Document:

Exhibit 10.44

Employment and Change in Control Agreement

 

This Employment and Change in Control Agreement (this “Agreement”) is entered into effective as of this 12th day of December, 2016, by and between Dime Community Bank, a New York State-chartered savings bank and wholly-owned subsidiary of Dime Community Bancshares, Inc. (the “Corporation”) and Conrad Gunther (the “Executive”).

Whereas, the Executive has accepted employment as a senior officer of the Corporation and Dime Community Bank, a New York-chartered savings bank and wholly-owned subsidiary of the Corporation (the “Bank” or the “Employer”);

Whereas, the parties wish to set for the terms and conditions of the Executive’s employment in this Agreement;

Now Therefore, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

Article 1

Employment

1.1        Employment. The Bank hereby employs the Executive as Executive Vice President of Business Banking according to the terms and conditions of this Agreement. The Executive shall serve under the direction of the Senior Executive Vice President of Business Banking or the Bank’s Chief Operating Officer.  The Executive shall serve the Bank faithfully, diligently, competently, and to the best of the Executive’s ability.  Unless otherwise authorized in writing by the Bank’s President and Chief Executive Officer, the Executive shall exclusively devote full working time, energy, and attention to the business of the Bank and to the promotion of the Bank’s interests; provided, however, that Executive shall be permitted to continue as a director of CVD Equipment Corporation.  Without the written consent of the Bank, the Executive shall not render services to or for any person, firm, bank, or other entity or organization in exchange for compensation, regardless of the form in which the compensation is paid and regardless of whether it is paid directly or indirectly to the Executive.  Nothing in this section 1.1 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.

1.2        Term.

(a)         The term of this Agreement shall include: (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and continuing for twenty-four (24) months thereafter (the “Retention Period”), plus (ii) any extensions following the expiration of the Retention Period made pursuant to  Section 1.2(b) of this Agreement.

 

(b)          Commencing on or before the second anniversary of the initial term and on each anniversary of such date thereafter, the Compensation Committee of the Board of Directors of the Bank (the “Compensation Committee”) shall consider the advisability of an extension of the term of this Agreement in light of the circumstances then prevailing and may, in its discretion, recommend to the Board of Directors of the Bank (the “Board”) an extension of the term of the Agreement so that the remaining term shall be twenty-four (24) months.   Any extension of the term of this Agreement following the Retention Period will not extend the Retention Period.

(c)           The Committee’s decision not to extend the term of this Agreement shall not – by itself – give the Executive any rights under this Agreement to claim an adverse change in position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under Articles 4, 5 or 6 of this Agreement.

1.3         At-Will Employment.

  

(a)         This Agreement in no way guarantees Executive the right to continue in the employment of the Bank.  Executive’s employment is considered employment at will, subject to Employee’s right to receive payments and benefits upon certain terminations of employment as provided herein.

(b)         Nothing in this Agreement shall mandate or prohibit a continuation of the Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and the Executive may mutually agree.

Article 2

Compensation

2.1        Total Compensation

(a)         Base Salary.  In consideration of the Executive’s performance of the obligations under this Agreement, the Bank shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $325,000, less applicable withholdings and authorized deductions, payable on a semi-monthly basis in accordance with the Bank’s regular pay practices.  The Executive’s salary shall be reviewed annually by the Compensation Committee.  The Executive’s first annual salary review will occur no later than March 31, 2017.  Any increase in the Executive’s salary shall become the “Base Salary” for purposes of this Agreement.

(b)         Signing Bonus.  On December 31, 2016, if the Executive is actively employed at the Bank, the Executive shall be paid a signing bonus of $50,000 in cash, less applicable withholdings and authorized deductions. If the Executive’s employment with the Bank is terminated by the Bank for Cause (as defined herein) or by the Executive for any reason prior to the one-year anniversary of the Effective Date, the Executive agrees to repay the full amount of such signing bonus to the Bank within thirty (30) days of the Executive’s termination date.

 

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(c)          Annual Bonus.  During the term of this Agreement, with respect to each calendar year (or portion thereof) during which the Executive is employed by the Bank, the Executive shall be eligible for an annual discretionary bonus opportunity in accordance with the terms and conditions of the Bank’s annual incentive program (“AIP”).  The AIP bonus criteria shall be established by the Compensation Committee, set forth in writing and communicated to the Executive for each applicable calendar year (the “performance period”).  Executive shall first become eligible to participate in the AIP during the 2017 performance period.  Any AIP bonus earned during the 2017 performance period shall be paid in 2018, no later than March 31, 2018.

(d)        LTIP.  The Executive is eligible to participate in the Bank’s Long Term Incentive Program (“LTIP”).  LTIP incentives can be distributed in shares of Corporation common stock and/or cash.   The Bank engages a third party compensation consultant to work with the Compensation Committee on an annual basis to establish the LTIP incentive opportunities. The Executive shall first become eligible to participate in the LTIP during the 2017 calendar year.  In lieu of a 2017 LTIP award, if the Executive is actively employed by the Bank on January 3, 2017 (the “Grant Date”), the Executive shall receive a Restricted Stock Award valued at $130,000 (the “Restricted Stock Award”). The number of shares subject to the Restricted Stock Award will be based on the Fair Market Value (as such term is defined in Dime Community Bancshares, Inc. 2013 Equity And Incentive Plan (the “2013 Equity Plan”)) of the Corporation common stock on the Grant Date.  The Restricted Stock Award will vest ratable over a four year period commencing of the first anniversary of the Grant Date and is subject to all other terms and conditions of the 2013 Equity Plan.  Fair Market Value is currently defined under the 2013 Equity Plan as the final reported sales price on the date of grant (or if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) as reported in the principal consolidated reporting system with respect to securities listed or admitted to trading on the principal United States securities exchange on which the Corporation stock is listed, as of the closing of the market in New York City and without regard to after-hours trading activity.

2.2        Other Benefit Plans and Perquisites.

(a)        Benefit plans.  In addition to the salary and benefit arrangements noted in Section 2.1 above, the Executive shall be entitled throughout the term of this Agreement to participate in any and all officer or employee compensation and benefit plans of the Corporation and the Bank in effect from time to time, including without limitation, equity plans, retirement plans and medical, dental, disability, and group life benefits and to receive any and all other fringe benefits provided from time to time, provided that the Executive satisfies the eligibility requirements for any such plans or benefits.

(b)         Reimbursement of business expenses.  Subject to guidelines issued from time to time by the Bank and upon submission of documentation to support expense reimbursement in conformity with applicable requirements of federal income tax laws and regulations, the Executive shall be entitled to reimbursement for all reasonable business expenses incurred performing the obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Bank.

 

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(c)         Paid Leave.  The Executive shall be entitled to paid annual vacation and sick leave in accordance with the policies established from time to time by the Bank. However, in no event shall the Executive be entitled to less than twenty (20) days of vacation and five (5) personal days.

(d)         Automobile Allowance.  During the term of this Agreement, the Executive shall receive an automobile allowance of $1,000 per month for all expenses of insurance, registration, operation and maintenance of an automobile.

Article 3

Employment Termination

3.1        Termination Because of Death or Disability.

(a)         Death.  The Executive’s employment shall terminate automatically at the Executive’s death.  If the Executive dies in active service to the Bank, the Executive’s estate shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which death occurred as well as any bonus or incentive compensation calculated through the date of death, as specified in the Bank’s short-term and long-term incentive compensation plans and related agreements.

 (b)        Disability.  By delivery of written notice 30 days in advance to the Executive, the Bank may terminate the Executive’s employment if the Executive is disabled.  For purposes of this Agreement, the Executive shall be considered “disabled” if an independent physician selected by the Bank and reasonably acceptable to the Executive or the Executive’s legal representative determines that, because of illness or accident, the Executive is unable to perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of 90 consecutive days.  The Executive shall not be considered disabled, however, if the Executive returns to work on a full-time basis within 30 days after the Bank gives notice of termination due to disability.  If the Executive’s employment terminates because of disability, the Executive shall receive the Base Salary earned through the date on which termination became effective, any reimbursement of expenses incurred through the date of termination, any unpaid bonus or incentive compensation calculated through the date of termination (as specified in the Bank’s short-term and long-term incentive compensation plans and related agreements),  any payments the Executive is eligible to receive under any disability insurance program in which the Executive participates, and such other benefits to which the Executive may be entitled under the Corporation’s and Bank’s benefit plans, policies, and agreements, or the provisions of this Agreement.

3.2        Involuntary Termination with Cause.  The Bank may terminate the Executive’s employment with Cause at any time upon written notice.  If the Executive’s employment terminates with Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and reimbursement of expenses to which the Executive is entitled when termination becomes effective.   For purposes of this Agreement “Cause” means any of the following: (i) gross negligence or gross neglect of duties to the Bank, (ii) conviction of a felony or of a misdemeanor involving moral turpitude or (iii)  fraud, disloyalty, dishonesty, or willful violation of any law or significant Corporation or Bank policy.

 

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3.3          Involuntary Termination Without Cause and Voluntary Termination with Good Reason.

Unless otherwise provided herein, with written notice to the Executive 30 days in advance, the Bank may terminate the Executive’s employment without Cause.  Termination without Cause shall take effect at the end of the 30-day period.  During the Retention Period (as such term is defined in Section 1.2(a) of this Agreement), the Bank may in its sole discretion terminate the Executive’s employment without Cause at any time immediately upon notice. With advance written notice to the Bank as provided in clause (ii) below, the Executive may terminate employment with Good Reason.  If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to receive the Base Salary earned through the date of termination, any reimbursement of expenses incurred through the date of termination, any unpaid bonus calculated through the date of termination (as specified in the Bank’s short-term and long-term incentive compensation plans and related agreements), and such other benefits to which the Executive may be entitled under the Corporation’s and the Bank’s benefit plans, policies, and agreements, or the provisions of this Agreement.  In addition, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement.  For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions of the safe-harbor definition of good reason contained in Internal Revenue Code Section 409A are satisfied, as the same may be amended from time to time.  For purposes of clarification and without intending to affect the foregoing reference to Section 409A for the definition of Good Reason, as of the Employment Date the safe-harbor definition of separation from service for good reason in Treasury Regulation 1.409A-1(n)(2)(ii) would provide as follows –

(i)          a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent: (i) a diminution of the Executive’s Base Salary, (ii) a material diminution of the Executive’s authority, duties, or responsibilities, (iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report, (iv) a material change in the geographic location at which the Executive must perform services for the Bank or (v) any other action or inaction that constitutes a material breach by the Bank of this Agreement.

(ii)        the Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (i) within 90 days after the initial existence of the condition, and the Bank shall have 30 days thereafter to remedy the condition.

3.4        Voluntary Termination by the Executive Without Good Reason.  If the Executive terminates employment voluntarily but without Good Reason, the Executive shall receive the Base Salary earned through the date of termination and any reimbursement of expenses incurred through the date of termination.

 

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3.5        Termination Generally.  If at employment termination the Executive is serving as a director of the Corporation and/or the Bank, the Executive shall be deemed to have resigned as a director effective immediately after termination, regardless of whether the Executive submits a formal, written resignation as director.  All files, records, documents, manuals, books, forms, reports, memoranda, studies, data, calculations, recordings or correspondence, in whatever form they may exist, and all copies, abstracts and summaries of the foregoing, and all physical items related to the business of the Corporation and the Bank, their affiliates, and their respective directors and officers, whether of a public nature or not, and whether prepared by Executive or not, are and at employment termination shall remain the exclusive property of the Corporation and the Bank, and without the Corporation’s or the Bank’s advance written consent shall not be removed from their premises except as required in the course of providing services under this Agreement, and at termination shall be promptly returned by the Executive to the Corporation and the Bank.

Article 4

Severance Compensation During the Retention Period

4.1        Cash Severance after Termination Without Cause or Termination with Good Reason.  If the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason during the Retention Period, in addition to the cash severance and benefits payable under Section 3.3 of this Agreement, the Bank shall pay to the Executive in a single lump sum cash payment, without discount for the time value of money, an amount equal to his remaining Base Salary that would have been paid to the Executive had he remained employed by the Bank through the Retention Period.  The Bank and the Executive acknowledge and agree that the compensation and benefits under this Section 4.1 shall not be payable if, on the date of termination, compensation and benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

4.2        Release.  The Executive shall be entitled to no compensation or other benefits under this Article 4 unless (x) within 90 days after the Executive’s employment termination the Executive shall have entered into a release in form satisfactory to the Executive, the Corporation and the Bank acknowledging the Bank’s and the Executive’s remaining obligations and releasing both parties, as well as the Corporation’s and Bank’s officers, directors, and employees from  any and all liability, directly or indirectly, arising out of their actions for or on behalf of the Bank, from any other claims or obligations arising out of the Executive’s employment by the Bank, including the circumstances of the Executive’s employment termination, and (y) within that 90-day period the release shall have become irrevocable, final, and binding on the Executive under all applicable law, with expiration of all applicable revocation periods.  If the final day of the 90-day period for execution and finality of a liability release occurs in the taxable year after the year in which the Executive’s employment termination occurs, the benefits to the Executive under this Article 4 shall be payable in the taxable year in which the 90-day period ends and shall not be paid in the taxable year in which employment termination occurs.  Nothing in this Section 4.2 is intended to abrogate the Executive’s review and revocation rights under the Older Workers’ Benefit Protection Act that may be included in any such release, and the 90-day period shall be extended if necessary to permit Executive to exercise such rights.  The non-compete and other covenants contained in Article 8 of this Agreement are not contingent on the Executive entering into a release under this Section 4.2 and shall be effective regardless of whether the Executive enters into the release.

 

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Article 5

Change in Control

5.1        Change in Control Benefits.  If (i) a Change in Control occurs during the term of this Agreement, and (ii) within 12 months following such Change in Control, either the Bank terminates the Executive’s employment without Cause or the Executive terminates employment with Good Reason, then the Bank shall promptly make or cause to be made a lump-sum cash payment to the Executive in an amount equal to two (2) times the sum of: (i) Executive’s Base Salary at the time of the Change in Control or at termination of employment following a Change in Control, whichever is greater and (ii) the amount that the Executive’s annual incentive award under the Bank’s short-term incentive compensation plan would have been at “Target” for the calendar year prior to the Change in Control, or if higher, the average of the actual short-term incentive awards earned by the Executive for the most recent two (2) calendar years (the “Change in Control Payment”).  The Change in Control Payment payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value.  If the Executive receives a Change in Control Payment under this Section 5.1 the Executive shall not be entitled to any additional severance benefits under Section 4.1 of this Agreement after employment termination.  The Executive shall be entitled to benefits under this Section 5.1 on no more than one occasion during the term of this Agreement.

5.2        Change in Control Defined.  For purposes of this Agreement “Change in Control” means a change in control as defined in Internal Revenue Code Section 409A, as the same may be amended from time to time.  For purposes of clarification and without intending to affect the foregoing reference to Section 409A for the definition of Change in Control, as of the Effective Date a Change in Control as defined in Treasury Regulation 1.409A-3(i)(5) would provide as follows –

(a)         Change in ownership: a change in ownership of a corporation occurs on the date any one person or group accumulates ownership of corporation stock constituting more than 50% of the total fair market value or total voting power of corporation stock, or

(b)         Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of corporation stock possessing 30% or more of the total voting power of corporation stock, or (y) a majority of the corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the corporation’s board of directors, or

(c)         Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the corporation’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the corporation assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the corporation’s assets immediately before the acquisition or acquisitions.  For this purpose, gross fair market value means the value of the corporation’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

 

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5.3        Limitation on Benefits. Notwithstanding anything contained herein to the contrary, in the event it shall be determined that any payment or distribution made at any time by the Company, the Bank, or any affiliate of the Company or the Bank to or for the benefit of the Executive (whether paid or payable, or distributed or distributable, pursuant to the terms of this Agreement or otherwise) (a “Payment”) would constitute an “excess parachute payment” (as defined in Internal Revenue Code Section 280G(b)(2)), such Payment shall be reduced to the extent necessary to ensure that no portion of such Payment will be non-deductible to the Employer by Internal Revenue Code Section 280G or will be subject to the excise tax imposed by Internal Revenue Code Section 4999 (the “Reduced Payment”), and the Executive shall have no further rights or claims with respect to an amount in excess of the Reduced Payment. If a Payment is reduced pursuant to this Section 5.3, the Employer shall reduce or eliminate the following portions of the Payment in successive order to reach the Reduced Payment: (i) first, the benefits portion of the Payment, (ii) then, the cash portion of the Payment, and (iii) then, the equity portion of the Payment. Any determination required under this Section 5.3 (including, without limitation, the amount of the Reduced Payment and the assumptions to be utilized in arriving at such determination) shall be made by the Employer and its tax advisors, whose determination shall be final, conclusive and binding upon the Executive.

Article 6

Post-Termination Insurance Coverage

6.1        Post-Termination Insurance Coverage.

 (a)        Subject to Section 6.1(b), if the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason, the Bank shall continue or cause to be continued medical and dental insurance coverage for the Executive and the Executive’s dependents and beneficiaries under substantially similar terms in effect for the Executive during the enrollment period immediately prior to Executive’s termination of employment.  Except in the event of a Change in Control, the medical and dental insurance benefits provided by this Section 6.1(a) shall be reduced if the Executive obtains medical or dental insurance benefits through another entity, or eliminated entirely if the other entity’s insurance benefits are equivalent or superior to the benefits provided under this Section 6.1(a).  If the insurance benefits are reduced, they shall be reduced by an amount such that the Executive’s aggregate insurance benefits for the period specified in this Section 6.1(a) are equivalent to the benefits to which the Executive would have been entitled had the Executive not obtained medical or dental insurance benefits through another entity.  The medical and dental insurance coverage shall continue until the first to occur of (w) the Executive’s return to employment with the Bank or another entity offering equivalent or superior insurance benefits, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z) the end of the term remaining under this Agreement when the Executive’s employment terminates.  Notwithstanding the foregoing, in the event the Executive terminates employment following a Change in Control under the terms and conditions set forth in Article 5 of this Agreement, the medical and dental insurance benefits provided under this Section 6.1 shall continue for twenty-four (24) months.  This Section 6.1 shall not be interpreted to limit any benefits to which the Executive or the Executive’s dependents or beneficiaries may be entitled under any of the Bank’s or the Corporation’s employee benefit plans, agreements, programs, or practices after the Executive’s employment termination.

 

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(b)         If (x) under the terms of the applicable policy or policies for the insurance benefits specified in Section 6.1(a) it is not possible to continue the Executive’s coverage or (y) when employment termination occurs the Executive is a specified employee within the meaning of Internal Revenue Code Section 409A, if any of the continued insurance benefits specified in Section 6.1(a) would be considered deferred compensation under Section 409A, and finally if an exemption from the six-month delay requirement of Section 409A(a)(2)(B)(i) is not available for that particular insurance benefit, instead of continued insurance coverage under Section 6.1(a), the Bank shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for the lesser of the number of months remaining in the term of this Agreement or the number of months until the Executive attains age 65.  The lump-sum payment shall be made 30 days after employment termination or, if Section 6.1(b) applies and a six-month delay is required under Section 409A, on the first day of the seventh month after the month in which the Executive’s employment terminates.

Article 7

Confidentiality

7.1        Non-disclosure.  Subject to Section 8.2, the Executive covenants and agrees not to reveal to any person, firm, or Corporation any confidential information of any nature concerning the Corporation, the Bank, their respective businesses, or anything connected therewith.  As used in this Article 7, the term “confidential information” means all of the Corporation’s and the Bank’s and their affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to –

(a)         the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information,

(b)         the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information,

(c)         the whole or any portion or phase of any marketing or sales information, sales records, customer lists, customer information, employee lists, employee information, financial products and services, financial products and services pricing, financial information and projections, or other sales information, and

(d)         trade secrets, as defined from time to time by the laws of the State of New York.

 

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However, confidential information excludes information that – as of the date hereof or at any time after the date hereof – is published or disseminated without obligation of confidence or that becomes a part of the public domain (x) by or through action of the Corporation, or (y) otherwise than by or at the direction of the Executive.  This section 7.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

7.2        Return of Materials.  The Executive agrees to deliver or return to the Corporation and the Bank upon termination, upon expiration of this Agreement, or as soon thereafter as possible, all written information and any other similar items furnished by the Corporation and the Bank or prepared by the Executive in connection with the Executive’s services hereunder.  The Executive will retain no copies thereof after termination of this Agreement or termination of the Executive’s employment.

7.3        Injunctive Relief.  The Executive hereby acknowledges that the enforcement of this Article 7 and Article 8 is necessary to ensure the preservation, protection, and continuity of the business, trade secrets, and goodwill of the Corporation and the Bank, and that the restrictions set forth in Article 8 are reasonable in terms of time, scope, territory, and in all other respects.  The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Corporation or the Bank if the Executive fails to observe the obligations imposed by Articles 7 and 8.  Accordingly, if the Corporation or the Bank institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Corporation or the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.  If there is a breach or threatened breach by the Executive of the provisions of Article 8, the Corporation and the Bank shall be entitled to an injunction without bond to restrain the breach or threatened breach, and the prevailing party in any such proceeding shall be entitled to reimbursement for all costs and expenses, including reasonable attorneys’ fees.  The existence of any claim or cause of action by the Executive against the Corporation or the Bank shall not constitute and shall not be asserted as a defense by the Executive to enforcement of Articles 7 and 8.

7.4        Affiliates’ Confidential Information is Covered.  For purposes of this Agreement the term “affiliate” includes the Corporation and any entity that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the Corporation or the Bank.

7.5        Survival of Obligations.  The Executive’s obligations under Article 7 shall survive employment termination regardless of the manner in which termination occurs and shall be binding upon the Executive’s heirs, executors, and administrators.

Article 8

Competition After Employment Termination

8.1        Restrictions on the Executive’s Post-Employment Activities.  The restrictions in this Article 8 have been negotiated, presented to and accepted by the Executive contemporaneous with the offer and acceptance by the Executive of this Agreement.  The Bank’s decision to enter into this Agreement is conditioned upon the Executive’s agreement to be bound by the restrictions contained in this Article 8.  This Article 8 shall be void if a Change in Control occurs before the Executive’s employment termination. For purposes of this Article 8 the term “Corporation” includes not only the Corporation but also the Bank.

 

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(a)         Promise of no solicitation.  Subject to Section 8.2 of this Agreement, the Executive promises and agrees that during the Restricted Period (as defined below) the Executive shall not:

(i)          directly or indirectly solicit or attempt to solicit any Customer (as defined below) to accept or purchase Financial Products or Services (as defined below) of the same nature, kind, or variety as provided to the Customer by the Corporation during the year immediately before the Executive’s employment termination with the Corporation,

(ii)         directly or indirectly influence or attempt to influence any Customer, joint venturer, or other business partner of the Corporation to alter that person or entity’s business relationship with the Corporation in any respect, and

(iii)        accept the Financial Products or Services business of any Customer or provide Financial Products or Services to any Customer on behalf of anyone other than the Corporation.

(b)        Promise of no competition.  Except where the employment of the Executive is terminated pursuant to section 3.3 of this Agreement, the Executive promises and agrees that during the Restricted Period the Executive shall not become employed by or serve as a director, partner, consultant, agent, or owner of 2% or more of the outstanding stock of or contractor to any entity providing Financial Products or Services that is located in or conducts business in the Restricted Territory.

(c)         Promise of no raiding/hiring.  While employed by the Bank and, in the event of a termination of Executive’s employment, for a period of one year thereafter, in consideration of the obligations of the Bank hereunder, including without limitation, its disclosure of Confidential Information to Executive, Executive shall not directly or indirectly, for himself or as principal, agent, independent contractor, consultant, director, officer, member, or employee of any other person, firm, corporation, partnership, company, association or other entity, either: (a) hire, attempt to employ, contact with respect to hiring, solicit with respect to hiring or enter into any contractual arrangement with any employee or former employee of the Bank or any Bank Affiliate, or (b) induce or otherwise advise or encourage any employee of the Bank or any Bank Affiliate to leave his or her employment; unless, in each such case, such employee or former employee has not been employed by the Bank or a Bank affiliate for a period in excess of six months at the time of such solicitation, attempt to employ, contact, employment or inducement.

(d)        Promise of no disparagement.  Subject to Section 8.2, the Executive promises and agrees that during the Restricted Period the Executive shall not cause statements to be made (whether written or oral) that reflect negatively on the business reputation of the Corporation.  The Corporation likewise promises and agrees that during the Restricted Period the Corporation shall not cause statements to be made (whether written or oral) that reflect negatively on the reputation of the Executive.  Nothing herein is intended to restrict the Executive or the Corporation from testifying truthfully in response to any lawfully served subpoena or other legal process.

 

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(e)         Acknowledgment.  The Executive and the Corporation acknowledge and agree that the provisions of this Article 8 have been negotiated and carefully determined to be reasonable and necessary for the protection of legitimate business interests of the Corporation.  Both parties agree that a violation of Article 8 is likely to cause immediate and irreparable harm that will give rise to the need for court ordered injunctive relief.  In the event of a breach or threatened breach by the Executive of any provision of this Agreement, the Corporation shall be entitled to obtain an injunction without bond restraining the Executive from violating the terms of this Agreement and to institute an action against the Executive to recover damages from the Executive for such breach.  These remedies for default or breach are in addition to any other remedy or form of redress provided under New York law.  The parties acknowledge that the provisions of this Article 8 survive termination of the employment relationship, but the provisions of this Article 8 shall be null and void if a Change in Control occurs before employment termination.   The parties agree that if any of the provisions of this Article 8 are deemed unenforceable by a court of competent jurisdiction, that such provisions may be stricken as independent clauses by the court in order to enforce the remaining restrictions and that the intent of the parties is to afford the broadest restriction on post-employment activities as set forth in this Agreement.  Without limiting the generality of the foregoing, without limiting the remedies available to the Corporation for violation of this Agreement, and without constituting an election of remedies, if the Executive violates any of the terms of Article 8 the Executive shall forfeit on the Executive’s own behalf and that of his beneficiary(ies) any rights to and interest in any severance or other benefits under this Agreement or other contract the Executive has with the Corporation or the Bank.

(f)          Definitions:

(i)          “Restricted Period” as used herein means the twelve-month period immediately after the Executive’s termination and/or separation of employment with the Corporation, regardless of the reason for termination and/or separation.  The Restricted Period shall be extended in an amount equal to any time period during which a violation of Article 8 of this Agreement is proven.

(ii)         “Restricted Territory” as used herein means: (i) the New York City boroughs of Manhattan, Brooklyn, Queens and the Bronx and (ii) Nassau and Suffolk counties in Long Island, New York.

(iii)         “Customer” as used herein means any individual or entity with who or which the Corporation has a contractual or business relationship, or engaged in negotiations toward such a relationship, joint venturer, entity of any sort, or other business partner of the Corporation, with, for or to whom the Corporation has provided Financial Products or Services during the last year of the Executive’s employment with the Corporation; or any individual, joint venturer, entity of any sort, or business partner whom the Corporation has identified as a prospective customer of Financial Products or Services within the last year of the Executive’s employment with the Corporation.

 

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(iv)        “Financial Products or Services” as used herein means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity and that is offered by the Corporation or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and  properly incident to banking, or other products or services of the type of which the Executive was involved during the Executive’s employment with the Corporation.

8.2        Confidential Disclosure in Reporting Violations of Law or in Court Filings.  Executive acknowledges and the Bank and the Corporation agree that Executive may disclose Confidential Information in confidence, directly or indirectly, to federal, state, or local government officials, including, but not limited to, the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law or regulation or making other disclosures that are protected under the whistleblower provisions of state or federal laws or regulations. Executive may also disclose Confidential Information in a document filed in a lawsuit or other proceeding; however, only if the filing is made under seal. Nothing in this Agreement is intended to conflict with federal law protecting confidential disclosures of a trade secret to the government or in a court filing, 18 U.S.C. §1833(b), or to create liability for disclosures of Confidential Information that are expressly allowed by 18 U.S.C. §1833(b).

Article 9

Miscellaneous

9.1        Successors and Assigns.

(a)         This Agreement is binding on successors.  This Agreement shall be binding upon the Bank any successor to the Bank, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Bank by purchase, merger, consolidation, reorganization, or otherwise.  But this Agreement and the Bank’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Bank.

(b)         This Agreement is enforceable by the Executive’s heirs.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c)         This Agreement is personal in nature and is not assignable.  This Agreement is personal in nature.  Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided herein.  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution.  If the Executive attempts an assignment or transfer that is contrary to this Section 9.1, the Bank shall have no liability to pay any amount to the assignee or transferee.

 

13

9.2        Governing Law, Jurisdiction and Forum.  This Agreement shall be construed under and governed by the internal laws of the State of New York, without giving effect to any conflict of laws provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.  By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in the State of New York.  Any actions or proceedings instituted under this Agreement shall be brought and tried solely in courts located in Kings County, New York or in the federal court having jurisdiction in Kings County, New York.  The Executive expressly waives the right to have any such actions or proceedings brought or tried elsewhere.

9.3        Entire Agreement.  This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive.  Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void.

9.4        Notices.  Any notice under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile.  Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the most current address of the Executive in the personnel records of the Bank at the time of the delivery of such notice, and properly addressed to the Bank if addressed to the address of the Bank’s principal office.

9.5        Severability.  If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law.  If any provision of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

9.6        Captions and Counterparts.  The captions in this Agreement are solely for convenience.  The captions do not define, limit, or describe the scope or intent of this Agreement.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

9.7        Amendment and Waiver.  This Agreement may not be amended, released, discharged, abandoned, changed, or modified except by an instrument in writing signed by each of the parties hereto.  The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision or affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

 

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9.8        FDIC Part 359 Limitations.  Despite any contrary provision within this Agreement, any payments made to the Executive under this Agreement, or otherwise, shall be subject to compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments, and any other regulations or guidance promulgated thereunder.

9.9        Compliance with Internal Revenue Code Section 409A.  The Bank and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with Internal Revenue Code Section 409A of the Internal Revenue Code of 1986.  If when the Executive’s employment terminates the Executive is a specified employee, as defined in Section 409A, and if any payments under this Agreement, including Articles 4, 5 or 8, will result in additional tax or interest to the Executive because of Section 409A, then despite any provision of this Agreement to the contrary the Executive shall not be entitled to the payments until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the Executive under Section 409A.  As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum.  If any provision of this Agreement does not satisfy the requirements of Section 409A, the provision shall be applied in a manner consistent with those requirements despite any contrary provision of this Agreement.  If any provision of this Agreement would subject the Executive to additional tax or interest under Section 409A, the Bank shall reform the provision.  However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision.  References in this Agreement to Section 409A include the rules, regulations, and guidance of general application issued by the Department of the Treasury under Section 409A.

 

9.10      Guarantee.  The Corporation hereby irrevocably and unconditionally guarantees to the Executive the payment of all amounts, and the performance of all other obligations, due from the Bank in accordance with the terms of this Agreement as and when due without any requirement of presentment, demand of payment, protest or notice of dishonor or nonpayment.

 

15

In Witness Whereof, the parties have executed this Employment and Change in Control Agreement as of the date first written above.

 

	 	
DIME COMMUNITY BANK

	 	 	 
	 	By:	
/s/ KENNETH J. MAHON

	 	 	
Kenneth J. Mahon

	 	 	
President & Chief Executive Officer

	 	 	 
	 	DIME COMMUNITY BANCSHARES, INC.
	 	 	
(as guarantor)

	 	 	 
	 	By:	
/s/ KENNETH J. MAHON

	 	 	
Kenneth J. Mahon

	 	 	
President & Chief Executive Officer

	 	 	 
	 	
/s/ CONRAD GUNTHER

	 	
Conrad Gunther

 

 

16Exhibit 10.45

 

PURCHASE AND SALE AGREEMENT 

Between 

THE DIME SAVINGS BANK OF WILLIAMSBURGH, 

as Seller, 

and 

TAVROS CAPITAL PARTNERS USA LLC, 

as Purchaser 

Dated: October 7, 2015 

 

TABLE OF CONTENTS 

	 	 	
Page

	
ARTICLE I

	 
	
SALE OF PROPERTY

	
1

	 	 
	
1.1

	
Sale

	
1

	
1.2

	
Excluded Property

	
2

	
1.3

	
Development Rights Survey

	
3

	
1.4

	
Access to Property

	
3

	 	 	 
	
ARTICLE II

	 
	
PURCHASE PRICE

	
3

	 	 
	
2.1

	
Purchase Price

	
3

	 	 	 
	
ARTICLE III

	 
	
DEPOSIT

	 	
4

	 	 	 
	
3.1

	
Deposit

	
4

	
3.2

	
Application of Deposit

	
4

	
3.3

	
Escrow Agent

	
5

	 	 	 
	
ARTICLE IV

	 
	
CLOSING, PRORATIONS AND CLOSING COSTS

	
7

	 	 
	
4.1

	
Closing

	
7

	
4.2

	
Prorations

	
7

	
4.3

	
Transfer Taxes

	
7

	
4.4

	
Sales Taxes

	
8

	
4.5

	
Closing Costs

	
8

	 	 	 
	
ARTICLE V

	 
	
TITLE AND SURVEY MATTERS

	
8

	 	 
	
5.1

	
Title

	
8

	
5.2

	
Violations

	
14

 

i

	
ARTICLE VI

	 
	
REPRESENTATIONS AND WARRANTIES OF SELLER

	
14

	 	 
	
6.1

	
General Representations

	
14

	
6.2

	
Seller's Knowledge

	
16

	
6.3

	
Survival

	
16

	
6.4

	
Limitation of Liability

	
17

	
6.5

	
Representations as a Condition to Closing

	
17

	 	 	 
	
ARTICLE VII

	 
	
"AS IS" SALE

	
18

	 	 
	
ARTICLE VIII

	 
	
REPRESENTATIONS AND WARRANTIES OF PURCHASER

	
18

	 	 
	
8.1

	
Authority

	
18

	
8.2

	
Bankruptcy or Debt of Purchaser

	
19

	
8.3

	
No Financing Contingency

	
19

	
8.4

	
Purchaser's Acknowledgment

	
19

	
8.5

	
Patriot Act

	
20

	 	 	 
	
ARTICLE IX

	 
	
SELLER'S INTERIM OPERATING COVENANTS

	
21

	 	 
	
9.1

	
Operations

	
21

	
9.2

	
Maintain Insurance

	
22

	
9.3

	
Notices of Violation; Other Notices

	
22

	
9.4

	
Permits and Licenses

	
22

	
9.5

	
Casualty and Condemnation

	
22

	
9.6

	
Leases

	
22

	
9.7

	
Zoning

	
22

	
9.8

	
Subdivision

	
22

	
9.9

	
Cornice Removal

	
23

	 	 	 
	
ARTICLE X

	 
	
CLOSING CONDITIONS

	
24

	 	 
	
10.1

	
Conditions to Obligations of Seller

	
24

	
10.2

	
Conditions to Obligations of Purchaser

	
24

 

ii

	
ARTICLE XI

	 
	
CLOSING

	 	
25

	 	 	 
	
11.1

	
Seller's Closing Obligations

	
25

	
11.2

	
Intentionally Omitted

	
27

	
11.3

	
Purchaser's Closing Obligations

	
27

	 	 	 
	
ARTICLE XII

	 	 	 
	
RISK OF LOSS

	
27

	 	 
	
12.1

	
Casualty

	
27

	
12.2

	
Condemnation

	
28

	
12.3

	
General Obligations Law

	
29

	 	 	 
	
ARTICLE XIII

	 
	
DEFAULT

	
29

	 	 
	
13.1

	
Default by Seller

	
29

	
13.2

	
Default by Purchaser

	
29

	 	 	 
	
ARTICLE XIV

	 	 	 
	
BROKERS

	
30

	 	 
	
14.1

	
Brokerage Indemnity

	
30

	 	 	 
	
ARTICLE XV

	 	 	 
	
PUBLICATION AND CONFIDENTIALITY

	
30

	 	 
	
15.1

	
Publication

	
30

	
15.2

	
Confidentiality

	
31

	 	 	 
	
ARTICLE XVI

	 
	
RESERVED

	 	
31

	 	 	 
	
ARTICLE XVII

	 
	
MISCELLANEOUS

	
31

	 	 
	
17.1

	
Notices

	
31

	
17.2

	
Governing Law; Venue

	
32

	
17.3

	
Headings

	
33

	
17.4

	
Business Days

	
33

 

iii

	
17.5

	
Counterpart Copies

	
33

	
17.6

	
Binding Effect

	
33

	
17.7

	
Successors and Assigns

	
33

	
17.8

	
Assignment

	
33

	
17.9

	
Interpretation

	
34

	
17.10 

	
Entire Agreement

	
34

	
17.11

	
Severability

	
34

	
17.12 

	
Survival

	
34

	
17.13

	
Exhibits

	
34

	
17.14

	
Limitation of Liability

	
34

	
17.15 

	
Prevailing Party

	
34

	
17.16

	
Real Estate Reporting Person

	
35

	
17.17 

	
No Recording

	
35

	
17.18 

	
No Other Parties

	
35

	
17.19 

	
Waiver of Trial by Jury

	
35

	
17.20 

	
Cooperation

	
35

 

iv

LIST OF EXHIBITS AND SCHEDULES

 

Exhibits:

	
Exhibit A

	
–

	
Land

	
Exhibit B

	
–

	
Wire Instructions

	
Exhibit C

	
–

	
Form of Owner's Affidavit

	
Exhibit D-1

	
–

	
Form of Deed

	
Exhibit D-2

	
–

	
Form of General Assignment

	
Exhibit E

	
–

	
Form of Seller's Representation Certificate

	
Exhibit F

	
–

	
Form of FIRPTA Certificate

	
Exhibit G

	
–

	
Reserved

	
Exhibit H

	
–

	
Form of Zoning Lot and Development Agreement

	
Exhibit I

	
–

	
Form of Lease

	
Exhibit J

	
–

	
Form of Purchaser's Representation Certificate

	
Exhibit K

	
–

	
Outline of Tax Lot Subdivision

	
Exhibit L

	
–

	
Form of Waiver and Subordination

	
Exhibit M

	
–

	
Seller Premises

	
Exhibit N

	
–

	
Form of Declaration

Schedules:

 

	
Schedule 5.1.3

	
Permitted Exceptions

	
Schedule 6.1.9

	
Tax Proceedings

	
Schedule 6.1.10

	
Litigation

	
Schedule 6.1.11

	
Insurance Policies

 

v

PURCHASE AND SALE AGREEMENT 

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as of the 7th day of October, 2015 by and between THE DIME SAVINGS BANK OF WILLIAMSBURGH, a New York State chartered Savings Bank ("Seller"), and TAVROS CAPITAL PARTNERS USA LLC, a Delaware limited liability company ("Purchaser").

WITNESSETH:

WHEREAS, Seller is the fee simple owner of those certain parcels of real property lying and being situated in the Borough of Brooklyn, City of New York, County of Kings, State of New York, at Block 2447, Lots 13, 19, 35, 41 and 135, and commonly known as 275 South 5th Street, 146 and 150 Marcy Avenue, 205 Havemeyer Street and 262 South 4th Street, Brooklyn, New York, as further described in Exhibit A attached hereto (the "Land");

WHEREAS, Seller is also the fee simple owner of that certain parcel of real property lying and being situated in the Borough of Brooklyn, City of New York, County of Kings, State of New York, at Block 2447, Lot 36, and commonly known as 257 South 5th Street (the "Seller Premises"); and

WHEREAS, upon the terms and conditions set forth in this Agreement, Seller desires to sell, and Purchaser desires to acquire, the Land, all Improvements (as hereinafter defined) therein, the Real Property (as hereinafter defined), the Intangible Property (as hereinafter defined) and the Subject Floor Area Development Rights (as defined in the ZLDA) appurtenant to the Seller Premises, and all liabilities, obligations and undertakings arising in connection therewith from and after the Closing (hereinafter defined), except to the extent otherwise provided in the Lease (hereinafter defined) subject, in all respects to such matters as are described or provided for herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:

ARTICLE I 

SALE OF PROPERTY 

1.1          Sale.  Subject to and in accordance with the terms and conditions set forth in this Agreement, Seller hereby agrees to sell, assign and convey to Purchaser, and Purchaser agrees to purchase, acquire and accept from Seller, all of Seller's right, title and interest in and to the following (collectively, the "Property"):

1.1.1           The Land and buildings, structures, fixtures and improvements thereon (collectively, the "Improvements");

 

1.1.2           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 or any portion thereof, to the center line thereof, and any strips and gores adjacent to the Land or any portion thereof, and all right, title and interest of Seller in and to any award made or to be made in lieu of the foregoing or any portion thereof and, subject to the terms hereof, in and to any unpaid award for damage to the Land and Improvements or any portion thereof by reason of any change of grade of any street or any closing of any street, road or avenue;

1.1.3           The rights, privileges, grants and easements appurtenant to the Land, if any, including, without limitation, all development rights, air rights, and all of Seller's right, title and interest, if any, in and to all easements, licenses, covenants and other rights-of-way or other appurtenances used in connection with the beneficial use and enjoyment of the Land (the Land, Improvements and property described in Section 1.1.2 and Section 1.1.3, collectively, the "Real Property");

1.1.4           All (i) guarantees, licenses, approvals, certificates, permits, consents, authorizations, variances and warranties and other intangible property relating to the Real Property and (ii) all plans, drawings, specifications, surveys and other technical descriptions relating to the Real Property to the extent in Seller's possession or control (collectively, the "Intangible Property"); and

1.1.5           All right, title and interest of Seller in and to all of the Subject Floor Area Development Rights (as defined in the ZLDA) appurtenant to the Seller Premises and, in connection therewith, the easements set forth in the ZLDA, free from liabilities, liens or other encumbrances, except as set forth herein or in the ZLDA and with no increase in the Purchase Price due and owing to Seller.

1.2          Excluded Property.

1.2.1           Any (i) service contracts, utility agreements, maintenance agreements and other similar contracts or agreements, and any union or other collective bargaining contracts (a) currently in effect with respect to the Property (collectively, the "Existing Contracts") or (b) entered into after the date hereof in accordance with the terms of this Agreement (collectively, the "New Contracts"; the Existing Contracts and New Contracts are referred to herein as, collectively, the "Contracts"), if any;

1.2.2           Except as expressly set forth in this Agreement, all rights and interests and obligations of Seller as owner of the Property arising prior to the Closing (including, without limitation, tax refunds, casualty and condemnation proceeds, tenant security deposits applied in accordance with the terms of this Agreement, utility deposits and rental arrearages) and attributable to periods prior to the Closing;

1.2.3           Except as expressly set forth in this Agreement, any cause of action or claim of, or against, Seller existing as of Closing; and

1.2.4           All fixtures, machinery, equipment and personal property that Seller is permitted to remove from the Demised Premises (as such term is defined in the Lease) pursuant to the terms of the Lease.

 

2

1.3          Development Rights Survey.  Promptly after the execution of this Agreement, Purchaser shall, at its sole cost and expense, cause an independent, third party architect, engineer, or surveyor to certify to Seller and Purchaser the amount of Retained Floor Area Development Rights (as defined in the ZLDA) (the “Development Rights Survey”), which Development Rights Survey shall be binding on Seller and Purchaser absent manifest error. Seller shall cooperate with Purchaser in connection with the performance of the Development Rights Survey and any updates thereto and provide Purchaser’s architect, engineer or surveyor access to the Seller Premises. The parties agree that the Development Rights Survey shall be at Purchaser’s sole cost and expense, that it shall be scheduled in consultation with Seller during normal business hours, that access to the Seller Premises shall be subject to the rights of the tenants therein, and that the architect, engineer or surveyor shall procure and maintain liability insurance, in the form and in the amount customarily carried in connection with the performance of such Development Rights Survey and reasonably satisfactory to Seller.

1.4          Access to Property.  Purchaser or any other party designated by Purchaser, and their respective agents, shall have the right to enter the Property at all reasonable times, upon reasonable prior notice (which notice may be oral), to (i) examine the Property, (ii) show it to prospective mortgagees, lessees and their respective agents and representatives or others provided that Seller shall have the right to accompany Purchaser and any such interested party at all times while the same are in the Property), and (iii) to conduct such inspections and testing with respect to the Property, including, without limitation, a phase I or phase II environmental assessment, an appraisal, an engineering or property condition report; to make borings in connection with geotechnical testing and to do perform any other physical testing, alterations or work in connection with the demolition, construction and/or development of the Property (or the filings, approvals and/or permits in connection therewith); provided, however, that (a) the same shall be scheduled reasonably in advance with Seller, (b) shall not unreasonably interfere with the conduct of Seller's business operations, (c) shall be conditioned on Purchaser procuring and maintaining liability insurance, in the form and in the amount customarily carried in connection with the performance of such activities and reasonably satisfactory to Seller, (d) shall not occur in any Secure Areas (as defined below), and (e) if requested by Seller, shall occur during non- business hours or weekends. It is acknowledged that Seller may, from time to time, have certain security or confidentiality requirements such that portions of the Property shall be locked and inaccessible to all Persons unless specifically authorized by Seller (any such areas, the "Secure Areas"). Notwithstanding anything to the contrary contained herein, it is agreed that Purchaser's right of access to any Secure Areas shall be permitted in the sole and absolute discretion of Seller.

ARTICLE II 

PURCHASE PRICE 

2.1          Purchase Price.  The purchase price for the Property shall be Eighty Million Dollars ($80,000,000.00) (the "Purchase Price").  No portion of the Purchase Price is attributable to any personal property included in the transactions. The Purchase Price, net of all prorations and adjustments as provided for herein, shall be paid by Purchaser as follows:

 

3

2.1.1           Five Million Dollars ($5,000,000.00) of the Purchase Price (the "Deposit") shall be deposited with Stewart Title Insurance Company, as escrow agent (the "Escrow Agent"), by wire transfer of immediately available federal funds pursuant to the wire transfer instructions set forth on Exhibit B attached hereto, simultaneously with the execution and delivery of this Agreement by Purchaser; and

2.1.2           The difference between the Purchase Price and the Deposit (the "Balance of the Purchase Price"), subject to such apportionments and adjustments as are provided herein, shall be paid on the Closing Date (as hereinafter defined) by wire transfer of immediately available federal funds to, or as directed by, Seller simultaneously with the delivery of the Deed (as hereinafter defined).

The Deposit shall be held in escrow and shall be payable in accordance with Article III hereof.

ARTICLE III 

DEPOSIT 

3.1          Deposit.  Concurrently with the execution of this Agreement, and as a condition precedent to the effectiveness of this Agreement, Purchaser shall deposit with the Escrow Agent the Deposit, the receipt of which is hereby acknowledged by Escrow Agent's execution hereof. The Deposit and Interest (as hereinafter defined) accrued thereon shall be held in escrow, and not in trust, by the Escrow Agent at a banking institution approved by Seller.

3.2          Application of Deposit.

3.2.1           If the Closing occurs, then the Deposit shall be paid to Seller and applied against the Purchase Price and the accrued interest on the Deposit ("Interest"), if any, shall, at Purchaser's election, (i) be paid to Seller and credited against the Balance of the Purchase Price or (ii) be paid to Purchaser.

3.2.2           In the event that the Closing does not occur because of a default by Purchaser under this Agreement and Seller elects to terminate this Agreement as a result thereof, the Deposit and all Interest shall be paid to and retained by Seller pursuant to Section 13.2 hereof.

 

3.2.3           In the event that the Closing does not occur because of a default by Seller under this Agreement, or in the event that any of the closing conditions set forth in this Agreement are not satisfied, and Purchaser elects to terminate this Agreement as a result thereof, the Deposit and all Interest shall be paid to and retained by Purchaser pursuant to Section 13.1 hereof.

3.2.4           The party receiving the Interest shall pay any income taxes thereon. Seller and Purchaser shall each provide the other with its respective tax identification number promptly after the date of this Agreement.

 

4

3.2.5           If either party makes a demand upon the Escrow Agent for delivery of the Deposit and Interest, the Escrow Agent shall promptly give notice to the other party of such demand. If a notice of objection to the proposed payment is not received by the Escrow Agent from the other party within ten (10) calendar days of its receipt of notice from the Escrow Agent, the Escrow Agent is hereby authorized to deliver the Deposit and all Interest to the party that made the demand. If the Escrow Agent receives a notice of objection within said ten (10) calendar day period, then the Escrow Agent shall have the right, at its option, to either (A) continue to hold the Deposit and Interest and thereafter pay it to the party entitled thereto when the Escrow Agent (i) receives a written notice from the objecting party withdrawing the objection, (ii) receives a written notice signed by both parties directing disposition of the Deposit and Interest or (iii) receives a final judgment or order of a court of competent jurisdiction or (B) deposit the same with a court of competent jurisdiction in the State of New York, and Escrow Agent shall rely upon the decision of such court or a written statement executed by both Seller and Purchaser setting forth how the Deposit and Interest should be released.

3.3          Escrow Agent.  The parties further agree that:

3.3.1           The Escrow Agent is executing this Agreement to acknowledge the Escrow Agent's responsibilities hereunder, which may be modified only by a written amendment signed by all of the parties hereto. Any amendment to this Agreement that is not signed by the Escrow Agent shall be effective as to the parties thereto, but shall not be binding on the Escrow Agent. Escrow Agent shall accept the Deposit with the understanding of Seller and Purchaser that Escrow Agent is not a party to this Agreement except to the extent of its specific responsibilities hereunder, and does not assume or have any liability for the performance or nonperformance of Purchaser or Seller hereunder to either of them.

3.3.2           The Escrow Agent shall be protected in relying upon the accuracy, acting in reliance upon the contents, and assuming the genuineness of any notice, demand, certificate, signature, instrument or other document which is given to the Escrow Agent without verifying the truth or accuracy of any such notice, demand, certificate, signature, instrument or other document;

3.3.3          The Escrow Agent shall not be bound in any way by any other agreement or understanding between Seller and Purchaser, whether or not the Escrow Agent has knowledge thereof or consents thereto unless such consent by Escrow Agent is given in writing.

3.3.4           The Escrow Agent's sole duties and responsibilities shall be to hold and disburse the Deposit and Interest accrued thereon in accordance with this Agreement.

3.3.5           The Escrow Agent shall not be liable for any action taken or omitted by the Escrow Agent in good faith and believed by the Escrow Agent to be authorized or within its rights or powers conferred upon it by this Agreement, except for damage caused by the gross negligence, bad faith or willful misconduct of the Escrow Agent.

3.3.6           Upon the disbursement of the Deposit and Interest in accordance with this Agreement, the Escrow Agent shall be relieved and released from any liability under this Agreement.

 

5

3.3.7           The Escrow Agent may resign at any time upon at least ten (10) days prior written notice to Seller and Purchaser. If, prior to the effective date of such resignation, Seller and Purchaser shall each have approved, in writing, a successor escrow agent, then upon the resignation of the Escrow Agent, the Escrow Agent shall deliver the Deposit and Interest to such successor escrow agent. From and after such resignation and the delivery of the Deposit and Interest accrued thereon to such successor escrow agent, the Escrow Agent shall be fully relieved of all of its duties, responsibilities and obligations under this Agreement, all of which duties, responsibilities and obligations shall be performed by the appointed successor escrow agent. If for any reason, Seller and Purchaser shall not approve a successor escrow agent within such period, the Escrow Agent may bring any appropriate action or proceeding for leave to deposit the Deposit and Interest with a court of competent jurisdiction, pending the approval of a successor escrow agent, and upon such deposit the Escrow Agent shall be fully relieved of all of its duties, responsibilities and obligations under this Agreement.

3.3.8           Seller and Purchaser hereby agree to, jointly and severally, indemnify, defend and hold the Escrow Agent harmless from and against any liabilities, damages, losses, costs or expenses incurred by, or claims or charges made against, the Escrow Agent (including reasonable attorneys' fees, expenses and court costs) by reason of the Escrow Agent's acting or failing to act in connection with any of the matters contemplated by this Agreement as escrow agent or in carrying out the terms of this Agreement as escrow agent, except as a result of the Escrow Agent's gross negligence, bad faith or willful misconduct.

3.3.9           Subject to the provisions of Section 3.2.5, in the event that a dispute arises in connection with this Agreement, or as to the rights of either Seller or Purchaser in and to, or the disposition of, the Deposit and Interest, the Escrow Agent shall have the right to (w) hold and retain the Deposit and Interest until such dispute is settled or finally determined by litigation, arbitration or otherwise, or (x) deposit the Deposit and Interest with an appropriate court of law, following which the Escrow Agent shall thereby and thereafter be relieved and released from any liability or obligation under this Agreement, or (y) institute an action in interpleader or other similar action permitted by stakeholders in the State of New York, or (z) interplead any of the parties hereto in any action or proceeding which may be brought to determine the rights of Seller and Purchaser to all or any part of the Deposit and Interest.

3.3.10         The Escrow Agent shall not have any liability or obligation for loss of all or any portion of the Deposit or Interest by reason of the insolvency or other action or omission of the institution of depository with whom the applicable escrow account is maintained.

3.3.11         Escrow Agent shall not be liable or responsible for any failure, refusal or inability of the depository into which the Deposit is deposited to pay the Deposit at Escrow Agent’s direction, or for levies by taxing authorities based upon the taxpayer identification number used to establish this interest bearing account. Escrow Agent shall not be responsible for any interest except for such interest as is actually received (which interest received shall be added to and considered part of the Deposit), nor shall Escrow Agent be responsible for the loss of any interest arising from the closing of any account or the sale of any certificate of deposit or other instrument prior to maturity.

 

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ARTICLE IV 

CLOSING, PRORATIONS AND CLOSING COSTS 

4.1          Closing.

4.1.1           The closing of the purchase and sale of the Property (the "Closing") shall be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York, 10036, at 2:00 p.m. local time, or, if Purchaser's lender requests, at the offices of Purchaser's lender or its counsel located in New York, New York, on February 18, 2016 TIME BEING OF THE ESSENCE (such date, or the date to which such date is adjourned pursuant to the express written terms hereof, the "Scheduled Closing Date"), subject to any adjournments as expressly permitted under this Agreement. Each of Seller and Purchaser shall have the one-time right to adjourn the Scheduled Closing Date for up to fifteen (15) days upon prior written notice to the other party at least five (5) Business Days prior to the Scheduled Closing Date, time being of the essence as to such delivery date, separate and apart from other extension or adjournment rights provided for herein. For the avoidance of doubt, each of Seller and Purchaser acknowledges and agrees that TIME IS OF THE ESSENCE with respect to the performance by Purchaser and Seller of their respective obligations to close the transactions contemplated hereunder on the Scheduled Closing Date (as the same may be adjourned in accordance with the terms hereof).

4.1.2          As used herein the term "Closing Date" shall mean the date on which the Closing actually occurs. In order to facilitate the timely and expeditious closing of title and the payment of the Purchase Price on the Closing Date, Seller and Purchaser shall conduct and complete a comprehensive pre-closing on the Business Day or Business Days (as may be necessary) prior to the Closing Date.

4.2          Prorations. Except as otherwise provided under this Agreement, in consideration of the Lease to be entered into at Closing pursuant to the terms hereof by the sole member of Seller, The Dime Savings Bank of Williamsburgh, a New York State chartered savings bank ("Tenant"), and Tenant's obligations under the Lease, there shall be no prorations, credits or adjustments hereunder of any items, including, without limitation, rents, additional rents, real estate taxes and assessments, personal property taxes, business improvement district assessments and charges, vault charges and special assessments, charges for telephone, electric, sewer, water, gas, steam and other utility bills, trash removal bills, janitorial and maintenance service bills, insurance premiums, fees and other amounts payable under the Licenses and Permits or any other operating or administrative expenses relating to the Property, it being the intention of the parties that all such charges remain the sole obligation and responsibility of Tenant after Closing pursuant to, and to the extent specifically provided in, the terms of the Lease. Seller and Purchaser acknowledge that such prorations shall be made pursuant to Section 21.6 of the Lease upon the expiration or termination thereof.

4.3          Transfer Taxes. Seller shall pay at Closing all transfer taxes imposed upon the conveyance of the Property hereunder (including as relates to the Deed and the ZLDA), pursuant to Section 1402 of the New York State Tax Law and Title 11 of Chapter 21 of the Administrative Code of the City of New York (the "Transfer Taxes") and agrees to indemnify and hold Purchaser harmless with respect to any loss, cost, cause of action or claim of any nature relating thereto. Seller shall file or cause to be filed all necessary tax returns with respect to all such Transfer Taxes and, to the extent required by applicable law, Purchaser will join in the execution of any such tax returns. The provisions of this Section 4.3 shall survive the Closing.

 

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4.4          Sales Taxes. Although it is not anticipated that any sales tax shall be due and payable in connection with the transactions contemplated hereunder, Purchaser agrees that Purchaser shall pay any and all New York State and New York City sales and/or compensating use taxes imposed upon or due in connection with the transactions contemplated hereunder (but not any such taxes which are attributable to any period prior to the Closing Date, which shall be Seller's obligation). Purchaser shall file all necessary tax returns with respect to all such taxes and Seller will cooperate with Purchaser's efforts with respect to such sales and use taxes and related filings, including by filing such forms as requested by Purchaser and joining in the execution of any such tax returns. There shall be no allocation of the Purchase Price to any personal property included in the transactions contemplated hereunder. The provisions of this Section 4.4 shall survive the Closing.

4.5          Closing Costs.

 

4.5.1           Purchaser shall pay all recording fees and charges associated with the recordation of the Deed, other than the Transfer Taxes which are payable by Seller under Section 4.3 and other than any recording fees and charges in connection with the satisfaction, discharge and other release documents for all title matters that are not Permitted Exceptions (as hereinafter defined). Seller shall pay all fees and commissions due to the Broker (as hereinafter defined) in accordance with Section 14.1. Seller shall pay all recording fees and charges in connection with the satisfaction, discharge and other release documents for all title matters that are not Permitted Exceptions. Purchaser shall pay all title insurance premiums, title examination fees and survey costs incurred by Purchaser. Seller and Purchaser shall each pay 50% of all escrow fees, if any. All other costs, fees, expenses and charges of any kind incident to the sale and conveyance of the Property from Seller to Purchaser, including attorneys' fees and consultants' fees (except as otherwise provided in Section 17.15), shall be borne by the party incurring the same.

ARTICLE V 

TITLE AND SURVEY MATTERS 

5.1          Title.

5.1.1           Purchaser's Title Commitment and Survey. Purchaser shall, at its sole cost and expense, within five (5) Business Days from the date hereof, order a title insurance commitment for an owner's policy of title insurance for the Property ("Purchaser's Title Commitment") from Stewart Title Insurance Company ("Purchaser's Title Company"), setting forth the status of title to the Property and any defects in or objections or exceptions to title to the Property, together with true and correct copies of all instruments giving rise to such defects, objections or exceptions. Purchaser shall instruct Purchaser's Title Company to forward a copy of Purchaser's Title Commitment and any updates thereof to Seller's attorney simultaneously with (or promptly after) the issuance thereof to Purchaser. Seller has delivered to Purchaser a copy of a survey of the Property by New York City Land Surveyors, PC ("Surveyor"), dated September 10, 2015 (the "Survey"). Purchaser may , at its sole cost and expense, order an updated Survey or survey inspection from the Surveyor. Purchaser shall instruct the Surveyor to forward a copy of any updated Survey or survey inspection and any further updates thereof to Seller's attorney and Purchaser's Title Company simultaneously with (or promptly after) the issuance thereof to Purchaser.

 

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5.1.2           Title Objections.          (a) If Purchaser's Title Commitment, the Survey or any update of either the Survey or Purchaser's Title Commitment shall reveal or disclose any defects, objections or exceptions in the title to the Property which are not Permitted Exceptions (as hereinafter defined) and to which Purchaser objects ("Title Objections"), then Purchaser (or Purchaser's counsel) shall notify Seller (or Seller's counsel) of such Title Objections in writing ("Exception Notice") within ten (10) Business Days of Purchaser's receipt of Purchaser's Title Commitment and the Survey or within five (5) Business Days of Purchaser's receipt of any update of Purchaser's Title Commitment or the Survey, as applicable (but in any event prior to the Closing Date).

(b)          If Purchaser does not notify Seller in writing of any such Title Objections within the time period set forth in this Section 5.1.2, then Purchaser shall be deemed to have accepted the applicable matter as reflected in Purchaser's Title Commitment and any updates received by Purchaser, and Purchaser shall be deemed to have waived any claims, defects or exceptions which it might otherwise have raised with respect to the matters reflected therein and the same shall be deemed to be Permitted Exceptions for all purposes of this Agreement.

5.1.3           Permitted Exceptions to Title. Subject to the terms and provisions of this Agreement, the Property shall be sold and conveyed subject only to the following exceptions to title (the "Permitted Exceptions"):

(a)          All presently existing and future liens for unpaid real estate taxes and water and sewer charges not due and payable as of the date of the Closing, subject to adjustment as hereinabove provided or which are made Seller's obligation under the Lease;

(b)          Any state of facts shown on the Survey (other than any Title Objections that Seller is expressly obligated pursuant to the terms hereof to remove prior to Closing);

(c)          all laws, ordinances, rules and regulations of any Governmental Authority (as hereinafter defined), as the same now exist or may be hereafter modified, supplemented, promulgated, meted or issued;

(d)          the right, lack of right or restricted right of any owner of the Property to construct and/or maintain (and the right of any Governmental Authority to require the removal of) any vault or vaulted area, in or under the streets, sidewalks or other areas abutting the Property, and any applicable licensing statute, ordinance and regulation, the terms of any license pertaining thereto and the lien of vault taxes, provided any such vault taxes or charges which are then due and payable are paid by Seller at Closing and any such vault taxes or charges which are not then due and payable are apportioned as provided in this Agreement (or are made Seller's obligation under the Lease);

 

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(e)          all presently existing and future liens of real estate assessments and water rates, water meter charges, water frontage charges and sewer taxes, rents and charges, if any, provided that such items are not, as of the Closing, due and payable and are apportioned as provided in this Agreement;

(f)           all violations of laws, ordinances, orders, requirements or regulations of any Governmental Authority, having jurisdiction with respect to the Property whether or not noted in the records of, or issued by, any Governmental Authority, existing on the Closing Date or hereafter issued or noted, but specifically not including fines or penalties resulting from such violations;

(g)          all possible minor 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, on, under or above any street or highway, the Property or any adjoining property including, without limitation, the roof cornice located on the northwest corner of the roof on the improvements located on Block 2447 Lot 36 and shown on the Survey, subject to the terms of the ZLDA (as hereinafter defined);

(h)          standard printed exclusions from coverage contained in the form of title policy or "marked-up" title commitment employed by the Title Company;

(i)           such matters as the Purchaser's Title Company shall be willing to omit as exceptions to coverage or affirmatively insure over at no cost or expense to Purchaser with respect to an owner's policy of title insurance issued by Purchaser's Title Company on the Closing Date and the title insurance policy for Purchaser's lender;

(j)           minor variations between the tax lot lines and the description of the Land set forth on Exhibit A attached hereto and made a part hereof;

(k)          all utility easements of record;

(l)           the exceptions set forth on Schedule 5.1.3;

(m)         any matter that is deemed a Permitted Exception in accordance with Section 5.1.2(b) of this Agreement;

(n)          any liens, encumbrances and other matters created by or on behalf of Purchaser, including, without limitation, any documents or instruments to be recorded as part of any financing for the acquisition of the Property by Purchaser;

(o)          any exception not included in the Purchaser's Exception Notice (hereinafter defined) or deemed to be a Permitted Exception pursuant to the terms hereof; and

 

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(p)          any other matter or thing affecting title to the Property that Purchaser shall have expressly agreed in writing to accept.

5.1.4           Seller's Title Company. Notwithstanding the provisions of this Article V, in the event that Purchaser's Title Company shall raise any Title Objection which is not a Permitted Exception, or notwithstanding proof or evidence delivered by Seller sufficient to permit said Title Objections to be omitted, Purchaser's Title Company shall refuse to omit said Title Objection, Seller shall have no obligation to eliminate such Title Objection and Purchaser shall have no right to terminate the Agreement by reason of such exception if another nationally recognized title company authorized to do business in New York shall be prepared to insure title to the Property at regular rates without such Title Objection and the matter giving rise to such Title Objection shall be deemed to constitute a Permitted Exception hereunder, provided such nationally recognized title company agrees in writing to omit such Title Objection at no additional cost.

5.1.5           Elimination of Liens.

(a)          Notwithstanding anything in this Article V to the contrary, Seller shall be obligated to obtain the release, satisfaction and otherwise discharge of record (or with respect to (1) below, an assignment to Purchaser's lender, if requested by Purchaser) prior to Closing (1) the lien of any mortgage, deed of trust, security agreement, financing statement, or any other instrument which evidences or secures indebtedness secured by the Property, (2) a mechanics' or materialmans' lien (including any broker's lien), a judgment lien, or any other lien that results from the failure of Seller to pay a claim for work performed or labor or materials furnished (other than with the prior written approval of Purchaser), (3) any encumbrances voluntarily recorded or otherwise placed by Seller against the Property on or following the date hereof without the prior written approval by Purchaser (items (1)-(3), the "Required Removal Encumbrances"), and (4) any other lien, judgment or other encumbrance that would not fall within the definition of a Required Removal Encumbrance, that is not a Permitted Exception and which can be satisfied by the payment of a liquidated sum not in excess of $400,000 in the aggregate (such amount, the "Other Liens Cap") for all such other liens (the items described in the preceding subclause (4) being "Other Liens"). Seller, in its discretion, may adjourn the Closing Date for up to sixty (60) days in the aggregate in order to eliminate any Other Liens (which are not Permitted Exceptions); provided, however, that in no event shall Seller be permitted to adjourn the Closing Date pursuant to the terms of this Section 5.1.4 to a date which is more than one (1) year from the date hereof. In lieu of eliminating any title defects which are not Permitted Exceptions which Seller shall be required, pursuant to the express terms hereof, to eliminate under this Agreement, Seller may deposit with Purchaser's Title Company such amount of money as may be determined by Purchaser's Title Company as being sufficient to induce Purchaser's Title Company, without the payment of any additional premium or at any cost to Purchaser, to omit such title defects which are not Permitted Exceptions from Purchaser's title insurance policy and the title insurance policy for Purchaser's lender. If, as of the Closing Date, there are any title defects (which are not Permitted Exceptions or are not otherwise omitted from Purchaser's title insurance policy without the payment of additional premiums or cost to Purchaser), then, subject to Seller's right to adjourn, upon at least five (5) Business Days' prior notice to Purchaser (or such lesser period during the five (5) Business Days prior to the Scheduled Closing Date), the Closing Date for up to sixty (60) days in the aggregate in order to eliminate any such title defects (but in no event beyond the date which is one (1) year after the date hereof), Purchaser shall have the right (as its sole and exclusive remedy with respect to such matters) either (I) to terminate this Agreement by delivering notice thereof to Seller, in which event Purchaser shall be entitled to the return of the Deposit and Interest and its rights pursuant to Section 13.1 of this Agreement, and neither party shall have any obligations hereunder except those expressly stated to survive the termination of this Agreement, or (II) to waive, in writing, its objection thereto and consummate the Closing, in which event (i) such title defects shall thereupon constitute Permitted Exceptions for all purposes of this Agreement and (ii) Seller shall be obligated, at Closing, to remove any Required Removal Encumbrances which are not Permitted Exceptions and Purchaser shall be entitled to a credit against the Balance of the Purchase Price in an amount equal to the sum of (x) the amount necessary to discharge of record and/or satisfy all of the Required Removal Encumbrances and (y) the lesser of (A) the amount necessary to discharge of record and/or satisfy all of the unsatisfied Other Liens or (B) the Other Liens Cap. Notwithstanding the foregoing, Seller shall have an obligation hereunder to discharge and/or satisfy all Required Removal Encumbrances and Other Liens (subject to the cap on Other Liens set forth herein) at or prior to Closing and Seller's failure to do so shall constitute a material default by Seller and the provisions of Section 13.1 shall apply; provided, that Purchaser may, at Purchaser's sole discretion, proceed to the Closing and accept a credit against the Purchase Price equal to the sum of (x) the amount necessary to discharge of record and/or satisfy all of the Required Removal Encumbrances and (y) the lesser of (A) the amount necessary to discharge of record and/or satisfy all of the unsatisfied Other Liens or (B) the Other Liens Cap.

 

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(b)          Notwithstanding anything in clause (a) hereof to the contrary, Purchaser may (in its sole discretion) accept such title as Seller can convey, without reduction of the Purchase Price or any credit or allowance on account thereof, except as in Section 5.1.5(a) set forth, or any claim against Seller. The acceptance of the Deed by Purchaser shall be deemed to be full performance of, and discharge of, every agreement and obligation on Seller's part to be performed under this Agreement, except for such matters which are expressly stated in this Agreement to survive the Closing, to the limit of such survival, if any.

5.1.6           Payment from Balance of the Purchase Price.  Any Required Removal Encumbrances or Other Liens, together with the cost of recording or filing any instruments necessary to discharge such Required Removal Encumbrances or Other Liens, may, in Seller's discretion, be paid out of the proceeds of the Balance of the Purchase Price payable at the Closing. Seller hereby agrees to deliver to Purchaser, at least three (3) Business Days prior to the Closing Date, instruments in recordable form sufficient, in Purchaser's and Purchaser's Title Company's reasonable discretion, to discharge any such Required Removal Encumbrances. Upon request of Seller, delivered to Purchaser no later than three (3) Business Days prior to the Closing, Purchaser shall instruct the Escrow Agent to apply closing funds to the order of the holder of any such Required Removal Encumbrances or Other Liens, and including any interest and/or penalties, (the "Encumbrance Release Funds") and Purchaser shall be entitled to a credit against the Closing Balance in the amount of such Encumbrance Release Funds.

5.1.7           Affidavits. If Purchaser's Title Commitment discloses judgments, bankruptcies or other returns against persons having names the same as or similar to that of Seller, then Seller, upon request, shall deliver to Purchaser's Title Company affidavits, in form 12 reasonably acceptable to Purchaser's Title Company and to Seller, stating that such judgments, bankruptcies or other returns are not against such Seller. In addition, at Closing, Seller shall deliver an Owner's Affidavit in the form attached hereto as Exhibit C.

 

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5.1.8   Parties-In-Interest Certification.

(a)          Promptly after the execution and delivery of this Agreement, Purchaser, at its sole cost and expense, shall obtain and deliver to Seller and its counsel a certification of the "parties in interest" (as defined in the ZLDA) to the Seller Premises and the Land (the "Certification") by Purchaser's Title Company, certifying to Seller and Purchaser the metes and bounds description of the Seller Premises and the Land, the identity of the "parties in interest" owning fee simple to the Seller Premises and the Land, and the identity of all other "parties in interest" with respect to the Seller Premises and the Land. Purchaser, at its sole cost and expense, shall cause the Purchaser's Title Company to update the Certification as of the Closing Date (as hereinafter defined). Seller shall use commercially reasonable efforts (which efforts do not include an obligation to expend more than $100,000.00 in the aggregate and/or an obligation to commence litigation or institute other legal proceedings) to cause to be executed, acknowledged and delivered at the Closing, a waiver and subordination substantially in the form annexed hereto as Exhibit L ("Waiver and Subordination") from each holder of a mortgage encumbering the Seller Premises and from any other party in interest with respect to the Seller Premises shown on the Certification issued at Closing in connection with the ZLDA, unless Seller otherwise disposes of the interest of such parties at or prior to the Closing.

(b)          Seller, at Seller's sole cost and expense, shall use commercially reasonable efforts (which efforts do not include an obligation to expend more than $100,000.00 in the aggregate and/or an obligation to commence litigation or institute other legal proceedings) to remove (or shall take such actions as are required for the Purchaser's Title Company to provide affirmative title insurance coverage to the reasonable satisfaction of Purchaser as part of the Endorsement, as hereinafter defined, with respect to) any defect, lien, encumbrance or violation relating to or attaching to the Subject Floor Area Development Rights, whether now existing or hereafter arising prior to the Closing Date, which would prevent the creation of the Combined Zoning Lot (as defined in the ZLDA) or would prevent the transfer of the Subject Floor Area Development Rights (as defined in the ZLDA).

(c)          The Purchaser's Title Company shall, at the Closing and at Purchaser's sole cost and expense, issue to Purchaser affirmative title insurance coverage (free from any and all encumbrances of the type described in Section 5.1.8(b) above) for any rights granted pursuant to the ZLDA, at standard rates, including a standard "New York City Development Rights Endorsement" with respect to the ZLDA (as hereinafter defined) (the "Endorsement"). If the Purchaser's Title Company will not issue title insurance as required in this Section 5.1.8(c) for any reason (other than as a result of (A) Purchaser's acts, (B) any failure of any "party in interest" or in any Additional Parcels (as defined in the ZLDA) to execute or waive its rights to execute the Declaration (as defined herein), or (C) any failure of any "party in interest" in the Land or in any Additional Parcels (as defined in the ZLDA) to execute, or to subordinate its interests in the Land or such Additional Parcel (as defined in the ZLDA) to, the ZLDA, Purchaser at its sole and absolute discretion may either (I) terminate this Agreement upon notice to Seller and the Escrow Agent and receive a return of the Deposit, in which event no party hereto shall have further rights or obligations hereunder (other than those which are expressly stated to survive the Closing or earlier termination of this Agreement), or (II) consummate the purchase hereunder without such title insurance and without any reduction in the Purchase Price.

 

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5.2          Violations. Purchaser agrees to purchase the Property subject to any and all notes or notices of violations of law, or municipal ordinances, orders, designations or requirements whatsoever noted in or issued by any federal, state, municipal or other governmental department, agency or bureau or any other governmental authority having jurisdiction over the Property (collectively, "Violations"), or any condition or state of repair or disrepair existing as of the date hereof (including those Violations disclosed by Seller to Purchaser in writing). Purchaser shall accept the Property subject to all Violations, the existence of any conditions at the Property which would give rise to such Violations, if any, and any governmental claims arising from the existence of such Violations, in each case without any abatement of or credit against the Purchase Price. Notwithstanding anything hereinabove to the contrary, (i) any liens, fines, penalties and/or judgment resulting from such Violations shall be governed by Section 5.1.4 above and (ii) if the amounts of any such liens, fines, penalties or judgments resulting from such Violations (together with any Other Liens) shall exceed the Other Liens Cap and the Seller elects not to pay the full amount required to discharge and/or satisfy all such liens, fines, penalties, judgments and Other Liens, then Purchaser may (in its discretion), elect (I) to terminate this Agreement by delivering notice thereof to Seller, in which event Purchaser shall be entitled to the return of the Deposit and Interest and its rights pursuant to Section 13.1 of this Agreement, and neither party shall have any obligations hereunder except those expressly stated to survive the termination of this Agreement, or (II) to consummate the Closing, in which event the parties shall proceed to Closing hereunder and Purchaser shall be entitled to a credit against the Balance of the Purchase Price in an amount equal to the Other Liens Cap.

 

ARTICLE VI 

REPRESENTATIONS AND WARRANTIES OF SELLER 

6.1          General Representations. Seller represents and warrants that the following matters are true and correct as of the date hereof and as of the Closing Date as follows:

6.1.1           Authority. Seller is a limited liability company duly formed, validly existing and in good standing under the laws of the State of New York and has the requisite power and authority to enter into and perform the terms of this Agreement and all documents executed by Seller which are to be delivered to Purchaser at Closing (the "Seller Closing Documents") in accordance with their respective terms. This Agreement and the Seller Closing Documents are, and at the time of Closing will be, duly authorized, executed and delivered by Seller, the legal, valid and binding obligation of Seller enforceable against Seller in accordance with their respective terms, and do not violate any provision of any agreement or judicial order to which Seller is a party or to which Seller is subject. All documents to be executed by Seller which are to be delivered at Closing will, at the time of Closing, be duly authorized, executed and delivered by Seller and will be legal, valid and binding obligations of Seller. Seller 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. Neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby is prohibited by, or requires Seller to obtain any consent, authorization, approval or registration from any other person or entity or under any law, statute, rule, regulation, judgment, order, writ, injunction or decree which is binding upon Seller.

 

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6.1.2           Bankruptcy or Debt of Seller. Seller has not made a general assignment for the benefit of creditors, filed any voluntary petition in bankruptcy or, to Seller's knowledge, suffered the filing of an involuntary petition by Seller's creditors, suffered the appointment of a receiver to take possession of all, or substantially all, of Seller's assets, suffered the attachment or other judicial seizure of all, or substantially all, of Seller's assets, admitted in writing its inability to pay its debts as they generally come due or made an offer of settlement, extension or composition to its creditors generally. Seller is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Seller insolvent.

6.1.3           Foreign Person.  Seller is not a "foreign person" within the meaning of Section 1445(f) of the Code.

6.1.4           Patriot Act.    (i) Neither Seller nor any person, group, entity or nation that Seller is acting, directly or indirectly for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, "Specially Designated National and Blocked Person," or is otherwise a banned or blocked person, group, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control ("OFAC"), and Seller is not engaging in the transactions contemplated by this Agreement, directly or indirectly, on behalf of, or instigating or facilitating the transactions contemplated by this Agreement, directly or indirectly, on behalf of, any such person, group, entity or nation; and (ii) Seller is not, and shall not become, a person or entity whose activities are regulated by the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 or the regulations or orders thereunder.

6.1.5           Leases.  Neither Seller nor any of its affiliates is a party to any lease or other occupancy agreement affecting the Property (other than, at Closing, the Lease) and the only occupant of the Property is Seller (and at Closing, will be the Tenant pursuant to the Lease).

6.1.6           Contracts.   Schedule 6.1.6 attached hereto is a true, correct and complete list of all Existing Contracts to which the Property is subject which will remain in effect after the Closing Date. Seller has made available to Purchaser true, correct and complete copies of the Existing Contracts.

6.1.7           Condemnation.  Seller has not received any written notice of any kind, and to Seller's knowledge there are no existing, pending or contemplated condemnation, eminent domain or similar proceedings with respect to the Property or any portion thereof.

6.1.8           Tax Appeal Proceedings. Except as set forth on Schedule 6.1.8  attached hereto, Seller has not filed, and has not retained anyone to file, notices of protest against, or to commence actions to review or seek a refund or reduction of any real property tax assessments ("Tax Proceedings") against the Property which are currently pending.

 

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6.1.9           Litigation.  Seller has not received actual notice that any action, suit or proceeding has been commenced against Seller in connection with the Property (exclusive of tort and other liability proceeding for which adequate insurance coverage is available and exclusive of the proceedings set forth on Schedule 6.1.9 hereto) and to the best of Seller's knowledge, no action, suit or proceeding is threatened against Seller in connection with the Property.

6.1.10         Purchase Rights.  There are no rights of first offer to purchase, rights of first refusal to purchase, purchase options or similar rights or pertaining to the Property. Except pursuant to this Agreement, Seller has not conveyed or contracted to convey any air or development rights appurtenant to all or any portion of the Property or the Seller Premises.

6.1.11         Insurance Policy.   Schedule 6.1.11 attached hereto contains a correct and complete list of property and casualty insurance policies and liability insurance policies (collectively, the "Insurance Policies") maintained by Seller with respect to the Real Property as of the date hereof.

6.1.12 Environmental Claims. Seller has no pending, or to Seller's knowledge, contingent liability, and has received no written notice, relating to any claim, order or proceeding pursuant to any applicable environmental laws ("Environmental Claim") concerning the Property.

6.1.13         Reports. Seller has provided Purchaser with true, correct and complete copies of all third party environmental reports, engineering reports and property condition reports, in each case as the same relate to the Property and which are either in the possession or under the control of Seller.

6.1.14         Union. Seller is not party to a union contract and there are no retroactive increases or other accrued and unpaid sums owed to any employee which will be binding on Purchaser.

6.2          Seller's Knowledge. For purposes of this Agreement and any Seller Closing Document, whenever the phrases "to Seller's knowledge", "to the current, actual knowledge of Seller" or the "knowledge" of Seller or words of similar import are used, they shall be deemed to refer to the actual, present, conscious knowledge only of Michael Pucella and not any implied, imputed or constructive knowledge of Michael Pucella or any other party, without any independent investigation having been made or any implied duty to investigate or inquire other than reasonable inquiry of the property manager and leasing agent for the Improvements. Seller hereby represents and warrants that Michael Pucella is the representative of Seller with knowledge of the representations, warranties and statements of Seller set forth in this Agreement.

6.3          Survival. The express representations and warranties made in this Agreement by Seller shall not merge into any instrument of conveyance delivered at the Closing and all of the representations and warranties made in this Agreement by Seller shall survive the Closing for a period of six (6) months (the "Survival Period"); provided, however, that any action, suit or proceeding with respect to the truth, accuracy or completeness of such representations and warranties shall be commenced, if at all, to the extent Purchaser provided notice to Seller of such claim on or before the date which is six (6) months after the date of the Closing and, if Purchaser does not provide such notice to Seller on or before the date that is six (6) months after the date of Closing then any action, suit or proceeding relating thereto shall be void and of no force or effect. The terms and provisions of this Section 6.3 shall survive the Closing.

 

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6.4          Limitation of Liability. From and after the Closing Date, (i) Seller shall have no liability for any losses, claims, costs or expenses suffered or incurred by Purchaser as a result of the inaccuracy of any of the representations or warranties of Seller set forth in Section 6.1 hereof and/or under any of the certificates of Seller updating such representations and warranties set forth in, or delivered pursuant to, this Agreement ("Purchaser's Damages") if the same in the aggregate shall have a monetary value (or be in a monetary amount claimed) of less than $50,000.00 (the "Liability Basket") and (ii) the aggregate liability of Seller arising pursuant to or in connection with any such default or inaccuracy of any of such representations and warranties of Seller and/or such certificates of Seller set forth in, or delivered pursuant to, this Agreement shall not exceed $5,000,000.00 (the "Liability Cap"). The terms and provisions of this Section 6.4 shall survive Closing and/or termination of this Agreement.

6.5          Representations as a Condition to Closing.

6.5.1          For purposes of this Agreement, a "Mandatory Representation/Warranty" shall mean any representation and/or warranty made by Seller in this Agreement:

(a)          set forth in Sections 6.1.1 through 6.1.5, Section 6.1.10 and Section 6.1.14 of this Agreement;

 

(b)          that Seller knows to be untrue as of the date such representation or warranty is made;

(c)          the breach of which would prevent the Title Company from insuring fee simple title to the Land subject only to Permitted Exceptions; and/or

(d)          the breach of which could result in losses, claims, costs or expenses to Purchaser in an amount in excess of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00).

6.5.2           If any of the representations and warranties of Seller set forth herein above and all other representations and warranties of Seller contained in this Agreement shall not be true and correct in all material respects as of the Closing Date (except to the extent any such representations and warranties expressly relate to an earlier date and with such changes as are permitted under, or result by reason of the effect of, this Agreement), then:

(a)          If such representation or warranty constitutes a Mandatory Representation/Warranty, then the same shall be deemed a Seller default pursuant to Section 13.1.1 of this Agreement, however, Purchaser's sole remedy with respect to any such default shall be to terminate this Agreement, receive the Deposit and Interest accrued thereunder and, in the event such default is willful, Purchaser shall furthermore be entitled to its remedies under Section 13.1.2.

 

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(b)          If such representation or warranty does not constitute a Mandatory Representation/Warranty, then the same shall be deemed a breach of representations or warranties under Sections 6.3 and 6.4 and the parties shall continue to be absolutely and unconditionally obligated to consummate the transactions contemplated under this Agreement.

6.5.3           Representation Update. If at any time prior to the Closing any of Seller's representations contained in this Article VI need to be updated in order not to be inaccurate, Seller shall deliver to Purchaser an instrument (the "Representation Update") advising Purchaser in which respects such representations must be updated.

ARTICLE VII 

"AS IS" SALE 

Subject only to Seller's covenants, representations, warranties and indemnifications in this Agreement or any other Seller Closing Document, Purchaser shall purchase the Property in its "AS IS" condition at the Closing Date, subject to all latent and patent defects (whether physical, financial or legal, including permitted title defects), based solely on Purchaser's own inspection, analysis and evaluation of the Property and not in reliance on any records or other information obtained from Seller or on Seller's behalf. Purchaser acknowledges that it is not relying on any statement or representation (other than representations, warranties, covenants and indemnifications contained in this Agreement, or in any other Seller Closing Document) that has been made or that in the future may be made by Seller or any of Seller's employees, agents, attorneys or representatives concerning the condition of the Property (whether relating to physical conditions, operation, performance, title, or legal matters).

ARTICLE VIII 

REPRESENTATIONS AND WARRANTIES OF PURCHASER 

Purchaser represents and warrants to Seller that the following matters are true and correct as of the date hereof.

8.1          Authority.  Purchaser is a limited liability company, duly organized, validly existing and in good standing under the laws of Delaware. This Agreement and all documents executed by Purchaser which are to be delivered to Seller at Closing (the "Purchaser Closing Documents") have been or will be on the Closing Date duly authorized, executed and delivered by Purchaser, are the legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with their respective terms, and do not violate any provision of any agreement or judicial order to which Purchaser is a party or to which Purchaser is subject. All documents to be executed by Purchaser which are to be delivered at Closing will, at the time of Closing, be duly authorized, executed and delivered by Purchaser, be legal, valid and binding obligations of Purchaser, and will not violate any provision of any agreement or judicial order to which Purchaser is a party or to which Purchaser is subject. Neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated hereby is prohibited by, or requires Purchaser to obtain any consent, authorization, approval or registration from any other person or entity or under any law, statute, rule, regulation, judgment, order, writ, injunction or decree which is binding upon Purchaser.

 

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8.2          Bankruptcy or Debt of Purchaser. Purchaser represents and warrants to Seller that Purchaser has not made a general assignment for the benefit of creditors, filed any voluntary petition in bankruptcy or, to Purchaser's knowledge, suffered the filing of an involuntary petition by Purchaser's creditors, suffered the appointment of a receiver to take possession of all, or substantially all, of Purchaser's assets, suffered the attachment or other judicial seizure of all, or substantially all, of Purchaser's assets, admitted in writing its inability to pay its debts as they come due or made an offer of settlement, extension or composition to its creditors generally.

8.3          No Financing Contingency. It is expressly acknowledged by Purchaser that the transaction contemplated by this Agreement is not subject to any financing contingency and that no financing for the transaction contemplated by this Agreement shall be provided by Seller.

 

8.4          Purchaser's Acknowledgment.  Purchaser acknowledges and agrees that, except as expressly provided in this Agreement or any other Seller Closing Document, the form of which is annexed hereto or is otherwise approved by Purchaser, including Article VI hereof, Seller has not made, does not make and specifically disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to (a) the nature, quality or condition of the Property, including, without limitation, the water, soil and geology, (b) the income to be derived from the Property, (c) the suitability of the Property for any and all activities and uses which Purchaser may conduct thereon, (d) the compliance of or by the Property or its operation with any laws, rules, ordinances, designations or regulations of any applicable governmental authority or body, including, without limitation, the Americans with Disabilities Act, any applicable federal, state or local landmark designations, and any rules and regulations promulgated under or in connection with any of the foregoing, (e) the habitability, merchantability or fitness for a particular purpose of the Property, (f) the current or future real estate tax liability, assessment or valuation of the Property, (g) the availability or non- availability or withdrawal or revocation of any benefits or incentives conferred by any federal, state or municipal authorities or (h) any other matter with respect to the Property, and specifically that Seller has not made, does not make and specifically disclaims any representations regarding solid waste, as defined by the U.S. Environmental Protection Agency regulations at 40 C.F.R., Part 261, or the disposal or existence, in or on the Property, of any hazardous substance, as defined by the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, and applicable state laws, and regulations promulgated thereunder. Purchaser further acknowledges and agrees that having been given the opportunity to inspect the Property, except as specifically provided in this Agreement or any other Seller Closing Document including Article VI hereof, Purchaser is relying solely on its own investigation of the Property and not on any information provided or to be provided by, or on behalf of, Seller and that Purchaser has completed its due diligence review of the Property. Purchaser further acknowledges and agrees that any information provided or to be provided with respect to the Property was obtained from a variety of sources and that Seller, except as otherwise expressly provided herein, has not made any independent investigation or verification of such information. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY OTHER SELLER DOCUMENT, INCLUDING ARTICLE VI HEREOF, AND AS A MATERIAL INDUCEMENT TO SELLER'S EXECUTION AND DELIVERY OF THIS AGREEMENT, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS ON AN "AS IS, WHERE IS" CONDITION AND BASIS. Purchaser acknowledges, represents and warrants that Purchaser is not in a significantly disparate bargaining position with respect to Seller in connection with the transaction contemplated by this Agreement; that Purchaser freely and fairly agreed to this waiver as part of the negotiations for the transaction contemplated by this Agreement; and that Purchaser is represented by legal counsel in connection with the transaction by this Agreement and Purchaser has conferred with such legal counsel concerning this waiver. The terms and provisions of this Section 8.4 shall survive the Closing and/or termination of this Agreement.

 

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8.5          Patriot Act.

8.5.1           Purchaser hereby represents and warrants that Purchaser (i) is in compliance with the Office of Foreign Assets Control sanctions and regulations promulgated under the authority granted by the Trading with the Enemy Act, 12 U.S.C. § 95 (a) et seq., and the International Emergency Economic Powers Act, 50 U.S.C. § 1701, et seq., as the same apply to it or its activities; (ii) is in compliance with that certain Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended from time to time (the "Patriot Act") and all rules and regulations promulgated under such Act applicable to Purchaser; and (iii) (A) is not now, nor has ever been, under investigation by any governmental authority for, nor has been charged with or convicted of a crime under, 18 U.S.C. §§ 1956 or 1957 or any predicate offense thereunder; (B) has never been assessed a civil penalty under any anti-money laundering laws or predicate offenses thereunder; (C) has not had any of its funds seized, frozen or forfeited in any action relating to any anti-money laundering laws or predicate offenses thereunder; (D) has taken such steps and implemented such policies as are reasonably necessary to ensure that it is not promoting, facilitating or otherwise furthering, intentionally or unintentionally, the transfer, deposit or withdrawal of criminally-derived property, or of money or monetary instruments which are (or which Purchaser suspects or has reason to believe are) the proceeds of any illegal activity or which are intended to be used to promote or further any illegal activity; and (E) has taken such steps and implemented such policies as are reasonably necessary to ensure that it is in compliance with all laws and regulations applicable to its business for the prevention of money laundering and with anti-terrorism laws and regulations, with respect both to the source of funds from its investors and from its operations, and that such steps include the development and implementation of an anti-money laundering compliance program within the meaning of Section 352 of the Patriot Act, to the extent such a party is required to develop such a program under the rules and regulations promulgated pursuant to Section 352 of the Patriot Act.

8.5.2           Neither Purchaser nor, to the knowledge of Purchaser, any other person owning a direct or indirect, legal or beneficial interest in Purchaser is in violation of the Executive Order or the Patriot Act.

 

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8.5.3          Neither the Purchaser nor, to the knowledge of Purchaser, any of its constituents, investors (direct or indirect and whether or not holding a legal or beneficial interest) or affiliates, acting or benefiting, directly or indirectly, in any capacity in connection with the Property, this Agreement, or any of the transactions contemplated hereby, is: (i) listed in the Annex to, or otherwise subject to the provisions of, that certain Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism (the "Executive Order"), (ii) that is named as a "specifically designated national (SDN)" on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website (http://www.treas.gov.ofac/t11sdn.pdf) or at any replacement website or other replacement official publication of such list or that is named on any other Governmental Authority list issued post 9/11/2001, (iii) acting, directly or indirectly, in contravention of any AML Law or terrorist organizations or narcotics traffickers, including those persons that are included on any relevant lists maintained by the United Nations, North Atlantic Treaty Organization, Financial Action Task Force on Money Laundering, U.S. Office of Foreign Assets Control, U.S. Securities and Exchange Commission, U.S. Federal Bureau of Investigation, U.S. Central Intelligence Agency, U.S. Internal Revenue Service, all as may be amended or superseded from time to time or (iv) that is owned or controlled by, or acting for or on behalf of, any person described in clause (i), (ii) or (iii) above (a "Prohibited Person").

8.5.4           To the knowledge of Purchaser, none of the funds or other assets of the Purchaser constitute property of, or are beneficially owned, directly or indirectly, by any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, (i) the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., (ii) The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and (iii) any executive orders or regulations promulgated thereunder, with the result that sale to Purchaser, its managing member or any non- managing member (whether directly or indirectly) is prohibited by law (an "Embargoed Person"). No Embargoed Person has any interest of any nature whatsoever in the Purchaser (whether directly or indirectly), and none of the funds of any Purchaser have been derived from any unlawful activity with the result that an investment in the Purchaser (whether directly or indirectly) or sale to the Purchaser, is prohibited by law or that execution, delivery and performance of this Agreement or any of the transactions contemplated hereby is in violation of law.

 

Any material breach by Purchaser of the foregoing representations and warranties shall be deemed a default by Purchaser under Section 13.2 of this Agreement and (y) the representations and warranties contained in this Article VIII shall be continuing in nature and shall survive the expiration or earlier termination of this Agreement.

ARTICLE IX 

SELLER'S INTERIM OPERATING COVENANTS 

9.1          Operations. Except as may be expressly provided in this Agreement, Seller agrees, at its cost and expense, to operate, maintain and manage its interest in the Property through the Closing Date or earlier termination of this Agreement in substantially the same manner as it has operated, maintained and managed the Property through the date hereof, subject to ordinary wear and tear and further subject to this Article IX. Seller shall have no obligation to make any capital replacements to the Improvements from and after the date hereof except as required to perform Seller's obligations under any agreement to which Seller is a party. Additionally, Seller shall not mortgage, lien, pledge, encumber, sell or transfer or otherwise dispose of the Property or any interest therein, including, without limitation, any air or development rights related to the Property or the Seller Premises.

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9.2          Maintain Insurance.  From and after the date hereof and prior to the Closing, Seller shall pay all required premiums and not take or permit any action that would result in the cancellation, termination or suspension of any of the Insurance Policies.

9.3          Notices of Violation; Other Notices. Seller shall promptly notify Purchaser of, and shall promptly deliver to Purchaser a copy of, any notice Seller or any affiliate of Seller may receive or send, from and after the date hereof and prior to the Closing, from or to any governmental authority, concerning a violation of laws at the Property. Seller shall promptly notify Purchaser of, and shall deliver to Purchaser a copy of any notice Seller shall receive prior to the Closing, with respect to any material litigation, arbitration, proceeding or administrative procedure with any person or entity which affects the Property.

9.4          Permits and Licenses.  Except as required pursuant to the terms of any Permit or License or as otherwise required by any Governmental Authority, Seller will not amend, modify cancel or rescind any of the Permits and Licenses prior to the Closing Date. For purposes of this Agreement, the term "Governmental Authority" means the United States, the State, County and City of New York, and any political subdivision, agency, authority, department, court, commission, board, bureau or instrumentality of any of the foregoing which has or is asserting jurisdiction over any of the parties hereto or over any of the Property.

9.5          Casualty and Condemnation.  Seller shall promptly deliver to Purchaser notice of any fire or other casualty occurring at the Property between the date hereof and the date of Closing and of which Seller has actual knowledge. Seller shall promptly deliver to Purchaser notice of any actual or threatened condemnation of all or any part of the Property of which Seller obtains knowledge.

9.6          Leases.  Seller shall not enter into any leases, licenses or other occupancy agreements with respect to the Property.

9.7          Zoning. Seller shall not change or submit any application to change the current zoning or legal use of the Property or the Seller Premises.

9.8          Subdivision.  Promptly after the date hereof, Seller, at its sole cost and expense, shall take all commercially reasonable actions to pursue the subdivision of Block 2447, Lot 36 (the "Retained Parcel") into two (2) separate and distinct tax lots in accordance with the drawings annexed hereto as Exhibit K (the eastern lot therein being hereinafter referred to as the "Eastern Lot"). In the event that the subdivision is completed on or prior to Closing, or will be completed as a result of the delivery of the deed at Closing, then Purchaser shall accept title to the Eastern Lot for no additional consideration. In the event that such subdivision is not completed by, or as a result of, the Closing, then Seller shall notify Purchaser thereof in writing (the "Subdivision Completion Notice") and Purchaser shall have fifteen (15) days from the date such Subdivision Completion Notice is received to elect to accept a deed of the Eastern Lot for no additional consideration, time being of the essence as to the date by which Purchaser must make such election, and Purchaser's failure to notify Seller in writing of its election to accept such deed by the date required hereunder shall be deemed to constitute Purchaser's election to not accept such deed. If the Eastern Lot is transferred to Purchaser after the Closing, then Purchaser and Seller shall execute and record an amendment to the ZLDA to reflect the transfer of the Eastern Lot from the Owner Land to the Developer Land (as such terms are defined in the ZLDA) with no change in the Developer Floor Area Development Rights. The provision of this Section 9.8 shall survive the Closing.

 

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9.9          Cornice Removal. From and after the Closing, Purchaser shall have the right, at Purchaser's sole cost and expense, to remove the so-called "return" portion of the existing cornice (i.e., the entire fascia on the northern side of the Retained Parcel) on the improvements which are situated on the Retained Parcel and which encroaches over the Property, as depicted on Exhibit O annexed hereto such that the northern facade of the improvements on the Retained Parcel permit Purchaser to construct improvements on the Property flush against the improvements on the retained Parcel provided that (i) Purchaser provides a reasonably detailed description of the means and methodology (including, if appropriate, drawings depicting any construction work to be performed on the improvements on the Retained Parcel) for removing such cornice, (ii) Purchaser provides Seller with copies of all legally required permits and approvals required for the removal of such cornice, (iii) Purchaser provide evidence of insurance reasonably satisfactory to Seller with respect to such removal activities and the contractors performing such work, (iv) Purchaser provides Seller with prior written notice of the commencement of such work, (v) subject to compliance with applicable laws and regulations, Purchaser uses commercially reasonable efforts to extend the remaining cornice over the improvements to be constructed on the lot adjacent to the Retained Parcel in accordance with a design which has been previously submitted to and reasonably approved by Seller, (vi) Purchaser shall be responsible for repairing and restoring any damage to the improvements on the Retained Parcel as a result of the removal of such portion of the cornice, and (vii) Purchaser indemnifies and holds Seller harmless from and against any and all actual, out-of-pocket loss, cost, liability or expense incurred or suffered by Seller as a result of Purchaser's removal of the cornice and incorporation of the Remaining Cornice into Purchaser’s improvements including, without limitation, any claims by Purchaser's contractors. For the purpose of clarity, the "return" portion of the existing cornice which encroaches over the Property shall constitute Purchaser’s property following the Closing and neither Seller nor any transferee of Seller shall make any claim in respect thereof or any portion of the Property into which the Remaining Cornice shall have been incorporated (including, without limitation, claims of adverse possession) other than with respect to an alleged breach of the provisions of this Section 9.9. The provisions of this Section 9.9 shall survive the closing.

 

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ARTICLE X 

CLOSING CONDITIONS 

10.1        Conditions to Obligations of Seller.

10.1.1         The obligations of Seller under this Agreement to sell the Property and consummate the other transactions contemplated hereby shall be subject to the satisfaction of the following conditions on or before the Closing Date, except to the extent that any of such conditions may be waived by Seller in writing at or prior to Closing in Seller's sole and absolute discretion.

(a)          All representations and warranties of Purchaser contained in Article VIII of this Agreement shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if such representations and warranties were made anew as of the Closing Date, and Purchaser shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by Purchaser on or prior to the Closing Date.

(b)          Purchaser shall have delivered the documents and instruments required to be delivered by Purchaser pursuant to Section 11.3 of this Agreement.

(c)          No order, writ, injunction or decree (collectively, "Order") shall have been entered and be in effect by any court of competent jurisdiction or any authority, and no requirement of any Governmental Authority shall have been promulgated or enacted and be in effect, that restrains, enjoins or invalidates the transactions contemplated hereby or the current use of the Property; provided that if any of the foregoing shall be in effect as a direct or indirect result of Seller's acts or omissions taken or omitted by Seller with the intention of preventing the Closing, the failure of Seller to close by reason any of the foregoing shall constitute a default by Seller hereunder, entitling Purchaser to all rights and remedies of Purchaser provided under Section 13.1 hereof.

 

10.1.2        Subject to Article XII and Section 3.2, in the event Seller shall elect not to close due to the failure of any one or more of the conditions precedent to Seller's obligation to sell set forth in this Section 10.1 which has not been waived by Seller in writing in Seller's sole and absolute discretion and which failure was caused by a default by Purchaser of its obligations hereunder which entitles the Seller to the Deposit and Interest pursuant to Article XIII, Seller shall so notify Purchaser and Escrow Agent no later than the day of Closing in writing specifying the unfulfilled conditions, and, subject to the provisions of Section 3.2.5, Escrow Agent shall deliver the Deposit and Interest to Seller, and this Agreement shall terminate, and neither party shall have any further obligation under this Agreement (except the Surviving Termination Obligations (as hereinafter defined)). 

 

10.2        Conditions to Obligations of Purchaser.

 

10.2.1         The obligations of Purchaser under this Agreement to purchase the Property and consummate the other transactions contemplated hereby shall be subject to the satisfaction of the following conditions on or before the Closing Date, except to the extent that any of such conditions may be waived by Purchaser in writing at or prior to Closing in the Purchaser's sole and absolute discretion.

(a)          Subject to the provisions of Section 6.5, all representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if such representations and warranties were made anew as of the Closing Date and Seller shall have performed and complied in all material respects with all material covenants and agreements required by this Agreement to be performed or complied with by Seller on or prior to the Closing Date.

 

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(b)          Seller shall have delivered the documents and instruments required to be delivered by Seller pursuant to Section 11.1 of this Agreement.

(c)          No Order shall have been entered and be in effect by any court of competent jurisdiction or any authority, and no requirement of any Governmental Authority shall have been promulgated or enacted and be in effect, that restrains, enjoins or invalidates the transactions contemplated hereby or the current use of the Property; provided, that if any of the foregoing shall be in effect as a direct or indirect result of Purchaser's acts or omissions taken or omitted by Purchaser with the intention of preventing the Closing, the failure of Purchaser to close by reason of any of the foregoing shall constitute a default by Purchaser hereunder, entitling Seller to all rights and remedies of Seller provided under Section 13.2 hereof.

(d)          Title to the Property shall be delivered to Purchaser subject only to the Permitted Exceptions.

10.2.2        Subject to Article XII and Section 3.2 and further subject to Seller's right to adjourn the Closing hereunder, in the event Purchaser shall elect not to close due to the failure of any one or more of the conditions precedent to Purchaser's obligation to consummate the transaction set forth in this Section 10.2 which has not been waived by Purchaser in writing in Purchaser's sole and absolute discretion, Purchaser shall so notify Seller and Escrow Agent no later than the day of Closing in writing specifying the unfulfilled conditions, and, except as otherwise provided in Article XIII, Escrow Agent shall deliver the Deposit to Purchaser and this Agreement shall terminate, and neither party shall have any further obligation under this Agreement (except the Surviving Termination Obligations).

ARTICLE XI 

CLOSING 

11.1        Seller's Closing Obligations.  Seller shall execute, acknowledge (where applicable) and deliver or cause to be delivered to Purchaser at Closing the following:

11.1.1         A bargain and sale deed without covenants in the form of Exhibit D-1 attached hereto, conveying to Purchaser Seller's right, title and interest in the Real Property, subject only to the Permitted Exceptions (the "Deed");

11.1.2         A general assignment in the form of Exhibit D-2, conveying to Purchaser Seller's right, title and interest in the Intangible Property (the "Assignment");

11.1.3         A certificate in the form of Exhibit E attached hereto (herein called "Seller's Representation Certificate"), indicating that the representations and warranties of Seller set forth in Article VI are true and correct on the Closing Date, or, if there have been permitted changes after the date hereof to the Closing Date, describing such changes;

 

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11.1.4        The following items to the extent in Seller's possession, or under Seller's control: (i) keys for all entrance doors to the Property and (ii) all warranties, guaranties, operating reports, permits, licenses, files, drawings, plans and specifications relating to the Property and other materials related to the ownership or operation of the Property;

11.1.5        A certificate substantially in the form of Exhibit F attached hereto certifying that Seller is not a "foreign person" as defined in Section 1445 of the Internal Revenue Code of 1986, as amended;

11.1.6        A New York City Real Property Transfer Tax Return and New York State Combined Real Estate Transfer Tax Return and Credit Line Mortgage Certificate (Form TP-584) (together, the "Transfer Tax Returns"), each duly signed by Seller, together with the payment of the amount of the Transfer Taxes, if any, due in connection with the transactions contemplated hereunder (including the Deed and the ZLDA), in each case by delivery to Purchaser's Title Company of a certified check payable to the order of the Commissioner of Finance in the amount of the Transfer Tax due to New York City and a certified check payable to the order of the New York State Department of Taxation and Finance in the amount of the Transfer Tax due to New York State (unless Seller elects to have Purchaser make such payments with a credit against the Purchase Price, in which case such payments shall be so made by Purchaser);

11.1.7        (a) Evidence reasonably satisfactory to Purchaser and Purchaser's Title Company that the person executing the Closing documents on behalf of Seller has full right, power and authority to do so, and (b) an Owner's Affidavit in the form of Exhibit C attached hereto (with such changes as necessary for the Title Company to omit any title objections which Seller is obligated or elects to discharge and/or satisfy hereunder);

11.1.8        Instruments reasonably acceptable to Purchaser in order to terminate the documents of record identified as (i) Covenants and Restrictions in liber 4871 page 1 and (ii) Light and Air Easement in liber 6869 page 92;

11.1.9        A Declaration of Zoning Lot Restrictions, which shall be in the form annexed hereto as Exhibit N, as it may be amended (without other substantive change) at the Closing to provide for the inclusion or subtraction of Additional Parcels to the Combined Zoning Lot (the "Declaration");

11.1.10      A zoning lot and development agreement, in the form attached hereto as Exhibit H (the "ZLDA"), which shall be recorded in the applicable New York City land records immediately after the recordation of the Deed and prior to the recordation of any mortgage obtained by Purchaser;

11.1.11      Any Waiver and Subordination(s) required to be delivered by Seller;

11.1.12      A lease, executed by Tenant, in the form attached hereto as Exhibit I (the "Lease"), together with the payment of any security deposit required thereunder; and

11.1.13      Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transactions which are the subject of this Agreement.

 

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11.2        Intentionally Omitted.

11.3        Purchaser's Closing Obligations. Purchaser, at its sole cost and expense, shall deliver or cause to be delivered to Seller at Closing the following:

11.3.1        The Balance of the Purchase Price, after all adjustments are made at the Closing as herein provided, by Federal Reserve wire transfer of immediately available funds;

11.3.2        Purchaser shall duly execute, acknowledge (as appropriate) and deliver to Seller at Closing:

(a)          the Declaration;

(b)          the ZLDA;

(c)          any Waiver and Subordination(s) required to be delivered by Purchaser;

(d)          the Lease; and

(e)          the Transfer Tax Returns.

11.3.3        Evidence reasonably satisfactory to Seller's and Purchaser's Title Company that the person executing the Closing documents on behalf of Purchaser has full right, power and authority to do so;

11.3.4        A certificate in the form of Exhibit J attached hereto ("Purchaser's Representation Certificate"), indicating that the representations and warranties of Purchaser set forth in Article VIII are true and correct on the Closing Date, or, if there have been changes, describing such changes; and

11.3.5        Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transactions which are the subject of this Agreement.

ARTICLE XII 

RISK OF LOSS 

12.1        Casualty.  If all or any part of the Property is damaged by fire or other casualty occurring following the date hereof and prior to the Closing, whether or not such damage affects a material part of the Property, then neither party shall have the right to terminate this Agreement, and the parties shall nonetheless consummate this transaction in accordance with this Agreement, without any abatement of the Purchase Price or any liability or obligation on the part of Seller by reason of said destruction or damage. In such event, Seller shall be entitled to retain all casualty insurance proceeds received under the casualty insurance policies in effect with respect to the Property on account of said physical damage or destruction.

 

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12.2        Condemnation.

12.2.1        If, prior to the Closing Date, any part of the Property is taken (other than a temporary taking), or if Seller shall receive an official notice from any governmental authority having eminent domain power over the Property of its intention to take, by eminent domain proceeding, any part of the Property (a "Taking"), then:

(a)          if such Taking results in a decrease of 10% or less of the floor area development rights currently existing with respect to the Property, as determined by an independent architect chosen by Seller (subject to Purchaser's review and reasonable approval of such determination and the provisions of Section 12.2.2 below), then neither party shall have any right to terminate this Agreement, and the parties shall nonetheless consummate the transaction in accordance with this Agreement, without any abatement of the Purchase Price or any liability or obligation on the part of Seller by reason of such Taking; provided, however, that Seller shall, on the Closing Date, (i) assign and remit to Purchaser, and Purchaser shall be entitled to receive and keep, the net proceeds of any award or other proceeds of such Taking which may have been collected by Seller as a result of such Taking less the reasonable out of pocket expenses incurred by Seller in connection with such Taking, or (ii) if no award or other proceeds shall have been collected, deliver to Purchaser, an assignment of Seller's right to any such award or other proceeds which may be payable to Seller as a result of such Taking, and Purchaser shall reimburse Seller for the reasonable out of pocket expenses incurred by Seller in connection with such Taking at the time of Purchaser's receipt of any such award or other proceeds.

(b)          if such Taking results in a decrease of more than 10% of the floor area development rights currently existing with respect to the Property, as determined by an independent architect chosen by Seller (subject to Purchaser's review and reasonable approval of such determination and the provisions of Section 12.2.2 below), then Purchaser shall have the option, exercisable within thirty (30) days after receipt of notice of such Taking (but in any event prior to the Closing Date), time being of the essence, to terminate this Agreement by delivering notice thereof to Seller, whereupon the Deposit and Interest shall be returned to Purchaser, and this Agreement shall be deemed canceled and of no further force or effect, and neither party shall have any further rights or liabilities against or to the other except pursuant to the provisions of this Agreement which are expressly provided to survive the termination hereof. If a Taking described in this clause (b) shall occur and Purchaser shall not have timely elected to terminate this Agreement, then Purchaser and Seller shall consummate this transaction in accordance with this Agreement, without any abatement of the Purchase Price or any liability or obligation on the part of Seller by reason of such Taking; provided, however, that Seller shall, on the Closing Date, (i) assign and remit to Purchaser, and Purchaser shall be entitled to receive and keep, the net proceeds of any award or other proceeds of such Taking which may have been collected by Seller as a result of such Taking less the reasonable out of pocket expenses incurred by Seller in connection with such Taking, or (ii) if no award or other proceeds shall have been collected, deliver to Purchaser, an assignment of Seller's right to any such award or other proceeds which may be payable to Seller as a result of such Taking, and Purchaser shall reimburse Seller for the reasonable out of pocket expenses incurred by Seller in connection with such Taking at the time of Purchaser's receipt of any such award or other proceeds. Seller shall not compromise or settle any claim without Purchaser's prior written consent (which shall not be unreasonably withheld).

 

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12.2.2        Any disputes under this Article XII as to whether the Taking results in a decrease of 10% or less of the floor area development rights currently existing with respect to the Property shall be resolved by expedited arbitration before a single arbitrator acceptable to both Seller and Purchaser in their reasonable judgment in accordance with the rules of the American Arbitration Association; provided, that if Seller and Purchaser fail to agree on an arbitrator within five (5) days after a dispute arises, then either party may request The Real Estate Board of New York, Inc. to designate an arbitrator. Such arbitrator shall be an independent architect or appraiser (as applicable) having at least ten (10) years of experience in the construction of, or valuation of, office buildings in Brooklyn. The costs and expenses of such arbitrator shall be borne equally by Seller and Purchaser.

 

12.3        General Obligations Law. The provisions of this Article XIII are intended to supersede those of Section 5-1311 of the General Obligations Law of New York.

ARTICLE XIII 

DEFAULT 

13.1        Default by Seller.

13.1.1        If Seller shall default in the performance of any of its obligations to be performed by Seller on or prior to the Scheduled Closing Date in any material respect, Purchaser may elect, as the sole and exclusive remedy of Purchaser, to (i) terminate this Agreement and receive the Deposit and Interest accrued thereon from the Escrow Agent in accordance with the terms and provisions of Section 3.2 hereof, and in such event, Seller shall not have any liability whatsoever to Purchaser hereunder other than with respect to the Surviving Termination Obligations or (ii) enforce specific performance of Seller's obligations under this Agreement, provided that any action for specific performance shall be commenced within one hundred twenty (120) days after the Scheduled Closing Date. Notwithstanding the foregoing, from and after the Closing, nothing contained in this Section 13.1 shall limit Purchaser's remedies at law or in equity as to the Surviving Termination Obligations.

13.1.2        Notwithstanding the foregoing, if this Agreement shall be terminated by Purchaser under this Section 13.1 as a result of Seller's willful default, Seller shall reimburse Purchaser for all of its reasonable out-of-pocket legal and diligence costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, provided that in no event shall Seller's reimbursement obligation exceed $25,000.00.

13.2        Default by Purchaser. If Purchaser shall default in the payment of the Purchase Price or in the performance of its obligations to be performed on the Scheduled Closing Date in any material respect, Purchaser and Seller agree it would be impractical and extremely difficult to fix the damages which Seller may suffer. Therefore, Purchaser and Seller hereby agree a reasonable estimate of the total net detriment Seller would suffer in the event Purchaser defaults and fails to complete the purchase of the Property is and shall be, as Seller's sole and exclusive remedy (whether at law or in equity), a sum equal to the Deposit and Interest. Upon such default by Purchaser and failure to close as required hereunder, Seller shall have the right to receive the Deposit and Interest from the Escrow Agent, in accordance with the terms and provisions of Section 3.2 hereof, as its sole and exclusive remedy, and thereupon, this Agreement shall terminate, and neither Seller nor Purchaser shall have any further rights or obligations hereunder except with respect to the Surviving Termination Obligations. THE AMOUNT OF THE DEPOSIT AND INTEREST SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR PURCHASER'S DEFAULT AND FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREBY EXPRESSLY WAIVED BY SELLER.

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ARTICLE XIV 

BROKERS 

14.1  Brokerage Indemnity.

14.1.1        Seller and Purchaser each represents and warrants to the other that it has not dealt or negotiated with any broker in connection with the sale of the Property as provided by this Agreement other than Cushman and Wakefield Realty of Manhattan, LLC (the "Broker").

14.1.2        Purchaser shall indemnify, defend and hold harmless Seller, its affiliates, and its and their partners, members, trustees, advisors, officers, and directors, against all losses, damages, costs, expenses (including reasonable fees and expenses of attorneys), causes of action, suits or judgments of any nature arising out of any claim, demand or liability to or asserted by any broker, agent or finder, licensed or otherwise, claiming to have dealt with Purchaser in connection with the transactions contemplated by this Agreement other than the Broker.

14.1.3        Seller shall indemnify, defend and hold harmless Purchaser and its affiliates, and its and their partners, members, trustees, advisors, officers and directors, against all losses, damages, costs, expenses (including reasonable fees and expenses of attorneys), causes of action, suits or judgments of any nature arising out of any claim, demand or liability to or asserted (i) by the Broker in connection with the transactions contemplated by this Agreement and (ii) by any broker, agent or finder, licensed or otherwise, claiming to have dealt with Seller in connection with the transactions contemplated by this Agreement other than the Broker.

14.1.4        Seller shall pay the Broker in connection with the consummation of the transactions contemplated by this Agreement pursuant to a separate agreement between Seller and Broker. The provisions of this Article XV shall survive the Closing and/or termination of this Agreement.

ARTICLE XV 

PUBLICATION AND CONFIDENTIALITY 

15.1        Publication. Purchaser and Seller acknowledge that upon execution of this Agreement and at Closing, the parties shall issue a press release in form and substance reasonably agreed to by the parties hereto; provided nothing herein shall restrict either party from issuing a press release to the extent required by law or requirements of the Securities and Exchange Commission. In addition, Purchaser and Seller shall consult with each other prior to making any public statements with respect to this Agreement and the transactions contemplated hereby, and except as otherwise may be required by law or regulation, or as Seller has customarily disclosed to its shareholders, or as otherwise set forth in this Section 15.1, Purchaser and Seller shall not make any public statements, including, without limitation, any press releases, with respect to this Agreement and the transactions contemplated hereby, without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed.

 

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15.2        Confidentiality. Purchaser shall not disclose the terms of this Agreement or the transactions contemplated hereby or any non-public information received in connection therewith to any third party, except, Purchaser's lawyers, investors, consultants, accountants, mortgage brokers, and lenders, all actual or prospective, and affiliates who are instructed to keep such information confidential in accordance with the terms hereof who need to know such terms or are otherwise compelled by law or judicial mandate.

ARTICLE XVI 

RESERVED 

ARTICLE XVII 

MISCELLANEOUS 

17.1        Notices.  Any and all notices, requests, demands or other communications hereunder shall be given in writing and by hand delivery, by electronic delivery (portable document format) (with confirmation of electronic mail by electronic receipt or reply email), by overnight courier, or by registered or certified mail, return receipt requested, first class postage prepaid addressed as follows (or to such new address as the addressee of such a communication may have notified the sender thereof):

	 	
To Seller:

	 	 	 
	 	 	
The Dime Savings Bank of Williamsburgh

	 	 	209 Havemeyer Street
	 	 	
Brooklyn, New York 11211

	 	 	
Attention: Michael Pucella

	 	 	
Email: mpucella@dime.com

	 	 	 
	 	
With a copy to:

	 	 	 
	 	 	
Skadden, Arps, Slate, Meagher & Flom LLP 

	 	 	Four Times Square
	 	 	
New York, New York 10036

	 	 	
Attention: Marco P. Caffuzzi, Esq.

	 	 	
Email: marco.caffuzzi@skadden.com

 

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To Purchaser:

	 	 	 
	 	 	
Tavros Capital Partners USA LLC

	 	 	
27 W 24th St., Suite 702

	 	 	
New York, NY 10010

	 	 	
Attention: Nicholas Silver

	 	 	
Email: nsilvers@tavroscapital.com

	 	 	 
	 	
With a copy to:

	 	 	 
	 	 	
Szenberg & Okun PLLC

	 	 	
152 West 57th Street, 22nd Fl 

	 	 	New York, NY 10019
	 	 	
Attention: Jacob Okun, Esq.

	 	 	
Email: jacob.okun@szenok.com

	 	 	 
	 	
To Escrow Agent:

	 	 	 
	 	 	
Title Associates, a division of Stewart Title Insurance Company 

	 	 	825 Third Avenue, 30th Floor
	 	 	
New York, NY 10022

	 	 	
Attn: Jack Foley

	 	 	
Email: jfoley@titleassociates.com

Purchaser's counsel may give any notices or other communications hereunder on behalf of Purchaser, and Seller's counsel may give any notices or other communications hereunder on behalf of Seller, and each notice so given shall have the same force and effect as if sent by such party. Any notice hereunder shall be deemed given on the date of receipt by the addressee or the date receipt would have been effectuated if delivery were not refused. The inability to deliver a notice because of a changed address of which proper notice was not given shall be deemed a refusal of such notice.

17.2        Governing Law; Venue.

17.2.1    This Agreement was negotiated in the State of New York and was executed and delivered by Seller and Purchaser in the State of New York, which State the parties agree has a substantial relationship to the parties and to the underlying transactions embodied hereby, and in all respects, including, without limiting the generality of the foregoing, matters of construction, validity, enforcement and performance, this Agreement and the obligations arising hereunder shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed wholly within such State, without giving effect to the principles of conflicts of law of such jurisdiction. To the fullest extent permitted by law, the parties hereby unconditionally and irrevocably waive and release any claim that the law of any other jurisdiction governs this Agreement, and this Agreement shall be governed and construed in accordance with the laws of the State of New York as aforesaid pursuant to Section 5-1401 of the New York General Obligations Law.

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17.2.2       To the maximum extent permitted by applicable law, any legal suit, action or proceeding against any of the parties hereto arising out of or relating to this Agreement shall be instituted in any federal or state court in New York, New York, pursuant to Section 5- 1402 of the New York General Obligations Law, and each party hereby irrevocably submits to the exclusive jurisdiction of any such court in any such suit, action or proceeding. Each party hereby agrees to venue in such courts and hereby waives, to the fullest extent permitted by law, any claim that any such action or proceeding was brought in an inconvenient forum.

17.3        Headings. The captions and headings herein are for convenience and reference only and in no way define or limit the scope or content of this Agreement or in any way affect its provisions.

17.4        Business Days. If any date herein set forth for the performance of any obligations of Seller or Purchaser or for the delivery of any instrument or notice as herein provided should be on a Saturday, Sunday or legal holiday, the compliance with such obligations or delivery shall be deemed acceptable on the next Business Day following such Saturday, Sunday or legal holiday. As used herein, (i) the term "legal holiday" means any state or Federal holiday for which financial institutions or post offices are generally closed in the State of New York and (ii) the term "Business Day" means any weekday of Monday through Friday which is not a legal holiday.

17.5        Counterpart Copies. This Agreement may be executed in two or more counterpart copies, all of which counterparts shall have the same force and effect as if all parties hereto had executed a single copy of this Agreement.

17.6        Binding Effect. This Agreement shall not become a binding obligation upon Seller or Purchaser unless and until the same has been fully executed by both Purchaser and Seller and a fully executed counterpart has been delivered by Seller to Purchaser

17.7        Successors and Assigns.  This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

17.8        Assignment.  This Agreement may not be assigned by Purchaser and any assignment or attempted assignment by Purchaser shall constitute a default hereunder and shall be deemed null and void and of no force or effect. A transfer of the controlling direct or indirect ownership interests of Purchaser shall constitute an assignment of this Agreement. Notwithstanding the foregoing, this Agreement may be assigned by Purchaser without Seller's consent to any entity (i) in which Purchaser, Arel Capital or any of their principals own an economic interest and (ii) which is controlled by Purchaser, Arel Capital or any of their principals. A copy of any assignment of this Agreement permitted hereunder, together with an agreement of the assignee assuming all of the terms and conditions of this Agreement to be performed by Purchaser in form reasonably satisfactory to counsel for Seller, shall be delivered to the attorneys for Seller prior to the Closing, and in any event no such assignment shall relieve Purchaser from its obligations under this Agreement nor result in a delay in the Closing. In the event Purchaser assigns this Agreement as permitted hereunder, all representations and warranties and covenants and obligations of Purchaser hereunder shall apply with equal force to such assignee. For purposes of this Section 17.8, the term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting stock, by contract or otherwise.

 

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17.9        Interpretation.  This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Seller and Purchaser have contributed substantially and materially to the preparation of this Agreement.

17.10     Entire Agreement.  This Agreement and the Exhibits and Schedules attached hereto contain the final and entire agreement between the parties hereto with respect to the sale and purchase of the Property and are intended to be an integration of all prior negotiations and understandings. Purchaser, Seller and their respective agents shall not be bound by any terms, conditions, statements, warranties or representations, oral or written, not contained herein. No change or modifications to this Agreement shall be valid unless the same is in writing and signed by the parties hereto. Each party reserves the right to waive any of the terms or conditions of this Agreement which are for their respective benefit and to consummate the transactions contemplated by this Agreement in accordance with the terms and conditions of this Agreement which have not been so waived. Any such waiver must be in writing and signed by the party benefited by the applicable provision.

17.11     Severability.  If any one or more of the provisions hereof shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein, unless and to the extent that the invalidation of any such term or provision materially alters the intent of the parties hereto.

17.12     Survival. Except for those provisions of this Agreement which expressly provide that any obligation, representation, warranty or covenant contained therein shall survive the Closing or the termination of this Agreement (collectively, the "Surviving Termination Obligations"), the provisions of this Agreement and the representations and warranties herein shall not survive after the conveyance of title and payment of the Balance of the Purchase Price.

17.13     Exhibits.  Each of the Exhibits and Schedules attached hereto are incorporated herein by reference.

17.14     Limitation of Liability. The obligations of Seller and Purchaser are intended to be binding only on Seller and Purchaser and each of such party's assets (including, with respect to Purchaser, the Deposit), and shall not be personally binding upon, nor shall any resort be had to, any of the members, partners, officers, directors, shareholders, advisors, trustees, agents, or employees of Seller or Purchaser, or any of their respective affiliates or any of their respective properties.

17.15     Prevailing Party.  Should either party employ an attorney to enforce any of the provisions hereof (whether before or after Closing, and including any claims or actions involving amounts held in escrow and any claims for a breach of representation), the nonprevailing party in any final judgment agrees to pay the other party's reasonable attorneys' fees and expenses in or out of litigation and, if in litigation, trial, appellate, bankruptcy or other proceedings, such fees and expenses expended or incurred in connection therewith, as determined by a court of competent jurisdiction. The provisions of this Section 17.15 shall survive Closing and/or any termination of this Agreement.

 

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17.16     Real Estate Reporting Person. Escrow Agent is hereby designated the "real estate reporting person" for purposes of Section 6045 of the Code and Treasury Regulation 1.6045-4 and any instructions or settlement statement prepared by Escrow Agent shall so provide. Upon the consummation of the transaction contemplated by this Agreement, Escrow Agent shall file a Form 1099 information return and send the statement to Seller as required under the aforementioned statute and regulation. Seller and Purchaser shall reasonably cooperate with Escrow Agent in connection with Escrow Agent's duties as real estate reporting person.

17.17     No Recording. Except in connection with an action for specific performance, neither this Agreement nor any memorandum or short form hereof shall be recorded or filed in any public land or other public records of any jurisdiction, by either party and any attempt to do so may be treated by the other party as a breach of this Agreement.

17.18     No Other Parties. This Agreement is not intended, nor shall it be construed, to confer upon any person or entity, except the parties hereto and their respective heirs, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

17.19     Waiver of Trial by Jury.  The respective parties hereto shall and hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Agreement, or for the enforcement of any remedy under any statute, emergency or otherwise.

17.20     Cooperation.   (a)  Seller shall have the right to structure the sale of the Property as a forward or reverse exchange thereof for other real property of a like-kind to be designated by Seller (including the ability to assign this Agreement to an entity established in order to effectuate such exchange), with the result that the exchange shall qualify for non-recognition of gain or loss under Section 1031 of the Internal Revenue Code of 1986, as amended, in which case Purchaser shall execute any and all documents reasonably necessary to effect such exchange, as reasonably approved by Purchaser's counsel, and otherwise assist and cooperate with Seller in effecting such exchange; provided that: (i) any costs and expenses incurred by Purchaser as a result of structuring such transaction as an exchange, as opposed to an outright sale, shall be borne by Seller; (ii) Seller shall indemnify and hold harmless Purchaser from and against any and all liabilities, costs, damages, claims or demands arising from the cooperation of Purchaser in effecting the exchange contemplated hereby; and (iii) such exchange shall not result in any delay in closing the transaction without Purchaser's prior written consent. Seller, in its discretion, may adjourn the Closing Date for up to thirty (30) days in the aggregate, in order to effect such exchange.

 

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(b)         Purchaser shall have the right to structure the sale of the Property as a forward or reverse exchange thereof for other real property of a like-kind to be designated by Purchaser (including the ability to assign this Agreement to an entity established in order to effectuate such exchange), with the result that the exchange shall qualify for non-recognition of gain or loss under Section 1031 of the Internal Revenue Code of 1986, as amended, in which case Seller shall execute any and all documents reasonably necessary to effect such exchange, as reasonably approved by Seller's counsel, and otherwise assist and cooperate with Purchaser in effecting such exchange; provided that: (i) any costs and expenses incurred by Seller as a result of structuring such transaction as an exchange, as opposed to an outright sale, shall be borne by Purchaser; (ii) Purchaser shall indemnify and hold harmless Seller from and against any and all liabilities, costs, damages, claims or demands arising from the cooperation of Seller in effecting the exchange contemplated hereby; and (iii) such exchange shall not result in any delay in closing the transaction without Seller's prior written consent.

[SIGNATURE PAGE TO FOLLOW] 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

	 	
SELLER:

	 	 	 
	 	
THE DIME SAVINGS BANK OF WILLIAMSBURGH

	 	 	 
	 	
By:

	
/s/ Michael P. Devine

	 	 	
Name: Michael P. Devine

	 	 	
Title: Vice Chairman & President

 

Signature Page – Purchase and Sale Agreement

 

	 	
PURCHASER:

	 	 	 
	 	
TAVROS CAPITAL PARTNERS USA LLC

	 	 	 
	 	
By:

	
/s/ Nicholas Silvers

	 	
Name:  

	
Nicholas Silvers

	 	
Title:

	Authorized Signatory

 

Signature Page – Purchase and Sale Agreement

 

The Escrow Agent hereby executes this Agreement for the sole purpose of acknowledging receipt of the Deposit and its responsibilities hereunder and to evidence its consent to serve as Escrow Agent in accordance with the terms of this Agreement.

	 	
ESCROW AGENT:

	 	 	 
	 	
STEWART TITLE INSURANCE COMPANY

	 	 	 
	 	
By:

	
/s/ Kristin V. Bellouny

	 	
Name:  

	
Kristin V. Bellouny

	 	
Title:

	
VP & Senior Underwriting Counsel

 

Signature Page – Purchase and Sale Agreement

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