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Exhibit 10.1  

CONTRIBUTION AND PURCHASE AND SALE AGREEMENT  

between  

220 NEWS BUILDINGS LLC,  

AND  

SL GREEN OPERATING PARTNERSHIP, L.P.  

Premises:  

 220 East 42nd Street

New York, New York  

 As of November    , 2002  

  

 
 

TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	1.	 	AGREEMENT TO CAUSE CONTRIBUTION AND SALE; DESCRIPTION OF PROPERTY	 	2
	2.	 	EXCEPTIONS TO TITLE; TITLE MATTERS	 	3
	3.	 	CONSIDERATION AND PAYMENT	 	7
	4.	 	CLOSING	 	11
	5.	 	AS IS	 	12
	6.	 	APPORTIONMENTS	 	14
	7.	 	REPRESENTATIONS AND WARRANTIES OF THE PARTIES; CERTAIN COVENANTS	 	23
	8.	 	CLOSING DELIVERIES	 	34
	9.	 	CONDITIONS TO CLOSING OBLIGATIONS	 	38
	10.	 	LIMITATION ON LIABILITY OF PARTIES	 	40
	11.	 	FIRE OR OTHER CASUALTY; CONDEMNATION	 	41
	12.	 	BROKERAGE	 	43
	13.	 	CLOSING COSTS; FEES AND DISBURSEMENTS OF COUNSEL, ETC.	 	43
	14.	 	NOTICES	 	44
	15.	 	SURVIVAL; GOVERNING LAW	 	46
	16.	 	COUNTERPARTS; CAPTIONS	 	46
	17.	 	ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES	 	46
	18.	 	WAIVERS; EXTENSIONS	 	46
	19.	 	FURTHER ASSURANCES	 	47
	20.	 	ASSIGNMENT	 	47
	21.	 	PRONOUNS	 	48
	22.	 	SUCCESSORS AND ASSIGNS	 	48
	23.	 	ESCROW	 	48
	24.	 	TAX PROCEEDINGS	 	50
	25.	 	ACCESS; POSSESSION	 	51
	26.	 	MAINTENANCE OF THE PROPERTY	 	52
	27.	 	LEASING AND CONTRACTS	 	52
	28.	 	EXISTING MORTGAGE INDEBTEDNESS; EXISTING MEZZANINE INDEBTEDNESS	 	53
	29.	 	CONFIDENTIALITY; PUBLIC DISCLOSURE	 	54
	30.	 	INTENTIONALLY OMITTED	 	55
	31.	 	UNION AGREEMENTS; OTHER EMPLOYEE MATTERS	 	55

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	32.	 	TAX DEFERRED EXCHANGE	 	57
	33.	 	NO PROPERTY DISPOSITION	 	57
	34.	 	CERTAIN ALLOCATIONS	 	58
	35.	 	CERTAIN TAX INFORMATION	 	59

	
List of Exhibits
	Exhibit A	 	Description of the Land
	Exhibit B	 	Title Exceptions
	Exhibit C	 	Wiring Instructions
	Exhibit D	 	Form of Downpayment Letter of Credit
	Exhibit E	 	Existing Mortgage Indebtedness and List of Mortgage Loan Documents
	Exhibit F	 	Existing Mezzanine Debt and List of Mezzanine Loan Documents
	Exhibit G	 	Reserve Accounts
	Exhibit G-1	 	Pending Draws
	Exhibit H	 	Form of Recipient Agreement
	Exhibit I	 	Space Leases
	Exhibit J	 	Activity Report
	Exhibit J-1	 	Arrearage Schedule
	Exhibit J-2	 	Schedule of Security Deposits
	Exhibit K	 	Payable Commissions and Leasing Brokerage Agreements
	Exhibit L	 	Tenant Improvement Costs
	Exhibit M	 	Overage Rent Base Years
	Exhibit N	 	Service Contracts
	Exhibit O	 	Pending Litigation
	Exhibit O-1	 	Tax Proceedings
	Exhibit P	 	Union Agreements
	Exhibit Q	 	Employees
	Exhibit R	 	Transferor's Casualty Insurance
	Exhibit S	 	Form of Notice to Mortgage Lender
	Exhibit S-1	 	Form of Request for Mezzanine Lender Consent
	Exhibit T	 	Form of Transferor Guaranty
	Exhibit U	 	Space Schedule
	Exhibit V	 	Form of Rent Escrow Agreement
	Exhibit W	 	Form of Deed
	Exhibit X	 	Form of Assignment of Space Leases
	Exhibit Y	 	Form of Notice to Space Lessees
	Exhibit Z	 	Form of Assignment of Service Contracts
	Exhibit AA	 	Form of Omnibus Assignment
	Exhibit BB	 	Form of Estoppel
	Exhibit CC	 	Mandatory Space Lessees
	Exhibit DD	 	Form of Title Affidavit
	Exhibit EE	 	Form of Tax Indemnity

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CONTRIBUTION AND PURCHASE AND SALE AGREEMENT    
  

        THIS
CONTRIBUTION AND PURCHASE AND SALE AGREEMENT ("Agreement"), made as of November    , 2002, by and between 220 NEWS
BUILDING LLC, a Delaware limited liability company, having an office c/o The Witkoff Group LLC, 220 East 42nd Street, New York, New York 10017
("Transferor"), and SL GREEN OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an office at 420 Lexington Avenue, New York, New York
10017 ("SLGOP"). 

W I T N E S S E T H:

        A.    Transferor
owns the Property (as hereinafter defined). 

        B.    Subject
to the terms and conditions set forth below, SLGOP desires to acquire the Property, and Transferor and its beneficial owners wish to contribute, distribute,
exchange, sell or otherwise transfer their respective interests in the Property to SLGOP or its Designee (as hereinafter defined). 

        C.    The
beneficial owners of Transferor intend to cause the transactions described below (collectively, the "Interim
Transactions") to occur immediately prior to the Closing (as hereinafter defined): 

        1.    Transferor
will distribute or transfer the Property to its sole member, 220 News Building MZ LLC ("MZ"); 

        2.    MZ
will make in-kind distributions of undivided tenancy-in-common interests in and to the Property to its sole members, News Funding,
LLC ("Funding") and 220 News LLC ("News"), such that Designee, as the designee of Funding, shall acquire
an undivided 68.15% tenancy-in-common interest in the Property (the "SLGOP Interest"), and News shall acquire an undivided
31.85% tenancy-in-common interest in the Property; 

        3.    News
will make in-kind distributions of undivided tenancy-in-common interests in and to its tenancy-in-common
interest in the Property to its sole members, Forty Two News LLC ("DRA") and Daily Planet LLC
("Planet"), such that DRA shall acquire an undivided 11.15% tenancy-in-common interest in the Property and Planet shall acquire
an undivided 20.70% tenancy-in-common interest in the Property; 

        4.    Planet
will make an in-kind distribution of an undivided tenancy-in-common interest in and to a portion of its
tenancy-in-common interest in the Property to Steven C. Witkoff ("SCW") or, at SCW's election, to a limited liability company in
which SCW owns all of the beneficial interests and which is a disregarded entity for federal income tax purposes (such entity, the "SCW Entity"; SCW and
SCW Entity are sometimes collectively referred to herein as "SCW Recipient"), such that (i) SCW Recipient will acquire an undivided 15.13%
tenancy-in-common interest in the Property (the "SCW Interest"), and (ii) Planet will retain an undivided 5.57%
tenancy-in-common interest in the Property. 

        D.    As
used in this Agreement, DRA, Planet and SCW are individually referred to as a "Transferor Party" and collectively as
"Transferor Parties". 

        NOW,
THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows: 

        1.    Agreement to Cause Contribution and Sale; Description of Property.    

        1.1    Transferor
agrees to cause the Interim Transactions to occur and to cause each Transferor Party, as more particularly described below, to either contribute or otherwise
transfer and convey or cause to be contributed or otherwise transferred and conveyed, to SLGOP or its Designee, and SLGOP agrees to acquire and accept or cause its Designee to acquire and accept from
the Transferor Parties, upon the terms and conditions hereinafter contained: (a) those certain lots, pieces or parcels of land located in the City, County and State of New York, as more
particularly bounded and described in Exhibit A attached hereto and hereby made a part hereof (the
"Land"), together with the buildings erected thereon (collectively, the "Building") and any 

 

and all other fixtures and improvements erected thereon (the Building and such other fixtures and improvements being hereinafter collectively referred to as the
"Improvements"), (b) all right, title and interest, if any, of Transferor and the Transferor Parties in and to (i) the land lying in the
bed of any street, highway, road or avenue, opened or proposed, public or private, in front of or adjoining the
Land, to the center line thereof, (ii) any rights of way, appendages, appurtenances, easements, sidewalks, alleys, gores or strips of land adjoining or appurtenant to the Land or any portion
thereof and used in conjunction therewith, (iii) any development rights and entitlements appurtenant to the Land or any portion thereof, and (iv) any award or payment made or to be made
in lieu of any of the foregoing or any portion thereof and any unpaid award for damage to the Land or any of the Improvements by reason of change of grade or closing of any street, road or avenue, it
being understood and agreed that Transferor and the Transferor Parties will execute and deliver to SLGOP on the Closing Date (as hereinafter defined) or thereafter (which obligation shall survive the
Closing (as hereinafter defined)), upon reasonable written request, all proper instruments for the conveyance of such right, title and interest and for the assignment and collection of any such awards
or payments, together with; (c) all right, title and interest, if any, of Transferor and the Transferor Parties in and to (i) the improvements, machinery and fixtures located within,
attached or appurtenant to, or at or upon all or any portion of the Property at the date hereof or used in connection with the operation of, or used or adapted for use in connection with the enjoyment
or occupation of the Property (including, without limitation, any fire protection or other life safety, heating and air conditioning systems), excluding however, any fixtures owned by public utilities
or Space Lessees (as hereinafter defined) under the Space Leases (as hereinafter defined), together with the Plans (as hereinafter defined), (ii) all tangible personal property located on or
used in connection with the operation or maintenance of the Property and the Improvements including, without limitation, computers and computer equipment, computer software (whether owned or licensed)
and other equipment (collectively, the "Personal Property"); (d) the interest of landlord under all Space Leases, together with all security
deposits paid by Space Lessees thereunder and any guaranties of the obligations of the Space Lessees under the Space Leases (individually, a "Space Lease
Guaranty" and collectively, "Space Lease Guaranties"); (e) all right, title and interest of Transferor and the Transferor
Parties in and to Assigned Contracts (as hereinafter defined); (f) all right, title and interest of Transferor and the Transferor Parties in and to all Warranties (as hereinafter defined)
relating to all or any portion of the Property and the Improvements; (g) all right, title and interest of Transferor and the Transferor Parties in and to in all intangible personal property now
or hereafter owned by Transferor or the Transferor Parties and used exclusively in the use, operation, occupancy, maintenance or development of the property and interests described including, without
limitation, all marketing, advertising and promotional materials and photographs, the right to use the name "The News Building" and any other trade name now or hereafter used in connection with the
foregoing, and all future tax benefits (excluding income tax benefits) and benefits of incentive programs now or hereafter allowed by governmental authorities in connection with the ownership,
operation and/or renovation of the Property ("Intangible Personal Property"); and (h) all right, title and interest title and interest of
Transferor and the Transferor Parties in and to all governmental and public certificates, permits, licenses, approvals and similar entitlements relating to the development, construction, operation,
use, maintenance or occupancy of the Property and the erection of signage on or at the Property (individually and collectively, the "Permits"). 

        All
of the above enumerated property, rights and interests to be contributed or otherwise transferred and conveyed to SLGOP or its Designee pursuant to this Agreement (including, without
limitation, the Property and Improvements are hereinafter sometimes collectively referred to as the "Property". 

        1.2    Transferor
and each Transferor Party shall cause each of the Interim Transactions to occur immediately prior to the Closing, such that immediately prior to the
conveyance to SLGOP 

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or its Designee, the Property will be owned, subject to the terms and conditions of this Agreement, by a designee of Funding which is a limited liability company in which SLGOP owns all of the
beneficial
interests and which is a disregarded entity for federal income tax purposes (as to an undivided 68.15% tenancy-in-common interest), DRA (as to an undivided 11.15%
tenancy-in-common interest), SCW Recipient (as to an undivided 15.13% tenancy-in-common interest), and Planet (as to an undivided 5.57%
tenancy-in- common interest). 

        2.    Exceptions to Title; Title Matters.    

        2.1    Transferor
shall at the Closing cause each Transferor Party to contribute or sell, as applicable, such party's undivided tenancy-in-common
interest in the 

        Property
to SLGOP or its Designee subject only to the following matters affecting title thereto (collectively the "Permitted Exceptions"): 

        2.1.1    All
presently existing and future liens for unpaid real estate taxes, vault charges and water and sewer charges not due and payable as of the date of the Closing,
subject to adjustment as provided below. 

        2.1.2    All
zoning, building, environmental and other laws, ordinances, codes, restrictions and regulations of all governmental authorities having jurisdiction with respect to
the Property in effect on the date hereof, including, without limitation, landmark designations and all zoning variances and special exceptions, if any (collectively, "Laws and
Regulations"). 

        2.1.3    State
of facts shown on survey of the Property made by Earl B. Lovell - S.P. Belcher, Inc. ("LB") dated
November 10, 1982 and Line Survey made by LB dated January 1, 1986, and most recently redated by visual examination made by LB on September 6, 2002 (the
"Survey"), plus such additional facts which wo uld be disclosed by a survey dated as of the Closing, provided such additional facts do not materially
adversely affect the use thereof for office purposes (collectively, "Facts"). 

        2.1.4    Rights
of tenants, as tenants only, of the Property pursuant to Space Leases which either are (a) in effect on the date hereof or (b) entered into after
the date hereof in accordance with the express provisions of this Agreement (collectively, "Space Lessees"), and all persons claiming by, through or
under such Space Lessees. 

        2.1.5    Except
as shown on the Survey, possible encroachments and/or projections of stoop areas, roof cornices, window trims, vent pipes, cellar doors, steps, columns and
column bases, flue pipes, signs, piers, lintels, window sills, fire escapes, satellite dishes, protective netting, sidewalk sheds, ledges, fences, coping walls (including retaining walls and yard
walls), air conditioners and the like, if any, projecting from the Building over any street or highway, the Property or over any adjoining property
and encroachments of similar elements projecting from adjoining property over the Property; provided, however, that with respect to any such encroachment or projection of portions of the Building over
any adjoining property, the Title Company will affirmatively insure, at regular rates and without additional premium, that the Building may remain undisturbed. 

        2.1.6    The
matters described in Exhibit B attached hereto and made a part hereof. 

        2.1.7    Those
objections to title which are the responsibility to cure, correct or remove of any Space Lessee under its Space Lease (a) as to which an SLG Advance (as
hereinafter defined) is to be made at Closing, or (b) which is not in arrears in the payment to Transferor of Fixed Rent (as hereinafter defined) in an amount equal to or greater than sixty
(60) days of Fixed Rent payable by such Space Lessee under its Space Lease. 

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        2.2    Transferor
and SLGOP have each received an examination of title to the Property (the "Title Report") dated
October 10, 2002 as title number TS 4001525 prepared by TSNY Agency of New York City, Inc. (the "Title Company"). 

        2.3    If,
on the Closing Date, Transferor is unable to contribute or sell, as applicable, to SLGOP title to the Property or to cause the contribution or sale, as applicable,
of 100% of all undivided tenancy-in-common interests therein to SLGOP subject to and in accordance with the provisions of this Agreement, Transferor shall be entitled, upon
notice delivered to SLGOP on or prior to the Closing Date (as hereinafter defined), to adjourn the Closing one or more times in accordance with Section 4 to enable Transferor to contribute or
sell or cause the contribution or sale, as applicable, of such title to the Property. If on or before the date then scheduled for Closing, Transferor does not so elect to adjourn the Closing, or if at
the adjourned date Transferor is unable to contribute or sell, as applicable, or cause the contribution or sale, as applicable, of title subject to and in accordance with the provisions of this
Agreement, then on the date then scheduled for Closing, SLGOP shall be entitled to proceed to Closing or to adjourn the Closing for up to ten (10) days (such ten (10) day period
hereinafter, the "Election Period"). On or prior to the expiration of the Election Period, SLGOP shall elect to either (a) terminate this
Agreement by notice delivered to Transferor and Escrow Agent (as hereinafter defined), in which event Escrow Agent shall repay to SLGOP the Downpayment (as hereinafter defined), together with any
interest earned thereon, or return to SLGOP the Downpayment Letter of Credit (as hereinafter defined), as applicable (either such case, a "Downpayment
Return") or (b) to elect to close title to the Property upon the terms set forth in Section 2.4 by notice given to Transferor, in which event the Closing shall
occur no later than three (3) Business Days following such election. The failure by SLGOP to make an election prior to expiration of the Election Period shall be deemed an election to terminate
this Agreement. If SLGOP shall elect (or is deemed to have elected) to terminate this Agreement, upon the Downpayment Return it shall thereupon be deemed canceled and become void and of no further
effect, and neither party hereto shall have any obligations of any nature to the other hereunder or by reason hereof, except that the provisions of Sections 12, 13, 23, 25 and 29 hereof shall survive
such termination. If Transferor elects to adjourn the Closing as provided above, this Agreement shall remain in effect for the period or periods of adjournment in accordance with its
terms. Transferor shall not be required to take or bring any action or proceeding or take any other steps to remove any defect in or objection to title or to fulfill any condition precedent to SLGOP's
obligations under this Agreement or to expend any moneys therefor, nor shall SLGOP have any right of action against Transferor therefor, at law or in equity, except that notwithstanding the foregoing,
Transferor shall, all at no cost or expense to SLGOP, (i) satisfy the reasonable requirements of the Title Company as to Transferor's power and authority to enter into this Agreement and
(ii) pay, discharge or remove of record or cause to be paid, discharged or removed of record at Transferor's sole cost and expense all of the following items:    (1) 
Voluntary Liens (as hereinafter defined) and (2) other liens encumbering the Property (or any tenancy-in-common interest therein) which (v) are not Voluntary
Liens, (w) are not the responsibility of a Space Lessee under its Space Lease to pay, discharge or remove of record, (x) are in liquidated amounts, (y) may be satisfied solely by
the payment of money (including the preparation or filing of appropriate satisfaction instruments in connection therewith) and (z) do not exceed $500,000.00 in the aggregate (the
"Title Cure Cost Limit"). The term "Voluntary Liens" as used herein shall mean liens and other
encumbrances (other than Permitted Exceptions), whether or not in liquidated sums, which Transferor or any Transferor Party has allowed to be placed on the Property or any
tenancy-in-common interest therein after the date hereof, including judgments entered by default or otherwise without opposition or defense by Transferor or a Transferor Party
and federal, state and municipal tax liens, and any lien or other encumbrance arising by reason of any Interim Transaction, including, without limitation, the transfer of any
tenancy-in-common interest in the Property by Transferor or any of MZ, News or 

4

 

any Transferor Party, or the acquisition of any tenancy-in-common interest in the Property by any of the foregoing parties. Voluntary Liens shall not include Violations (as
hereinafter defined), which shall be governed by Section 5.4. 

        2.4    Notwithstanding
anything in Section 2.3 above to the contrary, SLGOP may at any time accept such title as Transferor or any Transferor Party can contribute or
sell, as applicable, without reduction of the Consideration (as hereinafter defined) or any credit or allowance on account thereof or any claim against Transferor or any Transferor Party, except that
SLGOP shall be entitled to a credit against the Consideration in an amount equal to the lesser of (a) the actual cost of curing all defects in or objections to title to the Property that
Transferor is obligated to cure pursuant to Section 2.3, or (b) the Title Cure Cost Limit. The acceptance of the Deeds (as hereinafter defined) by SLGOP shall be deemed to be full
performance of, and discharge of, every agreement and obligation on Transferor's part to be performed under this Agreement, except for such matters which are expressly stated in this Agreement to
survive the Closing. 

        2.5    The
amount of any unpaid taxes, assessments and water and sewer charges which Transferor is obligated to pay and discharge, with interest and penalties, may at the
option of Transferor be paid by SLGOP out of the balance of the Consideration, if official bills therefor with interest and penalties thereon figured to said date are furnished to or obtained by the
Title Company at the Closing for payment thereof and the Title Company duly omits from the Title Policy (as hereinafter defined) any exception therefor without payment of any additional premium. 

        2.6    If
the Property or any interest therein shall, at the time of the Closing, be subject to any liens such as for judgments or transfer, inheritance, estate, franchise,
license or other similar taxes or any encumbrances or other title exceptions which would be grounds for SLGOP to reject title hereunder,
the same shall not be deemed an objection to title provided that, at the Closing, Transferor or a Transferor Party pays, by Wire Transferred Funds (as hereinafter defined) the amount required to
satisfy the same, or at Transferor's option, allows SLGOP a credit against the Consideration in an amount sufficient to (a) cause the Title Company at the Closing to omit the same as an
exception to the Title Policy without payment of any special premium) and (b) to satisfy and discharge of record such liens and encumbrances, together with the cost of recording or filing of
any instruments required in connection therewith. 

        2.7    SLGOP
shall be solely responsible for causing the Title Company, at SLGOP's sole cost and expense, to issue any endorsements that SLGOP requires, and the issuance of
such endorsements shall not be a condition precedent to Closing or SLGOP's obligation to perform as required hereunder. 

        3.    Consideration and Payment.    

        3.1    The
consideration payable for the Property is TWO HUNDRED SIXTY FIVE MILLION AND 00/100 DOLLARS ($265,000,000.00), subject to such apportionments, adjustments and
credits as are provided herein (the "Consideration"). A portion of the Consideration shall be payable by SLGOP or its Designee in the followi ng manner,
reflecting the acquisitions of tenancy-in-common interests in the Property by SLGOP or its Designee set forth in this Agreement: (a) the issuance by SLGOP of OP Units
(as hereinafter defined) to SCW Recipient, as described in Section 3.2.2(a), i n consideration for SCW's contribution to SLGOP or its Designee of the SCW Interest; and (b) the payment by
SLGOP or its Designee of the DP Amount (as hereinafter defined) and Cash Balance (as hereinafter defined), as described in Sections 3.2.1 and 3.2.2(d), in consideration for the sale by the Transferor
Parties other than SCW Recipient to SLGOP or its Designee of the Non-SCW Portion (as hereinafter defined). A portion of the Consideration shall be satisfied upon the receipt of the SLGOP
Interest by Funding or the Designee, as part of the Interim Transactions, in redemption of Funding's interest in Transferor. A portion of the Consideration shall consist of the acceptance by SLGOP or
its Designee of title to 

5

 

the Property subject to, and assumption of, the Existing Indebtedness (as hereinafter defined), as described in Sections 3.2.2(b) and 3.2.2(c). 

        3.2    The
Consideration shall be payable as follows: 

        3.2.1    On
the date hereof, FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) (the "DP Amount"), payable concurrently herewith in
immediately available funds, by federal funds wire transfer ("Wire Transferred Funds") to the Title Company, as escrow agent
("Escrow Agent") pursuant to the instructions (the "Wire Instructions") set forth on  Exhibit C attached
hereto and made a part hereof (the "Downpayment"). The Downpayment shall be
held by Escrow Agent and disbursed in accordance with the terms and conditions of this Agreement. Any interest earned on the Downpayment shall until Closing be deemed to be part of the Downpayment and
shall be paid together with the principal portion of the Downpayment to the party entitled thereto; provided, however, that interest earned on the Downpayment shall be divided equally between SLGOP
and the Transferor Parties (other than
SCW Recipient), and the portion of the interest payable to SLGOP shall be credited toward the Consideration upon the Closing. In lieu of the Downpayment, at SLGOP's option, SLGOP may concurrently
herewith or at any time prior to the Closing, deliver to Escrow Agent a clean, irrevocable letter of credit in the DP Amount naming Transferor as beneficiary issued by and drawn upon Fleet Bank, N.A.
or another bank reasonably satisfactory to Transferor which is a member of the New York Clearinghouse Association (hereinafter referred to as the "Issuing
Bank") in the form attached hereto as Exhibit D and made a part hereof (the "Downpayment Letter
of Credit"), the term of which Downpayment Letter of Credit shall not expire prior to May 28, 2003 and which Downpayment Letter of Credit shall be deemed to be a
substitute for the Downpayment hereunder. The Downpayment Letter of Credit shall be held by Escrow Agent and delivered in accordance with the terms and conditions of this Agreement. After making the
Downpayment, SLGOP may elect to deliver a Downpayment of Letter of Credit in substitution thereof by delivering to Escrow Agent a Downpayment Letter of Credit in the form attached hereto as  Exhibit D, and delivering to Transferor a copy of such Downpayment Letter of Credit. Unless Escrow Agent shall have theretofore received notice
from Transferor that the Downpayment Letter of Credit does not conform to Exhibit D, within two (2) Business Days (as hereinafter defined)
of receipt by Escrow Agent of the Downpayment Letter of Credit and evidence of delivery of a copy thereof to Transferor, Escrow Agent shall return the Downpayment to SLGOP by Wire Transferred Funds in
accordance with written instructions delivered by SLGOP. 

        3.2.2    On
the Closing Date, as follows: 

        (a)    By
SLGOP's issuance to SCW Recipient of Class B Common Units of limited partnership interest of SLGOP (the "OP
Units") having a value, determined in accordance with Section 3.3, in an amount elected by SCW pursuant to Section 3.3 which does not exceed the lesser of
(i) the difference between (A) THIRTEEN MILLION AND 00/100 DOLLARS ($13,000,000.00) and (B) either (1) the value of OP Units, if any, theretofore issued to SCW, a SCW
Entity or Jeffrey A. Goldberger or an entity in which Jeffrey A. Goldberger owns all of the beneficial interests and which is a disregarded entity for federal income taxes
("JAG") in consideration of such party's transfer to a designee of SLGOP of either (y) the membership interest of SCW, a SCW Entity or JAG in
(I) 125 Broad Unit A LLC, the fee owner of Commercial Condominium Unit A ("Unit A") in The 125 Broad Condominium (the
"Condominium"), and/or (II) 125 Broad Unit C LLC, the fee owner of Commercial Condominium Unit C ("Unit
C") in the Condominium, or (z) the tenancy-in-common interest of SCW, a SCW Entity or JAG in Unit A and/or Unit C (the interests described in
either clause (y) or (z), the "125 Interest"), or (2) the value of OP Units, if any, which (I) SCW has theretofore elected to have
issued to him or a SCW Entity or (II) JAG has elected to have issued to him upon the contribution of the 125 Interest to SLGOP or its affiliate, if closing of the 125 Interest has not yet
occurred, or (ii) 15.13% of the    difference between Two 

6

 

Hundred Sixty Five Million and 00/100 Dollars ($265,000,000.00) and the outstanding principal balance of the Existing Indebtedness as of the Closing Date, such difference to be increased or decreased
for SCW's share (such share to be determined by Transferor) of such apportionments, adjustments and credits as are provided in this Agreement (the amount so elected (or deemed elected pursuant to
Section 3.3) by SCW, the "OP Unit Amount"). 

        (b)    By
the acceptance by SLGOP or its Designee(s) of title to the Property subject to, and the assumption of (subject to the non-recourse provisions thereof),
the outstanding principal balance, as of
the Closing Date, of the first mortgage indebtedness described in Exhibit E attached hereto and made a part hereof (such sum, the
"Existing Mortgage Indebtedness"), evidenced by that certain promissory note dated as of September 7, 2001 made by Transferor (the
"Mortgage Note"), and secured by, inter alia, that certain Mortgage and Security Agreement of even date
therewith, encumbering the Property (the "Existing Mortgage") and the other documents and instruments evidencing or securing the Existing Mortgage
Indebtedness, all of which are described in Exhibit E (the Mortgage Note, the Existing Mortgage and such other documents and instruments are
collectively referred to herein as the "Mortgage Loan Documents"). 

        (c)    By
the assumption by SLGOP or its Designee(s) of (subject to the non-recourse provisions thereof) the outstanding principal balance, as of the Closing Date,
of the mezzanine indebtedness described in Exhibit F attached hereto and made a part hereof (such sum, the "Existing
Mezzanine Indebtedness", and together with the Existing Mortgage Indebtedness, the "Existing Indebtedness"), evidenced by that
certain promissory note dated as of September 7, 2001 made by MZ, the sole member of Transferor (the "Mezzanine Note"), and secured by,  inter alia,
that certain Pledge and Security Agreement of even date therewith, made by MZ in favor of German American Capital Corporation, and assigned
to CTMP II FC Daily News (DB) ("Mezzanine Lender"), with respect to all of the membership interests in Transferor (the
"Transferor Pledge") and the other documents and instruments evidencing or securing the Existing Mezzanine Indebtedness, all of which are described on  Exhibit F (the Mezzanine Note, the Transferor Pledge and such other documents and instruments are collectively referred to herein as the
"Mezzanine Loan Documents") pursuant to an agreement (a "New Mezzanine Loan Agreement") to be entered
into by SLGOP or its Designee(s) with Mezzanine Lender upon the substantially the same terms and conditions as the Existing Mezzanine Indebtedness, and providing for, inter
alia, SLGOP or its Designee(s) becoming the obligor(s) of the Existing Mezzanine Indebtedness, and Mezzanine Lender agreeing to release the Transferor Pledge and accepting in
substitution thereof a pledge of all of Designee(s) direct or indirect ownership interests ("Fee Equity Interests") in the fee owner of the Property
("Fee Owner") upon consummation of the transactions described in this Agreement. 

        (d)    By
payment to Transferor (or as Transferor may direct), on behalf of each Transferor Party of the amount by which the Consideration exceeds the sum of (i) the
Existing Indebtedness plus (ii) the OP Unit Amount plus (iii) the Preferred Equity Investment (as defined in the Limited Liability Company Operating Agreement of MZ (the
"LLC Agreement") (such difference, the "Cash Balance"), in the manner hereinafter provided in this
Section 3.2.2. If (y) SLGOP has not provided Escrow Agent with the Downpayment Letter of Credit, SLGOP shall pay the amount by which (1) the Cash Balance exceeds (2) the
Downpayment (and one-half (1/2) of the interest earned thereon), on the Closing Date or (z) SLGOP has provided Escrow Agent with the Downpayment Letter of Credit,
SLGOP shall pay the Cash Balance to Transferor on the Closing Date, in either case, subject to the apportionments, adjustments and credits provided in this Agreement, simultaneously with the delivery
of the Deeds in Wire Transferred Funds to an account at such bank as shall be 

7

 

designated by Transferor by written notice to SLGOP at least one (1) Business Day prior to the Closing Date. If SLGOP has provided Escrow Agent with the Downpayment Letter of Credit, Escrow
Agent shall contemporaneously deliver the Downpayment Letter of Credit to SLGOP at the Closing, together with a letter and any other document required by the Issuing Bank, executed (and acknowledged,
if required) by Transferor and Escrow Agent, confirming that Transferor has no further rights thereto. 

        3.2.3    The
parties hereto acknowledge and agree that the value of the Personal Property and the Intangible Personal Property is de
minimis and that no part of the Consideration is allocable thereto. 

        3.3    (a)    Not
less than two (2) Business Days prior to the Closing, Transferor shall (a) advise SLGOP as to the OP Unit Amount which SCW elects to
have issued, and (b) if the OP Units are to be issued to a SCW Entity, deliver to SLGOP copies of the organizational documents thereof, evidencing that SCW is the sole member thereof. If
Transferor fails to notify SLGOP of the amount of OP Units to be issued to SCW Recipient on or prior to such date, SCW shall be deemed to have elected to receive $11,000,000.00 as the OP Unit Amount.
SCW Recipient shall at Closing receive that number of OP Units which is equal to the quotient of (a) the OP Unit Amount divided by (b) the trailing average daily closing price on the New
York Stock Exchange of the common stock of SL Green Realty Corp. ("SLG") for the ninety (90) Trading Days (as hereinafter defined) immediately
preceding the second Business Day immediately prior to Closing Date (the "Average Share Price"); provided, however, that any fractional OP Units shall
be eliminated by rounding down to the nearest whole number and cash paid in lieu of such fractional amount calculated on the basis of the Average Share Price. The OP Units shall be entitled to such
dividends, have such voting, redemption and other rights, and be subject to the terms, conditions and restrictions set forth in that certain First Amended and Restated Agreement of Limited Partnership
of SL Green Operating Partnership, L.P., dated as of August 20, 1997, as amended by (x) that certain First Amendment to the First Amended and Restated Agreement of Limited Partnership of
SL Green Operating Partnership, L.P., dated as of May 14, 1998, (y) that certain Second Amendment to the First Amended and Restated Agreement of Limited Partnership of SL Green Operating
Partnership, L.P., dated as of June 3, 2002, and (z) any further amendments thereto entered into after the date hereof which do not materially adversely affect SCW Recipient's rights in
and to the OP Units (collectively, the "Partnership Agreement"), including, without limitation, the rights and terms of redemption set forth in
Section 8.6 thereof, as modified by Section 7.6 of this Agreement. If SLGOP amends the Partnership Agreement after the date hereof and the terms of such amendment materially adversely
affect SCW Recipient's rights in and to the OP Units, Transferor may terminate this Agreement by notice given to SLGOP within ten (10) days of receipt of such amendment to the Partnership
Agreement, and upon such termination, SLGOP shall be entitled to a Downpayment Return, and thereafter neither party shall have any further obligation of any nature to the other hereunder, except that
the provisions of Sections 12, 13, 23, 25 and 29 shall survive such termination. In the event the terms of this Agreement relating to OP Units conflict with any term or provision of the Partnership
Agreement, the terms of this Agreement shall prevail. SCW (and the SCW Entity, if applicable) shall at Closing execute and deliver to SLGOP the OP Unit Recipient Agreement in the form attached hereto
as Exhibit H and made a part hereof ("Recipient Agreement") for the OP Units. As used herein,
"Trading Day" means a day on which the New York Stock Exchange is open for the transaction of business. 

        (b)    At
Closing, SLGOP shall (i) issue the OP Units to SCW Recipient, (ii) execute and deliver to SCW and SCW Recipient, if applicable, a counterpart of the
Counterpart OP Signature Page (as hereinafter defined), and (iii) take all steps necessary and appropriate to amend the records of the Partnership to reflect the admission of SCW Recipient to
the Partnership, as provided in Section 12.3 of the Partnership Agreement. 

8

 

        3.4    Subject
to Section 23.1.3, whenever in this Agreement SLGOP is entitled to a return of the Downpayment, SLGOP shall be entitled to the return of the Downpayment
actually being held by Escrow Agent pursuant to this Agreement, together with all interest earned thereon, or to the return of the Downpayment Letter of Credit. Subject to Section 23.1.3,
whenever in this Agreement Transferor is entitled to retain the Downpayment, Transferor shall be entitled to the Downpayment actually being held by Escrow Agent pursuant to this Agreement, together
with all interest earned thereon, or to the Downpayment Letter of Credit actually delivered to Escrow Agent and shall be entitled to draw thereupon; provided, however, that upon Closing the actual
amount of all such interest shall be divided equally between SLGOP and Transferor as provided above. 

        3.5    For
the purposes of this Agreement, the capitalized term "Business Day" means any day of the year on which banks are not
required or are authorized by law to close in New York City. 

        3.6    Wherever
it is provided in this Agreement that SLGOP is entitled to a credit to be applied toward payment of the Consideration, Transferor may elect to pay to SLGOP at
Closing, by Wire Transferred Funds, an amount equal to such credit as SLGOP is so entitled in lieu of such credit. 

        4.    Closing.    

        4.1    The
closing of the transaction contemplated hereby (the "Closing") shall occur at 10:00 AM Eastern Standard Time on
January 10, 2003 (such date, as the same may be adjourned by Transferor or SLGOP pursuant to the terms of this Agreement, being herein referred to as the "Closing
Date"). 

        4.2    Transferor
and SLGOP shall each be entitled to adjourn the date scheduled for Closing one or more times, provided that no such adjournment shall be to a date later than
10:00 AM Eastern Standard Time on February 10, 2003 (the "Outside Closing Date"). Either Transferor or SLGOP may exercise its right to adjourn
the Closing hereunder by delivering to the other notice of any such adjournment on or before the then scheduled Closing Date, setting forth the adjourned date for Closing. 

        4.3    The
Closing will occur at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, 24th floor, New York, New York 10022. TIME SHALL BE OF THE ESSENCE WITH
RESPECT TO THE OBLIGATION OF BOTH TRANSFEROR AND SLGOP TO CLOSE ON THE OUTSIDE CLOSING DATE. 

9

   
        5.    As Is.    

        5.1  (a)
Except as is expressly set forth in this Agreement to the contrary, SLGOP is expressly acquiring the Property "AS IS, WHERE IS, AND WITH ALL FAULTS" as of the date
hereof. Transferor has specifically bargained for the assumption by SLGOP of all responsibility to investigate the Property, Laws and Regulations, Facts, Space Leases and Service Contracts and of all
risk of adverse conditions existing as of the date hereof and has structured the Consideration and other terms of this Agreement in consideration thereof. SLGOP has undertaken all such investigations
of the Property, Laws and Regulations, Facts, Space Leases and Service Contracts as SLGOP deems necessary or appropriate under the circumstances as to the current status of the Property and based upon
same, except as is expressly set forth in this Agreement to the contrary, SLGOP is and will be relying solely upon such inspections and examinations and the advice and counsel of its own consultants,
agents, legal counsel and officers. 

        (b)  SLGOP
EXPRESSLY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER TRANSFEROR, NOR THE TRANSFEROR PARTIES NOR ANY PERSON ACTING ON BEHALF OF
TRANSFEROR OR ANY TRANSFEROR PARTIES, NOR ANY PERSON OR ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY SLGOP IN CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR INDIRECT OFFICER,
DIRECTOR, PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT, REPRESENTATIVE, ACCOUNTANT, ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT, CONTRACTOR, SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING
PARTIES (TRANSFEROR, AND ALL OF THE OTHER PARTIES DESCRIBED IN THE PRECEDING PORTIONS OF THIS SENTENCE (OTHER THAN SLGOP AND/OR ANY AFFILIATE THEREOF)) SHALL BE REFERRED TO HEREIN COLLECTIVELY AS THE
"EXCULPATED PARTIES") HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESSED OR IMPLIED, BY
OPERATION OF LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION WARRANTIES OF HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO THE PROPERTY, THE PERMITTED USE OF THE
PROPERTY OR THE ZONING AND OTHER LAWS AND REGULATIONS APPLICABLE THERETO OR THE COMPLIANCE BY THE PROPERTY THEREWITH, THE REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED WITH THE PROPERTY, THE
EXISTING MORTGAGE INDEBTEDNESS, THE EXISTING MEZZANINE INDEBTEDNESS, OR OTHERWISE RELATING TO THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREIN. SLGOP FURTHER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY
SET FORTH IN THE AGREEMENT, ALL MATERIALS THAT HAVE BEEN PROVIDED BY ANY OF THE EXCULPATED PARTIES HAVE BEEN PROVIDED WITHOUT ANY WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED AS TO THEIR
SUITABILITY FOR ANY PURPOSE OR ACCURACY AND EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, SLGOP SHALL NOT HAVE ANY RECOURSE AGAINST TRANSFEROR OR ANY OF THE OTHER EXCULPATED PARTIES IN THE EVENT OF ANY ERRORS THEREIN OR OMISSIONS THEREFROM. EXCEPT AS EXRESSLY SET FORTH IN THIS
AGREEMENT, SLGOP IS ACQUIRING THE PROPERTY BASED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION AND INSPECTION OF THE PROPERTY AND NOT IN RELIANCE ON ANY INFORMATION PROVIDED BY TRANSFEROR, OR ANY OF THE
OTHER EXCULPATED PARTIES. 

10

 

        5.2  Except
as is expressly set forth in this Agreement to the contrary, Transferor hereby disclaims all warranties of any kind or nature whatsoever (including warranties of
habitability and fitness for particular purposes), whether expressed or implied, including, without limitation, warranties with respect to the Property. Notwithstanding anything to the contrary
contained herein, this Article 5 does not limit or affect in any way any indemnification provision contained in this Agreement. 

        5.3  Except
as expressly set forth in this Agreement to the contrary, Transferor makes no warranty with respect to the presence of Hazardous Materials (as hereinafter
defined) within the Property. The term "Hazardous Materials" shall mean (a) those substances included within the definitions of any one or more
of the terms "hazardous materials", "hazardous wastes", "hazardous substances", "industrial wastes", and "toxic pollutants", as such terms are defined under the Environmental Laws, or any of them,
(b) petroleum and petroleum products, including, without limitation, crude oil and any fractions thereof, (c) natural gas, synthetic gas and any mixtures thereof, (d) asbestos and
or any material which contains any hydrated mineral silicate, including, without limitation, chrysotile, amosite, crocidolite, tremolite, anthophylite and/or actinolite, whether friable or
non-friable, (e) polychlorinated biphenyl ("PCBs") or PCB-containing materials or fluids, (f) radon, urea
formaldehyde, lead, lead in drinking water or lead based paint, (g) any pathogen, toxin or other biological agent or condition including, without limitation, any fungus, mold, mycotoxin or
microbial matter naturally occurring or otherwise, (h) any other hazardous or radioactive substance, material, pollutant, contaminant or waste, and (i) any other substance with respect
to which any Environmental Law or governmental authority requires environmental investigation, monitoring or remediation. The term "Environmental Laws"
shall mean all federal, state and local laws, statutes, guidelines, codes, ordinances, regulations, now or hereafter in effect, in each case as amended or supplemented from time to time, including,
without limitation, all applicable judicial or administrative orders, applicable consent decrees and binding judgments relating to the regulation and protection of human health, safety, the
environment and natural resources (including, without limitation, ambient air, surface, water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation),
including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. §§ 9601 et seq.), the Hazardous Material
Transportation Act, as amended (49 U.S.C. §§ 1801 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act, as amended
(7 U.S.C. §§ 136 et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S. §§ 6901  et seq.), the Toxic Substance
Control Act, as amended (42 U.S.C. §§ 7401 et
seq.), the Clean Air Act, as amended (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control
Act, as amended (33 U.S.C. §§ 1251 et seq.), the Occupational Safety and Health Act, as amended (29 U.S.C.
§§ 651 et seq.), the Safe Drinking Water Act, as amended (42 U.S.C. §§ 300f et
seq.), Environmental Protection Agency regulations pertaining to Asbestos (including, without limitation, 40 C.F.R. part 61, Subpart M, the United States Environmental
Protection Agency Guidelines on Mold Remediation in Schools and Commercial Buildings, the United States Occupational Safety and Health Administration regulations pertaining to Asbestos (including,
without
limitation, 29 C.F.R. Sections 1910.1001 and 1926.58), applicable New York State and New York City statutes and the rules and regulations promulgated pursuant thereto regulating the storage, use and
disposal of Hazardous Materials, the New York City Department of Health Guidelines on Assessment and Remediation of Fungi in Indoor Environments and any state or local counterpart or equivalent of any
of the federal statutes, rules and regulations set forth above, and any federal, state or local transfer of ownership notification or approval statutes. 

        5.4  The
Property shall be contributed and sold free and clear of all violations of all building, fire, sanitary, environmental, housing and similar Laws and Regulations
(collectively, "Violations"), other than those (a) which are the express obligation of a Space Lessee under its Space Lease, (b) which
arise under or with respect to New York City Local Law 11 of 1998 and/or any 

11

 

inspections required thereunder, whether or not noted of record or (c) relating to sidewalk violations. Transferor shall prior to Closing cause all Violations for which it is responsible
hereunder to be cured and removed of record (provided that the cost of such cure and removal, when aggregated with any cost incurred by Transferor to cure title defects which are not Voluntary Liens,
does not exceed the Title Cure Cost Limit) and shall pay all fines and penalties in respect thereof as provided in Section 6.1.5. If Transferor is unable to complete all work required to cure
all Violations for which it is responsible hereunder prior to the Closing, Transferor shall credit SLGOP at Closing with the cost of curing such Violations and all costs of removing same of record, as
estimated by a consulting architect or engineer selected by SLGOP and reasonably approved by Transferor, provided that such credit, when aggregated with any cost incurred by Transferor to cure title
defects which are not Voluntary Liens, does not exceed the Title Cure Cost Limit. In addition, SLGOP shall at Closing receive a credit (which shall not reduce the Title Cure Cost Limit) in the amount
of $80,000.00, representing the estimated cost of performing all work required to remove all sidewalk violations. The credits to which SLGOP is entitled to pursuant to this Section 5.4 are
referred to herein collectively as the "Violation Cure Credit". 

        6.    Apportionments.    

        6.1  At
the Closing, the following items shall be apportioned between the parties as of 11:59 PM on the day preceding the Closing Date. Except as hereinafter expressly
provided, all prorations shall be done on the basis of a three hundred sixty-five (365) day year and the actual number of days elapsed to the Closing Date or the actual number of
days in the month in which the Closing occurs, as applicable. Any errors in the apportionments pursuant to this Section 6 shall be corrected by appropriate re-adjustment between
Transferor and SLGOP post-closing, provided that notice of any such error, with supporting calculations, shall be given by SLGOP to Transferor or by Transferor to SLGOP, as the case may
be, no later than one (1) year after the Closing, and all such apportionments shall be deemed final as of such date. Except as otherwise specifically provided for herein, all apportionments
shall be made in the manner recommended by the Customs in Respect to Title Closings of the Real Estate Board of New York, Inc., and there shall be no other apportionments. The provisions of
this Section 6.1 shall survive the Closing. The items to be apportioned are: 

        6.1.1(a)    Fixed
rent (including fixed charges for electricity on a "rent inclusion" or similar basis, if applicable) under Space Leases (collectively, "Fixed
Rent") which is collected on or prior to the Closing in respect of the month in which the Closing occurs (the "Current Month"), shall be apportioned on a per diem basis based upon the number of days
in the Current Month prior to the Closing Date (which shall be allocated to Transferor) and the number of days in the Current Month on and after the Closing Date (which shall be allocated to SLGOP).
If, at the Closing, any Fixed Rent is unpaid, as set forth in the Updated Activity Report (as hereinafter defined), subject to clause (c) below, payments of Fixed Rent thereafter received from
such Space Lessee shall be applied and disbursed in the following order and priority: 

        (i)    First,
on account of the actual and reasonable out- of-pocket costs of collection incurred by SLGOP and paid to third parties not affiliated with
SLGOP; 

        (ii)  Next,
on account of Fixed Rent owing by such Space Lessee in respect of the Current Month, to be apportioned between Transferor and SLGOP as provided in
Section 6.1.1(a); 

        (iii)  Next,
to SLGOP, in an amount equal to all other Fixed Rent owing by such Space Lessee in respect of all periods after the Current Month; 

12

 

        (iv)  Next,
to Transferor, in an amount equal to all other Fixed Rent owing by such Space Lessee in respect of all periods preceding the Current Month, as set forth in the
Updated Activity Report; and 

        (v)  The
balance, if any, to SLGOP. 

        (b)    Rental
payments for fuel pass-alongs, so-called escalation rent or charges based upon real estate taxes, operating expenses, labor costs, cost of
living increases or like items (collectively, "Overage Rent") which are collected on or prior to the Closing in respect of the Current Month, shall be
apportioned on a per diem basis based upon the number of days in the Current Month prior to the Closing Date (which shall be allocated to Transferor) and the number of days in the Current Month on and
after the Closing Date (which shall be allocated to SLGOP). If, at the Closing, any Overage Rent is unpaid, as set forth in the Updated Activity Report, subject to clause (c) below, payments of
Overage Rent thereafter received from such Space Lessee shall be applied and disbursed in the following order and priority: 

        (i)    First,
on account of the actual and reasonable out-of-pocket costs of collection incurred by SLGOP and paid to third parties not affiliated with
SLGOP; 

        (ii)  Next,
on account of Overage Rent owing by such Space Lessee in respect of the Current Month, to be apportioned between Transferor and SLGOP as provided in
Section 6.1.1(a); 

        (iii)  Next,
to SLGOP, in an amount equal to all Overage Rent owing by such Space Lessee in respect of all periods after the Current Month; 

        (iv)  Next,
to Transferor, in an amount equal to all Overage Rent owing by such Space Lessee in respect of all periods preceding the Current Month, as set forth in the
Updated Activity Report; and 

        (v)  The
balance, if any, to SLGOP. 

        (c)  All
monies received by Transferor from Space Lessees after the Closing in respect of Fixed Rent, Overage Rent or Reimbursables (as hereinafter defined) shall be remitted
to SLGOP within two (2) Business Days of receipt thereof (provided that Transferor shall not be obligated to make any remittance more than weekly), who shall allocate and disburse such amounts
between the parties as provided in this Agreement. In the event SLGOP has not received all sums including, without limitation, Fixed Rent, Overage Rent and Reimbursables owing by a Space Lessee under
its Space Lease for any period after the Closing (collectively, "Post Closing Rent"), SLGOP shall, subject to clause (f) below, apply any
payments received after the Closing from such Space Lessee in the following order: (i) first, to Fixed Rent, (ii) second, to that portion of Overage Rent relating to real estate taxes,
and (iii) third, to such other components of Post Closing Rent as SLGOP elects. For all purposes under this Section 6, payments made to SLGOP as landlord as a prepayment of Fixed Rent or
Overage Rent shall nevertheless be deemed due and owing to SLGOP if such prepayment is for no more than one (1) month of Fixed Rent or Overage Rent and is made not more than one
(1) month in advance. 

        (d)  Overage
Rent prepaid by Space Lessees or otherwise payable by Space Lessees based on an estimated amount shall be re-apportioned subsequent to the Closing as
and when the related Space Lessee's actual obligation for such Overage Rent is reconciled pursuant to the related Space Lease. Transferor shall furnish to SLGOP at Closing (and thereafter promptly
upon request) all information with respect to any period prior to the Closing reasonably necessary for the billing of Overage Rent and Reimbursables. Such reapportionment shall be made on a per diem
basis based upon the number of days in the respective period of ownership of the Property of each party hereto. SLGOP and Transferor shall jointly determine whether the items constituting Overage 

13

 

Rent have been overbilled or underbilled with respect to accounting periods prior to or in which the Closing occurs. If SLGOP and Transferor determine (subject to any protest rights of any Space
Lessee) that there has been an ove rbilling and an overbilled amount has been received, Transferor shall promptly remit to SLGOP that portion of such overbilling allocable to the period prior to
Closing, and upon receipt thereof, SLGOP shall reimburse or credit against Overage Rent next coming due such amount to the Space Lessees which paid the excess amount. If SLGOP and Transferor determine
(subject to any protest rights of any Space Lessee) that there has been an underbilling, the additional amount shall be included in SLGOP's next monthly rent billing to the Space Lessees who are
determined to owe such additional amount, and the parties shall apportion such amount(s) so received in the respective proportions in which Overage Rent was previously apportioned between the parties
as provided in Section 6.1.1(c). 

        (e)  Amounts
payable by Space Lessees in respect of overtime heat, air conditioning or other utilities or services, freight elevator charges, supplemental water, HVAC and
condenser charges, services or repairs and labor costs associated therewith, above standard cleaning and all other items which are payable to Transferor as reimbursement or payment for above standard
overtime services whether pursuant to such Space Lessee's Space Lease or pursuant to a separate agreement with Transferor (collectively "Reimbursables")
shall not be adjusted, and shall, subject to clause (c) above, belong to the party furnishing such utilities, labor or services to such Space Lessee. 

        (f)    If
any Space Lessee expressly identifies any payment of Post Closing Rent as a payment made to be in respect of a period prior to the Closing, or such payment of Post
Closing Rent is otherwise determinable from the context of such payment as being in respect of a period prior to the Closing (e.g., it is accompanied by an invoice for an item of Fixed Rent or Overage
Rent in such amount), then, provided that at the time of such payment such Space Lessee is current for the period following the Closing in the payment of (i) Fixed Rent, and (ii) that
portion of Overage Rent relating to real estate taxes, the payment (or portion thereof) so identified shall be remitted by SLGOP to Transferor (subject to apportionment if in respect of the Current
Month). To the extent any payment received from a Space Lessee after the Closing does not indicate whether the payment is for an item of Fixed Rent, Overage Rent or Reimbursables in respect of a
period prior to or after the Closing, and the same cannot be clearly determined from the context of such payment, then such payment will be applied as determined by SLGOP pursuant to clause (c)
of this Section. 

        (g)  All
security deposits and advance rentals in the nature of security deposits paid by Space Lessees (or any predecessor thereof) pursuant to Space Leases
("Security Deposits") which are described in the schedule attached hereto as Exhibit J-2 and
made a part hereof shall be delivered to SLGOP at the Closing. Security Deposits held in cash at Closing shall, net of sums on deposit in the Security Deposit Reserve Sub-Account (as
defined in the Mortgage Loan Documents) which are to be assigned to SLGOP, be credited toward the Consideration. Any transfer fees or charges due in respect of the assignment and/or replacement of any
unapplied security deposit comprised of a letter of credit (a "Security LC") shall be borne equally by Transferor and SLGOP. To the extent that any
Security LC shall not be transferable as of the Closing, Transferor and SLGOP shall cooperate with each other following the Closing so as to transfer the same to SLGOP or to obtain a replacement
letter of credit with respect thereto in favor of SLGOP as soon as practicable after the Closing. Transferor shall deliver any such Security LC to SLGOP at the Closing and until any such Security LC
shall be transferred or replaced, Tr ansferor shall, within two (2) Business Days of receipt of SLGOP's certification that a default has occurred under the applicable Space Lease entitling the
landlord thereunder to apply the Security Deposit, draw upon the same and deliver the proceeds to SLGOP for SLGOP's application in accordance with the applicable Space Lease, provided that such
certification of SLGOP shall contain an agreement, in form and substance reasonably satisfactory to Transferor, whereby SLGOP indemnifies and holds Transferor 

14

 

and Transferor Parties harmless from and against any and all obligations, liabilities, claims, demands, lossess, damages, causes of action, judgments, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) arising in connection with such drawing. 

        (h)  (i)     For
a period not to exceed one hundred eighty (180) days subsequent to the Closing, SLGOP agrees that it shall include in its regular
billings to Space Lessees the amount of any Fixed Rent, Overage Rent or Reimbursables due to Transferor pursuant to this Agreement; provided, however, that SLGOP shall not be required to institute
legal proceedings for the collection of such sums or incur any additional expense in connection therewith. 

        (ii)  If,
as of the Closing Date, any Space Lessee identified in Exhibit J-1 attached hereto and made a
part hereof is more than thirty (30) days in arrears in the payment of either Fixed Rent or Overage Rent, as set forth in the Updated Activity Report (the amount of such arrears hereinafter,
the "Arrearage"), SLGOP shall at Closing advance to Transferor an amount equal to 25% of the Arrearage disclosed on the Updated Activity Report,
excluding any Arrearage relating to the Current Month, in respect of each such Space Lessee (any amount so advanced hereinafter, the "SLG Advance"). In
addition, SLG may, by notice to Transferor given not less than two (2) Business Days prior to Closing, elect to make an SLG Advance in respect of any Arrearage in respect of any other Space
Lessee. SLGOP shall be the sole party entitled to bring an action or proceeding against any Space Lessee as to which an SLG Advance has been made. All payments received by SLGOP after the Closing in
respect of any Arrearage for which an SLG Advance has been made shall be applied as follows: 

        (1)  First,
to reimburse SLGOP for sums paid to Transferor as the SLG Advance; 

        (2)  Next,
to SLGOP, on account of the actual and reasonable out-of-pocket costs of collection incurred by SLGOP and paid to third parties not
affiliated with SLGOP; and 

        (3)  the
balance, if any, 50% to Transferor and 50% to SLGOP. 

15

  

        (iii)  Transferor
shall retain the right to bring a separate and independent cause of action for money damages only against any Space Lessee as to which (1) an
Arrearage exists as of the Closing, and (2) an SLG Advance is not made. 

        (i)    Transferor
shall have the right from time to time for a period expiring on the later of (i) of one hundred eighty (180) days following the Closing, or
(ii) the disposition or settlement of any litigation pending against any Space Lessee either disclosed on Exhibit O, or as to which an SLG
Advance has been made, on reasonable prior notice to SLGOP, to review SLGOP's rental records with respect to the Property to ascertain the accuracy of such accountings. SLGOP shall have the right from
time to time for a period of one hundred eighty (180) days following the Closing, on reasonable prior notice to Transferor, to review Transferor's rental records with respect to the Property to
ascertain the accuracy of such accountings. 

        (j)    The
provisions of Section 6.1.1 shall not apply to payments received in respect of Rent Escrow Space (as hereinafter defined), which shall be governed by
Section 7.5. 

        6.1.2    Except
to the extent required to be paid by Space Lessees directly to the applicable taxing authority pursuant to the related Space Leases, real estate
taxes, BID charges or assessments, unmetered water and sewer charges and vault charges, if any, and any and all other municipal or governmental assessments of any and every nature levied or imposed
upon the Property in respect of the current fiscal year of the applicable taxing authority in which the Closing Date occurs (the "Current Tax Year"), on
a per diem basis based upon the number of days in the Current Tax Year prior to the Closing Date (which shall be allocated to and paid by Transferor on or prior to Closing) and the number of days in
the Current Tax Year on and after the Closing Date (which shall be allocated to SLGOP). If the Closing shall occur before the tax rate for the Current Tax Year is fixed, the apportionment of real
estate taxes shall be upon the basis of the tax rate for the next preceding fiscal period applied to the latest assessed valuation. Promptly after the new tax rate is fixed for the fiscal period in
which the Closing takes place, the apportionment of real estate taxes shall be recomputed. In the event that the tax rate for the Current Tax Year is adjusted after the date hereof, the adjusted tax
rate shall be deemed to apply to real estate taxes for the entire Current Tax Year, and the installment of real estate taxes paid by Transferor on July 1, 2002 shall be recalculated to reflect
the new tax rate for the purposes of apportionment hereunder. Upon the Closing Date and subject to the adjustment provided above, SLGOP shall be responsible for real estate taxes and assessments
levied or imposed upon the Property payable in respect of the Current Tax Year and all periods after the Current Tax Year. In the event that any assessments levied or imposed upon the Property prior
to the Closing are payable in installments, all such remaining unpaid installments due on and after the Closing Date shall be credited to SLGOP or paid in full by Transferor at Closing. 

        6.1.3    Charges
and fees due under contracts for the supply to the Property of heat, steam, electric power, gas and light and telephone (other than those which
are the direct responsibility of Space Lessees), if any, in respect of the billing period of the related service provider in which the Closing Date occurs (the "Current Billing
Period") on a per diem basis based upon the number of days in the Current Billing Period prior to the Closing Date (which shall be allocated to and paid by Transferor on or
prior to Closing) and the number of days in the Current Billing Period on and after the Closing Date (which shall be allocated to SLGOP) and assuming that all charges are incurred uniformly during the
Current Billing Period. At SLGOP's election, Transferor shall either (a) receive a credit against the Consideration for deposits held by any provider of the foregoing utilities
("Transferor Deposits"), in which case all such Transferor Deposits for which Transferor receives such credit shall remain in place for the benefit of
SLGOP and Transferor shall execute and deliver such documents as shall be necessary to assign such Transferor Deposits to SLGOP, or (b) not receive such credit for such Transferor Deposits, in
which case Transferor may obtain a 

16

 

return or refund of any such Tr ansferor Deposits for which Transferor does not receive such credit. 

        6.1.4(a)
Interest accrued in respect of the Existing Mortgage Indebtedness and the Existing Mezzanine Indebtedness for the Current Month, on a per diem basis, based upon
the number of days in the Current Month prior to the Closing (which shall be allocated to and paid by Transferor), and the number of days on and after the Closing (which shall be credited to SLGOP). 

        (b)    At
Closing, Transferor shall, for no additional consideration, (a) cause that certain Guaranteed Transaction Confirmation dated September 7, 2001 between
Transferor and Credit Lyonnais New York Branch ("Credit Lyonnais"), as counterparty, as supplemented by ISDA Master Agreement between Credit Lyonnais
and Transferor, relating to the Existing Mortgage Indebtedness to be assigned to SLGOP subject to the rights of Mortgage Lender therein, and (b) cause MZ to cause that certain Interest Rate Cap
Agreement dated as of September 7, 2001 between MZ and Credit Lyonnais relating to the Existing Mezzanine Indebtedness to be assigned to SLGOP subject to the rights of Mezzanine Lender (the
interest rate cap agreements referred to in (a) and (b), collectively, the "Interest Cap"). Transferor may seek to obtain a release from Credit
Lyonnais with respect to all obligations arising after the Closing under the Interest Cap, and SLGOP shall cooperate in all reasonable respects in connection therewith, provided that SLGOP shall not
incur any cost or expense (other than de minimis) in connection therewith. 

        (c)    The
amounts held by Mortgage Lender (as hereinafter defined) or Funding, as applicable, in the reserve accounts (individually, a "Reserve
Account" and collectively, the "Reserve Accounts") set forth in Exhibit G
attached hereto and made a part hereof, less payments made in respect of Pending Draws (as hereinafter defined), shall, with the exception of the Dividend Reserve (as defined in the LLC Agreement), be
assigned to SLGOP. The Dividend Reserve shall be paid to the Rent Escrow Agent (as hereinafter defined) and applied toward the Rental Escrow Sum (as hereinafter defined), and Transferor shall pay any
additional sum required to be deposited into the Rent Escrow pursuant to Section 7.5. At Closing, Transferor shall be credited in an amount equal to the balance of the Tax and Insurance Escrow
Reserve Account (as defined in the Mortgage Loan Documents), and, other than with respect to the transfer of the Security Deposit Reserve Sub-Account, shall receive no other credit
on account of the Consideration by reason of the assignment to SLGOP of any other Reserve Account. Transferor shall pay or credit to SLGOP the difference between the cash Security Deposits required to
be paid or credited to SLGOP pursuant to Section 6.1.1(g) and the balance in the Security Deposit Reserve Sub-Account. 

        (d)    Transferor
shall be entitled to receive and retain all payments in respect of Pending Draws. Prior to Closing, Transferor may seek payment from (i) the Future
Leasing Expenses Reserve Account (as defined in the Mortgage Loan Documents), for payment of (y) Tenant Improvements relating to Space Leases entered into after the date hereof in accordance
with Section 27 and (z) Payable Commissions set forth in Exhibit K or due with respect to Space Leases entered into after the date
hereof, (ii) the Free Rent Reserve Account (as defined in the Mortgage Loan Documents), for monthly payments equal to the free rent previously granted to Omnicom, (iii) either the
Contractual Leasing Expenses Reserve Account (as defined in the Mortgage Loan Documents), the Future Leasing Expenses Reserve Account, or the NY Media Group Reserve Account (as defined in the Mortgage
Loan Documents) for payment of the Tenant Improvements set forth on Exhibit L in the manner described therein, and (iv) the Local Law 10
and 11 Reserve, for payment of the cost of scaffolding charges and engineering fees. Transferor shall not make any other draw requests from the Reserve Accounts, other than for reimbursement of
capital costs incurred to perform work required either (A) to remedy Violations noted after the date hereof, or (B) in the event of an 

17

 

emergency, provided that Transferor shall promptly notify SLGOP if any such expense is incurred. SLGOP agrees that if Transferor shall, during the period commencing on the day following the date of
the last Pending Draw and expiring on the Closing, pay any expense for which (y) reimbursement from the Reserve Accounts is permitted pursuant to this Section 6.1.4, and (z) a
draw request is not submitted to Mortgage Lender (a "Reserve Advance"), SLGOP shall at Closing reimburse Transferor for up to $250,000.00 of such
Reserve Advances, provided that Transferor shall deliver paid invoices or other evidence reasonably satisfactory to SLGOP that (1) the cost was incurred for an expense to be paid from the
Reserve Accounts prior to Closing and (2) the amount for which reimbursement is sought has been paid. 

        6.1.5    (a)    Fines,
penalties and interest on Violations, including those Violations which Transferor is not obligated to cure, shall be allocated to
and paid by Transferor on or prior to the Closing, and (b) SLGOP shall be paid or credited in the amount of the Violation Cure Credit. 

        6.1.6    Tenant
Improvement Costs (as hereinafter defined), if any, listed on Exhibit L and Payable
Commissions (as hereinafter defined), if any, payable under the Leasing Brokerage Agreements (as hereinafter defined) and listed on Exhibit K in
respect of any and all Space Leases entered into at any time prior to the date hereof shall be paid by SLGOP. Payable Commissions payable in connection with the exercise after the date hereof of any
renewal, extension or expansion option provided for in any Space Lease shall be paid by SLGOP. Notwithstanding the foregoing, SLGOP shall at Closing receive a credit to be applied toward the
Consideration in the amount of $127,800.00 on account of certain Tenant Improvements Costs relating to the Space Leases. 

        6.1.7    Charges
payable under Assigned Contracts in respect of the Current Billing Period on a per diem basis based upon the number of days in the Current
Billing Period prior to the Closing Date (which shall be allocated to and paid by Transferor on or prior to Closing) and the number of days in the Current Billing Period on and after the Closing Date
(which shall be allocated to SLGOP) and assuming that all charges are incurred uniformly during the Current Billing Period. 

        6.1.8    Salaries,
wages and other employee benefits and charges (including accrued vacation pay, union dues, pension contributions and other similar benefits)
payable or accrued to the Employees (as hereinafter defined). 

        6.1.9    Any
charges or fees for transferable licenses and Permits for the Property. 

        6.1.10    All
other items customarily apportioned in connection with sales of similar property in the State and City of New York. 

        6.2  If
there are water meters measuring water consumption within the Property, Transferor shall endeavor to furnish readings to a date not more than five (5) days
prior to the Closing Date, and the unfixed meter charges and the unfixed sewer rents, if any, based thereon for the intervening time shall be apportioned on the basis of such last readings. If
Transferor fails or is unable to obtain such readings, the Closing shall nevertheless proceed and the parties shall apportion the meter charges and sewer rents on the basis of the last readings and
bills received by Transferor and the same shall be appropriately readjusted after the Closing on the basis of the next subsequent bills. Unpaid water meter and other utility charges as of the Closing
Date which (a) are the obligation of Space Lessees under Space Leases who are current in all monetary obligations under their respective Space Lease and (b) are less than sixty
(60) days old, shall not be an objection to title and SLGOP shall look solely to such Space Lessees for collection of such amounts. 

        6.3  Transferor
shall furnish to SLGOP not less than two (2) Business Days prior to the Closing a proposed closing statement setting forth proposed c losing
adjustments and other credits and charges to each party pursuant to this Agreement. 

18

 

        6.4  Transferor
shall at Closing pay those sums required to be paid under Section 9.1.3 of this Agreement in respect of the LLC Agreement. 

        6.5  The
provisions of this Section 6 shall survive the Closing; provided, however, that any re-prorations or re-apportionments shall be made
as and when required under Section 6.1 above. Notwithstanding the
foregoing, to the extent that (a) a Space Lessee asserts a claim for overpayment of Overage Rent paid in respect of a period prior to Closing and (b) such Space Lessee has offset or
reduced any sum payable under its Space Lease by all or a portion of such claim, or has brought an action against SLGOP (i) Transferor shall remain liable therefor without limitation as to time and
(ii) SLGOP may bring such action or proceeding as is necessary against Transferor to enforce performance of the foregoing obligation of Transferor. Any corrected adjustment or proration shall
be paid in Wire Transferred Funds to the party entitled thereto. 

        7.    Representations and Warranties of the Parties; Certain Covenants.    

        7.1  Transferor
warrants, represents and covenants to and with SLGOP that the following are true and correct on the date hereof: 

        7.1.1    Transferor
is a limited liability company duly formed and in good standing under the laws of the State of Delaware and has the requisite power and
authority to enter into and to perform the terms of this Agreement. Transferor is not subject to any law, order, decree, restriction or agreement which prohibits or would be violated by this Agreement
or the consummation of the transactions contemplated hereby, other than any violation of the Mortgage Loan Documents or the Mezzanine Loan Documents which may result from the Interim Transactions,
which will be cured or waived by Closing. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite action of
Transferor. This Agreement constitutes, and each document and instrument contemplated hereby to be executed and delivered by Transferor, when executed and delivered, shall constitute the legal, valid
and binding obligation of Transferor enforceable against Transferor in accordance with its respective terms (subject to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally). 

        7.1.2    Transferor
is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code 1986, as amended, or any regulations
promulgated thereunder (collectively, the "Code"). 

        7.1.3    Neither
the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby is prohibited by, or
requires Transferor to obtain any consent, authorization, approval or registration under any law, statute, rule, regulation, judgment, order, writ, injunction or decree which is binding upon
Transferor, other than the Lender Consents (as hereinafter defined). 

        7.1.4    There
are no judgments, orders, or decrees of any kind against Transferor unpaid or unsatisfied of record, nor any actions, suits or other legal or
administrative proceedings pending or, to the best of Transferor's actual knowledge, threatened in writing against Transferor, which could have any material adverse effect on Transferor or the ability
of Transferor to consummate the transactions contemplated by this Agreement. 

        7.1.5    There
are no leases or other agreements for the use or occupancy of all or any portion of the Property to which Transferor is a party or by which
Transferor is bound other than those set forth on Exhibit I attached hereto and made a part hereof (such leases or occupancy agreements, together
with all renewals, replacements and amendments thereof entered into after the date hereof in accordance with Section 27, being herein referred to as the "Space
Leases"). Transferor has delivered to SLGOP true, correct and complete copies of all of the Space Leases and all Space Lease Guaranties, and has delivered to SLGOP or made
available to SLGOP for review all 

19

 

material correspondence relating to the Space Leases together with all other books, records, billing summaries and back-up for billing of Overage Rent and Reimbursables in the possession
or control of Transferor (collectively, the "Lease Files"). Transferor shall, promptly following the date hereof, authorize and instruct its accountants
to grant access to SLGOP's accountants to historic work papers required for an audit under Sections 3-05 and 3-14 of Regulation S-X under the
Securities Exchange Act of 1934 (to be performed at SLGOP's sole cost and expense). 

        7.1.6    As
to the Space Leases: 

        (a)    Each
has not been modified except as set forth on Exhibit I, and Fixed Rent, Overage Rent and other additional
rent set forth in the Space Leases are being billed to the Space Lessees in accordance with the most recent Activity Reconciliation Report prepared by Transferor, a copy of which is attached hereto as  Exhibit J
(the "Activity Report"). The Activity Report identifies (i) Fixed Rent as
"Monthly Rent", (ii) Overage Rent as "Real Estate Tax Esc.", and "Operating Expense Esc.", (iii) Reimbursables by specific category of services provided, (iv) Arrearages as "End
Balance", and (v) Security Deposits as "Sec. Dep. Bal.". No Space Lessee is in arrears of its obligations to pay Fixed Rent or Overage Rent, except as set forth on the Activity Report. To the
best of Transferor's knowledge, each Space Lease is in full force and effect. 

        (b)    (i) Transferor
has not received written notice that it is in default of its obligations under any Space Lease which has not been cured or waived in writing, and
Transferor has no knowledge of any default of any of its material obligations under any Space Lease, (ii) except as set forth in the Activity Report, no Space Lessee is in arrears in the
payment of any monetary obligation under its Space Lease, and (iii) to the best of Transferor's knowledge, no Space Lessee is in default of any material non-monetary obligation
under its Space Lease. 

        (c)    All
Space Lessees have been delivered possession of the premises demised to them under their respective Space Leases. 

        (d)    To
the best of Transferor's knowledge, no Space Lessee has, and Transferor has not received any written notice from any Space Lessee asserting, any defense to, offset or
claim against, Fixed Rent, Overage Rent or other sum payable by it under its Space Lease which remains outstanding. Except as expressly set forth in the Space Leases, no Space Lessee is entitled to
any free rent, abatement, rent
concession or tenant improvement allowance, other than Tenant Improvement Costs, if any, which are to be prorated pursuant to Section 6.1.6. 

        (e)    Except
as otherwise set forth in the Space Leases or in the Activity Report, no Space Lessee has prepaid any rents or additional rents for more than one (1) month
in advance. 

        (f)    Other
than sums on deposit in the Security Deposit Reserve Sub-Account, Transferor is, and has been since July 1, 2002, in possession of the Security
Deposits set forth in Exhibit J-2, which correctly sets forth whether such Security Deposit is held in cash or Security LC. From and
after the date hereof through and including the Closing Date or earlier termination of this Agreement, Transferor shall not apply all or any portion of any Security Deposit held by Transferor against
a default by any Space Lessee under its Space Lease, nor shall Transferor return to any Space Lessee all or any portion of its Security Deposit, unless required to do so in accordance with the
provisions of the applicable Space Lease. 

        (g)    Except
as set forth on Exhibit K attached hereto and made a part hereof, there are no leasing brokerage
commissions (or unpaid installments thereof) with respect to any Space Leases (the "Payable Commissions") which are now due and payable (including
renewals, extensions or expansions of any Space Lease, regardless of whether or not such renewal, 

20

 

extension or expansion is pursuant to a provision contained in an existing Space Lease). Exhibit K sets forth the sole leasing brokerage
agreements ("Leasing Brokerage Agreements") relating to the Property in effect on the date hereof, true and complete copies of which have been delivered
to SLGOP. At Closing, SLGOP shall assume the obligations of Transferor arising from and after the Closing under the Leasing Brokerage Agreements pursuant to the Omnibus Assignment (as hereinafter
defined). 

        (h)    Except
as set forth on Exhibit L attached hereto and made a part hereof, there is no tenant improvement work
required to be performed by the landlord under any Space Lease or for which the landlord is required under any Space Lease to reimburse any Space Lessee or grant any allowance in favor of any Space
Lessee which has not been completed and/or the costs of which (the "Tenant Improvement Costs") have not been paid or allowed (regardless of whether such
Space Lessee is in default under its Space Lease). 

        (i)    The
base years of each component of Overage Rent consisting of so-called escalation rent or charges based upon real estate taxes, operating expenses, labor
costs, cost of living increases or like items payable by each Space Lessee is set forth in Exhibit M attached hereto and made a part hereof. 

        (j)    There
are no outstanding sums presently due under the Space Lease dated as of September 7, 2001 between Transferor, as landlord, and Space Consulting LLC, as
tenant, of space on the 24th floor of the Building (the "Space Consulting Lease"), nor has Mortgage Lender made demand that payment of
rent thereunder be made and deposited into the collection account maintained in connection with the Mortgage Loan. The landlord under the Space Consulting Lease has not delivered the premises demised
thereunder. 

21

  

        (k)    Notwithstanding
anything to the contrary contained in this Agreement, (i) Transferor does not represent or warrant that any particular Space Lease will be in
force or effect at Closing, that the Space Lessees will have performed their obligations under the Space Leases or that the Space Lessees will not be the subject of bankruptcy proceedings, and
(ii) the existence of any default by a Space Lessee, the failure of a Space Lessee to perform its obligations under its Space Lease, the termination of any Space Lease prior to Closing by
reason of the Space Lessee's default or the existence of bankruptcy proceedings pertaining to any Space Lessee, shall not, except as otherwise provided herein, affect the obligation of SLGOP to close
pursuant to this Agreement. 

        7.1.7    A
true and complete list of all service, maintenance and other contracts (excluding Space Leases) in connection with the Property are set forth on  Exhibit N attached hereto and made a part hereof
together with all renewals, replacements, extensions thereof (collectively,
"Service Contracts"). Transferor has delivered to SLGOP true, correct and complete copies of all of the Service Contracts. To Transferor's knowledge,
each of the Service Contracts is in full force and effect and Transferor has not received any written notice of any defaults thereunder. At Closing, SLGOP shall assume the existing Service Contracts
with ADT, Trans Lux and MCS—Canon (collectively, the "Required Contracts"). Not less than thirty-five (35) days prior to
the Closing, SLGOP shall designate other Service Contracts to be assigned to it by Transferor at Closing (such Service Contracts, together with the Required Contracts hereinafter collectively, the
"Assigned Contracts"), and Transferor shall, at its sole cost, cause all Service Contracts which are not Assigned Contracts to be terminated as of the
Closing. 

        7.1.8    Except
as set forth on Exhibit O attached hereto and made a part hereof, there are no actions to which
Transferor is a party, suits to which Transferor is a party, or proceedings to which Transferor is a party (including landlord/tenant proceedings) pending or, to the best of Transferor's knowledge,
threatened in writing against the Property, at law or in equity, before any federal, state, municipal or governmental department, commission, board, bureau, agency or instrumentality which could, if
adversely determined, (a) materially adversely affect title to the Property, (b) prohibit or impair Transferor from consummating the transactions contemplated hereby, or
(c) materially adversely affect the continued maintenance, use and operation of the Property. Exhibit O-1 sets forth all
pending proceedings for reduction of the assessed valuation of the Property ("Tax Proceedings"). 

        7.1.9    To
the best of Transferor's knowledge, there is no condemnation, environmental, zoning or other land-use proceeding instituted, and served upon Transferor
or of which it has otherwise received notice, or, to the best of Transferor's knowledge, threatened in writing, against the Property. 

        7.1.10    The
sole union agreements to which Transferor is a party are described on Exhibit P attached hereto and made a
part hereof (the "Union Agreements"). Exhibit P correctly identifies all union locals to which
the Union Agreements relate. The only persons employed by or on behalf of Transferor in connection with the management, operation or maintenance of the Property are set forth on  Exhibit Q attached
hereto and made a part hereof (the "Employees"). From and after the date
hereof through and including the Closing or earlier termination of this Agreement, Transferor shall not, except if required (a) pursuant to the express terms of any of the Union Agreements or
any renewal or amendment thereof which is renewed on an industry-wide basis or (b) to replace any of the Employees, (i) hire new Employees or (ii) materially increase
the salary, wages or other benefits of any of the Employees, without the prior written consent of SLGOP. Transferor shall notify SLGOP reasonably promptly if Transferor hires new Employees.  Exhibit Q correctly sets forth the salaries, wages, vacation pay, bonuses and any other fringe benefits (including, without limitation, social
security, unemployment compensation, employee disability insurance, sick pay, welfare and pension fund contributions, payments and deposits (if any) of all 

22

 

Employees. To the best of Transferor's actual knowledge, there are no employment proceedings filed and pending against Transferor by any current Employee. 

        7.1.11    To
the best of Transferor's actual knowledge, Transferor has not received notice from any governmental authority having jurisdiction over the Property asserting any
uncured violation of Environmental Laws. 

        7.1.12    Except
as disclosed in that certain Phase I Environmental Assessment dated March 7, 2000 prepared by Property Solutions Incorporated and addressed to Mortgage
Lender, to Transferor's actual knowledge, without any investigation or inquiry, no Hazardous Material currently exists within or has been or is being disposed of or released from, the Property or the
Building in violation of Environmental Laws. 

        7.1.13    Neither
Transferor nor, to Transferor's knowledge, any Space Lessee or guarantor under a Space Lease Guaranty has either filed or been the subject of any filing of a
petition under any federal or state bankruptcy or insolvency laws, suffered the appointment of a receiver to take possession of all, or substantially all, of its assets, suffered the attachment or
other judicial seizure of all, or substantially all, of its assets, admitted in writing its inability to pay its debts as they come due, nor made an offer of settlement, extension or composition to
its creditors generally. 

        7.1.14    Set
forth in Exhibit G is a true and complete schedule of all Reserve Accounts and the balances thereof as of
October 30, 2002. Exhibit G-1 sets forth the sole draw requests previously submitted to Mortgage Lender requesting payment
from the Reserve Accounts which are unpaid as of such date ("Pending Draws") or any draws made in accordance with Section 6.1.4, and to the
extent Mortgage Lender pays to SLGOP any such draw after the Closing, SLGOP shall promptly remit same to Transferor. 

        7.1.15    Attached
hereto as Exhibit R and made a part hereof are true and complete copies of certificates of insurance
evidencing all property insurance maintained by Transferor, with respect to the Property, including fire and extended coverage and rental interruption insurance ("Transferor's
Casualty Insurance"). Transferor's Casualty Insurance is in full force and effect and all premiums therefore have been fully paid through the stated term of such policies. 

        7.1.16    There
are no agreements, documents or other instruments evidencing or securing the Existing Mortgage Indebtedness, other than the Mortgage Loan Documents, true,
correct and complete copies of which have been delivered by Transferor to SLGOP. 

        7.1.17    The
outstanding principal balance due in respect of the Existing Mortgage Indebtedness as of the date hereof is One Hundred Fifty Eight Million and 00/100 Dollars
($158,000,000.00). The Existing Mortgage and the other Mortgage Loan Documents are in full force and effect. Transferor has not received any notice of acceleration or default under the Existing
Mortgage and/or the other Mortgage Loan Documents from the holder thereof ("Mortgage Lender"). 

        7.1.18    There
are no agreements, documents or other instruments evidencing or securing the Existing Mezzanine Indebtedness, other than Mezzanine Loan Documents, true, correct
and complete copies of which have been delivered by Transferor to SLGOP. 

        7.1.19    The
outstanding principal balance due in respect of the Existing Mezzanine Indebtedness as of the date hereof is Twenty Eight Million Five Hundred Thousand and 00/100
Dollars ($28,500,000.00). The Transferor Pledge and the other Mezzanine Loan Documents are in full force and effect. Transferor has not received any notice of acceleration or default under the
Transferor Pledge and/or the other Mezzanine Loan Documents from Mezzanine Lender. 

        7.1.20    No
work has been performed to the Property by or on behalf of Transferor (a) which require approvals or other sign-offs from the New York City
Department of Buildings or any other 

23

 

federal, state, county or municipal governmental authority which have not been obtained or (b) would require a change in the certificate of occupancy for the Property which has not been
obtained. To Transferor's knowledge, no Space Lessee has requested in writing Transferor's consent to perform any alteration or other work which would require a change in the certificate of occupancy
to the Property. 

        7.1.21    Consummation
of the Interim Transactions, and the contribution or sale, as applicable, of title to the Property and of undivided
tenancy-in-common interests therein by each of Transferor, MZ, News and each Transferor Party, and the acquisition by MZ, News and each Transferor Party of such
tenancy-in-common interest, will not create or give rise to any lien, claim, charge, encumbrance or other objection to title to the Property or any interest therein which will
remain as a title exception following the Closing. 

        7.1.22    In
order to induce SLGOP to issue the OP Units required to be issued hereunder, SCW hereby acknowledges and confirms his understanding that the issuance by SLGOP of
the OP Units is intended to be exempt from registration under the Securities Act of 1933, as amended, and the rules and regulations thereunder (the "1933
Act"). In furtherance thereof, SCW represents and warrants to SLGOP as follows: 

        (a)    SCW
or the SCW Entity, as applicable, is acquiring the OP Units solely for its own account for the purpose of investment and not as a nominee or agent for any other
person and not with a view to, or for offer or sale in connection with, any distribution of any thereof. SCW acknowledges and agrees that the recipient of the OP Units is not permitted to offer,
transfer, sell, assign, pledge, encumber, hypothecate, or otherwise dispose of any of the OP Units except as permitted in (i) this Agreement or (ii) the Partnership Agreement. 

        (b)    SCW
is knowledgeable, sophisticated and experienced in business and financial matters, and fully understands the limitations on transfer described in this Agreement and
the Partnership Agreement. SCW is able to bear the economic risk of holding the OP Units for an indefinite period and is able to afford the complete loss of its investment in the OP Units. 

        (c)    SCW
has been advised and acknowledges that (i) the OP Units may not be transferred or redeemed, except in accordance with this Agreement and the Partnership
Agreement and SCW and the SCW Entity, if applicable, will continue to bear the economic risk of its investment in the OP Units during the period of ownership, (ii) it is not anticipated that
there will be any public market for the OP Units at any time, (iii) Rule 144 promulgated under the 1933 Act may not be available with respect to the sale of any securities of SLGOP and
SLGOP has made no covenant, and makes no covenant, to make Rule 144 available with respect to the sale of any securities of SLGOP and (iv) a notation shall be made in the appropriate
records of SLGOP indicating that the OP Units are subject to the restrictions on transfer set forth in this Agreement and the Partnership Agreement. 

        (d)    SCW
is an "accredited investor" (as such term is defined in Rule 501 (a) of Regulation D under the 1933 Act). 

        (e)    If
at or prior to Closing, SCW designates a SCW Entity to acquire the OP Units, each of the representations and warranties set forth in this Section 7.1.22 shall
be deemed to have been restated at Closing by SCW and the SCW Entity, jointly and severally. 

        For
the purposes of this Agreement, the terms "to the actual knowledge of Transferor", "to the best of Transferor's actual knowledge", "to Transferor's knowledge", "Transferor has no
knowledge" and phrases of similar import shall mean the actual, present knowledge (and not constructive knowledge) of SCW, James F. Stomber, Jr. and Steven Sikora, without investigation or inquiry,
which individuals
Transferor hereby represents and warrants are the persons at a management or supervisory level who would, in the ordinary course of their responsibilities as employees or agents of Transferor, 

24

 

receive notice from other agents or employees of Transferor or from other persons or entities of any of the matters described in the representations and warranties in this Agreement which are limited
by the knowledge of Transferor. The representations and warranties of Transferor set forth in this Section 7 are subject to the limitation that to the extent that Transferor has delivered to
SLGOP any Space Leases prior to the date hereof, and either such Space Leases or the Permitted Exceptions contain provisions inconsistent with any representation or warranty, then such representation
or warranty shall be deemed modified to conform to such provisions. 

        7.2    SLGOP
warrants, represents and covenants to and with Transferor that the following are true and correct on the date hereof: 

        7.2.1    SLGOP
is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware and has the requisite power and authority to enter into
and to perform the terms of this Agreement. SLGOP has the corporate power and authority (a) to execute, deliver and perform this Agreement and (b) to issue, sell and deliver the OP Units
hereunder. The execution and delivery of this Agreement, the sale and issuance of the OP Units, and the consummation of the transactions contemplated hereby have been duly authorized by all requisite
action of SLGOP, and will not violate any provision of law, any order of any court or other agency of government, the Partnership Agreement of SLGOP or the Certificate of Incorporation or
By-Laws of SLG, or any provision of any indenture of material agreement or document to which SLGOP or SLG is a party or by which it or its properties or assets is bound. This Agreement
constitutes, and each document and instrument contemplated hereby to be executed and delivered by SLGOP, when executed and delivered, shall constitute the legal, valid and binding obligation of SLGOP
enforceable against SLGOP in accordance with its respective terms (subject to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditor's rights generally). 

        7.2.2    Neither
the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby is prohibited by, or requires SLGOP to
obtain any consent, authorization, approval or registration under any law, statute, rule, regulation, judgment, order, writ, injunction or decree which is binding upon SLGOP. 

        7.2.3    There
are no judgments, orders, or decrees of any kind against SLGOP unpaid or unsatisfied of record, nor any actions, suits or other legal or administrative
proceedings pending or, to the best of SLGOP's knowledge, threatened against SLGOP, which would have any material adverse effect on the business or assets or the condition, financial or otherwise, of
SLGOP or the ability of SLGOP to consummate the transactions contemplated by this Agreement. 

        7.2.4    SLGOP
has delivered to Transferor a true and complete copy of the Partnership Agreement. The Partnership Agreement is in full force and effect. 

        7.2.5    The
OP Units will at Closing be duly authorized and, when issued by SLGOP, will be validly issued in accordance with the terms of the Partnership Agreement and
Delaware law, fully paid and non-assessable. 

        7.2.6    Each
of (i) the offer and sale o f the OP Units, (ii) the conversion of the OP Units (from Class B Units into Class A Units) pursuant to
Section 4.2.A. of the Partnership Agreement and (iii) the issuance of shares of SLG common stock that may be issued upon redemption of the OP Units pursuant to Section 8.6 of the
Partnership Agreement is exempt from the registration requirements of the 1933 Act. 

        7.2.7    SLGOP
directly or indirectly owns all of the legal and beneficial interests in Funding. 

25

 

        The
representations of SLGOP set forth in Sections 7.2.1, 7.2.2, 7.2.4, 7.2.5, 7.2.6 and 7.2.7 shall survive the Closing without limitation as to time, and the representation set forth
in Sections 7.2.3 shall survive Closing for a period of 270 days following the Closing. 

        7.3    The
representations and warranties (a) of Transferor, contained in Sections 7.1.1 through 7.1.3, inclusive, and (b) of SCW and the SCW Entity, if
applicable, contained in Section 7.1.22, shall survive the Closing without limit as to time, and (c) of Transferor, contained in Sections 7.1.4 through 7.1.21, inclusive, shall survive
the Closing for a period expiring 270 days following the Closing (the survival periods referred to above, collectively, the "Survival Period").
Any claim by SLGOP of a breach of the representations or warranties made by Transferor in Sections 7.1.1 through 7.1.21 (a "Breach") shall be asserted
by SLGOP prior to the expiration of the applicable Survival Period, by SLGOP delivering to Transferor written notice thereof (a "Claim Notice"). If
Transferor fails to cure such Breach after receipt of a Claim Notice, SLGOP's sole remedy shall be to commence a legal proceeding in a court of competent jurisdiction against Transferor alleging that
Transferor is in breach of such representation or warranty (a "Proceeding"), which Proceeding must be commenced, if at all, within sixty
(60) days after the expiration of the Survival Period. Notwithstanding the foregoing, if prior to the Closing SLGOP becomes aware of one or more Breaches (whether in the Bring Down Certificate
or otherwise) which, in the aggregate, would not result in an adverse economic impact ("Damage") to SLGOP or the Property greater than $75,000.00 (the
"Threshold"), SLGOP shall not be entitled to refuse to close title by reason thereof. Transferor acknowl edges and agrees that SLGOP shall not be deemed
to have waived any rights with respect to any Breach of which SLGOP has knowledge prior to Closing if such Breach (and all others of which SLGOP then has knowledge) does not exceed the Threshold;
provided, however, that Transferor shall have no liability to SLGOP with respect to any Breach unless and until the Damage arising from all Breaches exceeds the Threshold. SLGOP shall not, by closing
hereunder, be deemed to waive any Breach of which it has knowledge prior to the Closing unless such Breach, together with all other Breaches of which SLGOP has knowledge prior to the Closing, cause
Damage in excess of the Threshold. If prior to the Closing SLGOP becomes aware of one or more Breaches which cause Damage in excess of the Threshold, SLGOP may elect to either (i) waive such
Breach or Breaches and close title to the roperty, and receive a credit equal to the Threshold to be applied
against the Consideration, or (ii) avail itself of the remedies set forth in Section 10.2. If SLGOP elects to terminate this Agreement pursuant to clause (ii) immediately above,
SLGOP shall be entitled to a Downpayment Return. After the Closing, SLGOP may deliver a Claim Notice only if SLGOP becomes aware of one or more Breaches which, when combined with any Breach(es)
existing prior to the Closing but not asserted because the Damage therefrom did not exceed the Threshold, results in Damage which exceeds the Threshold. The aggregate liability of Transferor arising
by reason of or in connection with all alleged Breaches asserted after the Closing shall not in any event exceed $3,000,000.00 (the "Maximum Amount").
The terms and provisions of this Section 7.3 shall survive the Closing and/or termination of this Agreement. 

        7.4    By
their signatures set forth below, SCW and DRA hereby agree to jointly and severally guaranty payment to SLGOP, Designee and their successors and assigns an amount
equal to all Damage, not to exceed the Maximum Amount, resulting from one or more Breaches, pursuant to the form of Guaranty attached hereto as Exhibit T  and made a part hereof (the "Transferor Guaranty"), which is to be executed and delivered at Closing. The provisions of this
Section 7.4 shall survive the Closing. 

        7.5    Rent
Escrow. 

        (a)    At
the Closing, Transferor shall establish an escrow (the "Rental Escrow") in an amount equal to the aggregate Fixed Rent
payable in respect of all portions of the Property (collectively, the "Rent Escrow Space") which are either (i) listed on  Exhibit U attached

26

 

hereto and made a part hereof (the "Space Schedule") or (ii) subject to a Space Lease not listed on Exhibit U  pursuant to which the Space Lessee
thereunder is, as of the Closing Date, in arrears in payment (excluding application of any Security Deposit) to Transferor in an amount equal
to or greater than ninety (90) days of Fixed Rent payable by such Space Lessee under its Space Lease (a Space Lease described in this clause (ii) is referred to as a
"Defaulted Space Lease"), calculated as follows: (y) as to the Rent Escrow Space listed on Exhibit U,  the sum of $4,379,624.00, and (z) as
to the Rent Escrow Space covered by a Defaulted Space Lease, the amount equal to the Fixed Rent (which for purposes hereof shall be
deemed to be the Fixed Rent last payable by the Space Lessee thereunder prior to the applicable default) during the period commencing on the first day of the month immediately following Closing (the
"First Rental Payment Date") and continuing for the next succeeding twelve (12) calendar months (the "Rental Escrow
Period"; the amount so deposited in the Rental Escrow hereinafter the "Rental Escrow Sum"). Sums on deposit in the Dividend
Reserve, plus the positive difference between the Rental Escrow Sum and the sums on deposit in the Dividend Reserve, shall make up the Rental Escrow and shall be deposited with Solomon and Weinberg
LLP ("Rent Escrow Agent") pursuant to an escrow agreement substantially in the form annexed hereto as Exhibit V  and made a part hereof (the
"Rent Escrow Agreement"). Transferor hereby consents to the pledge and assignment to Mortgage Lender
and/or Mezzanine Lender (or any successor thereto), if required by either such party, of the Rent Escrow and the rights thereto hereunder and under the Rent Escrow Agreement. In such event, SLGOP
shall notify Transferor of such pledge and assignment, and Transferor shall execute such reasonable documents and reasonable instruments as Mortgage Lender and/or Mezzanine Lender may reasonably
request to consent such pledge and assignment and to set forth Mortgage Lender's and/or Mezzanine Lender's Agreement to recognize Transferor's rights with respect to the Rent Escrow, but the failure
to do so shall not affect or impair the consent to such pledge or assignment set forth in the immediately preceding sentence. In no event shall such pledge or assignment by SLGOP affect
Transferor's right to receive payment of Fixed Rent received by SLGOP in respect of a New Space Lease or in respect of a Defaulted Space Lease, as provided in clause (b), below. 

        (b)    On
the First Rental Payment Date and on the first day of each month immediately thereafter until the expiration of the Rental Escrow Period, SLGOP shall be permitted to
draw, and Rent Escrow Agent shall be authorized to pay to SLGOP, without notice to Transferor, one thirteenth (1/13) of the Rental Escrow Sum. If and to the extent that SLGOP shall
receive payment of Fixed Rent in respect of Rent Escrow Space at any time prior to expiration of the Rental Escrow Period pursuant to a new Space Lease covering such Rent Escrow Space entered into
after the Closing (a "New Space Lease") or in respect of a Defaulted Space Lease, then SLGOP shall, except as provided below, within ten
(10) Business Days following expiration of the calendar month of receipt thereof by SLGOP, pay such Fixed Rent to Transferor. Notwithstanding the foregoing, if (i) Fixed Rent payable
under a New Space Lease is in excess of market rent for comparable space ("Excess Rent"), and (ii) SLGOP certifies (an
"Excess Rent Certification") to Transferor that the Excess Rent reflects other financial considerations between SLGOP and the Space Lessee thereunder
and includes a financial analysis calculating the Excess Rent, SLGOP shall retain such Excess Rent portion of Fixed Rent (e.g., if Fixed Rent exceeds the market rate for comparable space, reflecting a
landlord advance of Tenant Improvements, such excess will be disregarded for purpose of this clause (b) and shall be retained by SLGOP). If Transferor shall dispute the calculation by SLGOP of
Excess Rent, it shall notify SLGOP within ten (10) days of receipt of the Excess Rent Certification, which notice (an "Excess Rent Objection")
shall include Transferor's calculation of Excess Rent, if any, or the calculation supporting a determination that there is no Excess Rent. If Transferor and SLGOP are unable to resolve such dispute 

27

 

within ten (10) days following receipt by SLGOP of the Excess Rent Objection, the parties shall submit the calculations set forth in the Excess Rent Certification and the Excess Rent Objection
to a licensed real estate broker having not less than ten (10) years experience in leasing comparable properties in New York City and experienced in mediation
("Mediator") mutually acceptable to SLGOP and Transferor (and if such parties are unable to agree upon the identity of the Mediator within five
(5) days, they shall jointly request the President of the Real Estate Board of New York to select the Mediator), who shall be instructed to determine which calculation most closely reflects the
amount, if any, of Excess Rent to be retained by SLGOP and the amount of Fixed Rent to be paid to Transferor. The role of Mediator shall be limited to selecting the calculations of either SLGOP or
Transferor, and such decision shall be final and binding upon the parties hereto. All fees and expenses of Mediator shall be shared equally by the parties hereto. 

        (c)    The
Rental Escrow Sum shall be held in an interest bearing account, and all accrued interest shall be paid quarterly to Transferor. Amounts payable to Transferor
pursuant to clause (b) shall, if unpaid for more than a thirty (30) day period following the due date thereof, bear interest rate of ten percent (10%) per annum from the due date thereof
until payment thereof. Transferor shall have the right from time to time during the Rent Escrow Period, on reasonable prior notice to SLGOP, to review SLGOP's rental records with respect to the Rent
Escrow Space and/or to request copies thereof. 

28

  

        (d)    The
provisions of this Section 7.5 shall survive the Closing. 

        7.6    OP Unit Conversion. SCW hereby covenants and agrees, on behalf of himself and, if applicable, the SCW Entity acquiring OP
Units, that prior to expiration of the Lock-Out Period (as hereinafter defined), such party will not convert the OP Units into shares of SLG common stock, or, directly or indirectly
(including without limitation, through the entering into of a cash-settled derivative instrument), offer for sale, sell, contract to sell, pledge or otherwise dispose of any such OP Units
that are received by such party under this Agreement without first obtaining the prior written consent of SLG, which consent may be granted or withheld in SLG's sole and absolute discretion. As used
herein, "Lock-Out Period" shall mean the period commencing on the Closing Date and expiring on the earlier to occur of (a) two
(2) years after the Closing Date, or (b) the first date upon which the exchange of the OP Units for SLG stock and the sale of such stock will not result in the loss of the rate reduction
payable in respect of (i) the New York State Transfer Tax (as hereinafter defined) and (ii) the New York City Transfer Tax (as hereinafter defined), by reason of the acceptance by SCW or
the SCW Entity, if applicable, of OP Units as part of the Consideration for the Property (collectively, the "OP Exemption"). SCW understands and agrees
that (y) the OP Units to be received by SCW or the SCW Entity, as applicable, at Closing will not be certificated, and (z) prior to the Closing, the Partnership Agreement may be amended
from time to time by SLGOP, and all references herein to the Partnership Agreement shall include all such amendments. 

        The
provisions of this Section 7.6 shall survive the Closing. 

        8.    Closing Deliveries.    

        8.1    At
or prior to the Closing, Transferor and the Transferor Parties, where applicable, shall make, shall have have made or shall have caused to be made, the following
deliveries: 

        8.1.1    Transferor
and each of MZ, News and each Transferor Party shall execute, deliver, and acknowledge (where appropriate) such documents and instruments required to fully
implement the Interim Transactions, and to vest title to the Property, as tenants-in-common, in Designee and the Transferor Parties. 

        8.1.2    Transferor
and each Transferor Party shall execute, acknowledge and deliver to Designee in respect of such party's undivided tenancy-in-common
interest in the Property, a bargain and sale deed without covenants against grantor's acts, in the form attached hereto as Exhibit W and made a
part hereof (the "Deed"). 

        8.1.3    Transferor
and each Transferor Party shall execute, acknowledge and deliver to SLGOP an assignment of all of such party's right, title and interest as landlord or
otherwise under each of the Space Leases in respect of the Property, and of any security deposits required thereunder to be held by Transferor on the date of the Closing, in the form attached hereto
as Exhibit X and made a part hereof (the "Assignment of Space Leases"), and shall deliver to
SLGOP (a) executed originals or copies (if Transferor does not have originals in its possession), certified to be true, correct and complete, of each of such Space Leases and any Space Lease
Guaranty, (b) all Lease Files, (c) the Security LC's and (d) without duplication of the foregoing, the property management files. 

        8.1.4    Transferor,
on behalf of all Transferor Parties, shall execute and deliver to SLGOP notices to the Space Lessees under the Space Leases advising them of the sale of
the Property in the form attached hereto as Exhibit Y and made a part hereof. 

        8.1.5    Transferor
and each Transferor Party shall execute, acknowledge and deliver to SLGOP an assignment of all of such party's right, title and interest in and to the
Assigned Contracts, in the form attached hereto as Exhibit Z and made a part hereof (the "Assignment of Service  

29

 

 Contracts"). Transferor shall deliver Transferor's original counterparts or copies (if Transferor does not have originals in its ossession), 

        certified
to be true, correct and complete, of all Assigned Contracts. 

        8.1.6    Transferor
and each Transferor Party shall execute, acknowledge and deliver to SLGOP an omnibus assignment (the "Omnibus
Assignment"), conveying and transferring to SLGOP all right, title and interest of Transferor and each Transferor Party, if any, in and to all Personal Property, Improvements,
Permits, Warranties, Intangible Personal Property and Plans, in the form attached hereto as Exhibit AA and made a part hereof. 

        8.1.7    Transferor
shall deliver an Activity Report for the month in which Closing occurs (the "Updated Activity Report"),
certified by Transferor to be true, correct and complete in all material respects. 

        8.1.8    To
the extent in Transferor's possession or control, Transferor shall deliver to SLGOP (a) all keys, computer passwords, access cards and security codes to all
portions of the Property and the Building,
(b) all presently effective warranties or guaranties from any contractors, subcontractors, suppliers, manufacturers, servicemen or materialmen in connection with any of the Personal Property or
any construction, renovation, repairs or alterations of the Property, the Improvements or any tenant improvements (collectively, the "Warranties"), and
(c) copies of all as-built plans and specifications for the Property (collectively, the "Plans"). 

        8.1.9    Each
Transferor Party shall deliver to SLGOP a certificate, duly executed and acknowledged by such party, in accordance with Section 1445 of the Code. 

        8.1.10    Each
of Transferor, DRA and Planet shall deliver to SLGOP limited liability company resolutions of such party and consents of its members in customary form reasonably
satisfactory to SLGOP and the Title Company, authorizing the transaction contemplated herein and the execution and delive ry of the documents required to be executed and delivered hereunder. 

        8.1.11    Transferor
shall deliver to SLGOP a certificate of Transferor, dated as of the Closing, certifying to the fulfillment of the conditions set forth in
Section 9.2.3 hereof (the "Bring Down Certificate"). 

        8.1.12    (a)
Transferor shall promptly after the date hereof request from each Space Lessee an estoppel ("Estoppel") which
shall be either (i) in the form attached hereto as Exhibit BB and made a part hereof, or (ii) in the event any Space Lease provides
for the form of Estoppel that the Space Lessee thereunder shall be required to deliver to the landlord under such Space Lease or set(s) forth the matters to be contained in such an Estoppel in
connection with a sale and/or ground lease and/or mortgaging of all or any part of the Property, in such form or containing those matters required to be addressed by such Space Lessee. Transferor
shall deliver copies of each Estoppel to SLGOP for its review promptly following receipt thereof. On or before the second (2nd) Business Day prior to the Closing, as a condition to SLGOP's obligation
to close, SLGOP shall have received Confirming Estoppels (as hereinafter defined) from the Space Lessees listed in Exhibit CC attached hereto and
made a part hereof (collectively, the "Mandatory Space Lessees") and other Space Lessees whose demised premises, when combined with that of the
Mandatory Space Lessees, cover not less than seventy-five percent (75%) of the rentable square feet covered by all Space Leases then in effect within the Property (hereinafter the
"Required Area"). 

        (b)    As
used in this Agreement, the capitalized term "Confirming Estoppel" shall mean an Estoppel executed and delivered by a
Space Lessee which confirms (i) in all respects the matters set forth in Section 7.1.6 (or, as applicable, such matters as such Space Lessee is required to address in an estoppel
certificate pursuant to the related Space Lease), subject to 

30

 

non-material variations and (ii) that the dates through which Fixed Rent and Overage Rent have been paid does not conflict with that set forth in the Updated Activity Report. 

        8.1.13    Each
Transferor Party shall execute, acknowledge and deliver a Combined Real Estate Transfer Tax Return and Credit Line Mortgage Certificate, Form TP-584
in respect of the Property (the "State Transfer Tax Return"). 

        8.1.14    Each
Transferor Party shall execute, acknowledge and deliver a New York City Department of Finance Real Property Transfer Tax Return in respect of the Property (the
"City Transfer Tax Return ").  

        8.1.15    If received, Transferor shall deliver or cause to be delivered the Mortgage Lender Consent (as hereinafter defined), and the Mezzanine Lender Consent, duly executed
by Mortgage Lender and Mezzanine Lender, respectively. 

        8.1.16    Transferor
shall pay Mortgage Lender's Expenses (as hereinafter defined) and Mezzanine Lender's Expenses (as hereinafter defined). 

        8.1.17    Transferor
shall terminate (a) all property management agreements relating to the Property entered into with entities affiliated with Transferor or any
Transferor Party, and (b) all leasing agency agreements, if any, relating to all leasing activity after the Closing other than that entered into with an affiliate of SLGOP, or those granted by
SLGOP or its affiliate. 

        8.1.18    Transferor
shall execute, acknowledge and deliver to SLGOP an assignment of the Interest Cap. 

        8.1.19    Transferor
shall execute, acknowledge and deliver to the Title Company a title affidavit in the form attached hereto as Exhibit DD  and made a part hereof. 

        8.1.20    SCW
and DRA shall execute, acknowledge and deliver he 

        Transferor
Guaranty. 

        8.1.21    Transferor
shall deposit the Rental Escrow with Rental Escrow Agent and execute and deliver the Rental Escrow Agreement. 

        8.1.22    Intentionally
Omitted. 

        8.1.23    SCW
and the SCW Entity, if applicable, shall execute and deliver (a) the Recipient Agreement, (b) two (2) counterparts of the Partnership
Agreement (the "Counterpart OP Signature Page"), and (c) all other documents required by the Recipient Agreement. 

        8.1.24    Transferor
shall cause MZ to deliver a copy of its federal income tax return for the year ended December 31, 2001 (the "Federal Income
Tax Return"), and Transferor shall deliver the Tax Schedule (as hereinafter defined). 

        8.2    At
or prior to the Closing, SLGOP shall make, have made or caused to be made, the following deliveries: 

        8.2.1    SLGOP
shall pay to Transferor the balance of the Consideration required pursuant to Section 3.2 hereof. 

        8.2.2    SLGOP
shall deliver to Transferor resolutions of the general partner of SLGOP authorizing the transaction contemplated by this Agreement. 

        8.2.3    SLGOP
shall execute, acknowledge and deliver to each Transferor Party a counterpart of the Assignment of Space Leases. 

        8.2.4    SLGOP
shall execute and deliver the Recipient Agreement to SCW. 

31

 

        8.2.5    SLGOP
shall execute, acknowledge and deliver to each Transferor Party a counterpart of the Assignment of Service Contracts. 

        8.2.6    SLGOP
shall execute, acknowledge and deliver counterparts of each State Transfer Tax Return. 

        8.2.7    SLGOP
shall execute, acknowledge and deliver counterparts of each City Transfer Tax Return. 

        8.2.8    SLGOP
shall execute, acknowledge and deliver (or cause to be executed, acknowledged or delivered, as applicable) the Confirmatory Mortgage Documents (as hereinafter
defined). 

        8.2.9    SLGOP
shall execute and deliver the Rental Escrow Agreement. 

        8.2.10    SLGOP
shall execute and deliver, or cause its Designee to execute and deliver, the New Mezzanine Loan Agreement. 

        8.2.11    SLGOP
shall execute and deliver a counterpart of the Omnibus Assignment. 

        8.3    Transferor
and SLGOP, at the Closing, shall prepare, execute and deliver to each other, subject to all the terms and provisions of this Agreement, a closing statement
setting forth, inter alia, the closing adjustments and material monetary terms of the transaction contemplated hereby. 

        9.    Conditions to Closing Obligations.    

        9.1    Notwithstanding
anything to the contrary contained herein, the obligation of Transferor to close title in accordance with this Agreement is expressly conditioned upon
the fulfillment by and as of the time of the Closing of each of the conditions listed below, provided that Transferor, at its election, evidenced by written notice delivered to SLGOP at or prior to
the Closing, may waive any of such conditions: 

        9.1.1    SLGOP
shall have executed and delivered to Transferor (or the Transferor Parties, as applicable) all documents described in Section 8.2, shall have paid the
Consideration and shall have taken or caused to be taken all of the other material action required of SLGOP in this Agreement. 

        9.1.2    All
representations and warranties made by SLGOP in this Agreement shall be true and correct in all material respects as of the date of the Closing. 

        9.1.3    SLGOP
shall have caused Funding, the current holder of a Special Member Interest (as defined in the LLC Agreement) in MZ, to (a) waive payment to Funding of the
Additional Return (as defined in the LLC Agreement) and any sum which would be due upon calculation of the IRR Lookback Payment (as defined in the LLC Agreement) in respect of the period
January 1, 2003 through September 7, 2003 by reason of redemption of the Special Member Interest, it being understood and agreed that (i) the Additional Return payable to Funding
through December 31, 2002 shall remain due and payable when, and as provided under the LLC Agreement, regardless of the date Closing occurs,
and (ii) Transferor shall at Closing satisfy the Preferred Equity Investment by distribution of the SLGOP Interest to Designee and payment of the Preferred Equity Return through the Closing
Date (and any other sum payable by reason of an occurrence of an Event of Default under the LLC Agreement prior to Closing), (b) execute and deliver to News a release of all obligations arising
from and after the Closing Date under the LLC Agreement and all other agreements executed and delivered pursuant to the LLC Agreement, including all obligations of guarantors and indemnitors thereof,
and (c) to execute and deliver a statement confirming that, to the knowledge of Funding (which for the purposes of this Agreement shall mean the actual, present knowledge (and not constructive
knowledge) of Marc Holliday and Andrew Mathias, without investigation or inquiry, which individuals SLGOP hereby represents and warrants are the persons who would, in the ordinary course of their
responsibilities as officers of SLGOP, receive 

32

 

notice from other employees or agents of SLGOP or from other persons or entities of such matters) that no default by News exists under the LLC Agreement. 

        9.1.4    SLG
shall not have revoked its prior election pursuant to Section 856(c)(1) of the Code to be taxed as a REIT or engaged in any activity which has caused SLG to
lose its REIT status. 

        9.1.5    The
consummation of the transactions contemplated hereby and the delivery of the Consideration to Transferor shall have been duly and validly authorized and approved
by the board of directors of SLG in its capacity as the general partner of SLGOP. 

        9.2    Notwithstanding
anything to the contrary contained herein, the obligation of SLGOP to close title and pay the Consideration in accordance with this Agreement is
expressly conditioned upon the fulfillment by and as of the time o f the Closing of each of the conditions listed below, provided that SLGOP, at its election, evidenced by written notice delivered to
Transferor at or prior to the Closing, may waive all or any of such 

        conditions: 

        9.2.1    Transferor
and each Transferor Party shall have caused the Interim Transactions to have occurred. 

        9.2.2    Transferor
and each Transferor Party shall have executed and delivered to SLGOP all of the documents, and shall have taken or caused to be taken all of the other
actions, required of Transferor under this Agreement. 

        9.2.3    All
representations and warranties made by Transferor (and SCW and the SCW Entity, if applicable) in this Agreement shall be true and correct in all material respects
when made and as of
the Closing Date, except to the extent the facts and circumstances underlying such representations and warranties may have changed as of the Closing, in which event Transferor shall represent in the
Bring Down Certificate such changed facts and circumstances. SLGOP shall not be obligated to close if a epresentation or warranty is not true and correct in all material respects as of the Closing
Date unless caused by changed facts or circumstances which pursuant to the terms of this Agreement are permitted to have occurred. 

33

  

        9.2.4    The
Title Company shall be willing to insure title to the Property pursuant to an ALTA 1992 Owner's Policy of Title Insurance in the amount of the Consideration at
regular rates and without additional premium, subject only to the Permitted Exceptions and as otherwise provided in this Agreement (the "Title Policy"). 

        9.2.5    SLGOP
shall have received Confirming Estoppels required pursuant to Section 8.1.12. 

        9.2.6    Mortgage
Lender shall have executed and delivered the Mortgage Lender Consent, and SLGOP shall have approved the form, terms and conditions of the Confirmatory
Mortgage Documents. 

        9.2.7    Mezzanine
Lender shall have executed and delivered (a) the Mezzanine Lender Consent, and (b) the New Mezzanine Loan Agreement. 

        9.2.8    Transferor
shall have caused News to execute and deliver a statement confirming that, to the knowledge of News, that is no default by Funding under the LLC Agreement. 

        9.2.9    SLGOP
shall have received all other documents and instruments required to be delivered or which it is entitled to receive pursuant to this Agreement. 

        10.    Limitation on Liability of Parties.    

        10.1    In
the event SLGOP shall default in the performance of SLGOP's obligations under this Agreement and the Closing does not occur as a result thereof (a
"SLGOP Default"), Transferor's sole and exclusive remedy shall be, and Transferor shall be entitled, to retain the Downpayment and any interest earned
thereon or, as and for full and complete liquidated and agreed damages for SLGOP's default, and each party shall be released from any further liability to the other hereunder, except that the
provisions of Sections 12, 13, 23, 25 and 29 hereof shall survive. TRANSFEROR AND SLGOP AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH TRANSFEROR MAY SUFFER
UPON A SLGOP DEFAULT AND THAT THE DOWNPAYMENT AND ANY INTEREST EARNED THEREON REPRESENTS A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT TRANSFEROR WOULD
SUFFER UPON A SLGOP DEFAULT. SUCH LIQUIDATED AND AGREED DAMAGES ARE NOT INTENDED AS A FORFEITURE OR A PENALTY WITHIN THE MEANING OF APPLICABLE LAW. 

        10.2    In
the event of a failure of a condition to SLGOP's obligations hereunder which do not otherwise constitute a willful and intentional default by Transferor hereunder
which SLGOP is unwilling to waive, or if Transferor shall be unable to comply with or perform its obligations under this Agreement, SLGOP may, as its sole remedy in such event, elect to terminate this
Agreement, and in such event Escrow Agent shall make a Downpayment Return and upon the Downpayment Return, each party shall be released from any further liability to the other hereunder, except that
the provisions of Sections 12, 13, 23, 25 and 29 hereof shall survive. In the event that Transferor shall willfully and intentionally default in the performance of Transferor's obligations under this
Agreement and the Closing does not occur as a result thereof, except as set forth in the last sentence of this Section 10.2, SLGOP's sole and exclusive remedy shall be, and SLGOP shall be
entitled, to elect either (a) a Downpayment Return, and receive from Transferor payment of an amount, not to exceed $350,000.00, in reimbursement for SLGOP's actual and reasonable
out-of-pocket costs and expenses incurred in connection with the transactions contemplated hereby and paid to third parties not affiliated with SLGOP, including without
limitation, all costs and expenses incurred in connection with SLGOP's review and inspection of the Property, preparation and negotiation of this Agreement (including, without limitation, reasonable
attorneys fees and disbursements), and fees and disbursements of SLGOP's consultants, and upon the Downpayment Return and such reimbursement each party shall be released from any further liability to
the other hereunder, except that the provisions of Sections 12, 13, 23, 25 and 29 hereof shall survive, or 

34

 

(b) seek specific performance of Transferor's obligations hereunder; provided, however, that any action for specific performance must be commenced within ninety (90) days of the later
of (i) the Closing Date or (ii) the date upon which SLGOP first becomes aware of Transferor's willful and intentional default, after which SLGOP shall be limited to the remedy set forth
in clause (a), above. 

        11.    Fire or Other Casualty; Condemnation.    

        11.1    Transferor
agrees (a) to maintain Transferor's Casualty Insurance in full force and effect through the Closing, and (b) to give SLGOP reasonably prompt
notice of any fire or other casualty occurring at the Property of which Transferor obtains knowledge, between the date hereof and the date of the Closing, or of any actual or threatened condemnation
of all or any part of the Property of which Transferor obtains knowledge. 

        11.2    If
prior to the Closing there shall occur damage to the Property caused by fire or other casualty, the Closing shall be adjourned for twenty (20) days, or for
such longer period (not to exceed sixty (60) days) as may be reasonably required in order to permit (a) SLGOP's architect or engineer to estimate the cost to repair or restore the
Property to its condition immediately prior to such casualty (the "Estimated Repair Cost") and (b) allow Transferor and SLGOP to receive from the
insurers under Transferor's Casualty Insurance (i) confirmation that such loss is an insured loss and (ii) an estimate of the amount of insurance proceeds payable in respect thereof (the
items described in clauses (i) and (ii) being herein referred to as the "Insurer's Loss Payable Statement"). If, prior to the Closing,
either (x) a fire or other casualty causes damage to the Property and either (1) the Estimated Repair Cost is
$5,000,000.00 or more, (2) one or more Space Lessees occupying more than 5% of the rentable square feet of the Property is entitled to terminate its Space Lease (which right has not been
waived) or (3) Mortgage Lender does not agree to make all insurance proceeds payable in respect of such casualty available for repair or restoration of the Property (clauses (1), (2) or
(3) being herein referred to as a "Material Casualty") or (y) there shall occur a taking by condemnation of any material portion of the
Property, then, and in either such event, SLGOP may elect to terminate this Agreement by written notice given to Transferor within (A) in the case of a fire or other casualty, ten
(10) Business Days after SLGOP shall have received the Insurer's Loss Payable Statement, and (B) in the case of a condemnation, ten (10) Business Days after Transferor has given
SLGOP the notice referred to in Section 11.1 hereof, in which event Transferor shall promptly instruct Escrow Agent to make a Downpayment Return, this Agreement shall thereupon be null and void
and neither party hereto shall thereupon have any further obligation to the other, except that the provisions of Sections 12, 13, 23, 25 and 29 hereof shall survive such termination. 

        11.3    If
SLGOP does not elect to terminate this Agreement, then (a) the Closing shall take place as herein provided, (b) Transferor shall at the Closing
(i) assign to SLGOP, by written instrument in form reasonably satisfactory to SLGOP, all of Transferor's interest in and to any insurance proceeds or condemnation awards which may be payable to
Transferor on account of any such fire, casualty or condemnation, and (ii) credit to SLGOP on account of the Consideration (A) any such proceeds (as reflected in the Insurer's Loss
Payable Statement) or awards theretofore paid, and (B) any applicable insurance deductible. The proceeds of rent interruption insurance, if any, shall on the Closing Date be appropriately
apportioned between SLGOP and Transferor. 

        11.4    If,
prior to the Closing, there shall occur (a) damage to the Property caused by fire or other casualty which is not a Material Casualty or (b) a taking
by condemnation of any part of the Property which is not material, then, and in either such event, SLGOP shall not have the right to terminate this Agreement by reason thereof, but Transferor shall at
Closing, assign to SLGOP by written instrument in form and substance reasonably satisfactory to SLGOP, all of Transferor's interest in any insurance proceeds or condemnation awards which payable to
Transferor on account of any such fire, casualty or condemnation, and shall credit to SLGOP on account of the 

35

 

Consideration (A) any such proceeds (as reflected in the Insurer's Loss Payable Statement) or awards theretofore paid to Transferor and (B) the amount of any applicable insurance
deductible. The proceeds of rent interruption insurance, if any, shall on the Closing Date be appropriately apportioned between SLGOP and Transferor. 

        11.5    Nothing
contained in this Section 11 shall be construed to impose upon Transferor any obligation to repair any damage or destruction caused by fire or other
casualty or condemnation. 

        11.6    For
purposes of this Section 11 a taking of a material part of the Property shall mean any taking which either (a) in SLGOP's reasonable opinion, leaves
remaining a balance of the Property which may not be economically operated (after appropriate restoration) for the purpose for which the Property was operated or intended to be operated prior to such
taking, taking into account the Consideration to
be paid by SLGOP or (b) involves an area which is more than five (5%) percent of the aggregate rentable area of the Property. 

        11.7    In
the event that SLGOP does not elect to terminate this Agreement in accordance with Section 11.2 above, or upon the occurrence of the events set forth in
Section 11.4 (a) or (b) above, Transferor and SLGOP shall jointly negotiate with insurers and any condemning authority regarding the amount of any insurance proceeds and/or any
condemnation awards payable in respect thereof. Transferor shall not contest, settle or compromise any claim without SLGOP's approval, which will not be unreasonably withheld or delayed. 

        12.    Brokerage.    

        SLGOP
and Transferor each represent and warrant to the other that it has not dealt with any broker, consultant, finder or like agent who might be entitled to a commission or compensation
on account of introducing the parties hereto, the negotiation or execution of this Agreement or the closing of the transactions contemplated hereby. SLGOP and Transferor each further agree to
indemnify and hold the other, their respective successors and assigns, harmless from and against all claims, losses, liabilities and expenses (including, without limitation, reasonable attorneys fees
and disbursements) which may be asserted against, imposed upon or incurred by such party by reason of any claim made by any other broker, consultant, finder or like agent for commissions or other
compensation for bringing about this transaction or claiming to have introduced the Property to SLGOP. The provisions of this Section 12 shall survive the Closing or other termination of this
Agreement. 

        13.    Closing Costs; Fees and Disbursements of Counsel, etc.    

        (a)    At
the Closing, Transferor shall pay and shall cause MZ, News and each Transferor Party to pay (i) the New York State Real Estate Transfer Tax pursuant to
Article 31 and Section 1402 of the New York Tax Law (the "State Transfer Tax") and the New York City Real Property Transfer Tax imposed
pursuant to Title 11, Chapter 21 of the New York City Administrative Code (the "City Transfer Tax"; the State Transfer Tax and the City Transfer Tax
collectively, "Transfer Taxes") upon or payable in connection with each Interim Transaction and the transfer of title to the Property and of each
tenancy-in-common interest therein (including, without limitation, the transfer of the SLGOP Interest by MZ to Designee) and the recordation of the Deed(s) in connection with
each of the foregoing, (ii) all Mortgage Lender's Expenses and Mezzanine Lender's Expenses, and (iii) all costs of assigning the Interest Cap to SLGOP. Transfer Taxes payable hereunder
shall, at Transferor's election, be allowed for out of the Consideration and paid by SLGOP on behalf of Transferor and each Transferor Party other than SCW. All such tax payments to be paid by
Transferor or any Transferor Party shall be made by certified check payable directly to the order of the appropriate governmental authority or by Wire Transferred Funds to the Title Company. SCW or
the SCW Entity, as applicable, may seek to avail itself of the OP Exemption, provided that SCW shall at Closing furnish to SLGOP such documentation as SLGOP reasonably requests to evidence compliance
with all requirements for such exemption. Notwithstanding delivery of such evidence of compliance with all requirements for the OP 

36

 

Exemption to SLGOP, Transferor and SCW shall bear all risk that the transactions described in this Agreement and the transfer of the Property hereunder does not qualify, in whole or in part, for the
OP Exemption or for any other exemptions claimed in connection with the Interim Transactions and the transactions occurring hereunder. SLGOP shall pay (y) all charges for recording and/or
filing the Deed(s) and (z) all title charges and survey costs, including the premium for SLGOP's Title Policy. Except as set forth in Section 10.2 hereof, each of the parties hereto
shall bear and pay the fees and disbursements of its own counsel, accountants and other advisors in connection with the negotiation and preparation of this Agreement and the Closing. 

        (b)    By
their signatures below, SCW and DD Investment Partners L.P. ("DD"), a Delaware limited partnership which is the owner
of the majority of the legal and beneficial ownership interests in DRA, agree to each execute and deliver to SLGOP at Closing an indemnity agreement in the form attached hereto as  Exhibit EE and
made a part hereof, pursuant to which SCW and DD shall indemnify the SLGOP Parties against all claims for Transfer Tax Liabilities
(as hereinafter defined), severally and not jointly, in the following proportions: SCW 65%, and DD: 35%. As used herein, "Transfer Tax Liabilities"
means any additional Transfer Taxes which may be claimed or assessed after the Closing in connection with the transactions contemplated under this Agreement, including, without limitation, by reason
of any transfer of an undivided tenancy-in-common interest in the Property provided for under this Agreement, or as the result of a determination that the OP Exemption is not
available or applicable to the transfer of the Property, in whole or in part, together with all interest and penalties imposed in connection therewith and all damages, losses, liabilities, claims,
costs or expenses (including, without limitation, reasonably attorneys' fees, expenses, disbursements and court costs) suffered or incurred by the SLGOP Parties by reason of such claim or assessment. 

        (c)    The
provisions of this Section 13 shall survive the Closing. 

        14.    Notices.    

        Except
as otherwise provided in this Agreement, all notices, demands, requests, consents, approvals or other communications (for the purposes of this Section collectively referred to as
"Notices") required or permitted to be given hereunder or which are given with respect to this Agreement, in order to constitute effective notice to the
other party, shall be in writing and shall be deemed to have been given when (a) personally delivered with signed delivery receipt obtained prior to 4 p.m., (b) upon receipt, when
sent by prepaid reputable overnight courier or (c) three (3) days after the date so mailed if sent postage prepaid by registered or certified mail, return receipt requested, in each case
addressed as follows: 

	 	 	If to Transferor, to:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	220 News Building LLC

c/o The Witkoff Group LLC

220 East 42nd Street

New York, New York 10017

Attention: Steven C. Witkoff

Facsimile: (212) 672-4726	 	 
	 	 	 	 	 	 	 
	 	 	with copies to:	 	 	 	 
	 	 	 	 	 	 	 

37

 

	 	 	 	 	220 News Building LLC

c/o The Witkoff Group LLC

220 East 42nd Street

New York, New York 10017

Attention: James F. Stomber, Jr., Esq.

Facsimile: (212) 672-3434	 	 
	 	 	 	 	 	 	 
	 	 	 	 	and	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Jeffrey A. Lenobel, Esq.

Facsimile: (212) 593-5956	 	 
	 	 	 	 	 	 	 
	 	 	 	 	and	 	 
	 	 	 	 	 	 	 
	 	 	 	 	DRA Advisors, Inc.

220 East 42nd Street

New York, New York 10017

Attention: Brian T. Summers, Vice President

Facsimile: (212) 697-7403	 	 
	 	 	 	 	 	 	 
	 	 	 	 	and	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Blank Rome Tenzer Greenblatt LLP

405 Lexington Avenue

New York, New York 10174

Attention: Martin Luskin, Esq.

Facsimile: (212) 885-5003	 	 
	 	 	 	 	 	 	 
	 	 	If to SLGOP, to:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	420 Lexington Avenue.

New York, New York 10170

Attention: Marc Holliday

Andrew S. Levine

Facsimile:(212) 216-1785	 	 
	 	 	 	 	 	 	 
	 	 	with copies to:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Solomon and Weinberg LLP

685 Third Avenue

New York, New York 10017

Attention: Craig H. Solomon, Esq.

Howard R. Shapiro, Esq.

Facsimile: (212) 605-0999	 	 
	 	 	 	 	 	 	 

38

 

	 	 	If to Escrow Agent, to:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	TSNY Agency of New York City, Inc.

Two Park Avenue, Suite 1420

New York, New York 10016

Attention: Neil Clark

Facsimile: (646) 742-0732	 	 

        Notices
shall be valid only if served in the manner provided above. Notices may be sent by the attorneys for the respective parties and each such Notice so served shall have the same
force and effect as if sent by such party. 

        15.    Survival; Governing Law.    

        Except
as otherwise expressly set forth in this Agreement, the provisions of this Agreement shall not survive the Closing provided for herein. This Agreement has been negotiated,
executed and delivered and shall be governed by, interpreted under, and construed and enforced in accordance with, the laws of the State of New York from time to time in effect. 

        16.    Counterparts; Captions.    

        This
Agreement may be executed in counterparts, each of which shall be deemed an original. The captions are for convenience of reference only and shall not affect the construction to be
given any of the provisions hereof. 

        17.    Entire Agreement; No Third Party Beneficiaries.    

        This
Agreement (including all exhibits annexed hereto), contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior
understandings, if any, with respect thereto. This Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed
by the party to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein. The parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto. The provisions of this Section shall survive the Closing. 

        18.    Waivers; Extensions.    

        No
waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof or of any other agreement or provision
herein contained. No extension of time for performance of any obligations or acts shall be deemed an extension of the time for performance of any other obligations or acts. 

39

   
        19.    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 Agreement) as either may reasonably request from time to time, whether at or after the Closing, in furtherance of the purposes of this Agreement. The provisions of this
Section 19 shall survive the Closing. Each party shall cooperate with each other and do all acts as may be reasonably required or requested by the other party with regard to the fulfillment of
any condition precedent to such other party's obligations hereunder, including execution of any documents, applications or permits, but the representations and warranties of any party made in this
Agreement shall not be affected or released by any investigation or inquiry made by any party or any of its agents or consultants or by any waiver or fulfillment of any such condition. 

        20.    Assignment.    

        Except
as set forth in this Agreement, SLGOP shall neither assign its rights nor delegate its obligations hereunder without obtaining Transferor's prior written consent, which consent
shall not be unreasonably withheld or delayed. Notwithstanding anything to the contrary contained in this Section 20, SLGOP may, without the consent of Transferor, assign its rights and
delegate its obligations hereunder to any Affiliate (as hereinafter defined) of SLGOP, to whom the Property (or tenancy-in-common interests therein) shall be conveyed in
accordance with this Agreement (such assignee, a "Designee"). In connection with any assignment or designation permitted hereunder, such Designee shall
assume in writing all of SLGOP's obligations under this Agreement and thereupon, except as provided below, SLGOP shall be relieved of all obligations imposed upon it hereunder; provided, however, that
no such assignment shall (a) relieve SLGOP from its obligations (i) to issue the OP Units at Closing and take all other action necessary to vest the OP Units in SCW Recipient,
(ii) to indemnify SCW for Income Tax Liability (as hereinafter defined) arising under Section 33, (iii) to pay to Transferor Fixed Rent received during the Rental Escrow Period in
respect of a New Space Lease or pursuant to a Defaulted Space Lease, as provided in Section 7.5, (iv) to pay any Sublease Liability (as hereinafter defined), (v) to indemnify
Transferor for liability arising under Section 31, or (vi) to observe the tax allocations set forth in Section 34, or (b) delay issuance of the Mortgage Lender Consent and
the Mezzanine Lender Consent or submission of Confirmatory Mortgage Documents (as hereinafter defined) beyond the Outside Closing Date, provided, however, that the refusal of either Mortgage Lender or
Mezzanine Lender to issue the Mortgage Lender Consent and the Mezzanine Lender Consent by reason of an assignment to an Affiliate shall not be deemed to be a default by SLGOP under this Agreement.
Designee shall succeed to the rights, remedies and indemnifications to which SLGOP is entitled hereunder, to the extent the foregoing survive the Closing. Any other purported or attempted assignment
or delegation without obtaining Transferor's prior written consent or not otherwise permitted hereunder shall be void and of no effect. SLGOP shall advise Mortgage Lender and Mezzanine Lender of the
name and organizational structure of any Designee prior to the assignment of this Agreement. For purposes of
this Section 20, the capitalized term "Affiliate" means any limited liability company or other entity in which SLGOP owns, directly or indirectly
(through one or more entities, each of which is a disregarded entity for federal income tax purposes), all of the beneficial interests, and which is a disregarded entity for federal income tax
purposes. No consent given by Transferor to any transfer or assignment of SLGOP's rights or obligations hereunder shall be construed as a consent to any other transfer or assignment of SLGOP's rights
or obligations hereunder. 

        21.    Pronouns.    

        All
pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the parties may require. 

        22.    Successors and Assigns.    

        This
Agreement shall bind and inure to the benefit of Transferor, SLGOP and their respective permitted successors and assigns. 

40

 

        23.    Escrow.    

        23.1    Escrow
Agent shall hold the Downpayment, together with all interest earned thereon, in its interest bearing escrow account, or the Downpayment Letter of Credit, as the
case may be, in accordance with the following: 

        23.1.1    (a)    Escrow
Agent shall hold the Downpayment, together with all interest earned thereon, in Escrow Agent's escrow account at JP Morgan Chase, and shall
cause the Downpayment to earn interest at JP Morgan Chase's then prevailing insured money market rates on deposits of similar size. Escrow Agent shall have no liability for any fluctuations in the
interest rate paid by JP Morgan Chase on the Downpayment, and is not a guarantor thereof. 

        (b)    If,
on or before the date which is thirty (30) days prior to expiration of the Downpayment Letter of Credit, SLGOP has not delivered an extension thereof or a
replacement letter of credit in the form of the Downpayment Letter of Credit, Escrow Agent shall be entitled to deliver the Downpayment Letter of Credit to Transferor who shall be entitled to draw on
the same, provided that all proceeds thereof shall be paid by the issuing bank by Wire Transferred Funds to Escrow Agent's account described in clause (a) above, and thereafter such proceeds
shall be held as the Downpayment in accordance with the terms of this Agreement. 

        23.1.2    If
Escrow Agent receives a written notice signed by both Transferor and SLGOP stating that the Closing has occurred and that Transferor is entitled to receive the
Downpayment or that SLGOP is entitled to receive the Downpayment Letter of Credit, as the case may be, Escrow Agent shall deliver the Downpayment, together with the interest earned thereon to
Transferor, or the Downpayment Letter of Credit to SLGOP, as the case may be. If Escrow Agent receives a written notice signed by both Transferor and SLGOP that this Agreement has been terminated or
canceled, Escrow Agent shall deliver the Downpayment, together with the interest thereon, or the Downpayment Letter of Credit, as the case may be, as directed therein. 

        23.1.3    If
Escrow Agent receives a written request signed by SLGOP or Transferor (the "Noticing Party") stating that this
Agreement has been canceled or terminated and that the Noticing Party is entitled to the Downpayment, or the Downpayment Letter of Credit, as the case may be, or that the other party hereto (the
"Non-Noticing Party") has defaulted in the performance of its obligations hereunder, Escrow Agent shall deliver (by hand or nationally
recognized overnight courier) a copy of such request to the Non-Noticing Party. The Non-Noticing Party shall have the right to object to such request for the Downpayment by
written notice of objection delivered to and received by Escrow Agent ten (10) Business Days after the date of Escrow Agent's mailing of such copy to the Non-Noticing Party, but not
thereafter. If Escrow Agent shall not have so received a written notice of objection from the Non-Noticing Party, Escrow Agent shall deliver the Downpayment, together with the interest
earned thereon, or the Downpayment Letter of Credit, as the case may be, to the Noticing Party. If Escrow Agent shall have received a written notice of objection within the time herein prescribed,
Escrow Agent shall refuse to comply with any requests or demands on it and shall continue to hold the Downpayment, together with any interest earned thereon, or the Downpayment Letter of Credit, as
the case may be, until Escrow Agent receives either (a) a written notice signed by both Transferor and SLGOP stating who is entitled to the Downpayment (and interest) or the Downpayment Letter
of Credit, as the case may be, or (b) a final order of a court of competent jurisdiction directing disbursement of the Downpayment (and interest) or delivery of the Downpayment Letter of
Credit, as the case may be, in a specific manner, in either of which events Escrow Agent shall then disburse the Downpayment, together with the interest earned thereon, or deliver the Downpayment
Letter 

41

 

of Credit, as the case may be, in accordance with such notice or order. Escrow Agent shall not be or become liable in any way or to any person for its refusal to comply with any such requests or
demands until and unless it has received a direction of the nature described in clause (a) or (b) above. 

        23.2    Any
notice to Escrow Agent shall be sufficient only if received by Escrow Agent within the applicable time period set forth herein. All mailings and notices from Escrow
Agent to Transferor and/or SLGOP, or from Transferor and/or SLGOP to Escrow Agent, provided for in this Section 23 shall be addressed to the party to receive such notice at its notice address
set forth in Section 14 above (with copies to be similarly sent to the additional persons therein indicated), but the provisions of Section 14 relating to the manner of giving notices
and the effective dates thereof shall have no application to the provisions of this Section 23. 

        23.3    Notwithstanding
the foregoing, if Escrow Agent shall have received a written notice of objection as provided for in Section 23.1.3 above within the time therein
prescribed, or shall have received at any
time before actual disbursement of the Downpayment or delivery of the Downpayment Letter of Credit, as the case may be, a written notice signed by either Transferor or SLGOP disputing entitlement to
the Downpayment or the Downpayment Letter of Credit, as the case may be, or shall otherwise believe in good faith at any time that a disagreement or dispute has arisen between the parties hereto over
entitlement to the Downpayment or the Downpayment Letter of Credit, as the case may be (whether or not litigation has been instituted), Escrow Agent shall have the right, upon written notice to both
Transferor and SLGOP, (a) to deposit the Downpayment, together with the interest earned thereon, or the Downpayment Letter of Credit, as the case may be, with the Clerk of the Court in which
any litigation is pending and/or (b) to take such reasonable affirmative steps as it may, at its option, elect in order to terminate its duties as Escrow Agent, including, without limitation,
the depositing of the Downpayment, together with the interest earned thereon, with a court of competent jurisdiction and the commencement of an action for interpleader, the costs thereof to be borne
by whichever of Transferor or SLGOP is the losing party, and thereupon Escrow Agent shall be released of and from all liability hereunder except for any previous gross negligence or willful
misconduct. If Escrow Agent is in possession of a Downpayment Letter of Credit and has elected to terminate its duties as Escrow Agent hereunder during the pendency of a dispute between the parties,
it shall deliver the Downpayment Letter of Credit to Tr ansferor who shall be entitled to draw on the same, provided that all proceeds shall be paid by Wire Transferred Funds to Escrow Agent's account
described in Section 23.1.1(a), and such proceeds may thereafter be deposited with a court of competent jurisdiction, as set forth above. 

        23.4    Escrow
Agent is acting hereunder without charge as an accommodation to SLGOP and Transferor, it being understood and agreed that Escrow Agent shall not be liable for
any error in judgment or any act done or omitted by it in good faith or pursuant to court order, or for any mistake of fact or law. Escrow Agent shall not incur any liability in acting upon any
document or instrument believed thereby to be genuine. Escrow Agent is hereby released and exculpated from all liability hereunder, except only for willful misconduct or gross negligence. Escrow Agent
may assume that any person purporting to give it any notice on behalf of any party has been authorized to do so. Escrow Agent shall not be liable for, and SLGOP and Transferor hereby jointly and
severally agree to indemnify Escrow Agent against, any loss, liability or expense, including reasonable attorney's fees (paid to retained attorneys) arising out of any dispute under this Agreement,
including the cost and expense of defending itself against any claim arising hereunder. 

42

 

        24.    Tax Proceedings.    

        Transferor
shall not settle any Tax Proceedings which relate to any tax year (including the Current Tax Year) without SLGOP's consent, which consent shall not be unreasonably withheld or
delayed. Any refunds or credits paid in respect of Tax Proceedings for the periods prior to SLGOP's ownership of the Property shall remain the sole property of Transferor (subject to the rights, if
any, of current or former Space Lessees thereto). Transferor shall promptly upon receipt of any tax refund or credit remit such portion thereof to any current or former Space Lessee entitled to
receive the same, and Transferor shall indemnify and hold SLGOP harmless from and against all claims asserted by any current or former Space Lessee for any such sum. SLGOP shall promptly upon receipt
of any tax refund or credit in respect of the Current Year remit such portion thereof to any current or former Space Lessee entitled to receive same, and SLGOP shall indemnify and hold Transferor
harmless from
and against all claims asserted by any current or former Space Lessee for any such sum. From and after the date hereof until the Closing, Transferor shall not commence any new Tax Proceedings. The
provisions of this Section 24 shall survive the Closing. 

        25.    Access; Possession.    

        Possession
of the Property shall be delivered to SLGOP at the Closing; provided, however, that prior to the Closing Transferor shall afford SLGOP or its authorized representatives
reasonable access to the Property for the purpose of conducting such tests, inspections and reviews as SLGOP deems necessary or appropriate, including, without limitation, environmental
investigations. The entry by SLGOP or its representatives upon the Property, and the conduct of tests, inspections and reviews thereon shall be conducted in a manner so as to not interfere in any
material respect with the conduct of business by any Space Lessee or violate the terms of any Space Lease. Prior to Closing, SLGOP and its representatives shall be entitled to communicate directly
with any Space Lessee, provided that Transferor shall be given reasonable prior notice of an intended communication, and shall be entitled to accompany SLGOP or its representative during any meeting
with any Space Lessee.    Transferor shall, upon request of SLGOP, confirm in writing such authorization to any Space Lessee. In connection with any intrusive physical tests
("Tests") conducted by or on behalf of SLGOP at the Property, (a) SLGOP shall keep the Property free and clear of any mechanic's liens or
materialmen's liens, (b) Transferor shall be entitled to have a representative of Transferor present during such Tests, and (c) SLGOP shall furnish to Transferor certificates evidencing
property damage and liability insurance policies in the amount of (i) $2,000,000.00 for bodily injury or death to any one (1) person, $3,000,000.00 aggregate liability and
(ii) $2,000,000.00 property damage reasonably promptly prior to commencing any such Tests. SLGOP shall, upon completion of such Tests, either restore, at SLGOP's sole cost and expense, the
Property to its condition existing prior to such Tests, or pay to Transferor the cost of repairing or restoring any damage to the Property caused by SLGOP or its representatives. All inspection fees,
appraisal fees, engineering fees and other costs and expenses of any kind incurred by SLGOP or its representatives relating to such inspection and its other due diligence shall be at the sole expense
of SLGOP. In the event that the Closing hereunder shall not occur for any reason whatsoever (other than Transferor's willful default), SLGOP shall promptly return to Transferor copies of all due
diligence materials delivered by Transferor to SLGOP or its representatives then in SLGOP's possession. SLGOP and its representatives shall not conduct borings of the Property or drilling in or on the
Property in connection with the preparation of an environmental audit or in connection with any other inspection of the Property without the prior consent of Transferor, which will not be unreasonably
withheld or delayed. SLGOP shall indemnify and hold Transferor harmless from and against all liability, cost and expense incurred by Transferor arising out of the acts or omissions of SLGOP or its
representatives in connection with performance of Tests; provided, however, that Transferor agrees to look first to any insurance covering any such liability, cost or expense prior to making any claim
against SLGOP under the indemnity given hereunder. The provisions of Section 25 shall survive the Closing or any termination of this Agreement. 

43

 

        26.    Maintenance of the Property.    

        Between
the date of this Agreement and the Closing, Transferor shall (a) maintain the Property in the same condition and repair as exists on the date hereof, reasonable wear and
tear excepted, (b) perform all material obligations to be performed by the landlord under the terms of any Space Lease, and (c) otherwise operate the Property in the same manner as
before the making of this Agreement. Transferor shall not remove or transfer to any third party any Personal Property after the date hereof, except for repair or replacement thereof or in the ordinary
course of business. 

        27.    Leasing and Contracts.    

        Transferor
shall not, after the date of this Agreement, enter into any new Space Lease, Service Contract or Union Agreement affecting the Property, or any amendment, expansion, extension
or renewal thereof (except those to which a Space Lessee is expressly entitled pursuant to the terms of its applicable Space Lease), or permit any Space Lessee to enter into any sublease, assignment
or agreement pertaining to the Property (except as expressly authorized or permitted by such Space Lessee's Space Lease without the consent of the landlord thereunder), or waive, compromise or settle
any rights of Transferor under any contract or Space Lease, or return any Security Deposit (except as expressly required by a Space Lessee's Space Lease), or modify, amend, or terminate any Service
Contract (collectively a "Material Transaction"), without in each case obtaining SLGOP's prior written consent thereto which, except as provided below,
SLGOP may grant or withhold in its sole discretion. If (a) a Space Lessee requests Transferor's approval of any matter pursuant to an express provision in the Space Lease which expressly
requires Transferor to act reasonably, (b) upon the written direction of SLGOP, Transferor rejects such request, and (c) any claim is made against Transferor asserting that Transferor
acted unreasonably in rejecting such request, SLGOP shall indemnify and hold Transferor harmless from all such loss, cost or damage, including, without limitation, reasonable attorneys fees and
disbursements (such damages "Sublease Liability") for which Transferor is found liable to such Space Lessee as a result thereof, provided however, that
SLGOP shall be given prompt notice of any such claim, and SLGOP shall be entitled to defend such claim with counsel selected by SLGOP. Transferor shall not propose any new Service Contract which is
not terminable without cost or penalty upon not more than thirty (30) days prior notice. When seeking SLGOP's consent to a Material Transaction, Transferor shall provide notice of the identity
of the proposed tenant or other party thereto, a term sheet or letter of intent containing material business terms (including, without limitation, with respect to proposed leases the rent, expense
base, concessions, tenant improvement allowances, brokerage commissions, and expansion and extension options) (the "Material Terms") and such credit and
background information, if any, Transferor then possesses with respect to such proposed Space Lessee or other party. SLGOP shall not unreasonably withhold or delay its consent to a proposed Space
Lease if (i) the Material Terms are in accordance wi th prevailing market conditions, and (ii) the financial condition and general reputation of the proposed Space Lessee is satisfactory
to SLGOP. Upon SLGOP's consent to a Material Transaction involving a new Space Lease, Transferor shall use commercially reasonable efforts to negotiate and enter into a Space Lease on SLGOP's standard
lease form, without material change other than changes reasonably approved by SLGOP. Transferor shall also provide SLGOP with regular reports and information regarding the status of approved Material
Transactions being negotiated. SLGOP shall be responsible for Tenant Improvement Costs, leasing commissions and all other leasing costs payable in connection with any new Space Lease approved by SLGOP
pursuant to this Section. 

        28.    Existing Mortgage Indebtedness; Existing Mezzanine Indebtedness.    

        (a)    Transferor
will not (y) modify or amend any term, covenant, provision or agreement contained in any Mortgage Loan Document or enter into any new agreement in
respect of the Existing Mortgage Indebtedness without the prior consent of SLGOP, which consent may be withheld in SLGOP's sole discretion, or (z) make any prepayment of the Mortgage
Indebtedness, other than regularly scheduled payments under the Mortgage Loan Documents. Transferor shall 

44

 

make all regular monthly payments of principal and interest under the Mortgage Note and Existing Mortgage, and shall perform, observe and comply with all other monetary and material
non-monetary obligations under the Existing Mortgage and all other Mortgage Loan Documents such that prior to the Closing no default beyond applicable grace and notice periods shall occur.
After the date hereof, Transferor shall not execute any mortgage or create or suffer any lien or encumbrance which shall affect title to the Property or the right of SLGOP or its successor and/or
assigns hereunder. Transferor shall, promptly upon receipt deliver a copy to SLGOP of any notice of default under the Existing Mortgage or any other Mortgage Loan Document. Promptly following the date
hereof, Transferor shall deliver to Midland Loan Services, Inc., the servicer of the Mortgage Indebtedness, a notice and estoppel in the form attached hereto as  Exhibit S and made a part
hereof (the "Mortgage Lender Consent"), advising Mortgage Lender of the
sale and transfer of the Property to Designee subject to and upon Designee's assumption, subject to the non-recourse provisions thereof, of the Existing Mortgage Indebtedness. Transferor
shall pay all fees and expenses payable in connection therewith, including, without limitation, premiums for any endorsements to or redate of the title insurance policy previously issued to Mortgage
Lender, servicing fees, rating agency fees, assignment and assumption fees, attorneys fees and disbursements and processing fees required to be paid to Mortgage Lender as a condition to issuance by
Mortgage Lender of the Mortgage Lender Consent (collectively, "Mortgage Lender's Expenses"). Mortgage Lender's Expenses shall not include exit fees,
prepayment fees, fees and disbursements of SLGOP's counsel, or costs specifically incurred in connection with the execution and delivery by SLGOP or Carve -Out Guarantor (as hereinafter
defined) of any document or instrument required by Mortgage Lender as a condition to issuance of the Mortgage Lender Consent. SLGOP agrees to cause Designee to execute, acknowledge and deliver such
documents and instruments as are required by Mortgage Lender pursuant to the express provisions of the Mortgage Loan Documents, in the forms of the Mortgage Loan Documents or in such other form
approved by SLGOP, in connection with the assumption by Designee, subject to the non-recourse provisions set forth in the Mortgage Loan Documents, of the Existing Mortgage Indebtedness
(such documents and instruments, hereinafter the "Confirmatory Mortgage Documents"). SLGOP agrees to cooperate with Transferor in seeking the Mortgage
Lender Consent and to furnish such information regarding SLGOP or its Designee as Mortgage Lender reasonably requests. 

        (b)    Transferor
will not (y) modify or amend any term, covenant, provision or agreement contained in any Mezzanine Loan Document or enter into any new agreement in
respect of the Existing Mezzanine Indebtedness without the prior consent of SLGOP, which consent may be withheld in SLGOP's sole discretion or (z) make any prepayment of the Existing Mortgage
Indebtedness other than regularly scheduled payments required under the Mezzanine Loan Documents. Transferor shall make all regular monthly payments of principal and interest in respect of the
Existing Mezzanine Indebtedness, and shall perform, observe and comply with all other monetary and non-monetary obligations under the Transferor Pledge and all other Mezzanine Loan
Documents such that prior to the Closing no default beyond applicable grace and notice periods shall occur. Transferor shall, promptly upon receipt deliver a copy to SLGOP of any notice of default
under the Transferor Pledge or any other Mezzanine Loan Document. Promptly following the date hereof, Transferor shall make application to Mezzanine Lender for its (i) consent to the sale and
transfer of the Property to Designee(s) and (ii) agreement to enter into the New Mezzanine Loan Agreement (such consent and agreement by Mezzanine Lender (the "Mezzanine
Lender Consent", and together with the Mortgage Lender Consent, collectively the
"Lender Consents") by delivering a letter, in the form attached hereto as Exhibit S-1  and made a part hereof, and in connection therewith, Transferor
shall pay all fees and expenses payable in connection therewith, including, without limitation, servicing fees,
rating agency fees, assignment and assumption fees, attorneys fees and disbursements and processing fees required to be paid to Mezzanine Lender as a condition to Mezzanine Lender's agreement to enter
in to the New 

45

 

Mezzanine Loan Agreement (collectively, "Mezzanine Lender's Expenses"). Mezzanine Lender's Expenses shall not include exit fees, prepayment fees, fees
and disbursements of SLGOP's counsel, or costs incurred in connection with the execution and delivery by SLGOP or Carve-Out Guarantor of any document or instrument required by Mezzanine
Lender as a condition to issuance of the consent. SLGOP shall cooperate with Transferor in seeking the Mezzanine Lender Consent, and to furnish such information that Mezzanine Lender reasonably
requests in connection therewith. 

        29.    Confidentiality; Public Disclosure.    

        29.1    Except
as set forth below, Transferor and SLGOP covenant and agree not to communicate the terms or any aspect of this Agreement and the transactions contemplated hereby
to any person or entity and to hold, in the strictest confidence, the content of any and all information in respect of the Property which is supplied by Transferor to SLGOP or by SLGOP to Transferor,
without the express written consent of the other party; provided, however, that either party may, without consent, disclose the terms hereof and the transactions contemplated hereby (a) to its
respective advisors, consultants, officers, directors, principals, investors, attorneys, accountants and lenders (the "Transaction Parties") without the
express written consent of the other party, so long as any such Transaction Parties to whom disclosure is made shall also agree to keep all such information confidential in accordance with the terms
hereof and (b) if disclosure is required by law or by regulatory or judicial process or pursuant to any regulations promulgated by either the Securities and Exchange Commission, the New York
Stock Exchange or other public exchange for the sale and purchase of securities, provided that in such event Transferor or SLGOP, as applicable, shall notify the other party in writing of such
required disclosure, shall exercise all commercially reasonable efforts to preserve the confidentiality of the confidential documents or information, as the case may be, including, without limitation,
reasonably cooperating with the other party to obtain an appropriate order or other reliable assurance that confidential treatment will be accorded such confidential documents or information, as the
case may be, by such tribunal and shall disclose only that portion of the confidential documents or information which it is legally required to disclose. The foregoing confidentiality obligations
shall not apply to the extent that any such information is a matter of public record or is provided in other sources readily available to the real estate industry other than as a result of disclosure
by Transferor or SLGOP, as applicable. 

        29.2    Notwithstanding
the provisions of Section 29.1 above, at any time after the date hereof, SLGOP may, if SLGOP in its reasonable discretion deems it to be
necessary (upon the advice of counsel) to comply with law, rules or regulations or the requirements of a securities self regulatory organization, issue a press release or other public disclosure
acknowledging that SLGOP is under contract to purchase the Property, the anticipated closing date, and containing such other information which SLGOP reasonably believes to be required to be disclosed.
Transferor shall not unreasonably withhold or delay its approval of a press release which sets forth the purchase price, capitalization rate, square footage, the current occupancy rate at the
Property, the in-place average and market rents and the major tenancies at the Property. 

        30.    Intentionally Omitted.    

        31.    Union Agreements; Other Employee Matters.    

        (a)    SLGOP
agrees that, effective as of the Closing Date, all Employees who are union employees shall be offered the same employment by SLGOP (or by the property manager to
be engaged by SLGOP) on substantially the same terms and conditions as such Employees were employed immediately prior to the Closing. SLGOP shall be solely responsible for any and all
(i) salaries (for the period from and after the Closing Date), (ii) benefits attributable to the period from and after the Closing Date payable to the Employees, (iii) benefit
continuation and/or severance payments relating to any Employee that may be payable as a result of any termination of 

46

 

employment of any such Employee from and after the Closing Date, and (iv) notices, payments, fines or assessments due to any governmental authority pursuant to any Laws and Regulations with
respect to the employment, discharge or layoff of Employees from and after the Closing Date, including, but not limited to, such liability as arises under the Worker Adjustment and Retraining
Notification Act, Section 4980B of the Internal Revenue Code (COBRA) and any rules or regulations as have been issued in connection with any of the foregoing. 

        (b)    SLGOP
hereby agrees to indemnify Transferor and its affiliates against, and agrees to hold them harmless from, any and all claims, losses, damages and expenses
(including, without limitation, reasonable attorneys' fees and disbursements) and other liabilities and obligations incurred or suffered as a result of any claim by any Employee that arises under
federal, state or local statute (including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination Act of 1990, the Equal Pay Act, the
Americans with Disabilities Act of 1990, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, as amended, and all other statutes regulating the terms and conditions
of employment), under any regulation or ordinance, under the common law or in equity (including any claims for wrongful discharge or otherwise), arising out of actions, events or omissions that
occurred (or, in the case of omissions, failed to occur) from and after the Closing Date. 

        (c)    Transferor
hereby agrees to indemnify SLGOP and its affiliates against, and agrees to hold them harmless from, any and all claims, losses, damages and expenses
(including, without limitation, reasonable attorneys' fees and disbursements) and other liabilities and obligations incurred or suffered as a result of any claim by any Employee that arises under
federal, state or local statute (including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination Act of 1990, the Equal Pay Act, the
Americans with Disabilities Act of 1990, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, as amended, and all other statutes regulating the terms and conditions
of employment), under any regulation or ordinance, under the common law or in equity (including any claims for wrongful discharge or otherwise), arising out of actions, events or omissions that
occurred (or, in the case of omissions, failed to occur) prior to the Closing Date. 

        (d)    Effective
as of the Closing, SLGOP agrees to assume, observe, pay and perform all obligations and liabilities under Transferor's collective bargaining agreements with
Local 32 B-J of the Building Service Employees Union Local 30 of the Building Engineers Union, Local 111 (formerly 806) International Brotherhood of Teamsters and the New York District
Council, United Brotherhood of Carpenters (collectively, the "CBA"). SLGOP shall have sole responsibility for all such obligations and liabilities
arising under the CBA on or at any time after the Closing Date and hereby agrees to indemnify and hold Transferor harmless from and against all loss, cost and expense incurred by Transferor (including
reasonable attorneys' fees and disbursements) and all other liabilities and obligations incurred or suffered as a result of SLGOP's failure to so assume, observe, pay and perform the same. 

        (e)    The
provisions of this Section 31 shall survive the Closing. 

47

   
        32.    Tax Deferred Exchange.    

        (a)    SLGOP
and its Designee may elect to acquire title to all or a portion of the Property other than the SCW Interest and the SLGOP Interest (the
"Non-SCW Portion") as part of a tax deferred exchange (an "Exchange") pursuant to
Section 1031 of the Code, as amended ("Section 1031"), and in connection therewith, SLGOP may assign all or a portion of its rights under
this Agreement with respect to the Non-SCW Portion, and/or cause all or any portion of the DP Amount or the Cash Balance to be paid by a "Qualified Intermediary" (as defined in regulations
relating to Section 1031), or may direct that any Deed for such portion of the Property which is to be the subject of an Exchange be executed in the name of the party designated as the
"exchangor" thereunder. Transferor agrees to accept payment by such Qualified Intermediary as a payment by SLGOP, and provided that Transferor incurs no material liability, material cost or material
obligation as the result of any transaction, document or instrument to be executed and delivered in connection with the Exchange, agrees to cooperate, at SLGOP's sole cost and effect, with such
Exchange. 

        (b)    The
Transferor Parties (other than SCW) may elect to convey title to their interest in the Property as part of an Exchange, and in connection therewith, Transferor may
assign its rights under this Agreement to, and/or cause the Cash Balance to be paid to, a Qualified Intermediary. Provided that neither the Exchange nor any transactions, documents or instruments
entered into in connection therewith shall impose any material liability, material cost or material obligation of any kind upon SLGOP, SLGOP agrees to accept performance hereunder by, and to make
payment to, such Qualified Intermediary, and agrees to cooperate, at Transferor's sole cost and expense, with such Exchange. 

        33.    No Property Disposition.    

        Other
than pursuant to a Permitted Transfer (as hereinafter defined) or as otherwise set forth below, SLGOP or its Designee(s) covenants that it shall not sell, transfer, distribute or
otherwise dispose of the Property in a manner that would cause the recognition of taxable gain allocable to SCW under Section 704(c) of the Code with respect to the SCW Interest for the period
(the "Restricted Period") expiring seven (7) years after the Closing. As used herein, "Permitted
Transfer" means any one or more of the following: 

        (a)    the
execution and delivery of a purchase and sale agreement for all or any portion of (i) the Property or (ii) the Fee Equity Interests, provided that a
transfer of federal income tax ownership of the Property or of the Fee Equity Interests does not occur prior to the expiration of the Restricted Period; 

        (b)    a
transfer of federal income tax ownership of the Property or of the Fee Equity Interests that does not result in the recognition of gain by SCW prior to the expiration
of the Restricted Period, including, without limitation, a transfer qualifying as an Exchange under Section 1031 or other tax free exchange permitted under the Code; 

        (c)    a
contested or uncontested foreclosure sale of fee title to the Property, a contested or uncontested sale of fee title to the Property pursuant to any "power of sale"
afforded the holder of the Existing Mortgage Indebtedness or any replacement thereof under applicable law or a transfer of fee title to the Property in lieu of either of the foregoing, in each case
occasioned by the occurrence of one or more bona fide defaults thereunder, which transfer SLGOP may, in SLGOP's sole and absolute discretion, cause Fee Owner to make; 

        (d)    a
Uniform Commercial Code public or private sale of the Fee Equity Interests by the holder of the Existing Mezzanine Indebtedness o r any replacement thereof or a
transfer of such ownership interests in lieu of such public or private sale, in each case occasioned by the occurrence of one or more bona fide defaults thereunder, which transfer SLGOP may, in
SLGOP's sole and absolute discretion, cause the holder of such Fee Equity Interests to make; 

48

 

        (e)    a
transfer of federal income tax ownership of all or any portion of the Property and/or the Fee Equity Interests in a voluntary bankruptcy of or involuntary bankruptcy
against Fee Owner, the holder of the Fee Equity Interests, or SLGOP, whether pursuant to a plan of reorganization under Chapter 11 of the Bankruptcy Code, in liquidation pursuant to Chapter 7 of the
Bankruptcy Code, a sale pursuant to Section 363 of the Bankruptcy Code, or otherwise; and/or 

        (f)    a
casualty or condemnation of all or any portion of the Property. 

        In
addition to Permitted Transfers, prior to expiration of the Restricted Period, SLGOP or its Designee(s) may transfer the Property or the Fee Equity Interests, provided that SLGOP or
its Designee(s) pays to SCW an amount equal to the federal, state and local income tax that would be payable by an individual resident of New York City (or such other city of which SCW is a resident
in the year of such transfer), calculated at the highest applicable federal, state and local income tax rates (the "Income Tax Liability") by reason of
recognition of gain prior to expiration of the Restricted Period allocated to SCW under Section 704(c) of the Code
("Built-in-Gain") upon such disposition in a taxable transaction. The provisions of this Section 33 shall survive the
Closing through the expiration of the Restricted Period or other payment of any Income Tax Liability, if later. 

        34.    Certain Allocations.    

        SLGOP
shall use the "traditional method with curative allocations," as defined in Treas. Reg. Section 1.704-3(c), of
allocating income, gain, loss and deduction to account for the variation between the fair market value and adjusted basis of the SCW Interest. In furtherance thereof, an amount of gross rental income
from the Property for each taxable year of SLGOP equal to the Curative Allocation Amount (as hereinafter defined) for such year and which would otherwise have been allocated to partners of SLGOP other
than SCW Recipient for income tax purposes shall instead be allocated, solely for income tax purposes, to SCW Recipient. As used herein, "Curative Allocation
Amount" means, for any taxable year of SLGOP, an amount equal to 50% of the excess of (a) the amount of depreciation with respect to the SCW Interest allocable to
partners of SLGOP other than SCW Recipient for book purposes for such year, over (b) the amount of depreciation with respect to the SCW Interest allocable to such partners of SLGOP for income
tax purposes for such year. For purposes of this Section 34, to the extent that SCW Recipient shall own any interest in SLGOP other than the OP Units it receives under this Agreement, it shall
be considered a partner of SLGOP other than SCW Recipient. The provisions of this Section 34 shall survive the Closing. 

        35.    Certain Tax Information.    

        (a)    Transferor
has delivered to SLGOP (i) a schedule showing the adjusted tax basis anticipated as of December 31, 2002 of the SCW Interest and its components,
for federal income tax purposes, as well as related schedules of depreciation and depreciation lives and methods (the "Tax Schedule"), and
(ii) the federal income tax return of MZ for the year ended December 31, 2001 (the "Federal Income Tax Return", and together with the Tax
Schedule collectively, the "Tax Information"). Promptly after it becomes available, SCW shall provide a revised Tax Schedule that is updated through the
Closing. 

        (b)    SCW
and the SCW Entity, acknowledges and agrees that SLGOP will rely on the information contained in the Tax Information and other information furnished pursuant to
clause (a) in determining the potential amount of Built-in Gain with respect to which SLGOP or its Designee may be liable to pay Income Tax Liability pursuant to Section 33
in the event of a disposition of the Property or the Fee Equity Interests which is not a Permitted Transfer. The liability of SLGOP or its Designee shall be limited to the amounts calculated pursuant
to the tax information provided pursuant to this Agreement, notwithstanding that the actual amount of Built-in Gain recognized may be greater than the amount thereof calculated based upon
the information so provided. However, if the amount of actual Built-in Gain recognized is less than 

49

 

the amount so calculated, the liability of SLGOP or its Designee shall be based upon the actual amount thereof. 

        (c)    Unless
otherwise required by the IRS or any other governmental authority, for federal income tax purposes, the parties to this Agreement shall treat the distribution of
the SLGOP Interest by MZ to Funding that occurs as part of the Interim Transactions as a distribution to Funding and not as a "disguised sale" to Funding, under Section 707(a)(2)(B) of the Code
or the Treasury Regulations thereunder, of all or any portion of the SLGOP Interest. News and SCW shall cause MZ to timely
make the disclosure described in Treasury Regulations Section 1.707-6(c) and 1.707-8 in connection with such treatment. 

        [SIGNATURE
PAGE TO FOLLOW] 

50

 

        IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. 

	 	 	SELLER:
	 	 	 	 	 	 	 
	 	 	220 NEWS BUILDING LLC,

a Delaware limited liability company
	 	 	 	 	 	 	 
	 	 	By:	 	220 News Building MZ LLC,

a Delaware limited liability company,

Sole Member
	 	 	 	 	 	 	 
	 	 	By:	 	220 News LLC,

a New York limited liability company,

Managing Member
	 	 	 	 	 	 	 
	 	 	By:	 	Daily Planet LLC,

a New York limited liability company,

Manager
	 	 	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:	 	

	 	 	 	 	Title:	 	

	 	 	 	 	 	 	 
	 	 	By:	 	Forty Two News LLC,

a Delaware limited liability company
	 	 	 	 	 	 	 
	 	 	By:	 	News Forty Two Corp.,

a New York corporation
	 	 	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:	 	

	 	 	 	 	Title:	 	

        [SIGNATURE
PAGE CONTINUED] 

51

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	PURCHASER:
	 	 	 	 	 	 	 	 	 
	 	 	 	 	SL GREEN OPERATING PARTNERSHIP L.P.,

a Delaware limited partnership
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	SL Green Realty Corp.,

a Maryland corporation
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	

	 	 	 	 	 	 	Name:	 	

	 	 	 	 	 	 	Title:	 	

	 	 	 	 	 	 	 	 	 
	THE UNDERSIGNED HEREBY CONFIRMS

ITS AGREEMENT TO BE BOUND BY THE

PROVISIONS OF SECTION 7.4:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	FORTY TWO NEWS LLC	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:	 	Forty Two News LLC,

a Delaware limited liability company	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:	 	News Forty Two Corp.,

a New York corporation	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:	 	
 Name:

Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	THE UNDERSIGNED HEREBY JOINS IN THIS

AGREEMENT SOLELY FOR THE PURPOSE OF

(A) CONFIRMING THE REPRESENTATIONS

AND WARRANTIES SET FORTH IN

SECTION 7.1.22, AND (B) CONFIRMING HIS

AGREEMENT TO BE BOUND BY THE

PROVISIONS OF SECTIONS 7.4, 7.6, 13 AND 35:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	
 Steven C. Witkoff

	 	 	 	 	 	 

        [SIGNATURE
PAGE CONTINUED] 

52

 

	THE UNDERSIGNED HEREBY JOINS IN THIS

AGREEMENT SOLELY FOR THE PURPOSE

OF CONFIRMING ITS AGREEMENT TO BE

BOUND BY THE PROVISIONS OF

SECTION 13: DD INVESTMENT

PARTNERS L.P.	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:	 	General Realty, L.L.C.,

a Delaware limited liability company,

General Partner	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:	 	Managers, Inc.

a Delaware corporation	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:	 	
 Brian T. Summers

Vice President	 	 	 	 	 	 
	
	 	 	 	 	 	 	 	 

	ESCROW AGENT:	 	 
	 	 	 	 	 	 	 
	SOLELY FOR THE PURPOSES OF CONFIRMING THE PROVISIONS OF ARTICLE 23:	 	 
	 	 	 	 	 	 	 
	TSNY AGENCY OF NEW YORK CITY, INC.	 	 
	 	 	 	 	 	 	 
	By:	 	
	 	 
	 	 	Name:	 	Neil Clark	 	 
	 	 	Title:	 	 	 	 
	 	 	 	 	
	 	 

53

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CONTRIBUTION AND PURCHASE AND SALE AGREEMENT<PAGE>

                                                                    EXHIBIT 10.1

EXECUTION COPY

To: Computer Associates International, Inc.
Address: One Computer Associates Plaza
Islandia, NY 11749
Telephone: (631) 342-2860
Facsimile:  (631) 342-5224

Citibank, N.A.
Equity Derivatives
390 Greenwich Street, 4th Floor
New York, NY  10013
Telephone No.: 212- 723-7357
Facsimile No.: 212-723-8328

Re: Issuer Call Spread Transaction

Reference: E02-02529 to E02-02540 and E02-02544 to E02-02555

         The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between CITIBANK, N.A. ("Citibank" or
"Party A") and COMPUTER ASSOCIATES INTERNATIONAL, INC. (either "Counterparty" or
"Party B") on the Trade Date specified below (the "Transaction"). This letter
agreement constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.

         The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "Equity Definitions"), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This
Confirmation evidences a complete binding agreement between the Counterparty and
Citibank as to the terms of the transaction to which this Confirmation relates.
This Transaction shall be deemed to consist of Share Option Transactions, each
within the meaning as set forth in the Equity Definitions and each referred to
sequentially in Annex A.

         Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon the
parties' entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.

1. If the Counterparty and Citibank have entered into an ISDA Master Agreement
(the "Agreement"), then this Confirmation supplements, forms a part of, and is
subject to, that Agreement, as amended and supplemented from time to time. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below. If the Counterparty and Citibank have not entered into
an ISDA Master Agreement, then they agree to use all reasonable efforts to
promptly negotiate, execute and deliver an agreement in the form of the ISDA
Master Agreement (Multicurrency-Cross Border) (the "ISDA Form"), with such
modifications as the Counterparty and Citibank will in good faith agree. Upon
the execution of such an agreement, this Confirmation will supplement, form a
part of, and be subject to, that agreement. All provisions contained or
incorporated by reference in that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until the parties execute and
deliver that agreement, this Confirmation, together with all other documents
relating to the ISDA Form (each a "Confirmation") confirming transactions (each
a "Transaction") entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject to
an agreement in the form of the ISDA Form as if we had executed an agreement in
such form (but without any Schedule) on the Trade Date of the first such
Transaction between us (such agreement, or the ISDA Form, hereinafter the
"Agreement"). In the event of any inconsistency between the provisions of the
agreement and this Confirmation, this Confirmation will prevail for the purpose
of this Transaction. For purposes of such ISDA Master Agreement and with respect
of all Transactions thereunder in addition to such other modifications to the
ISDA Form as shall be agreed by the parties from time to time and which may be
set forth in any Confirmation, the parties agree to the following provisions
with respect to the ISDA Master Agreement: Second Method and Loss shall apply.

<PAGE>

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

General Terms applicable to each Share Option Transaction ("SOT"):

       Trade Date:                      March 13, 2002

       Option Style:                    European

       Option Type:                     Call Spread

       Buyer:                           Counterparty

       Seller:                          Citibank

       Shares:                          The common stock of Computer
                                        Associates International, Inc. (the
                                        "Issuer"), par value U.S. $0.10 per
                                        Share (Exchange symbol "CA")

       Number of Options:               As specified on Annex A

       Option Entitlement:              One Share per Option

       Low Call Strike Price:           U.S. $24.83

       High Call Strike Price:          U.S. $36.60

       Premium:                         $47,520,000.00

       Premium Payment Date:            March 18, 2002

       Exchange:                        The New York Stock Exchange

       Related Exchange(s):             The principal exchange(s) for options
                                        contracts or futures contracts, if any,
                                        with respect to the Shares

       Dividend Adjustment:             Notwithstanding the provisions of
                                        Section 9.1(e) of the Equity
                                        Definitions, if the Shares shall
                                        have gone ex-dividend with respect to
                                        any ordinary cash dividends ("Ordinary
                                        Dividend") on any day from and excluding
                                        the Trade Date, to and including the
                                        Expiration Date and such Ordinary
                                        Dividend is less than U.S. $0.04 per
                                        Share (assuming a semi-annual dividend
                                        with appropriate adjustments to the
                                        terms of this Transaction in the event
                                        that the Issuer pays dividends other
                                        than on a semi-annual basis) (the
                                        "Contractual Dividend"), then the Low
                                        Call Strike Price and the High Call
                                        Strike Price shall each be increased by
                                        an amount as determined by the
                                        Calculation Agent in a commercially
                                        reasonable manner.

Procedure for Exercise applicable to each Share Option Transaction:

        Exercise Date:                  The  Expiration  Date, if on such date a
                                        SOT is or is deemed to be exercised,
                                        unless there is a Market Disruption
                                        Event on that date. If there is a Market
                                        Disruption Event on that day, then the
                                        Exercise Date shall be the first
                                        succeeding Exchange Business Day on
                                        which there is no Market Disruption
                                        Event, unless there is a Market
                                        Disruption Event on each of the five
                                        Exchange Business Days immediately
                                        following the

                                       2
<PAGE>

                                        original date that, but for the Market
                                        Disruption Event, would have been the
                                        Exercise Date. In that case, (a) that
                                        fifth Exchange Business Day shall be
                                        deemed to be the Exercise Date,
                                        notwithstanding the Market Disruption
                                        Event, and (b) the Calculation Agent
                                        shall determine the Reference Price, or
                                        Settlement Price, as the case may be, on
                                        the basis of its good faith estimate of
                                        the trading value for the relevant
                                        Shares and each following Expiration
                                        Date for the remaining SOTs shall be
                                        postponed the minimum number of Exchange
                                        Business Days so that each Expiration
                                        Date for the remaining SOTs falls on a
                                        separate Exchange Business Day; provided
                                        however, that if an Expiration Date for
                                        any SOT shall occur on or after April
                                        29, 2005, an Additional Termination
                                        Event shall be deemed to have occurred,
                                        the Early Termination Date shall be
                                        April 29, 2005, this Transaction shall
                                        be the sole Affected Transaction and
                                        Citibank and Counterparty shall be the
                                        Affected Parties.

        Expiration Time:                The Valuation Time

        Expiration Date:                See Annex A

        Automatic Exercise:             Applicable;  provided that,
                                        notwithstanding the Equity Definitions,
                                        each Option will be deemed to be
                                        automatically exercised (i) where Cash
                                        Settlement or Net Share Settlement is
                                        applicable, at the Expiration Time on
                                        the Expiration Date, unless Counterparty
                                        notifies Citibank (by phone or in
                                        writing) prior to the Expiration Time on
                                        the Expiration Date that it does not
                                        wish Automatic Exercise to occur, and
                                        (ii) where Physical Settlement is
                                        applicable, at the Expiration Time on
                                        the Expiration Date if at such time the
                                        Option is In-the-Money. "In-the-Money"
                                        means that the Reference Price exceeds
                                        the Low Call Strike Price.

Valuation applicable to each Share Option Transaction:

       Valuation Time:                  At the close of trading of the regular
                                        trading session on the Exchange

       Valuation Date:                  The Exercise Date

 Settlement Terms applicable to each Share Option Transaction:

 Physical Settlement:                   Applicable, where each SOT shall be
                                        deemed "Physically-Settled"; provided,
                                        however, that the Counterparty may elect
                                        the method of settlement with respect to
                                        all or a portion of such SOT to be Cash
                                        Settlement, subject to the Additional
                                        Terms set forth in Section 3(a) herein,
                                        or Net Share Settlement, subject to the
                                        Additional Terms set forth in Section
                                        3(b) herein. Notwithstanding any
                                        election by the Counterparty to cash
                                        settle or net share settle all or a
                                        portion of any SOT in accordance with
                                        the terms hereof, Citibank may impose
                                        additional requirements or
                                        modifications, including, without
                                        limitation, the registration of the
                                        Shares held by Citibank as part of its
                                        hedge, the entering

                                       3
<PAGE>

                                        into of a registration rights agreement
                                        in a form acceptable to both parties,
                                        due diligence requirements of Citibank,
                                        and effectiveness of a registration
                                        statement if in its good faith
                                        determination registration of additional
                                        shares held as its hedge is legally
                                        required for sale in the public Market.
                                        For the avoidance of doubt, if
                                        Counterparty elects to settle all or a
                                        portion of any SOT pursuant to the Cash
                                        Settlement Terms or Net Share Settlement
                                        Terms as set forth below, the provisions
                                        relating to Physical Settlement will
                                        apply with respect to the remaining
                                        Number of Options not subject to Cash
                                        Settlement or Net Share Settlement.

 PHYSICAL SETTLEMENT TERMS:             Physical Settlement means that Citibank
                                        shall to deliver to the Counterparty the
                                        Number of Shares to be Delivered (as
                                        defined below) through the Clearance
                                        System against payment of the Settlement
                                        Price by the Counterparty to Citibank.

Number of Shares to be Delivered:       (a) If the  Reference  Price  is
                                        greater than the High Call Strike Price,
                                        the difference between (A) the Number of
                                        Options less (B) the product of (x) the
                                        Number of Options times (y) the quotient
                                        of (i) the Reference Price minus the
                                        High Call Strike Price, divided by (ii)
                                        the Reference Price.

                                        (b) If the Reference Price is greater
                                        than or equal to the Low Call Strike
                                        Price and less than or equal to the High
                                        Call Strike Price, the Number of
                                        Options.

                                        (c) If the Reference Price is less than
                                        the Low Call Strike Price, zero.

 Settlement Price:                      (a) If the Reference  Price is greater
                                        than or equal to the Low Call Strike
                                        Price, an amount equal to the product of
                                        the (x) the Low Call Strike Price times
                                        (y) the Number of Options;

                                        (b) If the Reference Price is less than
                                        the Low Call Strike Price, zero.

 Reference Price:                       The closing  price per Share on the
                                        Exchange at the Valuation Time on the
                                        Valuation Date

 Settlement Date:                       As defined in Section 6.2 of the Equity
                                        Definitions.

 Failure to Deliver:                    Applicable

 3. Additional Terms applicable to each Share Option Transaction:

 (a) Option to Cash Settle:             Counterparty  shall have the right, but
                                        not the obligation, to cash settle any
                                        SOT, in whole or in part. If the
                                        Counterparty elects such right, it will
                                        execute and deliver written notice to
                                        Citibank on any Currency Business Day
                                        but no later than 12:00 p.m. noon (or
                                        3:30 p.m. with respect to Option A under
                                        Schedule A) New York City time on the
                                        Currency Business Day prior to the
                                        Expiration Date for such SOT, specifying
                                        that Cash Settlement applies to such SOT
                                        and specifying the

                                       4
<PAGE>

                                        Number of Options subject to Cash
                                        Settlement. Once Cash Settlement is
                                        elected with respect to such SOT, such
                                        election shall be irrevocable. Such
                                        notice shall be given by facsimile and
                                        telephone.

 CASH SETTLEMENT TERMS:

 Cash Settlement:                       Applicable, provided  that Counterparty
                                        properly elects cash settlement in
                                        accordance with the "Option to Cash
                                        Settle" provision above. Citibank shall
                                        pay to the Counterparty the Cash
                                        Settlement Amount, if any, on the Cash
                                        Settlement Payment Date for all Options
                                        exercised or deemed exercised. For the
                                        avoidance of doubt, the Number of
                                        Options subject to Cash Settlement shall
                                        be the Number of Options so specified by
                                        Counterparty in the written notice
                                        delivered to Citibank.

 Cash Settlement Amount:                An amount, as calculated by the
                                        Calculation Agent, equal to the Number
                                        of Options exercised on the Exercise
                                        Date multiplied by the Option
                                        Entitlement multiplied by the Strike
                                        Price Differential.

Strike Price Differential:             (a) If the Settlement Price is greater
                                        than or equal to the Low Call Strike
                                        Price and less than or equal to the High
                                        Call Strike Price, an amount equal to
                                        the excess of the Settlement Price over
                                        the Low Call Strike Price; or

                                        (b) If the Settlement Price is greater
                                        than the High Call Strike Price, an
                                        amount equal to the excess of the High
                                        Call Strike Price over the Low Strike
                                        Price; or

                                        (c) If the Settlement Price is less than
                                        the Low Call Strike Price, zero.

 Cash Settlement Payment Date:          Three (3) Currency Business Days
                                        following the Exercise Date for a SOT

 Settlement Price:                      The closing price per Share on the
                                        Exchange at the Valuation Time on the
                                        Valuation Date.

Settlement Currency:                    USD

(b) Option to Net Share Settle:         The Counterparty shall have the right,
                                        but not the obligation, to net share
                                        settle any SOT, in whole, or in part. If
                                        the Counterparty elects such right,
                                        Counterparty will execute and deliver
                                        written notice to Citibank on any
                                        Currency Business Day but no later than
                                        12:00 p.m. noon (or 3:30 p.m. with
                                        respect to Option A under Schedule A)
                                        New York City time on the Currency
                                        Business Day prior to the Expiration
                                        Date for such SOT specifying that Net
                                        Share Settlement applies to such SOT and
                                        specifying the Number of Options subject
                                        to Net Share Settlement. Once Net Share
                                        Settlement is elected with respect to
                                        such SOT, such election shall be
                                        irrevocable. Such notice shall be given
                                        by facsimile and telephone.

 NET SHARE SETTLEMENT TERMS:

                                       5
<PAGE>

 Net Share Settlement:                  Applicable, provided that Counterparty
                                        properly elects net share settlement in
                                        accordance with the "Option to Net Share
                                        Settle" provision above. "Net Share
                                        Settlement" shall mean, Citibank shall
                                        deliver to the Counterparty, the Share
                                        Delivery Quantity of Shares on the
                                        Settlement Date to the account specified
                                        hereto free of payment through the
                                        Clearance System. For the avoidance of
                                        doubt, the Number of Options subject to
                                        Net Share Settlement with respect to a
                                        SOT shall be the Number of Options so
                                        specified by Counterparty in the written
                                        notice delivered to Citibank.

Share Delivery Quantity:                A number of Shares, as calculated by the
                                        Calculation Agent, equal to the Net
                                        Share Settlement Amount divided by the
                                        Settlement Price, plus cash in lieu of
                                        any fractional shares.

Net Share Settlement Amount:            The product of the Number of Options
                                        multiplied by the Option Entitlement,
                                        multiplied by the Strike Price
                                        Differential.

Strike Price Differential:              (a) If the Settlement Price is greater
                                        than or equal to the Low Call Strike
                                        Price and less than or equal to the High
                                        Call Strike Price, an amount equal to
                                        the excess of the Settlement Price over
                                        the Low Call Strike Price; or

                                        (b) If the Settlement Price is greater
                                        than the High Call Strike Price, an
                                        amount equal to the excess of the High
                                        Call Strike Price over the Low Strike
                                        Price; or

                                        (c) If the Settlement Price is less than
                                        the Low Call Strike Price, zero.

 Settlement Price:                      The closing price per Share on the
                                        Exchange at the Valuation Time on the
                                        Valuation Date.

 Settlement Date:                       As defined in Section 6.2 of the Equity
                                        Definitions.

 Failure to Deliver:                    Applicable

 Other Applicable Provisions:           If any portion of any SOT is to be Net
                                        Share Settled, the provisions of
                                        Sections 6.6, 6.7, 6.8 and 6.10 of the
                                        Equity Definitions will be applicable,
                                        except that all references in such
                                        provisions to "Physically-Settled" shall
                                        be read as references to "Net Share
                                        Settled". "Net Share Settled" in
                                        relation to any SOT means that Net Share
                                        Settlement is applicable to that SOT.

Adjustments applicable to each Share Option Transaction:

       Method of Adjustment:            Calculation Agent Adjustment (including
                                        with respect to the terms of Annex A
                                        hereto).

Extraordinary Events applicable to each Share Option Transaction:

       Consequence of Merger Events

       (a)  Share-for-Share:            Cancellation and Payment

                                       6
<PAGE>

       (b)  Share-for-Other:            Cancellation and Payment

       (c)  Share-for-Combined:         Cancellation and Payment

Nationalization, Insolvency or
De-Listing Event:                       Cancellation and Payment

       "De-Listing Event" means that the Shares cease to be listed on, or quoted
       by, any of the New York Stock Exchange, the American Stock Exchange or
       the Nasdaq Stock Market (or their respective successors) for any reason
       (other than a Merger Event, Nationalization or Insolvency). Upon the
       occurrence of a De-Listing Event, the provisions of Section 9.7 of the
       Equity Definitions will apply, with the Announcement Date deemed to be
       the date that the De-Listing Event first occurs (as determined by the
       Calculation Agent).

4.  Calculation Agent:                  Citibank, whose calculations and
                                        determinations shall be made in good
                                        faith and in a commercially reasonable
                                        manner, including with respect to
                                        calculations and determinations that are
                                        made in its sole discretion. In making
                                        determinations hereunder, the
                                        Calculation Agent agrees to consult with
                                        the calculation agent (the "Other
                                        Agent") under the Issuer call spread
                                        transaction dated as of the date hereof
                                        between the Counterparty and Banc of
                                        America Securities LLC (the "Other
                                        Transaction") so long as Banc of America
                                        Securities LLC or an affiliate thereof
                                        is the Other Agent and a similar
                                        provision is in the Other Transaction.

5.  Account Details:

         (a)      Account for payments to Counterparty:

                  Mellon Bank N.A., Pittsburgh
                  ABA#043000261
                  Acct:  Computer Associates International, Inc.
                  Acct No.: 178-1540

                  Account for delivery of Shares to Counterparty:

                  Mellon Investor Services LLP, Overpeck House
                  85 Challenger Road
                  Ridgefield Park, NJ 07660
                  Contact : Regina Brown
                  Telephone:  (917) 320-6238

         (b)       Account for payments to Citibank:

                   Citibank, N.A.
                   ABA# 021000089
                   For credit to Equity Derivatives
                   DDA# 00167679

                   To attention of  David Fabricius (212) 615-9043

                   Account for delivery of Shares from Citibank:.

6. Offices:

The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is
not a Multibranch Party.

                                       7
<PAGE>

The Office of Citibank for the Transaction is: New York

7. Notices: For purposes of this Confirmation:

(a)      Address for notices or communications to Counterparty:
         Computer Associates International, Inc.
         One Computer Associates Plaza
         Islandia,, New York 11749
         Attention: Treasurer
         Telephone No.:    (631) 342-2860
         Facsimile No.: (631) 342-5117

         Address for notices or communications to Citibank:

          Citibank N.A.
          c/o Salomon Smith Barney
          Equity Derivatives
          390 Greenwich Street, 3rd Floor
          New York, NY  10013
          Telephone No.:    (212) 723-7357
          Facsimile No.: (212) 723-8328

8.       Other Provisions

(a)      Each party represents that:

                  (i) NON-RELIANCE. It is acting for its own account, and it has
                  made its own independent decision to enter into this
                  Transaction and as to whether this Transaction is appropriate
                  or proper for it based upon its own judgement and upon advice
                  from such advisors as it has deemed necessary. It is not
                  relying on any communication (written or oral) of the other
                  party as investment advice or as a recommendation to enter
                  into this Transaction; it being understood that information
                  and explanations related to the terms and conditions of this
                  Transaction shall not be considered investment advice or a
                  recommendation to enter into this Transaction. It has not
                  received from the other party any assurance or guarantee as to
                  the expected results of this Transaction.

                  (ii) EVALUATION AND UNDERSTANDING. It is capable of
                  evaluating and understanding (on its own behalf or through
                  independent professional advice), and understands and accepts,
                  the terms, conditions and risks (economic and otherwise) of
                  this Transaction. It has adequate expertise in financial
                  matters to evaluate those terms and risks and is also capable
                  of assuming (financially and otherwise), and assumes, the
                  financial and other risks of this Transaction.

                  (iii) STATUS OF PARTIES. The other party or any affiliate of
                  such party is not acting as a fiduciary or an advisor for it
                  in respect of this Transaction.

                  (iv) Counterparty is an "eligible contract participant" (as
                  such term is defined in Section 1(a)(12) of the Commodity
                  Exchange Act, as amended (the "CEA")) because one or more of
                  the following is true:

                  (i)      Counterparty is an individual who:

                  (A)      has total assets in excess of U.S. $10,000,000; or

                  (B) has total assets in excess of U.S. $5,000,000 and has
                  entered into this Agreement in order to manage the risk
                  associated with an asset owned or liability incurred, or
                  reasonably likely to be owned or incurred, by Counterparty;

                                       8
<PAGE>

                  or,

                  (ii)     Counterparty is a corporation, partnership,
                           proprietorship, organization, trust or other
                           entity and:

                  (A)      Counterparty has total assets in excess of U.S.
                           $10,000,000;

                  (B) the obligations of Counterparty hereunder are guaranteed,
                  or otherwise supported by a letter of credit or keepwell,
                  support or other agreement, by an entity of the type described
                  in Section 1a(12)(A)(i) through (iv), 1a(12)(A)(v)(I),
                  1a(12)(A)(vii) or 1a(12)(C) of the CEA; or

                  (C) Counterparty has a net worth in excess of U.S. $1,000,000
                  and has entered into this Agreement in connection with the
                  conduct of Counterparty's business or to manage the risk
                  associated with an asset or liability owned or incurred or
                  reasonably likely to be owned or incurred by Counterparty in
                  the conduct of Counterparty's business.

          (b)  NO INFORMATION. The Counterparty represents and warrants that
               it and its affiliates are not entering into the Transaction on
               the basis of any material non-public information with respect
               to the Shares.

         (c)  PRIVATE PLACEMENT. The Counterparty represents and warrants to
              Citibank that it (A) is an "accredited investor" within the
              meaning of Rule 501(a) under the Securities Act, (B) is acquiring
              the instruments described in the Transaction for its own account,
              and not with a view to distribution and (C) understands and
              acknowledges that the Transaction has not and will not be
              registered under the Securities Act.

         (d)  CONSISTENT WITH PUBLIC DISCLOSURES. Counterparty represents and
              agrees that the Transaction and any repurchase of the Shares by
              Counterparty in connection with the Transaction has been approved
              by its board of directors and that any such repurchase has been or
              will be publicly disclosed.

         (e)  GOVERNING LAW/JURISDICTION. This Confirmation shall be governed by
              the laws of the State of New York without reference to the
              conflict of laws provisions thereof. The parties hereto
              irrevocably submit to the exclusive jurisdiction of the courts of
              the State of New York and the United States Court for the Southern
              District of New York in connection with all matters relating
              hereto and waive any objection to the laying of venue in, and any
              claim of inconvenient forum with respect to, these courts.

         (f)  DESIGNATION BY CITIBANK.Notwithstanding any other provision in
              this Confirmation to the contrary requiring or allowing Citibank
              to purchase, sell, receive or deliver any shares or other
              securities to or from the Counterparty, Citibank may designate any
              of its US affiliates to purchase, sell, receive or deliver such
              shares or other securities and otherwise to perform Citibank's
              obligations in respect of this Transaction and any such designee
              may assume such obligations. Citibank shall be discharged of its
              obligations to the Counterparty to the extent of any such
              performance.

         (g)  DISCLOSURE. Counterparty and Citibank hereby acknowledge and agree
              that Citibank has authorized Counterparty to disclose this
              Transaction to any and all persons, and there are no express or
              implied agreements, arrangements or understandings to the
              contrary, and Citibank hereby waives any and all claims to any
              proprietary rights with respect to this Transaction, and
              authorizes Counterparty to use any information which Counterparty
              receives or has received with respect to this Transaction in any
              manner.

         (h)  UNDERSTANDING. Counterparty acknowledges and agrees that it is not
              relying, and has not relied, upon Citibank or any affiliate of
              Citibank, with respect to the legal, accounting, tax or other
              implications of this Transaction and that it has conducted its own
              analyses of the legal, accounting, tax and other implications
              hereof.

                                       9
<PAGE>

         (I)  CERTAIN AUTHORIZED TRANSFERS. Citibank may transfer or assign
              its rights and obligations in whole or in part to (i) any of its
              affiliates or (ii) any entities sponsored or organized by, or on
              behalf of or for the benefit of, Citibank.

         (J)  MARKET DISRUPTION EVENT. (i) The first two lines of Section 4.3(a)
              of the Equity Definitions are amended to read: `Section 4.3 Market
              Disruption Event. (a) "Market Disruption Event" in relation to a
              Cash-Settled Option Transaction, Physically-Settled Option
              Transaction or Net Share Settled Transaction means:', (ii) the
              second and third line of Section 4.3(a)(ii) are hereby amended by
              deleting the words "during the one-half hour period that ends at
              the relevant Valuation Time" and replacing them with "at any time
              prior to the relevant Valuation Time" and (iii) the period at the
              end of Section 4.3(b) of the Equity Definitions shall be deleted
              and replaced with "or, for the purposes of Physical Settlement, an
              Expiration Date".

         (k)  WAIVER OF TRIAL BY JURY. EACH OF COUNTERPARTY AND CITIBANK HEREBY
              IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED
              BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO
              TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
              BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
              TO THIS TRANSACTION OR THE ACTIONS OF CITIBANK OR ITS AFFILIATES
              IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

         (l)   ADDITIONAL PROVISIONS.

              (i) The first paragraph of Section 9.1(c) of the Equity
              Definitions is hereby amended to read as follows: (c) `If
              "Calculation Agent Adjustment" is specified as the method of
              adjustment in the Confirmation of a Share Option Transaction, then
              following the declaration by the Issuer of the terms of any
              Potential Adjustment Event, the Calculation Agent will determine
              whether such Potential Adjustment Event has a material effect on
              the theoretical value of the relevant Shares or Options and, if
              so, will (i) make appropriate adjustment(s), if any, to any one or
              more of:' and, the sentence immediately preceding Section
              9.1(c)(ii) is hereby amended by deleting the words "diluting or
              concentrative".

              (ii) Section 9.1(e)(vi) of the Equity Definitions is hereby
              amended by deleting the words "other similar" between "any" and
              "event"; deleting the words "diluting or concentrative" and
              replacing them with "material"; and adding the following words at
              the end of the sentence "or Options".

              (iii) Section 9.6(a)(ii) of the Equity Definitions is hereby
              amended by (1) deleting from the third line thereof the word "or"
              after the word "official" and inserting a comma therefor, and (2)
              deleting the period at the end of subsection (ii) thereof and
              inserting the following words therefor " or (C) at Citibank's
              option, the occurrence of any of the events specified in Section
              5(a)(vii) (1) through (9) of the ISDA Master Agreement with
              respect to that Issuer."

              (iv) Notwithstanding Section 9.7 of the Equity Definitions,
              everything in the first paragraph of Section 9.7(b) of the
              Equity Definitions after the words "Calculation Agent" in the
              third line through the remainder of such Section 9.7 shall be
              deleted and replaced with the following:

              "based on an amount representing the Calculation Agent's
              determination of the fair value to Buyer of an option with terms
              that would preserve for Buyer the economic equivalent of any
              payment or delivery (assuming satisfaction of each applicable
              condition precedent) by the parties in respect of the relevant
              Transaction that would have been required after that date but for
              the occurrence of the Merger Event, Nationalization, Insolvency or
              De-Listing Event, as the case may be."

              (v) Solely for purposes of applying the Equity Definitions and for
              purposes of this Confirmation, any reference to a Strike Price
              shall be deemed to be a reference to any of the Low Call Strike
              Price or the High Call Strike Price, or both, as appropriate.

                                       10
<PAGE>

         (M)  ALTERNATIVE CALCULATIONS AND PAYMENT ON EARLY TERMINATION AND ON
              CERTAIN EXTRAORDINARY EVENTS. If Citibank shall owe Counterparty
              any amount pursuant to Sections 9.3, 9.6 or 9.7 of the Equity
              Definitions (except in the event of a Nationalization or a
              Merger Event in which the merger consideration to be paid to
              holders of Shares consists solely of cash) or pursuant to
              Section 6(d)(ii) of the Agreement (except in the event of an
              Event of Default in which Counterparty is the Defaulting Party
              or a Termination Event in which Counterparty is the Affected
              Party, other than an Event of Default of the type described in
              Section 5(a)(iii), (v), (vi) or (vii) of the Agreement or a
              Termination Event of the type described in Section 5(b)(i),
              (ii), (iii), (iv), or (v) of the Agreement that resulted from an
              event or events outside Counterparty's control) (a "Payment
              Obligation"), Counterparty shall have the right, in its sole
              discretion, to require Citibank to satisfy any such Payment
              Obligation by the Share Termination Alternative (as defined
              below) by giving irrevocable telephonic notice to Citibank,
              confirmed in writing within one Currency Business Day, between
              the hours of 9:00 a.m. and 4:00 p.m. New York local time on the
              Merger Date, Announcement Date or Early Termination Date, as
              applicable ("Notice of Share Termination"). Upon Notice of Share
              Termination no later than 8:00 a.m. on the Exchange Business Day
              immediately following the Merger Date, Announcement Date or
              Early Termination Date, as applicable, the following provisions
              shall apply:

              Share Termination Alternative:        Applicable and means that
                                                    Citibank shall deliver to
                                                    Counterparty the Share
                                                    Termination Delivery
                                                    Property on the date when
                                                    the Payment Obligation would
                                                    otherwise be due pursuant to
                                                    Section 9.7 of the Equity
                                                    Definitions or Section
                                                    6(d)(ii) of the Agreement,
                                                    as applicable (the "Share
                                                    Termination Payment Date"),
                                                    in satisfaction of the
                                                    Payment Obligation in the
                                                    manner reasonably requested
                                                    by Counterparty free of
                                                    payment.

              Share Termination Delivery Property:  A number of Share
                                                    Termination Delivery Units,
                                                    as calculated by the
                                                    Calculation Agent, equal to
                                                    the Payment Obligation
                                                    divided by the Share
                                                    Termination Unit Price. The
                                                    Calculation Agent shall
                                                    adjust the Share Termination
                                                    Delivery Property by
                                                    replacing any fractional
                                                    portion of a security
                                                    therein with an amount of
                                                    cash equal to the value of
                                                    such fractional security
                                                    based on the values used to
                                                    calculate the Share
                                                    Termination Unit Price.

              Share Termination Unit Price:         The value to Citibank of
                                                    property contained in one
                                                    Share Termination Delivery
                                                    Unit on the date such Share
                                                    Termination Delivery Units
                                                    are to be delivered as Share
                                                    Termination Delivery
                                                    Property, as determined by
                                                    the Calculation Agent in its
                                                    discretion by commercially
                                                    reasonable means and
                                                    notified by the Calculation
                                                    Agent to Citibank at the
                                                    time of notification of the
                                                    Payment Obligation.

              Share Termination Delivery Unit:      In the case of a Termination
                                                    Event or Event of Default,
                                                    one Share or, in the case of
                                                    a Merger Event, a unit
                                                    consisting of the number or
                                                    amount of each type of
                                                    property received by a
                                                    holder of one Share (without
                                                    consideration of any
                                                    requirement to pay cash or
                                                    other consideration in lieu
                                                    of fractional amounts of any
                                                    securities) in such Merger
                                                    Event. If a Share
                                                    Termination Delivery Unit
                                                    consists of property other
                                                    than cash or New Shares and
                                                    if Counterparty provides
                                                    irrevocable written notice
                                                    to the Calculation Agent on
                                                    or prior to the Merger Date
                                                    that it elects to

                                       11
<PAGE>

                                                    have Citibank deliver cash,
                                                    New Shares or a combination
                                                    thereof (in such proportion
                                                    as Counterparty designates)
                                                    in lieu of such other
                                                    property, the Calculation
                                                    Agent will replace such
                                                    property with cash, New
                                                    Shares or a combination
                                                    thereof as components of a
                                                    Share Termination Delivery
                                                    Unit in such amounts, as
                                                    determined by the
                                                    Calculation Agent in its
                                                    discretion by commercially
                                                    reasonable means, as shall
                                                    have a value equal to the
                                                    value of the property so
                                                    replaced. If such Merger
                                                    Event involves a choice of
                                                    consideration to be received
                                                    by holders, such holder
                                                    shall be deemed to have
                                                    elected to receive the
                                                    maximum possible amount of
                                                    cash.

              Failure to Deliver:                   Applicable

              Other applicable provisions:          If this Transaction is to be
                                                    Share Termination Settled,
                                                    the provisions of Sections
                                                    6.6, 6.7, 6.8 and 6.10 of
                                                    the Equity Definitions will
                                                    be applicable, except that
                                                    all references in such
                                                    provisions to
                                                    "Physically-Settled" shall
                                                    be read as references to
                                                    "Share Termination Settled"
                                                    and all references to
                                                    "Shares" shall be read as
                                                    references to "Share
                                                    Termination Delivery Units".
                                                    "Share Termination Settled"
                                                    in relation to this
                                                    Transaction means that Share
                                                    Termination Settlement is
                                                    applicable to this
                                                    Transaction.

         (n) EARLY UNWIND. In event the sale, as of March 13, 2002, of
         Convertible Senior Notes due 2007 of the Counterparty is not
         consummated with the initial purchasers pursuant to the Purchase
         Agreement dated March 13, 2002 among the Counterparty and Banc of
         America Securities LLC and Salomon Smith Barney Inc., as
         representatives of the initial purchasers, for any reason by the close
         of business in New York on March 18, 2002 (or such later date as agreed
         upon by the parties which in no event shall be later than April 17,
         2002)(March 18, 2002 or such later date as agreed upon being the "Early
         Unwind Date"), this Transaction shall automatically terminate (the
         "Early Unwind"), on the Early Unwind Date and (i) the Transaction and
         all of the respective rights and obligations of Citibank and
         Counterparty thereunder shall be cancelled and terminated and (ii) each
         party shall be released and discharged by the other party from and
         agrees not to make any claim against the other party with respect to
         any obligations or liabilities of the other party arising out of and to
         be performed in connection with the Transaction either prior to or
         after the Early Unwind Date. Citibank and Counterparty represent and
         acknowledge to the other that upon an Early Unwind, all obligations
         with respect to the Transaction shall be deemed fully and finally
         discharged.

                                       12
<PAGE>

         Please confirm your acceptance and agreement with the foregoing by
         immediately executing the copy of this Confirmation enclosed for that
         purpose and returning it Citibank, N.A. by facsimile at 212-723-8328.

                                 Very truly yours,

                                 CITIBANK, N.A.

                                  By: _________________________
                                  Authorized Signatory
                                  Name:

         Accepted and confirmed
         as of the Trade Date:

         COMPUTER ASSOCIATES INTERNATIONAL, INC.

         By:____________________________
         Authorized Signatory
         Name:

                                       13
<PAGE>

                                            ANNEX A

SCHEDULE A

SOT                       EXPIRATION DATE                   # OF OPTIONS
---                       ---------------                   ------------

Option A                   March 17, 2005                     1,355,793
Option B                   March 18, 2005                     1,355,793
Option C                   March 21, 2005                     1,355,793
Option D                   March 22, 2005                     1,355,793
Option E                   March 23, 2005                     1,355,793
Option F                   March 24, 2005                     1,355,793
Option G                   March 28, 2005                     1,355,793
Option H                   March 29, 2005                     1,355,793
Option I                   March 30, 2005                     1,355,793
Option O                   March 31, 2005                     1,355,792

provided, however, that if on March 10, 2005 ("Determination Date") the
closing price per Share on the Exchange at the close of trading is $31.00 per
Share or less, then Schedule A will be replaced for all purposes hereof by
Schedule B below. In the event there is a Market Disruption Event on March 10,
2005, then the Determination Date shall be the first succeeding Exchange
Business Day on which there is no Market Disruption Event, unless there is a
Market Disruption Event on each of the two Exchange Business Days immediately
following the original date that, but for the Market Disruption Event, would
have been the Determination Date. In that case, (a) that second Exchange
Business Day shall be deemed to be the Determination Date, notwithstanding the
Market Disruption Event, and (b) the Calculation Agent shall determine whether
Schedule A or Schedule B shall be applicable.

SCHEDULE B

SOT                         EXPIRATION DATE                  # OF OPTIONS
---                         ---------------                  ------------

Option A                    March 18, 2005                     2,711,586
Option B                    March 21, 2005                     2,711,586
Option C                    March 22, 2005                     2,711,586
Option D                    March 23, 2005                     2,711,586
Option O                    March 24, 2005                     2,711,585

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]