Exhibit 10.17

SUBORDINATE MORTGAGE NOTE

 

$21,000,000.00    October 15, 2009    Melville, New York

FOR VALUE RECEIVED, 250 WEST 57TH ST. ASSOCIATES L.L.C., a New York limited
liability company, with offices at c/o Malkin Holdings LLC, 60 East 42nd Street,
New York, New York 10165 (the “Maker”), promises to pay to SIGNATURE BANK, a New
York banking corporation, having an office at 68 South Service Road, Melville,
New York 11747 (the “Payee”), or such other place as may be designated in
writing by the holder of this Note, the principal sum of Twenty One Million and
00/100 Dollars ($21,000,000.00) or so much thereof as shall have been advanced
to the Maker pursuant to the terms of a loan agreement of even date herewith
between the Maker and the Payee (the “Loan Agreement”), together with interest
as hereinafter provided.

All outstanding principal and accrued and unpaid interest shall be due and
payable on January 5, 2015 (the “Maturity Date”).

Until the interest rate on this Note is fixed as set forth below, amounts
outstanding under this Note shall bear interest at an annual rate equal at all
times to the greater of (i) six and one half of one percent (6.50%) or (ii) one
percent (1%) plus the Prime Rate of the Payee (the “Variable Rate”). The “Prime
Rate” is the rate established from time to time by the Payee as its “Prime
Rate”. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. Such annual rate will change
on the effective date of any change in the Prime Rate. The Payee will not be
obligated to notify the Maker of any change in the Prime Rate.

Prior to the Maturity Date, the Maker shall have the option (by notice given to
Payee at least two (2) Business Days prior to the effective date of the fixing
of the interest rate to which such notice pertains), up to three (3) times with
minimum increments of $5,000,000.00, to fix the interest rate on all or any
portion of the principal on this Note then outstanding. In such event, the rate
shall be fixed until the Maturity Date at an annual rate equal to either:

 

  (a) Option A: The greater of (i) six and one half of one percent (6.5%) or
(ii) 300 basis points in excess of the weekly average yield on United States
Treasury Securities adjusted to a maturity closest to the Maturity Date as most
recently made available by the Federal Reserve Board as of thirty (30) days
prior to the effective date of the fixing of the interest rate. If the Maker
elects Option A, the Maker shall be subject to the payment of prepayment fees as
set forth below.

 

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  (b) Option B: The greater of (i) six and three quarters of one percent
(6.75%) or (ii) 325 basis points in excess of the weekly average yield on United
States Treasury Securities adjusted to a maturity closest to the Extended
Maturity Date as most recently made available by the Federal Reserve Board as of
thirty (30) days prior to the effective date of the fixing of the interest rate.
If the Maker elects Option B, the Maker may prepay this Note during the extended
term of this Note without any prepayment fees.

Interest shall be payable commencing on November 10, 2009 and monthly thereafter
on the tenth (10th) day of each month (the “Debit Date”). Interest shall be
calculated on the basis of a 360-day year and collected on the basis of the
actual number of days elapsed.

Monthly payments on this Note will be of interest only.

Until the Debt (as defined in the Mortgage, as hereinafter defined) has been
repaid in full, the Maker agrees to maintain an operating account (account
#1501xxxxxx) for the Mortgaged Property (as hereinafter defined) with the Payee.
Maker hereby unconditionally and irrevocably authorizes the Payee to
automatically debit from such account any and all payments due hereunder and
unconditionally warrants and represents to Payee that it shall, until the Debt
has been repaid in full, maintain sufficient funds in such account to pay same.
Time is of the essence as to all dates set forth herein, provided, however, that
whenever any payment that is to be made under this Note shall be stated to be
due on a Saturday, Sunday or public holiday or the equivalent for banks
generally under the laws of the State of New York (any other day being a
“Business Day”), such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such cases be included in the computation of
the payment of interest.

This Note may be prepaid in whole or in part (in multiples of One Hundred
Thousand and 00/100 Dollars ($100,000.00), at any time and from time to time
upon not less than thirty (30) days notice to Payee, provided that all accrued
and unpaid interest through the date of prepayment shall then be paid. Maker may
withdraw any such notice of prepayment at any time. Any portion of this Note
which is prepaid and being interest at a rate based on the Variable Rate, may be
prepaid without the payment of any prepayment fee. Any portion of this Note
which is prepaid and not bearing interest at the Variable Rate, may be prepaid
subject to the payment of a prepayment fee equal to an amount calculated by
multiplying (i) one percent (1%) times (ii) the number of years or partial years
remaining in the term of this Note times (iii) the amount of such prepayment. No
prepayment fee shall be due and payable during the sixty (60) day period
immediately preceding the Maturity Date. In addition, if the Maker has elected
Option B as the interest rate on this Note, as more fully described above, no
prepayment fee shall be due and payable.

 

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IT IS HEREBY EXPRESSLY AGREED, that the said principal sum secured by this Note
shall become due at the option of the holder hereof on the happening of any
default or event by which, under the terms of the Mortgage securing this Note,
said principal sum may or shall become due and payable; also, that all of the
covenants, conditions and agreements contained in said Mortgage are hereby made
part of this instrument.

Presentment for payment, notice of dishonor, protest and notice of protest are
hereby waived.

This Note is secured by a mortgage (the “Mortgage”) made by the Maker to the
Payee of even date herewith on Maker’s fee interest in the property situate at
250 West 57th Street, New York, New York.

Except for (i) the obligations of the Maker under the provisions of Paragraph 37
of the Mortgage, (ii) any acts or omissions constituting fraud or
misrepresentation by the Maker in connection with applying for the loan secured
by the Mortgage or in supplying information or documentation to the Payee
subsequent to the date hereof, (iii) the fraudulent misappropriation or
misapplication of the Rents collected at the Mortgaged Property (as defined in
the Mortgage), (iv) liability for rental or other income generated from the
Mortgaged Property received by the Maker after default beyond applicable notice,
grace and/or cure periods, if any, under the Mortgage which is not applied to
the Mortgaged Property (except that payments made to affiliates of the Maker for
amounts accrued in prior years, or in amounts which are in excess of then-market
rates shall not be considered applied to the Mortgaged Property), or
(v) deliberate waste, the liability of the Maker, its permitted successors or
assigns, under this Note or any other documents executed in connection with the
Mortgage is hereby strictly limited to the interest of the Maker, its permitted
successors or assigns, in the Mortgaged Property and any judgment in favor of
the Payee shall be satisfied only against the Mortgaged Property. Any judgment
in favor of the Payee by reason of any breach of any of the items described in
clauses (i) through (v) of this Paragraph may also be enforced against and
collected out of the other assets of the Maker as well as the Mortgaged
Property. No judgment arising under this Note may be satisfied against any asset
of any member of the Maker, and the Payee shall neither seek, demand nor be
entitled to obtain a deficiency judgment.

This Note may not be changed or terminated orally.

 

250 WEST 57TH ST. ASSOCIATES L.L.C. By:  

/s/ Peter L. Malkin

  Peter L. Malkin, Member

 

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STATE OF NEW YORK   )   )ss.: COUNTY OF NEW YORK   )

On the 15 day of October, 2009, before me, the undersigned, personally appeared
Peter L. Malkin, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacities, and that by his signatures on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.

 

/s/ Jennifer Kelly

Notary Public Jennifer Kelly Notary Public, State of New York NO. 01KE60xxxxx
Qualified in Nassau County Commission Expires November 8, 2009

 

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Subordinate Mortgage Note

 

 

 

250 WEST 57TH ST. ASSOCIATES L.L.C.

- to -

SIGNATURE BANK

 

 

 

Premises: 250 West 57th Street, New York, New York

The within premises lie in

Section 4, Block 1028, Lot 56

in New York County

CULLEN AND DYKMAN LLP

100 QUENTIN ROOSEVELT BOULEVARD

GARDEN CITY, NEW YORK 11530

 

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