Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

 

Among

 

STEINWAY, INC.,

 

as Seller,

 

and

 

111 WEST 57TH LH LLC,

 

as Purchaser

 

With Respect to

 

111 West 57th Street

New York, New York

 

As of March 25, 2013

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of March 25, 2013
(the “Effective Date”), is made by STEINWAY, INC., a Delaware corporation,
having an address at One Steinway Place, Long Island City, New York  11105
(“Seller”) and 111 WEST 57TH LH LLC, a Delaware limited liability company,
having an address at c/o JDS Development, 104 5th Avenue, 9th Floor, New York,
New York, 10011 (“Purchaser”).

 

RECITALS

 

A.            Seller owns the leasehold interest in that certain plot, piece and
parcel of land located in The City of New York, County of New York and State of
New York, as described on Schedule A attached hereto and made a part hereof (the
“Land”), and the fee interest in the Improvements (as hereinafter defined), each
pursuant to the terms of the Ground Lease (as hereinafter defined);

 

B.            Seller desires to sell, and Purchaser desires to purchase, the
Property (as hereinafter defined) for the consideration set forth herein, and
all in accordance with and subject to the terms and conditions of this
Agreement.

 

NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, Seller and Purchaser hereby
agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Capitalized terms used in this Agreement shall have the meanings ascribed to
them in Annex I of this Agreement.

 

ARTICLE II

 

AGREEMENT TO SELL AND PURCHASE;

 

TERMS OF SALE AND PURCHASE

 

2.1                               Agreement to Sell and Purchase.  For and in
consideration of the mutual covenants and agreements set forth herein and upon
and subject to the terms, provisions and conditions of this Agreement, Seller
hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase from
Seller, the Property, in each case for the consideration set forth herein, and
in each case free and clear of any lien, claim, charge or encumbrance, except
for the permitted exceptions listed on Schedule B attached hereto (collectively,
the “Permitted Exceptions”).

 

2.1.1                     For purposes of this Agreement, the “Property” shall
mean:

 

(i)                                     All right, title and interest in and to
the Land and the Real Property conveyed to Seller pursuant to the Ground Lease;

 

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(ii)                                  Subject to the terms of the Ground Lease,
the fee estate in the buildings and other improvements built on or attached to
the Land (the “Improvements”);

 

(iii)                               All of Seller’s right, title, and interest
in and to the fixtures built on or attached to the Real Property, other than
those relating solely to the space demised by the New Seller Space Lease and not
necessary for the operation of any other portion of the Building (the
“Fixtures”);

 

(iv)                              All of Seller’s right, title and interest, if
any, in and to all easements, rights of way, privileges, servitudes,
appurtenances and other rights, if any, running with Seller’s interest in the
Real Property;

 

(v)                                 Except for such items used solely in
connection with the space demised by the New Seller Space Lease and not
necessary for the operation of any other portion of the Building, all of
Seller’s right, title, and interest in and to the equipment and machinery owned
by or hereafter acquired by Seller and located on the Real Property and used in
connection with the ownership, maintenance, use, and operation of the Real
Property (the “Equipment”);

 

(vi)                              Except to the extent relating solely to the
space demised by the New Seller Space Lease and not necessary for the operation
of any other portion of the Building, all of Seller’s right, title and interest
in and to (A) any assignable guaranties, warranties, certificates, rights and
privileges relating to the Improvements, the Equipment or the Fixtures, to the
extent in effect on the Closing Date, (B) any assignable licenses and permits
relating to the Improvements, the Equipment or the Fixtures, to the extent in
effect on the Closing Date, (C) any deposits made by Seller (or Seller’s
predecessors-in-interest) with utility companies relating to the Improvements,
the Equipment or the Fixtures, to the extent apportionment is made therefor
under Section 8.1 hereof, (D) any plans or specifications relating to the
Improvements or the Fixtures, to the extent in Seller’s possession or control on
the Closing Date, and (E) any assignable trademarks, tradenames, logos, or
similar property relating to the Improvements or the Fixtures, other than any of
the foregoing using the “Steinway” name or associated with the business of
Seller or with any of its products (the items described in clauses (A), (B),
(C), (D)  and (E) above being collectively referred to herein as the “Contract
Rights”);

 

(vii)                           All of Seller’s right, title and interest under
all leases or other agreements for the present or future use or occupancy of any
space in the Improvements, in respect of which Seller holds the interest of the
lessor or licensor thereunder, as the case may be, and all guaranties or other
documents relating thereto (each, a “Space Lease”; collectively, the “Space
Leases”) that are in effect on the Closing Date, and all of Seller’s right,
title and interest to all money, letters of credit, bonds, certificates of
deposit, negotiable instruments, and other security deposited by the tenants or
occupants under the Space Leases to secure performance of tenants’ obligations
thereunder, to the extent such security remains in Seller’s possession or
control on the Closing Date (collectively, the “Security Deposits”);

 

(viii)                        All right, title and interest of Seller in and to
any Service Contracts relating to the Real Property as listed on Schedule C
attached hereto and made a part hereof, together with any new contracts entered
into under Section 5.2, but only to the extent such contracts or agreements are
in effect on the Closing Date or have not been terminated as provided in this
Agreement.

 

Notwithstanding the foregoing, “Property” shall specifically exclude any rights
to the name “Steinway” in any format or usage, including without limitation by
reference to the historical usage or name of any of the Improvements, and any
and all uses of the name “Steinway” shall belong to and remain with Seller. 
Notwithstanding the foregoing, nothing contained herein shall obligate Purchaser
to remove the

 

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“Steinway” name from the building if the cost of such removal is greater than
Five Thousand and No/100 Dollars ($5,000); provided, however, if the cost of
such removal shall exceed Five Thousand and No/100 Dollars ($5,000), Purchaser
shall nonetheless complete such removal if Seller, at its election, pays all
such additional costs and subject to the receipt of all required government
approvals and compliance with all laws, ordinances, regulations and
rules applicable to the Property.

 

2.2                               Purchase Price.  Subject to adjustment as
hereinafter provided, the purchase price to be paid by Purchaser to Seller for
the Property shall be the sum of (i) Forty Six Million and No/100 Dollars
($46,000,000) (the “Initial Purchase Price”), plus (ii) such amounts, if any, as
may be distributed to Seller pursuant to that certain Escrow Agreement (the
“Escrow Agreement”) between Purchaser and Seller dated as of the Closing Date
(the “Additional Purchase Price” and together with the Initial Purchase Price,
the “Purchase Price”).  On or prior to the Closing Date the Purchaser shall make
the following payments in cash:

 

2.2.1                     An amount equal to Five Million Six Hundred Thousand
and No/100 Dollars ($5,600,000) (including all interest and earnings thereon,
the “Deposit”), on (or prior to) the Effective Date by wire transfer of
immediately available funds to an account designated by the Title Company (in
such capacity, “Escrow Agent”), which Deposit shall be held by Escrow Agent in a
segregated, interest-bearing account with Capital One Bank or another commercial
bank reasonably approved by Seller and Purchaser;

 

2.2.2                     An amount equal to (a) the Initial Purchase Price, as
such amount may be increased or decreased pursuant to Article VIII, less (b) the
Deposit (the full amount of which shall be released to Seller at Closing), on
the Closing Date by wire transfer of immediately available United States federal
funds to the account or accounts designated not later than two business days
prior to the Closing Date by Seller;

 

2.2.3                     An amount equal to the amount required to be deposited
by Purchaser pursuant to the Escrow Agreement (the “Escrow Amount”), on the
Closing Date by wire transfer of immediately available United States federal
funds to the account set forth in the Escrow Agreement, a portion of which
amount may be used to pay the Additional Purchase Price pursuant to the Escrow
Agreement.

 

Any wire transfer on the Closing Date shall be initiated by 4:00 PM, Eastern
Standard Time, on such date.

 

2.3                               The Closing.  The consummation of the sale and
purchase of the Property contemplated by this Agreement (the “Closing”) shall
occur at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York,
New York, or at such other location in New York City as shall be mutually
acceptable to the parties.  Subject to the satisfaction or waiver of all of the
conditions precedent specified herein, the Closing shall occur at 10:00 A.M.,
New York time on May 20, 2013 or on such date as the parties may agree, subject
to Seller’s extension right in Section 3.2.5, with TIME BEING OF THE ESSENCE as
to Purchaser’s obligation to consummate the Closing on May 20, 2013, or such
extended date, as the case may be (such date, as the same may be extended or
adjourned by Purchaser or Seller in accordance with this Section 2.3 or as may
be otherwise modified by the mutual agreement of Seller and Purchaser, is
hereinafter referred to as the “Closing Date”).  Purchaser may, upon not less
than five (5) business days prior written notice to Seller, extend the Closing
Date one time to a date not later than June 3, 2013.

 

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ARTICLE III

 

TITLE AND SURVEY

 

3.1                               Delivery of Title and Survey.  On or before
the Effective Date, Seller has delivered to Purchaser a copy of the Survey and
Purchaser has delivered to Seller a copy of the Commitment issued by the Title
Company.  Purchaser acknowledges that the state of title reflected by the Survey
and the Commitment is acceptable to Purchaser in all respects.

 

3.2                               Title Matters.

 

3.2.1                     Seller hereby covenants and agrees from and after the
Effective Date not to create, consent to in writing, affirmatively permit in
writing, or actively collude in the creation or imposition of any Exception (as
hereinafter defined) without the prior written consent of Purchaser, which
consent may be withheld by Purchaser in its sole discretion.  Except as
expressly provided in this Agreement, Seller shall have no obligation to remove
any title exceptions, liens, mortgages, security interests, charges, leases,
tenancies, occupancies, easements, rights of way, encroachments, restrictive
covenants, judgments, liens (including mechanics’ liens) or other encumbrances
affecting the Property or the Land (collectively, “Exceptions”).

 

3.2.2                     Subject to Seller’s obligations to remove certain
Exceptions pursuant to Section 3.2.4 below (which are not subject to any cap on
Seller’s liability therefor), if Exceptions to title appear on any update or
continuation of the Commitment (each a “Continuation”) which are not Permitted
Exceptions, Purchaser shall notify Seller thereof by the earlier to occur of
(y) the day that is five (5) business days after Purchaser receives such
Continuation and (z) the last business day prior to the Closing Date in the
event Seller is not able to remove, discharge or bond any Exception which Seller
is required to remove, discharge or bond pursuant to this Article III, then
Seller shall so notify Purchaser.  Within ten days after such notice (but in any
event not later than the scheduled Closing Date), Purchaser shall elect, in its
sole discretion, either (x) to consummate the transaction provided for herein
and receive a credit against the Purchase Price equal to the amount required to
remove, discharge or bond any outstanding Exceptions which Seller is required to
remove, discharge or bond pursuant to this Section 3.2.2, but in no event shall
the amount of such credit be in excess of $690,000.00, in which event such
Exceptions shall constitute Permitted Exceptions for purposes of this Agreement,
or (y) to terminate this Agreement by notice to Seller, whereupon none of the
parties hereto shall have any further liability or obligation under this
Agreement, except for those specific rights and obligations of the parties to
this Agreement that specifically survive the termination of this Agreement.  If
Purchaser fails to notify Seller of such election within such 10 day period,
Purchaser shall be deemed to have elected to proceed pursuant to clause
(y) above, with the same force and effect as if Purchaser had affirmatively
elected clause (y) within such 10 day period.

 

3.2.3                     If the Commitment discloses judgments, bankruptcies or
similar returns against persons or entities having names the same as or similar
to that of Seller but which returns are not against Seller, Seller, on request,
shall deliver to Title Company affidavits reasonably acceptable to Seller and
Title Company to the effect that such judgments, bankruptcies or returns are not
against Seller, in form and substance sufficient to permit removal of same as
exceptions in Purchaser’s owner’s title policy.

 

3.2.4                     Notwithstanding anything to the contrary contained in
Section 3.2.2, Seller hereby agrees that it will, at or before Closing, remove,
discharge or bond (provided that, in the

 

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case of bonding, such bond removes the subject lien or encumbrance from the
title records or otherwise enables the Title Company to omit it as an Exception
from Purchaser’s owner’s title insurance policy and any lender’s title insurance
policy) (i) any Exception disclosed by the Continuation (other than the
Permitted Exceptions) created by, consented in writing to, or affirmatively
permitted in writing by Seller, against the Real Property or the Land after the
Effective Date, or any Exception disclosed by the Continuation which Seller
actively colluded in the creation or imposition of, against the Real Property or
the Land after the Effective Date, and (ii) all mechanics’ liens relating to
unpaid bills or claims for labor or services performed or material furnished or
delivered in connection with the Real Property or the Land, in each case which
were contracted for by Seller or otherwise voluntarily caused or created by
Seller; provided that in no event shall Seller be required to remove, discharge
or bond any liens that were filed against the Real Property or the Land for work
done by or on behalf of tenants under Space Leases, and the same shall
constitute Permitted Exceptions for purposes of this Agreement.

 

3.2.5                     Upon not less than three (3) business days (or, if
Seller has not been notified of the applicable Exception(s) as of such date,
upon the last business day prior to the Closing Date) prior written notice to
Purchaser, Seller shall be entitled to a one-time adjournment of the Closing to
a date not later than June 3, 2013 in order to remove any Exceptions that Seller
is obligated to remove or elects to remove pursuant to this Section 3.2.

 

ARTICLE IV

 

ACCESS TO THE PROPERTY; INSPECTIONS

 

4.1                               Access to the Property.  Subject to rights of
the tenants under Space Leases, from the Effective Date until the Closing (or
earlier termination of this Agreement), Purchaser, and any employee, agent,
principal or contractor of Purchaser, shall have the right to enter upon the
Property upon reasonable advance notice during ordinary business hours to
conduct reasonable non-invasive inspections, studies, surveys, analyses and
tests of the Property.  Seller may have a representative present at any time
that Purchaser or its representative is on the Property.  Purchaser shall
promptly notify Seller of, and shall promptly restore, any damage to the
Property caused by Purchaser or Purchaser’s employees, agents, principals or
contractors during any such entry upon the Property and shall satisfy any and
all mechanic’s liens which may be filed against the Property as a result of any
such entry onto or inspection of the Property.  Purchaser shall promptly notify
Seller of, and shall indemnify, defend and hold Seller (and its respective
principals, officers, directors, employees, agents, contractors, tenants and
subtenants) harmless from and against, any and all claims, liabilities, damages,
losses, costs or expenses (including attorneys’ fees and expenses) (other than
those arising out of Seller’s or its agents’ gross negligence or intentional
misconduct) arising as a result of any entry by Purchaser or any employee,
agent, principal or contractor of Purchaser upon the Property or any inspections
or other activities conducted by any of the foregoing on the Property.  The
provisions of this Section regarding indemnification shall survive the
termination of this Agreement or the Closing, whichever is applicable.  In
addition to the foregoing contractual obligations, Purchaser shall, and shall
cause its outside consultant(s) who are performing the physical inspections of
the Property for Purchaser to, obtain and provide to Seller, prior to Purchaser
or any employee, agent, principal or contractor of Purchaser entering upon the
Property after the Effective Date, evidence of comprehensive general liability
insurance coverage in an amount not less than $5,000,000 covering Purchaser’s
obligation under its indemnity obligation and naming Seller as additional named
insureds, which policy(ies) shall be kept in force and effect until the Closing
Date.  Purchaser shall not perform any inspections, studies, surveys, analyses
or tests of the Property without the prior written consent of Seller.  Except as
otherwise expressly set forth in this Agreement, Purchaser shall not be entitled
to terminate this Agreement or receive any reduction of the Purchase Price based
upon matters disclosed by any inspection of the Property.

 

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4.2                               Miscellaneous Provisions Pertaining to
Purchaser’s Inspection of the Property.  Purchaser and its agents, employees and
contractors shall keep in strict confidence all information obtained related to
such inspections of the Property in accordance with the provisions of
Section 9.3 hereof, and this obligation shall survive the termination of this
Agreement or the Closing, whichever is applicable.  No inspection of the
Property by Purchaser under the provisions of this Article IV shall interfere
with the operation of the Property or the conduct of business thereon by Seller
or any tenants or other occupants of the Property.  Except as otherwise
expressly set forth in this Agreement, Purchaser shall not be entitled to
terminate this Agreement or receive any reduction of the Purchase Price based
upon matters disclosed by any inspection and/or environmental audit of the
Property.

 

ARTICLE V

 

SELLER’S OPERATION OF THE PROPERTY PRIOR TO CLOSING

 

The following provisions shall be applicable to all matters relating to the
leasing, operation and management of the Property during the period between the
Effective Date and the Closing Date or earlier termination of this Agreement:

 

5.1                               Space Leases. Seller shall not (i) enter into
any Space Leases, (ii) amend, modify, renew, or extend any Space Lease,
(iii) consent to any assignment or sublease of a Space Lease which requires
Seller’s consent, or (iv) take any other material action with respect to any
Space Lease (excluding actions that Seller deems reasonably necessary to comply
with the terms of, or otherwise avoid default or liability under, the applicable
Space Lease; provided that Seller shall use reasonable efforts to consult with
Purchaser prior to taking any action with respect to the foregoing), except with
the prior written consent of Purchaser, which consent may be granted or withheld
in Purchaser’s sole discretion (except to the extent Seller is obligated as
landlord to be reasonable under such Space Lease, in which event Purchaser’s
consent will not be unreasonably withheld, conditioned or delayed); provided,
however, that (a) if Purchaser fails to object to any such action by Seller
within ten (10) business days (or such shorter time period in which Seller is
required to respond pursuant to the applicable Space Lease) after Seller gives
Purchaser notice thereof, then Purchaser shall be deemed to have consented to
such action, and (b) subject to Section 5.6.3, Seller may terminate any Space
Lease with Purchaser’s consent, which consent will not be unreasonably withheld,
conditioned or delayed, and, in connection with any such termination, Seller may
permit the tenant to remain in occupancy, and/or extend the term of the lease,
for a period not longer than the last date of the term of the New Seller Space
Lease.  Notwithstanding the foregoing, Seller makes no assurances, nor shall it
be a condition to closing, that the Space Leases will be in good standing and
performing or in force and effect on the Closing Date.

 

5.2                               Service Contracts.  Seller or its agents or
independent contractors may enter into contracts with third-parties relating to
the Property to the extent reasonably necessary for the operation of the
Property, provided that each such third-party contract is terminable by Seller
(or its agent or independent contractor) or, after Closing, by Purchaser,
without penalty or premium on not more than thirty (30) days’ prior notice to
the counterparty thereunder and further provided that such third-party contracts
shall otherwise be on market terms (it being understood, however, that Seller or
its agents or independent contractors may, subject to Purchaser’s prior written
consent (not to be unreasonably withheld, conditioned or delayed), enter into
contracts for the restoration of the Property after a casualty or a condemnation
without such contracts being terminable on thirty (30) days’ prior notice);
provided, however, nothing contained in this Section 5.2 shall restrict Seller
(or its agents or independent contractors) from entering into contracts relating
solely to the premises to be demised to Seller as tenant under the New Seller
Space Lease, so long as such contracts shall be terminable upon thirty (30)
days’ prior written notice from and after the expiration or earlier termination
of the New Seller Space Lease.  Notwithstanding anything to the contrary
contained herein, Seller shall make commercially reasonable

 

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efforts to seek, and Purchaser shall cooperate with Seller, to assist Seller in
obtaining the consent of Plymouth Rock Energy, LLC (“Electricity Provider”) to
the assignment of Seller’s rights pursuant to that certain Electricity Sales
Agreement between Electricity Provider and Seller, dated January 1, 2011 (the
“Electricity Contract”) at Closing; provided, however; that if Seller is unable
to obtain such consent of Electricity Provider on or before the date that is 30
days prior to the Closing Date, Seller shall terminate such contract, in which
case Seller shall be responsible for the payment of any termination fees payable
thereunder.  Any contracts with third-parties relating to the Property which do
not satisfy the conditions in the preceding sentence may not be entered into by
Seller (or its agents or independent contractors) without the consent of
Purchaser, which may be withheld by Purchaser in its sole discretion. 
Notwithstanding anything to the contrary contained herein, neither Seller nor
its agents or independent contractors shall enter into any collective bargaining
agreement or other agreement with a union or any other party or entity
concerning employees or conditions of employment in connection with the
Property, without the prior written consent of Purchaser, which may be withheld
by Purchaser in its sole discretion.  In addition, neither Seller nor its agents
or independent contractors shall independently seek to modify any such
collective bargaining agreement to which they are presently subject; provided,
however, that the actions of the Realty Advisory Board on Labor Relations
(“RAB”) or any other party to any such collective bargaining agreement shall not
be imputed to Seller or its agents or independent contractors for purposes of
this covenant.

 

5.3                               Operation of Property.  Except as otherwise
specifically set forth in this Article V, Seller shall operate the Property in
the ordinary course of business and will not make any alterations to the
Property other than with respect to alterations consisting only of painting,
installing or removing wall covering or carpeting or that otherwise are solely
of a cosmetic or decorative nature), or remove any of the Equipment therefrom
(unless the Equipment so removed is simultaneously replaced with Equipment of
similar value and utility or the Equipment so removed is no longer needed or
obsolete), without the prior written consent of Purchaser which shall not be
unreasonably withheld, denied or delayed.  Seller shall not be deemed to be in
default in respect of Seller’s covenant under this Section if (x) Seller or a
tenant performs during the period following the Effective Date and prior to the
Closing alterations to the Improvements in accordance with the terms of such
tenant’s Space Lease, or (y) such alterations that are in the nature of
emergency repairs.

 

5.4                               Violations. Except as otherwise set forth in
this Section 5.4, Purchaser agrees to purchase the Property subject to any and
all Violations noted or issued against the Property prior to or after the
Effective Date, and/or any penalty or fine imposed in connection with any of the
foregoing, and/or any condition or state of repair or disrepair and/or other
matter or thing, whether or not noted, which, if noted, would result in a
Violation being placed on the Property.  Seller shall have no duty to remove or
comply with or repair or disrepair any condition, matter or thing, relating to a
Violation placed on the Property on or prior to the Effective Date, other than
the Violations set forth on Schedule U hereto, which Seller shall be obligated
to remove prior to the Closing Date.  For any Violation first placed on the
Property after the Effective Date (a “Post-Effective Date Violation”), Seller
shall be required to, on or prior to the Closing Date, remove, comply with or
repair, together with any associated liens, penalties or fines or other
conditions (i) all Post-Effective Date Violations resulting from facts or
circumstances arising after the Effective Date and (ii) any other Post-Effective
Date Violation, solely to the extent that the cost of removal, compliance or
repair of all Post-Effective Date Violations (excluding those described in the
immediately preceding clause (i)) does not exceed $350,000 in the aggregate (the
“Violation Cap Amount”).  If Seller fails to remove any Post-Effective Date
Violation as required by this Section 5.4, Purchaser shall accept the Property
subject to each such Post-Effective Date Violation and all liens, penalties or
fines associated therewith and accept, as its sole and exclusive remedy, a
credit to the Purchase Price in the amount equal to (x) with respect to any
Violations pursuant to clause (i) above or as set forth on Schedule U, the
actual cost of removal, compliance or repair of such Violations and (y) with
respect to Post-Effective Date Violations described in clause (ii) of the
immediately preceding sentence,

 

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the lesser of (A) the actual cost of removal, compliance or repair of such
Post-Effective Date Violations and (B) the Violation Cap Amount.

 

5.5                               Security Deposits.  Seller shall not apply any
Security Deposits prior to or at the Closing except in accordance with the terms
of the applicable Space Lease.

 

5.6                               Affirmative Obligations.  After the Effective
Date and prior to the Closing, Seller shall:

 

5.6.1                     maintain insurance on the Property commensurate with
Seller’s past practice;

 

5.6.2                     reasonably assist and cooperate with Purchaser in
entering into discussions with tenants under Space Leases for purposes of
vacating the Property; provided, however, that (x) all such communications
(including any telephone communications) shall be in the presence of Seller and
such agents and representatives of Seller as Seller shall designate and
(y) Seller shall reasonably preapprove any written communications; provided,
further, that prior to Seller entering into any discussions or negotiating any
vacate agreements with tenants, (A) Seller shall request Purchaser’s approval to
negotiate a vacate agreement directly with such tenant(s) and (B) if Purchaser
approves discussions with any tenant, it will provide parameters upon which it
would be willing to offer a buy-out of such tenant’s Space Lease, including
(1) a date certain by which the tenant must vacate the Improvements and (2) a
maximum dollar amount payable to such tenant in order to vacate (clauses (1) and
(2), collectively, the “Vacate Parameters”).  Seller shall be prohibited from
offering such tenant a greater dollar amount or later date to vacate under its
Space Lease than those set forth in the Vacate Parameters.  Prior to execution,
any vacate agreement or ancillary documentation associated therewith shall be
subject to the prior written consent of Purchaser (which may be granted or
withheld in Purchaser’s sole discretion) (as approved by Purchaser, an “Approved
Vacate Agreement”). Seller shall not make any payments under any vacate
agreement, it being understood and agreed that Purchaser shall be bound by the
terms of, and required to make all payments under, each such Approved Vacate
Agreement.  Notwithstanding the foregoing, Purchaser shall not unreasonably
withhold its consent to any vacate agreement or termination of Space Lease that
does not require Seller or Purchaser to incur any cost, make any payment or
incur any liability in connection with such vacate agreement or termination,
provided that the tenant is required to vacate on or before a date that is
acceptable to Purchaser in its sole discretion;

 

5.6.3                     reasonably cooperate in good faith with Purchaser, at
Purchaser’s sole cost and expense, with respect to Purchaser’s redevelopment
plans for the Property, including, without limitation, by executing and
delivering any necessary applications or other documentation to governmental
agencies including licenses, permits, certificates, rulings or amendments
(collectively, the “Approvals”) with respect to the permitting, zoning or other
redevelopment of the Property, and to furnish such information as may be
reasonably requested by Purchaser in connection with such applications;
Purchaser shall have the right prior to the Closing Date, to make and prosecute
applications to any governmental authority for such Approvals as Purchaser, in
its sole discretion, deems necessary or desirable in connection with the
redevelopment of the Property; provided that no such documentation could
reasonably be expected to result in any liability on the part of Seller or any
of its affiliates and provided further, if the Closing does not occur hereunder,
Purchaser shall, at Purchaser’s sole cost and expense, withdraw any and all
applications for the Approvals;

 

5.6.4                     give Purchaser prompt written notice of: (i) any
material Casualty affecting all or any portion of the Property; (ii) any pending
or threatened material condemnation proceeding or material litigation affecting
the Real Property of which Seller receives actual written notice; and (iii) all
material

 

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written notices and other material written correspondence sent by a Seller Party
to, or received by a Seller Party from, Ground Lessor;

 

5.6.5                     send to Purchaser copies of any material written
notices delivered by a Seller Party to, or received by a Seller Party with
respect to, a Tenant, the Property or the Contracts.

 

5.6.6                     continue to comply in all material respects with its
obligations under the Space Leases, the Ground Lease, the Contracts and all
other agreements of Seller, including the obligation to pay all amounts due
under such agreements;

 

5.6.7                     continue to operate and maintain the Property in
substantially the same manner as it has heretofore been operated and maintained
by Seller prior to the Effective Date; and

 

5.6.8                     not exercise any right(s) of first offer or purchase
option rights granted to Seller pursuant to Section 12.2 or Section 12.3(a) of
the Ground Lease in connection with the sale of the fee title to the Land to an
affiliate of Purchaser. Seller represents to Purchaser that, on the Effective
Date, Seller delivered written notice to Ground Lessor in the form attached
hereto as Schedule V (the “ROFO/Purchase Option Waiver”).

 

5.7                               Ground Lease.  Seller shall not materially
modify, terminate, cancel or waive any material rights under the Ground Lease,
except (x) as required by Section 5.6.8 and Section 7.2.24 or (y) to the extent
Seller is obligated to do so in accordance with the terms of the Ground Lease or
as required by law.

 

5.8                               Ground Lessor Estoppel.  Seller shall request
in writing Ground Lessor to execute and deliver an estoppel certificate in the
form required under Section 8.2 of the Ground Lease.  Notwithstanding the
foregoing, Seller’s failure to obtain any such estoppel from Ground Lessor shall
not in any respect be deemed a default or breach of Seller’s obligations under
this Agreement, provided that Seller delivers a written form of estoppel to
Ground Lessor during the term hereof.

 

5.9                               Landmark Preservation Commission.  Seller
covenants and agrees that, so long as Purchaser is not in default of any of its
material obligations under this Agreement (and has received notice of such
default in accordance with the terms hereof), in connection with any discussions
and/or communications with the NYC Landmarks Preservation Commission, (x) any
such communications (including any telephone communications) shall be subject to
the prior written approval of Purchaser (to be granted or withheld in its sole
discretion); provided, that if Purchaser fails to promptly respond to any such
request for approval from Seller, Seller shall be permitted to communicate with
the NYC Landmarks Preservation Commission if Seller believes that such
correspondence is reasonably necessary in order for Seller to avoid liability in
connection therewith, and (y) to the extent feasible, in the presence (either
telephonically or in person) of Purchaser and/or representatives of Purchaser as
it shall designate from time to time.  Seller agrees to keep Purchaser informed
of any other written correspondence or communications received from the NYC
Landmarks Preservation Commission, and shall endeavor to provide Purchaser with
immediate written notice thereof.

 

5.10                        Space Lease Estoppels.  To the extent Purchaser
provides written notice to Seller requesting an estoppel certificate from any
tenant under a Space Lease and such estoppel certificate is either (i) in the
form required pursuant to such tenant’s Space Lease or (ii) reasonably
acceptable to Seller, then Seller shall request, in writing, that such tenant
execute and deliver an estoppel certificate in the form required pursuant to
such tenant’s Space Lease, provided that Purchaser prepares and delivers such
form to Seller.  Purchaser shall bear all reasonable costs and expenses incurred
by Seller in complying with Purchaser’s request(s) under this Section 5.9. 
Notwithstanding the foregoing, Seller’s failure to obtain an estoppel
certificate from any tenant shall not in any respect be deemed a default or
breach of Seller’s obligations under this Agreement, provided that Seller
requests and delivers pursuant to the applicable Space Lease a written form of
estoppel to each such tenant in accordance with this Section 5.9.

 

ARTICLE VI

 

CASUALTY AND CONDEMNATION

 

6.1                               Seller agrees between the date hereof and the
date of Closing to give Purchaser reasonably prompt written notice of any actual
or threatened (by any governmental authority in writing) condemnation
proceedings with respect to all or any part of the Property of which Seller
obtains knowledge.

 

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6.2                               If prior to the Closing there shall occur a
taking by condemnation of any “material portion” (as defined in Section 6.5
below) of the Property, then, and in any such event, Purchaser may elect to
terminate this Agreement by written notice given to Seller at any time prior to
or at the Closing, in which event either party, subject to the provisions of
Article XIII, may promptly instruct Escrow Agent to return the Deposit, together
with all interest earned thereon, to Purchaser, this Agreement shall thereupon
be null and void and neither party hereto shall thereupon have any further
obligation to the other, except for any provisions hereof expressly stated to
survive such termination.  If Purchaser elects not to terminate this Agreement,
then the Closing shall take place as herein provided, without abatement of the
Purchase Price, and all of Seller’s interest in and to any condemnation awards
which may be payable to Seller on account of any such condemnation actually
theretofore paid, less any amounts (the “Reimbursable Amounts”) (i) actually and
reasonably expended or incurred by Seller, in negotiating and/or obtaining any
condemnation award (including, without limitation, reasonable attorneys’ fees
and expenses) and/or (ii) theretofore actually and reasonably incurred or
expended by or for the account of Seller for the cost of any compliance with
laws, protective restoration or emergency repairs made by or on behalf of Seller
(to the extent Seller has not theretofore been reimbursed by its insurance
carriers for such expenditures), shall be paid to Purchaser at the Closing (or
such other date thereafter, upon receipt by Seller thereof).

 

6.3                               If prior to the Closing, there shall occur a
taking by condemnation of any part of the Property which is not material, then,
and in either such event, neither party shall have the right to terminate this
Agreement by reason thereof, but, all of Seller’s interest in any condemnation
awards which may be payable to Seller on account of any such condemnation, less
any Reimbursable Amounts, shall be paid to Purchaser at the Closing (or such
other date thereafter, upon receipt by Seller thereof).

 

6.4                               If prior to the Closing, there shall occur a
casualty of any material part of the Property, then Seller shall provide notice
of such casualty to Purchaser, and to the extent any insurance proceeds are
received by Seller in connection therewith, Seller shall not apply such amounts
towards the restoration or repair of the Property, except with the prior written
consent of Purchaser, and otherwise such amounts shall be paid to Purchaser at
the Closing (or such other date thereafter, upon receipt by Seller thereof)
without adjustment to the Purchase Price; provided, that Seller shall be
permitted to apply such proceeds to the restoration of the Premises (as defined
in the New Seller Space Lease) so long as (i) such restoration can be completed
no later than 60 days after such casualty (as estimated in any such case by a
reputable contractor, architect or engineer reasonably designated by Purchaser),
(ii) such restoration does not require an expenditure of greater of more than
fifteen percent (15%) of the full insurable value of the Improvements,
(iii) such restoration is at no cost to Purchaser (excepting application of
insurance proceeds that have been paid to Purchaser in accordance with this
Section 6.4), (iv) Purchaser shall have the right to approve any such
restoration work in its reasonable discretion and (v) any excess proceeds
following such restoration shall be paid to Purchaser at Closing without
adjustment to the Purchase Price.  Notwithstanding anything contained herein,
the parties hereby expressly agree that if there shall occur a casualty of any
part of the Property, neither party shall have the right to terminate this
Agreement by reason thereof.  The terms of this Section 6.4 shall supersede and
take the place of Section 5-1311 of the New York General Obligations Law.

 

6.5                               For purposes of this Article VI, a taking of a
“material portion” of the Property shall mean any taking in which the remaining
portion of the Property cannot be redeveloped in substantially the same manner
(and to create substantially the same value to Purchaser) as though such rights
had not been taken.

 

To the extent that any insurance proceeds or condemnation awards which may be
payable to Seller on account of any such condemnation are to be paid after the
Closing Date, the provisions of this Article VI shall survive the Closing.

 

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ARTICLE VII

 

CLOSING DELIVERIES AND OBLIGATIONS

 

7.1                               Costs of Closing.  Seller and Purchaser shall
each pay all fees and expenses of their respective legal counsel.  At or prior
to the Closing,

 

7.1.1                     Seller’s Closing Costs:  Seller shall pay, to the
extent applicable, in connection with the transfer of the Property pursuant to
this Agreement (i) any costs of Seller’s broker and (ii) the State of New York
Real Estate Transfer Tax and the New York City Real Property Transfer Tax. 
Except with respect to any liability that arises directly as a result of
Purchaser’s failure to comply with its obligations under Section 14.20, Seller
hereby indemnifies, defends and saves harmless Purchaser from and against any
transfer tax liability in connection with the transfer of the Property pursuant
to this Agreement (including with respect to any supplemental transfer taxes
pursuant to Section 14.20), and from and against any and all costs, claims,
liabilities, losses and expenses, including, without limitation, attorneys’ fees
and disbursements, incurred in contesting the existence or amount of any such
transfer tax liability or in respect of any such transfer tax liability,
including, without limitation, penalties, interest and other charges in respect
of the same.  Seller shall indemnify, defend and hold harmless Purchaser with
respect to any failure by Seller to comply with its obligations under this
Section 7.1.1.  The provisions of this Section 7.1.1 shall survive the Closing.

 

7.1.2                     Purchaser’s Closing Costs.  Purchaser shall pay the
following closing expenses:

 

(a)                                 all title insurance costs and premiums;

 

(b)                                 all costs and expenses incident to the
preparation of any updated survey;

 

(c)                                  all recordation fees;

 

(d)                                 all escrow fees;

 

(e)                                  any and all costs and expenses incurred
with regard to Purchaser’s  financing, if any; and

 

(f)                                   any and all costs and expenses incurred in
connection with Purchaser’s due diligence of the Property.

 

7.2                               Deliveries by Seller at Closing.  At the
Closing, Seller shall execute and/or deliver, as applicable, the following
documents to Purchaser:

 

7.2.1                     Intentionally omitted;

 

7.2.2                     An Assignment and Assumption Agreement pertaining to
Seller’s interest in the Ground Lease, in the form of Schedule G hereto, duly
executed by Seller (“Ground Lease Assignment”);

 

7.2.3                     A bargain and sale deed without covenants against
grantor’s acts, in the form of Schedule H hereto, duly executed and acknowledged
by Seller so as to convey to Purchaser

 

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Seller’s interest in the Improvements, subject only to the Permitted Exceptions
(the “Deed to Improvements”);

 

7.2.4                     Assignment and Assumption of Space Leases, in the form
of Schedule I hereto (the “Assignment and Assumption of Space Leases”), duly
executed by Seller;

 

7.2.5                     All originally executed counterparts in the possession
of Seller or its agents, or, in lieu thereof, true, correct and complete copies,
of the Space Leases, if any, that are in effect on the Closing Date, and
Seller’s leasing files pertaining thereto (including any supporting documents
necessary for the calculation of escalation rents) to the extent in the
possession of Seller or its agents;

 

7.2.6                     The Security Deposits theretofore paid in cash to (or
otherwise held by) Seller, to the extent held by Seller at the time of Closing,
together with an accounting certified by Seller of the disposition, if any, of
such Security Deposits, and any letter of credit constituting a Security Deposit
issued, amended or to be assigned pursuant to Section 8.10 of this Agreement;

 

7.2.7                     Copies of all licenses and permits relating to the
operation of the Real Property which Seller has in its possession and control;

 

7.2.8                     A bill of sale in the form of Schedule J hereto,
relating to Seller’s interest in the Equipment, duly executed by Seller;

 

7.2.9                     A “non-foreign person affidavit” that meets the
requirements of Section 1445(b)(2) of the Internal Revenue Code of 1986, as
amended, from Seller;

 

7.2.10              an Assignment and Assumption of Contract Rights and Service
Contracts (the “Assignment and Assumption of Contract Rights and Service
Contracts”), in the form of Schedule K attached hereto and made a part hereof,
duly executed by Seller so as to assign to Purchaser or Purchaser’s agents from
and after the Closing Date all of Seller’s interest in the Contract Rights and
Service Contracts that are in effect on the Closing Date;

 

7.2.11              All original executed counterparts in the possession of
Seller or Seller’s agents, or, in lieu thereof, true and correct copies, of the
documents comprising the Contract Rights and the Service Contracts, if any, that
are in effect on the Closing Date;

 

7.2.12              Owner’s Affidavits in the form required by the Title Company
and reasonably acceptable to Seller in order to eliminate the standard
exceptions to the leasehold policy of title insurance, if any, being obtained by
Purchaser, duly executed by Seller;

 

7.2.13              Executed copies of the notices to tenants under Space Leases
in effect on the Closing Date relating to the assignment of the Space Leases and
transfer of security deposits under the Space Leases to Purchaser and a general
direction relating to the payment of rent in the form set forth on Schedule L
hereto;

 

7.2.14              A certificate of Seller certifying that the execution and
delivery of the documents by Seller set forth herein have been duly authorized
by all necessary action of Seller and that such documents have been duly
executed and delivered by Seller;

 

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7.2.15              Tax returns in respect of the New York State Real Estate
Transfer Tax (the “TP-584 Form”) and the New York City Real Property Transfer
Tax (the “NYC-RPT”), both duly executed by Seller;

 

7.2.16              A Real Property Transfer Tax Report (the “RP-5217NYC”), duly
executed by Seller;

 

7.2.17              Resolutions and/or consents, as applicable, certified by a
general partner, managing member or officer, as the case may be, of Seller which
evidence and certify that the execution and delivery by Seller of this Agreement
and the documents set forth herein have been duly authorized by all necessary
action of Seller and that this Agreement and such documents have been duly
executed and delivered by Seller;

 

7.2.18              A certificate from Seller confirming that the
representations made by Seller in Section 10.1 remain true and correct on and as
of the Closing Date, except that Seller, in such certificate, may modify the
representations made by Seller in Sections 10.1.2, 10.1.3, 10.1.4, 10.1.6 and
10.1.7 hereof to reflect facts and circumstances that exist on and as of the
Closing Date (each such certificate being referred to herein as a “Seller’s
Update Certificate”); provided, however, that no such modification of the
representations made in a Seller’s Update Certificate will be deemed to cure any
breach (as of the Effective Date) of any representation made by Seller in
Section 10.1, and Purchaser shall have the remedies provided in Section 10.4
with respect to any breach or inaccuracy that existed as of the Effective Date,
provided that if Purchaser determines to close, Purchaser shall have waived all
post-closing rights and remedies with respect to such modified representations;

 

7.2.19              All Space Lease Estoppels received by Seller on or prior to
the Closing Date;

 

7.2.20              A lease pursuant to which Seller (or an affiliate of Seller)
will lease space from Purchaser in the Improvements, in the form of Schedule N
hereto (the “New Seller Space Lease”), duly executed by Seller;

 

7.2.21              To the extent in the possession of Seller, all keys or key
cards and alarm codes to, and all combinations to, any locks on, all entrance
doors to, and any equipment and utility rooms located in, the Improvements,
appropriately tagged for identification;

 

7.2.22              Intentionally omitted;

 

7.2.23              Intentionally omitted;

 

7.2.24              If requested in writing by Seller, a written affirmation of
the Ground Lease Modification; and

 

7.2.25              Such other documents contemplated to be delivered pursuant
to this Agreement or reasonably required to consummate the transactions
contemplated by this Agreement.

 

7.3                               Purchaser’s Deliveries at Closing.  At the
Closing, Purchaser shall deliver the following to Seller:

 

7.3.1                     In accordance with and subject to the adjustments
provided in this Agreement, the balance of the Initial Purchase Price as
provided in Section 2.2;

 

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7.3.2                     Written confirmation from the Escrow Agent under the
Escrow Agreement that Purchaser has deposited the Escrow Amount into the
Additional Purchase Price Escrow Account;

 

7.3.3                     The Ground Lease Assignment, duly executed by
Purchaser;

 

7.3.4                     The Assignment and Assumption of Space Leases, duly
executed by Purchaser;

 

7.3.5                     The Assignment and Assumption of Contract Rights and
Service Contracts, duly executed by Purchaser;

 

7.3.6                     The TP-584 Form, the NYC-RPT and RP-5217NYC, to the
extent required in connection with the consummation of the transaction
contemplated hereby, each duly executed by Purchaser;

 

7.3.7                     Intentionally Omitted;

 

7.3.8                     A certificate from Purchaser confirming that the
representations made by Purchaser in Section 10.2 hereof remain true and correct
on and as of the Closing Date (“Purchaser’s Update Certificate”);

 

7.3.9                     The New Seller Space Lease, duly executed by
Purchaser;

 

7.3.10              A subordination, nondisturbance and attornment agreement
with respect to the New Seller Space Lease, in customary form reasonably
acceptable to the parties thereto, executed and acknowledged by any lender from
whom Purchaser shall have obtained mortgage financing in connection with its
acquisition of the Property and by Purchaser (if such form provides for
Purchaser to be a party thereto);

 

7.3.11              Purchaser’s organizational documents, resolutions and
consents, as applicable, certified by a general partner, managing member or
officer, as the case may be, of Purchaser as true, correct and complete, which
evidence and certify that the execution and delivery by Purchaser of this
Agreement and the documents set forth herein have been duly authorized by all
necessary action of Purchaser and that this Agreement and such documents have
been duly executed and delivered by Purchaser;

 

7.3.12              If Purchaser has purchased the Fee Interest prior to the
Closing Date, a modification to the Ground Lease in the form attached hereto as
Schedule T duly executed by Purchaser; and

 

7.3.13              Such other documents contemplated to be delivered pursuant
to this Agreement or reasonably required to consummate the transactions
contemplated by this Agreement.

 

7.4                               Employees.

 

7.4.1                     Seller does not have any employees that are engaged
with respect to the Property or the operation thereof, and to Seller’s
knowledge, the personnel that are engaged with respect to the Property and the
operation thereof are employees of Cushman & Wakefield.

 

7.4.2                     The provisions of this Section 7.4 shall survive the
Closing.

 

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ARTICLE VIII

 

PRORATIONS AND OTHER ALLOCATIONS

 

8.1                               Prorations.  Subject to the terms of this
Article VIII, the items listed in this Section 8.1, without duplication, shall
be apportioned or prorated between Seller and Purchaser as of 11:59 p.m., New
York City time, on the day immediately preceding the Closing Date, and at the
Closing the net amount thereof shall either be (x) paid by Purchaser to Seller
by wire transfer of immediately available federal funds to a bank account or
accounts designated by Seller, or (y) credited by Seller against the Purchase
Price.

 

8.1.1                     real property taxes and assessments (including, if
applicable, any business personal property assessment) paid or payable by
Seller;

 

8.1.2                     water rates and charges paid or payable by Seller,
except those required to be paid by tenants under Space Leases directly to the
entity imposing same;

 

8.1.3                     sewer taxes and rents paid or payable by Seller,
except those required to be paid by tenants under Space Leases directly to the
entity imposing same;

 

8.1.4                     fuel and all other utilities paid or payable by
Seller, including, without limitation, taxes thereon;

 

8.1.5                     deposits on account by Seller with any utility company
servicing the Property, to the extent transferred to the account of Purchaser;

 

8.1.6                     deposits on account by Seller with any municipality
having jurisdiction over the Property, to the extent transferred to the account
of Purchaser;

 

8.1.7                     rents and charges under the Space Leases in effect on
the Closing Date, if, as and when collected;

 

8.1.8                     rents and other amounts due and payable, or prepaid,
under the Ground Lease;

 

8.1.9                     annual permit, license and inspection fees, if any, 
paid or payable by Seller on the basis of the fiscal year for which levied, if
the rights with respect thereto are transferable to Purchaser;

 

8.1.10              fees and charges under the Service Contracts that are in
effect on the Closing Date  paid or payable by Seller (it being understood that
all termination fees payable under any Service Contract due to the sale of the
Improvements shall be payable solely by Seller);

 

8.1.11              Intentionally omitted;

 

8.1.12              inventory in unopened packages; and

 

8.1.13              all other items of income or expense  paid or payable by
Seller that reasonably require apportionment in accordance with local custom and
practice to effectuate the transactions contemplated hereby.

 

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Seller shall provide a draft apportionment statement to Purchaser for
Purchaser’s review and approval not less than three (3) business days prior to
the Closing Date.  Seller and Purchaser shall cooperate to produce a schedule of
prorations and closing costs that is as complete and accurate as reasonably
possible, and adjust any apportionments made under this Article after the
Closing to account for errors or incorrect estimates made as of the Closing Date
(it being agreed that the parties’ aforesaid agreement to make such adjustments
shall survive the Closing for a period of twelve (12) months).

 

8.2                               Governmental Charges.  Apportionment of real
property taxes, water rates and charges, sewer taxes and rents and other similar
items shall be made on the basis of the fiscal year for which assessed.  If the
Closing Date occurs before the real property taxes, water rates and charges,
sewer taxes and rents or similar items with respect to the Property are finally
fixed for the fiscal year in which the Closing occurs, then the apportionments
thereof made at the Closing shall be made on the basis of the real property
taxes, water rates and charges, sewer taxes and rents or other similar items, as
the case may be, for the preceding fiscal year applied to the latest assessed
valuation.  After the real property taxes, water rates and charges, sewer taxes
and rents or similar items, as the case may be, are finally fixed for the fiscal
year in which the Closing occurs, Seller and Purchaser shall make a
recalculation of the apportionment thereof based on the amounts finally fixed
for the fiscal year in which the Closing occurs, and Seller or Purchaser, as the
case may be, shall make an appropriate payment to the other party based on such
recalculation.  Seller or its representatives shall have the right (x) at any
time before the Closing, to institute tax reduction or other proceedings to
reduce the assessed valuation of the Real Property with respect to any period
prior to the Closing Date and/or the period ending at the end of the fiscal year
in which the Closing occurs, and (y) subject to the next succeeding sentence, to
continue, after the Closing, any such proceedings commenced by Seller prior to
the Closing, provided that such proceedings with respect to the tax year in
which the Closing occurs shall not be finally settled by Seller without the
prior written consent of Purchaser, which consent shall not be unreasonably
withheld.  If Purchaser, at any time following the Closing, institutes tax
reduction or other proceedings not previously instituted by Seller to reduce the
assessed valuation of the Real Property with respect to the period ending at the
end of the fiscal year in which the Closing occurs, then such proceeding shall
not be finally settled by Purchaser without the prior consent of Seller, which
consent shall not be unreasonably withheld.  If any refund of any real property
tax, water rates and charges, sewer taxes and rents or similar items is issued
after the Closing Date for any period prior to the Closing Date or that includes
the period prior to the Closing Date, then such refund shall be applied as
follows: first, to the equitably allocated cost incurred in obtaining such
refund; second, to any amount required to be refunded to the tenants in
accordance with the terms of the Space Leases, to the extent applicable; and,
third, the balance of such refund, if any, shall be apportioned between Seller
and Purchaser (based on the period to which it relates) as of the Closing Date.

 

8.3                               Ground Lease.  All rent and other amounts
payable that are known to be due under the Ground Lease shall, without
duplication of any of Seller’s obligations otherwise set forth in this
Article VIII, be paid by Seller or credited to Purchaser as a reduction of the
Purchase Price.  Any amounts prepaid or otherwise paid in advance (including any
monthly rent pursuant to Section 2.3 of the Ground Lease) under the Ground Lease
shall be credited to Seller.

 

8.4                               Water Meters.  If there are any meters
measuring water consumption at the Real Property (other than meters measuring
water consumption for which a tenant is obligated to pay the charges therefor
directly to the utility company), Seller shall attempt to obtain meter readings
to a date that is no more than thirty (30) days before the Closing, and, if such
readings are obtained, the unfixed water rates and charges and sewer taxes and
rents, if any, based thereon for the intervening time, shall be apportioned on
the basis of such readings, or if such readings are not obtained, the unfixed
water rates and charges and sewer taxes and rents, if any, shall be apportioned
upon the last meter readings.

 

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8.5                               Payment of Certain Items.  The amount of any
unpaid taxes, assessments, water rates and charges, sewer taxes and rents and
any other similar items for periods prior to the Closing Date which Seller is
obligated to pay and discharge with respect to the Real Property, with interest
and penalties thereon through the date which is two (2) business days after the
Closing Date, may, at the option of Seller, be allowed to Purchaser out of the
Purchase Price, provided that official bills therefor with interest and
penalties thereon are furnished by Seller at the Closing.

 

8.6                               Fuel Oil.  Fuel oil, if any, owned by Seller
and located at the Real Property on the Closing Date shall be adjusted at the
cost thereof to Seller on a first in-first out basis.  Seller shall arrange for
the amount of fuel oil to be determined in writing by the fuel company presently
supplying fuel to the Real Property as of a date which is not more than five
(5) business days prior to the Closing Date, and such documentation shall be
provided to Purchaser for verification.

 

8.7                               Assessments.  If, on the Closing Date, the
Real Property, or any part thereof, is affected by any real property tax
assessments, then Seller shall pay such assessments; provided, however, that if
such assessments are payable in installments, then Seller shall pay such
installments due prior to the Closing Date, and Purchaser shall pay such
installments due after the Closing Date.

 

8.8                               Escalation Rents.  Seller shall be entitled to
all escalation rents (in the nature of reimbursements or pass-throughs for
operating expenses, real estate taxes and similar charges) with respect to any
Space Lease for any fiscal year ending prior to the Closing Date.  At the end of
the fiscal year during which the Closing occurs with respect to which escalation
rents are payable under each Space Lease, there shall be a calculation of the
portion of such escalation rents to which Seller is entitled, which portion
shall be equal to a fraction, the numerator of which is the number of days in
said fiscal year under the applicable Space Lease which elapsed prior to the
Closing Date and the denominator of which is the total number of days in said
fiscal year during which the Space Lease was in effect, and Purchaser shall be
entitled to the remaining portion of such escalation rents.  If Seller has
received escalation rents with respect to any Space Lease for such fiscal year
in excess of the amount to which it is entitled pursuant hereto, such excess
shall be paid by Seller to Purchaser within ten (10) business days after notice
to Seller of such calculation.  If Purchaser has received escalation rents with
respect to any Space Lease for such fiscal year in excess of the amount to which
it is entitled pursuant hereto, such excess shall be paid by Purchaser to Seller
within ten (10) business days after the later of (a) Purchaser’s receipt of such
excess of escalation rents, and (b) the date of such calculation.

 

8.9                               Collection of Rents.  To the extent that
pursuant to the provisions hereof Seller is entitled to any portion of rents or
charges payable under the Space Leases after the Closing, Purchaser shall bill
tenants under the Space Leases for all rents and charges as provided by their
respective Space Leases and Purchaser shall use commercially reasonable efforts
to collect any and all rents and charges due pursuant thereto; it being
understood that Purchaser shall have no obligation to terminate any Space Lease
or institute any collection actions for tenants’ failure to pay such rents and
charges.  Purchaser, without Seller’s prior written consent, which consent shall
not be unreasonably withheld or delayed, may not settle or compromise any rents
or charges which are due and payable from tenants who have rents or charges
outstanding for any period prior to the Closing Date.  Any amounts collected by
Purchaser as a result of such collection efforts or any legal proceeding shall
be applied first toward Purchaser’s reasonable attorneys’ fees and other
reasonable costs of collection incurred in connection therewith and then in
accordance with the provisions of Section 8.9 hereof.

 

8.10                        Application of Rents and Charges Under Space
Leases.  From and after the Closing Date, all rent and charge collections with
respect to the Property, net of the reasonable costs of collection (including
reasonable attorneys’ fees), shall be applied in the following order
(notwithstanding any designation by the remitting tenant), whether received by,
on behalf of or at the direction of Seller or

 

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Purchaser: (i) first to the calendar month during which the Closing Date occurs,
(ii) then to any arrears for the calendar month immediately before the calendar
month during which the Closing Date occurs, (iii) then to any calendar month or
months following the calendar month during which the Closing Date occurs for
which rent is then due and payable, and (iv) finally, to any arrears for the
period before the Closing Date owed by the applicable tenant to Seller (and not
theretofore collected by Seller pursuant to clause (ii) of this Section).  All
such unpaid rents and other charges collected from tenants shall be remitted
promptly after collection to (i) Seller to the extent that Seller has the right
thereto and (ii) Purchaser to the extent that Purchaser has the right thereto. 
Nothing contained herein shall be construed to prohibit Seller from bringing or
pursuing an action for money damages against any tenant after the Closing by
reason of such tenant’s failure to pay rent or charges for any period prior to
the Closing Date; provided, however, Seller shall not seek to terminate the
applicable Space Lease or evict the applicable tenant; and provided further that
Seller shall keep Purchaser advised of any such actions commenced by it.

 

8.11                        Security Deposits under Space Leases.  All cash
security deposits held by Seller under the Space Leases (including any accrued
interest thereon if Purchaser will be accountable to the tenants under the Space
Leases for such interest on the security deposits) will be turned over by Seller
to Purchaser on the Closing Date or, in the alternative, Purchaser shall receive
a credit against the Purchase Price for the aggregate amount of all such
security deposits.  Purchaser shall indemnify and hold Seller harmless against
any liability or expense incurred by Seller by reason of any tenant security
deposit (and interest thereon) transferred or credited to Purchaser at the
Closing.  If a tenant has deposited with Seller a letter of credit as security
for the performance of such tenant’s obligations under the applicable Space
Lease, Seller shall use reasonable efforts to compel such tenant to cause the
bank which issued such letter of credit to issue an amendment to such letter of
credit or issue a new letter of credit naming Purchaser as the beneficiary
thereunder effective as of the Closing Date.  In addition, if requested by
Purchaser, Seller shall execute instruments of assignment of Seller’s interest
under such letter of credit at or prior to Closing.  If Seller is unable to
provide for the transfer of Seller’s interest in any letter of credit held by
Seller as security under a Space Lease as provided in this Section at or prior
to Closing, then (a) Seller shall cooperate with Purchaser in arranging for the
assignment to Purchaser of the beneficiary’s interest under such letter of
credit (or the re-issuance to Purchaser of such letter of credit) promptly
following the Closing and (b) if requested by Purchaser, upon the default by a
tenant under its Space Lease, Seller shall present the applicable letter of
credit for payment and Purchaser shall indemnify Seller for, and hold Seller
harmless against, any and all loss, liability, costs or expenses (including
reasonable attorneys’ fees and disbursements) incurred in connection with such
presentment.

 

8.12                        Refundable Deposits.  Seller shall be entitled to
the refund of any existing utility security deposits or deposits on account with
any municipality having jurisdiction over the Property that are refundable.

 

8.13                        Survival.  The provisions of this Article VIII shall
survive the Closing.

 

ARTICLE IX

 

CONDITION OF PROPERTY AND DISCLAIMERS BY SELLER

 

9.1                               Seller’s Disclaimers.  Purchaser represents,
warrants, acknowledges and agrees (i) that Purchaser has examined to its
satisfaction and understands the operation and/or condition of the Property and
is relying solely on its own (or its representatives’) inspection, examination
and evaluation of the Property, (ii) that Purchaser has made such examination of
the operation, income and expenses of the Property, as well as all other matters
and documents affecting or relating to the transaction contemplated hereby, as
Purchaser deemed necessary, and (iii) that, except for the express
representations, warranties

 

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and covenants of Seller set forth in this Agreement, neither Seller nor its
respective affiliates, or any employees, agents, attorneys, partners, members,
officers, directors, advisors or property manager of Seller or their respective
affiliates have made any verbal or written representations, warranties or
statements of any nature or kind whatsoever to Purchaser, whether expressed or
implied, and, in particular, that no representations or warranties have been
made with respect to (a) the physical condition, quality or operation of the
Property (including, without limitation, (I) the absence or presence of
hazardous substances at, in or adjacent to the Property, (II) the compliance of
the Property with applicable legal or insurance requirements regarding hazardous
substances, or (III) the manner of construction and condition and state of
repair or lack of repair of any improvements located thereon), (b) the
suitability of the Property for any and all activities and uses which Purchaser
may conduct thereon, (c) the revenues and expenses of the Property, (d) the
zoning and other laws, ordinances, regulations and rules applicable to the
Property or the compliance of the Property or the operation of the Property
therewith, (e) the Space Leases, the Security Deposits, the Service Contracts,
the Contract Rights, the Permitted Exceptions and any rights or obligations of
Seller thereunder, (f) the occupancy of the Real Property or any part thereof,
(g) the quantity, quality or condition of the Fixtures, or (h) any other matter
or thing affecting or related to the Property or the transactions contemplated
hereby, except as and solely to the extent expressly set forth in this
Agreement.  Purchaser agrees that Seller shall not be bound in any manner
whatsoever by any guarantees, promises, projections, or other information
pertaining to the Property made, furnished or claimed to have been made or
furnished by Seller or any affiliates, employees, agents, attorneys, partners,
members, officers, directors, advisors or property manager of Seller or any
broker, whether verbally or in writing, except as expressly set forth in this
Agreement.  Purchaser acknowledges and agrees that, except as otherwise
expressly provided in this Agreement, Purchaser shall accept the Property on an
“AS IS, WHERE IS” basis, with all faults, in substantially its present
condition, subject to ordinary use, wear and tear and natural deterioration
between the date hereof and the Closing.  Purchaser hereby waives, to the extent
permitted by law, any and all implied warranties.

 

9.2                               Waiver of Liability.  Except as otherwise
expressly provided for in this Agreement, from and after the Closing, Purchaser
hereby expressly assumes all risk, liabilities, claims, damages and costs (and
agrees that Seller shall not be liable for any special, direct or indirect,
consequential or other damages) resulting or arising from or related to the
ownership, use, condition (including, but not limited to, its environmental
condition), location, maintenance, repair or operation of the Property. 
Purchaser acknowledges that any condition of the Property that Purchaser
discovers or desires to correct or improve prior to or after the Closing shall
be at Purchaser’s sole expense.  Purchaser expressly waives (to the extent
allowed by applicable law and except as otherwise expressly provided herein) any
claims under federal, state or other law that Purchaser might otherwise have
against Seller relating to the use, characteristics or condition of the
Property.  Any repairs paid for by Seller pursuant to this Agreement, if any,
shall be done without any warranty or representation by Seller, and Seller
hereby expressly disclaims any warranty or representation of any kind whatsoever
in connection with such repairs.  The terms of Section 9.1 and Section 9.2 shall
specifically survive the Closing.

 

9.3                               Confidentiality.  Unless disclosed as the
result of the valid order, subpoena or requirement of a governmental agency,
state, federal or municipal court or arbitrator who has jurisdiction over one or
more of the parties to this Agreement or disclosed by one of the parties hereto
in connection with a lawsuit between parties to this Agreement, Purchaser shall
keep in strict confidence all information obtained with respect to the Property
pursuant to or in connection with this Agreement or any confidentiality
agreement executed by Purchaser related to the Property (including, without
limitation, all terms and provisions of this Agreement, including the Purchase
Price, all information obtained with respect to the tenants and other occupants
of the Property and all information obtained in connection with any inspections
of the Property) until such time as the Closing is completed.  Purchaser may
introduce prospective tenants to the Property, but such introduction shall be
strictly subject to the confidentiality restrictions imposed on Purchaser by
this Section.  Purchaser agrees to instruct its agents, employees,

 

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advisors and consultants to comply with the provisions of this Section and any
confidentiality agreement executed in connection with the Property. 
Notwithstanding the foregoing, Purchaser may disclose all information obtained
with respect to the Property and the terms of this Agreement to its attorneys,
accountants, directors, bankers, potential lenders, joint venture partners,
actual or potential direct or indirect investors in the Property, shareholders
and advisors and other persons actually or prospectively involved in the
acquisition of the Property, as long as such parties or persons agree to keep
the information confidential until such time as the Closing hereunder is
completed.  Purchaser shall be responsible for any failure by any of its agents,
employees, advisors, consultants, attorneys, accountants, directors, bankers,
potential lenders, joint venture partners, potential investors in the Property,
shareholders and advisors or other persons to whom Purchaser shall have
disclosed any information regarding the Property to comply with this Section. 
If the purchase and sale of the Property contemplated hereunder is not completed
on or before September 1, 2013, for any reason, Purchaser shall promptly return
to Seller all instruments and materials, or copies of instruments and materials
delivered pursuant hereto, and copies of any reports or tests made by
Purchaser.  The provisions of this Section 9.3 shall survive any termination of
this Agreement.

 

ARTICLE X

 

REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER

 

10.1                           Seller’s Representations and Warranties.  Seller
hereby warrants and represents to Purchaser that, as of the Effective Date:

 

10.1.1                  Seller is a corporation duly organized and validly
existing and in good standing under the laws of the State of Delaware.  Seller
has full power to own its interest in the Property.  Seller has the power and
authority to enter into and to perform its obligations under this Agreement and
the documents to be executed and delivered by Seller pursuant hereto.  The
execution and delivery of this Agreement and such documents by Seller, and the
performance of Seller’s obligations hereunder and thereunder, have been duly
authorized by all necessary action on the part of Seller.  Upon execution and
delivery, this Agreement and such documents will constitute Seller’s valid and
binding obligations enforceable in accordance with their respective terms,
except to the extent limited by bankruptcy or insolvency laws, or laws affecting
creditor’s rights generally.  This Agreement and all documents to be delivered
by Seller at Closing do not conflict with any applicable provision of any law or
regulation to which Seller is subject, conflict with or result in a breach of or
constitute a default under any of the terms, conditions or provisions of any
agreement or instrument to which Seller is a party or by which Seller is bound
(except for the Superior Mortgage which will be satisfied or assigned at
Closing) or any order or decree applicable to Seller, or result in the creation
or imposition of any lien on any of Seller’s assets or property, which would
materially and adversely affect the ability of Seller to perform its obligations
under this Agreement.  Seller has obtained all consents, approvals,
authorizations or orders of any court or governmental agency or body, if any,
required for the execution, delivery and performance by Seller of this
Agreement.

 

10.1.2                  Seller is not a party to any pending action, suit,
condemnation or eminent domain proceeding, or other litigation or proceeding
with respect to the Property, which is reasonably likely to have a material
adverse effect on Seller’s ability to close on the sale of the Property, and
Seller has no actual knowledge of the existence or threat of any such action.

 

10.1.3                  Seller (and its agents and independent contractors) have
not entered into any Service Contracts which are in effect on the Effective Date
other than the Service Contracts set forth on Schedule C.  Schedule C is a true,
correct and complete list of the Service Contracts in

 

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effect as of the Effective Date, including, without limitation, all amendments,
modifications or agreements pertaining thereto, true and correct copies of which
have been delivered to Purchaser.  Other than the Service Contracts, all other
contracts for alterations, renovations or improvements with respect to the
Property entered into by Seller, its agents or independent contractors, have
been terminated and the applicable contract parties have been paid in full.

 

10.1.4                  There are no employees employed by Seller or Seller’s
agents (but not including any independent contractor) in connection with the
Property as of the date hereof who are members of any labor union or are
employed as building service employees, as that phrase is used in the Displaced
Building Service Workers Law (contained in the Administrative Code of the City
of New York) (“DBSWL”).  To the knowledge of Seller, there is no judgment,
award, agency order, labor grievance, arbitration, discrimination or other
employment related proceeding pending or threatened against Seller, except as
set forth on Schedule Q hereto.

 

10.1.5                  Neither Seller nor Seller’s agents (but not including
any independent contractor) is or has committed to become a party and/or
signatory to any collective bargaining agreement or other union agreement
relating to the Real Property.

 

10.1.6                  Attached hereto as Schedule S is a true, correct and
complete list of all Space Leases that are currently in effect, and any related
guaranties, and accurately sets forth (A) the expiration date of each Space
Lease, (B) the base real estate tax amount for escalations, (C) the base
operating expense amount for escalations, (D) whether and to the extent that any
tenant improvement work required to be performed by Seller has not yet been
performed with respect to the current term of each such Space Lease and for the
space currently demised under each such Space Lease, (E) whether and to the
extent that any tenant improvement fund or other fund required to be funded by
Seller to or for the account of tenant has not yet been funded with respect to
the current term of each such Space Lease and for the space currently demised
under each such Space Lease, (F) the security deposit, if any, deposited by the
tenant under such Space Lease with Seller as lessor thereunder, and (G) the
arrears, if any, due under each such Space Lease.  Other than the Ground Lease
and the Space Leases set forth on Schedule S, there are no other leases or other
rights of occupancy affecting or relating to the Property.  Except as set forth
on Schedule S, none of the Space Leases provides for any renewal or extension
options on the part of the tenant thereunder.  Except as otherwise indicated on
Schedule S attached hereto, (A) Seller has not received any written notice from
any tenant under any currently effective Space Lease that Seller is in default
under such Space Lease which default has not been cured, and (B) Seller has not
delivered any written notice to a tenant under a Space Lease that such tenant is
in default under such Space Lease which default has not been cured.  No tenant
is entitled to any rent concessions, rebates, rent abatements or tenant
improvement allowances or has been paid, promised, advanced or delivered any
payment inducement or any other item of value except, in each case, as set forth
on Schedule S and Seller has not received any advance payment of rent (other
than for the current month) on account of the applicable Space Lease.  Purchaser
will have no obligation to pay brokerage commissions after the Closing either
(a) upon any extension or renewal of, or election of a tenant not to exercise
any cancellation rights under, any Space Lease that is currently in effect, or
(b) upon the exercise of any option to lease additional space in the
Improvements contained in any Space Lease that is currently in effect by the
tenant under such Space Lease, except in either case as set forth on Schedule S.

 

10.1.7                  The copies of the Space Leases heretofore either
delivered to Purchaser or made available to Purchaser by or on behalf of Seller
are true, correct and complete.

 

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10.1.8                  The Ground Lease is in full force and effect.  The copy
of the Ground Lease heretofore either delivered to Purchaser or made available
to Purchaser by or on behalf of Seller, including without limitation, all
amendments and modifications or agreements pertaining thereto, if any, is true,
correct and complete in all respects.  Other than that certain letter, dated as
February 26, 2013, from Proskauer Rose LLP to Seller regarding a certain
Environmental Control Board violation, a copy of which has been provided to
Purchaser, Seller has not (i) received any written notice that Seller is in
default under the Ground Lease which default has not been cured, or
(ii) delivered any written notice to the lessor under the Ground Lease that the
lessor is in default under the Ground Lease which default has not been cured.

 

10.1.9                  Seller has complied in all material respects with the
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001, which comprises Title III of the International Money Laundering Abatement
and Anti-Terrorist Financing Act of 2001, which comprises Title III of the
Uniting and Strengthen America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) and the
regulations promulgated thereunder, and the rules and regulations administered
by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), to
the extent such laws are applicable to it.  Neither Seller, nor any direct or,
to Seller’s knowledge, indirect owner of Seller is included on the List of
Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is
a resident in, or organized or chartered under the laws of, (i) a jurisdiction
that has been designated by the U.S. Secretary of the Treasury under Section 311
or 312 of the Patriot Act as warranting special measures due to money laundering
concerns or (ii) any foreign country that has been designated as non-cooperative
with international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force
on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur.  The foregoing representation shall not be applicable to
any indirect owners of Seller whose ownership interest is solely in the form of
publicly traded stocks or other securities acquired in a publicly traded market.

 

10.1.10                                    Attached hereto as Schedule O is a
true, correct and complete list of all tax certiorari proceedings filed by or on
behalf of Seller that are currently “open” or otherwise known to Seller to
reduce the assessment of the Property for real estate tax purposes and the name
of the attorney representing Seller, as the case may be, in connection therewith
and the status of each such proceeding.

 

10.1.11                                    Seller has received no written notice
of any pending or proposed special assessments affecting the Property or any
portion thereof.  No assessments for public improvements have been made against
the Property which are unpaid as of the Effective Date.

 

10.1.12                                    Seller is not a “foreign person” as
defined in Section 1445 of the Code.

 

10.1.13                                    During the 18 month period ending on
the Effective Date, Seller has neither received nor delivered any written notice
relating to the designation of the Building or its interior as a landmark
pursuant to the Administrative Code of the City of New York, other than with
respect to (i) that certain notice letter dated January 22, 2013, sent by the
NYC Landmarks Preservation Commission to 111 West 57th Street Association, (ii)
that certain notice letter dated March 11, 2013, sent by the NYC Landmarks
Preservation Commission to 111 West 57th Street Association and (iii) that
certain notice letter dated March 22, 2013, sent by the NYC Landmarks
Preservation Commission to 111 West 57th Street Association, true and correct
copies of each of which have been delivered to Purchaser.

 

10.1.14                                    Seller has not made any voluntary,
nor has Seller received any written notice of any involuntary, petition in
bankruptcy (voluntary or otherwise), assignment for the

 

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benefit of creditors, or petition seeking reorganization or arrangement or other
action under Federal or state bankruptcy or insolvency law that is pending
against or contemplated by Seller.

 

10.2                           Purchaser’s Representations and Warranties. 
Purchaser represents and warrants to Seller, as of the Effective Date as
follows:

 

10.2.1                  Purchaser is a limited liability company duly organized
and validly existing and in good standing under the laws of the State of
Delaware.  Purchaser has full power to own Purchaser’s property and to carry on
Purchaser’s business as now being conducted.  Purchaser has the power and
authority to enter into and perform Purchaser’s obligations under this Agreement
and the documents to be executed and delivered by Purchaser pursuant hereto. 
The execution and delivery of this Agreement and such documents by Purchaser,
and the performance of Purchaser’s obligations hereunder and thereunder, have
been authorized by all necessary action on Purchaser’s part.  Upon execution and
delivery, this Agreement and such documents will constitute Purchaser’s valid
and binding obligations enforceable in accordance with their respective terms,
except to the extent limited by bankruptcy or insolvency laws, or laws affecting
creditor’s rights generally.

 

10.2.2                  Purchaser is not a party to any pending action, suit, or
other litigation or proceeding which is reasonably likely to have a material
adverse effect on Purchaser’s ability to close on the sale of the Property, and
Purchaser has no actual knowledge of the existence or threat of any such action.

 

10.2.3                  Purchaser has complied in all material respects with the
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001, which comprises Title III of the Patriot Act, and the regulations
promulgated thereunder, and the rules and regulations administered by the OFAC,
to the extent such laws are applicable to it.  Neither Purchaser, nor any direct
or, to Purchaser’s knowledge, indirect owner of Purchaser is included on the
List of Specially Designated Nationals and Blocked Persons maintained by the
OFAC, or is a resident in, or organized or chartered under the laws of, (i) a
jurisdiction that has been designated by the U.S. Secretary of the Treasury
under Section 311 or 312 of the Patriot Act as warranting special measures due
to money laundering concerns or (ii) any foreign country that has been
designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as
the Financial Action Task Force on Money Laundering, of which the United States
is a member and with which designation the United States representative to the
group or organization continues to concur.  The foregoing representation shall
not be applicable to any indirect owners of Purchaser whose ownership interest
is solely in the form of publicly traded stocks or other securities acquired in
a publicly traded market.

 

10.3                           Special Provisions Regarding Seller’s Warranties
and Representations.  The representations set forth in Section 10.1 hereof, as
updated by the Seller’s Update Certificate, shall survive the Closing until
(i) solely with respect to the representations and warranties set forth in
Section 10.1.6, 12 months following the Closing Date and (ii) with respect to
all other representations and warranties, 9 months following the Closing Date
(as applicable with respect to clauses (i) & (ii) above, the “Outside Date”). 
Within ten (10) days after Purchaser’s actual discovery of any misrepresentation
of a Seller made under Section 10.1 hereof as of the Effective Date, or pursuant
to the Seller’s Update Certificate (collectively, “Seller Misrepresentations”),
but in no event later than the Outside Date, Purchaser shall give Seller written
notice identifying the Seller Misrepresentation.  Notwithstanding anything
herein to the contrary, Seller’s liability for Seller Misrepresentations made by
it shall not exceed an amount equal to (a) solely with respect to the
representations and warranties set forth in Section 10.1.6, Three Million Three
Hundred Thousand and No/100 Dollars ($3,300,000), in the aggregate, and (b) with

 

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respect to all other representations and warranties, One Million and No/100
Dollars ($1,000,000), in the aggregate.  Purchaser shall not make any claim and
is not entitled to any damages or remedies against Seller with respect to any
Seller Misrepresentations made by it, unless and until Purchaser’s actual
damages (but not compensatory, consequential or punitive damages) resulting from
all claims for Seller Misrepresentations made by Seller exceed an amount equal
to $250,000, in the aggregate.  Any claim by Purchaser with respect to Seller
Misrepresentations shall be effective and valid only if made in writing against
Seller on or prior to the Outside Date.  Seller shall have a reasonable period
of time (not to exceed 120 days) after receipt of written notice of such a claim
to cure any Seller Misrepresentation resulting in such claim.  Notwithstanding
anything contained herein to the contrary, if (w) a Seller’s Update Certificate
shall modify the representations made by Seller in Section 10.1 hereof, as
applicable, as contemplated by Section 7.2.18 to reflect facts and circumstances
that exist on and as of the Closing Date, or Purchaser, at the Closing, has
actual knowledge that any of the representations made by Seller in the Seller’s
Update Certificate are untrue in any material respect (or Purchaser is deemed to
have knowledge that any of the representations set forth in a Seller’s Update
Certificate are untrue in any material respect, as provided below), then
Purchaser’s sole remedy for any such misrepresentation by Seller shall be to
terminate this Agreement by giving notice thereof to Seller on or prior to the
Closing Date, in which event thereafter none of the parties to this Agreement
shall have any further liabilities, duties, obligations, rights or entitlements
hereunder, except for those specific rights and obligations of the parties to
this Agreement that specifically survive the termination of this Agreement.  If
Purchaser fails to deliver such termination notice to Seller on or prior to the
Closing Date, then Purchaser shall proceed to Closing in accordance with the
terms hereof and Seller shall have no liability whatsoever to Purchaser with
respect to any such misrepresentation of which Purchaser has knowledge, or is
deemed to have knowledge, as of the Closing Date.

 

10.4                           Purchaser’s Knowledge. Whenever a representation
is qualified by the phrase “to Purchaser’s knowledge”, or by words of similar
import, the accuracy of such representation shall be based solely on the actual
(as opposed to constructive or imputed) knowledge of Michael Stern, without
independent investigation or inquiry and without any duty of inquiry or
investigation.  Notwithstanding the foregoing, for purposes of this Agreement,
Purchaser shall be deemed to have “knowledge” of any information relating to the
Property that is delivered to Purchaser in writing or has been otherwise made
available to Purchaser at the datasite located at sftp.gibsondunn.com and
commonly known as the “Gibson Dunn & Crutcher LLP SFTP website, port 22” (the
“Data Site”) as of the Effective Date, or any other information delivered in
writing at any time prior to the Closing Date, either by or on behalf of Seller,
including, without limitation, by Seller’s Broker (hereinafter defined) or any
partner, member, director, officer, employee or agent of Seller or Seller’s
Broker; provided, however, that in no event shall Purchaser be deemed to have
knowledge of any matter, except to the extent disclosed on any Schedule to this
Agreement, contained in any unexecuted Space Lease, Service Contract or any
other agreement provided on the Data Site which would require due execution by
the parties thereto in order to be enforceable.  Seller acknowledges that
Michael Stern is named solely for the purpose of defining the scope of
Purchaser’s knowledge and not for the purpose of imposing any liability on or
creating any duties running from Michael Stern to Seller and Seller agrees that
Michael Stern shall not have any personal liability under this Agreement or in
connection with the transactions contemplated hereby.  Purchaser hereby
represents and warrants that Michael Stern is the individual affiliated with
Purchaser who has the most knowledge as to the matters represented by Purchaser
herein.

 

10.5                           Knowledge of a Seller.  For purposes of this
Agreement, references to Seller’s “knowledge” shall be deemed to mean only the
actual knowledge of Dennis Hanson, the Executive Vice President and Chief
Financial Officer of Seller, and no other person or entity.  Seller hereby
represents and warrants that Dennis Hanson is the individual affiliated with
Seller who has the most knowledge as to the matters represented by Seller
herein.

 

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ARTICLE XI

 

CONDITIONS PRECEDENT

 

11.1                           Purchaser’s Conditions.  Subject to the terms of
this Agreement, Purchaser shall have no obligation to consummate the transaction
contemplated hereby at the Closing unless:

 

11.1.1                  the Seller’s Update Certificate indicates that Seller’s
representations as set forth in Section 10.1 hereof (other than condemnation or
eminent domain proceedings, which shall be governed by Article VI hereof) are
true and correct in all material respects on and as of the Closing Date without
being modified as of the Closing Date to reflect changed facts or circumstances;
provided, that for purposes of this Section 11.1.1, none of Seller’s
representations shall be deemed untrue in any material respect unless such
failure, together with all other failures of a Seller representation to be true,
shall, as of the Closing Date, have an adverse impact on Purchaser or its
intended redevelopment of the Property in an amount equal to no less than
$250,000;

 

11.1.2                  Seller has, in all material respects, performed or
complied with the material obligations on Seller’s part to be performed or
complied with hereunder on or prior to the Closing Date (including without
limitation Seller’s obligations under Article V and Section 7.2 hereof); and

 

11.1.3                  all other conditions precedent set forth herein to
Purchaser’s obligation to consummate the transaction contemplated hereby have
been satisfied in all material respects.

 

Purchaser shall have the right to waive any such conditions precedent to
Purchaser’s obligation to consummate the transaction contemplated hereby.  If
Purchaser elects to proceed to the Closing with actual knowledge (as such term
is used in Section 10.4 hereof) of (i) a default in any of the covenants,
agreements or obligations to be performed by Seller under this Agreement, and/or
(ii) an inaccuracy in or untruthfulness of any representation or warranty of
Seller made in this Agreement, then, upon the consummation of the Closing,
Purchaser shall be deemed to have waived any such default and/or inaccuracy and
shall have no claim against Seller on account thereof.  If Seller is in default
under this Agreement giving rise to Purchaser’s right to terminate this
Agreement as provided herein, then Purchaser shall not be obligated to
consummate the transaction contemplated hereby and the provisions of
Section 12.2 shall apply.

 

11.2                           Seller’s Conditions.  Subject to the terms of
this Agreement, Seller shall have no obligation to consummate the transaction
contemplated hereby at the Closing unless:

 

11.2.1                  the Purchaser’s Update Certificate indicates that
Purchaser’s representations as set forth in Section 10.2 hereof are true and
correct as of the Closing Date in all material respects without being modified
as of the Closing Date to reflect changed facts or circumstances;

 

11.2.2                  Purchaser has performed in all material respects all of
the obligations on Purchaser’s part to be performed on or prior to the Closing
Date (including without limitation Purchaser’s obligations under Sections 7.3
and 7.4 hereof); and

 

11.2.3                  all other conditions precedent set forth herein to
Seller’s obligations to consummate the transaction contemplated hereby have been
satisfied in all material respects.

 

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Seller shall have the right to waive any such conditions precedent to Seller’s
obligation to consummate the transaction contemplated hereby.  If Seller elects
to proceed to the Closing with actual knowledge of (i) a default in any of the
covenants, agreements or obligations to be performed by Purchaser under this
Agreement, and/or (ii) an inaccuracy in or untruthfulness of any representation
or warranty of Purchaser made in this Agreement, then, upon the consummation of
the Closing, Seller shall be deemed to have waived any such default and/or
inaccuracy and shall have no claim against Purchaser on account thereof.

 

ARTICLE XII

 

DEFAULT AND TERMINATION

 

12.1                           Seller’s Right to Terminate; Remedies Upon
Purchaser’s Default.

 

12.1.1                  Subject to Purchaser’s right of extension as set forth
in Section 2.3, if the Closing does not occur on or before May 20, 2013, due to
a default by Purchaser in its obligation to purchase the Property in accordance
with the terms of this Agreement, or if Purchaser shall default in the
performance of any of its other material obligations to be performed on or
before the Closing date, and such Purchaser default is not the result of a
Seller default as described in Section 12.2, then Seller shall have the right,
exercisable by notice to Purchaser, to terminate this Agreement, whereupon none
of the parties shall thereafter have any rights or obligations hereunder (other
than any such rights or such obligations that are expressly stated in this
Agreement to survive the termination thereof).  Nothing contained in this
Section shall limit Seller’s rights provided in Section 12.1.2.

 

12.1.2                  IF THE CLOSING AND THE TRANSACTIONS CONTEMPLATED HEREBY
ARE NOT CONSUMMATED AND SUCH FAILURE IS CAUSED BY A PURCHASER DEFAULT WHICH
REMAINS UNCURED FOLLOWING NOTICE AND EXPIRATION OF THE CURE PERIOD APPLICABLE
THERETO, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SELLER’S LIQUIDATED
DAMAGES AND SUCH AMOUNT SHALL PROMPTLY BE PAID TO SELLER BY ESCROW AGENT.  THE
PARTIES AGREE THAT IT WOULD BE EXTREMELY IMPRACTICABLE AND DIFFICULT TO
ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLER AS A RESULT OF PURCHASER’S
FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT, AND
THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE EXECUTION DATE OF THIS
AGREEMENT, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A
REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH
FAILURE, PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT WAIVE OR AFFECT
SELLER’S RIGHTS AND PURCHASER’S INDEMNITY OBLIGATIONS UNDER OTHER SECTIONS OF
THIS AGREEMENT.

 

12.1.3                  The terms of this Section 12.1 shall survive the
termination of this Agreement.

 

12.2                           Remedies Upon Seller’s Default.  If Seller
defaults in the performance of Seller’s material obligations hereunder
(including, without limitation, pursuant to Article V and Section 7.2 hereof)
beyond any applicable notice and cure periods, then Purchaser may, as
Purchaser’s sole remedy, either (i) terminate this Agreement by giving written
notice to Seller within 30 days after such default and, upon the giving of such
notice, this Agreement shall terminate and thereafter Escrow Agent shall
promptly remit the Deposit to Purchaser and neither party shall have any further
rights or obligations hereunder at law or in equity, for damages or otherwise
(other than any such rights or such obligations that are expressly stated herein
to survive the termination hereof), or (ii) initiate and prosecute an action
against Seller to seek specific performance of Seller’s obligations hereunder,
which action must be

 

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brought, if at all, within forty-five (45) days after Michael Stern’s actual
knowledge of such default by Seller, and in connection with such actions,
recover from Seller its actual out-of-pocket attorneys’ fees and expenses
incurred in connection with any such action.

 

ARTICLE XIII

 

GENERAL ESCROW PROVISIONS

 

13.1                           The obligations and rights of Escrow Agent under
this Agreement shall be subject to the following terms and conditions:

 

13.1.1                  The duties and obligations of Escrow Agent shall be
determined solely by the express provisions of this Agreement and no implied
duties or obligations shall be implied against Escrow Agent.  Further, Escrow
Agent shall be under no obligation to refer to any other document between or
among Purchaser and Seller referred to in or related to this Agreement, unless
Escrow Agent is provided with a copy of such document and consents thereto in
writing (other than the Escrow Agreement, which Escrow Agent acknowledges it has
been provided a copy of contemporaneously herewith).

 

13.1.2                  Escrow Agent shall not be liable to anyone by reason of
any error of judgment, or for any act done or step taken or omitted by Escrow
Agent in good faith, or for any mistake of fact or law, or for anything which
Escrow Agent may do or refrain from doing in connection herewith, unless caused
by or arising out of Escrow Agent’s actual and intentional misconduct or gross
negligence.

 

13.1.3                  Escrow Agent shall be entitled to rely, and shall be
protected in acting in reliance, upon any writing furnished to Escrow Agent by
either Purchaser or Seller and shall be entitled to treat as genuine, and as the
document it purports to be, any letter, paper or other document furnished to
Escrow Agent.  Escrow Agent may rely on any affidavit of either Purchaser or
Seller or any other person as to the existence of any facts stated therein to be
known by the affiant.

 

13.1.4                  If Seller shall become entitled to retain or receive the
Deposit or other amount paid under this Agreement, Escrow Agent shall pay the
same to Seller together with all interest earned thereon and if Purchaser shall
become entitled to a return of the Deposit or other amount paid under this
Agreement, Escrow Agent shall pay the same to Purchaser together with all
interest earned thereon; provided, however, that no disbursement pursuant to
this subsection shall be made by Escrow Agent until the fifth (5th) Business Day
following the receipt or deemed receipt of notice by Seller and Purchaser from
Escrow Agent of its intention to so disburse, and disbursement made by Escrow
Agent after the passage of such five (5) Business Day period shall relieve
Escrow Agent from all liability in connection with such disbursement unless such
disbursement is proscribed by order of a court of competent jurisdiction or
objected to in writing by Seller or Purchaser.  If such disbursement is objected
to in writing by Seller or Purchaser within such five (5) Business Day period,
then Escrow Agent shall not make such disbursement until unanimously instructed
in writing by Purchaser and Seller, or is directed to make such disbursement by
a court of competent jurisdiction.  Notwithstanding anything to contrary
contained herein, the five (5) Business Day requirement referred to above in
this Section 13.1.4 shall not apply to a disbursement of the Deposit at Closing.

 

13.1.5                  In the event of any disagreement between Purchaser and
Seller resulting in adverse claims and demands being made in connection with or
against the funds held in escrow,

 

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Escrow Agent shall refuse to comply with the claims or demands of either party
until such disagreement is finally resolved (i) by a court of competent
jurisdiction (in proceedings which Escrow Agent or any other party may initiate,
it being understood and agreed by Purchaser and Seller that Escrow Agent has
authority (but not the obligation) to initiate such proceedings) (ii) by an
arbitrator in the event that Purchaser and Seller mutually and jointly determine
to submit the dispute to arbitration pursuant to the rules of the American
Arbitration Association, and in so doing Escrow Agent shall not be or become
liable to a party or (iii) by written settlement between Purchaser and Seller.

 

13.1.6                  Purchaser and Seller each agree to jointly and severally
indemnify and hold harmless Escrow Agent against any and all losses,
liabilities, costs (including legal fees) and other expenses in any way incurred
by Escrow Agent (except to the extent Escrow Agent willfully disregards any
provision of this Agreement to which it is bound) in connection with or as a
result of any disagreement between Purchaser and Seller under this Agreement or
otherwise incurred by Escrow Agent in any way on account of its role as Escrow
Agent, except that neither Purchaser nor Seller shall have any obligation to pay
Escrow Agent any fee for escrow services hereunder.

 

13.1.7                  Escrow Agent in its sole discretion shall have the right
to resign as the Escrow Agent under this Agreement, provided that it shall
provide both Purchaser and Seller with at least thirty (30) days prior written
notice of such resignation pursuant to the notice provisions of Section 14.3. 
Upon any such resignation, Escrow Agent shall transfer the Deposit and any
interest earned thereon to a successor Escrow Agent jointly approved by
Purchaser and Seller, whereupon the original Escrow Agent shall have no further
obligation or liability whatsoever as Escrow Agent under this Agreement.

 

13.1.8                  The Deposit shall be invested in a money market account
or federally-insured savings account selected by Purchaser and reasonably
approved by Seller.  The parties hereby acknowledge and agree that Federal
Deposit Insurance for the Deposit, if any, is limited to a cumulative maximum
amount of $250,000.00 for each individual depositor for all of the depositor’s
accounts at the same or related institution.  The parties further hereby
acknowledge and agree that certain banking instruments such as, but not limited
to, repurchase agreements and letters of credit, are not covered at all by
Federal Deposit Insurance.  The parties acknowledge and agree that Escrow Agent
shall have no obligation or liability with respect to insuring the Deposit or
with respect to the solvency of the depository institution, or otherwise with
respect to the appropriateness of the depository institution for purposes of the
Deposit.  Further, the parties understand that Escrow Agent assumes no
responsibility for, nor will the parties hold the same liable for, any loss
occurring which arises from the fact that (x) the amount of the account or
accounts contemplated hereby may cause the aggregate amount of any individual
depositor’s account or accounts to exceed $250,000.00, (y) that this excess
amount is not insured by the Federal Deposit Insurance Corporation or (z) that
Federal Deposit Insurance is not available on certain types of bank instruments.

 

13.1.9                  Escrow Agent may pay the Deposit into a court of
competent jurisdiction upon commencement by Escrow Agent of an interpleader
action in such court.  The reasonable out-of-pocket costs and attorneys’ fees of
Escrow Agent for such interpleader action shall be paid by the losing party in
such interpleader action.

 

13.1.10            The rights and immunities of Escrow Agent hereunder shall
apply equally to its partners, of counsel, associates, employees, Affiliates and
agents.

 

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13.1.11            All of Escrow Agent’s obligations under this Agreement shall
automatically terminate upon disbursing the Deposit as set forth above.

 

ARTICLE XIV

 

GENERAL AND MISCELLANEOUS PROVISIONS

 

14.1                           Entire Agreement.  This Agreement contains all of
the terms agreed upon between the parties with respect to the subject matter
hereof, and all agreements heretofore had or made between the parties hereto are
merged in this Agreement which alone fully and completely expresses the
agreement of said parties (provided, however, that this Agreement does not
supersede any agreements between the Seller as to which Purchaser is not a
party).  This Agreement may not be modified or amended except by an instrument
executed and delivered by Seller and Purchaser which expressly states that it
intends to modify or amend this Agreement.

 

14.2                           Governing Law.  This Agreement shall be governed
by, interpreted under and construed and enforced in accordance with, the laws of
the State of New York.

 

14.3                           Notices.  Any notice, consent or other
communication made pursuant to, under or by virtue of this Agreement must be in
writing and shall be sent by (i) commercial overnight delivery service,
(ii) delivery by hand, or (iii) electronic mail, to the parties at the addresses
set forth below or such other address as a party shall designate from time to
time in accordance with this Agreement:

 

(a)

 

If to Seller:

 

Steinway Musical Instruments

 

 

 

 

800 South Street, Suite 305

 

 

 

 

Waltham, Massachusetts 02453

 

 

 

 

Attention: Dennis Hanson

 

 

 

 

Telephone: (781) 894-9770 ext. 5718

 

 

 

 

Telecopy: (781) 894-9803

 

 

 

 

dhanson@steinwaymusical.com

 

 

 

 

 

 

 

with a copy to:

 

Gibson Dunn & Crutcher LLP

 

 

 

 

200 Park Avenue

 

 

 

 

New York, New York 10166

 

 

 

 

Attention: Andrew Lance, Esq.

 

 

 

 

Telephone: (212) 351-3871

 

 

 

 

Telecopy: (212) 351-4035

 

 

 

 

alance@gibsondunn.com

 

 

 

 

 

(b)

 

If to Purchaser:

 

111 West 57th LH LLC

 

 

 

 

c/o JDS Development

 

 

 

 

104 Fifth Avenue, 9th Floor

 

 

 

 

New York, New York 10003

 

 

 

 

Attention: Michael Stern

 

 

 

 

Telephone: (646) 625-3649

 

 

 

 

Telecopy: (516) 355-6295

 

 

 

 

jdsdevelopment@gmail.com

 

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with copies to:

 

Kasowitz, Benson, Torres & Friedman LLP

 

 

 

 

1633 Broadway

 

 

 

 

New York, New York 10019

 

 

 

 

Attention: Douglas B. Heitner, Esq.

 

 

 

 

Telephone: (212) 506-1967

 

 

 

 

Telecopy: (212) 500-3554

 

 

 

 

dheitner@kasowitz.com

 

 

 

 

 

 

 

 

 

c/o Property Markets Group, Inc.

 

 

 

 

5 East 17th Street, 2nd Floor

 

 

 

 

New York, New York 10003

 

 

 

 

Attention: Kevin Maloney

 

 

 

 

Telephone: (212) 610-2855

 

 

 

 

Telecopy: (212) 610-2856

 

 

 

 

Email: KMaloney@PropertyMG.com

 

 

 

 

 

 

 

 

 

c/o Property Markets Group, Inc.

 

 

 

 

5 East 17th Street, 2nd Floor

 

 

 

 

New York, New York 10003

 

 

 

 

Attention: Franklin R. Kaiman, Esq.

 

 

 

 

Telephone: (212) 610-2855

 

 

 

 

Telecopy: (212) 610-2856

 

 

 

 

Email: FKaiman@PropertyMG.com

 

 

 

 

 

(c)

 

If to Escrow Agent:

 

Royal Abstract of New York LLC

 

 

 

 

500 Fifth Avenue

 

 

 

 

New York, New York 10110

 

 

 

 

Attention: Martin Kravet

 

 

 

 

Telephone: (212) 376-0900

 

 

 

 

Telecopy: (212) 376-0911

 

All notices or other communications so sent or delivered shall be deemed
delivered when received by the party to whom such notice or other communication
was so sent or delivered or upon the refusal by such party to accept delivery.

 

14.4                           Limitation on Personal Liability.

 

14.4.1                  Purchaser agrees that it shall not look to Seller’s
directors, officers, employees, shareholders, members, partners, affiliates,
agents or direct or indirect principals, to enforce Purchaser’s rights
hereunder, and that none of the directors, officers, employees, shareholders,
members, partners, affiliates, agents or direct or indirect principals of Seller
shall have any personal obligation or liability hereunder, and that Purchaser
shall not seek to assert any claim or enforce any of Purchaser’s rights
hereunder against any directors, officers, employees, shareholders, members,
partners, affiliates, agents or direct or indirect principals of Seller or
against any other person, partnership, limited liability company, corporation or
trust, as direct or indirect principal of Seller, whether disclosed or
undisclosed.

 

14.4.2                  Seller agrees that it shall not look to Purchaser’s
directors, officers, employees, shareholders, members, partners, affiliates,
agents or direct or indirect principals, to enforce Seller’s rights hereunder,
and that none of the directors, officers, employees, shareholders, members,
partners, affiliates, agents or direct or indirect principals of Purchaser shall
have any personal obligation or liability hereunder, and that Seller shall not
seek to assert any claim or enforce any of Seller’s rights hereunder against any
directors, officers, employees, shareholders, members, partners, affiliates,
agents or direct or indirect principals of Purchaser or against any other
person, partnership, limited liability company, corporation or trust, as direct
or indirect principal of Purchaser, whether disclosed or undisclosed.

 

14.4.3                  The provisions of this Section 14.4 shall survive the
Closing or earlier termination of this Agreement.

 

14.5                           Brokers.  Purchaser represents and warrants to
Seller that Purchaser dealt with no broker, finder or salesperson in connection
with this Agreement other than Seller’s Broker.  Purchaser shall indemnify
Seller, and hold Seller harmless, from and against, any and all losses, damages,
liabilities, costs and expenses (including without limitation, reasonable
attorneys’ fees and disbursements) incurred by Seller to the extent arising out
of a claim for commission or other compensation made by any other

 

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broker, finder or other person (other than Seller’s Broker) with whom Purchaser
dealt in connection herewith.

 

Seller represents and warrants to Purchaser that Seller dealt with no broker,
finder or salesperson in connection with this Agreement other than Seller’s
Broker, and that Seller shall be solely responsible to pay to Seller’s Broker
any commission or other compensation to which Seller’s Broker is entitled
pursuant to the separate agreement between Seller and Seller’s Broker.  Seller
shall indemnify Purchaser, and hold Purchaser harmless, from and against, any
and all losses, damages, liabilities, costs and expenses (including, without
limitation, reasonable attorneys’ fees and disbursements) incurred by Purchaser
to the extent arising out of a claim for commission or other compensation made
by Seller’s Broker or any other broker, finder or other person (other than
Purchaser’s Broker) with whom Seller dealt in connection herewith.

 

The provisions of this Section 14.5 shall survive the Closing or earlier
termination of this Agreement.

 

14.6                           Successors.  The terms and conditions hereof
shall be binding upon and inure to the benefit of the respective heirs,
executors, personal representatives, successors and permitted assigns of the
respective parties hereto.

 

14.7                           Time.  Time is of the essence as to the
performance of the terms and conditions hereof, provided, however, that if the
final date of any period which is set for the time provision of this Agreement
falls on a Saturday, Sunday or legal holiday under the laws of the United States
or the State of New York, in such event the time of such period shall be
extended to the next day which is not a Saturday, Sunday or legal holiday.

 

14.8                           Consent to Jurisdiction.  Each party irrevocably
submits to the jurisdiction of the state courts of the State of New York and to
the jurisdiction of the United States District Court for the Southern District
of New York for the purposes of each and every suit, action or other proceeding
arising out of or based upon this Agreement or the subject matter hereof.  All
parties hereby irrevocably consent to the exclusive jurisdiction by any such
court with respect to any such proceeding and hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise
(a) any claim that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than by failure to lawfully serve
process, (b) that it or its property is exempt or immune from the jurisdiction
of any such court or from any legal process commenced in such courts, and (c) to
the fullest extent permitted by applicable law, that (i) the action or
proceeding is brought in an inconvenient forum, (ii) the venue of such action or
proceeding is improper and (iii) this Agreement or the subject matter hereof may
not be enforced in or by such courts.

 

14.9                           Waiver of Jury Trial.  To the extent not
prohibited by applicable law, each party to this Agreement hereby waives its
respective right to a jury trial of any permitted claim or cause of action
arising out of this Agreement, any of the transactions contemplated hereby, or
any dealings between any of the parties hereto relating to the subject matter of
this Agreement or any of the transactions contemplated hereby.  The scope of
this waiver is intended to be all encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this Agreement or
any of the transactions contemplated hereby, including, contract claims, tort
claims, and all other common law and statutory claims.  This waiver is
irrevocable and shall apply to any subsequent amendments, supplements or other
modifications to this Agreement.

 

14.10                     Attorneys’ Fees.  Should any of Purchaser or Seller
employ an attorney or attorneys to enforce any of the terms and conditions
hereof, or to protect any right, title, or interest created or

 

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evidenced hereby, the non-prevailing party in any action pursued in courts of
competent jurisdiction shall pay to the prevailing party all reasonable costs,
damages, and expenses, including attorneys’ fees and disbursements, expended or
incurred by the prevailing party.  Any attorneys’ fees and other expenses
incurred by any party in enforcing a judgment in its favor in respect of this
Agreement shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys’ fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment.

 

14.11                     Waiver.  Either Purchaser or Seller may specifically
waive any breach of the terms and conditions hereof by the other party or
parties, but no waiver shall constitute a continuing waiver of similar or other
breaches of the terms and conditions hereof.  Except as otherwise expressly
provided herein, all remedies, rights, undertakings, obligations and agreements
contained herein shall be cumulative and not mutually exclusive.

 

14.12                     Severability.  If any of the terms and conditions
hereof shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other of the terms and conditions hereof (except to the extent that a party
is thereby deprived of consideration for its obligations hereunder) and the
terms and conditions hereof shall be thereafter construed as if such invalid,
illegal or unenforceable term or conditions had never been contained herein
(except as aforesaid).

 

14.13                     Counterparts.  This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document.  All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.  This Agreement may also be executed and
delivered by exchange of facsimile or email transmissions of originally executed
copies, provided that an originally executed copy is promptly delivered to each
party.

 

14.14                     Headings.  The headings herein are for reference
purposes only and shall not affect the meanings or interpretation of the terms
and conditions hereof.

 

14.15                     Interpretation.  Whenever the context hereof shall so
require, the singular shall include the plural, the male gender shall include
the female gender and neuter, and vice versa.  This Agreement shall not be
construed more strictly against one party than against any other, merely by
virtue of the fact that it may have been prepared by counsel for one of the
parties, it being recognized that both Purchaser and Seller have contributed
substantially and materially to the preparation of this Agreement.

 

14.16                     Assignability.  Purchaser may not assign this
Agreement, any direct or indirect interests in Purchaser or any of its rights
hereunder without first obtaining the written consent of Seller, which consent
Seller may withhold or condition in its sole discretion.  Any assignment in
contravention of this provision shall be void.  Any assignee shall be deemed to
have made any and all representations and warranties made by Purchaser
hereunder, as if the assignee were the original signatory hereto. 
Notwithstanding the foregoing, such consent shall not be required if such
assignee is an entity in which Michael Stern (i) owns no less than a six percent
(6%) equity interest, (ii) is the managing member or its equivalent and
(iii) controls the day-to-day decision-making of such entity.  No assignment by
Purchaser pursuant to this Section 14.16 or otherwise shall operate to release
Purchaser of any of its obligations under this Agreement.

 

14.17                     No Partnership.  Nothing contained in this Agreement
shall be construed to create a partnership or joint venture between or among the
parties or their successors in interest.

 

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14.18                     Recordation.  The parties hereto agree that neither
this Agreement nor any memorandum of notice hereof shall be recorded, and
Purchaser agrees not to file any notice of pendency or other instrument against
the Property.

 

14.19                     Proper Execution.  The submission by Seller to
Purchaser of this Agreement in unsigned form shall be deemed to be a submission
solely for Purchaser’s consideration and not for acceptance and execution.  Such
submission shall have no binding force and effect, shall not constitute an
option, and shall not confer any rights upon Purchaser or impose any obligations
upon Seller irrespective of any reliance thereon, change of position or partial
performance.  The submission by Seller of this Agreement for execution by
Purchaser and the actual execution and delivery thereof by Purchaser to Seller
shall similarly have no binding force and effect on Seller unless and until
Seller shall have executed this Agreement and a counterpart of this Agreement
executed by Seller shall have been delivered to Purchaser.

 

14.20                     Supplemental Transfer Tax Filing.  Upon final
calculation of the Additional Purchase Price, Seller shall be obligated to pay
any additional transfer taxes in accordance with Section 7.1.1 hereof. 
Purchaser shall reasonably cooperate with Seller in executing and filing any
supplemental forms with respect to the New York State Real Estate Transfer Tax
and the New York City Real Property Transfer Tax.

 

14.21                     Sales Tax.  Seller and Purchaser hereby acknowledge
and agree that it is their intention that no consideration shall be paid to
Seller by Purchaser on account of, and no portion of the Purchase Price shall be
allocated to, any personal property acquired by Purchaser on the Closing Date. 
Notwithstanding the foregoing, any sales tax payable as a result of the
transactions contemplated in this Agreement shall be paid by Purchaser. 
Purchaser hereby indemnifies, defends and saves harmless Seller from and against
any such sales tax liability, and from and against any and all costs, claims,
liabilities, losses and expenses, including, without limitation, attorneys’ fees
and disbursements, incurred in contesting the existence or amount of any such
sales tax liability or in respect of any such sales tax liability, including,
without limitation, penalties, interest and other charges in respect of the
same.  Purchaser shall indemnify, defend and hold harmless Seller with respect
to any failure by Purchaser to comply with its obligations under this
Section 14.21.

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the Effective Date.

 

SELLER:

STEINWAY, INC., a Delaware corporation

 

 

 

By:

/s/ Michael T. Sweeney

 

Name:

Michael T. Sweeney

 

Title:

Executive Vice President

 

 

 

 

PURCHASER:

111 WEST 57th LH LLC, a Delaware limited
liability company

 

 

 

By:

/s/ Michael Stern

 

Name:

Michael Stern

 

Title:

Authorized Signatory

 

 

 

By:

/s/ Kevin Maloney

 

Name:

Kevin Maloney

 

Title:

Authorized Signatory

 

Royal Abstract of New York LLC hereby joins in this Agreement for the sole
purpose of acknowledging receipt of the Deposit and agreeing to hold the Deposit
in escrow in accordance with the provisions of Article 13 hereof.

 

ESCROW AGENT:

ROYAL ABSTRACT OF NEW YORK LLC, a New York limited liability company

 

 

 

By:

/s/ Martin Kravet

 

Name:

Martin Kravet

 

Title:

President

 

 

The Effective Date of this Agreement is March 25, 2013.

 

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ANNEX I

 

DEFINITIONS

 

The following capitalized terms used in this Agreement shall have the meanings
ascribed to them below:

 

“Additional Purchase Price Escrow Account” shall mean the escrow account that is
established under the Escrow Agreement.

 

“Additional Purchase Price Escrow Agent” shall mean the escrow agent under the
Escrow Agreement.

 

“Agreement” shall have the meaning given such term in the first paragraph of
this Agreement.

 

“Approvals” shall have the meaning given such term in Section 5.6.3 of this
Agreement.

 

“Assignment and Assumption of Contract Rights and Service Contracts” shall have
the meaning given such term in Section 7.2.10 of this Agreement.

 

“Assignment and Assumption of Space Leases” shall have the meaning given such
term in Section 7.2.4 of this Agreement.

 

“Closing” shall have the meaning given such term in Section 2.4 of this
Agreement.

 

“Closing Date” shall have the meaning given such term in Section 2.4 of this
Agreement.

 

“Commitment” shall mean a Commitment for Owner Policy of Title Insurance issued
by the Title Company to the Purchaser pertaining to the Real Property, in
standard form promulgated in accordance with the American Land Title
Association’s requirements accompanied by true, correct, and complete copies of
all documents and instruments of record affecting the state of the title of
Seller to the Real Property as described therein.

 

“Continuation” shall have the meaning given such term in Section 3.2.2 of this
Agreement.

 

“Contract Rights” shall have the meaning given such term in Section 2.1.2 of
this Agreement.

 

“Control” shall mean (i) owning not less than 51% of the equity interest in a
person or entity and (ii) having the right to direct the general management of
the affairs of such person or entity by ownership of voting control, contract or
otherwise.

 

“DBSWL” shall have the meaning given such term in Section 10.1.4 of this
Agreement.

 

“Deed to Improvements” shall have the meaning given such term in Section 7.2.3
of this Agreement.

 

“Effective Date” shall mean the date on which this Agreement is fully executed,
which shall for all purposes in this Agreement be the date on which this
Agreement is last executed by Purchaser and Seller and which shall be indicated
by insertion of such date in the first paragraph of this Agreement.

 

“Equipment” shall have the meaning given such term in Section 2.1.2 of this
Agreement.

 

“Escrow Agent” shall have the meaning given such term in Section 2.2.1 of this
Agreement.

 

“Escrow Agreement” shall have the meaning given such term in Section 2.2 of this
Agreement.

 

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“Escrow Amount” shall have the meaning given such term in Section 2.2.3 of this
Agreement.

 

“Exceptions” shall have the meaning given such term in Section 3.2.1 of this
Agreement.

 

“Fee Interest” shall mean the fee interest in the Land.

 

“Fixtures” shall have the meaning given such term in Section 2.1.1(iii) of this
Agreement.

 

“Ground Lease” shall mean that certain Lease Agreement dated as of March 30,
1999, between 111 West 57th Street Associates, L.P., as lessor, and Seller, as
lessee, as the same may be amended solely in accordance with the terms hereof.

 

“Ground Lease Assignment” shall have the meaning given such term in
Section 7.2.2 of this Agreement.

 

“Ground Lease Modification” shall mean that certain Amendment to Ground Lease,
dated as of the Effective Date and effective upon Purchaser’s acquisition of the
Fee Interest, in form attached hereto as Schedule T.

 

“Ground Lessor” shall mean 111 West 57th Street Associates, L.P.

 

“Improvements” shall have the meaning given such term in Section 2.1.1(ii) of
this Agreement.

 

“Land” shall have the meaning given such term in the Recitals of this Agreement.

 

“Material Adverse Effect” shall mean a material adverse effect on the value,
utility, or operation of the Property.

 

“New Seller Space Lease” shall have the meaning given such term in
Section 7.2.20 of this Agreement.

 

“NYC-RPT” shall have the meaning given such term in Section 7.2.15 of this
Agreement.

 

“OFAC” shall have the meaning given such term in Section 10.1.9 of this
Agreement.

 

“Outside Date” shall have the meaning given such term in Section 10.3 of this
Agreement.

 

“Patriot Act” shall have the meaning given such term in Section 10.1.9 of this
Agreement.

 

“Permitted Exceptions” shall have the meaning given such term in Section 2.1 of
this Agreement.

 

“Post-Effective Date Violation” has the meaning set forth in Section 5.4 of this
Agreement.

 

“Property” shall have the meaning given such term in Section 2.1.1 of this
Agreement.

 

“Purchase Price” shall have the meaning given such term in Section 2.2 of this
Agreement.

 

“Purchaser” shall have the meaning given such term in the first paragraph of
this Agreement.

 

“Purchaser’s Update Certificate” shall have the meaning given such term in
Section 7.3.8 of this Agreement.

 

“RAB” shall have the meaning given such term in Section 5.2 of this Agreement.

 

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“Real Property” shall mean the (i) the leasehold interest in the Land pursuant
to the Ground Lease and (ii) the fee interest in the Improvements.

 

“Reimbursable Amounts” shall have the meaning given such term in Section 6.2 of
this Agreement.

 

“Replacement Employee” shall have the meaning given such term in Section 7.5.1
of this Agreement.

 

“RP-5217NYC” shall have the meaning given such term in Section 7.2.16 of this
Agreement.

 

“Security Deposits” shall have the meaning given such term in Section 2.1.2 of
this Agreement.

 

“Seller” shall have the meanings given such terms in the first paragraph of this
Agreement.

 

“Seller Misrepresentations” shall have the meaning given such term in
Section 10.4 of this Agreement.

 

“Seller Party(ies)” shall mean Seller and its respective direct and indirect
members, and their respective agents, officers, directors, trustees, advisors,
managers, members, agents, employees and counsel.

 

“Seller’s Broker” shall mean The Corcoran Group.

 

“Seller’s Update Certificate” shall have the meaning given such term in
Section 7.2.18 of this Agreement.

 

“Service Contracts” shall mean all third-party brokerage agreements, service
contracts, maintenance contracts, supply contracts, equipment rental contracts,
contracts for alterations, renovations or improvements and other similar
agreements with respect to the Property.

 

“Space Lease” or “Space Leases” shall have the meanings given such terms in
Section 2.1.2 of this Agreement.

 

“Property” shall have the meaning given such term in Section 2.1.2 of this
Agreement.

 

“Purchase Price” shall have the meaning given such term in Section 2.2 of this
Agreement.

 

“Survey” shall mean that certain survey of the Real Property performed by
Harwood Surveying PC and last updated March 8, 1999.

 

“Termination Notice” shall have the meaning given such term in Section 12.1.1.

 

“Title Company” shall mean Royal Abstract of New York LLC.

 

“TP-584 Form” shall have the meaning given such term in Section 7.2.15 of this
Agreement.

 

“Vacate Parameters” shall have the meaning given such term in Section 5.6.2 of
this Agreement.

 

“Violation Cap Amount” has the meaning set forth in Section 5.4 of this
Agreement.

 

“Violations” shall mean all violations of law or municipal ordinances, orders or
requirements noted in or issued by the departments of buildings, fire, labor,
health or other federal, state, county, city or other departments and
governmental agencies having jurisdiction against or affecting the Property.

 

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