Exhibit 10.6

 

PURCHASE OPTION AGREEMENT

 

THIS PURCHASE OPTION AGREEMENT is dated as of June 27, 2017 by and between iStar
Inc., having an address at 1114 Avenue of the Americas, 39th Floor, New York,
NY  10036 (“Optionor”) and Safety Income and Growth Operating Partnership LP, a
Delaware limited partnership, having an address at c/o SFTY Manager LLC, 1114
Avenue of the Americas, 39th Floor, New York, NY  10036 (“Optionee”).

 

WHEREAS, Optionor is the direct or indirect owner of iStar Sunnyvale
Partnership, L.P., a Delaware limited liability company (“Sunnyvale SPE”);

 

WHEREAS, Sunnyvale SPE and Graymark Capital, Inc., a California corporation
(“Graymark”) have executed a Letter of Intent dated as of February 13, 2017
(“LOI”), relative to the acquisition by Graymark of certain improvements on and
a ground lease interest as a tenant (“Premises”) in certain real property
located at 1050, 1060, 1070/1080, and 1090 East Arques, Sunnyvale, CA
(“Property”); and

 

WHEREAS, Optionor desires to grant Optionee an irrevocable option to purchase
Optionor’s ownership interest in Sunnyvale SPE upon the terms set forth herein.

 

NOW, THEREFORE, in consideration of Ten and 00/100 Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Optionor and Optionee agree:

 

1.                                 Optionor hereby grants to Optionee an
irrevocable option (the “Option”) to purchase Optionor’s direct and indirect
ownership interest in Sunnyvale SPE (“Interest”) following the acquisition of
the Premises by Graymark. The Option shall be exercisable in the manner and upon
the terms and provisions set forth in this Agreement.

 

2.                                 The Option may be exercised by Optionee on or
before the twelfth (12th) month anniversary of acquisition of the Premises, by
written notice delivered to Optionor at the address set forth above (the “Option
Notice”).

 

3.                                 If Optionee exercises the Option, Optionor
shall convey the Interest to Optionee or its designee (the “Transferee”), free
of liens, claims, or encumbrances, within [twenty (20) days] from and after
Optionor’s receipt of the Option Notice.  At the time that Optionor shall convey
the Interest to Transferee (“Closing”), the Premises shall be free from all
mortgages and other liens and otherwise in marketable condition, subject only to
those other liens, if any, in existence on the date hereof.

 

4.                                 At Closing, Transferee shall pay to Optionee
the sum of Thirty-five Million and no/100 Dollars for the Interest (“Purchase
Price”) in cash; provided, however, that by mutual agreement of the parties, the
Optionor may pay the Purchase Price in whole or in part with shares of common
stock, $.01 par value per share, of Safety, Income and Growth, Inc. (“REIT
Shares”) or units of limited partnership of Optionor (“OP Units”).  For purposes
of the foregoing, each REIT Share or OP Unit delivered in satisfaction of the
Purchase Price shall be valued at its average “Market Price,” as such term is
defined in Optionor’s First Amended and Restated Agreement of Limited
Partnership, dated as of the date hereof, for the 10 trading days immediately
preceding, but excluding, the date of the Option Notice.  Transferee shall pay
all reasonable legal costs, recording costs and any transfer taxes resulting
from the transfer of the Interest.

 

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5.                                 Optionor agrees that until the time to
exercise the Option has expired without Optionee’s exercise of the Option,
Optionor, without Optionee’s prior written consent, i) shall not transfer, sell,
pledge, or encumber its interest in the Interest; and ii) shall not and shall
direct Sunnyvale SPE to not, except in connection with the sale of the Premises
to Graymark, sell or transfer any rights in or to the Property, subject the
Premises to any lien, easement or restriction, adversely affect or limit any
rights benefiting the Property, or otherwise take any action which would
adversely affect the value, use or development of the Property.

 

6.                                 Optionor and Optionee may assign this
Agreement to any wholly-owned subsidiary without consent of the other party and
in such event all other terms of this Agreement shall remain in full force and
effect.  Any assignee must irrevocably consent and agree to be bound by all
terms of this Agreement.

 

7.                                 Any change or modification to this Agreement,
in order to become effective, must be in writing and signed by Optionor and
Optionee.

 

8.                                 This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements regarding the sale of
the Interest.

 

9.                                 This Agreement shall be governed by and
interpreted in accordance with the laws of New York.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

OPTIONOR:

 

 

 

iStar Inc., a Maryland corporation

 

 

 

By:

/s/ Geoffrey G. Jervis

 

Name:

Geoffrey G. Jervis

 

Its:

Chief Operating Officer & Chief Financial Officer

 

 

 

 

 

OPTIONEE:

 

 

 

Safety Income and Growth Operating Partnership LP, a Delaware limited
partnership

 

 

By:

/s/ Geoffrey G. Jervis

 

Name:

Geoffrey G. Jervis

 

Its:

Chief Operating Officer & Chief Financial Officer

 

 

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