CONTRACT

 

Between

 

TOMMY HILFIGER 485 FIFTH, INC.

 

Seller

 

and

 

PARK & 5TH PROPERTY LLC

 

Purchaser

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TABLE OF CONTENTS

 

1.    SUBJECT OF SALE.    1 2.    PURCHASE PRICE.    2 3.    DUE DILIGENCE
PERIOD.    2 4.    SPACE LEASES/SERVICE CONTRACTS.    4 5.    ASSIGNMENT OF
SPACE LEASES AND SERVICE AND MAINTENANCE CONTRACTS.    5 6.    APPORTIONMENTS.
   5 7.    VIOLATIONS.    7 8.    PENDING TAX PROCEEDINGS.    7 9.    “AS-IS”.
   7 10.    SECURITY DEPOSITS.    8 11.    BROKER.    8 12.    DESTRUCTION,
DAMAGE OR CONDEMNATION.    8 13.    STATUS OF TITLE.    13 14.    CLOSING.    13
15.    ADJOURNMENT PAYMENTS.    13 16.    NOTICES.    14 17.    FRANCHISE TAXES.
   15 18.    TITLE REPORT.    15 19.    SELLER’S LIMIT OF LIABILITY.    15 20.
   VENDEE’S LIEN.    16 21.    INABILITY TO PERFORM.    16 22.    DISCHARGE OF
ENCUMBRANCES.    16 23.    AFFIDAVIT REGARDING JUDGMENTS.    17

 

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24.    ASSIGNMENT OF CONTRACT.    17 25.    PURCHASER’S REPRESENTATION.    17
26.    SELLER’S RESPONSIBILITIES.    18 27.    COVENANTS BETWEEN CONTRACT AND
CLOSING.    21 28.    CONDITIONS TO CLOSING.    22 29.    ESCROW PROVISIONS.   
23 30.    TRANSFER OF TITLE.    25 31.    LIQUIDATED DAMAGES AND GUARANTY.    25
32.    SELLERS CLOSING OBLIGATIONS.    26 33.    PURCHASER’S CLOSING
OBLIGATIONS.    28 34.    FURTHER ASSURANCES.    28 35.    FIRPTA.    28 36.   
CONFIDENTIALITY.    29 37.    UNION AGREEMENTS.    29

38.

   CERTIFICATE OF OCCUPANCY    29 39.    MISCELLANEOUS.    29

 

SCHEDULES

 

Schedule A    Property Description Schedule B    Permitted Exceptions Schedule C
   Space Leases, Security Deposits and Rent Roll Schedule D    List of Service
Contracts and Maintenance Contracts Schedule E    List of Equipment Leases
Schedule F    List of Violations and Notices for Governmental Authorities

 

EXHIBITS

 

Exhibit 1    Assignment and Assumption of Space Leases Exhibit 2    Assignment
and Assumption of Service and Maintenance Contracts Exhibit 3    Form of
Guarantee Exhibit 4    Form of Estoppel Certificate Exhibit 5    Form of
Subordination, Non-Disturbance and Attornment Agreement Exhibit 6    Form of
Certificate of Seller’s Warranties and Representations Exhibit 7    Assignment
of Contract

 

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AGREEMENT made as of this 14th day of July, 2004, between TOMMY HILFIGER 485
FIFTH, INC., Delaware corporation, having an office at 25 West 39th Street, New
York, New York 10018 (hereinafter called “Seller”) and Park & 5th Property LLC,
a New York limited liability company, having an office at c/o Tri-Realty
Management Corp., 275 Madison Avenue, 30th Floor, New York, New York 10016
(hereinafter called “Purchaser”).

 

W I T N E S S E T H:

 

Seller and Purchaser hereby covenant and agree as follows:

 

1. Subject of Sale.

 

Seller agrees to sell and Purchaser agrees to purchase, upon the terms and
conditions set forth herein:

 

(a) All that certain plot, piece or parcel of land described on Schedule A
annexed hereto and made a part hereof, together with the improvements erected
thereon, which plot, piece or parcel of land and the improvements including
building and its components erected thereon are herein referred to as the
“Premises”;

 

(b) All right, title and interest of Seller, if any, in and to any land lying in
the bed of any street, road or avenue opened or proposed, in front of or
adjoining the Premises, to the center line thereof and to any unpaid award for
any taking by condemnation or any damage to the Premises by reason of a change
of grade of any street or highway. Upon the “Closing” (as hereinafter defined),
or thereafter on demand, Seller shall execute and deliver to Purchaser all
proper instruments for the conveyance of such title and the assignment and
collection of any such award;

 

(c) All right, title and interest of Seller, if any, in and to any fixtures,
(excluding trade fixtures) attached to the Premises and owned by Seller, but no
part of the “Purchase Price” (as hereinafter defined) shall be deemed to be paid
for such fixtures. This sale shall exclude all trade fixtures, equipment and
personal property located at the Premises to the extent remaining at the
Premises at Closing.

 

(d) All right, title and interest in the following:

 

  (i) All easements, rights of way, privileges, appurtenances and other rights
pertaining to the Premises;

 

  (ii) All right, title and interest of Seller if any in and to any strips and
gores adjoining or adjacent to the Premises;

 

  (iii) All plans, drawings, specifications and surveys in Seller’s possession
and able to be transferred and delivered to Purchaser; and

 

  (iv) All transferable guaranties, warranties, licenses, permits and
certificates in Seller’s possession or control as to the operation of the
Building.

 

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(e) The Premises are sold subject to only the matters referred to in Schedule B
attached hereto and made a part hereof (“Permitted Exceptions”).

 

2. Purchase Price.

 

(a) The purchase price is Forty-Eight Million Dollars ($48,000,000) (the
“Purchase Price”) payable by the Purchaser, as follows:

 

(i) Two Million Four Hundred Dollars ($2,400,000.00) (the “Initial Deposit”) on
the signing of this Contract, by official bank check, payable to Gursky &
Partners, LLP (“Escrow Agent”), receipt of which is hereby acknowledged by
Escrow Agent, and a further deposit of $1,800,000.00 if the Contract is accepted
in accordance with the provisions of Article 3A herein (the “Further Deposit”)
and an additional deposit (the “Additional Deposit” or “Guaranteed Sum”) to be
guaranteed by the parties referred to in Section 31 hereof pursuant to a
Guaranty as hereinafter defined (the “Guaranty”), which Guaranty shall also be
held in Escrow by the Escrow Agent, (the Initial Deposit, the Further Deposit
and Additional Deposit shall be collectively the “Deposit”);

 

(ii) At the Closing, the balance of the Purchase Price payable either, at
Seller’s option, (i) by good, unendorsed, certified check (or checks) of
Purchaser, or (ii) by official bank check (or checks) to the order of Seller, or
as Seller may direct.

 

(b) In the event that any of the checks comprising the Deposit is not paid when
the check (or checks) is presented for payment, such non-payment shall
constitute a material default of Purchaser hereunder for which Seller shall have
the option to terminate this Contract and if Seller shall elect to terminate
this Contract, neither party shall have any further rights or obligations under
this Contract, except that Seller shall have the right to retain the Deposit and
pursue its rights and remedies to collect the proceeds of said check (or checks)
and the Deposit.

 

(c) All checks being given by Purchaser under this Contract shall be drawn on a
member bank of the New York Clearing House Association.

 

(d) At either party’s election, the payment of any of the aforesaid sums shall
be made by electronic wire transfer pursuant to wiring instructions to be given
to Purchaser or Seller or by federal funds or check allowing immediately
available funds.

 

3. Due Diligence Period.

 

(a) All inspections remain subject to the confidentiality agreement executed by
Purchaser and its employees, contractors and agents, which is ratified herein
and incorporated by reference hereto (“Confidentiality Agreement”). The
Purchaser shall have the right to cause a physical inspection of the Premises to
be made by its agents, employees, engineers and architects, and Seller shall
permit and facilitate such inspection; provided, however, that no inspection
shall result in the imposition of a lien or other encumbrance on the Premises.
The Seller shall make available to the Purchaser all books, records, leases and
other information in its possession (solely related to the operation of the
Building) as Purchaser may reasonably request so as to enable Purchaser to make
a determination in Purchaser’s sole and absolute discretion as to whether

 

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Purchaser is satisfied as to the condition of and prospects for the Premises and
other matters relating thereto. If Purchaser is satisfied, in its sole
discretion, with the Premises, Purchaser may accept this Contract as provided
below, on or before August 9, 2004 (“Due Diligence Period”). To proceed with the
transaction, Purchaser must provide written notice, on or before 5:00 p.m. on
August 9, 2004 delivered to Escrow Agent’s office which shall state the
Purchaser will proceed to Closing (“Acceptance Notice”) and shall include with
the Acceptance Notice an official bank check for the amount of the Further
Deposit as defined herein. If the Acceptance Notice is not received on or before
August 9, 2004, then the Contract shall be deemed null and void and the Initial
Deposit will be promptly refunded and the Guaranty returned. TIME SHALL BE OF
THE ESSENCE AS TO PURCHASER’S OBLIGATIONS under this Section with respect to the
providing of the Acceptance Notice.

 

(b) Failure by Purchaser to give timely written notice of the Due Diligence
Notice as provided above shall be deemed to be a waiver by Purchaser of its
right to terminate this Contract.

 

(c) Prior to entering upon the Premises, Purchaser, at its sole cost, and
expense cause its contractors to provide a certificate of insurance indicating a
minimum of $1,000,000 in liability insurance for the benefit of Seller and any
other person or entity with an interest in the Premises, as Seller may request
as it deems reasonably necessary any additional named insured(s).

 

(d) Seller shall not be liable to Purchaser or any third party for any injury or
death to any person or damage to any property caused by, or related to, any act,
omission or neglect of Purchaser, its agents or contractors or any third party
occurring as a result of such inspections. Purchaser hereby indemnifies and
agrees to defend and hold Seller harmless from any claim, damage, liability,
judgment, loss, cost, penalty, fine or expense (including, without limitation,
reasonable attorneys’ fees and disbursements) relating to any such injury,
death, lien, encumbrance or damage arising out of the inspections caused by, or
related to, any act, omission, or neglect of Purchaser and not due to any act,
omission or neglect of Seller. This indemnity shall survive the Closing or
earlier termination of this Agreement.

 

(e) During the Due Diligence Period, Seller agrees to cooperate in all
reasonable respects with Purchaser and agrees to make available to Purchaser and
its agents all of the books, files, plans and records and related matters solely
relating to the operation of the Premises which are in the possession or under
the control of Seller. Purchaser’s investigation and any inspections shall take
place after notice to Seller and only in the presence of Seller’s designated
representative.

 

(f) Notwithstanding anything contained to the contrary herein, in the event
Seller and/or Seller’s affiliate(s) are unable in good faith but in its sole
opinion, to negotiate and execute acceptable leases to relocate the occupants of
the Tommy Space, as defined herein, then at any time during the Due Diligence
Period, the Seller may terminate this Agreement and immediately return all sums
paid to Seller on behalf of Purchaser and the Guaranty (“Seller’s Right to
Terminate”). If Seller has exercised Seller’s Right to Terminate, Seller must
notify Purchaser if it, within a year of the date of this Contract, intends to
enter into a Contract or letter of intent to sell the Premises, and in such
event Purchaser shall have a right upon five (5) business days written notice
after receipt of the Seller’s Reinstatement Notice (as hereinafter defined) to
reinstate this Contract with a waiver of the Due Diligence Period. If Purchaser
fails to give such notice, Seller shall be free to sell the Premises

 

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to a third party. Seller shall give prompt notice to Purchaser of any event
giving rise to a reinstatement of the Contract (“Seller’s Reinstatement
Notice”). The sum of $200,000.00 of the Deposit shall remain in escrow with
Escrow Agent until the period of time of the foregoing option has elapsed. If
the Contract is reinstated, the aforesaid sum of $200,000.00 shall be applied
against the required deposits, which deposits shall be promptly delivered to the
Escrow Agent. If the Purchaser does not opt to reinstate the Contract or if the
applicable period expires, the sum of $200,000.00 shall be promptly returned to
Purchaser, and the obligations hereunder shall be deemed terminated.

 

4. Space Leases/Service Contracts.

 

(a) Attached hereto as Schedule C is a list of the leases and licenses and any
security deposits being held by Seller (the “Space Leases”) with respect to the
Premises. Seller has delivered true and complete copies to Purchaser of all
leases, subleases, licenses and possession agreements, whereby space is occupied
at the Premises to Seller, in Seller’s possession. Purchaser acknowledges that
no representation has been made and no responsibility is assumed by Seller with
respect to the continued occupancy of the Premises, or the removal of any tenant
or licensee (“Space Tenants”) by summary proceedings or in any other manner.
Purchaser agrees that, except as provided by Section 9(c) hereof, the removal,
prior to the Closing, of any Space Tenant, of their own volition, and without
the consent of Seller, or by summary proceedings or otherwise, shall not be the
basis for, nor give rise to any claim on the part of Purchaser nor affect the
obligations of Purchaser under this Contract in any manner whatsoever and
Purchaser shall close title and accept delivery of the Deed (as hereinafter
defined) without such Space Tenant(s) in possession and without any allowance or
reduction in the Purchase Price.

 

(b) The portion of the Building not leased to third parties except for common
area (the “Tommy Space”) occupied by affiliates or licensees of Seller shall be
delivered vacant and free of tenancies.

 

(c) Seller shall not, after the end of the Due Diligence Period, without the
prior written consent of Purchaser not to be unreasonably withheld or delayed:
(i) execute any new Leases affecting the Premises, or any part thereof (the “New
Leases”); (ii) amend, modify or supplement any existing Lease; (iii) terminate
(except upon a default by the tenant thereunder) or accept the surrender of any
existing Lease; (iv) accept any prepayment of rent or other consideration, and
if prepaid rent is received by Seller for any period beyond the Closing Date, it
will be held in trust for Purchaser’s benefit; or (v) approve any sublease;
provided however that Seller is authorized without the prior written consent of
Purchaser to accept the termination of Leases at the end of their existing terms
and, provided same are at current market rent levels, to enter into or renew any
Leases or permit a sublease, and to maintain the Property in the normal course
of operating the Premises in the manner in which it is currently operated,
subject to Purchaser’s prior consent which shall not be unreasonably withheld.

 

(d) Attached hereto as Schedule D is a list of the service and maintenance
contracts (“Service and Maintenance Contracts”) with respect to the Premises.

 

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5. Assignment of Space Leases and Service and Maintenance Contracts.

 

(a) At the Closing, Seller shall assign to Purchaser all of its right, title,
and interest in and to all of the Space Leases in the form of the assignment
attached hereto as Exhibit 1.

 

(b) The Seller agrees to turn over to Purchaser, upon the closing of title, so
much of the security deposits received under the Leases (or letters of credit)
(or credit against the Purchase Price), as shown on Schedule C (“Security
Deposits”) as has been unapplied, in accordance with the terms of said Leases,
and simultaneously therewith the Purchaser agrees to execute and deliver to
Seller an agreement indemnifying Seller against any claim that may be made by
tenants in connection with the Security Deposits so transferred, and Seller
shall deliver to Purchaser an indemnity with respect to any security deposit
which has been applied by Seller to monies due to it.

 

(c) At the Closing, Seller shall assign to Purchaser all of its right, title and
interest in and to the Service and Maintenance Contracts which Purchaser has
agreed to continue pursuant to an Assignment Agreement attached hereto as
Exhibit 2. Purchaser must designate within ten (10) days after the date which
ends the Due Diligence Period, which service contracts it has not elected to
have Seller terminate prior to Closing.

 

6. Apportionments.

 

(a) The parties shall endeavor to cause a schedule of apportionments to be
agreed upon three days prior to the Closing Date. The following apportionments
shall be made between the parties at the Closing as of the close of business on
the day prior to the Closing Date (or Date of Possession as defined below):

 

(i) prepaid rents and Additional Rents (including Make-Up Payments, if any, as
defined in Section 26(l) below) or other charges with respect to the Space
Leases;

 

(ii) prepaid rents and Additional Rents and revenues, if any, from telephone
booths, vending machines and other income-producing agreements;

 

(iii) real estate taxes, water charges and sewer rents, if any, on the basis of
the fiscal period for which assessed, except that if there is a water meter on
the Premises, apportionment at the Closing shall be based on the last available
reading, subject to adjustment after the Closing when the next reading is
available;

 

(iv) wages, vacation pay, pension and welfare benefits and other fringe benefits
of all persons employed at the Premises, whose employment was not terminated at
or prior to the Closing;

 

(v) value of fuel (if any) stored on the Premises, at the price then charged by
Seller’s supplier, including any taxes;

 

(vi) charges under transferable Service Contracts or permitted renewals or
replacements thereof;

 

(vii) recurring governmental fees for any permits as and when incurred; and

 

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(viii) any other items customarily adjusted between Seller and Purchaser for a
first class office building in the Borough of Manhattan.

 

(b) If the Closing shall occur before a new tax rate is fixed, the apportionment
of taxes at the Closing shall be upon the basis of the old tax rate for the
preceding period applied to latest assessed valuation. Promptly after the new
tax rate is fixed, the apportionment of taxes shall be recomputed. Any
discrepancy resulting from such recomputation and any errors or omissions in
computing apportionments at Closing shall be promptly corrected, which
obligations shall survive the Closing.

 

(c) If any tenant is in arrears in the payment of rent on the Closing Date,
rents received from such tenant after the Closing shall be applied in the
following order of priority: (a) first to the month preceding the month in which
the Closing occurred; (b) then to the month in which the Closing occurred;
(c) then to any month or months following the month in which the Closing
occurred; and (d) then to the period prior to the month preceding the month in
which the Closing occurred. If rents or any portion thereof received by Seller
or Purchaser after the Closing are payable to the other party by reason of this
allocation, the appropriate sum, less a proportionate share any reasonable
attorneys’ fees, costs and expenses of collection thereof, shall be promptly
paid to the other party, which obligation shall survive the Closing.

 

(b) If any tenants are required to pay percentage rent, escalation charges for
real estate taxes, operating expenses, cost-of-living adjustments or other
charges of a similar nature (“Additional Rents”) and any Additional Rents are
collected by Purchaser after the Closing which are attributable in whole or in
part to any period prior to the Closing, then Purchaser shall promptly pay to
Seller Seller’s proportionate share thereof, less a proportionate share of any
reasonable attorneys’ fees, costs and expenses of collection thereof, if and
when the tenant paying the same has made all payments of rent and Additional
Rent then due to Purchaser pursuant to the tenant’s Lease, which obligation
shall survive the Closing. If any tenant is or becomes entitled to a refund of
overpayments of Additional Rent which are attributable in whole or in part to
any period prior to the Closing, Seller shall pay to Purchaser an amount equal
to the amount of such refund attributable to any such period within ten days
after notice from Purchaser, which obligation shall survive the Closing.

 

(c) Such adjustments, if and to the extent known and agreed upon as of the
closing, shall be (i) paid by Purchaser to Seller at the Closing (if the
prorations result in a net credit to Seller), or (ii) deducted from the Purchase
Price at the Closing (if the prorations result in a net credit to the
Purchaser). Any such adjustments not determined or not agreed upon as of the
Closing, shall be allocated on a fair and equitable basis as soon as invoices or
bills are available, with final adjustments to be made as soon as reasonably
possible after the Closing. Seller and Purchaser shall each act promptly and
reasonably in connection with determining the prorations under this Section.
This Section shall survive the Closing.

 

(f) Purchaser shall be credited with an amount equal to any unpaid expenses
which relate to the period prior to the Proration Date. To aid in such
prorations, Seller shall use commercially reasonable efforts to obtain billings
and meter readings as of the date that is no earlier than thirty (30) days prior
to the Proration Date, and the unfixed meter charge and the unfixed sewer rent,
if any, based thereon for the intervening time shall be apportioned on the basis
of such last reading, provided that, if Seller is unable to obtain any such
billings or meter

 

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readings prior to Closing then such charges and fees shall be prorated at the
Closing on the basis of the most recent reading. Periodically recurring
governmental fees for Permits, shall be prorated between Purchaser and Seller as
of the Proration Date on an accrual basis.

 

7. Violations.

 

Seller shall remedy prior to Closing any and all violations of government, local
and municipality law, rule, regulation or code relating to all or any part of
the Premises, so long as the cost thereof does not exceed $4,200,000.00. If such
cost does exceed $4,200,000.00 and Seller does not agree to pay it, Purchaser
may (i) either elect to close with a credit of Four Million Two Hundred Thousand
($4,200,000.00) Dollars, or (ii) terminate this Agreement and the Deposit shall
be refunded to Purchaser. Notwithstanding the foregoing, Seller shall be
responsible for remedying any and all violations (no matter what the amount)
which issue or have issued prior to the Closing, in connection with acts or
inactions of Seller or the occupants of the Tommy Space.

 

8. Pending Tax Proceedings.

 

Seller shall have the right to withdraw, settle or otherwise compromise any
proceedings then pending to review the real estate tax assessment of the
Premises applicable to the fiscal tax year in which the Closing occurs without
the consent of Purchaser. In the event such proceedings undertaken by Seller
result in a refund of any real estate taxes paid by the Seller in respect of
such fiscal tax year, such refund shall belong entirely to Seller.

 

9. “As-Is”.

 

(a) Purchaser represents to Seller that (i) Purchaser will, during the Due
Diligence Period, examine, inspect, and investigate to the full satisfaction of
Purchaser, the physical nature and condition of the Premises, (ii) neither
Seller nor any agent, officer, employee, or representative has made any
representations as to the physical nature or condition of the Premises, or the
Space Leases, or operating expenses or carrying charges affecting the Premises,
and (ii) Purchaser, in executing, delivering and performing this Contract, does
not rely upon any statement, information or representation to whomsoever made or
given whether to Purchaser or others, and whether directly or indirectly,
verbally or in writing, made by any person, firm or corporation except as set
forth herein. Without limiting the foregoing, but in addition thereto, if
Purchaser shall not have terminated this Contract pursuant to the provisions of
Section 2 above, then Purchaser shall take the Premises in its “AS-IS”
condition, subject to such reasonable use, wear, tear, natural deterioration and
damage and destruction as may occur between the date hereof and the Closing.

 

(b) Notwithstanding anything herein to the contrary, Seller makes no
representation or warranty that any fixtures or articles of personal property
used in connection with the Premises are owned by the Seller, it being
understood that certain of such fixtures and articles may be owned by the
tenants. Further, except as herein specifically provided, Seller makes no
representations whatsoever with respect to the Premises except that it is the
owner thereof, subject to the other items described in this Contract. Seller has
not made and does not make any representations as to the physical condition,
income, expense, operation or any other matter or thing affecting or related to
the Premises, and Purchaser hereby expressly acknowledges that no such

 

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representation has been made, except that Seller does represent that as of the
Closing Date all mechanical systems and the cooling tower will be intact and in
working order, and the roof will be free of leaks, reasonable wear and tear
excepted.

 

(c) Notwithstanding anything herein to the contrary, in the event that any of
the Space Tenants representing annualized rentals in excess of One Hundred
Thousand ($100,000.00) per annum are more than three (3) months in arrears in
payment of rents (“Defaulted Rentals”), the Purchase Price shall be reduced by
an amount equal to Three ($3.00) Dollars for each One ($1.00) Dollar in excess
of One Hundred Thousand ($100,000.00) Dollars for Defaulted Rentals (“Rental
Adjustments”). Should a Space Tenant be in arrears for more than three
(3) months between date of that ends the Due Diligence Period and the Closing
Date, Seller shall not take action to terminate its lease without Purchaser
consent not to be unreasonably withheld or delayed. Notwithstanding anything to
the contrary, contained in Section 6(c) with respect to Apportionments, in the
event Purchaser refuses to consent to Seller taking action to terminate a Space
Tenant with Defaulted Rentals, Seller shall be entitled to any Defaulted Rentals
received after the Closing, and such sums shall be promptly paid to Seller,
which obligations shall survive Closing.

 

10. Security Deposits.

 

The Security Deposit being held for the benefit of the tenants under the Space
Leases are listed on Schedule C (“Security Deposit”). At Closing, all Security
Deposits being held in cash will either be delivered to Purchaser by a check or
credit given at Closing. All Security Documents in the forms of letter(s) of
credit will be assigned to Purchaser by any appropriate instruments of transfer
or assignment.

 

11. Broker.

 

Purchaser and Seller represent and warrant to each other that it has had no
dealings with respect to this transaction with any real estate broker, firm or
salesman, or any other person or corporation, except CB Richard Ellis, Inc.
(successor in interest to Insignia/ESG, Inc.) (the “Broker”). Seller agrees to
pay the brokerage commission due to the Broker. Purchaser agrees to indemnify
Seller against, and defend Seller and save Seller harmless from and against any
and all claims, and Seller’s reasonable expenses related thereto (including
attorney’s fees and expenses) for brokerage commissions, fees or other
compensation by any person, firm or corporation (other than the Broker) which
arise as a result of a breach of Purchaser’s representation. Seller agrees to
indemnify Purchaser against, and defend Purchaser and save Purchaser harmless
from any and all claims, and purchaser’s reasonable expenses related thereto
(including reasonable attorneys’ fees and expenses), for brokerage commission,
fees and other compensation by any person, firm or corporation (including to
Broker) which arise as a result of a breach of Seller’s representation. The
provisions of this Paragraph shall survive the Closing and any termination of
this Agreement.

 

12. Destruction, Damage or Condemnation.

 

(a) Notwithstanding anything to the contrary implied or provided by law or in
equity, if, prior to the Closing, any material portion of the Premises is
damaged by fire, then elements or any other casualty, or if any material portion
of the Premises is taken by eminent domain or otherwise, Purchaser shall have
the right to terminate this Contract by written notice to the Seller

 

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and Escrow Agent, provided that such notice shall have been given within ten
(10) days following Purchaser’s receipt of notice of the occurrence of such
damage or condemnation, whereupon the Down payment shall be promptly returned to
Purchaser and thereupon this Contract and the obligations of the parties
hereunder shall terminate and no party hereto shall have any further obligations
in connection herewith except under those provisions that expressly survive a
termination of this Contract. If Purchaser does not terminate this Contract then
this Contract shall remain in full force and effect and the parties shall
nonetheless proceed to the Closing in accordance with this Contract, provided,
however, that in such event (i) Purchaser shall receive a credit against the
Purchase Price in an amount equal to the Reasonable Cost of Repair (as hereafter
defined) resulting from such casualty or the Diminution in Value (as hereafter
defined) resulting from such taking, as the case may be, and (ii) Seller shall
retain all rights in and to all proceeds or awards received or payable in
connection with such casualty or taking, notwithstanding anything in the
contrary in this.

 

(b) Seller shall promptly notify Purchaser of any fire or other casualty and of
any proposed taking. Seller shall not enter into any construction or other
contract for the repair or the restoration of the Premises (or otherwise cause
any such repair or restoration to be performed), without having obtained
Purchaser’s prior written consent, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, in the event of a fire or
other casualty at the Premises, Purchaser’s prior consent shall not be required
for any action which Seller shall elect to take in order to repair or remediate
any condition which poses a danger to Seller’s employees or the health and
welfare of the general public, provided that nothing in this Contract shall be
construed as requiring Seller to undertake any repair or restoration of the
Premises following any casualty or taking. Seller shall promptly perform such
work as shall be necessary to secure the Premises, and eliminate any condition
arising from such casualty that is hazardous to persons or property. Seller
shall keep Purchaser fully apprised of all work, if any, to be undertaken as
above provided.

 

(c) In the event there is damage to or destruction of an immaterial part of the
Premises by fire or other casualty or an immaterial part of the Premises is
affected by such taking, Purchaser shall not have the right to terminate this
Contract, but the parties shall proceed to the Closing, provided, however, that
in such event (i) Purchaser shall receive a credit against the Purchase Price in
an amount equal to the Reasonable Cost of Repair (as hereafter defined)
resulting from such casualty or the Diminution in Value (as hereafter defined)
resulting from such taking (if any), as the case may be, and (ii) Seller shall
retain all rights in and to all proceeds received or payable in connection with
such casualty or taking, notwithstanding anything in the contrary in this.

 

(d) (i) For purposes of this Section, damages from a fire or other casualty
shall be deemed material if the resulting Reasonable Cost of Repair (as
hereafter defined) exceeds $7,000,000.00. For purposes of this paragraph, the
term “Reasonable Cost of Repair” shall mean the reasonable sum of restoring the
affected portion of the Premises as nearly as practicable to its condition
immediately prior to the fire or other casualty, as reasonably determined in
consultation with qualified unaffiliated professionals and determined
(i) without reference to the cost of restoring any portion of the Premises the
restoration of which is inconsistent with Purchaser’s intended conversion of the
Property to residential use, and (ii) taking into account any repairs or
restoration carried out by Seller.

 

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(ii) In the event that Seller and Purchaser shall not have agreed upon the
Reasonable Cost of Repair caused by any fire or other casualty within forty-five
(45) days following the occurrence of such fire or other casualty, then either
party may, by written notice to the other party, require that such amount be
determined by a “baseball arbitration” conducted in accordance with subsection
(iii) of this Section. Any such notice shall contain the following statement, in
all capital letters on the first page thereof “THIS NOTICE IS BEING GIVEN UNDER
SECTION 12 OF THE CONTRACT OF SALE OF 485 FIFTH AVENUE, NEW YORK, NEW YORK YOUR
FAILURE TO COMPLY WITH THE REQUIREMENTS OF THAT SECTION WITHIN TWENTY
(20) BUSINESS DAYS MAY PREJUDICE YOUR INTEREST.” The result of any such
arbitration shall be binding and unappealable and judgment thereon may be
entered by any court of competent jurisdiction.

 

(iii) In the event any Reasonable Cost of Repair is to be determined pursuant to
this Section then Seller and Purchaser shall each submit to each other in
writing the name of an Independent Consultant (as hereafter defined) not later
than ten (10) business days after the notice requiring an arbitrator to
determine the Reasonable Cost of Repair. If either party shall fail to timely
designate an Independent Consultant then the Independent Consultant designated
by the other party shall make the determination required under this Section. If
both parties shall have timely designated an Independent Consultant then the two
Independent Consultants shall thereafter endeavor to establish by mutual
agreement the Reasonable Cost of Repair. In the event that such Independent
Consultants agree upon the Reasonable Cost of Repair within thirty (30) days
after their designation then such determination shall be promptly issued in
writing to, and shall be conclusive and binding upon, Seller and Purchaser, and
the Closing shall take place as provided for in Section 14 unless the date
provided for therein shall have passed, in which case the Closing shall occur on
the date that is five (5) business days after the date on which the Independent
Consultants shall have given notice of their determination, in which event such
date shall be deemed to be the “Closing Date” provided for in Section 14. In the
event the Independent Consultants designated by the Seller and Purchaser are
unable to agree on the Reasonable Cost of Repair within such thirty (30) day
period they shall jointly designate another Independent Consultant (the “Third
Consultant”) to make such determination. In the event the Independent
Consultants appointed by Seller and Purchaser are unable to agree on the
designation of a Third Consultant within ten (10) business days after the need
for such joint designation shall have arisen then either party may apply to a
court of competent jurisdiction or the American Arbitration Association to make
such designation. If both parties shall have made such applications then the
application of the party that shall have first given notice thereof to the other
party shall be the one utilized and the other party shall promptly withdraw its
application. Seller and Purchaser shall each submit a proposed Reasonable Cost
of Repair to the Third Consultant within ten (10) business days after his or her
appointment. The Third Consultant shall make the determination by selecting in
its entirety the proposal that best represents the Reasonable Cost of Repair as
determined in accordance with this Section and shall promptly communicate its
determination to Purchaser and Seller in writing. The Third Consultant shall
have no authority to modify either proposal or independently determine a
different Reasonable Cost of Repair. The Reasonable Cost of Repair selected by
the Third Consultant shall be conclusive and binding upon Seller and Purchaser,
and the

 

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Closing shall take place as provided for in Section 14 herein, unless the date
provided for therein shall have passed, in which case the Closing shall occur on
the date that is five (5) Business days after the date on which the Third
Consultant shall have given notice of its determination, in which event such
date shall be deemed to be the “Closing Date” provided for in this Section 14
herein. Each party shall bear the costs of the Independent Consultant it
designates. The cost of the Third Consultant shall be borne by the parties
equally.

 

(iv) For purposes of this Contract the term “Independent Consultant” shall mean
an architect, engineer, professional contractor, construction manager or
construction consultant (a “Construction Professional”) that (i) holds such
licenses or permits as may be required of that type of Construction Professional
practicing in the City of New York, (ii) has been actively and continuously
engaged in the design, construction, repair, renovation or alteration of
commercial real estate in the City of New York for the ten (10) year period
immediately preceding his or her designation under this Contract, and (iii) is
not an Affiliate of or related to the party that has designated him or her as an
Independent Consultant.

 

(v) For purposes of this Section, a taking shall be deemed material if the
resulting Diminution in Value (as hereafter defined) exceeds $7,000,000.00. For
purposes of this (v) the “Diminution in Value” shall mean the diminution in the
value of the Premises resulting from the referenced taking and shall be
determined (i) without reference to the value of any portions of the Premises
the restoration of which is inconsistent with Purchaser’s intended conversion of
the Property to residential use, and (ii) taking into account any repairs or
restoration carried out by Seller.

 

(vi) In the event that Seller and Purchaser shall not have agreed upon the
Diminution in Value caused by any taking within thirty (30) days following the
occurrence of such taking, then either party may, by written notice to the other
party, require that such amount be determined by a “baseball arbitration”
conducted in accordance with subsection (iii) of this Section 12. Any such
notice shall contain the following statement, in all capital letters on the
first page thereof: “THIS NOTICE IS BEING GIVEN UNDER SECTION 12 OF THE CONTRACT
OF SALE FOR 485 FIFTH AVENUE, NEW YORK, NEW YORK, FAILURE TO COMPLY WITH THE
REQUIREMENTS OF THAT SECTION WITHIN TEN (10) BUSINESS DAYS MAY PREJUDICE YOUR
INTEREST.” The result of any such arbitration shall be binding and unappealable
and judgment thereon may be entered by any court of competent jurisdiction.

 

(vii) In the event any Diminution in Value is to be determined pursuant to this
subsection then Seller and Purchaser shall each submit to each other in writing
the name of an Independent Appraiser (as hereafter defined) not later than ten
(10) Business days after the notice requiring an arbitration to determine the
Diminution in Value. If either party shall fail to timely designate an
Independent Appraiser then the Independent Appraiser designated by the other
party shall make the determination required under this Section 12. If both
parties shall have timely designated an Independent Appraiser then the two
Independent Appraisers shall thereafter endeavor to establish by mutual
agreement the Diminution in Value. In the event that such Independent Appraisers
agree upon the Diminution in Value within thirty (30) days after their
designation then such determination shall be promptly

 

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issued in writing to, and shall be conclusive and binding upon, Seller and
Purchaser, and the Closing shall take place as provided for in Section 14,
unless the date provided for therein shall have passed, in which case the
Closing shall occur on the date that is five (5) business days after the date on
which the Independent Appraisers shall have given notice of their determination,
in which event such date shall be deemed to be the “Closing Date” provided for
in Section 14. In the event the Independent Appraisers designated by Seller and
Purchaser are unable to agree on the Diminution in Value within such thirty
(30) day period they shall jointly designate another Independent Appraiser (the
“Third Appraiser”) to make such determination. In the event the Independent
Appraisers appointed by Seller and Purchaser are unable to agree on the
designation of a Third Appraiser within ten (10) Business days after the need
for such joint designation shall have arisen then either party may apply to a
court of competent jurisdiction or the American Arbitration Association to make
such designation. If both parties shall have made such applications then the
application of the party that shall have first given notice thereof to the other
party shall be the one utilized and the other party shall promptly withdraw its
application. Seller and Purchaser shall each submit a proposed Diminution in
Value to the Third Appraiser within ten (10) Business days after his or her
appointment. The Third Appraiser shall make its determination by selecting in
its entirety the proposal that best represents the Diminution in Value as
determined in accordance with this Section 12 and shall promptly communicate its
determination to Purchaser and Seller in writing. The Third Appraiser shall have
no authority to modify either proposal or independently determine a different
Diminution in Value. The Diminution in Value selected by the Third Appraiser
shall be conclusive and binding upon Seller and Purchaser, and the Closing shall
take place as provided for in Section 14 hereof, unless the date provided for
therein shall have passed, in which case the Closing shall occur on the date
that is five (5) Business days after the date on which the Third Appraiser shall
have given notice of its determination, in which event such date shall be deemed
to be the “Closing Date” provided for in Section 12. Each party shall bear the
costs of the Independent Appraiser it designates. The cost of the Third
Appraiser shall be borne by the parties equally.

 

(viii) For purposes of this Contract the term “Independent Appraiser” shall mean
an appraiser that (i) is a member of the American Institute of Real Estate
Appraisers, (ii) has earned the “MAI” designation, (iii) has been actively and
continuously engaged in the appraisal of commercial real estate in New York City
for the ten (10) year period immediately preceding his or her designation under
this Contract, and (iv) is not an Affiliate of or related to the party that has
designated him or her as an Independent Appraiser.

 

(e) The parties hereby waive the provisions of any statute which provides for a
different outcome or treatment in the event of a casualty or a taking.

 

(f) The provisions of this Section supersede the provisions of Section 5-1311 of
the General Obligations Law of the State of New York.

 

13. Status of Title.

 

Seller shall give, and Purchaser shall accept title to the Premises subject only
to (a) the exceptions set forth in this Contract on Schedule B, and (b) such
other monetary exceptions as

 

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the Title Company defined to be Commonwealth Title Insurance and Fidelity Title
Insurance Company shall be willing to omit as exceptions to coverage and insure
against collection and enforcement out of, or against, the Premises, and
provided that such shall be omitted from any mortgage policy and be reasonably
acceptable to Purchaser’s lender.

 

14. Closing.

 

The Closing of title (the “Closing”) shall take place on or about March 30, 2005
(the “Closing Date”) at the offices of Gursky & Partners, LLP, 1350 Broadway,
New York, New York 10018 at 10:00 o‘clock in the forenoon on that day at which
time the Deed shall be delivered upon payment to Seller of the balance of the
Purchase Price.

 

15. Adjournment Payments.

 

Seller shall have the right to adjourn the Closing to a date selected by Seller
at no cost and expense through and including June 30, 2005. Seller must give
sixty (60) day prior written notice to Purchaser of the intended Closing Date
(“Seller’s Notice”). If the Purchaser is unwilling, except for Purchaser’s
refusal based upon Seller’s failure to comply with its obligations under this
Contract, or unable to close on the Closing Date selected by Seller in Seller’s
Notice, then for the purposes of the calculation of the Adjournment Payments, as
described below, the “Adjournment Date” shall be the closing date established in
the Seller’s Notice. In no event will Seller be responsible for any Adjournment
Payments after the Adjournment Date established in the Notice, if Seller is able
to deliver the Tommy Space in accordance with this Contract.

 

If Seller is unable or unwilling to close on or before June 30, 2005, then the
parties have agreed that the Seller shall make an adjustment to the Purchase
Price by reducing the same in consideration of the right to adjourn the Closing
(“Adjournment Payments”) as follows:

 

  (a) If the Adjournment Date occurs during the period, July 1, 2005 –
August 31, 2005 (“Period 1”), the Seller at Closing will give the Purchaser a
purchase price adjustment equal to the sum of $27.50 per square foot per annum,
multiplied by 192,000 rentable square feet (“Building Square Feet”) less the
Seller’s Costs to Operate the Building , as defined below (“Adjournment Rent”).
The credit shall be, on a per diem basis, for the number of days of Period 1
from July 1, 2005 to August 31, 2005.

 

  (b) If the Adjournment Date occurs during the period, September 1, 2005 –
October 31, 2005 (“Period 2”), Seller at Closing will give a purchase price
adjustment equal to (i) Adjournment Rent for all of Period 1, and (ii) one and
one half times the Adjournment Rent for the number of days of Period 2 prior to
October 31, 2005 (“Adjournment Rent for Period 2”).

 

  (c) If the Closing occurs any time after October 31, 2005 (“Period 3”), the
Seller at Closing will give a purchase price adjustment equal to (i) Adjournment
Rent for all of Period 1; (ii) Adjournment Rent for all of Period 2 and
(iii) four times the Adjournment Rent for the number of days from November 1,
2005 through the Closing. In no event may the Adjournment Date go beyond

 

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December 15, 2005 (the “Outside Date”), and time shall be deemed to be of the
essence with respect to such date.

 

“Seller’s Costs to Operate the Building” shall be defined as all costs and
expenses for the maintenance, policing, securing, repair, replacement,
administration, insurance, environmental monitoring, operation and management of
the Building including without limitation the real estate taxes assessed against
the Building. Seller’s Costs to Operate the Building are estimated to be for the
calendar year 2004, the sum of $13.25 per square foot (inclusive of real estate
taxes).

 

Any credit as provided for herein to be made by Seller to Purchaser shall be
made by way of an adjustment to the Purchase Price. The parties hereto agree
that the adjustment to the Purchase Price based upon failure of Seller to close
as anticipated by the Purchaser, is a fair and reasonable basis of measuring the
potential loss, cost and expense to Purchaser, and not having the premises
available to it at an earlier date in order to obtain financing, install new
tenants and take action with respect to other of its prerogatives with respect
to the premises. Seller agrees that it will take all appropriate action to cause
Seller’s affiliates who occupy the Tommy Space to vacate the premises on or
before the Outside Date.

 

16. Notices.

 

All notices hereunder by either party to the other shall be sent by registered
or certified mail, return receipt requested or by overnight courier, providing
receipt of delivery, addressed to Seller at the address given for Seller at the
beginning of this Contract, with copies of such notices to Seller to be likewise
sent to:

 

Gursky & Partners, LLP

1350 Broadway

New York, New York 10018

Attn.: Steven R. Gursky, Esq.

 

and to Purchaser at the address given for Purchaser at the beginning of this
Contract with copies of such notices to Purchaser to be likewise sent to:

 

Fishbach Hertan

767 Third Avenue – 20th Floor

New York, New York 10017

Attention: Myron Fishbach, Esq.

 

Notices shall be deemed served three (3) days after the date of registration
with the postal authorities if sent by registered mail, three (3) days after the
date of mailing if sent by certified mail, or one (1) day after sending by
overnight courier. Notices on behalf of the respective parties may be given by
their attorneys and such notices shall have the same effect as if in fact
subscribed by the party on whose behalf it is given. Notwithstanding the
foregoing provisions of this Section, notices given by the attorneys may be
served by personal delivery and shall be deemed served on the date of delivery
if delivered prior to 6:00 p.m., and on the next business day if delivered after
6:00 p.m.

 

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17. Franchise Taxes.

 

Unpaid franchise taxes, dissolution taxes or any other similar taxes so levied,
of any corporation in the chain of title shall not be an objection to title so
long as the Title Company insures against collection of any such taxes out of or
enforcement against the Premises.

 

18. Title Report.

 

During the Due Diligence Period, Seller shall provide to Purchaser (at
Purchaser’s expense) an owner’s and mortgagee’s title insurance commitment from
the Title Company, (at Purchaser’s expense) committing to insure the Premises,
subject only to the matters referred to in Schedule B, provided Seller delivers
the same in accordance therewith. Purchaser shall pay to the Title Company, at
the Closing, all title charges, recording and survey costs. Purchaser shall from
time to time promptly, after obtaining knowledge thereof, notify Seller of any
defects, encumbrances, encroachments or other objections to title not herein
expressly consented to by Purchaser and which, in the opinion of Purchaser’s
attorney, title is not in conformance with Schedule B.

 

19. Seller’s Limit of Liability.

 

(a) If on the Closing Date it should appear that the Premises are affected by
any lien or encumbrance, outstanding interest or question of title not expressly
consented to herein by Purchaser, which renders or may render Seller’s title
uninsurable, Seller, at Seller’s election, shall have the privilege to remove or
satisfy the same, and shall, for that purpose, be entitled to one or more
adjournments of the Closing for a period not exceeding in the aggregate one
hundred eighty (180) days, but such extension shall not in any way be deemed to
abate the Purchaser’s right to receive the Purchase Price adjustments as
provided in Section 15 based upon an adjournment of the Closing Date, provided
however, that except as provided in Section 7, Seller shall not be obligated to
remove any violations, unless they have been knowingly incurred by Seller or its
affiliates and could have been prevented by reasonable action by Seller.

 

(b) Seller will discharge all defects or encumbrances (“Title Defects”) created
by Seller or its affiliates or which were knowingly created by Seller or its
affiliates and could have been prevented by reasonable action by Seller or its
affiliates. If the Title Defects were caused by a third party, then Seller shall
be required to expend, remove or discharge such Title Defects for an amount not
to exceed $4,200,000.00 (“Maximum Credit”) and Seller shall have a right to a
reasonable adjournment to cause said removal or discharge. Purchaser, shall
provide at Closing separate certified checks or official bank checks as
requested, aggregating the amount of the balance of the Purchase Price, to
facilitate the payment of such sums by Seller.

 

(c) If Seller elects to adjourn the Closing as provided in this Section, this
Contract shall remain in effect for the period or periods of adjournment, in
accordance with its terms.

 

(d) Notwithstanding the foregoing provisions of this Section, Purchaser may at
any time accept such title as Seller can convey, notwithstanding the existence
of any title defect not provided for in this Contract, without reduction of the
Purchase Price or any credit or allowance on account thereof or any claim
against Seller, except Purchaser will be entitled to the Maximum

 

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Credit. The acceptance of the Deed shall be deemed to be full performance of,
and discharge of, every agreement and obligation on Seller’s part to be
performed under this Contract, except for those which this Contract specifically
provides shall survive the Closing.

 

20. Vendee’s Lien.

 

In case of material default by Seller and failure to close title, the Deposit
then being held by Escrow Agent and the “net cost of title examination” are
hereby made liens upon the Premises but such liens shall not continue after
default by Purchaser hereunder. The term “net cost of title examination” is
defined for purposes of this Contract as the out-of-pocket expense actually
incurred by Purchaser for title examination, without issuance of policy.

 

21. Inability to Perform.

 

If for any reason whatsoever Seller shall be unable or fails to convey title
subject to and in accordance with the terms of this Contract, the sole
obligation of Seller shall be to refund the Deposit then being held by Escrow
Agent and to reimburse Purchaser for the Purchaser’s cost, and upon the making
of such refund and reimbursement, this Contract shall become void and of no
further force or effect, and neither party hereto shall have any further claim
against the other by reason of this Contract and the liens, if any, of Purchaser
against the Premises shall wholly cease. If Seller defaults, then Purchaser
shall be entitled to in addition to any and all remedies provided for by law,
maintain an action for specific performance against the Seller.

 

22. Discharge of Encumbrances.

 

If on the date of Closing there may be any taxes, assessments, water charges,
sewer rents, Seller may use any portion of the balance of the Purchase Price to
satisfy the same, provided Seller shall deliver to Purchaser at the Closing
instruments in recordable form and sufficient to satisfy such liens and
encumbrances of record, together with the cost of recording or filing said
instruments. Purchaser, if request is made within a reasonable time prior to the
Closing, agrees to provide at the Closing separate certified or official bank
checks as requested, aggregating the amount of the cash balance of the Purchase
Price, to facilitate the satisfaction of any such liens or encumbrances. The
existence of any such taxes, assessments, water charges or sewer rents or other
liens or encumbrances shall not be deemed objections to title if Seller shall
comply with the foregoing requirements. If the Title Company is willing to
insure Purchaser that such taxes, assessments, water charges, sewer rents, liens
and encumbrances are insured against collection and are “omitted” from its title
policy, and will not be collected out of and enforced against the Premises, then
Seller and shall have the right, in lieu of payment and discharge, to deposit
with the Title Company such funds or assurances or to pay such special or
additional premiums as the Title Company may require in order so to insure. In
such case the taxes, assessments, water charges, sewer rents, liens and
encumbrances with respect to which the Title Company has agreed so to insure
shall not be considered objections to title.

 

23. Affidavit Regarding Judgments.

 

If a search of the title discloses judgments, bankruptcies or other returns
against other entities having names the same as or similar to that of Seller,
Seller will on request deliver to Purchaser

 

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an affidavit showing that such judgments, bankruptcies or other returns are not
against Seller or any member and otherwise in such form and content that the
Title Company will remove such judgments, bankruptcies or other returns as
exceptions to title and will insure against collection of such judgments out of
the Premises.

 

24. Assignment of Contract.

 

This Contract may be assigned by Purchaser provided Purchaser delivers written
notice and a form of assignment of this Contract as set forth in Exhibit 7 or
such other form as shall be reasonably satisfactory to all parties.

 

25. Purchaser’s Representation.

 

The Purchaser represents and warrants to the Seller, which representations and
warranties shall survive the delivery of the Deed, as follows:

 

(a) That this Contract has been duly authorized, executed and delivered by the
Purchaser and constitutes a valid and legally binding obligation of the
Purchaser.

 

(b) The Purchaser is a limited liability company duly organized and validly
existing in good standing under the laws of the State of New York, and it is
duly authorized, qualified and licensed under all applicable laws, regulations,
ordinances and orders of public authorities (and has all the customary, usual,
necessary and requisite licenses) to own its properties and to carry on its
business in the places and in the manner as now being conducted; and there is no
action or proceeding now pending to dissolve the corporation, or to declare its
rights, powers, licenses, franchises or privileges, or any of them, to be null
and void or to suspend or revoke any of them.

 

(c) There are no claims, actions, suits or proceedings pending or threatened
against or affecting the Purchaser, at law or in equity, or before or by any
federal, state, municipal or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind wherever located,
which would inhibit Purchaser or prevent Purchaser from fulfilling its
obligations hereunder; and the Purchaser is not in default under any law or
regulation or with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or federal, state, municipal
or other governmental agency or any instrumentality which would inhibit
Purchaser or prevent Purchaser from fulfilling its obligations hereunder.

 

26. Seller’s Responsibilities.

 

Seller represents and warrants to Purchaser as follows, as of the date hereof:

 

(a) Seller is a corporation duly organized and validly existing under and by
virtue of the laws of the State of Delaware and is in good standing in the State
of Delaware. Seller has all requisite power and authority to execute, deliver
and perform the transactions contemplated by this Contract, and prior to
Closing, will have taken all corporate actions necessary to consummate the
transaction contemplated by this Contract. No approvals or consents by third
parties or governmental authorities are required in order for Seller to
consummate the transactions

 

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contemplated hereby. The execution and delivery of this Contract and the
performance by Seller of its obligations hereunder will not conflict with, or
result in breach of, any of the terms, conditions and provisions of any charter,
articles or incorporation, bylaws or operating agreement binding upon Seller or
any of its constituent entities.

 

(b) Seller has not (i) made a general assignment for the benefit of the
creditors, (ii) admitted in writing its inability to pay its debts as they
mature, (iii) had an attachment, execution\ or other judicial seizure of any
property interest which remains in effect, or (iv) become generally unable to
meet its financial obligations as they accrue. There is not pending any case,
proceeding or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or recomposition of Seller or the debts of such parties
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors or seeking appointment of a receiver, trustee, custodian or other
similar official for it.

 

(c) No person or entity, other than Purchaser pursuant to this Contract, has any
conditional or unconditional right or option to purchase all or any portion of
the Premises.

 

(d) To Seller’s knowledge, there is no action or proceeding (zoning,
environmental or otherwise) or governmental investigation pending, or, to the
knowledge of Seller, threatened against, or relating to Seller or the Premises,
or the transactions contemplated by this Contract, that is material to the
condemnation of such transactions or that will result in cost or liability to
Purchaser by virtue of its ownership of the Premises.

 

(e) To Sellers’ knowledge, there are no pending, threatened, condemnation or
eminent domain proceedings relating to or affecting the Premises.

 

(f) Schedule D attached hereto lists all service, maintenance, supply and
maintenance contracts affecting the Premises (collectively “Service Contracts”),
and the information set forth therein is accurate as of the date hereof.

 

(g) Schedule E sets forth all of the equipment leases relating to equipment and
machinery presently located in and/or servicing the Premises to the extent such
equipment leases will remain in effect after the Closing Date or delivery of
possession, whichever is later (the “Equipment Leases”).

 

(h) To Seller’s knowledge (i) no Hazardous Materials (as hereafter defined) have
been used, handled, manufactured, generated, produced, stored, treated,
processed, transferred, or disposed of in, at or on the Premises during the
period of Seller’s ownership of the Premises, except in substantial compliance
with all applicable laws, and (ii) Seller has not received written notice from
any person or entity of any violation of any Environmental Laws of the presence
of Hazardous Materials at the Premises. For purposes of this Contract (y) the
term “Hazardous Materials” shall mean (a) any toxic substance or hazardous
waste, hazardous substance or related hazardous material, or any pollutant or
contaminant; (b) radon gas, asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
which contain dielectric fluid containing levels of polychlorinated biphenyls in
excess of presenting existing federal, state or local safety guidelines,
whichever are more stringent; (c) any substance, gas material or chemical which
is defined as or included in the definition of “hazardous substances”, “toxic
substances”, “hazardous materials”, “hazardous wastes” or words of similar
import under any federal, state or local statute, law, code, or ordinance or
under the regulations adopted or guidelines promulgated

 

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pursuant to thereto, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. §9061 et seq.; the Hazardous Materials Transportation Act, as amended, 49
U.S.C. §1801, et seq.; the Resource Conservation and Recovery Act, as amended,
42 U.S.C. §6901, et seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. §1261, et seq.; and (d) any other chemical, material, gas or
substance, the exposure to or release of which is prohibited, limited or
regulated by any governmental or quasi-governmental entity or authority that has
jurisdiction over the Premises or the operations or activity as Premises, and
(z) the term “Environmental Laws” means all presently existing applicable
present statutes, regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions, franchises, agreements
and similar items, of or which any and all governmental agencies, departments,
commissions, boards, bureaus or instrumentalities of the United States, states
and political subdivisions thereof and all applicable judicial administrative
and regulatory decrees, judgments and orders relating to the protection of human
health or the environment.

 

(i) Except as provided in Schedule F, Seller has not received notice from any
governmental authority, mortgage, tenant, insurer or other party (i) that either
the Premises or the use or operation of the Premises as currently in violation
of any zoning or other land use regulations or environmental laws of
regulations, and to Seller’s knowledge no such notice has been issued; (ii) that
Seller is currently in violation of any ordinance, law or regulation or order of
any governmental or any agency, body or subdivision thereof (including, without
limitation, the local building department) or the recommendation of any
insurance carrier or Board of Fire Underwriters affecting the Premises, or that
any investigation has been commenced, or is contemplated, regarding any such
possible violation; or (iii) asserting that Seller is legally required to
perform work at the Premises and to Seller’s knowledge no such notice has been
issued.

 

(j) Except as set forth in Schedule D attached hereto, there are no union or
employment contracts or agreement (written or oral) affecting the Premises and
there are no employees of Seller at the Premises, and Seller shall indemnify
Purchaser against any loss, cost or expense resulting from any matter relating
to employees retained by Seller or on Seller’s behalf (including any management
or services agreement) which arise from acts or actions on or before the Closing
Date or thereafter to the extent that Seller or its affiliates continue to
retain any such employees after the Closing Date.

 

  (k) Seller is the sole owner of the Premises.

 

(l) The Leases listed on Schedule C are the only leases, licenses, tenancies,
possession agreements and occupancy agreements affecting the Premises on the
date of this Agreement in which Seller holds the lessor’s, licensor’s or
grantor’s interest and there are no other leases, licenses, tenancies,
possession agreements, occupancy agreements or other written agreements
affecting the Premises (other than subleases, licenses, tenancies or other
possession or occupancy agreements which may have been entered into by the
Tenants, or their predecessors in interest, under such Leases); true and
complete copies of the Leases listed on Schedule C (including any guaranties of
the Leases) in the possession or under the control of Seller have been delivered
to Purchaser; such Leases are in full force and effect and none of them has been
modified, amended or extended, except as set forth on Schedule C; and, except as
set forth on Schedule C, Seller as lessor under such Leases, has (a) not
received any notice that asserts that Seller is in default of any of its
obligations under such Leases which has not been cured or (b) neither sent a
notice of default to any Tenant under a Lease which has not been cured nor has
knowledge of a default by a Tenant of any

 

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material obligation under a Lease except for the rent arrearages set forth on
Schedule C; Base Rent and Additional Rent were billed to the Tenants for the
month of July, 2004, in accordance with the schedule set forth on Schedule C; no
Tenant is in arrears in the payment of the rent for more than the current
calendar month, except as set forth on Schedule C; no Tenant is entitled to, and
no claim in writing has been made for “free” rent, rent concessions, rebates,
rent abatements, set-offs, or offsets against rent or tenant improvement
allowances other than in accordance with the Lease with such Tenant; all work
required to be performed by the lessor under each of the Leases has been
completed and fully paid for in accordance with provisions of the Leases, except
as set forth on Schedule C; Seller has not consented in writing to any
subleases, except as set forth on Schedule C, Schedule C lists all written
sublease agreements in Seller’s possession; and Schedule C lists all Tenants,
the date of each Lease and any amendments thereto, any guaranties of the Leases,
and to the extent any such Leases was entered into during Seller’s period of
ownership of the Premises; the commencement dates and the rent commencement
dates. Except as set forth in the Leases, no renewals, extension or expansion
options or cancellation rights have been granted to any Tenant. Except with
respect to the lease for 485 Cameras & Electronics, Inc. (“C&E”), no brokerage
commissions are due with respect to leasing of the Space Leases. The Purchaser
acknowledges that there may be a commission owed to CB Richard Ellis (successor
in interest to Insignia/ESG) if C&E elects to extend its Lease and exercise its
renewal option in accordance with its Lease.

 

Notwithstanding anything to the contrary herein, Purchaser acknowledges that
Café Metro has been given the right to defer part of its rent payment
($10,000.00 per month from April 1, 2004 – December 31, 2004). The amount of the
deferral is to be made up by paying $5,000.00 per month (the “Make Up Payment”).
In addition to the rent due under Café Metro’s Lease with Seller, effective as
of January 1, 2005, the Purchaser agrees that to the extent it receives any Make
Up Payment it shall immediately pay the same to Seller.

 

(m) The Zoning Lot Development Agreement has not been modified by any instrument
not of record; neither to our knowledge, the developer under the zoning
declaration nor the Seller are in default under the ZELDA, which default remains
uncured nor, to the best of its knowledge, does there exist any state of facts
which, with the giving of notice, the passage of time, or both, would constitute
a default by Seller or the Developer under the ZELDA under the ZELDA.

 

All of the representations and warranties of each party set forth in this
Contract and any Schedule annexed hereto shall be true and correct in all
material respects upon the execution of this Contract and shall be deemed to be
repeated at and as of the Closing Date, and shall be true and correct in all
material respects as of the Closing Date. The representations and warranties of
Seller set forth in this Section shall survive the Closing for a period of
twenty-four (24) months within thirty (30) days of the end of the Due Diligence
Period (except with respect to Section 26(h) and (l) which shall survive
indefinitely) and no claim thereon shall be brought after the expiration of such
time period, provided that any claim based on any such representation or
warranty that has been timely asserted shall not be impaired in the event that
it has not been resolved prior to the expiration of such twenty-four (24) month
period.

 

27. Covenants Between Contract and Closing.

 

(a) Seller shall, to the extent able, and to the extent requested by Purchaser,
at its sole cost and expense, terminate, effective at or prior to the Closing,
all of the existing Service Contracts or indemnify Purchaser against any cost or
expense arising in connection with any Service

 

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Contract that shall not have been terminated as of the Closing

 

(b) Seller shall not enter into any new Service Contract without the prior
written consent of Purchaser unless such contract is terminable without penalty
at or prior to the Closing.

 

(c) After the end of the Due Diligence Period, Seller shall not undertake or
commence any capital renovations or alterations at the Premises in excess of
$5,000,000.00, except those necessary to comply with any of the provisions of
this Contract, any applicable law or to operate the Building, without the prior
written consent of Purchaser, which consent shall not be unreasonably withheld,
conditioned or delayed.

 

(d) Seller shall not withdraw, settle or otherwise compromise any protest or
reduction proceeding affecting real estate taxes assessed against the Premises
for any fiscal period in which the Closing is to occur and the Due Diligence
Period has ended or any subsequent fiscal period without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld. Real
estate tax refunds and credits received after the Closing Date which are
attributable to fiscal tax years prior to the fiscal tax year in which the
Closing occurs shall be paid to Seller, after deducting the expenses of
collection thereof; real estate tax refunds and credits received after the
Closing Date which are attributable to the fiscal tax year during which the
Closing Date occurs shall be apportioned between Seller and Purchaser, after
deducting the expenses of collection thereof, and real estate tax refunds and
credits which are attributable to any fiscal tax year following the fiscal tax
year in which the Closing occurs shall remain the sole property of Purchaser. In
the event any amounts or credits that, under this Section are payable to Seller
shall have been received by Purchaser, then such amounts or credits shall be
received by Purchaser in trust for Seller and shall be promptly forwarded to
Seller at the address set forth herein. The obligations set forth in the
preceding sentence shall survive the Closing.

 

(e) Subject to the Confidentiality Agreement(s) and specifically the provisions
concerning Trade Secrets, Seller shall allow Purchaser and/or its
representatives (provided Sellers representative accompanies the Seller and/or
its representatives) reasonable access to the Premises upon reasonable prior
notice and at reasonable times. Seller shall make available to Purchaser or its
representatives upon reasonable prior notice and at reasonable times such
maintenance and other records concerning the operation of the Premises as may be
reasonably requested by Purchaser (except for records that Seller reasonably
determines to be proprietary or confidential, and which relate to its affiliates
Trade Secrets), and Purchaser shall have the right, at Purchaser’s sole cost and
expense, to copy such maintenance records, operating manuals, plans and
specifications, and other records relating to the Premises and in Seller’s
possession or control as Purchaser may reasonably request, which right shall
survive the Closing for ninety (90) days.

 

(f) Seller shall promptly deliver to Purchaser notice of all actions, suits,
claims and other proceedings to which Seller is made a party and which affect
the Premises, or the use, possession or occupancy thereof, and shall (i) not
default, settle or compromise any such action, suit, claim or other proceeding
if such default, settlement or compromise would materially adversely affect
Purchaser or the Premises, and (ii) give Purchaser reasonable prior notice of
its intent to settle or compromise any such action, suit, claim or other
proceeding.

 

(g) Seller shall maintain to the extent reasonably necessary, all Permits in
full

 

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force and effect.

 

(h) Seller shall promptly deliver to the Purchaser copies of any notes or
notices of any Violation applicable to the Premises to the extent received.

 

(i) Seller shall promptly deliver to Purchaser notice of any actual or
threatened condemnation of the Premises or any portion thereof.

 

(j). Seller shall pay the aggregate amount of any New York State and City real
property transfer taxes payable in connection with this transaction including,
without limitation, the Real Property Transfer Tax imposed upon Seller by Title
II of Chapter 46 of the Administrative Code of the City of New York and the
amount of the documentary stamps to be affixed to the Deed in accordance with
Article 31 of the Tax Law of the State of New York (“Conveyance Taxes”). Seller
will also deliver to Purchaser the return(s) required by said statutes and the
regulations issued pursuant to the authority thereof, duly signed and sworn to
by Seller; Purchaser agrees to sign and swear to the return(s) and to cause the
check and return(s) to be delivered to the appropriate officer immediately after
the Closing. Purchaser shall pay all other recording fees on the Deed. Seller
hereby agrees to indemnify, defend and hold Purchaser harmless from and against
any and all liability, loss, cost, judgment, claim, counterclaim, damage or
expense (including, without limitation, attorneys’ fees and expenses), in
connection with the payment of Conveyance Taxes as required hereunder. The
provisions of this Section shall survive the Closing.

 

(k) Seller agrees that it shall not knowingly create or incur any violation,
mortgage, deed of trust, lien, pledge or other encumbrance in any way affecting
any portion of the Premises other than the Permitted Exceptions.

 

(l) Seller agrees that it shall not sell, lease, transfer, release, modify,
waive or encumber any development rights or similar rights appurtenant to the
Premises, if any, to the extent they may exist.

 

(m) Seller shall maintain the Premises in its current condition, subject to
reasonable wear and tear and Seller will deliver all mechanical systems, cooling
tower and roof intact, reasonable wear and tear excepted.

 

28. Conditions to Closing.

 

The obligations of Purchaser to consummate the transaction contemplated by this
Agreement are, in addition to the other terms and conditions of this Agreement,
subject to the following (any one ore more of which may be waived in whole or in
part by Purchaser at its discretion):

 

(i) The representations and warranties made by Seller in this Agreement being
true and correct in all material respects when made and on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made as of the Closing Date, and Seller shall deliver a
certificate to such effect at Closing;

 

(ii) Seller having performed in all material respects all covenants and
obligations in all material respects required by this Agreement to be performed
by Seller on or prior

 

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to the Closing Date;

 

(iii) All Maintenance and Service Contracts that may be terminated are
terminated in accordance with this Contract;

 

(iv) Purchaser receiving, at Closing, an ALTA Owner’s Extended Coverage Policy
of Title Insurance insuring good, clear record, marketable, insurable fee simple
title to the Premises subject only to the Permitted Exceptions, with
commercially standard endorsements or similar type of property;

 

(v) Seller shall request from each of the Space Tenants of the Premises, (A) an
estoppel certificate in the form attached as Exhibit 4 (“Estoppels”) and (B) to
extent requested by Purchaser, a subordination, non-disturbance and attornment
agreement substantially in the form attached as Exhibit 5 (“SNDA”) for the
benefit of Purchaser’s lender. Purchaser acknowledges that one tenant, Fifth
Avenue Generation, Inc. (“Generation”) has made certain claims against the
Seller which have been denied by Seller concerning among other things, damage to
the air conditioning unit and pipes in the space. Purchaser acknowledges it has
been made aware of the claims and if Generation delivers an estoppel certificate
with certain objections, Purchaser remains obligated to accept the estoppel
certificate and it shall not be a default under the terms of this Agreement. If
Seller is unable to obtain and deliver Estoppels for seventy percent (70%) of
the space occupied by Space Tenants (the “70%”) prior to the Closing Date, then
the Seller will provide an estoppel certificate to ensure the Purchaser does
obtain the 70% and Purchaser will waive the foregoing requirement (“Landlord’s
Estoppels”). In the event the Landlord’s Estoppels are materially false and the
Purchaser is actually damaged by the information provided in the Landlord’s
Estoppel then Seller shall be responsible for any claims, damages and/or
expenses arising from the material misrepresentation in the Landlord’s
Estoppels.

 

29. Escrow Provisions.

 

With respect to the Deposit and the Guaranty, Escrow Agent is instructed as
follows:

 

(a) Five business days after the end of the Due Diligence Period, if no
Acceptance Notice has been received, the Escrow Agent will promptly return the
Downpayment and the Guaranty.

 

  (b) the Closing, the Deposit then being held shall be paid over to Seller.

 

(c) In the event Purchaser shall fail to close title by reason of Purchaser’s
default, the parties agree that the damages that Seller will sustain as a result
thereof will be difficult, if not impossible, to ascertain and therefore, the
parties hereby authorize and direct Escrow Agent to pay the Deposit then being
held to Seller who may retain it as part of its liquidated damages and deliver
the Guaranty to the Seller.

 

(d) In the event of Seller’s willful default and failure to convey title, the
Deposit then being held shall be paid over to Purchaser.

 

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(e) The Deposit will be maintained in an interest bearing account at HSBC Bank
located at 415 Madison Avenue, New York, New York. Any interest earned on the
Deposit when received shall similarly be held in escrow by Escrow Agent and
(i) if the Deposit under the terms of this Contract is to be paid over to
Purchaser, then such interest shall similarly be paid over to Purchaser or
(ii) if the Deposit is to be paid over to Seller, then such interest shall
similarly be paid over to Seller.

 

(f) Escrow Agent, by signing this Contract at the end hereof where indicated,
signifies its agreement to hold the Deposit and Guaranty for the purpose and as
provided in this Section and to be bound by the terms hereof.

 

(g) In the event that any dispute shall arise with respect to the entitlement of
either party to the Deposit and/or the Guaranty, Escrow Agent shall have the
right at any time to commence an action in interpleader and to deposit and/or
the Guaranty with the clerk of a court of appropriate jurisdiction in the State
of New York. Upon the commencement of such action and the making of such
deposit, Escrow Agent shall be released and discharged from any and all further
obligations and responsibilities hereunder.

 

(h) Escrow Agent shall not incur any liability by reasons of any action or
non-action taken by it in accordance with this Section or pursuant to the
judgment or order of a court of competent jurisdiction. Escrow Agent shall have
the right to rely upon the genuineness of all certificates, notices and
instruments delivered to it pursuant hereto, and all the signatures thereto or
to any other writing received by Escrow Agent purporting to be signed by any
party hereto, and upon the truth of the contents thereof. Before making payment
or delivery of any moneys or documents held by Escrow Agent pursuant thereto,
Escrow Agent shall have the right to require delivery to it of an executed and
acknowledged receipt for the subject matter of the delivery to be made by it. In
the event of any dispute between the parties as to whether either party is in
default hereunder or as to any other material fact, Escrow Agent shall have the
right to refrain from taking any further action with respect to the subject
matter of the escrow until it is reasonably satisfied that such dispute is
resolved or action by Escrow Agent is required by an order or judgment of a
court of competent jurisdiction.

 

(i) At Closing, the Downpayment shall be paid to Seller. If for any reason the
Closing shall not have occurred and either party shall have made a written
demand upon Escrow Agent for payment of the Downpayment or release of the
Guaranty, Escrow Agent shall given written notice to the other party of such
demand. If Escrow Agent shall not have received a written objection from the
other party to the proposed payment or Guaranty release within seven
(7) business days after the giving of such notice, Escrow Agent is hereby
authorized to make such payment. If Escrow Agent does receive such written
objection within such seven (7) business day period, shall elect not to make
such payment, Escrow Agent shall continue to hold such amount until otherwise
directed by (i) written notice from the objecting party withdrawing its
objection, or (ii) joint written instructions from the parties to this Contract,
or (iii) a judgment to order of a court;

 

(j) Seller and Purchaser jointly and severally agree to indemnify and save the
Escrow Agent harmless from all loss, liability, costs and expenses (including
attorneys’ fees and disbursements paid to retained attorneys or representing the
fair value of legal services rendered by

 

24

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the Escrow Agent and disbursements incurred in connection therewith) incurred by
the Escrow Agent in connection with acting as the Escrow Agent hereunder.
Purchaser acknowledges that the Escrow Agent may act as attorney for Seller if
any such dispute should arise between the parties hereto concerning the Deposit
or for any other reason in connection with this Contract.

 

30. Transfer of Title.

 

(a) The deed to the Premises (the “Deed”) shall be the usual Bargain and Sale
Deed without Covenants in statutory short form for recording and shall be duly
executed and acknowledged so as to convey to Purchaser the title to the
Premises, free of all encumbrances, except as set forth in Schedule B, and shall
contain the covenant required by subdivision 5 of Section 13 of the Lien Law.

 

(b) At the Closing, Seller shall deliver a certified or bank check to the order
of the recording officer of the county in which the Deed is to be recorded for
the amount of the documentary stamps to be affixed to the Deed in accordance
with Article 31 of the Tax Law, and a certified or bank check to the order of
the New York City Department of Taxation and Finance, or the Title Company, for
the transfer taxes imposed by the City of New York, and a certified or bank
check to the order of the appropriate officer for any other tax payable by
reason of the delivery of the Deed, and a return or returns in respect of the
Deed, if any be required, duly signed and sworn to by Purchaser. Seller agrees
to sign (and swear to, if appropriate) such returns.

 

31. Liquidated Damages and Guaranty.

 

If Purchaser shall default in the performance of its obligations under this
Contract to and purchase the Premises, the remedy of Seller shall be to receive
as liquidated damage amount equal to the sum of $10,000,000.00 (“Liquidated
Damage Sum”, consisting of the Initial Deposit and the Further Deposit and the
Guaranteed Sum as defined herein). To cause payment of the Liquidated Damage
Sum, the Seller may retain the Initial Deposit and the Further Deposit, and to
either be paid by the Purchaser the differential between the aforesaid deposits
and the Liquidated Damage Sum including the right to collect the Guaranteed Sum
against the Guarantors, as described below, for the amount not to exceed
$5,800,000.00. Once the Liquidated Damage Sum has been collected and paid to
Seller, this Contract shall then be null and void, and the parties hereto shall
have no further rights, obligations or liabilities hereunder. As a material
inducement for Seller to enter into this Agreement and to ensure that the
Guaranteed Sum is paid, if the same is due to Seller, Hymie Mamiye, Charles
Mamiye, Jack Forgash, Morris Cohen, jointly and severally (“Guarantors”)
personally guarantee payment of an amount equal to $5,800,000.00 (“Guaranteed
Sum”). The Seller shall only be entitled to be paid the Guaranteed Sum by
Guarantors if the Initial Deposit and the Further Deposit become due and owing
to Seller as a result of Purchaser’s default. Simultaneously herewith,
Guarantors shall enter into the form of Guarantee attached hereto as Exhibit 3.
The Guarantee provided for herein does not in any way obviate the Purchaser from
its obligations under the Contract to pay the Initial Deposit and Further
Deposit in case of default by Purchaser hereunder. As provided herein, the
Guaranty will terminate and be deemed of no further force and effect at the
Closing or as a result of a default by Seller.

 

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32. Sellers Closing Obligations.

 

At the Closing, Seller shall deliver the following to Purchaser:

 

(a) A statutory form of bargain and sale deed with covenant against grantor’s
acts, containing the covenant required by Section 13 of the Lien Law, and
properly executed in proper form for recording so as to convey the title
required by this contract and a general bill of sale for the personal property
conveying, as more particularly set forth therein to Purchaser, all of Seller’s
right, title and interest in and to the personal property (“Personal Property”).

 

(b) All Leases initialed by Purchaser.

 

(c) An unpaid schedule of all security deposits and a check or credit to
Purchaser in the amount of any cash security deposits, including any interest
thereon, held by Seller on the Closing Date or, if held by an Institutional
Lender, an assignment to Purchaser and written instructions to the holder of
such deposits to transfer the same to Purchaser, and appropriate instruments of
transfer or assignment as set forth in Schedule C with respect to any security
deposits which are other than cash.

 

(d) A schedule updating the rent Schedule and setting forth all arrears in rents
and all prepayments of rents.

 

(e) All Service Contracts initialed by Purchaser and all others in Seller’s
possession which are in effect on the Closing Date and which may not be
terminated by their terms and which Purchaser has elected to accept which are to
be assignable by Seller to Purchaser.

 

(f) An assignment to Purchaser, without recourse or warranty, of all of the
interest of Seller in those Service Contracts, insurance policies, certificates,
permits and other documents to be delivered to Purchaser at the Closing which
are then in effect and are to be assigned by Seller to Purchaser.

 

(g) To the extent they are then in Seller’s possession and not posted at the
Premises, certificates, licenses, permits, authorizations and approvals issued
for or with respect to the Premises by governmental and quasi-governmental
authorities having jurisdiction.

 

(h) Such affidavits as Purchaser’s title company shall reasonably require in
order to omit from its title insurance policy all exceptions for judgments,
bankruptcies or other returns against persons or entities whose names are the
same as or similar to Seller’s name.

 

(i) Checks to the order of the appropriate officers in payment of all applicable
real property transfer taxes (including the New York City and New York City
Transfer taxes) and copies of any required tax returns therefor executed by
Seller, which checks shall be certified or official bank checks if required by
the taxing authority, unless Seller elects to have Purchaser pay any of such
taxes and credit Purchaser with the amount thereof, and

 

(j) A certification of non-foreign status, in form required by the Internal
Revenue Service, signed under penalty of perjury. Seller understands that such
certification will be retained by Purchaser and will be made available to the
Internal Revenue Service on request.

 

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(k) To the extent they are then in Seller’s possession, copies of and payroll
records. Seller shall make all other Building and tenant files and records
available to Purchaser for copying, which obligation shall survive the Closing.

 

(l) An original letter, executed by Seller or by its agent, with respect to each
tenancy, advising the respective tenants of the sale of the Premises to
Purchaser and directing that rents and other payments thereafter be sent to
Purchaser or as Purchaser may direct.

 

(m) If Seller is a corporation and if required by Section 909 of the Business
Corporation Law, a resolution of Seller’s board of directors authorizing the
sale and delivery of the deed and a certificate executed by the secretary or
assistant secretary of Seller certifying as to the adoption of such resolution
and setting forth facts showing that the transfer complies with the requirements
of such law. The deed referred to in 27(a) shall also contain a recital
sufficient to establish compliance with such law.

 

(n) Possession of the Premises in the condition required by this contract,
subject to the Leases and Tenancies, and keys therefor.

 

(o) A blanket assignment, without recourse or representation, of all Seller’s
right, title and interest, if any, to all contractors’, suppliers’,
materialmen’s and builders’ guarantees and warranties of workmanship and/or
materials in force and effect with respect to the Premises on the Closing Date
and a true and complete copy of each thereof.

 

(p) A certificate as set forth in Exhibit 6, confirming that the warranties and
representations of Seller that are set forth in this Contract are true and
complete as of the Closing Date.

 

(q) All plans, floor plans, architectural drawings, engineering plans and
studies and studies that relate to the land and the Premises and as built plans
for tenant’s improvements.

 

(r) Any other documents required by this Contract to be delivered by Seller.

 

(s) If able to be obtained using commercially reasonable efforts, an estoppel
certificate from the Developer under the zoning declaration in the form provided
in the declaration of zoning easement agreement dated June 30, 2000, as amended
and assigned (“ZELDA”), or, if such estoppel cannot be obtained, an estoppel
from Seller with respect to the matters contained in paragraph 24f of the ZELDA.

 

(t) An estoppel from Seller with respect to the ZELDA in the form provided in
the ZELDA documents.

 

33. Purchaser’s Closing Obligations.

 

At the Closing, Purchaser shall:

 

(a) Deliver to Seller checks or wire transfer of immediately available federal
funds to Seller, in payment of the portion of the Purchase Price payable at the
Closing, as adjusted for apportionments under Section 6, plus the amount of any
Security Deposits, if any, assigned herein.

 

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(b) Deliver to Seller an agreement with respect to tenants’ Security Deposits as
set forth in Schedule C.

 

(c) Cause the deed to be recorded, duly complete all required real property
transfer tax returns and cause all such returns and checks in payment of such
taxes to be delivered to the appropriate officers promptly after the Closing.

 

(d) Deliver to Seller an agreement assuming all of Seller’s (or Landlord’s)
obligations under the Leases from and after the Closing Date and indemnifying
and agreeing to defend Seller against any claims made by tenants with respect to
any failure to perform such obligations.

 

(e) Deliver to Seller a certificate confirming that the warranties and
representations of Purchaser set forth in this contract are true and complete as
of the Closing Date.

 

(f) Pay any sales tax due on the transfer of the Personal Property.

 

(g) Deliver any other documents required by this Contract to be delivered by
Purchaser.

 

34. Further Assurances.

 

The parties each agree to do such other and further acts and things, and to
execute and deliver such instruments and documents (not creating any obligations
additional to those otherwise imposed by this Contract), and which may
reasonably request from time to time, whether at or after the Closing, in
furtherance of the purposes of this Contract. The provisions of this Section
shall survive the Closing.

 

35. FIRPTA.

 

Seller acknowledges that it is not a foreign person, as that term is defined for
purposes of the Foreign Investment in Real Property Tax Act, Internal Revenue
Code, Section 1445, as amended, and the regulations promulgated thereunder
(collectively “FIRPTA”). At the Closing, Seller shall deliver an affidavit to
Purchaser, in a form complying with the provisions of FIRPTA, stating that
Seller is not a foreign person for purposes of FIRPTA.

 

36. Confidentiality.

 

Seller and Purchaser each agrees until the end of the Due Diligence Period to
keep the execution and delivery of this Contract confidential; disclosing
neither its existence nor its terms to any person other than the respective
executive officers and members of Purchaser, and Seller, and the respective
attorneys of Seller and Purchaser. Purchaser further agrees that any information
about the Premises which it obtains during the Due Diligence Period shall remain
confidential and shall not be disclosed to any third party unless required by a
court of competent jurisdiction. All confidential

 

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information about the Premises shall remain the property of Seller, and
Purchaser shall have no proprietary or other interest in such information unless
it shall acquire title to the Premises pursuant to the terms hereof. Purchaser
agrees to hold all such information in trust and agrees to return, and not
retain, any copies of confidential information upon request of Seller. Neither
Seller nor Purchaser shall respond to any press inquiry nor make any press
release without the prior written consent of the other. The foregoing shall not
restrict or prohibit Seller from disclosing any information or filing any
documents as required by any law, rule, regulation or governmental agency,
including, without limitation, the Securities and Exchange Commission or
disclosing such documents to its attorneys, advisers, brokers or mortgage
lenders.

 

37. Union Agreements.

 

The Seller warrants and represents that it is not a signatory to any union
agreements. Notwithstanding the foregoing, Seller and Purchaser acknowledge that
§22-505 of the Administrative Code of the City of New York (the “Building
Service Employee Protection Law”) establishes certain requirements concerning
the job security of building service employees that apply upon the transfer of a
building service contract including the transfer of a building contract in
connection with the sale of certain residential buildings and certain
commercial, institutional, or retail buildings. Seller shall ensure compliance
with the notice obligations set forth in §22-505(b)(1)-(4) (the “Law”) of the
Building Service Employee Protection Law, and Purchaser shall ensure compliance
with the substantive obligations of the Building Service Employee Protection
Law. Purchaser warrants and represents that it has certain requirements as to
the building employees in accordance with the law and shall be responsible to
comply. If the provisions of the law are complied with, then Purchaser shall
indemnify and hold Seller harmless for any claims, costs or damages (including
reasonable attorneys’ fees) incurred by because of Purchaser’s failure to comply
with its obligations under the Building Service Employee Protection Law.

 

38. Certificate of Occupancy.

 

Purchaser acknowledges that the Building was constructed prior to the date
Certificates of Occupancy (“CO”) were issued. However, because of a use change
on the ground floor, pursuant to the City of New York Building Code, there is
now a necessity for a CO for the retail space which is currently being operated
with a temporary CO. Seller will deliver the Premises at Closing with a valid
temporary CO and shall use reasonable efforts to provide a permanent Certificate
of Occupancy. Purchaser acknowledges that the status of the CO is not in control
of Seller.

 

39. Miscellaneous.

 

(a) This Contract and the Schedules and Exhibits annexed hereto constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof, and all understanding and agreements heretofore or simultaneously had
between the parties hereto are merged in and are contained in this Contract and
the Schedules and Exhibits.

 

(b) No provision of this Contract may be waived, changed, modified or discharged
orally, except by an agreement in writing signed by the party against who any
waiver, change, modification or discharge is sought.

 

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(c) The captions or article titles contained in this Contract and the Index, if
any, are for convenience and reference only and shall not be deemed a part of
this context of this Contract.

 

(d) This Contract shall be governed by and construed in accordance with the laws
of the State of New York.

 

(e) The terms “hereof,” and “hereunder,” and words of similar import, shall be
construed to refer to this Contract as a whole, and not to any particular
article or provisions, unless expressly so stated.

 

(f) The Schedules and Exhibits annexed hereto are hereby incorporated and made a
part of this Agreement.

 

(g) All words or terms used in this Contract, regardless of the number or gender
in which they are used, shall be deemed to include any other number and any
other gender as the context may require.

 

(h) This Contract shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns, if any, but nothing contained herein shall be deemed a
waiver of the provisions of Section 24 hereof. None of the provisions of this
Contract are intended to be, nor shall they be construed to be, for the benefit
of any third party.

 

(i) This Contract may not be recorded by Purchaser without the prior written
consent of Seller, which may be withheld for any or no reason. If Purchaser
breaches the provisions of this Paragraph, it will be deemed a default under the
terms and conditions of this Contract. The filing of any action for specific
performance by the Purchaser against the Seller is not deemed a violation of
this paragraph.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Contract the day
and year first above written.

 

SELLER: TOMMY HILFIGER 485 FIFTH, INC. /s/ Steven R. Gursky By:     Its:  
Secretary PURCHASER: PARK & 5TH PROPERTY LLC /s/ Hyman Mamiye By:   Hyman Mamiye
Its:   Mgr

 

ESCROW AGENT:

 

GURSKY & PARTNERS, LLP

 

/s/ Steven R. Gursky By:   Steven R. Gursky

 

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