Exhibit 10.15

SUBORDINATE MORTGAGE NOTE

 

$12,000,000.00   As of May 23, 2013   Melville, New York

FOR VALUE RECEIVED, 60 EAST 42ND ST. ASSOCIATES L.L.C. (F/K/A 60 EAST 42ND
ASSOCIATES), a New York limited liability company, with offices at c/o Malkin
Holdings LLC, 60 East 42nd Street, New York, New York 10165 (the “Maker”),
promises to pay to SIGNATURE BANK, a New York banking corporation, having an
office at 68 South Service Road, Melville, New York 11747 (the “Payee”), or such
other place as may be designated in writing by the holder of this Note, the
principal sum of Twelve Million and 00/100 Dollars ($12,000,000.00) or so much
thereof as shall have been advanced to the Maker pursuant to the terms of a loan
agreement of even date herewith between the Maker and the Payee (the “Loan
Agreement”), together with interest as hereinafter provided.

All outstanding principal and accrued and unpaid interest shall be due and
payable on November 5, 2014 (the “Maturity Date”).

Until the interest rate on this Note is fixed as set forth below, amounts
outstanding under this Note shall bear interest at an annual rate equal at all
times to the greater of (i) three and three quarters of one percent (3.75%) or
(ii) one half of one percent (1/2%) plus the Prime Rate of the Payee (the
“Variable Rate”). The “Prime Rate” is the rate established from time to time by
the Payee as its “Prime Rate”. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
Such annual rate will change on the effective date of any change in the Prime
Rate. The Payee will not be obligated to notify the Maker of any change in the
Prime Rate.

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

 

  (a) Option A: The greater of (i) three and three quarters of one percent
(3.75%) or (ii) 275 basis points in excess of the weekly average yield on United
States Treasury Securities adjusted to a maturity closest to the Maturity Date
as most recently made available by the Federal Reserve Board as of two
(2) Business Days prior to the effective date of the fixing of the interest
rate. If the Maker elects Option A, the Maker shall be subject to the payment of
prepayment fees as set forth below.

--------------------------------------------------------------------------------

  (b) Option B: The greater of (i) four percent (4.00%) or (ii) 300 basis points
in excess of the weekly average yield on United States Treasury Securities
adjusted to a maturity closest to the Maturity Date as most recently made
available by the Federal Reserve Board as of two (2) Business Days prior to the
effective date of the fixing of the interest rate. If the Maker elects Option B,
the Maker may prepay this Note during the term of this Note without any
prepayment fees.

Interest shall be payable commencing on June 10, 2013 and monthly thereafter on
the tenth (10th) day of each month (the “Debit Date”). Interest shall be
calculated on the basis of a 360-day year and collected on the basis of the
actual number of days elapsed.

Monthly payments on this Note will be of interest only.

Until the Debt (as defined in the Mortgage, as hereinafter defined) has been
repaid in full, the Maker agrees to maintain an operating account (account
#15020xxxxx) for the Mortgaged Property (as hereinafter defined) with the Payee.
Maker hereby unconditionally and irrevocably authorizes the Payee to
automatically debit from such account any and all payments due hereunder and
unconditionally warrants and represents to Payee that it shall, until the Debt
has been repaid in full, maintain sufficient funds in such account to pay same.
Time is of the essence as to all dates set forth herein, provided, however, that
whenever any payment that is to be made under this Note shall be stated to be
due on a Saturday, Sunday or public holiday or the equivalent for banks
generally under the laws of the State of New York (any other day being a
“Business Day”), such payment shall be made on the next succeeding Business Day.

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

 

2

--------------------------------------------------------------------------------

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

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

This Note is secured by a mortgage (the “Mortgage”) made by the Maker to the
Payee of even date herewith on Maker’s fee interest in the property situate at
60 East 42nd Street, New York, New York.

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

 

3

--------------------------------------------------------------------------------

This Note may not be changed or terminated orally.

 

60 EAST 42ND ST. ASSOCIATES L.L.C. By:   /s/ Anthony E. Malkin Name:   Anthony
E. Malkin Title:   Member

 

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

On the 21st day of May, 2013, before me, the undersigned, personally appeared
Anthony E. Malkin, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacities, and that by his signatures on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.

 

/s/ Judy H. Love

Notary Public

 

4

--------------------------------------------------------------------------------

Subordinate Mortgage Note

 

 

 

60 EAST 42ND ST. ASSOCIATES L.L.C.

(F/K/A 60 EAST 42ND ASSOCIATES)

- to -

SIGNATURE BANK

 

 

 

Premises: 60 East 42nd Street, New York, New York

The within premises lie in

Section 5, Block 1276, Lot 42

in New York County

CULLEN AND DYKMAN LLP

100 QUENTIN ROOSEVELT BOULEVARD

GARDEN CITY, NEW YORK 11530

 

5

--------------------------------------------------------------------------------

SUBORDINATE MORTGAGE

THIS MORTGAGE, made as of the 23rd day of May, 2013, between 60 EAST 42ND ST.
ASSOCIATES L.L.C., a New York limited liability company, with offices at c/o
Malkin Holdings LLC, 60 East 42nd Street, New York, New York 10165 (the
“Mortgagor”) and SIGNATURE BANK, a New York banking corporation, having an
office at 68 South Service Road, Melville, New York 11747 (the “Mortgagee”).

W I T N E S S E T H

WHEREAS, the Mortgagor is now the owner in fee simple of the entire premises
hereinafter described by metes and bounds as set forth on the attached
Schedule A (the “Premises”); and

WHEREAS, the Mortgagor is the owner in fee simple of the buildings and
improvements now or hereafter located on the Premises (the “Improvements”); and

WHEREAS, the Mortgagor is now indebted to the Mortgagee in the sum of Twelve
Million and 00/100 Dollars ($12,000,000.00), lawful money of the United States,
to be paid according to a certain subordinate mortgage note bearing even date
herewith (the “Note”) and to be advanced in accordance with the terms and
conditions of a loan agreement of even date herewith between the Mortgagor and
the Mortgagee (the “Loan Agreement”), together with any additional sums due
under the terms of the Note, the Loan Agreement and this Mortgage (the “Debt”).

NOW, THEREFOR, to secure the payment of the Debt, the Mortgagor hereby mortgages
to the Mortgagee, the Premises and the Improvements together with:

 

  (A) all right, title and interest of the Mortgagor in and to the land lying in
the streets and roads in front of and adjoining the Premises;

 

  (B) (a) all appurtenances to the Mortgaged Property, as hereinafter defined;

(b) to the extent owned by the Mortgagor, all machinery, equipment, fixtures
(including, but not limited to, all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) and other property of every kind
and nature whatsoever owned by the Mortgagor, or in which the Mortgagor has or
shall have an interest, now or hereafter located upon the Mortgaged Property or
appurtenances thereto and usable in connection with the Mortgaged Property (the
“Equipment”), and the right, title and interest of the Mortgagor in and to any
of the Equipment which may be subject to any security agreements (as defined in
subdivision (A)(73) of Section 9-102 of the Uniform Commercial Code of New
York), superior in lien to the lien of this Mortgage;

 

1

--------------------------------------------------------------------------------

(c) all awards or payments, including interest thereon, which may be made with
respect to the Mortgaged Property, whether from the exercise of the right of
eminent domain (including any transfer made in lieu of the exercise of said
right) or for any other injury to or decrease in the value of the Mortgaged
Property, to the extent of Mortgagor’s interest therein;

(d) all leases and other agreements affecting the use or occupancy of the
Mortgaged Property now or hereafter entered into (the “Leases”) and the right to
receive and apply the rents, issues and profits of the Mortgaged Property (the
“Rents”) to the payment of the Debt, to the extent of Mortgagor’s interest
therein;

(e) all proceeds of any unearned premiums on any insurance policies covering the
Mortgaged Property, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments or settlements made in lieu
thereof in reduction of the Debt, for damage to the Mortgaged Property, to the
extent of Mortgagor’s interest therein; and

(f) the right, in the name and on behalf of the Mortgagor, to appear in and
defend any action or proceeding brought with respect to the Mortgaged Property
and to commence any action or proceeding to protect the interest of the
Mortgagee in the Mortgaged Property.

The Premises, the Improvements and the Equipment together with the property,
rights and interests stated in Paragraphs (A) and (B) above are herein
collectively called the “Mortgaged Property”.

This is a subordinate mortgage subject to that certain consolidated mortgage
held of record by The Prudential Insurance Company of America in the original
consolidated principal amount of Ninety Six Million Twelve Thousand Five Hundred
Twenty Four and 00/100 Dollars ($96,012,524.00) which terms are set forth in the
Spreader, Consolidation and Modification of Mortgage and Security Agreement
dated as of November 5, 2009 and recorded in the Office of the City Register,
New York County on November 16, 2009 under CRFN 2009000xxxxxx which consolidates
the mortgages more fully described on Exhibit A annexed hereto and made a part
hereof (the “First Mortgage” or “Senior Mortgage”) and to the rights of the
holder of the First Mortgage (the “Senior Mortgagee”) in and to the Mortgaged
Property.

 

2

--------------------------------------------------------------------------------

And the Mortgagor covenants and warrants with the Mortgagee that:

1. The Mortgagor will pay the Debt as provided in the Note and as otherwise
provided herein.

2. The Mortgagor warrants the title to the Mortgaged Property subject to the
matters set forth in the title policy issued by First American Title Insurance
Company and insuring the lien of this Mortgage.

3. The Mortgagor will keep the Mortgaged Property insured against loss or damage
by fire with extended coverage, flood insurance, terrorism/war risk insurance
(to the extent available to the Mortgagor at commercially reasonable rates, as
determined by the Mortgagor in its reasonable discretion, which are comparable
to premiums per dollar of fire insurance coverage, in an amount not less than
the principal amount of the Debt) and such other hazards as the Mortgagee shall
from time to time require in amounts approved by the Mortgagee and shall pay the
premiums for such insurance as same become due and payable. All policies of
insurance (the “Policies”) shall be issued by an insurer reasonably acceptable
to the Mortgagee and shall contain the standard New York mortgagee clause
endorsement naming the Mortgagee loss payee and additional insured (subject to
the rights of the holder of the First Mortgage). The Mortgagor will assign and
deliver the Policies to the Mortgagee (subject to the rights of the holder of
the First Mortgage). Not later than fifteen (15) days prior to the expiration
date of each of the Policies the Mortgagor will deliver to the Mortgagee
satisfactory evidence of the renewal of each of the Policies. If the Mortgaged
Property is partially damaged by fire or other casualty, the Mortgagee shall
make seventy-five (75%) percent of the net insurance proceeds received by the
Mortgagee in connection with such damage available to the Mortgagor in order to
restore the Mortgaged Property, provided that: (i) the net insurance proceeds
are sufficient, in the opinion of the Mortgagee, to fully restore the Mortgaged
Property or, if such proceeds are insufficient to fully restore the Mortgaged
Property, the Mortgagor shall have deposited with the Mortgagee or, if required
by the holder of the First Mortgage, with the holder of the First Mortgage, cash
in an amount equal to the difference between the reasonably estimated cost of
restoring the Mortgaged Property and the amount of the net insurance proceeds;
(ii) the Mortgagor is not then in default under the terms of the Note or this
Mortgage; and (iii) in the opinion of the Mortgagee reasonably exercised the
Mortgaged Property can be fully restored within twelve (12) months from the
occurrence of such damage. The remaining twenty-five (25%) percent of the net
insurance proceeds shall be released to the Mortgagor once the renovation or
restoration is substantially completed and following such renovation or
restoration the rents under the Leases and income from the Mortgaged Porperty
are sufficient (as reasonably determined by Mortgagee) to pay the debt service
under the Note, the First Mortgage, real estate taxes on the Premises and the
operating expenses related thereto. If held by the Mortgagee, the Mortgagee will
hold all insurance proceeds in an interest-bearing money market account. The
interest earned thereon shall be the property of the Mortgagor and shall be
disbursed to the Mortgagor in the manner and for the purposes that insurance
proceeds are to be disbursed pursuant to this paragraph 3. In the event
insurance proceeds are made available to repair or restore the Mortgaged
Property in accordance with the foregoing, the Mortgagor shall retain an
architect, at its sole cost and expense (whose fees shall be paid out of the
insurance proceeds), who shall

 

3

--------------------------------------------------------------------------------

submit plans and specifications to the Mortgagee for the repair or restoration
of the Mortgaged Property (indicating that such repair or restoration can be
completed within the period provided for herein) and a budget itemizing the
projected costs of such repair or restoration. Such plans and specifications and
the budget are subject to the Mortgagee’s prior written approval (not to be
unreasonably withheld, delayed or conditioned). Prior to the commencement of any
repair or restoration the Mortgagor shall obtain, at its sole cost and expense,
all necessary permits and approvals therefor. If the insurance proceeds are held
by the Mortgagee and not by the holder of the First Mortgage, the Mortgagee
shall periodically disburse seventy-five (75%) percent of such net insurance
proceeds to pay for work completed or materials installed pursuant to the
approved plans and specifications and budget. The expenses incurred by the
Mortgagor (including, without limitation, architect’s and attorney’s fees and
all “soft” and “hard” costs in connection with such restoration) shall be paid
by the Mortgagor to the extent that seventy-five (75%) percent of the net
insurance proceeds are insufficient to pay for such expenses. The Mortgagee
shall not at any time be required to disburse any insurance proceeds to the
Mortgagor if the undisbursed balance of such net insurance proceeds is, in the
opinion of the Mortgagee, reasonably exercised, insufficient to timely complete
the restoration of the Mortgaged Property free and clear of all liens in
accordance with the aforesaid plans and specifications and budget. In the event
the Mortgaged Property is damaged to a greater extent than set forth above, in
the opinion of the Mortgagee, reasonably exercised, and subject to terms of the
First Mortgage, any sums paid to the Mortgagee by any insurer may be retained
and applied by the Mortgagee toward payment of the Debt in such priority and
proportions as the Mortgagee in its discretion shall deem proper or, at the
discretion of the Mortgagee, the same may be paid, either in whole or in part,
to the Mortgagor for such purposes as the Mortgagee shall designate. If the
Mortgagee shall receive and retain such insurance money, the lien of this
Mortgage shall be reduced only by the amount thereof received after expenses of
collection and retained by the Mortgagee and actually applied by the Mortgagee
in reduction of the Debt. The provisions of Subsection 4 of Section 254 of the
Real Property Law of New York covering the insurance of buildings against loss
by fire shall not apply to this Mortgage. The Mortgagee shall be entitled, in
the event of other insurance and contribution between the insurers, to receive
from the insurance moneys to be paid such an amount as would have been payable
under the policy or policies held for the benefit of the Mortgagee in case there
had been no contribution.

Notwithstanding anything contained in this paragraph 3 to the contrary, in the
event of a casualty loss covered by this Section 3, but subject to the
provisions of the First Mortgage, all insurance proceeds up to the sum of
$1,000,000.00 shall be paid directly to the Mortgagor as trustee on account of
the repair of the casualty to the Mortgaged Premises (subject to the rights of
the Senior Mortgagee). Said funds shall be paid by the Mortgagor to the
contractors/subcontractors on account of said work which shall be performed in
accordance with applicable municipal codes and the provisions of the Note or
this Mortgage and the First Mortgage.

Notwithstanding anything contained in this paragraph 3 to the contrary, provided
that no Event of Default shall have occurred and be continuing, the proceeds of
any rent loss or business interruption insurance will be paid to the Mortgagor
(subject to the rights of the Senior Mortgagee).

 

4

--------------------------------------------------------------------------------

Notwithstanding anything herein set forth to the contrary, all or any portion of
the insurance required to be maintained under this Mortgage may be issued by an
insurance company organized and owned in whole or in part by the Mortgagor and
the Ground Lessee or either of them, provided (i) that any such insurance
company shall reinsure substantially all of the risk underwritten by it and not
deemed reimbursable by government programs such as the Terrorism Risk Insurance
Program and (ii) such insurance company shall issue certificates of insurance in
form and substance satisfactory to the Mortgagee in its discretion reasonably
exercised. Such insurance company need not be rated by any insurance agency or
company.

4. The Mortgagor will pay all taxes, assessments, water rates, sewer rents and
other charges, including, without limitation, vault charges and license fees for
the use of vaults, chutes and similar areas adjoining the Premises, now or
hereafter levied or assessed against the Mortgaged Property (the “Taxes”) as
same become due and payable. The Mortgagor will deliver to the Mortgagee, within
thirty (30) days after such Taxes are due and payable, a receipted tax bill,
evidencing that the Taxes have been paid.

5. The Mortgagor, in addition to the payments of interest and principal or both
payable pursuant to the Note and this Mortgage, will pay to the Mortgagee on
each payment date an amount (the “Escrow Fund”) which would be sufficient to pay
the Taxes payable, or estimated by the Mortgagee to be payable, during the
ensuing twelve (12) months from the date of calculation, divided by the number
of Installments due during the period ending one (1) month prior to the date any
such real estate tax is payable. The Escrow Fund and the payments of interest or
principal or both payable pursuant to the Note and this Mortgage shall be added
together and shall be paid as an aggregate sum by the Mortgagor to the Mortgagee
(the “Installments”). The Mortgagee will apply the Escrow Fund to payments
required to be made by the Mortgagor pursuant to Paragraph 4 hereof. If the
amount of the Escrow Fund shall exceed the amounts due pursuant to Paragraph 4
hereof, the Mortgagee shall in its discretion: (a) return any excess to the
Mortgagor; (b) credit such excess against the Debt in such priority and
proportions as the Mortgagee in its discretion shall deem proper; or (c) credit
such excess against future payments to be made to the Escrow Fund. In allocating
such excess the Mortgagee may deal with the person shown on the records of the
Mortgagee to be the owner of the Mortgaged Property. If the Escrow Fund is not
sufficient to pay the Taxes, the Mortgagor shall pay to the Mortgagee, upon
request, an amount which the Mortgagee shall estimate as sufficient to make up
the deficiency, in default whereof the Mortgagee may apply any sums in its hands
to the payment of the following items in any order in its uncontrolled
discretion:

 

  (i) Taxes;

 

  (ii) Interest on the principal;

 

  (iii) Amortization of the principal;

 

  (iv) Late charges payable pursuant to the provisions hereof.

 

5

--------------------------------------------------------------------------------

Until expended or applied as above provided, any amounts in the Escrow Fund
shall constitute additional collateral security for the Debt and shall not bear
interest.

Notwithstanding the above, Mortgagor will not be required to escrow for Taxes
provided that no default shall exist hereunder beyond any applicable grace or
notice period and Mortgagor is providing Mortgagee with evidence of payment of
Taxes within thirty (30) days after the due date of the same.

6. Notwithstanding any taking by any public or quasi-public authority through
eminent domain or otherwise, the Debt shall not be reduced until any award or
payment therefor shall have been actually received after expenses of collection
and applied by the Mortgagee to the discharge of the Debt and the Mortgagee
shall not be limited to the interest paid on the award by the condemning
authority, but shall be entitled to receive out of the award interest on the
principal at the rate herein provided. The Mortgagee shall make the proceeds of
such award available for the restoration of the Mortgaged Property pursuant to
the provisions of paragraph 3 hereof, and any remaining proceeds after the
completion of such restoration may be applied by the Mortgagee to the discharge
of the Debt whether or not then due and payable. If the Mortgaged Property is
sold, through foreclosure or otherwise, prior to the receipt by the Mortgagee of
such award or payment, the Mortgagee shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive said net award or payment or a portion thereof sufficient to pay the
Debt, whichever is less.

7. The Mortgagee has the right to enter the Mortgaged Property for the purpose
of enforcing its interests as set forth herein. Nevertheless, subject to the
terms of this Paragraph 7, the Mortgagee waives the right to enter the Mortgaged
Property for the purpose of collecting the Rents and grants the Mortgagor the
right to collect, use and enjoy the Rents, and until the Mortgagee shall enter
the Mortgaged Property to enforce its rights under this Mortgage, the Mortgagor
shall have all rights to enforce the lessor’s rights under all Leases and other
agreements referenced in this Mortgage The Mortgagor shall hold the Rents, or an
amount sufficient to discharge all current sums due on the Debt, in trust for
use in the payment of the Debt. The right of the Mortgagor to collect the Rents
may be revoked by the Mortgagee upon the occurrence of any Event of Default by
giving notice of such revocation to the Mortgagor. Following such notice the
Mortgagee may enter upon the Mortgaged Property, collect, retain and apply the
Rents toward payment of the Debt in such priority and proportions as the
Mortgagee in its discretion shall deem proper.

 

6

--------------------------------------------------------------------------------

The Mortgagor shall not, without the consent of the Mortgagee, accept
prepayments of installments of Rent for a period of more than (1) month in
advance or further assign the whole or any part of the Rents. The Mortgagee
shall have all of the rights against lessees of the Mortgaged Property as set
forth in Section 291-f of the Real Property Law of New York. The Mortgagor will:
(a) fulfill or perform each and every provision thereof on its part to be
fulfilled or performed; (b) if requested by Mortgagee, promptly send to the
Mortgagee copies of all notices of default which it shall send or receive
thereunder; and (c) enforce all of the terms, covenants and conditions contained
in the Leases upon the lessee’s part to be performed, short of termination
thereof. In addition to the rights which the Mortgagee may have hereunder, in
the event of any default under this Mortgage, the Mortgagee, at its option, may
require the Mortgagor to pay monthly in advance to the Mortgagee, or to any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of such part of the Mortgaged Property as may be in
the possession of the Mortgagor. Upon default in any such payment the Mortgagor
will vacate and surrender possession of the Mortgaged Property to the Mortgagee
or to such receiver and in default thereof the Mortgagor may be evicted by
summary proceedings or otherwise.

In the event that Ground Lessee enters into subleases that require
subordination, non-disturbance and attornment agreements, the Mortgagee will
have the right to approve any such subleases (such approval not to be
unreasonably withheld, delayed or conditioned) and will, in connection with any
such approved sublease, enter into a commercially reasonable subordination,
non-disturbance and attornment agreement with the subtenant thereunder, in form
and substance satisfactory to the Mortgagee and its counsel in all respects in
their discretion, reasonably exercised.

Notwithstanding anything herein set forth to the contrary, as long as no Event
of Default shall have occurred and be continuing, Ground Lessee shall have the
right, without the consent of Mortgagee, to (i) sublease portions of the
Premises, (ii) amend any such sublease and/or (iii) terminate any such sublease.

8. The Mortgagor will cause the Mortgaged Property to be maintained in good
condition and repair. Except as contemplated by the Loan Agreement and subject
to the rights of the subtenants under the Leases, the Improvements and the
Equipment shall not be removed, demolished or altered (except for normal
replacement of the Equipment) without the consent of the Mortgagee. Subject to
the rights of the holder of the Senior Mortgage, the Mortgagor shall promptly
comply with all laws, orders and ordinances affecting the Mortgaged Property or
the use thereof and shall promptly repair, replace or rebuild (the “Work”) any
part of the Mortgaged Property which may be destroyed by any casualty or become
damaged, worn or dilapidated or which may be affected by any proceeding of the
character referred to in Paragraph 6 hereof and shall complete and pay for any
structure at any time in the process of construction or repair on the Premises.
If such casualty shall be covered by the Policies, the Mortgagor’s obligation to
do the Work shall be contingent upon the Mortgagee’s paying to the Mortgagor the
proceeds of the Policies, or such portion thereof as shall be necessary, upon
completion of the Work to the Mortgagee’s satisfaction. Notwithstanding the
foregoing, by its acceptance of this Mortgage, the Mortgagee acknowledges that
the Mortgagor is performing material alterations to the Mortgaged Property to
improve and upgrade them. Such improvement program and alterations in connection
with leasing space to subtenants shall be permitted without consent of the
Mortgagee.

 

7

--------------------------------------------------------------------------------

9. The Debt will, at the option of the Mortgagee, become immediately due and
payable in the event that the Mortgagor shall, without the prior written consent
of the Mortgagee, (a) permit the Mortgaged Property or any part thereof or any
interest therein to be sold, transferred, conveyed or further encumbered to any
other person or entity, or (b) sell, transfer, convey or encumber the Mortgaged
Property or any part thereof or any interest therein, which shall include but
not be limited to (i) where the Mortgagor is a corporation, the sale, transfer,
pledge or encumbrance of any of the outstanding shares of the corporation or the
dilution of the present stockholding or corporate control by issuance of new or
treasury stock or by conversion of any non-voting stock or other securities to
voting stock, or (ii) where the Mortgagor is a partnership, the sale, transfer,
pledge or encumbrance of any of the interests in the Mortgagor, or the
withdrawal, resignation or retirement of the general partner, or (iii) where the
Mortgagor is a limited liability company, the sale, transfer, pledge or
encumbrance of any of the interests in the Mortgagor.

Notwithstanding the foregoing, transfers of interests in the Mortgagor will be
permitted without the consent of the Mortgagee, provided that Peter L. Malkin
and/or Anthony Malkin and/or their controlled affiliates shall continue to have
substantial and active participation in the management of the Mortgagor (as
determined by the Mortgagee in its reasonable discretion). Notwithstanding the
foregoing, no interest in the Mortgagor may be transferred to a person who
appears as a “Sanctioned Party” on the list promulgated by the United States
Office of Foreign Assets Control.

Provided that no Event of Default shall then exist, the Mortgagee shall consent
to the transfer of the fee interest of the Mortgagor in the Mortgaged Property
from the Mortgagor to a single purpose Delaware limited liability company (“New
Mortgagor”) which is a subsidiary of Empire State Realty OP, L.P. (“OP”), the
New Mortgagor and the assumption by the New Mortgagor of the obligations of the
Mortgagor under this Mortgage and the other Loan Documents. In consideration for
the Mortgagee (i) consenting to the transfer of the Mortgagor’s fee interest in
the Mortgaged Property from the Mortgagor to the New Mortgagor and
(ii) consenting to the assumption by the New Mortgagor of the obligations of the
Mortgagor under this Mortgage and the the Loan Documents accruing on or after
the effective date of such transfer and assumption, the New Mortgagor or the
Mortgagor shall pay to the Mortgagee prior to or simultaneously with the
transfer of the Mortgaged Property and assumption of the Loan the reasonable
fees and expenses of the Mortgagee’s counsel for the preparation of the
documents executed in connection therewith as well as the fees and expenses for
the recording or filing of such documentation.

The Mortgagor shall waive its right to accelerate the Debt pursuant to any
provision of this Mortgage or the other Loan Documents which might otherwise
provide such right to the Mortgagee solely on account of the foregoing
transactions. The waiver set forth herein is limited precisely as written and
shall not be deemed to (a) be a consent to or a waiver of any other term or
condition of any of this Mortgage or the other Loan Documents or (b) prejudice
any right or rights which the Mortgagee may have in the future under or in
connection with this Mortgage or the other Loan Documents.

 

8

--------------------------------------------------------------------------------

Nothing contained in this Mortgage or the other Loan Documents shall be
construed as a prohibition on the pledge or encumbrance of any of the interests
in OP, as security or otherwise, and such pledge or encumbrance shall not
entitle the Mortgagee to accelerate the Debt. Further, the sale, transfer,
exchange, redemption or issuance of securities of Empire State Realty Trust,
Inc., the general partner of OP, and the sale, transfer, exchange, redemption or
issuance of interest in OP shall be permitted without the consent of the
Mortgagee and no such sale, transfer, exchange, redemption or issuance shall
constitute a transfer entitling the Mortgagee to accelerate the Debt.

10. After request by the Mortgagee, the Mortgagor, within ten (10) days and at
its expense, will furnish to the Mortgagee a statement, duly acknowledged and
certified, setting forth the amount of the Debt, the rate of interest thereon,
the date Installments were last paid, the offsets or defenses thereto, if any,
and that the Note and this Mortgage have not been modified or, if modified,
giving particulars of such modification.

11. All notices and other communications under this Mortgage are to be in
writing and addressed to each party as set forth below. Notices shall be deemed
to have been duly given upon the earliest of: (i) actual receipt; (ii) one
(1) day after having been timely deposited for overnight delivery, fee prepaid,
with a reputable overnight courier service, having a reliable tracking system;
or (iii) three (3) days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by certified
mail, postage prepaid, return receipt requested, and in the case of clause
(b) and (c) irrespective of whether delivery is accepted. A new address for
notice may be established by written notice to the other; provided, however,
that no change of address will be effective until written notice thereof
actually is received by the party to whom such address change is sent. Notice to
outside counsel or parties other than the named Mortgagor and Mortgagee, now or
hereafter designed by a party as entitled to notice, are for convenience only
and are not required for notice to a party to be effective in accordance with
this Section. Notice addresses are as follows:

To Mortgagee:

Signature Bank

68 South Service Road

Melville, New York 11747

Attention: John Zieran, Senior Vice President

With a copy to:

Cullen and Dykman LLP

100 Quentin Roosevelt Boulevard

Garden City, New York 11530

Attention: Amy F. Hecht, Esq.

 

9

--------------------------------------------------------------------------------

To Mortgagor:

60 East 42nd St. Associates L.L.C.

c/o Malkin Properties, L.L.C.

One Grand Central Place

60 East 42nd Street

New York, New York 10165

Attention:

With a copy to:

Malkin Holdings LLC

One Grand Central Place

60 East 42nd Street

New York, New York 10165

Attention: Legal

12. If this Mortgage is foreclosed, the Mortgaged Property or any interest
therein may, at the discretion of the Mortgagee, be sold in one or more parcels
and in any order or manner.

13. If any law or ordinance is enacted or adopted which imposes a tax, either
directly or indirectly, on the Note, this Mortgage or the Debt, the Mortgagor
will pay such tax with interest and penalties thereon, if any. In the event that
the Mortgagee shall be advised by counsel chosen by it that the payment of such
tax or interest and penalties by the Mortgagor would be unlawful, taxable to the
Mortgagee or unenforceable or would provide the basis for a defense of usury,
then and in that event the Mortgagee shall have the option, by written notice of
not less than ninety (90) days, to declare the Debt immediately due and payable.

14. If at any time the United States of America, any state thereof or any
subdivision of any such state shall require revenue or other stamps to be
affixed to the Note or this Mortgage, or shall impose any other tax or charge on
the same, the Mortgagor will pay for the same with interest and penalties
thereon, if any.

15. The Mortgagee and its agents will have the right to enter and inspect the
Mortgaged Property at all reasonable times.

16. The Mortgagor will keep adequate books and records of account in accordance
with generally accepted accounting practices consistently applied and will
furnish the Mortgagee with (i) annual reviewed financial statements for the
Mortgagor within one hundred twenty (120) days after the end of each calendar
year, as customarily prpared for the Mortgagor; (ii) a copy of its signed
federal income tax returns, including all schedules, within thirty (30) days of
the date of filing thereof; and (iii) if requested by Mortgagee, a rent roll for
the Premises. In addition, the Mortgagor will submit to the Mortgagee copies of
any operating statements or the like when the Mortgagor is required to submit
such information to any administrative or regulatory authority or agency having
jurisdiction. In addition to but not in lieu of any other remedies available to
the Mortgagee, upon the Mortgagor’s failure to supply to the Mortgagee timely as
provided above the records and/or other information required by this
Paragraph 16 within thirty (30) days of written request therefor and until such
records and/or information are furnished, interest payable under the Note and/or
this Mortgage shall be at the rate of twenty-four (24%) percent per annum or the
maximum rate allowed to be charged by law, whichever is lower.

 

10

--------------------------------------------------------------------------------

17. The Mortgagor will observe and perform each and every term to be observed or
performed by the Mortgagor pursuant to the terms of any agreement or recorded
instrument affecting or pertaining to the Mortgaged Property.

18. The Debt will become due at the option of the Mortgagee upon any one or more
of the following events (each an “Event of Default”):

(a) if any Installment is not paid when due and said default is not cured after
ten (10) days prior notice;

(b) if any of the Taxes are not paid when the same are due and payable and said
default is not cured after ten (10) days notice;

(c) if the Policies are not kept in full force and effect or if the Policies are
not assigned and delivered to the Mortgagee upon request;

(d) if the Mortgagor does not furnish a statement, in the manner provided
herein, of the amount of the Debt and the offsets or defenses thereto, if any;

(e) if without the consent of the Mortgagee any Improvement or the Equipment
(except for normal replacement of the Equipment) is removed, demolished or
altered or if the Mortgaged Property is not kept in good condition and repair;

(f) if any of the Rents are prepaid for a period of more than one (1) month in
advance or if any of the Rents are assigned without the consent of the
Mortgagee, except as otherwise provided in Paragraph 7 hereof;

(g) if any material representation or warranty of the Mortgagor or of any person
(a “Guarantor”) guaranteeing payment of the Debt or any portion thereof or the
performance by the Mortgagor of any of the terms of the notes, the Mortgage or
this Agreement, made herein or in any such guaranty or in any certificate,
report, financial statement or other instrument furnished in connection with the
making of the Note, this Mortgage or any such guaranty, shall prove false or
misleading in any material respect;

(h) if the Mortgagor or any Guarantor shall make an assignment for the benefit
of creditors;

 

11

--------------------------------------------------------------------------------

(i) if a receiver, liquidator or trustee of the Mortgagor or of any Guarantor
shall be appointed or if the Mortgagor or any Guarantor shall be adjudicated a
bankrupt or insolvent or if any petition for bankruptcy, reorganization or
arrangement pursuant to the Federal Bankruptcy Code or any similar federal or
state statute shall be filed by or against the Mortgagor or any Guarantor or if
any proceeding for the dissolution or liquidation of the Mortgagor or of any
Guarantor shall be instituted and, if such appointment, adjudication, petition
or proceeding was involuntary and not consented to by the Mortgagor or such
Guarantor, upon the same not being discharged, stayed or dismissed within one
hundred twenty (120) days;

(j) if the Mortgagor does not reimburse the Mortgagee upon demand for all
expenses incurred in remedying any default of the Mortgagor hereunder or in
appearing in, defending or bringing any action or proceeding to protect the
Mortgagee’s interest in the Mortgaged Property, including reasonable attorneys’
fees, with interest as provided herein;

(k) if for fifteen (15) days after notice from the Mortgagee the Mortgagor shall
continue to be in default under any other covenant of the Mortgagor hereunder;

(l) if, after a default thereunder, the Mortgagee elects to enforce its rights
under the Note or any instrument which may be held by the Mortgagee as
additional security for the Debt;

(m) if the Mortgagor shall be in default under any other mortgage covering any
part of the Mortgaged Property whether it is superior or inferior in lien to
this Mortgage, including, without limitation, the First Mortgage;

(n) if the Mortgaged Property becomes subject to (i) any tax lien which is
superior to the lien of this Mortgage, other than a lien for local Taxes and
assessments not due and payable, or (ii) any mechanic’s, materialman’s or other
lien and such lien shall remain undischarged for sixty (60) days;

(o) if the Mortgagor fails to promptly cure any violations of laws or ordinances
affecting or which may be interpreted to affect the Mortgaged Property;

(p) if the Mortgagor shall convey or lease any air development rights with
respect to the Mortgaged Property, inasmuch as the Mortgagor agrees that such
sale or lease would conclusively impair the Mortgagee’s security; or

 

12

--------------------------------------------------------------------------------

(q) if the Mortgaged Property is encumbered by any mortgage lien other than the
lien of this Mortgage and the lien of the First Mortgage, provided, however,
that the Mortgagor shall be permitted to further encumber the Mortgaged Property
provided that (i) the aggregate of all secured debt of the Mortgagor shall not
exceed fifty (50%) percent of the fair market value of the assets mortgaged,
(ii) the holder of any such subordinate indebtedness shall enter into a
subordination agreement with the Mortgagee, in form and substance satisfactory
to the Mortgagee and its counsel in all respects in the exercise of reasonable
discretion, and (iii) such subordinate financing does not create a default under
the documents executed in connection with the First Mortgage. The Mortgagee and
the Mortgagor shall attempt to agree upon the appraised value of the property
being mortgaged; and if they cannot agree after thirty (30) days, then either
party may require that such value be determined by an independent M.A.I.
appraiser reasonably agreeable to both parties engaged at Mortgagor’s expense.

Notwithstanding anything contained herein to the contrary, except for items
18(a), 18(b) and 18(q), the Mortgagee shall give Mortgagor thirty (30) days
written notice of non-monetary defaults (i.e., defaults that cannot be cured by
the payment of a liquidated sum of money) prior to accelerating the Mortgage. In
the event the default is of the nature that cannot be cured within thirty
(30) days and Mortgagor commences to cure same and diligently continues to
attempt to cure, the same shall not constitute a default and Mortgagor shall
have additional reasonable period of time in which to cure. If a default occurs
under the First Mortgage, such default shall not be deemed an Event of Default
unless and until the grace or cure period under the First Mortgage shall have
expired without the cure therefor having been effected. In the event that the
Mortgagee shall have cured such default, then the actual cost of such cure shall
be reimbursed by the Mortgagor, which reimbursement shall be due and payable
within five (5) days after demand therefor, and no Event of Default shall be
deemed to have occurred except upon the Mortgagor’s failure to pay such
reimbursement within such five (5) day period.

Upon the occurrence of any one of the foregoing events set forth in this
Paragraph 18 and upon the Mortgagee exercising its option to declare the Debt
immediately due and payable by reason thereof, the Mortgagor will pay, from the
date of that event, interest at the rate of twenty-four (24%) percent per annum
(the “Default Rate”).

19. If the Mortgagor fails to make any payment or to do any act as herein
provided, the Mortgagee may, but without any obligation to do so and upon
reasonable notice to or demand on the Mortgagor (except where immediate action
is required to avert a loss or forfeiture) and without releasing the Mortgagor
from any obligation hereunder, make or do the same in such manner and to such
extent as the Mortgagee may deem necessary to protect the security hereof, the
Mortgagee being authorized to enter upon the Mortgaged Property for such
purposes, or appear in, defend or bring any action or proceeding to protect its
interests in the Mortgaged Property or to foreclose this Mortgage or collect the
Debt. The cost and expense thereof (including reasonable attorneys’ fees), with
interest as provided in this paragraph, shall be due from Mortgagor upon demand
made by the Mortgagee. All such costs and expenses incurred by the Mortgagee in
remedying such default or in appearing in, defending or bringing any such action
or proceeding shall be paid with interest at the Default Rate for the period
after notice from the Mortgagee that such cost or expense was incurred to the
date of payment to the Mortgagee. All such costs and expenses incurred by the
Mortgagee pursuant to the terms hereof, with interest, shall be deemed to be
secured by this Mortgage.

 

13

--------------------------------------------------------------------------------

20. Mortgagor will pay a charge of five (5%) percent of any amount which cannot
be debited from its account due to insufficient balances on the Debit Date (as
defined in the Note), as liquidated damages for failure to make timely payment
and such late charge shall be secured by this Mortgage.

21. In any action to foreclose this Mortgage the Mortgagee shall be entitled to
the appointment of a receiver without notice, and without regard to the adequacy
of the security.

22. The failure of the Mortgagee to insist upon strict performance of any term
of the Note or this Mortgage shall not be deemed to be a waiver of any term of
the Note or this Mortgage. The Mortgagor shall not be relieved of the
Mortgagor’s obligations hereunder by reason of (a) the failure of the Mortgagee
to comply with any request of the Mortgagor to take any action to foreclose this
Mortgage or otherwise enforce any of the provisions hereof or of the Note,
(b) the release, regardless of consideration, of the whole or any part of the
Mortgaged Property, or (c) any agreement or stipulation by the Mortgagee
extending the time of payment or otherwise modifying or supplementing the terms
of the Note or this Mortgage. The Mortgagee may resort for the payment of the
Debt to any other security held by the Mortgagee in such order and manner as the
Mortgagee, in its discretion, may elect. The Mortgagee may take action to
recover the Debt or any portion thereof or to enforce any covenant hereof
without prejudice to the right of the Mortgagee thereafter to foreclose this
Mortgage. The rights of the Mortgagee under this Mortgage shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of the Mortgagee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.

23. If the Mortgagor consists of more than one person, the obligations and
liabilities of each such person hereunder shall be joint and several.

24. The terms of the Note and this Mortgage shall be construed by the laws of
the State of New York, except as herein expressly provided to the contrary.

25. This Mortgage is both a real property mortgage and a security agreement. The
Mortgaged Property includes both real and personal property and all other rights
and interests, whether tangible or intangible in nature, of the Mortgagor in the
Mortgaged Property.

The Mortgagor will, at the request of the Mortgagee, deliver to the Mortgagee
any and all further instruments which the Mortgagee shall require in order to
further secure and perfect the lien of this Mortgage. The Mortgagee is
authorized and empowered to file financing statements, as required by the
Uniform Commercial Code, to perfect its lien against the foregoing types of
personal property without first obtaining the signature of the Mortgagor on the
financing statements.

 

14

--------------------------------------------------------------------------------

26. The Mortgagor (and the undersigned representative of the Mortgagor, if any)
has full power, authority and legal right to execute this Mortgage and to keep
and observe all of the terms of the Note and this Mortgage on the Mortgagor’s
part to be performed.

27. The Mortgagee has the right to appear in and defend any action or proceeding
brought with respect to the Mortgaged Property and to bring any action or
proceeding, in the name and on behalf of the Mortgagor, which Mortgagee, in its
discretion, feels should be brought to protect its interests in the Mortgaged
Property.

28. If any term, covenant or condition of the Note or this Mortgage is held to
be invalid, illegal or unenforceable in any respect, the Note and this Mortgage
shall be construed without such provision.

29. This Mortgage may be executed in any number of duplicate originals and each
such duplicate original shall be deemed to constitute but one and the same
instrument.

30. If the Mortgagor is a corporation, the execution and delivery of this
Mortgage has been duly authorized by the board of directors of the Mortgagor and
there is no requirement under its certificate of incorporation or its by-laws
for consent of shareholders to this transaction; or if the Mortgagor is a
partnership, the execution and delivery of this Mortgage has been duly
authorized by the partners of the Mortgagor pursuant to its partnership
agreement; or if the Mortgagor is a limited liability company, the execution and
delivery of this Mortgage has been duly authorized in accordance with its
operating agreement.

31. Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Mortgage shall be used
interchangeably in singular or plural form. The word “Mortgagor” shall mean
“each Mortgagor and/or any subsequent owner or owners of the Mortgaged Property
or any part thereof or interest therein”. The word “Mortgagee” shall mean “the
Mortgagee or any subsequent holder of the Note”. The word “Note” shall mean “the
Note or any other evidence of indebtedness secured by this Mortgage”. The word
“person” shall include an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government, governmental
authority or other entity. The words “Mortgaged Property” shall include any
portion of the Mortgaged Property or interest therein. The word “Debt” shall
mean the principal with interest thereon and all other sums due pursuant to the
Note and/or this Mortgage and secured by this Mortgage. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms and the singular form of nouns and pronouns shall
include the plural and vice versa.

32. This Mortgage cannot be changed orally but only in writing by the person to
be charged.

 

15

--------------------------------------------------------------------------------

33. The Mortgagor hereby agrees that upon its failure to pay the Debt on the
maturity date the Mortgagor will pay to the Mortgagee interest on the then
unpaid principal at the Default Rate from the maturity date and until the actual
receipt and collection of the Debt by the Mortgagee. This charge shall be added
to the principal and shall be deemed to be part of the Debt. This paragraph,
however, shall not be construed as an agreement or privilege to extend this
Mortgage, nor as a waiver of any other right or remedy accruing to the Mortgagee
by reason of any such default.

34. The Mortgagor hereby waives the right to assert a counterclaim other than a
compulsory counterclaim in any action or proceeding brought against it by the
Mortgagee and waives trial by jury in any action or proceeding brought by either
party hereto against the other or in any counterclaim asserted by the Mortgagee
against the Mortgagor on any matters whatsoever arising out of or in any way
connected with the Note, this Mortgage or the Debt.

35. This Mortgage is subject to the express condition that at no time shall the
Mortgagor be obligated or required to pay interest on the principal balance due
hereunder at a rate which could subject the Mortgagee to either civil or
criminal liability as a result of being in excess of the maximum interest rate
which the Mortgagor is permitted by law to contract or agree to pay. If by the
terms of this Mortgage the Mortgagor is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of such
maximum rate, the rate of interest under this Mortgage and/or the Note shall be
deemed to be immediately reduced to such maximum rate and all previous payments
in excess of the maximum rate shall be deemed to have been payments toward the
reduction of principal and not to the interest due hereunder.

36. The Mortgagor covenants that the Mortgagor will, in compliance with
Section 13 of the Lien Law, receive the advances secured hereby and will hold
the right to receive such advances as a trust fund to be applied first for the
purpose of paying the cost of the improvement and will apply the same first to
the payment of the cost of the improvement before using any part of the total of
the same for any other purpose.

37. The Mortgagor hereby represents and warrants to the Mortgagee that, to the
best of Mortgagor’s knowledge and belief, the Mortgaged Property and the use
thereof are and have been in full compliance with all federal, state and local
laws, ordinances, rules and regulations regarding hazardous and toxic materials.
The Mortgagor hereby indemnifies and holds the Mortgagee free of and harmless
from and against any and all claims, demands, damages or liabilities the
Mortgagee may incur as a result of the failure of the Mortgaged Property to be
or to have been in full compliance with all federal, state and local laws,
ordinances, rules and regulations regarding hazardous and toxic materials.

 

16

--------------------------------------------------------------------------------

38. Except for (i) the obligations of the Mortgagor under the provisions of
Paragraph 37 of this Agreement, (ii) any acts or omissions constituting fraud or
misrepresentation by the Mortgagor in connection with applying for the loan
evidenced by the Note and secured by the Mortgage and the Note or this Mortgage
or in supplying information or documentation to the Mortgagee subsequent to the
date hereof, (iii) the fraudulent misappropriation or misapplication of the
Rents collected at the Mortgaged Property, (iv) liability for rental or other
income generated from the Mortgaged Property received by the Mortgagor after
default beyond applicable notice, grace and/or cure periods, if any, under the
Note or this Mortgage which is not applied to the Mortgaged Property (except
that payments made to affiliates of the Mortgagor for amounts accrued in prior
years, or in amounts which are in excess of then-market rates shall not be
considered applied to the Mortgaged Property), or (v) deliberate waste, the
liability of the Mortgagor, its permitted successors or assigns, under the Note,
this Mortgage and any other document evidencing or securing the Debt is hereby
strictly limited to the interest of the Mortgagor, its permitted successors or
assigns, in the Mortgaged Property and any judgment in favor of the Mortgagee
shall be satisfied only against the Mortgaged Property. Any judgment in favor of
the Mortgagee by reason of any of the items set forth in clauses (i) through
(v) of this Paragraph 38 may also be enforced against and collected out of the
other assets of the Mortgagor as well as the Mortgaged Property. No judgment
arising out of the Note or this Mortgage may be satisfied against any asset of
any member of the Mortgagor, and the Mortgagee shall neither seek, demand nor be
entitled to obtain a deficiency judgment.

39. Mortgagee may, either with or without entry or taking possession of the
Mortgaged Property as provided in this Mortgage or otherwise, personally or by
its agents or attorneys, and without prejudice to the right to bring an action
for judicial foreclosure of this Mortgage, sell the Mortgaged Property or any
part thereof pursuant to any procedures provided by applicable law, and all
estate, right, title, interest, claim and demand therein, and right of
redemption thereof, at one or more sales as an entity or in parcels, and at such
time and place upon such terms and after such notice thereof as may be required
or permitted by applicable law.

40. If an Event of Default shall have occurred and be continuing, the Mortgagee
shall have the right (but not the obligation) to apply partial payments on
account of principal, interest, tax escrow installments or tax arrears as it
shall determine in its sole discretion, reasonably exercised.

41. Upon payment in full of the Debt (by wire transfer of immediately available
funds), Mortgagee will assign this Mortgage to Mortgagor or its designee, at no
additional cost other than (a) reasonable legal fees incurred therewith; and
(b) an assignment fee of $1,500.00. However, Mortgagee shall have no
responsibility or liability in the event the original Note or other documents
are lost and shall, upon request if necessary, provide a lost note affidavit in
form satisfactory to Mortgagee and its counsel.

42. Notwithstanding anything herein to the contrary, wherever herein or in any
other document evidencing or securing the Debt the Mortgagee or its counsel
shall have discretion to approve or accept some document, action or state of
facts, such discretion shall be exercised in a commercially reasonable manner.

 

17

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Mortgage has been duly executed by the Mortgagor as of
the date first above written.

 

60 EAST 42ND ST. ASSOCIATES L.L.C.

By:

  /s/ Anthony E. Malkin

Name:

  Anthony E. Malkin

Title:

  Member

 

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

On the 21st day of May, 2013, before me, the undersigned, personally appeared
Anthony E. Malkin, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.

 

/s/ Judy H. Love

Notary Public

 

18

--------------------------------------------------------------------------------

SCHEDULE A

ALL THAT CERTAIN PLOT, PIECE OR PARCELS OF LAND, SITUATE, LYING AND BEING IN THE
BOROUGH OF MANHATTAN, OF THE CITY, IN THE COUNTY AND STATE OF NEW YORK, BOUNDED
AND DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE SOUTHERLY SIDE OF 42ND STREET, DISTANT 105 FEET
WESTERLY FROM THE CORNER FORMED BY THE INTERSECTION OF THE SOUTHERLY SIDE OF
42ND STREET WITH THE WESTERLY SIDE OF PARK AVENUE;

RUNNING THENCE SOUTHERLY PARALLEL WITH THE WESTERLY SIDE OF PARK AVENUE, 197
FEET 6 INCHES TO THE NORTHERLY SIDE OF 41ST STREET;

THENCE WESTERLY ALONG THE NORTHERLY SIDE OF 41ST STREET, 179 FEET 9 INCHES;

THENCE NORTHERLY PARALLEL WITH THE EASTERLY SIDE OF MADISON AVENUE AND PART OF
THE WAY THROUGH A PARTY WALL, 52 FEET;

THENCE WESTERLY PARALLEL WITH THE NORTHERLY SIDE OF 41ST STREET, 20 FEET 3
INCHES;

THENCE SOUTHERLY AGAIN PARALLEL WITH THE EASTERLY SIDE OF MADISON AVENUE, 3
FEET;

THENCE WESTERLY AGAIN PARALLEL WITH THE NORTHERLY SIDE OF 41ST STREET AND PART
OF THE WAY THROUGH A PARTY WALL, 100 FEET TO THE EASTERLY SIDE OF MADISON
AVENUE;

THENCE NORTHERLY ALONG THE EASTERLY SIDE OF MADISON AVENUE, 49 FEET 9 INCHES;

THENCE EASTERLY PARALLEL WITH THE SOUTHERLY SIDE OF 42ND STREET AND PART OF THE
WAY THROUGH A PARTY WALL, 100 FEET;

THENCE NORTHERLY AGAIN PARALLEL WITH THE EASTERLY SIDE OF MADISON AVENUE, 24
FEET 8-1/4 INCHES;

THENCE EASTERLY AGAIN PARALLEL WITH THE SOUTHERLY SIDE OF 42ND STREET, 18 FEET 6
INCHES;

 

19

--------------------------------------------------------------------------------

THENCE NORTHERLY AGAIN PARALLEL WITH THE EASTERLY SIDE OF MADISON AVENUE, 74
FEET AND  3/4 OF AN INCH TO THE SOUTHERLY SIDE OF 42ND STREET;

THENCE EASTERLY ALONG THE SOUTHERLY SIDE OF 42ND STREET, 181 FEET 6 INCHES TO
THE POINT OR PLACE OF BEGINNING.

 

20

--------------------------------------------------------------------------------

Mortgagor:    60 EAST 42ND ST. ASSOCIATES L.L.C. Mortgagee:    SIGNATURE BANK
Section:    5 Block:    1276 Lot:    42 Street Address:    60 East 42nd Street,
New York, New York

Check One Box Only

1. ¨ The attached mortgage covers real property principally improved or to be
improved by one or more structures containing in the aggregate not more than six
residential dwelling units, each having their own separate cooking facilities.

2. x The attached mortgage does not cover real property improved as described
above.

 

60 EAST 42ND ST. ASSOCIATES L.L.C. By:   /s/ Anthony E. Malkin Name:   Anthony
E. Malkin Title:   Member

 

21

--------------------------------------------------------------------------------

EXHIBIT A

 

1.

Mortgage dated the 31st day of January, 1941 made by Lincoln Building
Corporation to Aetna Life Insurance Company in the amount of $6,000,000 and
recorded in the Office of the City Register of the County of New York (the
“Register’s Office”) on the 31st day of January, 1941 in Liber 4475 Page 442;

 

2.

Mortgage dated the 31st day of July, 1947 made by Lincoln Building Corporation
to Aetna Life Insurance Company in the principal amount of $5,637,222.37 and
recorded in the Register’s Office on the 1st day of August, 1947 in Reel 4928
Page 537 which Mortgage was consolidated with the above Mortgage to form a
single lien in the amount of $10,000.000 and spread to cover Lots 42 and 44
pursuant to a Spreader and Consolidation Agreement dated the 31st day of July,
1947 and recorded in the Register’s Office on the 1st day of August, 1947 in
Reel 4928 Page 559, which Mortgages, as consolidated, were assigned by an
Assignment of Mortgage dated the 25th day of March, 1954 made by Aetna Life
Insurance Company to The Prudential Insurance Company of America and recorded in
the Register’s Office on the 1st day of April, 1954 in Liber 5457 Page 356;

 

3.

Mortgage dated the 31st day of March, 1954 made by WLKP Realty Corp. to The
Prudential Insurance Company in the amount of $7,550,000.00 and recorded in the
Register’s Office on the 1st day of April, 1954 in Liber 5457 Page 352 which
Mortgage was consolidated with the above Mortgages to form a single lien in the
amount of $16,000,000.00 pursuant to a Consolidation Agreement dated the 31st
day of March, 1954 between The Prudential Insurance Company of America and WLKP
Realty Corp. and recorded in the Register’s Office on the 1st day of April, 1954
in Liber 5457 Page 358 (which was the subject of a Participation Agreement dated
the 31st day of March, 1954 between The Prudential Insurance Company of America
and Aetna Life Insurance Company and recorded in the Register’s Office on the
1st day of April, 1954 in Liber 5457 Page 372 whereby The Prudential Life
Insurance Company of America has ownership in the loan to the extent of
$8,000,000.00 and Aetna Life Insurance Company has ownership in the loan to the
extent of $8,000,000.00, as modified by a Supplemental Agreement of Mortgage,
Participation Agreement dated the 26th day of October, 1955 between The
Prudential Insurance Company of America and Aetna Life Insurance Company and
recorded in Liber 5581 Page 503 each agree to extend the loan of their sharing
in ownership agreement at which point Aetna Life Insurance Company shall assign
to The Prudential Insurance Company of America its interest);

 

4.

Mortgage dated the 1st day of October, 1958 made by Lincoln Building Associates
to The Prudential Insurance Company of America in the amount of $2,618,269.06
and recorded in the Register’s Office on the 2nd day of October, 1958 in Liber
5775 Page 355 which Mortgage, by its terms, was consolidated with the above
Mortgages to form a single lien in the amount of $17,200,000.00 (which was the
subject of a Participation Agreement dated the 1st day of October, 1958 between
The Prudential Insurance Company of America and Aetna Life Insurance Company and
recorded in the Register’s Office on the 2nd day of October, 1958 in Liber 5775
Page 359 whereby The Prudential Life Insurance Company of America has ownership
in the loan to the extent of $9,909,134.41 and Aetna Life Insurance Company has
ownership in the loan to the extent of $7,290,865.59;

 

22

--------------------------------------------------------------------------------

5.

Mortgage dated the 2nd day of April, 1964 made by 60 E. 42nd St. Associates to
The Prudential Insurance Company of America in the amount of $1,574,134.86 and
recorded in the Register’s Office on the 2nd day of October, 1964 in Liber 6273
Page 248 which Mortgage, by its terms, was consolidated with the above Mortgages
to form a single lien in the amount of $16,330,000.00 (which was the subject of
an Agreement of Participation of Mortgages Agreement dated the 24th day of
April, 1964 between The Prudential Insurance Company of America and Aetna Life
Insurance Company and recorded in the Register’s Office on the 27th day of
April, 1964 in Liber 6273 Page 252 and thereafter Aetna Life Insurance Company
executed an Assignment of Mortgage dated the 28th day of March, 1969 to The
Prudential Insurance Company of America and recorded in the Register’s Office on
the 2nd day of April, 1969 in Reel 135 Page 1287 (which assigned its interest in
the mortgages described above), as modified by an Agreement dated the 1st day of
April, 1969 between Grancent Corp. and The Prudential Insurance Company of
America and recorded in the Register’s Office on the 2nd day of April, 1969 in
Reel 135 Page 1291 and by an Agreement dated as of the 1st day of April, 1979
between 60 East 42nd St. Association and The Prudential Insurance Company of
America and recorded in the Register’s Office on the 5th day of November, 1979
in Reel 501 Page 816, and further modified by an Agreement dated the 1st day of
April, 1981 made between 60 East 42nd St. Association and The Prudential
Insurance Company of America and recorded in the Register’s Office on the 3rd
day of September, 1981 in Reel 581 Page 1314, which Mortgages, as consolidated,
were thereafter assigned by an Assignment of Mortgage dated the 29th day of
September, 1982 made by The Prudential Insurance Company of America to Bankers
Life Company and recorded in the Register’s Office on the 5th day of October,
1982 in Reel 642 Page 271, and thereafter modified by an Agreement dated the
30th day of September, 1982 between 60 East 42nd St. Association and Bankers
Life Company and recorded in the Register’s Office on the 3rd day of November,
1982 in Reel 647 Page 1382, and thereafter assigned by an Assignment of Mortgage
dated September 1987 made by Principal Mutual Life Insurance Company f/k/a
Bankers Life Company to Apple Bank for Savings and recorded in the Register’s
Office on the 23rd day of December, 1987 in Reel 1337 Page 1651, as confirmed
and modified by an Agreement of Confirmation and Modification of Mortgage
Agreement dated as of the 30th day of September, 1987 between 60 East 42nd St
Associates and Apple Bank for Savings and recorded in the Register’s Office on
the 30th day of October, 1987 in Reel 1311 Page 1517, as assigned by an
Assignment of Mortgage dated the 13th day of September, 1994 made by Apple Bank
for Savings to Morgan Guaranty Trust Company of New York, as Trustee under
Declaration of Trust dated December 9, 1960, as amended, of its commingled
Pension Trust Fund, and recorded in the Register’s Office on the 11th day of
October, 1994 in Reel 2145 Page 21, which Mortgages, as consolidated, were
thereafter amended by an Amended Mortgage and Security Agreement and Assignment
of Leases and Rents Agreement dated the 6th day of October, 1994 made between 60
East 42nd St. Association and Morgan Guaranty Trust Company of New York, as
Trustee under Declaration of Trust dated December 9, 1960, as amended, of its
commingled Pension Trust Fund, and recorded in the Register’s Office on the 11th
day of October, 1994 in Reel 2145 Page 25, which Mortgages, as consolidated,
were thereafter assigned by an Assignment of Mortgage dated the 16th day of
November, 2004 made by JPMorgan Chase Bank, as Trustee under Amended and
Restated Declaration of Trust, dated November 13, 2001, as amended, for its
commingled Pension Trust Fund (Mortgage Private Placement) f/k/a Morgan Guaranty
Trust Company of New York, as Trustee under Declaration of Trust dated
December 9, 1960,a s amended, of its commingled Pension Trust Fund (Fixed
Income-Mortgages) to The Prudential Insurance Company of America and recorded in
the Register’s Office on the 28th day of December, 2004 as CRFN 2004000xxxxxx;

 

23

--------------------------------------------------------------------------------

6.

Mortgage dated the 8th day of March, 2000 made by 60 East 42nd St. Association
to Emigrant Savings Bank in the amount of $27,979,186.47 and recorded in the
Register’s Office on the 10th day of May, 2000 in Reel 3099 Page 600 which
Mortgage was assigned by an Assignment of Mortgage dated the 16th day of
November, 2004 made by Emigrant Savings Bank to The Prudential Insurance Company
of America and recorded in the Register’s Office on the 28th day of December,
2004 as CRFN 2004000xxxxxx;

 

7.

Mortgage dated as of the 23rd day of November, 2004 made by 60 East 42nd St.
Associates L.L.C. to The Prudential Insurance Company of America in the amount
of $44,000,000.53 and recorded in the Register’s Office on the 28th day of
December, 2004 as CRFN 2004000xxxxxx which Mortgage was consolidated with the
above Mortgages to form a single lien in the amount of $84,000,000.00 pursuant
to an Agreement of Spreader, Consolidation and Modification of Mortgage and
Security Agreement dated as of the 23rd day of November, 2004 between The
Prudential Insurance Company of America and 60 East 42nd St. Associates L.L.C.
and recorded in the Register’s Office on the 28th day of December, 2004 as CRFN
2004000xxxxxx, as amended by a First Amendment to Agreement of Spreader,
Consolidation and Modification of Mortgage and Security Agreement dated as of
the 23rd day of November, 2004 between The Prudential Insurance Company of
America and 60 East 42nd Associates L.L.C. and recorded in the Register’s Office
on the 3rd day of February, 2006 as CRFN 2006000xxxxxx;

 

8.

Mortgage dated as of the 5th day of November, 2009 made by 60 East 42nd St.
Associates L.L.C. to The Prudential Insurance Company of America in the amount
of $16,000,000.00 and recorded in the Register’s Office on the 16th day of
November, 2009 as CRFN 2009000xxxxxx.

 

24

--------------------------------------------------------------------------------

9.

Subordinate Mortgage

 

 

 

60 EAST 42ND ST. ASSOCIATES L.L.C.

- to -

SIGNATURE BANK

 

 

 

Premises: 60 East 42nd Street, New York, New York

The within premises lie in

Section 5, Block 1276, Lot 42

in New York County

Record and Return To:

CULLEN AND DYKMAN LLP

100 QUENTIN ROOSEVELT BOULEVARD

GARDEN CITY, NEW YORK 11530

ATTENTION: AMY F. HECHT, ESQ.

 

25