Agreement, in whole or part, without the prior written consent of Seller; except, however, that at the Closing, Purchaser shall be entitled to assign its rights under this Agreement to an Affiliate (as hereinafter defined) without Seller's prior written consent provided that (A) Purchaser and such Affiliate execute and deliver to Seller an originally executed Assignment and Assumption Agreement, in form and substance reasonably satisfactory to Seller, pursuant to which such Affiliate assumes all of Purchaser's obligations hereunder, and (B) Purchaser shall remain fully and primarily liable for all obligations and liabilities hereunder (including, without limitation, those that survive the Closing or earlier termination of this Agreement). For the purposes of this Section 11.4, the term "Affiliate" shall mean an entity (x) directly or indirectly controlling, controlled by, or under common control with Purchaser, or (y) fifty percent (50%) or more of whose equity interest is directly or indirectly owned or held by Purchaser. 11.5. Waiver of Jury Trial. EACH OF THE PURCHASER AND SELLER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF MATTERS RELATED TO THIS AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY. 11.6. Waiver. The rights of each of the parties under this Agreement are cumulative and may be exercised as often as any party considers appropriate. The rights of each of the parties hereunder shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing. Waiver of any one breach of any provision hereof shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. Failure to exercise or any delay in exercising any of such rights also shall not operate as a waiver or variation of that or any other such right. Defective or partial exercise of any such rights shall not preclude any other or further exercise of that or any their such right. No act or course of conduct or negotiation on the part of any such party shall in any way preclude such party from exercising any such right or constitute a suspension of or any variation of any such right. 11.7. Captions. Article captions contained herein are inserted as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or any provision hereof. 11.8. Prevailing Party. If either party hereto brings any action or suit against any other by reason of any breach of any of the covenants, agreements or provisions of this Agreement, then in such event, the prevailing party, as determined in such action or suit, shall be entitled to have and recover from the other party all costs and expenses of such action or suit, including, without limitation, reasonable attorneys' fees and expenses resulting therefrom, it being understood that the determination of the prevailing party shall be included in the matters which are the subject of such action or suit. 11.9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument. Upon Purchaser's execution and delivery of this Agreement, this Agreement shall be binding and effective upon, and shall be an irrevocable offer to Seller by, Purchaser until 12:00 noon (New York time) on the next business day following execution and delivery of this Agreement by Purchaser, unless Seller executes and delivers this Agreement prior to such time, in which case this Agreement shall remain binding and effective upon Purchaser in accordance with the terms of this Agreement. This Agreement shall not be binding upon or enforceable against Seller unless and until executed and delivered by Seller and the Escrow Agent has received the Initial Deposit. 11.10. Exhibits and Schedules. All Exhibits and Schedules attached hereto are incorporated herein by reference as though fully set forth at length herein. 11.11. Notices. (a) All notices, demands, requests, consents and waivers under this Agreement shall be in writing, shall refer to this Agreement and shall be (i) delivered personally, (ii) sent by registered or certified mail, postage prepaid, return receipt requested, (iii) sent by a nationally recognized overnight courier, or (iv) sent by telecopier, with written confirmation of the receipt of such telecopy, addressed as set forth below. If delivered personally, any notice shall be deemed to have been given on the first (1st) business day on or after the date delivered or refused. If mailed, any notice shall be deemed to have been given on the earlier to occur of the first (1st) business day on or after the date of delivery or the third (3rd) business day after such notice has been deposited in the U.S. mail in accordance with this Section 11.11. If sent by overnight courier, any notice shall be deemed to have been given on the first (1st) business day on or after the date following the date such notice was delivered to or picked up by the courier. If sent by telecopier, any notice shall be deemed to have been given (I) on the first (1st) business day on or after the date sent, if confirmation of receipt hereof is given on or before 5:00 p.m. (New York City time), or (II) on the next business day, if confirmation of receipt thereof is given after 5:00 p.m. (New York City time). Copies of all notices shall be given in accordance with the above as follows: TO SELLER: NBBRE-919 Third Avenue Associates, L.P. c/o NBB Real Estate Inc. 530 Fifth Avenue New York, New York 10036 Attention: Toshihiko Asai Telecopier: 813-3281-0215 WITH A COPY TO: Gibson, Dunn & Crutcher, LLP 200 Park Avenue New York, New York 10166 Attention: Andrew H. Levy, Esq. Telecopier: (212) 351-4035 and J.P. Morgan Investment Management Inc. 522 Fifth Avenue New York, New York 10036 Attention: Donald Rederscheid Telecopier: (212) 837-5208 TO PURCHASER: Reckson Operating Partnership, L.P. c/o Reckson Associates Realty Corp. 10 East 50th Street New York, New York 10022 Attention: Philip M. Waterman III Telecopier: (212) 715-6535 WITH A COPY TO: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Joshua Mermelstein, Esq. Telecopier: (212) 859-4000 (b) Any counsel designated above or any replacement counsel which may be designated respectively by either Seller or Purchaser or such counsel by written notice to the other party is hereby authorized to give notices hereunder on behalf of its respective client. 11.12. Construction. Whenever the singular number is used herein and when required by the context, the same shall include the plural, and the masculine, feminine and neuter genders shall each include the others, and the word "person" shall include corporation, firm, partnership, joint venture, trust or other entity. 11.13. Amendment. This Agreement may be amended or modified only by a written agreement executed by the person against whom enforcement of such amendment or modification is sought. 11.14. Entire Agreement. Other than that certain confidentiality letter, dated February 4, 1999, from or on behalf of Purchaser to Seller (the "Confidentiality Agreement"), this Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and no representations, inducements, promises or agreements, oral or otherwise, between the parties not contained herein shall be of any force or effect, all of the same being merged herein. 11.15. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without regard to principles of conflicts of law. 11.16 Monetary Amounts. All monetary amounts referred to herein are in United States Dollars. 11.17 Time of the Essence. Time shall be of the essence as to Purchaser's performance of all of its obligations under this Agreement. 11.18. Confidentiality. All terms and conditions of the Confidentiality Agreement shall remain in full force and effect according to its terms during the pendency of this Agreement and such terms thereof as are intended to survive acquisition of the Loan by Purchaser shall continue to survive. The provisions of this Section shall survive the Closing or any expiration or termination of this Agreement. 11.19. No Recording. Neither Seller nor Purchaser shall record, or arrange to record, this Agreement with any filing office in any jurisdiction. 11.20. Review Materials. On or before the Due Diligence Expiration Date, Purchaser and Seller shall jointly deliver to Escrow Agent a box containing all Review Materials as of such date. Escrow Agent shall hold such Review Materials (and any Review Materials thereafter jointly +delivered to Escrow Agent), at Purchaser's and Seller's joint expense, pursuant to the terms of an escrow agreement in form and substance reasonably satisfactory to Purchaser, Seller and Escrow Agent. Seller agrees that, unless requested by Purchaser, Seller shall not deliver (or make available to Purchaser at the room in the Real Property labeled "War Room") any Review Materials not previously delivered or made available to Purchaser during (a) the two (2) business day period prior to the Due Diligence Expiration Date, or (b) the two (2) business day period prior to the Closing Date. 11.21. Consent to Jurisdiction. Each of Purchaser and Seller hereby irrevocably and unconditionally (a) submits itself, solely for the purposes of any legal action or proceeding relating to this Agreement or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive jurisdiction of the Supreme Court of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts thereof (collectively, the "New York Courts"), (b) consents to the bringing of any such action or proceeding in the New York Courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court, including, without limitation any objection that such action or proceeding was brought in an inconvenient court, and agrees not to plead or otherwise assert the same, (c) agrees to service upon it of any and all process in any such action or proceeding at the address and in the manner set forth in Section 11.11 hereof, (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law, and (e) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 11.22. Acquisition of Partnership Interests. Purchaser has requested that Seller consider arranging for the sale of all of the partnership interests in Seller rather than a sale of the Loan. Seller shall consider such request once Purchaser delivers to Seller a written proposal regarding such sale; provided, however, that (a) neither Seller's consideration of such proposal nor anything contained herein shall be deemed a binding agreement to sell partnership interests in Seller, (b) Seller may accept or reject, in its sole and absolute discretion, any proposal by Purchaser, and (c) no person shall be bound to sell any partnership interests unless and until definitive documentation is executed and delivered by all parties thereto. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. SELLER: NBBRE-919 THIRD AVENUE ASSOCIATES, L.P. By: NBB Real Estate, Inc., its General Partner By: /s/ Ichiro Tsunada -------------------------------- Name: Ichiro Tsunada Title: President PURCHASER: RECKSON OPERATING PARTNERSHIP, L.P. By: Reckson Associates Realty Corp. its General Partner By: /s/ Scott Rechler --------------------------------- Scott Rechler President Employer Identification Number:_________________ THE UNDERSIGNED JOINS IN THE EXECUTION HEREOF SOLELY FOR THE PURPOSES OF AGREEING TO ACT AS "ESCROW AGENT" PURSUANT AND SUBJECT TO THE PROVISIONS OF THIS AGREEMENT: GIBSON, DUNN & CRUTCHER LLP By:/s/ Andrew H. Levy ------------------------------------ Andrew H. Levy, Partner -----END PRIVACY-ENHANCED MESSAGE-----