Document:

hme10q1q2009ex10-2.htm

    Exhibit
10.2

    

    

    

    EQUITY
GRANTS FOR NON-EMPLOYEE DIRECTORS

    Adopted
by the Board of Directors on May 5, 2009

    

    

    On May
11, 2009, each of the non-employee directors will be granted 6,000 options to
purchase Common Stock of Home Properties, Inc. (the
“Company”).   The exercise price for the options to be issued
will be the closing price of a share of the Company’s Common Stock as reflected
on the New York Stock Exchange on May 11, 2009 (the “Closing
Price”).  The options will be valued using the Black-Scholes
formula.

    

    On May
11, 2009, each of the non-employee directors also will be granted shares of the
Company’s restricted stock.  The number of shares of restricted stock
to be granted will be calculated as follows:  The value of the options
granted on May 11, 2009 will be subtracted from $84,000 to arrive at a
restricted stock value.  That value will be divided by the Closing
Price to determine the number of shares of restricted stock to be
granted.

    

    The
options and the restricted stock will be granted pursuant to the terms of the
Company’s 2008 Stock Benefit Plan, as amended.

    

    The
options will vest 20% on each of the first five grant date anniversaries (May 11
of 2010, 2011, 2012, 2013 and 2014) and terminate 10 years after the grant
date.  The restrictions on the restricted stock will lapse on the
fifth anniversary of the grant date.EXHIBIT
10.1

EXECUTION VERSION

	
 

	
 

	
PURCHASE
 AND SALE AGREEMENT

	
 

	
Between

	
 

	
1334
 YORK AVENUE L.P.,

	
 

	
SELLER.   

	
 

	
 

	
 

	
and

	
 

	
SOTHEBY’S

	
 

	
PURCHASER.

	
 

	
 

	
 

	
Premises:

	
 

	
1334
 York Avenue

	
New
 York, New York

	
 

	
January
 [__], 2008

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	

	
 

	
1.

	
 

	
DEFINITIONS

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
2.

	
 

	
PURCHASE AND SALE

	
 

	
4

	
 

	
 

	
 

	
 

	
 

	
3.

	
 

	
ACCESS

	
 

	
5

	
 

	
 

	
 

	
 

	
 

	
4.

	
 

	
PURCHASE PRICE AND DEPOSIT

	
 

	
6

	
 

	
 

	
 

	
 

	
 

	
5.

	
 

	
STATUS OF TITLE

	
 

	
7

	
 

	
 

	
 

	
 

	
 

	
6.

	
 

	
TITLE INSURANCE; LIENS

	
 

	
8

	
 

	
 

	
 

	
 

	
 

	
7.

	
 

	
APPORTIONMENTS

	
 

	
10

	
 

	
 

	
 

	
 

	
 

	
8.

	
 

	
INTENTIONALLY OMITTED

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
9.

	
 

	
COVENANTS OF SELLER AND PURCHASER

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
10.

	
 

	
CONDITIONS TO CLOSING

	
 

	
13

	
 

	
 

	
 

	
 

	
 

	
11.

	
 

	
CONDITION OF THE PROPERTY; REPRESENTATIONS

	
 

	
15

	
 

	
 

	
 

	
 

	
 

	
12.

	
 

	
INTENTIONALLY OMITTED

	
 

	
22

	
 

	
 

	
 

	
 

	
 

	
13.

	
 

	
CASUALTY/CONDEMNATION

	
 

	
22

	
 

	
 

	
 

	
 

	
 

	
14.

	
 

	
BROKERS AND ADVISORS

	
 

	
23

	
 

	
 

	
 

	
 

	
 

	
15.

	
 

	
RESOLUTION OF PENDING DISPUTES

	
 

	
24

	
 

	
 

	
 

	
 

	
 

	
16.

	
 

	
TRANSFER TAXES AND TRANSACTION COSTS

	
 

	
25

	
 

	
 

	
 

	
 

	
 

	
17.

	
 

	
DELIVERIES TO BE MADE ON THE CLOSING DATE

	
 

	
26

	
 

	
 

	
 

	
 

	
 

	
18.

	
 

	
CLOSING DATE

	
 

	
28

	
 

	
 

	
 

	
 

	
 

	
19.

	
 

	
NOTICES

	
 

	
29

	
 

	
 

	
 

	
 

	
 

	
20.

	
 

	
DEFAULT BY PURCHASER OR SELLER; REMEDIES

	
 

	
31

	
 

	
 

	
 

	
 

	
 

	
21.

	
 

	
FIRPTA COMPLIANCE

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
22.

	
 

	
ENTIRE AGREEMENT

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
23.

	
 

	
AMENDMENTS

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
24.

	
 

	
WAIVER

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
25.

	
 

	
PARTIAL INVALIDITY

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
26.

	
 

	
SECTION HEADINGS

	
 

	
35

i

	
 

	
 

	
 

	
 

	
 

	
27.

	
 

	
GOVERNING LAW

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
28.

	
 

	
PARTIES; ASSIGNMENT AND RECORDING

	
 

	
36

	
 

	
 

	
 

	
 

	
 

	
29.

	
 

	
CONFIDENTIALITY AND PRESS RELEASES

	
 

	
36

	
 

	
 

	
 

	
 

	
 

	
30.

	
 

	
FURTHER ASSURANCES

	
 

	
37

	
 

	
 

	
 

	
 

	
 

	
31.

	
 

	
THIRD PARTY BENEFICIARY

	
 

	
38

	
 

	
 

	
 

	
 

	
 

	
32.

	
 

	
JURISDICTION AND SERVICE OF PROCESS

	
 

	
38

	
 

	
 

	
 

	
 

	
 

	
33.

	
 

	
WAIVER OF TRIAL BY JURY

	
 

	
38

	
 

	
 

	
 

	
 

	
 

	
34.

	
 

	
MISCELLANEOUS

	
 

	
38

	
 

	
 

	
 

	
 

	
 

	
35.

	
 

	
ATTORNEYS’ FEES

	
 

	
39

	
 

	
 

	
 

	
 

	
 

	
36.

	
 

	
INTENTIONALLY OMITTED

	
 

	
40

	
 

	
 

	
 

	
 

	
 

	
37.

	
 

	
EXCULPATION

	
 

	
40

	
 

	
 

	
 

	
 

	
 

	
38.

	
 

	
EXISTING FINANCING

	
 

	
41

Schedules and Exhibits

	
 
	
 

	
Schedule A
	
Description of Land

	
Schedule B
	
Certain Permitted Encumbrance

	
Schedule C
	
Loan Documents

	
Schedule D
	
Material Litigation

	
Schedule E
	
Non-Disparagement Parties

	
 
	
 

	
Exhibit 1
	
Deposit Wire Instructions

	
Exhibit 2
	
Form of Deed

	
Exhibit 3
	
Form of Bill of Sale

	
Exhibit 4
	
Form of FIRPTA Certificate

	
Exhibit 5
	
Form of Assignment of the Sotheby’s Lease and
 Sotheby’s Lease Guaranty

	
Exhibit 6
	
Form of Omnibus Assignment and Assumption

	
Exhibit 7
	
Form of Title Company Affidavit

	
Exhibit 8
	
Copy of Memo of Contract

	
Exhibit 9
	
Form of Stipulated Dismissal

	
Exhibit 10
	
Form of Stipulation of Discontinuance

	
Exhibit 11
	
Copy of Principal Guaranty

ii

	
Exhibit 12

	
Form of Mutual Release and Covenant Not to Sue

	
Exhibit 13

	
Copy of Security Agreement

	
Exhibit 14

	
Copy of COJ Escrow Agreement

	
Exhibit 15

	
Copy of Confessions of Judgment

	
Exhibit 16

	
Copy of Termination Escrow Agreement

	
Exhibit 17

	
Copy of Loan Agreement

iii

          THIS PURCHASE AND SALE AGREEMENT (this
“Agreement”)
made as of the [__] day of January, 2008 between 1334 YORK AVENUE, L.P., a Delaware limited partnership, having
an address c/o RFR Holding LLC, 390 Park Avenue New York, New York 10022 (“Seller”)
and SOTHEBY’S, a Delaware corporation, having an address at 1334 York Avenue,
New York, New York 10022 (“Purchaser”). 

WITNESSETH:

          WHEREAS, Seller is the owner and holder of
the fee simple estate in and to (i) that certain plot, piece and parcel of land
(the “Land”) known as 1334 York Avenue, New York, New York and more
particularly described in Schedule A hereto, and (ii) the building and
all other improvements (collectively, the “Building”) located on the
Land (the Building and the Land being sometimes referred to hereinafter,
collectively, as the “Premises”);

          WHEREAS, Sotheby’s, Inc., New York
corporation (“Tenant”), is the tenant under that certain Lease, dated
February 7, 2003, between Seller, as landlord, and Tenant, as tenant, with
respect to the Premises (the “Sotheby’s Lease”); and

          WHEREAS, Seller desires to sell the
Property (as hereinafter defined) to Purchaser, and Purchaser desires to
purchase the Property from Seller, upon and subject to the terms and conditions
of this Agreement.

          NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements herein contained, the parties
hereto covenant and agree as follows:

          1.
DEFINITIONS.

	
 

	
 

	
AAA

	
Section 15(i)

	
Action

	
Section 15(a)(ii)

	
Adjoining Land

	
Section 2(a)

	
Accelerated Closing Notice

	
Section 18(b)

	
Acceleration Revocation

	
Section 18(b)

	
Agreement

	
Preamble

	
Appeal

	
Section 15(a)(iii)

	
Appellate Division

	
Section 15(a)(iii)

	
Apportionment Date

	
Section 7(a)

	
Appurtenances

	
Section 2(a)

	
Arbitration

	
Section 15(a)(i)

	
Arbitration Termination
 Documents

	
Section 15(d)

	
Arbitrator

	
Section 20(g)

	
Asbestos

	
Section 11(g)

1

	
Assumed Loan Liabilities

	
Section 38(f)(i)(x)

	
Assumption Costs

	
Section 38(b)(iii)(1)

	
Broker

	
Section 14(a)

	
Building

	
Recitals

	
business day

	
Section 4(c)

	
Cap

	
Section 11(f)

	
Casualty

	
Section 13(a)

	
Closing

	
Section 18(a)

	
Closing Conditions

	
Section 10(b)

	
Closing Date

	
Section 18(a)

	
COJ Escrow Agreement

	
Section 15(d)

	
Confessions of Judgment

	
Section 15(d)

	
Consent Outside Date

	
Section 38(e)

	
Controlled By

	
Section 28(b)(ii)

	
Consent Requirements

	
Section 38(b)(ii)

	
Controlled Affiliate

	
Section 28(b)

	
Continuation

	
Section 6(b)

	
Damages

	
Section 11(c)

	
Default Rate

	
Section 7(f)

	
Defeasance Agent

	
Section 38(f)(ii)

	
Defeasance Costs

	
Section 38(f)(ii)

	
Defeasance Election Notice

	
Section 38(e)

	
Defeasance Escrow Agreement

	
Section 38(f)(ii)

	
Deposit

	
Section 4(a)

	
Disclosed Survey Items

	
Section 5(a)

	
Discontinuance

	
Section 15(c)(ii)

	
Dismissal

	
Section 15(c)(i)

	
Diligence Party

	
Section 11(d)

	
Enforcement Costs

	
Section 11(c)

	
Environmental Laws

	
Section 11(g)

	
ERISA

	
Section 11(e)

	
Existing Financing

	
Section 38(a)

	
Existing Mortgage

	
Section 38(e)(iv)

	
FATCO

	
Section 6(a)

2

	
 

	
 

	
Final Closing Statement

	
Section 7(e)

	
Fuchs

	
Section 11(c)(ix)

	
FIRPTA

	
Section 21

	
Hazardous Materials

	
Section 11(g)

	
Initial Consent Request

	
Section 38(b)(i)

	
Interest

	
Section 20(e)

	
Land

	
Recitals

	
Lender

	
Section 38(a)

	
Lender’s Consent

	
Section 38(a)

	
Lender Reserves and Escrows

	
Section 38(g)(vi)

	
Legal Proceedings

	
Section 15(a)

	
Liens

	
Section 6(d)

	
Limitation Period

	
Section 11(c)

	
Limited Cure Items

	
Section 6(d)

	
Loan Documents

	
Section 38(a)

	
Lost Financing Costs

	
Section 18(b)

	
Lost Financing Cost Summary

	
Section 18(b)

	
No-Fault Termination

	
Section 20(h)

	
Non-Disparagment Parties

	
Section 29(c)

	
Notices

	
Section 19

	
PCBs

	
Section 11(g)

	
Permitted Encumbrances

	
Section 5

	
Personalty

	
Section 2(a)

	
Preliminary Closing Statement

	
Section 7(e)

	
Premises

	
Recitals

	
Principal Guaranty

	
Section 28(b)

	
Proceeding

	
Section 11(c)

	
Property

	
Section 2(a)

	
Purchase Price

	
Section 4(a)

	
Purchaser

	
Preamble

	
Purchaser Affiliates

	
Section 37(b)

	
Purchaser Confidentiality Parties

	
Section 29(a)

	
Purchaser Defeasance Cost Cap

	
Section 38(g)(iv)

	
Purchaser Knowledge Individual

	
Section 11(d)

	
Recovery Amounts

	
Section 11(d)

3

	
 

	
 

	
Recourse Rights

	
Section 37(a)

	
Release

	
Section 15(c)(iii)

	
Report

	
Section 6(a)

	
Representations

	
Section 11(c)

	
Right of First Offer

	
Section 2(c)

	
Royal

	
Section 6(a)

	
Rosen

	
Section 11(c)(ix)

	
Scheduled Closing Date

	
Section 18(a)

	
Security Agreement

	
Section 4(a)(i)

	
Seller

	
Preamble

	
Seller’s Affiliates

	
Section 37(a)

	
Seller’s Closing Conditions

	
Section 10(a)

	
Seller Knowledge Individual

	
Section 11(c)

	
Seller Parties

	
Section 11(a)

	
Seller Principals

	
Section 11(c)(ix)

	
Seller’s Title Affidavit

	
Section 17(a)(viii)

	
Servicer

	
Section 38(a)

	
Sotheby’s Lease Guaranty

	
Section 2(a)

	
Sotheby’s Lease

	
Recitals

	
Survey

	
Section 5(a)

	
Supreme Court

	
Section 15(ii)

	
Taking

	
Section 13(a)

	
Tenant

	
Recitals

	
Tenant Claims

	
Section 15(a)

	
Title Company

	
Section 6(a)

	
Title Objections

	
Section 6(b)

	
Transfer Taxes

	
Section 16(a)

	
Transfer Tax Laws

	
Section 16(a)

	
UCC-1s

	
Section 4(a)(i)

	
Violations

	
Section 6(e)

          2.
PURCHASE AND SALE.

               (a)
Seller shall sell, assign and convey to Purchaser, and Purchaser shall purchase
and acquire from Seller, subject to the terms and conditions of this Agreement,
(i) the Premises; (ii) the fixtures, furnishings, furniture, equipment,
machinery, inventory and appliances now owned or hereafter acquired by Seller
and contained in or on, and used in connection with, the ownership,
maintenance, use, occupancy and operation of the Premises

4

(collectively, the “Personalty”); (iii) any
easements, rights of way, privileges, appurtenances, strips, gores and other
rights pertaining to the Premises, including, without limitation, any existing
development rights (collectively, the “Appurtenances”); (iv) all of
Seller’s right, title and interest, if any, in and to all land in the bed of
any street, road, avenue, open or proposed, public or private, in front of or
adjoining the Premises or any portion thereof, and any award to be made in lieu
thereof and in and to any unpaid award for damage to the Premises by reasons of
change of grade of any street occurring after the date of execution and
delivery of this Agreement (collectively, the “Adjoining Land”); and (v)
all of Seller’s right, title and interest in, to and under the Sotheby’s Lease
(including, without limitation, that certain Guaranty of Lease, dated as of
February 6, 2003, delivered by Sotheby’s Holdings, Inc., in connection
therewith (the “Sotheby’s Lease Guaranty”) and any subordination,
nondisturbance and attornment agreements relating thereto). The Premises,
together with the Personalty, the Appurtenances, the Adjoining Land, the
Sotheby’s Lease and the Sotheby’s Lease Guaranty, are sometimes referred to
hereinafter, collectively, as the “Property.”

               (b)
The parties hereto acknowledge and agree that the value of the Personalty is de
minimis and that no part of the Purchase Price is allocable thereto.
Although it is not anticipated that any sales tax shall be due and payable,
Purchaser agrees that Purchaser shall be responsible for the payment of any and
all State of New York and City of New York sales taxes due and payable in
connection with the conveyance of the Personalty to Purchaser hereunder under
any applicable laws of the State of New York or City of New York and, in
connection therewith, if either party receives notice from the State or City of
New York requiring the filing of any sales tax returns, Purchaser shall be
responsible for the filing of all such tax returns and, to the extent required
by applicable law, Seller will, following request by Purchaser, promptly join
in the execution and delivery of any such tax returns. The terms of this Subsection
(b) shall survive Closing (as defined below).

               (c)
Seller, and Tenant (by evidence of Tenant’s signature to this Agreement),
hereby mutually acknowledge, agree and confirm that the right of first offer in
favor of Tenant provided for in Article 23 of the Sotheby’s Lease is not
applicable to this Agreement or the prospective sale of the Premises to
Purchaser pursuant hereto. The foregoing is not intended and shall not be
deemed to (i) amend or modify, or to constitute a waiver by Seller or Tenant
of, Article 23 of the Sotheby’s Lease, (ii) apply to any transactions other
than the purchase and sale of the Property pursuant to and in accordance with
the terms of this Agreement, or (iii) other than as may be expressly provided
for herein, waive, modify or otherwise affect Seller’s or Tenant’s respective claims,
defenses, rights and/or remedies in respect of the Arbitration, the Action or
the Appeal or any matters heretofore or hereafter relating thereto.

          3.
ACCESS.

               (a)
Purchaser agrees that it shall not have any so-called “due diligence
contingency” hereunder.

               (b)
Seller shall make available to Purchaser and its representatives, at Seller’s
offices at 390 Park Avenue New York, New York, to the extent in Seller’s
possession or control, (i) Seller’s books and records relating to the ownership
and operation of the Property

5

(but excluding Seller’s income tax records, its
corporate records with its members or partners and any records relating to
Seller’s selling negotiations or third party appraisals or any internal documents
relating to the value of the Property), and (ii) all records relating to the
Existing Financing, including, but not limited to, all Loan Documents (and
amendments or supplements thereto), and any material written correspondence and
notices received by or on behalf of Lender or Servicer and/or given on behalf
of Seller to Lender or Servicer.

          4.
PURCHASE PRICE AND DEPOSIT.

               (a)
The aggregate purchase price to be paid by Purchaser to Seller for the Property
(the “Purchase Price”) is THREE HUNDRED SEVENTY MILLION DOLLARS
($370,000,000.00), subject to apportionment as provided in Section 7
hereof, payable as follows:

                    (i)
Simultaneous with the mutual execution and delivery by Seller and Purchaser of
this Agreement, together with, as applicable, the following fully executed and,
if applicable, acknowledged, documents: (A) the Principal Guaranty, (B) the
Arbitration Termination Documents, (C) the Termination Escrow Agreement, (D)
the Confessions of Judgment, (E) the COJ Escrow Agreement, (F) a Memo of
Contract with respect to this Agreement (a copy of which is attached hereto as Exhibit
8), (G) that certain Security Agreement (as same may be modified, amended
or restated from time to time, the “Security Agreement”), a copy
of which is attached hereto as Exhibit 13 and (H) the UCC-1s (as defined
in the Security Agreement. Purchaser shall deliver to Seller by wire transfer
in immediately available federal funds the amount of FIFTY MILLION DOLLARS
($50,000,000.00) in accordance with the wire instructions set forth on Exhibit
1 (such deposit which is made pursuant to this Section 4(a)(i),
the “Deposit”);

                    (ii)
Upon the Closing, Seller shall be entitled to retain the Deposit, and Purchaser
shall deliver the balance of the Purchase Price, said balance to be comprised
of the Purchase Price less (x) the Deposit, and (y) if the
Existing Financing (as defined below) shall be assumed by Purchaser pursuant to
Article 38(f) hereof, the Assumed Loan Liabilities (as hereinafter
defined).

               (b)
All monies payable by Purchaser under this Agreement, unless otherwise
specified in this Agreement or directed by Seller, shall be paid by Purchaser
causing such monies to be wire transferred in immediately available federal
funds for credit to the Title Company (as defined below) at such bank account
or accounts, and divided into such amounts as may be reasonably required to
consummate the transactions contemplated by this Agreement.

               (c)
As used in this Agreement, the term “business day” shall mean every day other
than Saturdays, Sundays, all days observed by the federal or New York State
government as legal holidays and all days on which commercial banks in New York
State are required by law to be closed. Any reference in this Agreement to a
“day” or a number of “days” (other than references to a “business day” or
“business days”) shall mean a calendar day or calendar days. If the last day
upon which performance hereunder would otherwise be required or permitted is
not a business day, then the time for such performance shall be automatically
extended to the next day that is a business day.

6

          5.
STATUS OF TITLE.

          Subject to the terms and
provisions of this Agreement, Seller’s interest in the Premises shall be sold,
assigned, and conveyed by Seller to Purchaser, and Purchaser shall accept and
assume same, subject only to the following “Permitted Encumbrances:”

               (a)
the state of facts disclosed (the “Disclosed Survey Items”) on the
survey performed by Earl B. Lovell-S.P. Belcher, Inc., dated May 17, 2001 and
last updated by visual examination on November 15, 2007 by Fehringer Surveying,
P.C. (the “Survey”), and any further state of facts which are not
Disclosed Survey Items that an accurate update of the Survey of the Premises
would disclose, unless such further state of facts is attributable to a
condition that was created or consented to by Seller subsequent to November 15,
2007 without the approval of Tenant.

               (b)
the standard printed exclusions contained in the ALTA form of owner’s title
policy currently in use in New York with Standard New York endorsement as same
may be modified in reliance upon Seller’s Title Affidavit (as hereinafter
defined);

               (c)
those specific items described on Schedule B hereto;

               (d)
property taxes, subject to proration in accordance with Section 7
hereof;

               (e)
any laws, rules, regulations, statutes, ordinances, orders or other legal
requirements affecting the Premises, including, without limitation, all zoning,
land use, building and environmental laws, rules, regulations, statutes,
ordinances, orders or other legal requirements, including landmark designations
and all zoning variance and special exceptions, if any;

               (f)
any public utility company rights, easements and franchises relating to
electricity, water, steam, gas, telephone, sewer or other service or the right
to use and maintain poles, lines, wires, cables, pipes, boxes and other
fixtures and facilities in, over, under and upon the Premises, provided that if
unrecorded the same neither (i) materially adversely affect the present use of
the Property or any material portion thereof, nor (ii) are first created or
affirmatively consented to by Seller (without the consent of Purchaser, as set
forth in subsection (m) below) on or after the date hereof;

               (g)
any installment not yet due and payable of assessments imposed after the date
hereof and affecting the Premises or any portion thereof;

               (h)
all Violations (as hereinafter defined) now or hereafter issued or noted;

               (i)
the rights of the Tenant under the Sotheby’s Lease, and subordinate interests
thereunder held by subtenants under any subleases, licenses or occupancy
agreements in effect at Closing and others claiming by, through or under such
subleases, licenses or occupancy agreement, and any non-disturbance agreements
and memorandum of lease relating to any of them;

7

               (j)
consents by Seller or any former owner of all or a portion of the Premises for
the erection of any structure or structures on, under or above any street or
streets on which the Premises may abut;

               (k)
possible encroachments and/or projections of stoop areas, roof cornices, window
trims, vent pipes, cellar doors, steps, columns and column bases, flue pipes,
signs, piers, lintels, window sills, fire escapes, satellite dishes, protective
netting, sidewalk sheds, ledges, fences, coping walls (including retaining
walls and yard walls), air conditioners and the like, if any, on, under, or
above any street or highway, the Premises or any adjoining property unless
attributable to a condition created or consented to by Seller subsequent to the
date hereof without the approval of Tenant;

               (l)
any lien or encumbrance (including, without limitation, any mechanics’ lien or
materialmen’s lien), the removal of which is the obligation of the Tenant under
the Sotheby’s Lease or which Tenant affirmatively created, consented to or
permitted; and

               (m)
any liens, encumbrances or other title exceptions expressly approved in writing
by Purchaser, or waived by Purchaser pursuant to and in accordance with the
terms of this Agreement.

          6.
TITLE INSURANCE;
LIENS.

               (a)
Purchaser acknowledges that it has received and reviewed that certain title
report having an effective date of December 25, 2007, designated Title No.
829281 (the “Report”) from Royal Abstract of New York LLC, as agent (“Royal”).
At Closing, Purchaser shall obtain no less than fifty percent (50%) of its
title insurance from First American Title Insurance Company of New York (“FATCO”)
(on a direct basis through Steven Napolitano) and the remainder from Royal and/or
such other reputable title insurance companies licensed in the State of New
York selected by Purchaser (collectively, the “Title Company”) with
respect to Purchaser’s acquisition of the Property. Royal (or such other Title
Company selected by Purchaser) shall act as lead insurer; it being agreed that
if FATCO, Royal or such other title insurer as may be selected by Purchaser is
unwilling to insure over any item that FATCO, Royal or one or more other
reputable title insurers is willing to insure without additional costs (unless
Seller agrees to pay such cost) or condition, Purchaser (and, subject to
requisite approvals, its mortgage lender, if any) shall obtain all title
insurance with respect to Purchaser’s acquisition of the Property and financing
related thereto from the insurers willing to so insure (it being further agreed
to if FATCO is among such willing insurers, at least fifty percent (50%) of the
purchased coverage shall be purchased from FATCO directly through Steven
Napolitano).

               (b)
Purchaser has directed Royal to furnish a copy of the Report to Seller.
Purchaser shall direct the Title Company to deliver a copy of any update or
continuation to the Report (each, a “Continuation”) to Seller
simultaneously with its delivery of the same to Purchaser. If exceptions to
title appear on any Continuation, which are not Permitted Encumbrances and are
unacceptable exceptions to Purchaser (“Title Objections”), Purchaser
shall notify Seller of such Title Objections within the earlier of (i) seven
(7) business days after Purchaser receives such Continuation, and (ii) the
Closing Date (as defined below). If and to the extent that Purchaser fails to
so notify Seller of any such Title Objections as described above,

8

such Title Objections shall be deemed accepted by
Purchaser and included as “Permitted Encumbrances”. If Purchaser timely
notifies Seller in writing of any such Title Objections, Seller, in Seller’s
sole discretion, shall have up to sixty (60) days, in the aggregate, from the
date Seller receives notice of such Title Objections to remove or cure such
exceptions (and, if necessary the Closing Date shall be extended accordingly).
Seller shall be deemed to have given notice to Purchaser that Seller refuses to
cure any unacceptable exceptions, which Seller may so do in its sole
discretion, unless Seller, within the sooner to occur of (x) ten (10) business
days after receipt of notice from Purchaser, or (y) one (1) business day prior
to Closing, shall notify Purchaser in writing that Seller will attempt to cure
such unacceptable exceptions. Subject to the terms of Section 6(d)
hereof, if Seller fails or refuses to cure said unacceptable exceptions within
the time period above provided, Purchaser may (A) terminate this Agreement
within ten (10) business days after Seller gives notice, or is deemed to have
given notice, that Seller refuses to cure such unacceptable exceptions and the
Deposit shall be returned to Purchaser, or (B) if Purchaser fails to so
terminate, Purchaser shall be deemed to have waived such exceptions and accept
title subject thereto, in which event there shall be no reduction in the
Purchase Price. In the event that Purchaser elects to terminate this Agreement
pursuant to the foregoing clause “(A)”, the terms of Section 20(h)
hereof shall control and govern.

               (c)
Purchaser shall not be entitled to object to, and shall be deemed to have
approved, any liens encumbrances or other title exceptions (and the same shall
be deemed to be Permitted Encumbrances) (A) over which any reputable national
title insurer is willing to directly insure (without additional cost to
Purchaser or where Seller pays such cost), (B) which will be extinguished upon
the transfer of the Property, or (C) which are the responsibility of the Tenant
(or others claiming by through or under the Tenant) under the terms of the
Sotheby’s Lease. Seller acknowledges that Purchaser shall be not deemed to have
accepted or consented to any items or other matters appearing in the Report
other than as set forth on Schedule B hereto.

               (d)
It is expressly understood that in no event shall Seller be required to bring
any action or institute any proceeding, or to otherwise incur any costs or
expenses in order to attempt to eliminate any Title Objections on the Closing
Date. Notwithstanding the foregoing or anything to the contrary set forth in
this Agreement, if, at the Closing, the Property is subject to any (i) mortgage
or mortgages (other than the Existing Mortgage, provided Purchaser shall assume
the same pursuant to terms of Section 38 hereof) affecting the Premises
or any portion thereof, or (ii) Title Objections that come of record on or
after December 25, 2007, which matters are not Permitted Encumbrances and are,
as to clause (ii) above, voluntarily or consensually made or entered into by
Seller or any Seller Parties (all of the foregoing, as to clauses (i)
and (ii) above, are collectively referred to as “Liens”), Seller
shall be obligated, at Seller’s expense, regardless of cost, to pay the same
and cause any related Lien to be discharged as a condition to Closing, it being
agreed that Seller may use any portion of the Purchase Price to pay and
discharge any such Liens. In addition to Liens (and not in limitation of
Seller’s obligations with respect thereto), in the event that at the Closing
all or any portion of Property is subject to any other liens encumbering the
Property (including judgments, lis pendens and federal, state and municipal tax
liens other than for real estate taxes payable by Tenant pursuant to the
Sotheby’s Lease) that do not constitute Permitted Exceptions which are in
liquidated amounts and which may be satisfied by the payment of money
(including the preparation or filing of appropriate satisfaction instruments in
connection therewith (collectively, “Limited Cure Items”), Seller shall
be obligated, at Seller’s sole cost and expense, to cause the same to be

9

paid, discharged and removed of record at or prior to
Closing; provided, however, in no event shall Seller be obligated to spend in
respect of Limited Cure Items in excess of $5,000,000, in the aggregate.

               (e)
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 Premises (any of the following,
collectively, “Violations”), or any condition or state of repair or
disrepair or other matter or thing, whether or not noted, which, if noted,
would result in a Violation being placed on the Property. Seller shall have no
duty to remove or repair any condition, matter or thing existing, whether or
not noted, which, if noted, would result in a Violation being placed on the
Premises. Seller shall have no duty to remove or repair any of the
aforementioned Violations, or other conditions, and Purchaser shall accept the
Premises subject to all such Violations, the existence of any conditions at the
Premises 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.

          7.
APPORTIONMENTS.

               (a)
The following shall be apportioned between Seller and Purchaser as of 11:59
p.m. on the day immediately preceding the Closing Date (the “Apportionment
Date”) on the basis of the actual number of days of the month which shall
have elapsed as of the Closing Date and based upon the actual number of days in
the month and a 365 day year:

                    (i)
subject to Section 7(b), prepaid rents, fixed rents and additional rents
payable pursuant to the Sotheby’s Lease (including, without limitation,
operating expense escalation payments, real estate tax escalation payments and
percentage rent, if any, payable under the Sotheby’s Lease);

                    (ii)
prepaid fees for licenses and other permits, if any, assigned to Purchaser at
the Closing;

                    (iii)
all real estate taxes (including business improvement district charges) on the
Property shall be prorated based on the actual current tax bill. If such tax
bill has not yet been received by the Apportionment Date, then Purchaser and
Seller shall estimate the real estate taxes based upon Purchaser’s and Seller’s
good faith estimate of the change in the amount of the previous year’s tax bill
and Purchaser and Seller shall after the Closing reprorate the real estate
taxes as soon as the actual current tax bill is available;

                    (iv)
all other operating expenses (if any) payable by Seller with respect to the
Property; and

                    (v)
all other operating income (if any) receivable by Seller with respect to the
Property.

          In
all cases, the apportionments under clauses (iii) and (iv) of this Section
7(a)

10

shall be subject to Tenant’s obligations under the
Sotheby’s Lease, such that to the extent any such items are payable directly to
a third party by Tenant pursuant to the terms of Sotheby’s Lease, rather than
by Seller, the same shall not be apportioned between Seller and Purchaser and
to the extent same have not been paid by Tenant, Purchaser shall look solely to
the Tenant for payment or reimbursement of same.

               (b)
(i) If as of the Closing Date, Tenant is in arrears on any amounts due and
payable to Seller as landlord under the Sotheby’s Lease, such amounts, together
with any interest and penalties due thereon pursuant to the Sotheby’s Lease,
shall be credited to Seller and shall increase the balance of the Purchase
Price, and Seller shall assign and convey to Purchaser upon Closing all of
Seller’s right, title and interest in and to any such arrears.

                    (ii)
If, as of the Closing Date, Tenant has paid to Seller any rents, pursuant to
the Sotheby’s Lease, which are attributable to periods which occur on or after
the Closing Date, whether as a one time payment or in installments (e.g. for
real property tax escalations), such amounts shall be retained by Seller and
shall be credited to Purchaser against the balance of the Purchase Price.

               (c)
Purchaser shall have no right to receive any rental insurance proceeds which
relate to the period prior to the Closing Date and, if any such proceeds are
delivered to Purchaser, Purchaser shall, within five (5) business days
following receipt thereof, pay the same to Seller. Seller shall have no right
to receive any rental insurance proceeds which relate to the period on or after
the Closing Date and, if any such proceeds are delivered to Seller, Seller
shall, within five (5) business days following receipt thereof, pay the same to
Purchaser.

               (d)
To the extent transferable, and subject to the terms of Section 38(f)
hereof, Seller shall be entitled to a credit with respect to the amount of
Lender Reserves and Escrows (as defined below).

               (e)
At or prior to the Closing, Seller and Purchaser and/or their respective agents
or designees will jointly prepare a preliminary closing statement (the “Preliminary
Closing Statement”) which will show the net amount due either to Seller or
to Purchaser as the result of the adjustments and prorations provided for in
this Agreement, and such net due amount will be added to or subtracted from the
cash balance of the Purchase Price to be paid to Seller at the Closing pursuant
to Section 4, as applicable. Not later than the six (6) month
anniversary of the Closing Date, Seller and Purchaser will jointly prepare a
final closing statement reasonably satisfactory to Seller and Purchaser in form
and substance (the “Final Closing Statement”) setting forth the final
determination of the adjustments and prorations provided for herein and setting
forth any items which are not capable of being determined at such time (and the
manner in which such items shall be determined and paid). The net amount due
Seller or Purchaser, if any, by reason of adjustments to the Preliminary Closing
Statement as shown in the Final Closing Statement, shall be paid in cash by the
party obligated therefor within seven (7) business days following that party’s
receipt of the approved Final Closing Statement. The adjustments, prorations
and determinations agreed to by Seller and Purchaser in the Final Closing
Statement shall be conclusive and binding on the parties hereto except for any
items which are not capable of being determined at the time the Final Closing
Statement is agreed to by Seller and Purchaser, which items shall be determined
and paid in the manner set forth in the

11

Final Closing Statement and except for other amounts
payable hereunder pursuant to provisions which survive the Closing. Prior to
and following the Closing Date, each party shall provide the other with such
information as the other shall reasonably request (including, without
limitation, access to the books, records, files, ledgers, information and data
with respect to the Property during normal business hours upon reasonable
advance notice) in order to make the preliminary and final adjustments and
prorations provided for herein.

               (f)
If any payment to be made after Closing pursuant to Section 7(e) shall
not be paid when due hereunder, the same shall bear interest (which shall be
paid together with the applicable payment hereunder) from the Closing Date (or
if later, the date due) until so paid at a rate per annum equal to the Prime
Rate (as such rate may vary from time to time) as reported in The Wall
Street Journal plus 5% (the “Default Rate”). To the extent a
payment provision in this Section 7 does not specify a period for
payment, then for purposes hereof such payment shall be due within five (5)
business days of the date such payment obligation is triggered.

               (g)
The provisions of this Section 7 shall survive the Closing.

          8.
INTENTIONALLY OMITTED.

          9.
COVENANTS OF SELLER AND PURCHASER.

               (a)
During the period from the date hereof until the Closing Date:

                    (i)
Seller shall cause the grantor under the Security Agreement to perform its
obligations thereunder.

                    (ii)
Seller, in its capacity as “Borrower” under the Loan Documents, shall not take
any action (or fail to take any action) which, with or without the benefit of
any notice or cure rights provided for under the Loan Documents, (x)
constitutes a material violation or breach by Seller of any of its affirmative
obligations or negative covenants under the Loan Documents, and (y) materially
and adversely affects (A) Purchaser’s assumption of the Existing Financing
pursuant to Section 38 hereof, (B) Purchaser’s rights and remedies under
this Agreement, (C) Seller’s obligations to convey, and/or Purchaser ability to
acquire the Property pursuant to and in accordance with the terms of this
Agreement, (D) the Property, or (E) Purchaser, provided, however, any breach by
Seller of this Section 9(a)(ii) which is directly attributable to the
acts or omissions of Tenant under the Sotheby’s Lease shall not be a default by
Seller of this Section 9(a)(ii).

                    (iii)
Seller shall not, without Purchaser’s prior written approval, in Purchaser’s
sole discretion, (x) amend, supplement, terminate, extend or otherwise modify
in any respect the Loan Documents or any of the terms or conditions of the
Existing Financing, or (y) request Lender’s consent to take any action that, if
consented to by Lender and taken by Seller, would constitute any matter
described in the foregoing Section 9(a)(ii)(y).

                    (iv)
Seller shall keep Purchaser reasonably apprised with respect to any material
developments relating to the status of the Existing Financing and shall,

12

within five (5) Business Days following written
request by Purchaser, provide to Purchaser a written update as to Seller’s
dealings (if any) with the Lender regarding the pursuit of Lender’s Consent. 

               (b)
During the period from the date hereof until the Closing Date:

                    (i)
Purchaser shall keep Seller reasonably apprised with respect to any material
developments relating to the Request Application and shall, within five (5)
Business Days following written request by Seller, provide to a Seller a
written update as to Purchaser’s dealings with the Lender regarding the pursuit
of Lender’s Consent.

                    (ii)
Each of Purchaser and (by its signature hereto) Tenant consents to, and will
not oppose, any motion by Seller to enlarge the time to perfect the appeal
pending in the Action (as defined below), filed prior to the Closing Date.

                    (iii)
Each of Purchaser and (by its signature hereto) Tenant, consents to, and will
not oppose, any motion by Seller to stay the Arbitration (as defined below)
pending the Closing contemplated hereby, unless and to the extent otherwise
permitted pursuant to the terms of Sections 20(d) and (h).

          10.
CONDITIONS TO CLOSING.

               (a)
Conditions to Obligations of Seller. The obligation of Seller to effect
the Closing shall be subject to the fulfillment (or written waiver by Seller)
at or prior to the Closing Date of the following conditions (collectively, “Seller’s
Closing Conditions”):

                    (i)
Representations and Warranties. The representations and warranties of
Purchaser contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of Closing Date as though made at and as
of the Closing Date. Notwithstanding the foregoing, if prior to Closing any of
Purchaser’s representations and warranties set forth in this Agreement,
although true and correct when made, become untrue or incorrect as a result of
the facts underlying such representations and warranties having changed for any
reason other than a breach by Purchaser of its obligations under this
Agreement, then in such event, Purchaser shall give Seller prompt written
notice thereof and Purchaser shall have reasonable opportunity to cure any such
breach prior to Closing, unless such breach, even if cured, would have a
material adverse effect upon (w) Seller’s rights and remedies under this
Agreement, (x) Purchaser’s obligations or ability to acquire, and/or Seller’s
ability to convey, the Property to Purchaser pursuant to and in accordance with
the terms of this Agreement, (y) the Property, or (z) Seller, in which case the
foregoing cure rights shall not apply. Nothing in this Section 10(b)(i)
is intended or shall be deemed to affect any of the Purchaser’s obligations
under Section 9(b) hereof.

                    (ii)
Performance of Obligations. Purchaser shall have in all material
respects performed all obligations required to be performed by it under this
Agreement on and prior to the Closing Date, including payment of the full
balance of the Purchase Price.

                    (iii)
Delivery of Documents. Each of the documents required

13

under the terms of this Agreement to be delivered by
Purchaser at Closing shall have been delivered as provided herein.

                    (iv)
Releases. If the Existing Financing is assumed by Purchaser at Closing
as contemplated under Section 38(c) hereof, Lender shall release any
presently existing Borrower Principals from all obligations and liability under
and with respect to the Existing Financing accruing from and after the Closing
Date, and the return to Seller of any letter of credit delivered in connection
with the Existing Financing by Seller or any affiliate of Seller (unless prior
to the Scheduled Closing Date Lender refuses to grant such release or return
such letters of credit and Seller agreed to consummate the Closing despite such
refusal); and

          The
foregoing conditions under this Section 10(a) are for the benefit of
Seller, and Seller may, in its sole discretion, waive any or all of such
conditions and close title under this Agreement without any increase in,
abatement of, or credit against, the Purchase Price.

               (b)
Conditions to Obligations of Purchaser. The obligations of Purchaser to
effect the Closing shall be subject to the fulfillment (or written waiver by
Purchaser) at or prior to the Closing Date of the following conditions
(together with Seller’s Closing Conditions, collectively, the “Closing
Conditions”):

                    (i)
Representations and Warranties. The representations and warranties of
Seller contained in this Agreement shall be true and correct in all material
respects as of the date hereof, and as of Closing Date as though made at and as
of the Closing Date. Notwithstanding the foregoing, (I) if prior to Closing any
of Seller’s representations and warranties set forth in this Agreement,
although true and correct when made, become untrue or incorrect as a result of
the facts underlying such representations and warranties having changed for any
reason other than a breach by Seller of its obligations under this Agreement,
then in such event, Seller shall give Purchaser prompt written notice thereof
and Seller shall have reasonable opportunity to cure any such breach prior to
Closing, unless such breach, even if cured, would have a material adverse
effect upon (A) Purchaser’s assumption of the Existing Financing pursuant to Section
38 hereof, (B) Purchaser’s rights and remedies under this Agreement, (C)
Seller’s obligations or ability to convey, and/or Purchaser ability to acquire,
the Property to Purchaser pursuant to and in accordance with the terms of this
Agreement, (D) the Property, or (E) Purchaser, in which case the foregoing cure
rights shall not apply, and (II) provided that the same shall have been true
and correct when made, (x) the representations in Section 11(c)(vii) and
(xii) need not be true and correct as of the Closing Date, (y) the
representations in Section 11(c)(ix) need only be true and correct until
such time as all other conditions precedent to Purchaser’s obligation to effect
Closing pursuant to this Section 10(b) have been satisfied and (z) the
representations in Section 11(c)(xiii) need only be true and correct for
so long as the Security Agreement remains in effect. Nothing in this Section
10(b)(i) is intended or shall be deemed to affect any of the Seller’s
obligations under Section 9(a) hereof.

                    (ii)
Performance of Obligations. Seller shall have in all material respects
performed all obligations required to be performed by it under this Agreement
on and prior to the Closing Date.

                    (iii)
Delivery of Documents. Each of the documents required to

14

be delivered by Seller at Closing shall have been
delivered as provided herein.

          The
foregoing conditions under this Section 10(b) are for the benefit of
Purchaser, and Purchaser may, in its sole discretion, waive any or all of such
conditions and close title under this Agreement without any decrease in,
abatement of, or credit against, the Purchase Price.

          11.
CONDITION OF THE PROPERTY; REPRESENTATIONS.

               (a)
PURCHASER HEREBY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER SELLER, NOR ANY PERSON ACTING ON BEHALF OF SELLER, NOR ANY
PERSON OR ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS REVIEWED BY
PURCHASER IN CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR INDIRECT OFFICER,
DIRECTOR, PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT, REPRESENTATIVE,
ACCOUNTANT, ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT, CONTRACTOR,
SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES (SELLER, AND ALL OF THE
OTHER PARTIES DESCRIBED IN THE PRECEDING PORTIONS OF THIS SENTENCE (OTHER THAN
PURCHASER) SHALL BE REFERRED TO HEREIN COLLECTIVELY AS THE “SELLER PARTIES”)
HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS OR
WARRANTIES, WHETHER EXPRESSED OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE
(INCLUDING WITHOUT LIMITATION WARRANTIES OF HABITABILITY, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO THE PROPERTY, THE PERMITTED
USE OF THE PROPERTY OR THE ZONING AND OTHER LAWS, REGULATIONS AND RULES
APPLICABLE THERETO OR THE COMPLIANCE BY THE PROPERTY THEREWITH, THE REVENUES
AND EXPENSES GENERATED BY OR ASSOCIATED WITH THE PROPERTY, OR OTHERWISE
RELATING TO THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED HEREIN. PURCHASER
FURTHER ACKNOWLEDGES THAT ALL MATERIALS WHICH HAVE BEEN PROVIDED BY ANY OF THE
SELLER PARTIES HAVE BEEN PROVIDED, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS
AGREEMENT, WITHOUT ANY WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED AS TO
THEIR CONTENT, SUITABILITY FOR ANY PURPOSE, ACCURACY, TRUTHFULNESS OR
COMPLETENESS AND PURCHASER SHALL NOT HAVE ANY RECOURSE AGAINST SELLER OR ANY OF
THE OTHER SELLER PARTIES IN THE EVENT OF ANY ERRORS THEREIN OR OMISSIONS
THEREFROM. PURCHASER IS ACQUIRING THE PROPERTY BASED SOLELY ON ITS OWN
INDEPENDENT INVESTIGATION AND INSPECTION OF THE PROPERTY AND NOT IN RELIANCE ON
ANY INFORMATION PROVIDED BY SELLER OR ANY OF THE OTHER SELLER PARTIES, EXCEPT
FOR THE REPRESENTATIONS EXPRESSLY SET FORTH HEREIN. SUBJECT TO THE TERMS OF THE
FOREGOING SENTENCE, PURCHASER EXPRESSLY DISCLAIMS ANY INTENT TO RELY ON ANY
SUCH MATERIALS PROVIDED TO IT BY SELLER IN CONNECTION WITH ITS DUE DILIGENCE
AND AGREES THAT IT SHALL RELY SOLELY ON ITS OWN INDEPENDENTLY DEVELOPED OR
VERIFIED INFORMATION. 

15

               (b)
PURCHASER ACKNOWLEDGES THAT TENANT IS THE WHOLLY OWNED SUBSIDIARY OF, OR IS
OTHERWISE AFFILIATED WITH, PURCHASER AND, AS SUCH, PURCHASER IS PURCHASING THE
PROPERTY “AS IS” AND “WITH ALL FAULTS”, BASED UPON THE CONDITION (PHYSICAL OR
OTHERWISE) OF THE PROPERTY AS OF THE DATE OF THIS AGREEMENT AND AS OF THE
CLOSING, WEAR AND TEAR AND, SUBJECT TO THE PROVISIONS OF SECTION 13 OF
THIS AGREEMENT, LOSS BY CONDEMNATION OR FIRE OR OTHER CASUALTY EXCEPTED.
PURCHASER ACKNOWLEDGES AND AGREES THAT ITS OBLIGATIONS UNDER THIS AGREEMENT
SHALL NOT BE SUBJECT TO ANY FINANCING CONTINGENCY OR OTHER CONTINGENCIES OR
SATISFACTION OF CONDITIONS AND PURCHASER SHALL HAVE NO RIGHT TO TERMINATE THIS
AGREEMENT OR RECEIVE A RETURN OF THE DEPOSIT. NOTHING IN THIS PARAGRAPH IS
INTENDED TO CONSITUTE A WAVIER BY PURCHASER OF ANY OF ITS RIGHTS AND REMEIDES
UNDER THIS AGREEMENT AS TO ANY OF SELLER’S REPRERESNTATIONS OR WARRANTIES CONTAINED
HEREIN.

               (c)
Seller represents and warrants to Purchaser that the following (each a “Representation”
and collectively, the “Representations”) are true and correct as of the
date hereof and, except as provided in Section 10(b)(i) with respect to
the representations in Section 11(c)(vii), (ix), (xii) and (xiii),
shall be true and correct as of the Closing Date (it being agreed that such
exceptions shall in no way limit Seller’s obligations under Section 9(a)
hereof); provided, however, that if, prior to Closing, any of the
Representations, although true and correct when made, becomes untrue or
incorrect as a result of a breach or default by Tenant under the Sotheby’s
Lease, the same shall not be a default by Seller of this Section 11(c):

                    (i)
Seller has full power and authority to enter into and perform this Agreement in
accordance with its terms and this Agreement and all documents executed by
Seller which are to be delivered to Purchaser at Closing are, and at the time
of Closing will be, duly authorized, executed and delivered by Seller and are,
and at the time of Closing will be the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.

                    (ii)
Except for any injunction issued in connection with the matters described on Schedule
D hereto, the execution and delivery of this Agreement and the performance
by Seller of its obligations hereunder do not and will not (x) conflict with or
violate any judgment, order, writ, injunction or decree of any court or
governmental or quasi-governmental entity with jurisdiction over Seller or the
Property, including, without limitation, the United States of America, the
State of New York or any political subdivision of either of the foregoing, or
any decision or ruling of any arbitrator to which Seller is a party or by which
Seller or the Property is bound or affected or (y) violate or constitute a
default under any material document or instrument to which Seller is a party or
is bound or any of Seller’s limited partnership formation or governing
documents.

                    (iii)
Seller is a limited partnership validly existing under the laws of the State of
Delaware.

16

                    (iv)
Seller is not a “foreign person” as defined in the Internal Revenue Code
Section 1445. 

                    (v)
Exhibit 17 attached hereto and made a part hereof contains a true,
correct and complete copy of the Loan Agreement (as defined on Schedule C
hereto) and the First Amendment (as defined on Schedule C hereto), which
Loan Agreement as modified by the First Amendment has not been further
unmodified and is in full force and effect. Without limiting the foregoing, the
copies of the Loan Documents, as set forth on Schedule C hereto,
furnished by Seller to Purchaser prior to the date hereof are true, correct and
complete copies of the Loan Documents, including all exhibits and schedules
thereto. Other than as set forth on Schedule C hereto, there are no
material agreements, instruments or other documents evidencing or securing the
Existing Financing, including any amendments or modifications thereto.

                    (vi)
To Seller’s knowledge, except as set forth on Schedule D hereto, there
are no material actions, suits or proceedings (including landlord/tenant
proceedings) pending or threatened in writing which, if adversely determined,
could be reasonably expected to (x) prohibit Seller from, or materially delay
or interfere with Seller’s right and ability in respect of, consummating the
transaction contemplated hereby in accordance with the terms of this Agreement,
or (y) materially adversely affect title to the Property.

                    (vii)
Seller has not received any written notice of any pending or threatened
condemnation affecting the Property.

                    (viii)
Seller has not (x) commenced a voluntary case, or had entered against it a
petition, for relief under any federal bankruptcy act or any similar petition,
order or decree under any federal or state law or statute relative to
bankruptcy, insolvency or other relief for debtors, (y) caused, suffered or
consented to the appointment of a receiver, trustee, administrator,
conservator, liquidator or similar official in any federal, state or foreign
judicial or non-judicial proceedings, to hold, administer and/or liquidate all
or substantially all of its property, or (z) made an assignment for the benefit
of creditors.

                    (ix)
Neither Michael Fuchs, personally (“Fuchs”) nor Aby Rosen, personally (“Rosen”;
Fuchs and Rosen, collectively, the “Seller Principals”) has (x)
commenced a voluntary case, or had entered against it a petition, for relief
under any federal bankruptcy act or any similar petition, order or decree under
any federal or state law or statute relative to bankruptcy, insolvency or other
relief for debtors, (y) caused, suffered or consented to the appointment of a
receiver, trustee, administrator, conservator, liquidator or similar official
in any federal, state or foreign judicial or non-judicial proceedings, to hold,
administer and/or liquidate all or substantially all of its property, or (z)
made an assignment for the benefit of creditors.

                    (x)
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

17

that is enforced or administered by the Office of
Foreign Assets Control, 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.
Seller is not engaging in the transactions contemplated by this Agreement,
directly or indirectly, in violation of any laws relating to drug trafficking,
money laundering, or predicate crimes to money laundering. Seller has and will
continue to implement procedures, and has consistently and will continue to
consistently apply those procedures, to ensure the foregoing representations
and warranties remain true and correct at all times prior to Closing.

                    (xi)
The REMIC Prohibition Period (as defined in the Loan Agreement) has expired.

                    (xii)
To Seller’s Actual Knowledge, no Event of Default (as defined in the Loan
Agreement) has occurred and is continuing under the Loan Agreement.

                    (xiii)
The representations set forth in Section 3 of the Security Agreement are
true and correct.

          Any
and all uses of the phrase, “to Seller’s Actual Knowledge” or other references
to Seller’s knowledge in this Agreement (or in any Seller estoppel certificate
or other document delivered by Seller pursuant to the terms of this Agreement),
shall mean the actual knowledge of Rosen and/or Fuchs (collectively, the “Seller
Knowledge Individual”) as to a fact at the time given without any
investigation or inquiry. Without limiting the foregoing, Purchaser
acknowledges that the Seller Knowledge Individual has not performed and is not
obligated to perform any investigation or review of any files or other
information in the possession of Seller, or to make any inquiry of any persons,
or to take any other actions in order to confirm the accuracy of the
representations and warranties of Seller set forth in this Agreement. Neither
the actual, present, conscious knowledge of any individual or entity other than
a Seller Knowledge Individual, nor the constructive (but not actual) knowledge
of the Seller Knowledge Individual, shall constitute “actual knowledge” of a
Seller Knowledge Individual. If the representation of Seller in Section 11(c)(xiii)
was untrue when made or becomes untrue after the date hereof, same shall not be
deemed a misrepresentation by Seller, provided that the applicable
representation in Section 3 of the Security Agreement is timely cured
pursuant to Section 7(b) thereof.

          The
representations and warranties of Seller contained in this Section 11(c)
shall survive the Closing for one hundred eighty (180) days following the
Closing Date (the “Limitation Period”). Each such representation and
warranty shall automatically be null and void and of no further force and
effect on the 180th day following the Closing Date unless, prior to such 180th
day, Purchaser shall have provided Seller with a notice alleging that Seller is
in breach of such representation or warranty and specifying in reasonable
detail the nature of such breach. Purchaser’s sole remedy (subject to Section
11(f)) following the Closing with respect to a breach by Seller of any of
its representations and warranties herein shall be to commence a legal proceeding
against Seller alleging that Seller shall be in breach of such representation
or warranty and that Purchaser shall have suffered damages as a result thereof
(a “Proceeding”), which Proceeding must be commenced, if at all, within
sixty (60) days after the expiration of the Limitation Period. If Purchaser
shall have timely commenced a Proceeding and a court of competent jurisdiction
shall, pursuant to a final, non-appealable order in connection with such
Proceeding, determine that (1) Seller was in breach of the applicable
representation or warranty as of the date hereof or, as updated by Seller
pursuant to Section 10(b)(i) hereof, on the Closing 

18

          Date,
(2) Purchaser suffered actual damages (the “Damages”) by reason of such
breach, and (3) Purchaser did not have actual (not imputed or constructive)
knowledge of such breach prior to Closing and is not deemed to have had
knowledge prior to Closing of such breach as provided for in clause (d)
below, then Purchaser shall be entitled to receive, and Seller shall be
obligated to pay, an amount equal to any Recovery Amounts (as hereinafter
defined). Any such Recovery Amounts payable by Seller pursuant to this Section
11(c) shall (x) be paid within thirty (30) days following the entry of such
final, non-appealable order and delivery of a copy thereof to Seller and (y) if
not paid by the end of such thirty (30) day period, accrue Interest from the
day following such period until paid in full (it being agreed that if any
interest or penalties accrue thereon in accordance with law, Seller shall
receive a credit against payments of Interest under this clause (y) to the
extent of such legally mandated penalties or interest actually paid by Seller
to Purchaser). As referenced herein, the term “Recovery Amounts” means,
collectively, (A) Damages, and (B) all legal fees and disbursements reasonably
incurred by Purchaser in respect of any Proceedings in which Purchaser
prevailed, including, but not limited to, any appeals thereof and any
enforcement costs incurred by Purchaser in respect of this Section 11(c)
(the foregoing clause “(B)” items, collectively, “Enforcement Costs”).

               (d)
The representations and warranties of Seller set forth in Section 11(c)
are subject to the following limitations: (i) Seller does not represent or
warrant that the Sotheby’s Lease will be in force or effect as of the Closing
or that Tenant will not be in default thereunder, and (ii) in the event that,
prior to the Closing, Purchaser or any Diligence Party (as defined below) shall
obtain actual knowledge of any information that constitutes the basis of a
breach by Seller of a Representation, then, unless Purchaser shall have
delivered to Seller notice of such information specifying the representation,
warranty or condition to which such information relates prior to Closing,
Purchaser shall not be entitled to bring any action after the Closing Date
based on a breach of such Representation based on such information (but without
limiting any of Purchaser’s rights and remedies in respect of any other
information and/or the breach of any other Representations). Any and all uses
of the phrase, to Purchaser’s “actual knowledge” or other references to
Purchaser’s knowledge in this Agreement, shall mean the actual knowledge of William
S. Sheridan (the
“Purchaser Knowledge Individual”) as to a fact at the time given without
any investigation or inquiry. Without limiting the foregoing, Purchaser
acknowledges that the Purchaser Knowledge Individual has not performed and is
not obligated to perform any investigation or review of any files or other
information in the possession of Purchaser, or to make any inquiry of any
persons, or to take any other actions in order to confirm the accuracy of the
representations and warranties of Purchaser set forth in this Agreement.
Neither the actual, present, conscious knowledge of any individual or entity
other than a Purchaser Knowledge Individual, nor the constructive (but not
actual) knowledge of the Purchaser Knowledge Individual, shall constitute
“knowledge” or “actual knowledge” of a Purchaser Knowledge Individual. “Diligence
Party” shall mean any of the following: (A) the Purchaser Knowledge
Individual, (B) those officers, directors and employees of Seller, as well as
Seller’s attorneys and retained professionals, who were actively involved in
the negotiation of this Agreement and the consummation of the transactions
contemplated hereby, and (C) those officers, directors and employees of Tenant
who are actively involved in management and operation of the Property.
Notwithstanding anything to the contrary herein, for purposes of clause (ii)
of this Section 11(d) only, Purchaser shall be deemed to have actual
knowledge of the content of the Loan Documents and the content of any written
notices or printed materials provided to Purchaser by Seller and actually
received by Purchaser from and after the date of this Agreement.

19

               (e)
Purchaser hereby represents, warrants and covenants to Seller as of the date
hereof and as of Closing that:

                    (i)
Purchaser has full power and authority to enter into and perform this Agreement
in accordance with its terms and this Agreement and all documents executed by
Purchaser which are to be delivered to Seller at Closing are, and at the time
of Closing will be, duly authorized, executed and delivered by Purchaser and
are, and at the time of Closing will be the legal, valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with
their respective terms.

                    (ii)
Neither Purchaser nor any person, group, entity or nation that Purchaser 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, and Purchaser 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. Purchaser is not engaging in the transactions
contemplated by this Agreement, directly or indirectly, in violation of any laws
relating to drug trafficking, money laundering, or predicate crimes to money
laundering. None of the funds of Purchaser have been or will be derived from
any unlawful activity with the result that the investment of direct or indirect
equity owners in Purchaser is prohibited by law or that the transactions
contemplated by this Agreement or this Agreement is or will be in violation of
applicable law. Purchaser has and will continue to implement procedures, and
has consistently and will continue to consistently apply those procedures, to
ensure the foregoing representations and warranties remain true and correct at
all times prior to Closing.

                    (iii)
Purchaser is not an employee pension benefit plan subject to the provisions of
Title IV of ERISA (as defined below) or subject to the minimum funding
standards under Part 3, Subtitle B, Title I of ERISA or Section 412 of the
Internal Revenue Code or Section 302 of ERISA, and none of its assets
constitutes or will constitute assets of any such employee benefit plan subject
to Part 4, Subtitle B, Title I of ERISA. Purchaser is not a “governmental plan”
within the meaning of Section 3(32) of ERISA and the funds used by
Purchaser to acquire the Property are not subject to any state statutes regulating
investments of and fiduciary obligations with respect to governmental plans.
The transactions contemplated by this Agreement are not specifically excluded
by Part I(b) of PTE 84-14. As used herein, “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to time.

                    (iv)
Purchaser has not, and no affiliate of Purchaser that would likely be
“consolidated” with Purchaser in a bankruptcy or similar case has, (i)
commenced a voluntary case, or had entered against it a petition, for relief
under any federal bankruptcy act or any similar petition, order or decree under
any federal or state law or statute relative to

20

bankruptcy, insolvency or other relief for debtors,
(ii) caused, suffered or consented to the appointment of a receiver, trustee,
administrator, conservator, liquidator or similar official in any federal,
state or foreign judicial or non-judicial proceedings, to hold, administer and/or
liquidate all or substantially all of its property, or (iii) made an assignment
for the benefit of creditors.

                    (v)
Parent owns, directly or indirectly, 100% of the ownership interests in Tenant.

               (f)
Notwithstanding anything to the contrary set forth in this Agreement, Seller’s
post-Closing liability for breach of any representation or warranty of Seller
contained in this Agreement and in any document executed by Seller pursuant to
this Agreement, including any instruments delivered at Closing, shall, subject
to the limitations of survival set forth in this Section 11, be limited
to claims in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the
aggregate (the “Floor”), and Seller’s aggregate liability for any and all
claims arising out of any such representations and warranties (excluding, if
applicable, any Interest and Enforcement Costs) shall not exceed Fifteen
Million Dollars ($15,000,000) (the “Cap”), and in no event shall Seller
be liable for any incidental, consequential, indirect, punitive, special or
exemplary damages, or for lost profits, unrealized expectations or other
similar claims, and in every case Purchaser’s recovery for any claims
referenced above shall be net of any insurance proceeds and any indemnity,
contribution or other similar payment recovered or recoverable by Purchaser
from any insurance company, tenant, or other third party. It is acknowledged
and agreed that any Interest and Enforcement Costs payable to Purchaser
pursuant to the terms hereof shall be excluded from the calculation of the Cap,
and that any such Interest and Enforcement Costs shall be, if applicable,
payable notwithstanding that the amount thereof may cause sums payable by
Seller to exceed the Cap. Notwithstanding the foregoing, the Floor and the Cap
shall not apply to the representations made by Seller in Section 14 of
this Agreement.

               (g)
Seller makes no warranty in this Agreement and has not otherwise made any
warranty with respect to the presence of Hazardous Materials (as hereinafter
defined) on, above or beneath the Premises (or any parcel in proximity thereto)
or in any water on or under the Premises. The term “Hazardous Materials”
means (a) those substances included within the definitions of any one or more
of the terms “hazardous materials,” “hazardous wastes,” “hazardous substances,”
“industrial wastes,” and “toxic pollutants,” as such terms are defined under
the Environmental Laws, or any of them, (b) petroleum and petroleum products,
including, without limitation, crude oil and any fractions thereof, (c) natural
gas, synthetic gas and any mixtures thereof, (d) asbestos and or any material
which contains any hydrated mineral silicate, including, without limitation,
chrysotile, amosite, crocidolite, tremolite, anthophylite and/or actinolite,
whether friable or non-friable (collectively, “Asbestos”), (e)
polychlorinated biphenyl (“PCBs”) or PCB-containing materials or fluids,
(f) radon, (g) any other hazardous or radioactive substance, material,
pollutant, contaminant or waste, and (h) any other substance with respect to
which any Environmental Law or governmental authority requires environmental
investigation, monitoring or remediation. The term “Environmental Laws”
means all federal, state and local laws, statutes, ordinances and regulations,
now or hereafter in effect, in each case as amended or supplemented from time
to time, including, without limitation, all applicable judicial or
administrative orders, applicable consent decrees and binding judgments relating
to the regulation and protection of human health, safety, the environment and
natural resources (including, without limitation, ambient air, surface, water,
groundwater, wetlands, land surface or

21

subsurface strata, wildlife, aquatic species and
vegetation), including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. §§ 9601
et seq.), the Hazardous Material Transportation Act, as amended
(49 U.S.C. §§ 1801 et seq.), the Federal Insecticide, Fungicide,
and Rodenticide Act, as amended (7 U.S.C. §§ 136 et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S. §§ 6901 et seq.),
the Toxic Substance Control Act, as amended (15 U.S.C. §§ 2601 et seq.),
the Clean Air Act, as amended (42 U.S.C. §§ 7401 et seq.), the
Federal Water Pollution Control Act, as amended (33 U.S.C. §§ 1251 et seq.),
the Occupational Safety and Health Act, as amended (29 U.S.C. §§ 651 et seq.),
the Safe Drinking Water Act, as amended (42 U.S.C. §§ 300f et seq.),
Environmental Protection Agency regulations pertaining to Asbestos (including,
without limitation, 40 C.F.R. Part 61, Subpart M, the United States
Environmental Protection Agency Guidelines on Mold Remediation in Schools and
Commercial Buildings, the United States Occupational Safety and Health
Administration regulations pertaining to Asbestos including, without
limitation, 29 C.F.R. Sections 1910.1001 and 1926.58), applicable New York
State and City of New York statutes and the rules and regulations promulgated
pursuant thereto regulating the storage, use and disposal of Hazardous
Materials, the New York City Department of Health Guidelines on Assessment and
Remediation of Fungi in Indoor Environments and any state or local counterpart
or equivalent of any of the foregoing, and any related federal, state or local
transfer of ownership notification or approval statutes. Except with respect to
any claims arising out of any breach by Seller of any Representations,
Purchaser, for itself and its agents, affiliates, successors and assigns,
hereby releases and forever discharges Seller and the other Seller Parties from
any and all rights, claims and demands at law or in equity, whether known or
unknown at the time of this Agreement, which Purchaser or any other party has
or may have in the future, arising out of any Hazardous Material at, in, under
or about the Premises, including, without limitation, any claim for
indemnification or contribution arising under any Environmental Law. Purchaser,
hereby agrees to indemnify and defend Seller and the other Seller Parties
against any claims, demands, damages or losses relating to or arising out of
any Hazardous Material at, in, under or about the Premises.

          12.
INTENTIONALLY OMITTED.

          13.
CASUALTY/CONDEMNATION.

               (a)
Notwithstanding anything to the contrary implied or provided by law or in
equity, but subject to Section 13(b) below, if, after the date hereof
but prior to the Closing, any portion of the Building is damaged by fire, the
elements or any other casualty (a “Casualty”), or if any portion of the
Premises is taken by eminent domain or other similar proceeding (a “Taking”),
this Agreement shall remain in full force and effect and the parties shall
nonetheless proceed to the Closing in accordance with this Agreement.

               (b)
Notwithstanding the foregoing, if, after the date hereof but prior to the
Closing, all or substantially all of the Premises is taken by a Taking,
Purchaser may, by written notice to Seller given within fifteen (15) days after
notice to Purchaser of the Taking, elect to terminate this Agreement. In the
event that Purchaser shall so timely elect, the Deposit shall be returned to
Purchaser, and the terms of Section 20(h) hereof shall control and
govern. Unless this Agreement is so terminated, or if (i) less than all or
substantially all of the Premises

22

is taken by a Taking, or (ii) all or any portion of
the Premises is destroyed by a Casualty, then this Agreement shall remain in
full force and effect (except that “Property” shall be deemed to exclude the
portion so taken by a Taking), in which event Seller shall, on the Closing
Date, and upon receipt of the balance of the Purchase Price, (x) with respect
to a Taking, assign to Purchaser, by documentation reasonably satisfactory to
Purchaser (and, if applicable, the Lender), any awards due to Seller (and/or,
if previously received by Seller, pay to Purchaser, any awards so collected by
Seller) with respect to any such Taking, after deducting any reasonable amount
which Seller may have agreed or been obligated to pay in obtaining such award,
including reasonable attorneys’ fees and disbursements, or (x) with respect to
a Casualty, credit to Purchaser at Closing the amount of net insurance proceeds
received by Seller with respect to such Casualty and shall assign to Purchaser
its rights to any such insurance proceeds yet to be received by Seller, if any,
on the applicable insurance policy for the Property applicable to such claim.

               (c)
Seller shall notify Purchaser of any Casualty and of any proposed Taking
promptly after Seller shall have knowledge thereof. Seller shall not adjust or
settle any claims in connection with any Casualty or proposed Taking or enter
into any construction or other contract for the repair or the restoration of
the Property without Purchaser’s prior written consent, not to be unreasonably
withheld or conditioned.

               (d)
The provisions of this Section 13 are intended to constitute an “express
provision to the contrary” within the meaning of Section 5-1311 of the New York
General Obligations Law.

               (e)
In the event of any Taking occurring on the Scheduled Closing Date, such
Closing shall be extended to the tenth (10th) day following the
Scheduled Closing Date.

               (f)
The terms of this Section 13 shall be subject to the terms of the
Sotheby’s Lease, and nothing in this Section 13 is intended or shall be
deemed to constitute a waiver or modification of any provision of the Sotheby’s
Lease.

          14.
BROKERS AND ADVISORS.

               (a)
Purchaser represents and warrants to Seller that it has not dealt or negotiated
with, or engaged on its own behalf or for its benefit, any broker, finder,
consultant, advisor, or professional in the capacity of a broker or finder
(each a “Broker”) in connection with this Agreement. Purchaser hereby
agrees to indemnify, defend and hold Seller and the other harmless from and
against any and all claims, demands, causes of action, losses, costs and
expenses (including reasonable attorneys’ fees, court costs and disbursements)
arising from any claim for commission, fees or other compensation or
reimbursement for expenses made by any Broker engaged by or claiming to have
dealt with Purchaser in connection with this Agreement or the transactions
contemplated hereby.

               (b)
Seller represents and warrants to Purchaser that it has not dealt or negotiated
with, or engaged on its own behalf or for its benefit, any Broker in connection
with this Agreement or the transactions contemplated hereby. Seller hereby
agrees to indemnify, 

23

defend and hold Purchaser and its direct and indirect
shareholders, officers, directors, partners, principals, members, employees,
agents, contractors and any successors or assigns of the foregoing, harmless
from and against any and all claims, demands, causes of action, losses, costs
and expenses (including reasonable attorneys’ fees, court costs and
disbursements) arising from any claim for commission, fees or other
compensation or reimbursement for expenses made by any Broker engaged by or
claiming to have dealt with Seller in connection with this Agreement or the
transactions contemplated hereby.

               (c)
The provisions of this Section 14 shall survive the termination of this
Agreement or the Closing.

          15.
RESOLUTION OF PENDING DISPUTES.

               (a)
The following matters and proceedings (collectively the “Legal Proceedings”)
are currently pending between Seller and Tenant, relating to Tenant’s alleged
right to receive a first offer in connection with the Seller’s redemption of
certain partnership interests in 2005 (“Tenant’s Claims”): 

                    (i)
The arbitration before the American Arbitration Association (the “AAA”)
styled Sotheby’s,
Inc. v. 1334 York Avenue L.P., Case No. 50 115 T 00190 07 (the “Arbitration”);

                    (ii)
The proceedings before the New York Supreme Court, New York County, Commercial
Division (the “Supreme Court”), styled Sotheby’s, Inc. v. 1334 York Avenue
L.P., Index No. 601790/07 (the “Action”); and 

                    (iii)
The appellate proceedings before the New York Supreme Court, Appellate Division
– First Department (the “Appellate Division”), styled Sotheby’s,
Inc. v. 1334 York Avenue L.P., Index No. M-2983, 601790/07 (the “Appeal”).

               (b)
Upon execution of this Agreement, the Legal Proceedings shall be addressed and
resolved as follows:

                    (i)
Seller and Tenant shall jointly request a stay of the Arbitration without
prejudice pending Closing; and

                    (ii)
Tenant shall consent to, and not oppose, any motion by the Seller to enlarge
the time to perfect the Appeal without prejudice until the Closing has
occurred.

               (c)
Simultaneous with the execution of this Agreement, Seller and Tenant have
executed and delivered the following items, which shall be held in escrow by
FATCO, pursuant to a written escrow agreement, a copy of which is attached
hereto as Exhibit 16 (the “Termination Escrow Agreement”):

                    (i)
the Stipulated Dismissal with respect to the Arbitration, a copy of which is
attached hereto as Exhibit 9 (the “Dismissal”);

24

                    (ii)
the Stipulation of Discontinuance with respect to the Action in the form
attached hereto as Exhibit 10 (the “Discontinuance”); and

                    (iii)
the Mutual Release and Covenant Not to Sue, a copy of which is attached hereto
as Exhibit 12 (the “Release”).

               (d)
Simultaneous with the execution of this Agreement, Rosen and Fuchs have
executed and delivered those confessions of judgment, copies of which are
attached hereto as Exhibit 15 hereof (collectively, the “Confessions
of Judgment”), which shall be held in escrow by Royal pursuant to a written
escrow agreement, a copy of which is attached hereto as Exhibit 14 (the
“COJ Escrow Agreement”).

               (e)
Tenant shall not seek to lift the stay of the Arbitration or otherwise revive
the Arbitration prior to the release of the Arbitration Termination Documents
to Purchaser.

          The
Dismissal, the Discontinuance, and the Release shall be referred to herein,
collectively, as the “Arbitration Termination Documents”.

          16.
TRANSFER TAXES AND TRANSACTION COSTS.

               (a)
At the Closing, Seller and Purchaser shall execute, acknowledge, deliver and
file all such returns (or, if required by ACRIS E-tax procedures, an electronic
version thereof) as may be necessary to comply with Article 31 of the Tax Law
of the State of New York and the regulations applicable thereto, and the City
of New York Real Property Transfer Tax Law (Admin. Code Article 21) and the
regulations applicable thereto (collectively, as the same may be amended from
time to time, the “Transfer Tax Laws”). The transfer taxes payable
pursuant to the Transfer Tax Laws shall collectively be referred to as the “Transfer
Taxes”. Seller shall pay (or cause to be paid), upon Closing, to the
appropriate governmental authority the Transfer Taxes which may be payable in
connection with the consummation of the transactions contemplated by this
Agreement.

               (b)
Seller shall be responsible for (i) the costs of its legal counsel, advisors
and other professionals employed by it in connection with the sale of the Property,
(ii) any recording fees relating to its obligations to remove title objections,
and (iii) any other costs and expenses which are the obligation of Seller
pursuant to and in accordance with the terms of Sections 20 and 38
hereof.

               (c)
Except as otherwise provided above, Purchaser shall be responsible for (i) the
costs and expenses associated with its due diligence, (ii) the costs and
expenses of its legal counsel, advisors and other professionals employed by it
in connection with the purchase of the Property, (iii) all premiums and fees
for title examination and title insurance and endorsements obtained and all
related charges and survey costs in connection therewith, (iv) subject to the
terms of Section 38 hereof, all costs and expenses incurred in
connection with any financing obtained by Purchaser, including without
limitation, loan fees, mortgage recording taxes, financing costs and lender’s
legal fees, (v) any recording fees with respect to the transactions
contemplated by this Agreement, and (vi) any other costs and expenses which are

25

the obligation of Purchaser pursuant to and in
accordance with the terms of Sections 20 and 38 hereof.

               (d)
The provisions of this Section 16 shall survive the Closing or the
earlier termination of this Agreement.

          17.
DELIVERIES TO BE MADE ON THE CLOSING DATE.

               (a)
Seller’s Documents and Deliveries: On the Closing Date, Seller shall
deliver or cause to be delivered to Purchaser the following:

                    (i)
A duly executed and acknowledged Bargain and Sale Deed Without Covenants
Against Grantor’s Acts in the form of Exhibit 2;

                    (ii)
A duly executed Bill of Sale in the form of Exhibit 3;

                    (iii)
Originals or, if originals are unavailable, copies, of plans and
specifications, technical manuals and similar materials for the Building to the
extent same are in Seller’s possession;

                    (iv)
A duly executed certification as to Seller’s nonforeign status as prescribed in
Section 21, in the form of Exhibit 4;

                    (v)
Originals or, if originals are unavailable, copies, of all books and records
relating to the operation of the Premises and maintained by Seller during
Seller’s ownership thereof, to the extent same are in Seller’s possession.

                    (vi)
Originals or, if originals are unavailable, copies, of all permits, licenses
and approvals relating to the ownership, use or operation of the Premises, to
the extent same are in Seller’s possession; 

                    (vii)
Keys and combinations in Seller’s possession relating to the operation of the
Premises;

                    (viii)
Seller shall deliver to the Title Company a title affidavit substantially in
the form attached hereto as Exhibit 7 (“Seller’s Title Affidavit”);

                    (ix)
As may be reasonably requested by the Title Company, Seller shall deliver to
the Title Company copies of Seller’s partnership agreement and partnership
certificate and, if required by law or its partnership agreement, copies of
partnership resolutions and/or consents of the constituent partners of Seller
authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement, all certified
as true and correct by a general partner of Seller; and

                    (x)
All documents and instruments as are required to be delivered and executed,
and/or caused to be delivered, and executed, by Seller pursuant to the
provisions of Section 17(c).

26

          Seller shall be deemed
to have delivered the items set forth in clauses (iii), (v) and (vii)
above if the same are delivered to Tenant or are otherwise in the possession of
Tenant as of the Closing Date.

               (b)
Purchaser’s Documents and Deliveries: On the Closing Date, Purchaser
shall deliver or cause to be delivered to Seller the following:

                    (i)
Subject to the terms of Section 38 hereof, payment of the balance of the
Purchase Price payable at the Closing by 3:00 p.m., eastern time, on the
Closing Date, as adjusted for apportionments under Section 7, in the
manner required under this Agreement;

                    (ii)
If Purchaser is a corporation, (i) copies of the certificate of incorporation
and by-laws of Purchaser and of the resolutions of the board of directors of
Purchaser authorizing the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated by this Agreement
certified as true and correct by the Secretary or Assistant Secretary of
Purchaser; (ii) a good standing certificate for Purchaser issued by the state
of incorporation of Purchaser, dated within thirty (30) days of the Closing
Date; (iii) a good standing certificate for Purchaser issued by the State of
New York dated within thirty (30) days of the Closing Date; and (iv) an
incumbency certificate executed by the Secretary or Assistant Secretary of
Purchaser with respect to those officers of Purchaser executing any documents
or instruments in connection with the transactions contemplated herein;

                    (iii)
If Purchaser is a partnership, copies of Purchaser’s partnership agreement and
partnership certificate and, if required by law or its partnership agreement,
copies of partnership resolutions and/or consents of the constituent partners
of Purchaser authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement, all certified as true and correct by a general partner of Purchaser;

                    (iv)
If Purchaser is a limited liability company, (i) copies of Purchaser’s articles
of organization and operating agreement and consent of the members of Purchaser
authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement, all of the
foregoing being certified as true and correct by the managing member(s) of
Purchaser; (ii) a good standing certificate issued for Purchaser by the state
of organization of Purchaser, dated within thirty (30) days of the Closing
Date; (iii) a good standing certificate for Purchaser issued by the State of
New York dated within thirty (30) days of the Closing Date; and (iv) an
incumbency certificate executed by an officer or manager of Purchaser with
respect to individuals executing any documents or instruments on behalf of
Purchaser in connection with the transactions contemplated herein; 

                    (v)
All documents and instruments as are required to be delivered and executed,
and/or caused to be delivered, and executed, by Purchaser pursuant to the
provisions of Section 17(c).

27

               (c)
Jointly Executed Documents: Seller and Purchaser shall, on the Closing
Date, each execute, acknowledge (as appropriate) and exchange or caused to be
executed and exchanged the following documents:

                    (i)
The returns required under the Transfer Tax Laws, if any, and any other tax
laws applicable to the transactions contemplated herein;

                    (ii)
An Omnibus Assignment and Assumption Agreement in the form of Exhibit 6;

                    (iii)
The Preliminary Closing Statement, together with the payment of all amounts
specified therein to be paid by Seller; 

                    (iv)
An Assignment and Assumption of the Sotheby’s Lease and Sotheby’s Lease
Guaranty, in the form of Exhibit 5;

                    (v)
Intentionally Omitted; 

                    (vi)
An Art Commission Agreement, in the form agreed to as of the date hereof
between Seller and Purchaser; and

                    (vii)
Any other affidavit, document, or instrument required to be delivered by Seller
or Purchaser or reasonably requested by the Title Company (so long as such
request does not add additional warranties or covenants to Seller), pursuant to
the terms of this Agreement or applicable law in order to effectuate the
transfer of title to the Premises in accordance with the terms of this
Agreement.

          18.
CLOSING DATE.

               (a)
The closing of the transactions contemplated hereunder (the “Closing”)
shall occur, and the documents referred to in Section 17 shall be
delivered upon tender of the Purchase Price provided for in this Agreement, at
10:00 a.m., eastern time, on July 1, 2009 (such date, or the date Seller sets
for the Closing if Seller shall elect to (i) accelerate such date pursuant to
the terms of Section 18(b) hereof, or (ii) adjourn such date pursuant to
any adjournment rights in favor of Seller expressly provided for under the
terms of this Agreement, being referred to in this Agreement as the “Scheduled
Closing Date”; and the actual date of the Closing, the “Closing Date”),
at the offices of Seller’s attorneys, Fried, Frank, Harris, Shriver &
Jacobson LLP, One New York Plaza, New York, New York 10004, or upon notice by
Purchaser, at the office of the attorneys for Lender (or such other mortgage
lender Purchaser may utilize in connection with a defeasance pursuant to Section
38(e) hereof). Time is of the essence as to the Purchaser’s and Seller’s
obligation to close the transactions contemplated hereunder on the Scheduled
Closing Date. Notwithstanding the foregoing time of the essence requirement,
the parties acknowledge and agree that the Scheduled Closing Date may be
adjourned by up to two (2) business days by Seller in order to accommodate a
three-day defeasance process (including, without limitation, in order to
defease the Existing Financing on a date permitted for defeasance under the
Loan Documents).

28

               (b)
Notwithstanding the foregoing, Seller may, upon prior written notice to
Purchaser (an “Accelerated Closing Notice”), accelerate the Scheduled
Closing Date to a date occurring no earlier than the later to occur of (i)
April 1, 2008, (ii) the date that is ninety (90) days following Purchaser’s
receipt of such Accelerated Closing Notice, and (iii) the date that is (x)
thirty (30) days following the Consent Outside Date, provided that Lender’s
Consent shall have been obtained on or before the Consent Outside Date, or (y)
ninety (90) days following the Consent Outside Date, in the event that Lender’s
Consent shall not have been obtained (or shall have lapsed and not been renewed
after having been obtained) on or before the Consent Outside Date. If reasonably
necessary to coordinate Seller’ acquisition of a replacement property in
connection with a desired 1031 like-kind exchange, Seller may revoke an
Accelerated Closing Notice, provided that (A) such revocation shall be
delivered by written notice to Purchaser (an “Acceleration Revocation”)
not less than fifteen (15) business days prior to the then Scheduled Closing
Date, and (B) if the Closing shall entail a defeasance of the Existing Mortgage
pursuant to Section 38(e) hereof (rather than an assumption of the
Existing Mortgage pursuant to the Section 38(c) hereof), Seller shall
reimburse Purchaser for any Lost Financing Costs (as herein defined) upon the
sooner to occur of (I) the date that shall be five (5) business days following
the Acceleration Revocation, or (II) the Closing. As used herein, the terms “Lost
Financing Costs” shall mean any material and non-refundable third-party
expenses expended (or committed to be expended) by Purchaser from and including
the date of an Accelerated Closing Notice to and including the date of an
Acceleration Revocation, in connection with Purchaser’s procuring mortgage
and/or mezzanine financing intended to finance Purchaser’s acquisition of the
Property, including, without limitation, any rate-lock or loan commitment fees,
good faith deposits, and reasonable legal fees and expenses relating directly
to any such financing. Seller’s obligation to reimburse Purchaser for Lost
Financing Costs as above-provided shall be limited to those costs previously
identified by Purchaser in a timely delivered Lost Financing Cost Summary (as
hereinafter defined). Within five (5) business days following written request
by Seller, which request may be made from time to time following an Accelerated
Closing Notice, Purchaser may (but shall not be obligated to) furnish to Seller
a written description and quantification (a “Lost Financing Cost Summary”)
of any costs that would constitute Lost Financing Costs if Seller were to send
an Acceleration Revocation to Purchaser as of the date of such Lost Financing
Cost Summary. If Seller makes payment to Purchaser with respect to Lost
Financing Costs and Purchaser later receives any benefit from its payment of
such Lost Financing Costs, Seller shall be entitled to a credit at Closing in
the amount of such benefit realized by Purchaser.

          19.
NOTICES.

          All notices, demands, requests or other communications
(collectively, “Notices”) required to be given or which may be given
hereunder shall be in writing and shall be sent by (a) national overnight
delivery service, or (b) facsimile transmission (provided that the original
shall be simultaneously delivered by national overnight delivery service or
personal delivery), or (c) personal delivery, addressed as follows:

29

	
 

	
 

	
 

	
 

	
(i)

	
If to Seller:

	
 

	
 

	
 

	
 

	
 

	
1334 York Avenue L.P.

	
 

	
 

	
c/o RFR Holding

	
 

	
 

	
390 Park Avenue

	
 

	
 

	
New York, New York, 10022

	
 

	
 

	
Attention: Aby Rosen 

	
 

	
 

	
Fax: (212) 308-5090

	
 

	
 

	
 

	
 

	
 

	
with a copy to:

	
 

	
 

	
 

	
 

	
 

	
1334 York Avenue L.P.

	
 

	
 

	
c/o RFR Holding

	
 

	
 

	
390 Park Avenue

	
 

	
 

	
New York, New York, 10022

	
 

	
 

	
Attention: Frank Mangieri, Esq. 

	
 

	
 

	
Fax: (212) 308-5090

	
 

	
 

	
 

	
 

	
 

	
and with a copy to:

	
 

	
 

	
 

	
 

	
 

	
Fried, Frank, Harris, Shriver & Jacobson LLP

	
 

	
 

	
One New York Plaza

	
 

	
 

	
New York, New York 10004

	
 

	
 

	
Attention: Jonathan L. Mechanic, Esq.

	
 

	
 

	
Fax: (212) 859-4000

	
 

	
 

	
 

	
 

	
(ii)

	
If to Purchaser:

	
 

	
 

	
 

	
 

	
 

	
c/o Sotheby’s

	
 

	
 

	
1334 York Avenue

	
 

	
 

	
New York, New York 10022

	
 

	
 

	
Attention: William S. Sheridan

	
 

	
 

	
Fax: (845) 613-7412

	
 

	
 

	
 

	
 

	
 

	
with a copy to:

	
 

	
 

	
 

	
 

	
 

	
Stroock & Stroock & Lavan LLP

	
 

	
 

	
180 Maiden Lane

	
 

	
 

	
New York, NY 10038

	
 

	
 

	
Attention: Peter G. Koffler, Esq.

	
 

	
 

	
Fax: (212) 806-2686

          Any
Notice so sent by national overnight delivery service, or personal delivery
shall be deemed given on the date of receipt or refusal as indicated on the
return receipt, or the receipt of the national overnight delivery service or
personal delivery service. Any Notice sent by facsimile transmission shall be
deemed given when received as confirmed by the telecopier electronic
confirmation receipt. A Notice may be given either by a party or by such
party’s attorney. Seller or Purchaser may designate, by not less than five (5)
business days’ notice given

30

to the others in accordance with the terms of this Section
19, additional or substituted parties to whom Notices should be sent hereunder.

          20.
DEFAULT BY PURCHASER OR SELLER; REMEDIES.

               (a)
If (i) Purchaser shall default in the payment of the Purchase Price or in the
performance of any of its other obligations to be performed on the Closing Date
or in its obligation to timely deposit documents or funds in escrow as required
pursuant to Section 38(e)(ii), or (ii) Purchaser shall default in the
performance of any of its material obligations to be performed prior to the
Closing Date and, with respect to any default under this clause (ii) only, such
default shall continue for five (5) business days after notice to Purchaser,
Seller’s sole remedy by reason thereof (in lieu of prosecuting an action for
damages or proceeding with any other legal or equitable course of conduct, the
right to bring such actions or proceedings being expressly and voluntarily
waived by Seller, to the extent legally permissible, following and upon advice
of its counsel) shall be to commence an expedited arbitration in accordance
with Section 20(g) asserting that Purchaser has defaulted under this
Agreement. If the Arbitrator decides (I) that Purchaser was in default of its
obligations hereunder to the extent described in the foregoing clauses “(i)” or
“(ii)” of this Section 20(a), and (II) if Seller has alleged a default
by Purchaser to the extent described in clause “(i),” that Seller was ready,
willing and able to effect the Closing on the Scheduled Closing Date and all of
Purchaser’s conditions precedent to effectuating a Closing, as per the terms of
Section 10(b), were satisfied as of the Scheduled Closing Date (except
to the extent, if any, such conditions precedent require any action or
cooperation of Purchaser), then Seller shall be entitled to terminate this
Agreement and, upon such termination, Seller shall be entitled to (x) such
remedies as prescribed pursuant to Section 20(c) hereof, and (y) retain
the Deposit as liquidated damages for Purchaser’s default hereunder, it being
agreed that the damages by reason of Purchaser’s default are difficult, if not
impossible, to ascertain, and thereafter Purchaser and Seller shall have no
further rights or obligations under this Agreement except for those that are
expressly provided in this Agreement to survive the termination hereof. 

               (b)
If (i) Seller shall default in any of its obligations to be performed on the
Closing Date or in its obligation to timely deposit documents or funds in
escrow as required pursuant to Section 38(e)(iii) or (ii) Seller shall
default in the performance of any of its material obligations to be performed
prior to the Closing Date and, with respect to any default under this clause
(ii) only, such default shall continue for five (5) business days after
notice to Seller, Purchaser as its sole remedy by reason thereof (in lieu of
prosecuting an action for damages or proceeding with any other legal or
equitable course of conduct, the right to bring such actions or proceedings
being expressly and voluntarily waived by Purchaser, to the extent legally
permissible, following and upon advice of its counsel), shall be to commence an
expedited arbitration in accordance with Section 20(g) asserting that
Seller has defaulted under this Agreement. If the Arbitrator decides (I) that
Seller was in default of its obligations hereunder to the extent described in
the foregoing clauses “(i)” or “(ii)” of this Section 20(b) and (II) if
Purchaser has alleged a default by Seller to the extent described in clause
“(i),” that Purchaser shall have been ready, willing and able to effect the
Closing on the Scheduled Closing Date, and all of Seller’s conditions precedent
to effectuating a Closing, as per the terms of Section 10(a) hereof were
satisfied as of the Scheduled Closing Date (except (A) payment of the balance
of the Purchase Price to Seller and (B) to the extent, if any, such conditions
precedent

31

require any action or cooperation of Seller)), then
Purchaser may elect one (1) of the following two (2) remedies and shall not be
entitled to any other remedies (it being agreed that Purchaser’s election to
pursue the remedy provided under the following clause “A” shall be deemed a
waiver by Purchaser of any rights to thereafter pursue the remedies provided in
clause “B” in respect of the subject default): (A) specific performance of Seller’s
obligations hereunder or (B) terminate this Agreement and receive a return of
the Deposit, in accordance with the terms of Section 20(f) hereof, and
exercise its rights under Section 20(d) hereof. Upon such return
pursuant to the foregoing clause “(B)”, and subject to the terms of Sections
20(d) and 20(f), this Agreement shall terminate and neither party
hereto shall have any further obligations hereunder except for those that are
expressly provided in this Agreement to survive the termination hereof.
Notwithstanding the foregoing, (I) Purchaser shall have no right to specific
performance, if Seller shall be prohibited from performing its obligations
hereunder by reason of any law, governmental regulation, or other legal
requirement applicable to Seller, and (II) Purchaser shall not be prohibited
from pursuing its rights and remedies under Section 20(b)(B) hereof,
notwithstanding previously electing the remedy of specific performance, if
Seller shall be unable to duly perform its obligations under this Agreement
notwithstanding its specific performance obligations. 

               (c)
Subject to the terms of Section 20(g) hereof, in the event of the
termination of this Agreement by Seller pursuant to Section 20(a)
hereof, Seller shall be entitled to retain or apply the Deposit as elected by
Seller in its sole discretion and upon notice to Purchaser, instruct FATCO to
deliver all Arbitration Termination Documents to Seller, whereupon Seller may
elect to file the same, as applicable, with the AAA and the Supreme Court, and
instruct Royal to return the Confessions of Judgment to Seller marked
“cancelled.”

               (d)
Subject to the terms of Sections 20(g) and 20(f) hereof, in the
event of the termination of this Agreement by Purchaser pursuant to Section
20(b)(B) hereof, Purchaser shall be entitled, upon notice to Seller, to (x)
instruct FATCO to deliver all Arbitration Termination Documents to Purchaser,
whereupon Purchaser may elect to destroy the same, and (y) instruct Royal to
deliver the Confessions of Judgment to Purchaser, and proceed with the
Arbitration of Tenant’s Claims and to revive the Action, provided that any
action to reinstate the Arbitration or revive the Action may only be taken
following the release of the Arbitration Termination Documents to Purchaser and
must be taken within forty five (45) days following the date of such release.
If the Arbitration Termination Documents are released to Purchaser pursuant to
this Section 20(d) and Purchaser and/or Tenant elects to reinstate the
Arbitration and revive the Action, Seller will not object to Purchaser and/or
Tenant taking such action, and in no event will either party’s rights in the
Legal Proceedings be prejudiced or in any way diminished by reason of this
Agreement, any delay occasioned by this Agreement or any termination of this
Agreement.

               (e)
As used herein, “Interest” shall mean the Default Rate, calculated from and
including the date upon which Seller shall have been obligated to pay the
subject item accordance with the terms of this Agreement (including, but not
limited to, the return of the Deposit), to and including the date upon which
the entire such amount shall have been paid or returned to Purchaser in
immediately available federal funds, as per wire instructions to be furnished
by Purchaser.

32

               (f)
In any case where Seller is obligated pursuant to the terms of this Agreement
to return the Deposit to Purchaser, (i) the Deposit shall accrue Interest from
and after the day that is ten (10) Business Days after such amount first
becomes due and payable until repaid in full (with all accrued Interest
thereon), (ii) the Deposit, together with any Interest thereon, shall be paid
by wire transfer in immediately available federal funds for credit to Purchaser
at such bank account or accounts, and divided in to such amounts, as may be
reasonably directed by Purchaser, and (iii) if not repaid in full (with all
accrued Interest thereon) within thirty (30) days after the date first due,
Purchaser shall be entitled to elect to, in Purchaser’s sole discretion,
without limiting any of Purchaser’s other rights and remedies in respect of
Seller’s obligation to return of the Deposit (including against Seller under
this Agreement and against the Seller Principals under the Principal Guaranty),
receive from Royal the Confessions of Judgment and enter and enforce the same
against the Principal Guarantors. Promptly following any return of the Deposit
(with all accrued Interest thereon) to Purchaser by Seller or one or both of
the Seller Principals in accordance with the requirements of this Section
20(f), Royal shall, unless previously released to Purchaser pursuant to the
foregoing clause “(iii)”, return the Confessions of Judgment to Seller marked
“cancelled.” 

               (g)
Any actions arising out of this Agreement, including without limitation, the
resolution of any disputes as to whether a party has defaulted in or breached
any of its obligations under this Agreement and/or whether a party shall be
entitled to terminate this Agreement or the Security Agreement, shall be, at
the request of either party, resolved by binding arbitration conducted in New
York City, with John Zuccotti serving as sole arbitrator, subject to and in
accordance with the terms of this Section 20(g). If John Zuccotti
is unable or unwilling to serve as arbitrator, each party shall, within three
(3) business days following notice to both parties from John Zuccotti or his
designated representative of his unavailability, designate one (1) arbitrator
of its choosing, and the two (2) designated arbitrators shall, within three (3)
business days of their appointment, designate a third arbitrator who shall be
an attorney having at least ten (10) years of commercial real estate experience
(John Zuccotti or such panel of three (3) arbitrators, the “Arbitrator”).
If the Arbitrator consists of a panel of three (3) arbitrators, all decisions
of the Arbitrator shall require agreement by at least two (2) of such three
(3). Any such arbitration will be commenced by service of the claimant’s demand
for arbitration upon counsel for the respondent. Simultaneously with or
promptly following serving its demand for arbitration, the claimant shall send
a copy of such demand to John Zuccotti together with a request that John
Zuccotti serve as the arbitrator with respect thereto and shall send a copy of
such demand to each of Royal and FATCO in their capacities as escrow agents
under the COJ Escrow Agreement and Termination Escrow Agreement, respectively.
Any answer to the demand for arbitration will be served on counsel for the
claimant within five (5) business days after service of the demand, and any
reply to any counterclaim asserted in the answer will be served on counsel for
the respondent and the Arbitrator within three (3) business days after service
of the answer. Claimant’s demand for arbitration, any answer to such demand and
any reply to such answer, shall be served on the Arbitrator simultaneously with
service on opposing counsel, unless the Arbitrator has yet to be determined at
such time. Within ten (10) business days after service of the demand for
arbitration or appointment of a panel of three (3) arbitrators, whichever is
later, the Arbitrator will give the parties’ counsel notice of the time, date
and place of the arbitration hearing, such hearing to be scheduled to begin
within ten (10) business days after such notice. The arbitration will be
conducted subject to Rules E-1, E-3, E-5, E-8 and E-9 of the Expedited
Procedures of the Commercial Arbitration Rules of the American Arbitration
Association, it being understood that the provisions of this Section 20(g)
shall supersede any 

33

conflicting or inconsistent provision of such Rules.
At the Arbitrator’s discretion, the Arbitrator may direct the production of
documents in advance of the hearing. If an arbitration is commenced pursuant to
this Section 20(g), none of Purchaser, Tenant or Seller may seek to revive the
Action or Arbitration until the Arbitrator has rendered its final decision and
following such decision, the Arbitration and Action may only be revived if and
to the extent expressly permitted hereunder upon a termination of this
Agreement and consistent with the Arbitrator’s decision. In the event that
either party fails to timely designate its alternate arbitrator within the
required three (3) business day period, and such failure is not cured within
two (2) business after written notice thereof, the other party may designate
such third arbitrator. The terms of this Section 20(g) shall not apply
to the respective rights and remedies of Seller and Purchaser following the
Closing, which rights and remedies shall, subject to the terms and conditions
of this Agreement, include those available at law, in equity and otherwise.

               (h)
Subject to Section 20(g), in the event of a termination of this
Agreement in accordance with the terms and provisions of Section 6(b) or
Section 13(b) or due to the failure of a condition to closing set forth
in Section 10 to occur where such failure was not the result of a breach
by either party to the extent described in clauses “(i)” or “(ii)” of Sections
20(a) or (b) (each, a “No-Fault Termination”), (x) the Deposit shall
be returned to Purchaser, (y) Purchaser shall be entitled, upon notice to
Seller, to instruct FATCO to deliver all Arbitration Termination Documents to
Purchaser, whereupon Purchaser may elect to destroy the same, and (z) Purchaser
shall be entitled, upon notice to Seller, to instruct Royal to deliver the
Confessions of Judgment to Purchaser, and proceed with the Arbitration of
Tenant’s Claims and to revive the Action. If the Arbitration Termination
Documents are released to Purchaser pursuant to this Section 20(h) and
Purchaser and/or Tenant elects to reinstate the Arbitration and revive the Action,
Seller will not object to Purchaser and/or Tenant taking such action, and in no
event will either party’s rights in the Legal Proceedings be prejudiced or in
any way diminished by reason of this Agreement, any delay occasioned by this
Agreement or any termination of this Agreement. In the event of a No-Fault
Termination, any action to reinstate the Arbitration or revive the Action may
only be taken following after the release of the Arbitration Termination
Documents to Purchaser and must be taken within forty five (45) days following
the date of such release.

               (i)
The provisions of this Section 20 shall survive the termination hereof.

          21.
FIRPTA COMPLIANCE.

          Seller
shall comply with the provisions of the Foreign Investment in Real Property Tax
Act, Section 1445 of the Internal Revenue Code of 1986 (as amended, “FIRPTA”).
Seller hereby represents and warrants that Seller is not a foreign person as
that term is defined in the Internal Revenue Code and Income Tax Regulations.
On the Closing Date, Seller shall comply with any temporary or final
regulations promulgated with respect thereto and any relevant revenue
procedures or other officially published announcements of the Internal Revenue
Service of the U.S. Department of the Treasury in connection therewith.

34

          22.
ENTIRE AGREEMENT.

          Subject
to the terms of Section 15 hereof, this Agreement contains all of the
terms agreed upon between Seller and Purchaser with respect to the subject
matter hereof, and all prior agreements, understandings, representations and
statements, oral or written, between Seller and Purchaser are merged into this
Agreement. The provisions of this Section 22 shall survive the Closing
or the termination hereof.

          23.
AMENDMENTS.

          This
Agreement may not be changed, modified or terminated, except by an instrument
executed by Seller and Purchaser. The provisions of this Section 23
shall survive the Closing or the termination hereof.

          24.
WAIVER.

          No
waiver by either party of any failure or refusal by the other party to comply
with its obligations shall be deemed a waiver of any other or subsequent
failure or refusal to so comply. The provisions of this Section 24 shall
survive the Closing or the termination hereof.

          25.
PARTIAL INVALIDITY.

          If
any term or provision of this Agreement or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and shall be enforced to the fullest extent
permitted by law. The provisions of this Section 25 shall survive the
Closing or the termination hereof.

          26.
SECTION HEADINGS.

          The
headings of the various sections of this Agreement have been inserted only for
the purposes of convenience, and are not part of this Agreement and shall not
be deemed in any manner to modify, explain, expand, or restrict any of the
provisions of this Agreement. The provisions of this Section 26 shall
survive the Closing or the termination hereof.

          27.
GOVERNING LAW.

          This
Agreement shall be governed by the laws of the State of New York without giving
effect to conflict of laws principles thereof. The provisions of this Section
27 shall survive the Closing or the termination hereof.

35

          28.
PARTIES; ASSIGNMENT AND RECORDING.

               (a)
This Agreement and the various rights and obligations arising hereunder shall
inure to the benefit of and be binding upon Seller and Purchaser and their
respective successors and permitted assigns.

               (b)
Purchaser may not assign or otherwise transfer this Agreement or any of its
rights or obligations hereunder or any of the direct or indirect ownership
interests in Purchaser, without first obtaining Seller’s consent thereto. Notwithstanding
the foregoing, the Purchaser named herein shall have the right to assign this
entire Agreement (including the Deposit and that certain Principal Guaranty,
dated as of the date hereof, made jointly and severally by the Seller
Principals, a copy of which is attached hereto as Exhibit 11 (the “Principal
Guaranty”) and all rights hereunder and thereunder) to a Controlled
Affiliate (as defined below); provided that such an assignment or transfer of
this Agreement shall not relieve the Purchaser named herein of any of its
obligations hereunder or the transactions contemplated hereby and the Purchaser
named herein shall remain liable on a joint and several basis with such
assignee for the payment and performance of Purchaser’s obligations under this Agreement
and the transactions contemplated hereby which accrue prior to the date of such
assignment (including, without limitation, those liabilities under Section
35 hereof). “Controlled Affiliate” shall mean any entity (i)
controlled, directly or indirectly, by Sotheby’s, a Delaware corporation (“Parent”),
and (ii) not less than 30% of the beneficial interests in which are owned,
directly or indirectly, by Parent, as of the date of the assignment and the
Closing Date. “Controlled by” means the power and authority to direct
the business and affairs of the assignee. Any attempted assignment in violation
of the foregoing shall be void. Seller acknowledges that Parent is a publicly
traded company, and agrees that any restrictions in this Section 28(b)
on assignments and transfers shall not apply to or otherwise restrict any
purchases, sales, trades or other transfers of the stock of, or shareholder or
other ownership interests in, Parent. 

               (c)
Neither this Agreement nor any memorandum hereof may be recorded without first
obtaining Seller’s consent thereto.

               (d)
The provisions of Section 28(a) and 28(c) shall survive the
Closing or the sooner termination hereof. The provisions of Section 28(b)
shall survive the termination hereof.

          29.
CONFIDENTIALITY AND PRESS RELEASES.

               (a)
Until the Closing, Purchaser and its “executive officers” (as defined in Rule 3b-7 of the General
Rules and Regulations under the Securities Exchange Act of 1934)
(collectively, the “Purchaser Confidentiality Parties”) will treat the
information disclosed to it by Seller in connection with the transaction
contemplated hereby, or otherwise gained through Purchaser’s access to Seller’s
books and records, as confidential, giving it the same care as Purchaser
Confidentiality Parties’ own confidential information, and make no use of any
such disclosed information not independently known to Purchaser Confidentiality
Parties except in connection with the transactions contemplated hereby. Each of
the Purchaser Confidentiality Parties shall advise its employees, attorneys,
agents and consultants that are provided access to such information of the
foregoing confidentiality restrictions, and instruct them to observe the

36

same. Until the Closing, Seller will treat the
information disclosed to it by Purchaser in connection with the transaction
contemplated hereby, as confidential, giving it the same care as Seller’s own
confidential information, and make no use of any such disclosed information not
independently known to Seller except in connection with the transactions
contemplated hereby. Seller shall advise its principles, attorneys, agents,
employees and consultants of the foregoing confidentiality restrictions, and
instruct them to observe the same.

               (b)
None of Seller and/or all of the officers and directors of Seller
(collectively, the “Seller Confidentiality Parties”) or any Purchaaser
Confidentiality Parties shall issue any press releases (or other public
statements) whether before or after the Closing Date, with respect to the
transaction contemplated in this Agreement or the negotiation thereof without
approval of the other party, which approval may not be unreasonably withheld,
conditioned or delayed. 

               (c)
The parties identified on Schedule E (the “Non-Disparaging Parties”)
shall not, and (i) Purchaser shall instruct its “executive officers” (as
defined in Rule
3b-7 of the General Rules and Regulations under the Securities Exchange Act of
1934) not to, and (ii) each Seller Confidentiality Party shall not, at
any time, make any public statements, or include in any public disclosure,
whether written or oral, or take any other action which is intended, or could
reasonably be expected, to publicly disparage, defame, or harm the reputation
of, or otherwise cause adverse publicity to, any other Non-Disparaging Party.
Moreover, if any Non-Disparaging Party receives a question or inquiry from a
third-party in connection with any news, reporting or other media business,
with respect to status or specific terms of the Action or Arbitration, such
Non-Disparaging Party shall not respond other than by stating either, “The
parties have resolved the matter,” or “No comment.”

               (d)
Seller acknowledges that Parent is a public company, and that nothing in this Section
29 shall apply to, restrict or otherwise prevent Parent, Seller or any
Seller Confidentiality Parties (and/or their respective representatives,
professionals and agents) from filing or otherwise disclosing facts,
information or other data relating to Parent, Purchaser, Seller and/or this
transaction as may be required by law, rule or regulation, or with respect to
which Parent, Seller or any Seller Confidentiality Party may be obligated to
comply, including in respect of any applicable securities laws, tax codes or
otherwise and including a form “8k” and the “Q&A” customarily related
thereto.

               (e)
The provisions of Section 29(a) shall survive Closing or the sooner
termination of this Agreement; the provisions of Section 29(b) and (c)
shall survive the Closing or the sooner termination of this Agreement, in
either case for a period of eighteen (18) months; and the provisions of Section
29(d) and this Section 29(e) shall survive the Closing or the sooner
termination of this Agreement, without limitation.

          30.
FURTHER ASSURANCES.

          Seller
and Purchaser will do, execute, acknowledge and deliver all and every such
further acts, deeds, conveyances, assignments, notices, transfers and assurances
as may be reasonably required by the other party, for the better assuring,
conveying, assigning, transferring and confirming unto Purchaser the Property
and for carrying out the intentions or facilitating the

37

consummation of this Agreement. The provisions of this
Section 30 shall survive the Closing.

          31.
THIRD PARTY BENEFICIARY.

          This
Agreement is an agreement solely for the benefit of Seller and Purchaser (and,
as to Sections 15, 20(d) and 20(h) hereof, Tenant) (and their permitted
successors and/or assigns). No other person, party or entity shall have any
rights hereunder nor shall any other person, party or entity be entitled to
rely upon the terms, covenants and provisions contained herein. The provisions
of this Section 31 shall survive the Closing or the termination hereof.

          32.
JURISDICTION AND SERVICE OF PROCESS.

          The
parties hereto agree to submit to personal jurisdiction in the State of New
York in any action or proceeding arising out of this Agreement and, in
furtherance of such agreement, the parties hereby agree and consent that
without limiting other methods of obtaining jurisdiction, personal jurisdiction
over the parties in any such action or proceeding may be obtained within or
without the jurisdiction of any court located in New York and that any process
or notice of motion or other application to any such court in connection with
any such action or proceeding may be served upon the parties by registered or
certified mail to or by personal service at the last known address of the
parties, whether such address be within or without the jurisdiction of any such
court. Purchaser hereby irrevocably designates its counsel, Stroock, &
Stroock & Lavan LLP, as its agent for service of process in connection with
any matter relating to this Agreement. Seller hereby irrevocably designates its
counsel, Fried, Frank, Harris, Shriver & Jacobson LLP, as its agent for
service of process in connection with any matter relating to this Agreement.
The provisions of this Section 32 shall survive the Closing or the
termination hereof.

          33.
WAIVER OF TRIAL BY JURY.

          Seller
and Purchaser hereby irrevocably and unconditionally waive any and all right to
trial by jury in any action, suit or counterclaim arising in connection with,
out of or otherwise relating to this agreement. The provisions of this Section
33 shall survive the Closing or the termination hereof.

          34.
MISCELLANEOUS.

               
(a) This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument.

               (b)
Any consent or approval to be given hereunder (whether by Seller or Purchaser)
shall not be effective unless the same shall be given in advance of the taking
of the action for which consent or approval is requested and shall be in
writing. Except as otherwise expressly provided herein, any consent or approval
requested of Seller or Purchaser may be withheld by Seller or Purchaser in its
sole and absolute discretion.

38

               (c)
Seller’s taxpayer identification number is 05-0550916; Purchaser’s taxpayer
identification number is 38-2478409.

               (d)
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 including a qualified
intermediary, an exchange accommodation title holder or one or more single
member limited liability companies that are owned by any of the foregoing
persons), 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, the Treasury Regulations thereunder and IRS Revenue Procedure 2000-37.
Purchaser shall promptly execute any and all documents reasonably requested by
Seller to effect such exchange, and otherwise assist and cooperate with Seller
in effecting such exchange, provided that (i) any such documents shall not
impose upon Purchaser any obligation beyond those arising under this Agreement
other than de minimis or
ministerial obligations, and (ii) any additional costs and expenses incurred by
Purchaser as a result of structuring such transaction as an exchange (including
reasonable attorneys fees and disbursements), as opposed to an outright sale,
shall be borne by Seller, and Seller shall indemnify and hold Purchaser
harmless from and against all losses, damages, costs, expenses and liabilities
(including, without limitation, reasonable attorneys’ fees) solely to the
extent incurred by Purchaser by reason of its performance of its obligations
under this Section 34(d). The foregoing indemnity shall not be limited
by the Floor or the Cap. None of Seller’s obligations under this Agreement
shall be conditioned upon the completion of such exchange program and the
acquisition of the replacement property. The provisions of this Section
34(d) shall survive the Closing or the termination hereof.

               (e)
This Agreement is not intended, and shall not be deemed, to constitute an
“executory contract for the sale of real property under which the vendee has or
is entitled to possession”, as contemplated on under New York Tax Law Section
250, and it is acknowledged that any right of possession of Tenant to the
Premises pursuant to the Sotheby’s Lease is and shall be separate and distinct
from any rights and remedies of Purchaser pursuant to the terms of this
Agreement.

          35.
ATTORNEYS’ FEES.

          In
the event of any arbitration under Section 20(g) between the parties
hereto to enforce any of the provisions of this Agreement or any right of
either party hereto or a litigation after Closing as contemplated by the final
paragraph of Section 11(c), the unsuccessful party to such arbitration
or litigation shall pay to the successful party all costs and expenses,
including reasonable attorneys’ fees and disbursements, incurred herein by the
successful party in and as part of the judgment rendered in such arbitration or
litigation. The foregoing shall not apply to the Arbitration, the Action or the
Appeal, which shall be governed by the terms, if any, of the Sotheby’s Lease,
governing the costs of enforcement and dispute resolution. 

39

          36.
INTENTIONALLY OMITTED.

          37.
EXCULPATION.

               (a)
Purchaser agrees that, other than with respect to its rights pursuant to the
Principal Guaranty (the “Recourse Rights”), it does not have and will
not have any claims or causes of action against any disclosed or undisclosed
officer, director, employee, trustee, shareholder, partner, member, principal,
parent, owner, subsidiary or other affiliate of Seller, including, without
limitation, RFR Holding LLC, or any officer, director, employee, trustee,
shareholder, partner or principal of any such parent, subsidiary or other
affiliate (collectively, “Seller’s Affiliates”), arising out of or in
connection with this Agreement or the transactions contemplated hereby. Other
than in respect of its Recourse Rights, Purchaser agrees to look solely to
Seller and its assets for the satisfaction of any liability or obligation
arising under this Agreement or the transactions contemplated hereby, or for
the performance of any of the covenants, warranties or other agreements
contained herein, and further agrees not to sue or otherwise seek to enforce
any personal obligation against any of Seller’s Affiliates with respect to any
matters arising out of or in connection with this Agreement or the transactions
contemplated hereby. Without limiting the generality of the foregoing
provisions of this Section 37(a), other than in respect of its Recourse
Rights, Purchaser hereby unconditionally and irrevocably waives any and all
claims and causes of action of any nature whatsoever it may now or hereafter
have against Seller’s Affiliates, and hereby unconditionally and irrevocably
releases and discharges Seller’s Affiliates from any and all liability
whatsoever which may now or hereafter accrue in favor of Purchaser against
Seller’s Affiliates, in connection with or arising out of this Agreement or the
transactions contemplated hereby. The foregoing is not intended and shall not be
deemed to (i) amend or modify, or to constitute a waiver by Seller or Tenant
of, Article 23 of the Sotheby’s Lease, (ii) apply to any transactions other
than the purchase and sale of the Property pursuant to and in accordance with
the terms of this Agreement, or (iii) other than as may be expressly provided
for herein, waive, modify or otherwise affect Seller’s or Tenant’s respective
claims, defenses, rights and/or remedies in respect of the Arbitration, the
Action or the Appeal or any matters heretofore or hereafter relating thereto.
Nothing in this Section 37(a) is intended or shall be deemed to
constitute a waiver by Parent of any of its defenses, counterclaims or other
actions from time to time raised or otherwise available to Parent under or in
respect of the Sotheby’s Lease Guaranty.

               (b)
Seller agrees that it does not have and will not have any claims or causes of
action against any disclosed or undisclosed officer, director, employee,
trustee, shareholder, partner, member, principal, parent, owner, subsidiary or
other affiliate of Purchaser, or any officer, director, employee, trustee,
shareholder, partner or principal of any such parent, subsidiary or other
affiliate (collectively, “Purchaser’s Affiliates”), arising out of or in
connection with this Agreement or the transactions contemplated hereby. Seller
agrees to look solely to Purchaser and its assets for the satisfaction of any
liability or obligation arising under this Agreement or the transactions
contemplated hereby, or for the performance of any of the covenants, warranties
or other agreements contained herein, and further agrees not to sue or
otherwise seek to enforce any personal obligation against any of Purchaser’s
Affiliates with respect to any matters arising out of or in connection with
this Agreement or the transactions contemplated hereby. Without limiting the
generality of the foregoing provisions of this Section

40

37(b),
Seller hereby unconditionally and irrevocably waives any and all claims and
causes of action of any nature whatsoever it may now or hereafter have against
Purchaser’s Affiliates, and hereby unconditionally and irrevocably releases and
discharges Purchasers Affiliates from any and all liability whatsoever which
may now or hereafter accrue in favor of Seller against Purchaser’s Affiliates,
in connection with or arising out of this Agreement or the transactions
contemplated hereby. The foregoing is not intended and shall not be deemed to
(i) amend or modify, or to constitute a waiver by Seller or Tenant of, Article
23 of the Sotheby’s Lease, (ii) apply to any transactions other than the
purchase and sale of the Property pursuant to and in accordance with the terms
of this Agreement, or (iii) other than as may be expressly provided for herein,
waive, modify or otherwise affect Seller’s or Tenant’s respective claims,
defenses, rights and/or remedies in respect of the Arbitration, the Action or
the Appeal or any matters heretofore or hereafter relating thereto. Nothing in
this Section 37(b) is intended or shall be deemed to affect any of
Seller’s rights and remedies (x) pursuant to the Sotheby’s Lease Guaranty and
(y) against Tenant under the Sotheby’s Lease and in connection with the
Arbitration and the Action.

               (c)
The provisions of this Section 37 shall survive the termination of this
Agreement and the Closing.

          38.
EXISTING FINANCING.

               (a)
Existing Financing. Seller is presently the borrower under that certain
mortgage loan (the “Existing Financing”) encumbering the Property,
originated by Bank of America, N.A. (“Lender”), in the original
principal amount of $235,000,000, pursuant to and in accordance with all of
those instruments, documents and other materials described on Schedule C
hereto (collectively, the “Loan Documents”). The Existing Financing has
been securitized, and is presently serviced by Bank of America, N.A. (the “Servicer”).

               (b)
Lender’s Consent. Purchaser and Seller acknowledge the mutual benefit of
obtaining the written consent (“Lender’s Consent”) of the Lender and/or
the Servicer, as applicable (which, for purposes of this Section 38(b),
shall be collectively referred to as “Lender”), to the conveyance of the
Property in its entirety to, and the related assumption of the Existing
Financing by, Purchaser, as contemplated under this Agreement, pursuant to and
in accordance with the terms and conditions of Section 7.5 of the Loan
Agreement. In furtherance thereof, Seller and Purchaser hereby confirm the
following anticipated protocol for obtaining Lender’s Consent, expressly
agreeing, however, that neither Seller nor Purchaser shall be under any
affirmative obligation, expressly or implicitly, to adhere to or carry out such
protocol, nor shall (except as may otherwise be expressly provided herein)
Seller or Purchaser be in deemed to be in default or breach under this
Agreement for the failure to obtain Lender’s Consent for any reason or no
reason:

                    (i)
On or before the date that is ten (10) business days following the date hereof,
Seller agrees that it shall notify the Lender, in writing and otherwise in
accordance with the terms of the Loan Agreement, of the transaction
contemplated hereby, and request that the Lender promptly furnish written
application requirements and conditions for obtaining Lender’s Consent (the “Initial
Consent Request”). In connection with the Initial Consent Request, Seller
shall deliver to Lender a copy of this Agreement, and is hereby authorized to
indicate in its submittal that Purchaser intends to make Parent available as
the

41

substitute “Borrower Principal” in respect of
obligations and liabilities accruing from and after the Closing Date pursuant
to Sections 12.6, and Articles 4, 13, 15 and 18 of the Loan Agreement.

                    (ii)
Purchaser or Seller, as the case may be, shall, promptly upon receipt from
Lender of any written response to the Initial Consent Request containing
Lender’s application requirements and conditions (the “Consent Requirements”),
forward the same to the other party (in accordance with the terms of Section
19 hereof).

                    (iii)
In respect of the Consent Requirements, if any:

                          (1)
Purchaser shall, provided the Consent Requirements are, in Purchaser’s
reasonable discretion, reasonable and customary for similar transactions and
not materially inconsistent with the provisions of Section 7.5 of the Loan
Agreement, proceed with reasonable promptness and diligence to deliver to the
Lender a formal application requesting Lender’s Consent (the
“Request Application”), and same shall be accompanied by check or wire
of immediately available funds by Purchaser in payment of (x) the $25,000
processing fee required under terms of Section 7.5(b) the Loan Agreement, and
(y) any other application fees and any advance legal and processing fees
required by the terms of the Consent Requirements or as reasonably requested by
Lender to commence and expedite the processing of the Request Application
(collectively, the “Assumption Costs”). Simultaneously with or promptly
following sending the Request Application to Lender, Purchaser shall send a
copy thereof to Seller.

                          (2)
Following submission of the Request Application to Lender, Purchaser shall
provide to Lender such information, financial statements, and any additional
information (as is under Purchaser’s control) as may be requested by Lender,
including authorization to conduct background checks and credit inquiries;
provided, however, that Purchaser shall not be obligated to accommodate any
such request by Lender that in Purchaser’s reasonable discretion, is not
reasonable and customary for similar transactions and is materially
inconsistent with the provisions of Section 7.5 of the Loan Agreement.

                          (3)
If required by the terms of the Consent Requirements, the Loan Agreement or
otherwise reasonably requested by Lender, Purchaser shall identify Parent as
the substitute “Borrower Principal” in respect of obligations and liabilities
accruing from and after the Closing Date pursuant to Sections 12.6, and
Articles 4, 13, 15 and 18 of the Loan Agreement, and provide Lender with such
information, financial statements, and any additional information as may be
dictated by the Consent Requirement or as otherwise reasonably requested by
Lender, including authorization to conduct background checks and credit
inquiries with respect to Purchaser and Parent (in its capacity as substitute
“Borrower Principal”), provided that that (w) any liability to such substituted
Borrower Principals shall, expressly, be only on a going-forward basis, as to
liabilities and obligations first accruing from and after Closing, (x) in no
event shall Purchaser be required to offer any one or more individuals,
entities or other parties other than Parent as a substitute Borrower Principal
except as may be acceptable to Purchaser in its sole discretion, (y) in no
event shall Purchaser (or any substitute Borrower Principal) be required to
post a letter of credit or furnish other credit enhancement, unless Borrower
and/or such substitute Borrower Principal shall elect, in its sole discretion,
to do so, and (z) any obligations and liabilities of such substituted Borrower 

42

Principals shall, expressly, be only in respect of
Sections 12.6, and Articles 4, 13, 15 and 18 of the Loan Agreement.

                          (4)
Purchaser acknowledges that Seller shall request that Lender release any
presently existing Borrower Principals from all obligations and liability under
and with respect to the Existing Financing accruing from and after the Closing
Date, and the return to Seller of a letter of credit, if any, delivered in
connection with the Existing Financing by Seller or any affiliate of Seller.

                    (iv)
Seller and Purchaser acknowledge and agree that in order for any Lender’s
consent to the conveyance of the Property to, and the related assumption of the
Existing Financing by, Purchaser, to constitute “Lender’s Consent” as
contemplated under this Section 38, the same must (x) be in writing and
delivered to both Seller and Purchaser, and (y) be acceptable in form and
substance to Seller and Purchaser in their respective sole discretion.

                    (v)
Seller and Purchaser acknowledge and agree the Lender’s Consent may be conditional
upon or subject to (x) the closing of the purchase and the sale of the Property
contemplated under this Agreement, and/or (y) the execution and delivery of
certain specified documents and deliveries specified therein.

                    (vi)
Seller and Purchaser each agree, if requested in writing by the other party, to
confirm in writing within five (5) business days following receipt of such
request, whether Lender’s Consent has been obtained, in order to avoid any
ambiguity or misunderstanding between the parties, and to dictate whether the
terms of either Section 38(c) or Section 38(e) hereof shall
apply.

                    (vii)
If Lender’s Consent is not obtained on or before the date that is one hundred
twenty (120) days following the date of this Agreement and Seller asserts that
such failure is the result of Purchaser’s default in its obligations under Sections
38(b)(iii)(1) or 38(b)(iii)(2) and/or 38(b)(iii)(3),
then, subject to Section 20(g), as Seller’s sole and exclusive remedies
with respect to such default, (A) Seller may immediately terminate the Security
Agreement and (B) Seller or the grantor under the Security Agreement may
terminate the UCC-1s by filing UCC-3 financing statement amendments.

               (c)
Assumption Obligations.

          If
Lender Consent shall be obtained and accepted by Seller and Purchaser in
accordance with the terms of Sections 38(b)(iv), (v) and (vi),
and the Existing Financing shall be assumed by Purchaser upon the Closing,
then:

                    (i)
Purchaser shall, upon Closing, execute and/or deliver or cause to be delivered
to the Lender one or more agreements, legal opinions, resolutions,
certificates, hazard and title insurance endorsements, and such other
instruments and documents as the Lender may require in connection with
Purchaser’s acquisition of the Property, all to the extent expressly provided
for in the Lender’s Consent (including, without limitation, if required at the
time of Closing, the provision of any updated information, payment of any
additional fees, update of title insurance, and delivery of any additional
instruments or documents as the Lender

43

may require to produce a timely Lender’s Consent as of
the Closing), and Purchaser shall otherwise comply with all of the requirements
and provisions of Section 7.5 of the Loan Agreement and the Lender’s Consent to
the extent same are incumbent upon the proposed successor borrower (as
distinguished from the existing borrower). Seller shall comply with all of the
requirements and provisions of Section 7.5 of the Loan Agreement and the
Lender’s Consent to the extent to same are incumbent upon the existing borrower
(as distinguished from the proposed successor borrower). 

                    (ii)
Seller shall execute and deliver (and, if applicable, cause any existing
Borrower Principals to execute and deliver) such releases of the Lender as may
be requested by the Lender to obtain Lender’s Consent.

                    (iii)
Purchaser may request, but shall not demand as a condition to Closing, the
Lender’s consent to any matter other than the Lender’s Consent, and the
obligations of Seller and Purchaser under this Agreement shall not be subject
to or conditioned upon obtaining any other consent or changes to the Loan
Documents of any kind from the Lender or pursuant to the Existing Financing or
Loan Documents. Seller acknowledges and agrees that nothing herein shall
prevent Purchaser from engaging in discussions and negotiations with Lender,
Servicer and their respective legal counsels in respect of closing
documentation, deliveries and requirements.

                    (v)
All costs and expenses relating to an assumption of the Existing Financing,
including without limitation, those costs and expenses as set forth in Section
38(b)(iii)(1), shall be governed by the terms of Section 38(f)
below.

               (d)
Delay in Closing.

          In
the event that Lender’s Consent is obtained on or before the Consent Outside
Date, but Closing does not occur hereunder within the timeframe contemplated by
the terms of the Lender’s Consent (whether stated as an expiration date, or,
effectively, as a condition or requirement thereto), Seller and Purchaser
acknowledge that the Lender’s Consent may lapse and/or expire, in which case:

                    (i)
Seller and Purchaser shall make commercially reasonable efforts to renew,
confirm and/or reapply for, as applicable, a new Lender’s Consent and/or
reactivate/re-implement the previously furnished Lender’s Consent, all on the
same substantive terms and conditions of any previously furnished Lender’s
Consent.

                    (ii)
In the event that Seller and Purchaser do not, at least thirty (30) days prior
to the Scheduled Closing Date (the “Consent Renewal Deadline”), obtain a
new Lender’s Consent and/or reactivate, re-implement and ratify, as applicable,
the previously furnished Lender’s Consent, all on the same substantive terms
and conditions of any previously furnished Lenders’ Consent (or on such terms
and conditions mutually agreeable to Seller and Purchaser) and otherwise
consistent with the terms of this Section 38, then the terms of Section
38(e) hereof shall govern except that Purchaser shall have the right upon
written notice to Seller within five (5) Business Days after the Consent
Renewal Deadline to extend the Scheduled Closing Date by no more than sixty
(60) days.

44

               (e)
Failure to Obtain Lender’s Consent. If (i) Lender’s Consent shall not be
obtained prior to April 1, 2008 (the “Consent Outside Date”), or (ii)
Lender’s Consent shall have been previously obtained, but not timely renewed,
reactivated and/or ratified on or before the Consent Renewal Deadline, then the
Existing Financing shall be defeased on the Scheduled Closing Date as set forth
in Section 38(f) and clauses (i) – (iv) of this Section 38(e).
Upon written notice not less than five (5) business days prior to the
then-existing Consent Outside Date, Seller or Purchaser may from time to time
extend the Consent Outside Date to a date not later than July 1, 2008 in one or
more (30) thirty day intervals, provided, however, that Purchaser shall not be
entitled to extend the Consent Outside Date if Seller has sent an Accelerated
Closing Notice to Purchaser that was not subsequently revoked by an
Acceleration Revocation. Notwithstanding the foregoing, if Lender’s Consent
shall have been previously obtained, but not timely renewed, reactivated and/or
ratified on or before the Consent Renewal Deadline but is renewed, reactivated
and/or ratified within thirty (30) days following the Consent Renewal Deadline
then (x) the Existing Financing shall not be defeased and shall instead be
assumed by Purchaser on the Scheduled Closing Date and (y) either party may
extend the Scheduled Closing Date to a date occurring no later than the date
that is thirty (30) days after the date on which Lender’s Consent was renewed,
reactivated and/or ratified.

                    (i)
Seller shall notify the Lender, within five (5) Business Days after the later
to occur of, as applicable, (x) the Consent Outside Date, or (y) the Consent
Renewal Deadline, in writing that, Seller intends to defease the Existing
Financing by the Scheduled Closing Date (as may be determined pursuant to Section
18(b)), and request Lender’s instructions, requirements and conditions in
respect thereto. 

                    (ii)
Purchaser shall cooperate in all reasonable respects with Seller’s defeasance
of the Existing Financing, including, without limitation, (x) executing and
delivering any commercially reasonable documentation required in connection
therewith, and if necessary, deliver the same into escrow with the Title
Company or other escrow agent charged with effectuating the defeasance (the “Defeasance
Agent”) up to forty-eight (48) hours in advance of Closing (to wit, “day 1” of the defeasance
process), (y) causing funds equal to the sum of the balance of the Purchase
Price payable by Purchaser at Closing and fifty percent (50%) of the Defeasance
Costs (as defined below) be placed into escrow up to twenty-four (24) hours in
advance of Closing (to wit, “day
2” of the Defeasance process) and (z) entering into a reasonable and customary
escrow agreement with the Defeasance Agent (the “Defeasance Escrow Agreement”)
which shall provide, among other things, (1) for the deposit of documents and
funds with the Defeasance Agent, and the timetable with respect thereto, (2)
that necessary funds may be released from escrow to purchase the defeasance
collateral immediately prior to the transfer of title to the Property to
Purchaser, (3) that any Purchaser funds shall be released from escrow and
return to Purchaser in the event that Purchaser is entitled to a return of the
Deposit, and (4) such other terms and conditions as are customary in
transactions involving the simultaneous sale of property and the defeasance of
the mortgage encumbering such property, in conjunction with a “New York style”
assignment of such mortgage.

                    (iii)
Seller shall cooperate in all reasonable respects with the defeasance,
including, without limitation, (x) executing and delivering any commercially
reasonable documentation required in connection therewith (including, but not
limiting to, having Seller’s legal counsel deliver one or more required legal
opinions to for the benefit of

45

Lender, Servicer and/or the Defeasance Agent), and if
necessary, deliver the same into escrow with the Defeasance Agent up to
forty-eight (48) hours in advance of Closing (to
wit, “day 1” of the defeasance process), (y) if and to the extent
that the amount Deposited by Purchaser under subparagraph (ii)(y) is not
sufficient to satisfy all of Defeasance Costs and otherwise consummate the
Closing, funds equal to such shortfall shall be placed into escrow with the
Defeasance Agent up to twenty-four (24) hours in advance of Closing (to wit, “day 2” of the Defeasance process
and (z) entering into the Defeasance Escrow Agreement.

                    (iv)
Seller acknowledges that if the Existing Financing is defeased, Purchaser
intends for the mortgage securing the Existing Financing (the “Existing
Mortgage”) to be assigned to Purchaser’s new mortgage lender, in order to
effectuate certain mortgage recording tax savings. Seller acknowledges that any
such mortgage recording tax savings realized by Purchaser in connection with
any such assignment of the Existing Mortgage shall be for the sole benefit of
Purchaser, and Seller shall have no claim or right thereto. Seller agrees to
reasonably and diligently, in good faith, cooperate with Purchaser, Lender and
Purchaser’s prospective mortgage lender in order to facilitate and effectuate
an assignment of the mortgage securing the Existing Financing, including, but
not limited to, executing and delivering any commercially reasonable
documentation required in connection therewith, and if necessary, deliver the
same into escrow with the Defeasance Agent up to forty-eight (48) hours in
advance of Closing (to wit, “day
1” of the defeasance process), provided that (x) any such documents shall not
impose upon Seller any material obligation beyond those arising under this
Agreement, and (y) subject to the provisions of Section 38(f) below, any
additional costs and expenses incurred by Seller as a result of such assignment
(including reasonable attorneys fees), shall be borne by Purchaser, and
Purchaser shall indemnify and hold Seller harmless from and against all losses,
damages, costs, expenses and liabilities (including, without limitation,
reasonable attorneys’ fees) solely to the extent incurred by Seller by reason
of its performance of its obligations under this Section 38(e)(iv). The
foregoing indemnity shall survive the Closing. Purchaser hereby agrees that
that effectuation of an assignment of the Existing Mortgage as contemplated by
this Section 38(e)(iv) shall not be a condition precedent to Purchaser’s
obligations to close hereunder. 

               (f)
Payment of Expenses. (i) In the event that Lender’s Consent shall be
obtained, and the Existing Financing shall be assumed by Purchaser in
accordance with the terms of this Section 38: 

               (w)
Purchaser shall pay to Lender upon Closing (or reimburse Seller, if Seller
shall have previously paid the same), if and to the extent not theretofore
paid, (x) the Assumption Costs, (y) the 1% assumption fee contemplated by
Section 7.5(c)(i) of the Loan Agreement, and (z) any out-of-pocket costs and
expenses, including without limitation, all processing fees, application fees,
recording fees, underwriting and rating agency fees, reasonably attorney fees,
incurred by Lender (and chargeable to Borrower) in connection with the Lender’s
Consent as contemplated by Section 7.5(c)(i) of the Loan Agreement;

               (x)
Purchaser shall receive a credit against the balance of the Purchase Price
payable at Closing pursuant to Section 4(a)(ii) hereof in the amount of
any principal, accrued and unpaid interest and all other sums due and unpaid to
lender in respect of The Existing Financing that is assumed by Purchaser and
verified in writing by Lender, which

46

verification shall be conclusively binding upon Seller
and Purchaser (absent manifest error) (collectively, the “Assumed Loan
Liabilities”);

               (y)
Purchaser shall reimburse Seller (in the same manner as is provided for herein
for the payment of the balance of the Purchase Price) for any and all (i)
deposits, reserves and escrows being held as of the Closing Date by or for the
benefit of the Lender (or their servicer) under the Loan Documents, including,
without limitation, reserves or escrows for real estate taxes, insurance,
deferred maintenance, capital replacements, re-letting costs and/or tenant
improvements and leasing commissions, and (ii) for any and all other funds
derived from the Property held by the Lender (or the Servicer) in any lockbox
or other account or sub-account, subject to adjustment in accordance with
proration provisions specified herein, in each case (collectively, the “Lender
Reserves and Escrows”), if and to the extent that (x) the amount of such
Lender Reserves and Escrows, and the location and characterization thereof, are
verified in writing by Lender, and are duly transferred and assigned to and for
the benefit of Purchaser with the same force and effect as if Purchaser had
posted such funds for its own account, (y) Purchaser would otherwise be required,
pursuant to the terms of the Loan Documents, to post such funds for its own
account as a condition to Closing, and (z) Lender is not required to remit such
funds directly to Seller; and

               (z)
At the Closing, Seller shall, at Purchaser’s request, assign all of
Seller’s right, title and interest in the Lender Reserves and Escrows to
Purchaser, pursuant to such documents and other instruments reasonably
satisfactory to Purchaser and Lender.

                    (ii)
In the event that Lender’s Consent shall not be obtained and the Existing
Financing shall be defeased in accordance with the terms of Section 38(e),
then Seller and Purchaser shall each pay fifty percent (50%) of the aggregate
costs and expenses (collectively, the “Defeasance Costs”) related to a
defeasance of the Existing Financing, comprised of (i) the costs of obtaining
the replacement collateral, (ii) all processing fees of the Defeasance Agent,
the Lender and the Servicer, and (iii) any application fees (other than the
$25,000 processing fee paid to Lender by Purchaser pursuant to Section
38(b)(iii)(1) hereof and Lender’s costs and expenses (including, without
limitation legal fees and expenses) incurred by Lender in connection with the
proposed assumption of the Existing Financing by Purchaser, the payment of
which shall be the sole obligation of Purchaser), attorneys’ fees, recording
fees, underwriting and rating agency fees charged by the Defeasance Agent, the
Lender and the Servicer. It is acknowledged that Defeasance Costs are not
intended to include the base cost of any replacement collateral, but only the
cost differential between the amount of a principal payment and the purchase
cost of any replacement collateral, all as determined by the Defeasance Agent;
any such base cost shall be the sole obligation and liability of Seller and may
be paid by or at the direction of Seller out of funds paid by Purchaser in its
payment of the Purchase Price to Seller.

                    (iii)
The terms of this Section 38(f) shall survive Closing.

[Remainder of Page
Intentionally Left Blank]

47

          IN
WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed
the day and year first above written.

	
 

	
 

	
 

	
 

	
 

	
SELLER:

	
 

	
 

	
 

	
1334 YORK AVENUE L.P.,

	
 

	
a Delaware limited partnership

	
 

	
 

	
 

	
 

	
 

	
By: 1334 GP II LLC, A Delaware limited liability
 company, its general partner

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
PURCHASER:

	
 

	
 

	
 

	
SOTHEBY’S, a
 Delaware corporation

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

The undersigned hereby

acknowledges and consents

to and agrees to be bound by 

the provisions of Section 2(c), 

Sections 9(b)(ii) and (iii), Section 11(c)(ii) 

and Articles 15, 20 and 38:

SOTHEBY’S, INC., a
New York corporation,

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

48

SCHEDULE A

Description of the Land

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

BEGINNING AT
THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK AVENUE
(FORMERLY AVENUE A) AND THE SOUTHERLY SIDE OF 72nd STREET;

RUNNING THENCE
IN A SOUTHERLY DIRECTION ALONG THE EASTERLY SIDE OF YORK AVENUE 204 FEET 4
INCHES TO THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK
AVENUE AND THE NORTHERLY SIDE OF 71st STREET;

THENCE IN AN
EASTERLY DIRECTION ALONG THE NORTHERN SIDE OF 71st STREET, 198 FEET;

THENCE IN A
NORTHERLY DIRECTION AND PARALLEL WITH YORK AVENUE 204 FEET 4 INCHES TO THE
SOUTHERLY SIDE OF 72nd STREET;

AND THENCE IN
A WESTERLY DIRECTION ALONG THE SOUTHERLY SIDE OF 72nd STREET 198 FEET TO THE
POINT OR PLACE OF BEGINNING.

SCHEDULE B

Additional Permitted Encumbrances

	
 

	
 

	
1.

	
2007/2008
 2nd half taxes due 1/1/2008, water and sewer rents and assessments set forth
 in the Report.

	
 

	
 

	
2.

	
There are
 five open mortgages of record, which were consolidated to form a single lien
 of $235,000,000 in favor of Mortgage Electronic Registration Systems, Inc.
 (See Mortgage Schedule attached hereto).1

	
 

	
 

	
3.

	
Covenants
 and restrictions contained in deed made by Nathaniel P. Rogers and Emily
 Rogers to Griffith Rome dated 7/10/1871 and recorded 10/19/1871 in (as) Liber
 1199 Cp 151 (Liber is illegible), provided that the Title Company shall
 affirmatively insure, at no additional cost, that violation of the same shall
 not result in a forfeiture or reversion of title.

	
 

	
 

	
4.

	
Terms,
 covenants, conditions and agreements contained in a lease made by and between
 1334 York Avenue, L.P., Lessor, and Sotheby’s, Inc., Lessee, a memorandum of
 which dated 2/7/2003 was recorded on 3/7/2003 in (as) CRFN 2003000039218.

	
 

	
 

	
 

	
IN REGARD
 THERETO:

	
 

	
 

	
 

	
a)
 Landlord’s Waiver and Consent made by 1334 York Avenue L.P. in favor of
 JPMorgan Chase Bank, as collateral agent, dated as of 2/7/2003 and recorded
 3/7/2003 as CRFN 2003000039220.

	
 

	
 

	
 

	
b)
 Subordination, Non-Disturbance and Attornment Agreement made by and between
 Sotheby’s, Inc. and Bank of America, N.A. dated as of 6/22/2005 and recorded
 8/3/2005 as CRFN 2005000434392.

	
 

	
 

	
 

	
c)
 Subordination, Non-Disturbance and Attornment Agreement made by and between
 Sotheby’s, Inc. and Bank of America, N.A., dated as of 2/7/03 and recorded
 3/7/03 as CRFN 2003000039222.

	
 

	
 

	
 

	
d)
 Subordination Agreement made between Bank of America, N.A. and 1334 York
 Avenue L.P. dated as of 2/7/03 and recorded 3/7/03 as CRFN 2003000039221.

	
 

	
 

	
5.

	
Notice of
 Compliance made by New York City Department of Environmental Protection dated
 4/19/2006 and recorded 6/6/2006 as CRFN 2006000315143.

	
 

	
 

	
 

	
a) Order
 made by Commissioner of NYC Department of Environmental Protection dated
 12/5/2005 and recorded 3/17/2006 as CRFN 2006000154337.

1
Item 2 shall be deemed to be excluded from this schedule if the existing loan
is defeased (unless and to the extent such mortgages securing the existing loan
are assigned to a new lender in connection with any such defeasance).

	
 
	
 
	 	
 

	
6.
	
The
 following Financing Statement(s) (UCC-1):2

	
 
	
 
	 	
 

	
 
	
Debtor:
	 	
1334 York
 Avenue L.P.

	
 
	
 
	 	
 

	
 
	
Secured
 Party
	 	
Mortgage
 Electric Registration Systems, Inc.

	
 
	
 
	 	
 

	
 
	
File No.:
	 	
CRFN
 2005000396841

	
 
	
Filed:
	 	
7/15/2005

	
 
	
Covers:
	 	
Fixture
 Filing

	
 
	
Land (Block
 & Lot):
	 	
Block: 1483
 Lot: 1

	
 
	
 
	 	
 

	
7.
	
Zoning Lot
 Description and Ownership Statement made by Kohn Pedersen Fox Associates, PC
 dated 9/28/01 and recorded 10/1/01 in Reel 3364 page 1287.

	
 
	
 
	 	
 

	
8.
	
Certification
 Pursuant to Zoning Lot made by Chicago Title Insurance Company dated 9/17/01
 and recorded 10/1/01 in Reel 3364 page 1290.

	
 
	
 
	 	
 

	
9.
	
Subordination
 Agreement made by and between Sotheby’s, Inc. and The Chase Manhattan Bank
 dated as of 11/10/00 and recorded 11/28/00 in Reel 3196 page 721.

2 Item 6 shall be deemed to be excluded from
this schedule if the existing loan is defeased (unless and to the extent the
existing loan is assigned to a new lender in connection with any such
defeasance).

Mortgage Schedule

	
 

	
 

	
 

	
 

	
A.

	
Mortgage in
 the original principal amount of $75,000,000 made by Sibs, LLC to The Chase
 Manhattan Bank, as Collateral Agent for the benefit of the Lenders, dated as
 of 11/10/00 and recorded 11/28/00 in Reel 3196 page 685.

	
 

	
 

	
 

	
 

	
 

	
Mortgage Tax
 Paid: $2,062,500

	
 

	
 

	
 

	
 

	
 

	
1.

	
Said
 mortgage A was modified by a First Amendment to Mortgage, Assignment of
 Leases and Rents, Security Agreement and Financing Statement between Sibs,
 LLC and JP Morgan Chase Bank, as successor in interest to The Chase Manhattan
 Bank, in its capacity as collateral agent for the lenders referred to in a
 Credit Agreement, dated 7/11/01 and recorded 8/20/01 in Reel 3345 page 179.

	
 

	
 

	
 

	
 

	
 

	
2.

	
Said
 mortgage A was further modified by a Second Amendment to Mortgage, Assignment
 of Leases and Rents, security Agreement and Financing Statement between Sibs,
 LLC and JP Morgan Chase Bank, as successor in interest to The Chase Manhattan
 Bank, in its capacity as collateral agent for the lenders referred to in a
 Credit Agreement, dated 2/7/03 and recorded 3/7/03 as CRFN 2003000039197.

	
 

	
 

	
 

	
 

	
 

	
3.

	
Said
 mortgage A was assigned by JP Morgan Chase Bank (f/k/a The Chase Manhattan
 Bank) in its capacity as Collateral Agent for the benefit of the lenders to
 Bank of America, N.A. by Assignment of Mortgage dated 2/7/03 and recorded
 3/7/03 as CRFN 2003000039199.

	
 

	
 

	
 

	
 

	
B.

	
Substitute
 Mortgage B, Assignment of Leases and Rents, security Agreement and Fixture
 Filing in the original principal amount of $3,915,285.34 made by Sixth Avenue
 Partners, LLC, 516 Fifth Avenue Partners, LLC to Westdeutsche Immobilien Bank
 dated 10/8/02 and recorded 12/16/02 in Reel 3686 page 1528 (indexed against
 Block 1259 Lot 33-known as 516 Fifth Avenue).

	
 

	
 

	
 

	
 

	
 

	
Mortgage Tax
 Paid: $0

	
 

	
 

	
 

	
 

	
 

	
For
 Information Only: Said mortgage “B” was derived as
 follows:

	
 

	
 

	
 

	
 

	
 

	
Mortgage
 Severance Agreement made by and between sixth Avenue Partners, LLC, (original
 mortgagor), 516 Fifth Avenue Partners, LLC, (new mortgagor), collectively
 known as “the mortgagor” and Westdeutsche Immobilien Bank, a German Bank
 Corp., which splits and severs consolidated mortgage in Reel 2536 page 1560
 into two substitute Mortgages and Notes:

	
 

	
 

	
 

	
 

	
 

	
 

	
a.

	
Substitute
 Mortgage A in the amount of $6,584,714.66 indexed against Block 1259 Lot 33
 (known as 516 Fifth Avenue); and

	
 

	
 

	
 

	
 

	
 

	
 

	
b.

	
Substitute
 Mortgage B in the amount of $3,915,285.34 indexed against Block 1259 Lot 33
 (known as 516 Fifth Avenue).

	
 

	
 

	
 

	
 

	
 

	
Said
 mortgage B was spread to also encumber Block 868 Lots 1 and 9005 (known as
 425 Fifth Avenue) by Spreader Agreement made by and between 516 Fifth Avenue
 Partners, LLC, Sixth Avenue Partners, LLC, RED 425 Fifth Avenue, LP,
 collectively known as “the mortgagor” and Westdeutsche Immobilien Bank, dated
 10/23/02 and recorded 12/16/02 in Reel 3686 page 1572.

	
 

	
 

	
 

	
 

	
 

	
Said
 mortgage B was released from premises known as Block 1259 Lot 33 (known as
 516 Fifth Avenue) by Partial Release of Mortgage, Assignment of Leases and
 Rents, Security Agreement and Fixture Filing made by and between 516 Fifth
 Avenue Partners, LLC, Sixth Avenue Partners, LLC, RFD 425 Fifth Avenue, LP,
 known as “the mortgagor” and Westdeutsche Immobilien Bank, dated 10/23/02 and
 recorded 12/16/02 in Reel 3686 page 1589.

	
 

	
 

	
 

	
Said
 mortgage B was assigned by Westdeutsche Immobilien Bank to Eandesdank BVRY LW
 by Assignment of Mortgage dated 10/23/02 and recorded 12/16/02 in Reel 1386
 Page 1617.

	
 

	
 

	
 

	
Said
 mortgage B was spread to also encumber Block 1483 Lot 1 (known as 1334 York
 Avenue) by Spreader Agreement made by and between 1334 York Avenue L.P., 516
 Fifth Avenue Partners, LLC, Sixth Avenue Partners, LLC, RID 425 Fifth Avenue,
 LP, and Handesdank BVNY LLC, dated 2/7/03 and recorded 3/7/03 as CRFN
 2003000039200.

	
 

	
 

	
 

	
Said
 mortgage B was released from premises known as Lots 1 and 9005 (known as 425
 Fifth Avenue) by Partial Release of Mortgage, Assignment of Leases and Rents,
 Security Agreement and Fixture Filing made by and between 1334 York Avenue
 L.P., 516 Fifth Avenue Partners, LLC, Sixth Avenue Partners, LLC, RFD 425
 Fifth Avenue, LP, and Handesdank BVNY LLC, dated as of 2/7/03 and recorded
 3/7/03 as CRFN 2003000039201.

	
 

	
 

	
 

	
1.

	
Said
 mortgage B was assigned by Handesdank BVNY LLC to Bank of America, N.A. by
 Assignment of Mortgage dated as of 2/7/03 and recorded 3/7/03 as CRFN
 2003000039202.

	
 

	
 

	
 

	
 

	
C.

	
Mortgage “D”
 in the original principal amount of $46,203,527.99 made by Green 290 Madison
 LLC to Lehman Brothers Holdings Inc., d/b/a Lehman Capital Holdings Inc.,
 dated as of 2/7/03 and recorded 3/7/03 as CRFN 2003000039205. (originally
 covered other premises from which it was released)

	
 

	
 

	
 

	
 

	
 

	
Mortgage Tax
 Paid: $0

	
 

	
 

	
 

	
 

	
 

	
Said
 mortgage “C” was derived as follows:

	
 

	
 

	
 

	
 

	
 

	
Said
 mortgage in the amount of $197,403,527.99 made by 1515 Broadway Associates,
 L.P. to The Equitable Life Assurance Society of the United States dated as of
 5/15/02 and recorded 7/1/02 in Reel 3550 page 2430.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was assigned by The Equitable Life Assurance society of the United
 States to Lehman Brothers Holdings Inc. by Assignment of Mortgage dated
 5/15/02 and recorded 7/1/02 in Reel 3550 Page 2451.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was spread to additionally cover premises at 290 Madison Avenue, New
 York, N.Y. (Block 1275 Lot 16) by spreader Agreement made by and between
 Green 290 Madison LLC and Lehman Brothers Holdings Inc., dated 5/15/02 and
 recorded 7/1/02 in Reel 3550 page 2451.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was released from premises known as 1515 Broadway, New York, N.Y.
 (Block 1016 Lot 36) by Partial Release of Mortgage made by and between Lehman
 Brothers Holdings Inc. and 1515 Broadway Fee Owner LLC, dated as of 5/15/02
 and recorded 7/1/02 in Reel 3550 page 2462.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was modified by the Note and Mortgage Severance Agreement made by
 and between Green 290 Madison LLC and Lehman Brothers Holdings Inc., d/b/a
 Lehman Capital, dated as of 10/24/02 and recorded 12/6/02 in Reel 3678 page
 2086 into two mortgages as follows:

	
 

	
 

	
 

	
 

	
 

	
Mortgage
 “A”, which mortgage is not at issue here; and

	
 

	
 

	
 

	
 

	
 

	
Mortgage “B”
 in the original principal amount of $81,203,527.99 made by Green 290 Madison
 LLC to Lehman Brothers Holdings Inc., d/b/a Lehman Capital, dated as of
 10/24/02 and recorded 12/6/02 in Reel 3678 page 2105.

	
 

	
 

	
 

	
 

	
 

	
Said
 mortgage “B” was modified pursuing to Note and Mortgage Severance Agreement
 made by and between Lehman Brothers Holdings Inc., d/b/a Lehman Capital and
 Green 290 Madison LLC dated as of 2/7/03 and recorded 3/7/03 as CRFN
 2003000039203 into two mortgages as follows:

	
 

	
 

	
 

	
 

	
 

	
Mortgage
 “C”, which mortgage is not at issue here; and

	
 

	
 

	
 

	
 

	
 

	
Mortgage “D”
 in the amount of $46,203,527.99, which is shown in this chain as Mortgage C.

	
 

	
 

	
 

	
 

	
 

	
1.

	
Said
 mortgage C was assigned by Lehman Brothers Holdings Inc., d/b/a Lehman
 Capital to Handesdank BVNY LLC by Assignment of Mortgage dated as of 2/7/03
 and recorded 3/7/03 as CRFN 2003000039206.

	
 

	
 

	
 

	
 

	
 

	
2.

	
Said
 mortgage C was spread to also encumber Block 1483 Lot 1 (known as 1334 York
 Avenue) by Spreader Agreement made by and between 1334 York Avenue L.P.,
 Green 290 Madison LLC and Handesdank BVNY LLC, dated 2/7/03 and recorded
 3/7/03 as CRFN 2003000039207.

	
 

	
 

	
 

	
 

	
 

	
3.

	
Said
 mortgage C was released from premises known as 290 Madison Avenue, New York,
 N.Y. (Block 1275 Lot 16) by Partial Release of Mortgage made by and between
 1334 York Avenue L.P., Green 290 Madison LLC and Handesdank BVNY LLC, dated
 2/7/03 and recorded 3/7/03 as CRFN 2003000039208.

	
 

	
 

	
 

	
 

	
 

	
4.

	
Said
 mortgage C was assigned by Handesdank BVNY LLC to Bank of America, N.A. by
 Assignment of Mortgage dated 2/7/03 and recorded 3/7/03 as CRFN
 2003000039209.

	
 

	
 

	
 

	
 

	
D.

	
Mortgage “X”
 in the original principal amount of $4,131,186.71 made by Green 290 Madison
 LLC to Lehman Brothers Holdings Inc., d/b/a Lehman Capital, dated as of
 2/7/03 and recorded 3/7/03 as CRFN 2003000039211.

	
 

	
 

	
 

	
 

	
 

	
Mortgage Tax
 Paid: $0

	
 

	
 

	
 

	
 

	
 

	
For
 Information Only: Said mortgage “D” was derived as
 follows:

	
 

	
 

	
 

	
 

	
 

	
Leasehold
 Building Loan Mortgage, Assignment of Leases and Rents and Security Agreement
 in the amount of $29,974,999.50 made by 673 First Realty Company to The Chase
 Manhattan Bank, N.A., dated 8/25/98 and recorded 8/30/98 in Reel 1457 page
 1633 (which mortgage was originally secured by a Leasehold Interest in
 property located at 673 First Avenue, New York, N.Y.).

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was modified by a certain Mortgage Modification Agreement made by
 and between 673 First Realty company and The Chase Manhattan Bank, N.A. dated
 as of 7/17/92 and recorded 8/14/93 in Reel 1896 page 877.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was thereafter severed pursuant to that certain Note and Mortgage
 Severance Agreement made by and between 673 First Realty Company to The Chase
 Manhattan Bank, N.A. dated 12/10/93 and recorded 12/21/93 in Reel 2037 page
 2006.

	
 

	
 

	
 

	
 

	
 

	
Said
 Agreement split the mortgage into a continuing lien of $23,000,000 evidenced
 by the Mortgage, and a severed lien which is not at issue here;

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage, as severed and in the amount of $23,000,000, was assigned by The
 chase Manhattan Bank, N.A. to Mitsui Nevitt capital Corporation and
 Presidential Life Insurance Company (collectively, the “Mitsui Mortgagee”) by
 Assignment of Mortgage dated 12/10/93 and recorded 12/21/93 in Reel 2037 page
 2020.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was further amended by a certain Amended and Restated First
 Mortgage, Security Agreement and Assignment of Leases and Rents made by and
 between 673 First Realty Company, and Mitsui Nevitt Capital Corporation and
 Presidential Life Insurance Company (collectively, the “Mitsui Mortgagee”),
 dated 10/10/93 and recorded 12/21/93 in Reel 2037 page 2026.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was assigned by the Mitsui Leasing Capital Corporation (f/k/a Mitsui
 Nevitt capital corporation) and Residential Life Insurance company to Lehman
 Brothers Holdings Inc., d/b/a Lehman capital, by Assignment of Mortgage dated
 as of 12/26/02 and recorded 3/3/03 as CRFN 2003000030800 and re-recorded by
 Assignment of Mortgage dated as of 12/30/02 and recorded 3/7/03 as CRFN
 2003000039193.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was spread to additionally cover premises at 290 Madison Avenue, New
 York, N.Y. (Block 1275 Lot 16) by Spreader Agreement made by and between

	
 

	
 

	
 

	
 

	
 

	
Green 290
 Madison LLC and Lehman Brothers Holdings Inc., d/b/a Lehman capital, dated
 12/26/02 and recorded 3/3/03 as cH.FN 2003000030801, and by Spreader
 Agreement made by Green Madison LLC, Green 673 Realty LLC and Lehman Brothers
 Holding Inc., d/b/a Lehman Capital dated as of 12/30/02 and recorded 3/7/03
 as CRFN 2003000039194.

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was released from premises known as 673 First Avenue, New York, N.Y.
 (Block 944 Lot 22) by Partial Release of Mortgage made by and between Lehman
 Brothers Holdings Inc., d/b/a Lehman Capital and Green 673 Realty LLC, dated
 as of 12/26/02 and recorded 3/3/03 as CRFN 2003000030802 and by partial
 release made by Lehman Brothers Holdings Inc., d/b/a Lehman Capital and Green
 673 Realty LLC, dated as of 12/30/02 and recorded 3/7/03 as CRFN

	
 

	
 

	
 

	
 

	
 

	
Said above
 mortgage was further modified in the reduced principal balance of $5,675,473
 by a Note and Mortgage Severance Agreement made by and between Green 290
 Madison LLC and Lehman Brothers Holdings Inc., d/b/a Lehman Capital, dated as
 of 2/7/03 and recorded 3/7/03 as CRFN 2003000039210, as follows:

	
 

	
 

	
 

	
 

	
 

	
Mortgage “Y”
 in the amount of $1,544,286.29, which mortgage is not at issue here; and

	
 

	
 

	
 

	
 

	
 

	
Mortgage “X”
 in the amount of $4,131,186.71 set forth above as Mortgage D.

	
 

	
 

	
 

	
 

	
1.

	
Said
 mortgage D was assigned by Lehman Brothers Holdings Inc., d/b/a Lehman
 capital to Handesdank BVNY LLC by Assignment of Mortgage dated as of 2/7/03
 and recorded 3/3/03 as CRFN 2003000039213.

	
 

	
 

	
 

	
 

	
2.

	
Said mortgage
 D was spread to also encumber Block 1483 Lot 1 (known as 1334 York Avenue by
 Spreader Agreement made by and between 1334 York Avenue L.P, Green 290
 Madison LLC and Handesdank BVNY LLC, dated 2/7/03 and recorded 3/3/03 as CRFN
 2003000039214.

	
 

	
 

	
 

	
 

	
3.

	
Said
 mortgage D was released from premises known as 290 Madison Avenue, New York,
 N.Y.. (Block 1275 Lot 16) by Partial Release of Mortgage by and between 1334
 York Avenue L.P., Green 290 Madison LLC and Handesdank BVNY LLC, dated 2/7/03
 and recorded 3/7/03 as CRFN 2003000039215.

	
 

	
 

	
 

	
 

	
4.

	
Said
 mortgage D was assigned by Assignment of Mortgage by Handesdank BVNY LLC to
 Bank of America, N.A., dated 2/7/03 and recorded 3/7/03 as CRFN
 2003000039216.

	
 

	
 

	
 

	
 

	
5.

	
Said
 mortgage D and mortgages A, B and C were consolidated to form a single lien
 of $129,250,000 by Consolidation Agreement made by and between Bank of
 America, N.A. and 1334 York Avenue L.P. dated 2/7/03 and recorded 3/7/03 as
 CRFN 2003000039217.

	
 

	
 

	
 

	
 

	
6.

	
Said
 mortgages A through D, as consolidated, were assigned by Bank of America,
 N.A. to LaSalle Bank National Association, as trustee for the registered
 holders of Banc of America Commercial Mortgage Inc., Commercial Mortgage
 Pass-

	
 

	
 

	
 

	
 

	
 

	
Through
 Certificates, Series 2003-1, by Assignment of Mortgage dated 3/27/03 and
 recorded 8/5/04 as CRFN 2004000482732.

	
 

	
 

	
 

	
 

	
7.

	
Said
 mortgages A through D, as consolidated and in the reduced amount of
 $126,238,922.32 were assigned by LaSalle Bank National Association, as
 trustee for the registered holders of Banc of America Commercial Mortgage
 Inc., Commercial Mortgage Pass-Through certificates, Series 2003-1 to Bank of
 America, N.A. by Assignment of Mortgage dated 6/22/05 and recorded 8/3/05 as
 CRPN 2005000434390.

	
 

	
 

	
 

	
E.

	
Mortgage and
 Agreement of Consolidation and Modification of Mortgage, Assignment of Leases
 and Rents and Security Agreement in the original principal amount of
 $108,761,077.68 made by 1334 York Avenue L.P. to Mortgage Electronic
 Registration Systems, Inc., as nominee for Bank of America, N.A., dated as of
 6/22/05 and recorded 8/3/05 as CRFN 2005000434391.

	
 

	
 

	
 

	
Mortgage Tax
 Paid: $3,045,310.81

	
 

	
 

	
 

	
1.

	
Said
 mortgages A, B, C, D and E were consolidated to form a single lien of
 $235,000,000 by the terms of said mortgage E.

SCHEDULE C

Loan Documents

Loan Agreement
by and between 1334 York Avenue L.P. (“Borrower”) and Bank of America,
N.A. (“Lender”), dated as of June 22, 2005 (the “Loan Agreement”).

Consolidated,
Amended and Restated Promissory Note by Borrower in favor of Lender in the
principal sum of $235,000,000.00, dated as of June 22, 2005.

Note Severance
and Modification Agreement by and between Borrower and Lender, dated as of June
22, 2005.

Replacement
Note A by Borrower in favor of Lender in the principal sum of $210,000,000.00,
dated as of June 22, 2005.

Replacement
Note B by Borrower in favor of Lender in the principal sum of $25,000,000.00,
dated as of June 22, 2005.

Allonge to
Mortgage Note by LaSalle Bank National Association (“LaSalle Bank”) in
favor of Lender, together with Note in the principal sum of $129,250.00, dated
as of June 22, 2005.

Mortgage and
Agreement of Consolidation and Modification of Mortgage, Assignment of Leases
and Rents, and Security Agreement by Borrower to Mortgage Electronic
Registration Systems, Inc., dated as of June 22, 2005.

Section 255
Affidavit of Mortgage and Agreement of Consolidation and Modification of
Mortgage, Assignment of Leases and Rents, and Security Agreement, dated as of
June 22, 2005.

Assignment and
Subordination of Management Agreement and Consent of Manger made by Borrower to
Lender and consented to by RFR Realty LLC, dated as of June 22, 2005.

Section 275
Affidavit of Michael Fuchs, dated as of June 22, 2005.

Tenant
Estoppel Certificate of Sotheby’s, Inc. (“Sotheby’s”), dated as of June
22, 2005.

Subordination,
Non-Disturbance and Attornment Agreement made by and between Sotheby’s and
Lender, dated as of June 22, 2005.

UCC-1
Financing Statements naming Borrower as Debtor and Lender as Secured Party
(Delaware Secretary of State), dated as of June 22, 2005.

UCC-1
Financing Statements naming Borrower as Debtor and Lender as Secured Party (New
York Recorder’s Office), dated as of June 22, 2005.

Closing Escrow
Letter dated June 21, 2005 from Dechert LLP, counsel for Lender, to Title
Companies, dated as of June 22, 2005.

Post-Closing
Letter to Lender from Borrower, dated as of June 22, 2005.

Borrower’s
Certification, dated as of June 22, 2005.

First
Amendment to Loan Agreement and Other Loan Documents, dated as of September 20,
2005, between Borrower and Lender (the “First Amendment”).

Note Severance
and Modification Agreement, by and between Borrower and Lender, dated as of
September 20, 2005.

Replacement
Note A-1 by Borrower in favor of Lender in the principal sum of
$110,000,000.00, dated as of September 20, 2005.

Replacement
Note A-2 by Borrower in favor of Lender in the principal sum of
$100,000,000.00, dated as of September 20, 2005.

SCHEDULE D

Material Litigation

1. The
arbitration before the American Arbitration Association styled Sotheby’s, Inc. v. 1334 York Avenue L.P.,
Case No. 50 115 T 00190 07.

2. The
proceedings before the New York Supreme Court, New York County, Commercial
Division, styled Sotheby’s, Inc. v. 1334
York Avenue L.P., Index No. 601790/07.

3. The
appellate proceedings before the New York Supreme Court, Appellate Division –
First Department, styled Sotheby’s, Inc. v.
1334 York Avenue L.P., Index No. M-2983, 601790/07.

SCHEDULE E

Non-Disparaging Parties

Purchaser
Non-Disparaging Parties:

Alfred Taubman

Robert “Bobby” Taubman

Bill Ruprecht

Bill Sheridan

Don Pillsbury

Jon Olsoff

Jan Prasens

Mike Gillis

Karen Sutton

Richard Buckley

Carolyn Smith

Seller
Non-Disparaging Parties

Aby Rosen

Michael Fuchs

Jason Brown

Frank Mangieri

EXHIBIT 1

WIRE INSTRUCTIONS

50% of the Deposit to be wired to:

Bank:
HSBC Bank 

Account
Name: Michael Fuchs 
Account
Number: 610 189875
ABA Number:
021-001088

and 50% to:

Bank:
HSBC Bank 

Account
Name: Aby Rosen 
Account
Number: 610 143662
ABA Number:
021-001088

EXHIBIT 2

FORM OF DEED

          THIS
INDENTURE, made as of the ____ day of __________, _____, by 1334 York Avenue
L.P., having an address c/o RFR Holding LLC, 390 Park Avenue, New York, New
York 10022 (hereinafter referred to as “Grantor”), to ____________, a
___________ having an office at 1334 York Avenue, New York, New York 10022
(hereinafter referred to as “Grantee”).

          WITNESSETH,
that Grantor, in consideration of Ten Dollars ($10.00), lawful money of the
United States, paid by Grantee, does hereby grant and release unto Grantee, the
heirs or successors and assigns of Grantee forever:

          ALL
that certain plot, piece or parcel of land with the building and improvements
thereon erected, situate, lying and being, more particularly described on Exhibit
A attached hereto and made a part hereof (the “Premises”);

          TOGETHER
WITH all right, title and interest, if any, of Grantor in and to any streets
and roads abutting the Premises to the centerlines thereof;

          TOGETHER
WITH the appurtenances and all the estate and rights of Grantor in and to the
Premises.

          TO
HAVE AND TO HOLD the Premises unto Grantee, the heirs or successors and assigns
of Grantee forever.

          AND
Grantor, in compliance with Section 13 of the Lien Law, covenants that Grantor
will receive the consideration for this conveyance and will hold the right to
receive such consideration as a trust fund to be applied first for the purpose
of paying the cost of the improvements at the Premises and will apply the same
first to the payment of the cost of the improvements before using any part of
the total of the same for any other purpose.

          IN
WITNESS WHEREOF, Grantor has duly executed this deed the day and year first
above written.

	
 

	
 

	
 

	
 

	
 

	
GRANTOR:

	
1334 YORK AVENUE L.P.

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
) ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the ____ day of __________ in the year _____ before me, the undersigned,
personally appeared _______________________, personally known to me or proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person or entity upon behalf of which the individual
acted, executed the instrument.

	
 

	
 

	

	
 

	
Signature
 and Office of individual

	
 

	
taking
 acknowledgment

	
 

	
 

	
 

	
 

	
 

	
Bargain and Sale Deed

	
 

	
SECTION:

	
5

	
Without Covenant Against Grantor’s Acts

	
 

	
BLOCK:

	
1483

	
 

	
 

	
LOT:

	
1

	

	
 

	
COUNTY:

	
New York

	
 

	
 

	
 

	
 

	
1334 York Avenue L.P.

	
 

	
STREET

	
1334 York
 Avenue

	
 

	
 

	
ADDRESS:

	
New York,
 New York

	
TO

	
 

	
 

	
 

	
 

	
 

	
RETURN BY
 MAIL TO:

	

	
 

	
 

	
 

	
 

	
Stroock
 & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attention: Peter G. Koffler, Esq.

Exhibit A

Legal Description

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

BEGINNING AT
THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK AVENUE
(FORMERLY AVENUE A) AND THE SOUTHERLY SIDE OF 72nd STREET;

RUNNING THENCE
IN A SOUTHERLY DIRECTION ALONG THE EASTERLY SIDE OF YORK AVENUE 204 FEET 4
INCHES TO THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK
AVENUE AND THE NORTHERLY SIDE OF 71st STREET;

THENCE IN AN
EASTERLY DIRECTION ALONG THE NORTHERN SIDE OF 71st STREET, 198 FEET;

THENCE IN A
NORTHERLY DIRECTION AND PARALLEL WITH YORK AVENUE 204 FEET 4 INCHES TO THE
SOUTHERLY SIDE OF 72nd STREET;

AND THENCE IN
A WESTERLY DIRECTION ALONG THE SOUTHERLY SIDE OF 72nd STREET 198
FEET TO THE POINT OR PLACE OF BEGINNING.

EXHIBIT 3

FORM OF BILL OF SALE

          1334
YORK AVENUE L.P., a Delaware limited partnership, having an office c/o RFR
Holding LLC, 390 Park Avenue, New York, New York 10022 (“Seller”), in
consideration of Ten Dollars ($10.00) and other good and valuable consideration
paid to Seller by ________________, a __________________, having an address at
1334 York Avenue, New York, New York (“Purchaser”), the receipt and sufficiency
of which are hereby acknowledged, hereby sells, conveys, assigns, transfers,
delivers and sets over to Purchaser all fixtures, furniture, furnishings,
equipment, machinery, inventory, appliances and other articles of tangible
personal property owned by Seller and which are located at and used or usable
in connection with the real property located at 1334 York Avenue, New York, New
York.

          TO
HAVE AND TO HOLD unto Purchaser and its successors and assigns to its and their
own use and benefit forever.

          This
Bill of Sale is made by Seller without recourse and without any expressed or
implied representation or warranty whatsoever, except to the extent expressly
provided in that certain Purchase and Sale Agreement dated _________, 2008
between Seller and Sotheby’s, a Delaware corporation, and subject to any
limitations therein.

          IN
WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed as of this
___ day of ____________________, 200_.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

[Add Schedule
A]

EXHIBIT 4

FORM OF ENTITY TRANSFEROR FOREIGN INVESTORS
REAL PROPERTY TAX ACT

CERTIFICATION AND AFFIDAVIT

          Section
1445 of the Internal Revenue Code of 1986, as amended (the “Code”),
provides that a transferee of a U.S. real property interest must withhold tax
if the transferor is a foreign person. To inform ________________ (“Transferee”)
that withholding of tax is not required upon disposition of a U.S. real
property interest by 1334 YORK AVENUE, L.P., a Delaware limited partnership (“Transferor”),
the undersigned hereby certifies the following on behalf of Transferor:

                    (a)
Transferor is not a foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Code and Income Tax
Regulations);

                    (b)
Transferor is not a disregarded entity as defined in Treasury Regulations
Section 1.14452(b)(2)(iii)(c). The U.S. employer identification number of
Transferor is 05-0550916;

                    (c)
Transferor has an address at c/o RFR Holding LLC, 390 Park Avenue New York, New
York 10022.

                    (d)
The address of the subject property is 1334 York Avenue, New York, New York
10022.

          Transferor
understands that this Certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be
punished by fine, imprisonment or both.

          Under
penalties of perjury, I declare that I have examined this Certification and to
the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have the authority to sign this document on behalf of
Transferor.

______ __,
______

[TRANSFEROR SIGNATURE BLOCK]

EXHIBIT 5

ASSIGNMENT AND ASSUMPTION OF SOTHEBY’S LEASE,
SOTHEBY’S LEASE

GUARANTY AND SOTHEBY’S SNDA

          1334
YORK AVENUE L.P., a Delaware limited partnership, having an office c/o RFR
Holding LLC, 390 Park Avenue, New York 10022 (“Assignor”), in consideration of
Ten Dollars ($10.00) and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, hereby assigns to
________________, a ___________________ having an address at 1334 York Avenue,
New York, New York (“Assignee”), (1) all right, title and interest of Assignor
as lessor under that certain lease dated February 7, 2003 between Assignor, as
landlord and Sotheby’s, Inc., as tenant (the “Sotheby’s Lease”) for
space at the real property located at 1334 York Avenue, New York, New York, (2)
all right, title and interest of Assignor under that certain Guaranty of Lease
dated February 7, 2003 by Sotheby’s Holdings, Inc., as guarantor to Assignor,
(the “Sotheby’s Guaranty”) and (3) all right, title, and interest of
Assignor under that certain Subordination, Non-Disturbance and Attornment
Agreement dated June 22, 2005 between Sotheby’s, Inc., as tenant, and Bank of
America, N.A., as lender and acknowledged and agreed to by Sotheby’s Holdings,
Inc., as guarantor and Assignor, as landlord (the “Sotheby’s SNDA”).

          Assignee
hereby expressly assumes all of the obligations imposed upon the lessor under
the Sotheby’s Lease, which accrue from and after the date hereof.

          This
Assignment and Assumption of Sotheby’s Lease, Sotheby’s Lease Guaranty and
Sotheby’s SNDA and is made by Assignor without recourse and without any express
or implied representation or warranty whatsoever, except to the extent
expressly provided in that certain Purchase and Sale Agreement dated _________,
2008 between Assignor and Sotheby’s, a Delaware corporation, and subject to any
limitations therein..

          This
Assignment and Assumption of Sotheby’s Lease, Sotheby’s Lease Guaranty and
Sotheby’s SNDA shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

          IN
WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and
Assumption of Sotheby’s Lease, Sotheby’s Lease Guaranty and Sotheby’s SNDA to
be executed as of this _____ day of _____________, 200_.

	
 

	
 

	
 

	
 

	
 

	
ASSIGNOR:

	
 

	
 

	
 

	
1334 YORK
 AVENUE L.P.

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
ASSIGNEE:

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

EXHIBIT 6

FORM OF OMNIBUS ASSIGNMENT AND ASSUMPTION
AGREEMENT

          THIS
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT, made and entered into this ____
day of _________, 200_, between 1334 YORK AVENUE L.P., a Delaware limited
partnership, having an address c/o RFR Holding LLC, 390 Park Avenue, New York,
New York (“Assignor”) and ____________, a ____________ having an address at
1334 York Avenue, New York, New York (“Assignee”).

WITNESSETH:

          Assignor
for Ten Dollars ($10.00), and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby assigns to
Assignee all of Assignor’s right, title and interest in, to and under (i) all
books, records, and files owned by Assignor and relating to the occupancy, use
or operation of the real property located at 1334 York Avenue, New York, New
York, the “Premises”), (ii) all transferable licenses, approvals,
certificates and permits held by Assignor and exclusively relating to the
occupancy, use or operation of the Premises, and (iii) all other items of
intangible personal property owned by Assignor and exclusively relating to the
occupancy, use or operation of the Premises (other than items expressly
excluded from the sale of the Premises pursuant to that certain Purchase and
Sale Agreement, dated ____________ __, 2008 between Assignor and Sotheby’s, a
Delaware corporation; the items set forth in clauses (i) through (iii) above
are hereinafter referred to collectively as the “Property Matters”);

          TO
HAVE AND TO HOLD unto Assignee and its successors and assigns to its and their
own use and benefit forever.

          Assignee
hereby expressly assumes the obligations of Assignor in respect of the Property
Matters accruing from and after the date hereof.

          This
Agreement is made by Assignor without recourse and without any expressed or
implied representation or warranty whatsoever, except to the extent expressly
provided in the Purchase Agreement and subject to any limitations therein.

          This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

          IN
WITNESS WHEREOF, Assignor and Assignee have executed this Omnibus Assignment
and Assumption Agreement as of the date first above written.

	
 

	
 

	
 

	
 

	
 

	
 

	
ASSIGNOR:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
1334 YORK AVENUE L.P.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
ASSIGNEE:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

EXHIBIT 7

FORM OF TITLE COMPANY AFFIDAVIT 

AFFIDAVIT OF TITLE FOR CORPORATIONS,
PARTNERSHIPS OR LIMITED

LIABILITY COMPANIES

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Dated: 

	
_________________

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
Title No:

	
_______________________

	
 

	
) ss:

	
 

	
 

	
 

	
COUNTY OF
 NEW YORK

	
)

	
Premises:
 1334 York Avenue, New York, NY

The undersigned
entity, being duly sworn, deposes and says:

	
 

	
 

	
 

	
 

	
TENANCY:

	
 

	
 

	
 

	
 

	
1.

	
Sotheby’s,
 Inc. is the only tenant and does not have a right of first refusal or option
 to purchase the premises except as set forth in its lease.

	
 

	
 

	
 

	
 

	
WORK BY CITY OF NEW YORK:

	
 

	
 

	
 

	
 

	
2.

	
Since
 ____________ no work has been done on the above premises by the City of New
 York, nor has any demand been made by the City of New York for any such work
 that would result in charges by the City of New York Department of Rent and
 Housing Maintenance Emergency Services or charges by the New York City
 Department of Environmental Protection for water tap closings or any related
 work or charges by the New York City Department of Health, nor any unpaid
 inspection fees or permit fees.

	
 

	
 

	
 

	
 

	
FEDERAL/STATE TAX LIENS

	
 

	
 

	
 

	
 

	
3.

	
To the
 knowledge of the undersigned, there are no federal or state tax liens or
 claims assessed or filed against the entity in this or any other state.

	
 

	
 

	
 

	
 

	
BANKRUPTCY/CREDITORS

	
 

	
 

	
 

	
 

	
4.         To
 the knowledge of the undersigned, no proceeding in Bankruptcy has been
 instituted by or against the entity in any court or before any officer of any
 state or of the United States, nor has the entity at any time made an
 assignment for the benefit of creditors.

THIS AFFIDAVIT IS EXECUTED TO INDUCE (i)
ROYAL ABSTRACT OF NEW YORK LLC, AS AGENT FOR ______________________________ AND
(ii) _________________________ (COLLECTIVELY, “THE INSURER”) TO ISSUE ITS
POLICY OF TITLE INSURANCE COVERING SAID PREMISES FREE AND CLEAR

OF THE AFORESAID, KNOWING THAT IT WILL RELY
UPON THE STATEMENTS HEREIN MADE.

THE UNDERSIGNED
ENTITY SHALL INDEMNIFY ROYAL ABSTRACT OF NEW YORK LLC AND THE INSURER FOR ANY
LOSS, CLAIM, COSTS OR DAMAGES WHICH MAY ENSUE FROM THE RELIANCE UPON THESE
STATEMENTS.

[Signature
page follows.]

	
 

	
 

	
 

	
 

	
1334 York Avenue L.P.

	
 

	
 

	
a Delaware limited
 partnership

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
Sworn to
 before me this

	
 

	
 

	
_______ day
 of ______________, 200__

	
 

	
 

	
 

	
 

	
 

	
NOTARY
 PUBLIC

	
 

	
 

EXHIBIT 9

FORM OF STIPULATED DISMISSAL

AMERICAN
ARBITRATION ASSOCIATION 

	
 

	
 

	
 

	
 

	

	
x

	
 

	
 

	
 

	
 

	
 

	
SOTHEBY’S,
 INC.,

	
 

	
:

	
 

	
 

	
 

	
:

	
 

	
 

	
Claimant,

	
:

	
             Case No. 50 115 T 00190 07

	
 

	
 

	
:

	
 

	
- against -

	
:

	
 

	
 

	
 

	
:

	
 

	
1334 YORK
 AVENUE L.P.,

	
 

	
:

	
 

	
 

	
 

	
:

	
 

	
 

	
Respondent.

	
 

	
 

	

	
x

	
 

STIPULATED DISMISSAL WITH PREJUDICE

          Having
mutually agreed upon a settlement of the disputes to be resolved herein, the
parties request that this matter, including all claims and counterclaims that
have been asserted, or that might have been asserted, herein, be dismissed with prejudice, with each
party to bear its own costs and attorneys’ fees. 

	
 

	
 

	
 

	
 

	
 

	
Dated: 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
New York, NY

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
STROOCK
 & STROOCK & LAVAN

	
 

	
FRIED,
 FRANK, HARRIS, SHRIVER & JACOBSON LLP

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
By: 

	
 

	
 

	

	
 

	
 

	

	
 

	
Charles G.
 Moerdler

	
 

	
 

	
Gregg L.
 Weiner

	
 

	
Curtis C.
 Mechling

	
 

	
 

	
Robert E.
 Juceam

	
 

	
 

	
 

	
 

	
Israel David

	
180 Maiden
 Lane

	
 

	
One New York
 Plaza

	
New York, NY
 10038-4982

	
 

	
New York, NY
 10004

	
(212)
 806-5400

	
 

	
(212)
 859-8579

	
 

	
 

	
 

	
 

	
 

	
Attorneys for Sotheby’s, Inc.

	
 

	
Attorneys for 1334 York Avenue L.P.

EXHIBIT 10

FORM OF STIPULATION OF DISCONTINUANCE

SUPREME COURT
OF THE STATE OF NEW YORK 

COUNTY OF NEW
YORK 

	
 

	
 

	
 

	
 

	
 

	

	
x

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SOTHEBY’S,
 INC.

	
 

	
:

	
 

	
 

	
 

	
 

	
:

	
 

	
Index No.
 601790/07

	
 

	
Petitioner,

	
:

	
 

	
 

	
 

	
 

	
:

	
 

	
STIPULATION OF

	
- against -

	
:

	
 

	
DISCONTINUANCE

	
 

	
 

	
:

	
 

	
 

	
1334 YORK
 AVENUE L.P.

	
 

	
:

	
 

	
 

	
 

	
 

	
:

	
 

	
Assigned to
 Justice Fried

	
 

	
 

	
:

	
 

	
Commercial
 Division Part 60

	
 

	
Respondent.

	
:

	
 

	
 

	

	
x

	
 

	
 

          The
above-entitled proceeding having been compromised and settled, and no party
being an infant, incompetent for whom a committee has been appointed or
conservatee, and no person not a party having an interest in the subject matter
of the action, 

          IT
IS HEREBY STIPULATED AND AGREED by and between the attorneys of record for all
parties herein that the above-entitled proceeding, including any and all
appeals that have been noticed herein, be and hereby is discontinued with prejudice
pursuant to CPLR 3217(a)(2), without costs to any party as against another.
This stipulation may be filed and an order may be entered upon this stipulation
without further notice to any party. 

	
 

	
 

	
 

	
 

	
 

	
Dated: 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
New York, NY

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
STROOCK
 & STROOCK & LAVAN

	
 

	
FRIED,
 FRANK, HARRIS, SHRIVER & JACOBSON LLP

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
By: 

	
 

	
 

	

	
 

	
 

	

	
 

	
Charles G.
 Moerdler

	
 

	
 

	
Gregg L.
 Weiner

	
 

	
Curtis C.
 Mechling

	
 

	
 

	
Robert E.
 Juceam

	
 

	
 

	
 

	
 

	
Israel David

	
180 Maiden
 Lane

	
 

	
One New York
 Plaza

	
New York, NY
 10038-4982

	
 

	
New York, NY
 10004

	
(212)
 806-5400

	
 

	
(212)
 859-8579

	
 

	
 

	
 

	
 

	
 

	
Attorneys for Sotheby’s, Inc.

	
 

	
Attorneys for 1334 York Avenue L.P.

MUTUAL RELEASE AND COVENANT NOT TO SUE

          This
Mutual Release and Covenant Not to Sue (“Release”) is made and entered into as
of ______________, between Sotheby’s, Inc. and 1334 York Avenue L.P. (“York
LP”). 

          WHEREAS,
on May 24, 2007, Sotheby’s, Inc. commenced against York LP an arbitration
before the American Arbitration Association, styled as Sotheby’s, Inc. v. 1334 York Avenue L.P.,
Arbitration Case No. 50 115 T 00190 07 (the “Arbitration”), alleging a breach
of the right of first offer provision of Section 23 of the parties’ Lease; 

          WHEREAS,
on May 30, 2007, Sotheby’s, Inc. commenced a proceeding before the New York
Supreme Court, Commercial Division styled Sotheby’s,
Inc. v. 1334 York Avenue L.P., Index No. 601790/07 (the “Action”);
and 

          WHEREAS,
the parties have agreed to fully and finally settle all of their disputes. 

          NOW,
THERFORE, for and in consideration of the mutual covenants, agreements and
conditions set forth herein, and other good and valuable consideration, the
sufficiency, adequacy and receipt of which are hereby expressly acknowledged by
each of the parties, the parties agree as follows: 

	
 

	
 

	
1.

	
Mutual
 Release. Sotheby’s, Inc., on the one hand, and York
 LP, on the other, each on behalf of itself and on behalf of each of its
 respective present and former, direct and indirect, parents, subsidiaries and
 affiliated corporations, companies, partnerships, joint ventures, limited
 partnerships and limited liability companies, and each of their present and former
 officers, directors, general and limited partners, employees, shareholders,
 members, attorneys, representatives and agents, and the successors, assigns
 and heirs of each of them, hereby fully releases and forever discharges the
 other, including its present and former, direct and indirect, parents,
 subsidiaries and affiliated corporations, companies, partnerships, joint
 ventures, limited partnerships and limited liability companies, and its
 present and former officers, directors, general and limited partners,
 employees, shareholders, members, attorneys, representatives and agents and
 its successors, assigns and heirs, from and against any and all claims,
 demands, actions or causes of action, liabilities, damages, suits, requests
 for specific performance, debts, dues, sums of money, accounts, bonds, bills,
 covenants, contracts, controversies, liens, costs, expenses, rights of first
 offer and demands whatsoever, in law, equity or otherwise, of whatever kind
 or nature (a “Claim”), which it has, had or will ever have from the beginning
 of the world through the date hereof, whether presently known or unknown,
 fixed, contingent, or inchoate, relating to or arising out of or in any
 manner whatsoever connected with: (i) the right of first offer under Section
 23 of the Lease between York LP and Sotheby’s, Inc.; (ii) any transaction (in
 2005 or otherwise) between York LP and SachsenFonds GmbH, SachsenFonds USA II
 GmbH & Co. KG, SachsenFonds Verwaltungsgesellschaft USA GmbH, SF York
 Avenue, Inc., or SF York Agent, Inc., including the 2005 redemption of
 partnership interests in York LP; (iii) any of the matters raised or that
 could have been raised in the Arbitration; and/or (iv) any of the matters
 raised or that could have been raised in the Action. 

	
 

	
 

	
2.

	
Covenant Not
 to Sue. The parties hereto (and their affiliates)
 covenant and agree that they will not, at any time hereafter, either directly
 or indirectly, initiate, assign, maintain or prosecute, or in any way
 knowingly aid or assist in the initiation, maintenance or prosecution of any
 Claim released in Section 1 of this Release. 

	
 

	
 

	
3.

	
No Admission.
 The parties hereto acknowledge and agree that each party does not admit any
 liability, such liability being expressly denied. This Release may not be
 used by any party as evidence in any proceeding (of any nature and in any
 forum) for any liability, or as an admission, by or against any other party
 except to enforce the terms or provisions of this Release. 

	
 

	
 

	
4.

	
Governing
 Law. This Release and all disputes arising hereunder
 or related hereto, shall be governed by, construed and interpreted in
 accordance with the internal laws of the State of New York, without giving
 effect to the New York conflict of laws principles. Sotheby’s, Inc. and its
 affiliates, and York LP and its affiliates agree that the courts of the State
 of New York located in New York County or the federal courts located in the
 Southern District of New York have exclusive jurisdiction over them in
 connection with this Release, and that venue is proper in such courts.
 Sotheby’s, Inc. and York LP (and their respective affiliates) further agree
 not to plead or claim that a proceeding in connection with this Release
 brought in such court has been brought in an inconvenient forum. 

	
 

	
 

	
5.

	
Counterparts.
 This Release may be simultaneously executed in several counterparts or other
 such duplicate versions or by facsimile, each of which shall be an original
 and all of which shall constitute but one and the same instrument. All
 signatures to this Release need not appear on the same version, and the
 signatories may execute different versions, so long as they contain identical
 provisions, and all such executed versions shall together constitute the
 complete Release. 

	
 

	
 

	
6.

	
No Waiver.
 Nothing herein is intended to or shall affect or otherwise constitute a
 waiver by York LP or Sotheby’s of any rights and remedies against each other
 in respect of that certain Purchase and Sale Agreement dated _____, by and
 between York LP and Sotheby’s. 

	
 

	
 

	
 

	
 

	
SOTHEBY’S, INC., 

 a New York corporation 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
1334 YORK AVENUE L.P., a Delaware limited
 partnership

	
 

	
 

	
 

	
 

	
 

	
By: 1334 GP
 II LLC, a Delaware limited liability company, its general partner

	
 

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK 

	
)

          On
the _____ day of ______________ in the year 2008, before me, the undersigned, a
notary public in and for said state, personally appeared _____________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument. 

	
 

	
 

	
 

	

	
 

	
Notary
 Public 

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the _____ day of _______________ in the year 2008, before me, the undersigned,
a notary public in and for said state, personally appeared ___________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument. 

	
 

	
 

	

	
 

	
Notary
 Public 

	
 

MEMO OF CONTRACT

	
 

	
 

	
 

	
NAME AND ADDRESS OF SELLER:

	
 

	
1334 Park Avenue L.P., a Delaware limited partnership, having an
 address at c/o RFR Holding LLC, 390 York Avenue, New York, New York

	
 

	
 

	
 

	
NAME AND ADDRESS OF PURCHASER:

	
 

	
Sotheby’s, a
 Delaware corporation, having an address at 1334 York Avenue, New York, New
 York 10022

	
 

	
 

	
 

	
CONTRACT:

	
 

	
This
 memorandum relates to that certain Purchase and Sale Agreement (the “Contract”)
 dated as of _________ __, 2008, between Seller, as seller, and Purchaser, as
 purchaser.

	
 

	
 

	
 

	
DESCRIPTION OF THE PREMISES:

	
 

	
The premises
 to be conveyed pursuant to the Contract (the “Premises”) consists of
 the land and all of Seller’s right, title and interest in and to the building
 and improvements thereon located in the borough of Manhattan at Block 1483,
 Lot 1, also known as 1334 York Avenue, New York, New York, the metes and
 bounds description which is more particularly described on Schedule A
 attached hereto.

	
 

	
 

	
 

	
CONTRACT CLOSING DATE:

	
 

	
The date
 fixed by the Contract for the conveyance of title to the Premises (the “Closing”)
 is July 1, 2009 or such other date as may be adjusted pursuant to the terms
 of the Contract.

	
 

	
 

	
 

	
CONTRACT DEPOSIT:

	
 

	
Pursuant to
 the terms of the Contract, Purchaser has delivered to Seller a cash deposit
 of Fifty Million ($50,000,000.00) Dollars.

	
 

	
 

	
 

	
TERMS OF CONTRACT GOVERN:

	
 

	
The
 respective rights, obligations and remedies of Seller and Purchaser with
 reference to each other and the Premises shall be fixed, determined and
 governed solely by the terms of the Contract, this being a Memorandum of
 Contract of Sale executed by the parties hereto solely for the purpose of
 providing an instrument for recording
 pursuant to Section 294 of the Real Property Law, in lieu of recording the
 Contract. In the event of any inconsistency or conflict between the terms and
 conditions of this memorandum and the terms and conditions of the Contract,
 the terms and conditions of the Contract shall control.

The parties
hereto have executed and delivered this Memorandum of Contract of Sale for the
purpose of giving notice of existence of the Contract to whomsoever it may
concern, and is not intended to govern, or to be used to construe, the
provisions of the Contract. For a statement of the rights, privileges and
obligations created under and by the Contract and of the options, terms,
covenants and conditions contained therein, reference should be made to the
Contract.

This
Memorandum of Contract of Sale may be executed in any number of counterparts,
each of which shall constitute an original, but all of which, taken together,
shall constitute but one and the same instrument.

          IN
WITNESS WHEREOF, Seller and Purchaser have duly executed this Memorandum of
Contract of Sale as of the ___ day of ______, 2008.

	
 

	
 

	
 

	
 

	
 

	
SELLER:

	
 

	
 

	
 

	
 

	
 

	
 

	
1334 YORK AVENUE L.P.,

	
 

	
 

	
a Delaware limited partnership

	
 

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
PURCHASER

	
 

	
 

	
 

	
 

	
 

	
 

	
SOTHEBY’S,

	
 

	
 

	
a Delaware corporation

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the _____ day of _______________ in the year 2008, before me, the undersigned,
a notary public in and for said state, personally appeared _____________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

	
 

	
 

	
 

	

	
 

	
Notary
 Public

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the _____ day of _______________ in the year 2008, before me, the undersigned,
a notary public in and for said state, personally appeared ___________, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

	
 

	
 

	
 

	

	
 

	
Notary
 Public

Schedule A

Description of Land

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

BEGINNING AT
THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK AVENUE
(FORMERLY AVENUE A) AND THE SOUTHERLY SIDE OF 72nd STREET;

RUNNING THENCE
IN A SOUTHERLY DIRECTION ALONG THE EASTERLY SIDE OF YORK AVENUE 204 FEET 4
INCHES TO THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK
AVENUE AND THE NORTHERLY SIDE OF 71st STREET;

THENCE IN AN
EASTERLY DIRECTION ALONG THE NORTHERN SIDE OF 71st STREET, 198 FEET;

THENCE IN A
NORTHERLY DIRECTION AND PARALLEL WITH YORK AVENUE 204 FEET 4 INCHES TO THE
SOUTHERLY SIDE OF 72nd STREET;

AND THENCE IN
A WESTERLY DIRECTION ALONG THE SOUTHERLY SIDE OF 72nd STREET 198
FEET TO THE POINT OR PLACE OF BEGINNING.

ESCROW AGREEMENT

          THIS
ESCROW AGREEMENT (this “Agreement”)
made as of this ___ day of January, 2008, by and among (i) 1334 York Avenue
L.P., a Delaware limited partnership, having an office c/o RFR Holding LLC, 390
Park Avenue, New York, New York 10022 (“Seller”), (ii) Aby Rosen and
Michael Fuchs (collectively, the “Guarantors” and each a “Guarantor”),
each an individual having an address c/o RFR Holding LLC, 390 Park Avenue, New
York, New York 10022, (iii) Sotheby’s, a Delaware corporation, having an office
at 1334 York Avenue, New York, New York 10021 (“Purchaser”), and (iv)
Royal Abstract of New York LLC, as escrow agent, having an office at 500 Fifth
Avenue, New York, New York 10110 (“Escrow
Agent”).

WITNESSETH :

          WHEREAS,
simultaneously herewith, Seller and Purchaser have executed that certain
Purchase and Sale Agreement relating to the real property known as 1334 York
Avenue, New York, New York (the “Purchase Agreement”);

          WHEREAS,
pursuant to a certain Guaranty of even date herewith, the Guarantors have
agreed to guaranty the performance of certain contingent liabilities of Seller
pursuant to the Purchase Agreement; and

          WHEREAS,
simultaneously herewith, the Guarantors have delivered to Escrow Agent
original, executed, and dated Affidavits of Judgment by Confession
(collectively, the “Confessions of Judgment”).

          NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

	
 

	
 

	
 

	
 

	
1.

	
Capitalized
 terms not otherwise defined herein shall have their respective meanings set
 forth in the Purchase Agreement.

	
 

	
 

	
 

	
 

	
2.

	
Escrow Agent
 hereby acknowledges receipt of one (1) set of original, executed, and dated
 Confessions of Judgment, which shall be held by Escrow Agent subject to the
 provisions of this Agreement. The Confessions of Judgment shall not be deemed
 effective and delivered until they are released from escrow in accordance
 with the provisions of this Agreement.

	
 

	
 

	
 

	
 

	
3.

	
Escrow Agent
 shall deliver the Confessions of Judgment to Seller or to Purchaser, as the
 case may be, under the following conditions:

	
 

	
 

	
 

	
 

	
 

	
 

	
a.

	
the
 Confessions of Judgment shall be delivered to Seller upon the Closing; or

	
 

	
 

	
 

	
 

	
 

	
 

	
b.

	
the
 Confessions of Judgment shall be delivered to Seller following receipt by
 Escrow Agent of written demand therefor from Seller stating that Seller is
 entitled to the same pursuant to and in accordance with the terms of the
 Purchase Agreement, if Purchaser shall not have given written notice of 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
objection in
 accordance with the provisions of Section 4 set forth below; or

	
 

	
 

	
 

	
 

	
 

	
 

	
c.

	
the
 Confessions of Judgment shall be delivered to Purchaser following receipt by
 Escrow Agent of written demand therefor from Purchaser stating Purchaser is
 entitled to the same pursuant to and in accordance with the terms of the
 Purchase Agreement, if Seller shall not have given written notice of
 objection in accordance with the provisions of Section 4 set forth below; or

	
 

	
 

	
 

	
 

	
 

	
 

	
d.

	
the
 Confessions of Judgment shall be delivered to Purchaser or Seller as directed
 by joint written instructions of Seller and Purchaser.

	
 

	
 

	
 

	
 

	
4.

	
Upon receipt
 of a written demand for the Confessions of Judgment by Seller or Purchaser,
 Escrow Agent shall promptly give written notice thereof (including a copy of
 such demand) to the other party. The other party shall have the right to
 object to the delivery of the Confessions of Judgment, by giving written
 notice of such objection to Escrow Agent at any time within ten (10) business
 days after such party’s receipt of notice from Escrow Agent, but not
 thereafter. Such notice shall set forth the basis for objecting to the
 delivery of the Confessions of Judgment. Upon receipt of such notice of
 objection, Escrow Agent shall promptly give a copy of such notice to the
 party who filed the written demand. If Escrow Agent shall have timely
 received such notice of objection, Escrow Agent shall continue to hold the
 Confessions of Judgment, until (x) Escrow Agent receives joint written notice
 from Seller and Purchaser directing the delivery of the Confessions of
 Judgment, in which case Escrow Agent shall then convey the Confessions of
 Judgment in accordance with said direction, or (y) Escrow Agent receives a
 copy of a decision of the Arbitrator that (A) is certified by the Arbitrator
 or by each of Seller and Purchaser, as a true and correct copy of the
 Arbitrator’s final decision and (B) directs the delivery of the Confessions
 of Judgment, in which event Escrow Agent shall then convey the Confessions of
 Judgment in accordance with said direction, or (z) in the event Escrow Agent
 shall receive a written notice advising that an arbitration over entitlement
 to or effectiveness of the Confessions of Judgment has been commenced
 pursuant to Section 20(g) of the Purchase Agreement, Escrow Agent may
 deposit the counterparts of the Confessions of Judgment with the Arbitrator. Escrow
 Agent acknowledges that in the event that an arbitration commences pursuant
 to Section 20(g) of the Purchase Agreement, none of Seller, Tenant, or
 Purchaser may request a return of the Confessions of Judgment until Escrow
 Agent receives either (i) written confirmation from Seller and Purchaser that
 such arbitration has been settled or (ii) a final decision from the
 Arbitrator.

	
 

	
 

	
 

	
 

	
5.

	
Escrow Agent
 may rely and act upon any instrument or other writing reasonably believed by
 Escrow Agent to be genuine and purporting to be signed and presented by any
 person or persons purporting to have authority to act on behalf of Seller or
 Purchaser, as the case may be, and shall not be liable in connection with the
 performance of any duties imposed upon Escrow Agent by the provisions of this
 Agreement, except for Escrow Agent’s own gross negligence, willful misconduct
 or default. Escrow Agent shall have no duties or responsibilities except
 those set forth herein. Escrow Agent shall not be bound by any modification,
 cancellation or rescission of this Agreement unless the same is in writing 

	
 

	
 

	
 

	
 

	
 

	
and signed
 by Purchaser, Seller, and Escrow Agent. Escrow Agent shall be reimbursed by
 Seller and Purchaser for any expenses (including reasonable legal fees),
 including all of Escrow Agent’s fees and expenses with respect to any
 interpleader action incurred in connection with this Agreement, and such
 liability shall be joint and several; provided, however, that, as between
 Purchaser and Seller, the prevailing party in any dispute over the
 Confessions of Judgment shall be entitled to reimbursement by the losing
 party of any such expenses paid to Escrow Agent. In the event that Escrow
 Agent shall be uncertain as to Escrow Agent’s duties or rights hereunder, or
 shall receive instructions from Purchaser or Seller that, in Escrow Agent’s
 opinion, are in conflict with any of the provisions hereof, Escrow Agent
 shall be entitled to hold the Confessions of Judgment and may decline to take
 any other action. After delivery of the Confessions of Judgment in accordance
 herewith, Escrow Agent shall have no further liability or obligation of any
 kind whatsoever.

	
 

	
 

	
 

	
 

	
6.

	
Escrow Agent
 shall have the right at any time to resign upon ten (10) business days prior
 notice to Seller and Purchaser. Seller and Purchaser shall jointly select a
 successor Escrow Agent and shall notify Escrow Agent of the name and address
 of such successor Escrow Agent within ten (10) business days after receipt of
 notice of Escrow Agent of its intent to resign. If Escrow Agent has not
 received notice of the name and address of such successor Escrow Agent within
 such period, Escrow Agent shall have the right to select on behalf of Seller
 and Purchaser a bank or trust company to act as successor Escrow Agent
 hereunder. At any time after the ten (10) business day period, Escrow Agent
 shall have the right to deliver the Confessions of Judgment to any successor
 Escrow Agent selected hereunder, provided such successor Escrow Agent shall
 execute and deliver to Seller and Purchaser an assumption agreement whereby
 it assumes all of Escrow Agent’s obligations hereunder. Upon the delivery of
 the Confessions of Judgment, the successor Escrow Agent shall become the
 Escrow Agent for all purposes hereunder and shall have all of the rights and
 obligations of the Escrow Agent hereunder, and the resigning Escrow Agent
 shall have no further responsibilities or obligations hereunder.

	
 

	
 

	
 

	
 

	
7.

	
If Escrow
 Agent is authorized to release the Confessions of Judgment from escrow by
 written directions as described in Section 3(c) above, then Escrow Agent
 shall deliver same to Purchaser.

	
 

	
 

	
 

	
 

	
8.

	
If Escrow
 Agent is authorized to release the Confessions of Judgment from escrow by
 written directions as described in Section 3(a) or (b) above, then Escrow
 Agent shall first mark the Confessions of Judgment “cancelled” prior to
 releasing same.

	
 

	
 

	
 

	
 

	
9.

	
If Escrow
 Agent is authorized to release the Confessions of Judgment from escrow by
 written directions as described in Section 3(d) above, then Escrow Agent
 shall deliver (or destroy) the Confessions of Judgment to Purchaser or Seller
 as so directed by joint written instructions of Seller and Purchaser.

	
 

	
 

	
 

	
 

	
10.

	
All notices,
 demands, requests, consents, approvals or other communications which are
 required or permitted to be given under this Agreement or which any party
 hereto desires to give with respect to this Agreement (each, a “Notice”) shall be given in
 accordance 

	
 

	
 

	
 

	
 

	
 

	
with the
 terms of the Purchase Agreement, except that Notices delivered to Escrow
 Agent shall be sent in any manner permitted by the Purchase Agreement to:

	
 

	
 

	
 

	
Royal
 Abstract of New York LLC

	
 

	
500 Fifth
 Avenue

	
 

	
New York,
 New York 10110

	
 

	
Fax:
 212-376-0911

	
 

	
Attention:
 Martin Kravet

	
 

	
 

	
11.

	
It is
 expressly understood that Escrow Agent acts hereunder as an accommodation to
 Purchaser and Seller and as a depository only and is not responsible or
 liable in any manner whatsoever for the sufficiency, correctness, genuineness
 or validity of any instrument deposited with it, or for the form of execution
 of such instruments, or for the identity, authority or right of any person
 executing or depositing the same, or for the terms and conditions of any
 instrument pursuant to which Escrow Agent or the parties may act.

	
 

	
 

	
12.

	
The duties
 of Escrow Agent are purely ministerial. The Escrow Agent shall not have any
 duties or responsibilities except those set forth in this Agreement and shall
 not incur any liability in acting upon any signature, notice, request,
 waiver, consent, receipt or other paper or document believed by Escrow Agent
 to be genuine, and Escrow Agent may assume that any person purporting to give
 it any notice on behalf of any party in accordance with the provisions hereof
 has been duly authorized to do so.

	
 

	
 

	
13.

	
Escrow Agent
 may act or refrain from acting in respect of any matter referred to herein in
 full reliance upon and by and with the advice of counsel which may be
 selected by it (including any member or employee of its firm) and shall be
 fully protected in so acting or refraining from acting upon the advice of
 such counsel.

	
 

	
 

	
14.

	
By its
 execution hereof, Purchaser and Seller hereby jointly and severally agree to
 indemnify and save Escrow Agent harmless from any and all loss, damage,
 claims, liabilities, judgments and other cost and expense of every kind and
 nature which may be incurred by Escrow Agent arising out of its acting as
 Escrow Agent hereunder (including, without limitation, reasonable attorneys’
 fees and disbursements, which shall include the fees and disbursements of any
 member or employee of its firm) except in the case of its own willful
 misconduct or gross negligence. The provisions of this Paragraph 13 shall
 survive the termination of this Agreement.

	
 

	
 

	
15.

	
This
 Agreement and all matters relating hereto shall be governed by and construed
 and interpreted in accordance with the laws of the State of New York.

	
 

	
 

	
16.

	
This
 Agreement shall be binding upon and shall inure to the benefit of the parties
 hereto and their respective heirs, personal representatives, successors and
 assigns.

	
 

	
 

	
17.

	
This
 Agreement may be executed in multiple counterparts each of which shall be
 deemed an original and all of which, when taken together, shall constitute
 one and the same instrument.

	
 

	
 

	
18.

	
It is
 understood and agreed that all understandings and agreements heretofore had
 between the parties hereto with respect to the subject matter hereof are
 merged into this Agreement, which alone fully and completely expresses their
 agreement.

	
 

	
 

	
[SIGNATURE PAGES TO FOLLOW]

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

	
 

	
 

	
 

	
 

	
 

	
SELLER

	
 

	
 

	
 

	
 

	
 

	
 

	
1334 YORK
 AVENUE L.P.,

	
 

	
 

	
a Delaware
 limited partnership

	
 

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
PURCHASER

	
 

	
 

	
 

	
 

	
 

	
 

	
SOTHEBY’S,

	
 

	
 

	
a Delaware
 corporation

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

	
 

	
 

	
 

	
 

	
 

	
ESCROW AGENT

	
 

	
 

	
 

	
 

	
 

	
 

	
ROYAL
 ABSTRACT OF NEW YORK LLC,

 as Escrow Agent

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	

	
 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

	
 

	
 

	
Acknowledged
 and Accepted this ___ day of ____, 200__

	
 

	
 

	

	
 

	
Aby Rosen,
 an individual

	
 

	
 

	
 

	

	
 

	
Michael
 Fuchs, an individual

	
 

AFFIDAVIT OF JUDGMENT BY CONFESSION

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
) ss.:

	
COUNTY OF
 NEW YORK

	
)

          ABY
ROSEN, residing at _______________________, New York, being duly sworn, deposes
and says:

          1.
I hereby confess judgment in favor of Sotheby’s, a Delaware corporation, or its
successors or assigns (“Sotheby’s”) for the sum of Fifty Million Dollars
($50,000,000.00) and hereby authorize Sotheby’s or its successors, assigns or
legal representatives to enter judgment for that sum, plus accrued interest and
less any payments on account, against me in the county of my residence and in
any jurisdiction where such judgment is enforceable in the circumstances set
forth below.

          2.
This Affidavit of Judgment by Confession is executed pursuant to New York Civil
Practice Law and Rules Section 3218 to secure Sotheby’s against a liability
arising out of the following facts:

	
 

	
 

	
 

	
 

	
a.

	
On or about
 ___________, Sotheby’s entered into a Purchase and Sale Agreement
 (“Agreement”) with 1334 York Avenue L.P., a Delaware limited partnership,
 having an address at c/o RFR Holding LLC, 390 Park Avenue, New York, New York
 10022 (“Seller”).

	
 

	
 

	
 

	
 

	
b.

	
Pursuant to
 the Contract, Seller agreed to sell, and Sotheby’s agreed to purchase the
 land and building at 1334 York Avenue, New York, New York 10022 (the
 “Property”).

	
 

	
 

	
 

	
 

	
c.

	
Pursuant to
 the terms of the Contract, Sotheby’s has paid to Seller a cash deposit of
 Fifty Million ($50,000,000.00) Dollars (the “Deposit”).

	
 

	
 

	
 

	
 

	
d.

	
Pursuant to
 the terms of the Contract, Seller will be obligated to repay the Deposit to
 Sotheby’s under certain circumstances, including certain circumstances in
 which Sotheby’s and Seller do not consummate the closing of the sale of the
 Property.

	
 

	
 

	
 

	
 

	
e.

	
Simultaneous
 with the execution and delivery of the Contract and payment of the Deposit,
 Michael Fuchs and I, as principals of Seller, executed and delivered a
 Guaranty, dated ___________, for the benefit of Sotheby’s (the “Guaranty”).
 Under the Guaranty, Michael Fuchs and I agreed, as Guarantors, absolutely,
 unconditionally, irrevocably, jointly and severally to guarantee Seller’s
 obligation to repay the Deposit to Sotheby’s as required under the Contract.

	
 

	
 

	
 

	
 

	
f.

	
Simultaneous
 with the execution and delivery of the Contract and payment of the Deposit, and
 to secure performance of my obligations under the Guaranty, I executed and
 delivered this Affidavit of Judgment by Confession to _______________, as
 escrow agent (“Escrow Agent”), to be held in escrow pending closing of the
 sale of the Property or repayment of the Deposit. In the event the sale of
 the Property does not close and the Deposit is not repaid to Sotheby’s as
 required under the Contract and/or the Guaranty, Escrow Agent is to deliver
 this Affidavit of Judgment by Confession to Sotheby’s.

	
 

	
 

	
 

	
 

	
g.

	
If the sale
 of the Property does not close, Seller will be required to repay the Deposit
 to Sotheby’s as provided in the Contract, and, in the event that Seller fails
 to repay the Deposit as required under the Contract, I will be 

	
 

	
 

	
 

	
 

	
 

	
obligated to
 pay the amount of the Deposit to Sotheby’s as required under the Guaranty.

          3.
Upon release from escrow of this Affidavit of Judgment by Confession, I will
therefore be indebted to Sotheby’s for up to the total sum of Fifty Million
($50,000,000.00) Dollars.

          4.
This Confession of Judgment may be entered without any prior notice to myself,
Michael Fuchs or Seller.

          5.
I further authorize entry of judgment against me for costs and disbursements as
provided in Section 3218(b) of the New York Civil Practice Law and Rules and
reasonable attorney’s fees incurred by Sotheby’s in the entry of this judgment
and any subsequent proceedings to enforce such judgment.

          6.
This Confession of Judgment does not involve an installment sale as prohibited
by New York Civil Practice Law and Rules Section 3201.

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
ABY ROSEN

	
 

	
 

	
 

	
Sworn to
 before me on this

	
 

	
 

	
_____ day of
 ____________

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
               Notary
 Public

	
 

	
 

ESCROW AGREEMENT

          THIS
ESCROW AGREEMENT (this “Agreement”)
made as of this 11th day of January, 2008, by and among (i) 1334 York Avenue
L.P., a Delaware limited partnership, having an office c/o RFR Holding LLC, 390
Park Avenue, New York, New York 10022 (“Seller”), (ii) Sotheby’s, a
Delaware corporation, having an office at 1334 York Avenue, New York, New York
10021 (“Purchaser”), and (iii) First American Title Insurance Company of
New York, as escrow agent, having an office at 633 Third Avenue, New York, New
York 10017 (“Escrow Agent”).

WITNESSETH: 

          WHEREAS,
the following matters and proceedings (collectively the “Legal Proceedings”)
are currently pending between Seller and Purchaser, an affiliate of Sotheby’s,
Inc. (“Tenant”) relating to Purchaser’s alleged right to receive a first
offer for the land and the building known as 1334 York Avenue situated in the
City, County and State of New York and more particularly described in Schedule
A (the “Premises”), in connection with the Seller’s redemption of
certain partnership interests in 2005:

	
 

	
 

	
 

	
 

	
i)

	
The
 arbitration before the American Arbitration Association styled Sotheby’s, Inc. v. 1334 York Avenue L.P.,
 Case No. 50 115 T 00190 07 (the “Arbitration”); and

	
 

	
 

	
 

	
 

	
ii)

	
The
 proceedings before the New York Supreme Court, New York County, Commercial
 Division, styled Sotheby’s, Inc. v. 1334
 York Avenue L.P., Index No. 601790/07 (the “Action”);

          WHEREAS,
simultaneously herewith, Seller and Tenant have delivered to Escrow Agent: (i)
two (2) original executed and undated counterparts of the Stipulated Dismissal
with respect to the Arbitration (the “Stipulated Dismissal”); (ii) two
(2) original executed and undated counterparts of the Stipulation of
Discontinuance with respect to the Action (the “Stipulation of
Discontinuance”, and together with the Stipulated Dismissal, the “Filed
Documents”); and (iii) four (4) original executed and undated counterparts
of the Mutual Release and Covenant Not to Sue (“Mutual Release”, and
collectively with the Filed Documents, the “Release Documents”).

          NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

          1.
Capitalized terms not otherwise defined herein shall have their respective
meanings set forth in the Purchase Agreement.

          2.
Escrow Agent hereby acknowledges receipt of four (4) original executed and
undated counterparts of the Mutual Release and two (2) original executed and
undated counterparts of each of the Filed Documents, which shall be held by
Escrow Agent subject to the provisions of this Agreement. The Release Documents
shall not be deemed effective and delivered until they are released from escrow
in accordance with the provisions of this Agreement.

          3.
Escrow Agent shall deliver the Release Documents to Seller or to Purchaser, as
the case may be, under the following conditions:

          (a)
the original executed counterparts of each of the Release Documents shall be
delivered to each of Seller and Purchaser at the Closing; or

          (b)
following receipt by Escrow Agent of written demand therefor from Seller
stating that Seller is entitled to the same pursuant to and in accordance with
the terms of the Purchase Agreement and provided that Purchaser shall not have
given written notice of objection in accordance with the provisions of Section
4 set forth below, Escrow Agent shall return to each of Seller and Purchaser
such party’s own signatures to the Release Documents; or

          (c)
the Release Documents shall be delivered only to Purchaser (and not to Seller)
following receipt by Escrow Agent of written demand therefor from Purchaser
stating Purchaser is entitled to the same pursuant to and in accordance with
the terms of the Purchase Agreement, if Seller shall not have given written
notice of objection in accordance with the provisions of Section 4 set forth
below; or

          (d)
the Release Documents shall be delivered to Purchaser or Seller as directed by
joint written instructions of Seller and Purchaser.

          4.
Upon receipt of a written demand for the Release Documents by Seller or
Purchaser, Escrow Agent shall promptly give written notice thereof (including a
copy of such demand) to the other party. The other party shall have the right
to object to the delivery of the Release Documents, by giving written notice of
such objection to Escrow Agent at any time within ten (10) business days after
such party’s receipt of notice from Escrow Agent, but not thereafter. Such
notice shall set forth the basis for objecting to the delivery of the Release
Documents. Upon receipt of such notice of objection, Escrow Agent shall
promptly give a copy of such notice to the party who filed the written demand.
If Escrow Agent shall have timely received such notice of objection, Escrow
Agent shall continue to hold the Release Documents, until (x) Escrow Agent
receives joint written notice from Seller and Purchaser directing the delivery
of the Release Documents, in which case Escrow Agent shall then convey the
Release Documents in accordance with said direction, or (y) Escrow Agent
receives a copy of a decision of the Arbitrator that (A) is certified by the
Arbitrator or by each of Seller and Purchaser, as a true and correct copy of
the Arbitrator’s final decision and (B) directs the delivery of the Release
Documents, in which event Escrow Agent shall then convey the Release Documents
in accordance with said direction, or (z) in the event Escrow Agent shall
receive a written notice advising that an arbitration over entitlement to or
effectiveness of the Release Documents has been commenced pursuant to Section
20(g) of the Purchase Agreement, Escrow Agent may deposit the counterparts
of the Release Documents with the Arbitrator. Escrow Agent acknowledges that in
the event that an arbitration commences pursuant to Section 20(g) of the
Purchase Agreement, none of Seller, Tenant, or Purchaser may request a return
of the Release Documents until Escrow Agent receives either (i) written confirmation
from Seller and Purchaser that such arbitration has been settled or (ii) a
final decision from the Arbitrator.

          5.
Escrow Agent may rely and act upon any instrument or other writing reasonably
believed by Escrow Agent to be genuine and purporting to be signed and
presented by any

person or
persons purporting to have authority to act on behalf of Seller or Purchaser,
as the case may be, and shall not be liable in connection with the performance
of any duties imposed upon Escrow Agent by the provisions of this Agreement,
except for Escrow Agent’s own gross negligence, willful misconduct or default.
Escrow Agent shall have no duties or responsibilities except those set forth
herein. Escrow Agent shall not be bound by any modification, cancellation or
rescission of this Agreement unless the same is in writing and signed by
Purchaser, Seller, and Escrow Agent. Escrow Agent shall be reimbursed by Seller
and Purchaser for any expenses (including reasonable legal fees), including all
of Escrow Agent’s fees and expenses with respect to any interpleader action
incurred in connection with this Agreement, and such liability shall be joint
and several; provided, however, that, as between Purchaser and Seller, the
prevailing party in any dispute over the Release Documents shall be entitled to
reimbursement by the losing party of any such expenses paid to Escrow Agent. In
the event that Escrow Agent shall be uncertain as to Escrow Agent’s duties or
rights hereunder, or shall receive instructions from Purchaser or Seller that,
in Escrow Agent’s opinion, are in conflict with any of the provisions hereof,
Escrow Agent shall be entitled to hold the Release Documents and may decline to
take any other action. After delivery of the Release Documents in accordance herewith,
Escrow Agent shall have no further liability or obligation of any kind
whatsoever.

          6.
Escrow Agent shall have the right at any time to resign upon ten (10) business
days prior notice to Seller and Purchaser. Seller and Purchaser shall jointly
select a successor Escrow Agent and shall notify Escrow Agent of the name and
address of such successor Escrow Agent within ten (10) business days after
receipt of notice of Escrow Agent of its intent to resign. If Escrow Agent has
not received notice of the name and address of such successor Escrow Agent
within such period, Escrow Agent shall have the right to select on behalf of
Seller and Purchaser a bank or trust company to act as successor Escrow Agent
hereunder. At any time after the ten (10) business day period, Escrow Agent
shall have the right to deliver the Release Document to any successor Escrow
Agent selected hereunder, provided such successor Escrow Agent shall execute
and deliver to Seller and Purchaser an assumption agreement whereby it assumes
all of Escrow Agent’s obligations hereunder. Upon the delivery of the Release
Documents, the successor Escrow Agent shall become the Escrow Agent for all
purposes hereunder and shall have all of the rights and obligations of the
Escrow Agent hereunder, and the resigning Escrow Agent shall have no further
responsibilities or obligations hereunder.

          7.
If Escrow Agent is authorized to release the Release Documents from escrow by
written directions as described in Section 3(a) or (b) above, then Escrow Agent
shall (a) date the Release Documents the date of such authorization, (b)
deliver two (2) counterparts of the Mutual Release to each of Purchaser and
Seller at their respective addresses first written above, and (c) deliver one
(1) original and one (1) copy of the Filed Documents to Seller and one (1) copy
of the Filed Documents to Purchaser, each at their respective addresses first
written above.

          8.
If Escrow Agent is authorized to release the Release Documents from escrow by
written directions as described in Section 3(c) above, then Escrow Agent shall
physically destroy all of the counterparts of all of the Release Documents,
unless otherwise instructed in writing by Purchaser.

          9.
If Escrow Agent is authorized to release the Release Documents from escrow by
written directions as described in Section 3(d) above, then Escrow Agent shall
deliver (or

destroy) the
Release Documents to Purchaser or Seller as so directed by joint written
instructions of Seller and Purchaser.

          10.
All notices, demands, requests, consents, approvals or other communications
which are required or permitted to be given under this Agreement or which any
party hereto desires to give with respect to this Agreement (each, a “Notice”) shall be given in
accordance with the terms of the Purchase Agreement, except that Notices
delivered to Escrow Agent shall be sent in any manner permitted by the Purchase
Agreement to:

	
 

	
 

	
First
 American Title Insurance Company of New York

	
633 Third
 Avenue

	
New York,
 New York 10017

	
Attention:
 Michael J. Berey, General Counsel

	
 

	
and Steven
 Napolitano, President and CEO

	
Fax:
 212-331-1511/212-331-1579

It is
expressly understood that Escrow Agent acts hereunder as an accommodation to
Purchaser and Seller and as a depository only and is not responsible or liable
in any manner whatsoever for the sufficiency, correctness, genuineness or
validity of any instrument deposited with it, or for the form of execution of
such instruments, or for the identity, authority or right of any person
executing or depositing the same, or for the terms and conditions of any
instrument pursuant to which Escrow Agent or the parties may act.

          11.
The duties of Escrow Agent are purely ministerial. The Escrow Agent shall not
have any duties or responsibilities except those set forth in this Agreement
and shall not incur any liability in acting upon any signature, notice,
request, waiver, consent, receipt or other paper or document believed by Escrow
Agent to be genuine, and Escrow Agent may assume that any person purporting to
give it any notice on behalf of any party in accordance with the provisions
hereof has been duly authorized to do so.

          12.
Escrow Agent may act or refrain from acting in respect of any matter referred
to herein in full reliance upon and by and with the advice of counsel which may
be selected by it (including any member or employee of its firm) and shall be
fully protected in so acting or refraining from acting upon the advice of such
counsel.

          13.
By its execution hereof, Purchaser and Seller hereby jointly and severally
agree to indemnify and save Escrow Agent harmless from any and all loss,
damage, claims, liabilities, judgments and other cost and expense of every kind
and nature which may be incurred by Escrow Agent arising out of its acting as
Escrow Agent hereunder (including, without limitation, reasonable attorneys’
fees and disbursements, which shall include the fees and disbursements of any
member or employee of its firm) except in the case of its own willful
misconduct or gross negligence. The provisions of this Paragraph 13 shall
survive the termination of this Agreement.

          14.
This Agreement and all matters relating hereto shall be governed by and
construed and interpreted in accordance with the laws of the State of New York.

          15.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns.

          16. This
Agreement may be executed in multiple counterparts each of which shall be
deemed an original and all of which, when taken together, shall constitute one
and the same instrument.

          17.
It is understood and agreed that all understandings and agreements heretofore
had between the parties hereto with respect to the subject matter hereof are
merged into this Agreement, which alone fully and completely expresses their
agreement.

[SIGNATURE PAGES TO FOLLOW]

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

	
 

	
 

	
 

	
 

	
SELLER

	
 

	
 

	
 

	
 

	
1334 YORK
 AVENUE L.P.,

	
 

	
a Delaware
 limited partnership

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name: 

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
PURCHASER

	
 

	
 

	
 

	
 

	
SOTHEBY’S,

	
 

	
a Delaware
 corporation

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
ESCROW AGENT

	
 

	
 

	
 

	
 

	
First
 American Title Insurance

	
 

	
Company of
 New York,

	
 

	
as Escrow
 Agent

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
Acknowledged
 and Agreed:

	
 

	
 

	
 

	
TENANT

	
 

	
 

	
 

	
 

	
SOTHEBY’S, INC.

	
 

	
a Delaware
 corporation

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

Schedule A

Description of the Land

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

BEGINNING AT
THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK AVENUE
(FORMERLY AVENUE A) AND THE SOUTHERLY SIDE OF 72nd STREET;

RUNNING THENCE
IN A SOUTHERLY DIRECTION ALONG THE EASTERLY SIDE OF YORK AVENUE 204 FEET 4
INCHES TO THE CORNER FORMED BY THE INTERSECTION OF THE EASTERLY SIDE OF YORK
AVENUE AND THE NORTHERLY SIDE OF 71st STREET;

THENCE IN AN
EASTERLY DIRECTION ALONG THE NORTHERN SIDE OF 71st STREET, 198 FEET;

THENCE IN A
NORTHERLY DIRECTION AND PARALLEL WITH YORK AVENUE 204 FEET 4 INCHES TO THE
SOUTHERLY SIDE OF 72nd STREET;

AND THENCE IN
A WESTERLY DIRECTION ALONG THE SOUTHERLY SIDE OF 72nd STREET 198
FEET TO THE POINT OR PLACE OF BEGINNING.

EXHIBIT 17

COPY OF LOAN AGREEMENT

[To be attached]

PRINCIPAL GUARANTY

          THIS
PRINCIPAL GUARANTY (this “Guaranty”) entered into as of the ___ day of
___________, 2008, and made by ABY ROSEN, having an address at c/o RFR Holding
LLC, 390 Park Avenue, 3rd Floor, New York, New York 10022, as guarantor (“Rosen”),
and MICHAEL FUCHS, having an address at c/o RFR Holding LLC, 390 Park Avenue,
3rd Floor, New York, New York 10022, as guarantor (“Fuchs”; Fuchs,
together with Rosen being collectively referred to herein as the “Guarantor”)
for the benefit of SOTHEBY’S, a Delaware corporation, having an address at 1334
York Avenue, New York, New York 10022 (“Purchaser”).

          WHEREAS,
simultaneously with the execution and delivery of this Guaranty, Purchaser is
entering into a Purchase and Sale Agreement (the “Contract”), with 1334
York Avenue, L.P., a Delaware limited partnership having an address c/o RFR
Holding LLC, 390 Park Avenue, New York, New York 10022 (“Seller”), with
respect to the fee interest in certain real property located at 1334 York
Avenue, New York, New York.

          WHEREAS,
any capitalized items used herein and not expressly defined herein shall have
the meanings ascribed thereto in the Contract.

          WHEREAS,
pursuant to the terms of the Contract, Purchaser is, on, or about the date
hereof, delivering to Seller the sum of Fifty Million ($50,000,000.00) Dollars
in respect of the Deposit.

          WHEREAS,
pursuant to the terms and conditions of the Contract, Seller may be required,
under certain prescribed circumstances, to (a) return the Deposit to Purchaser
and (b) pay to Purchaser Interest on the Deposit, all as more particularly set
forth in the Contract (all such liabilities and obligations being hereinafter
referred to as the “Guaranteed Obligations”).

          WHEREAS,
Rosen and Fuchs are principals of Seller.

          WHEREAS,
Guarantor will be directly benefited by Seller entering into the Contract with
Purchaser.

          WHEREAS,
as a condition precedent to, and material inducement for, Purchaser entering
into the Contract, Seller has caused Guarantor to guaranty, pursuant to this
Guaranty, the payment and performance of the Guaranteed Obligations.

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

	
 

	
 

	
Section 1. Terms
 of Guaranty.

          Guarantor
absolutely, unconditionally and irrevocably guarantees to Purchaser the prompt
payment and performance when due of the Guaranteed Obligations.

          (a)
The obligations, covenants, agreements and duties of Guarantor under this
Guaranty shall in no way be affected or impaired by reason of the occurrence,
from time to time, of any of the following with respect to the Contract, even
though notice may not have been given to, or received from, Guarantor, or the
further consent of Guarantor thereto may not have been obtained:

	
 

	
 

	
 

	
 

	
(i) The waiver
 by Purchaser of the performance or observance of any agreement, covenant,
 term or condition to be performed or observed by Seller;

	
 

	
 

	
 

	
 

	
(ii) The
 extension of the time for the payment of any sums owing or payable under the
 Contract or the time for the performance of any other obligation under or
 arising out of or on account of the Contract;

	
 

	
 

	
 

	
 

	
(iii) The
 supplementing, modification or amendment (whether material or otherwise) of
 the Contract or any of the obligations of Seller or Purchaser set forth in
 the Contract;

	
 

	
 

	
 

	
 

	
(iv) Any failure,
 omission, delay or lack on the part of Purchaser or any other person to
 enforce, assert or exercise any right, power or remedy conferred on such
 person in or by virtue of the Contract, or any action on Purchaser’s or such
 person’s part granting indulgence or extension in any form;

	
 

	
 

	
 

	
 

	
(v) The
 voluntary or involuntary liquidation, dissolution, marshalling of assets and
 liabilities, receivership, insolvency, bankruptcy, assignment for the benefit
 of creditors, reorganization, arrangement, composition or readjustment of, or
 other similar application, action or proceeding affecting Seller or
 Guarantor, or any of their assets;

	
 

	
 

	
 

	
 

	
(vi) The release
 of Seller from the performance or observance of any of the agreements,
 covenants, terms or conditions contained in the Contract by operation of law
 or otherwise; or

	
 

	
 

	
 

	
 

	
(vii) The
 termination of the Contract.

          (b)
Guarantor hereby acknowledges that this Guaranty (i) is an absolute and
unconditional guaranty of payment, and not merely of collection; and (ii) is a
direct and primary obligation of Guarantor (and Guarantor’s obligations
hereunder are not as a surety). Guarantor hereby waives diligence and all
demands, protests, presentments and notices of every kind and nature,
including, but not limited to, notices of presentment, demand for payment or
performance, protest, notice of default or nonpayment, notice of dishonor,
notice of protest and notice of acceptance of this Guaranty and the creation,
renewal, extension, modification or accrual of any of the obligations Guarantor
has hereby guaranteed.

          (c)
Guarantor hereby waives any and all legal requirements that Purchaser institute
any action or proceeding, at law or in equity, against Seller or anyone else,
or exhausts its remedies against Seller or anyone else, in respect of the
Guaranteed Obligations as a condition precedent to bringing an action or
proceeding against Guarantor under this Guaranty, and Guarantor hereby
acknowledges that Guarantor shall remain liable hereunder jointly and severally
with Seller and as a principal until the Guaranteed Obligations shall have been
satisfied, notwithstanding any fact, act, event or occurrence which might
otherwise operate as a

legal or
equitable discharge of a surety or guarantor. All rights and remedies afforded
to Purchaser by reason of this Guaranty are separate and cumulative rights and
remedies and it is agreed that no one of such rights or remedies, whether
exercised by Purchaser or not, shall be deemed to be an exclusion of any of the
other rights or remedies available to Purchaser and shall not limit or
prejudice any other legal or equitable right or remedy which Purchaser may
have.

          (d)
Guarantor understands that the exercise by Purchaser of certain rights and
remedies may affect or eliminate Guarantor’s right of subrogation against
Seller and that Guarantor may therefore incur partially or totally
nonreimbursable liability hereunder. Nevertheless, Guarantor hereby authorizes
and empowers Purchaser, its successors, endorsees and/or assigns, to exercise
in its or their sole discretion, any rights and remedies, or any combination thereof,
which may then be available, it being the purpose and intent of Guarantor that
the obligations hereunder shall be absolute, continuing, independent and
unconditional under any and all circumstances. Guarantor subordinates all
indebtedness owing to Guarantor from Seller to the payment of any amounts due
to Purchaser with respect to the Guaranteed Obligations. In the event that
Guarantor shall advance or become obligated to pay any sums under this
Guaranty, Guarantor agrees that Guarantor shall have no right of subrogation or
reimbursement against Seller unless and until all amounts due under this
Guaranty shall have been paid in full and all of Guarantor’s obligations under
the Guaranty shall have been fully performed. To the extent Guarantor’s waiver of
these rights of subrogation or reimbursement as set forth in this Guaranty are
found by a court of competent jurisdiction to be void or voidable for any
reason, Guarantor agrees that its rights of subrogation and reimbursement
against Seller shall be junior and subordinate as to lien, time of payment and
in all other respects to Purchaser’s rights against Seller and to Purchaser’s
right, title and interest in such collateral or security. Nothing herein
contained is intended or shall be construed to give Guarantor any right of
subrogation in or under the Contracts or any right to participate in any way
therein, or in the right, title or interest of Purchaser in or to the
Contracts, notwithstanding any payments made by Guarantor under this Guaranty,
all such rights of subrogation and participation being hereby expressly waived
and released.

          (e)
Guarantor unconditionally waives any defense to the enforcement of this
Guaranty, including, without limitation, the right to plead any and all
statutes of limitations as a defense to Guarantor’s liability under this
Guaranty, other than the defense that the Guaranteed Obligations have been
performed in full or that the Guaranteed Obligations are not due and payable or
performable pursuant to the express terms of the Contract.

          (f)
This Guaranty shall survive the exercising of Purchaser’s rights and remedies
under the Contract, it being agreed that this Guaranty shall terminate only
upon the earlier to occur of (i) full payment and performance of the Guaranteed
Obligations, (ii) the full satisfaction and performance of all of Seller’s
obligations under the Contract or (iii) a termination of the Contract pursuant
to Section 20(a) thereof.

	
 

	
 

	
Section 2. Covenants,
 Representations and Warranties.

          (a)
Any action, suit or proceeding in connection with this Guaranty shall be
brought in a court of record in either the State of New York, County of
New York, or of the United States District Court for the Southern District of
New York, Guarantor and Purchaser hereby

consenting and
submitting to the jurisdiction thereof; and service of process may be made upon
Guarantor or Purchaser, by certified or registered mail, at the address to be
used for the giving of notice to Guarantor or Purchaser, as applicable, under
Section 3(b). Nothing herein shall affect the right of Purchaser to commence
legal proceedings or otherwise to proceed against Guarantor in any other
jurisdiction or to serve process in any manner permitted by applicable law. In
any action, suit or proceeding in connection with this Guaranty, Guarantor
hereby waives any claim that New York County or the Southern District of New
York is an inconvenient forum, any claim for special, consequential or punitive
damages and the right to interpose any defense based upon any claim of laches
and any set-off or counterclaim of any nature or description.

          (b)
The parties agree that the State of New York has a substantial relationship to
the parties and to the underlying transaction embodied hereby, and in all
respects, including, without limiting the generality of the foregoing, matters
of construction, validity and performance, this Guaranty 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 in
such State (without regard to principles of conflict laws) and any applicable
law of the United States of America. To the fullest extent permitted by law,
Guarantor hereby unconditionally and irrevocably waives any claim to assert
that the law of any other jurisdiction governs this Guaranty, and this Guaranty
shall be governed by and construed in accordance with the laws of the State of
New York pursuant to Section 5-1401 of the New York General Obligation Law.

          (c)
Each of Guarantor and Purchaser hereby knowingly, voluntarily and intentionally
waives any rights that it may have to a trial by jury in any litigation arising
in any way in connection with this Guaranty.

          (d)
Guarantor represents and warrants that Guarantor has the power and authority to
execute, deliver and carry out the terms and provisions of this Guaranty and
has duly authorized, executed, and delivered the same.

          (e)
Guarantor represents and warrants that neither the execution and delivery of
this Guaranty, nor the consummation of the transactions herein contemplated,
nor compliance with the terms and provisions hereof, will contravene any
provision of law, statute, rule or regulation to which Guarantor is subject or
any judgment, decree, franchise, order or permit applicable to Guarantor, or
will conflict or will be inconsistent with, or will result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the property or assets of the
Guarantor pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which the Guarantor is a party or may be bound
or subject.

          (f)
Guarantor represents and warrants that (i) Guarantor is a principal of Seller,
has personal knowledge of and is familiar with Seller’s business affairs and
books and records; (ii) that Seller is in sound financial condition as of the
date of this Guaranty; (iii) Guarantor has received, and reviewed with
competent legal counsel, the Contract and is familiar with the terms and
conditions thereof, including, but not limited to, the provisions of the
Contract relating to the Guaranteed Obligations and (iv) that, to Guarantor’s
knowledge, Seller will be financially able to perform its obligations under the
Contract in accordance with the terms and conditions thereof.

	
 

	
 

	
Section 3. Miscellaneous.

          (a)
All guaranties, covenants and agreements contained in this Guaranty shall bind
the respective successors and assigns of Guarantor and shall inure to the
benefit of Purchaser and its successors and assigns.

          (b)
Any notice, demand, consent, approval, direction, agreement or other
communication (any “Notice”) required or permitted hereunder or under
any other documents in connection herewith shall be in writing and shall be
directed as follows:

	
 

	
 

	
If to Rosen:

	
c/o RFR
 Holding LLC

	
 

	
390 Park
 Avenue, 3rd Floor

	
 

	
New York,
 New York 10022

	
 

	
Facsimile:
 (212) 308-5090

	
 

	
 

	
and a copy
 to:

	
Fried,
 Frank, Harris, Shriver & Jacobson LLP

	
 

	
One New York
 Plaza

	
 

	
New York,
 New York 10004

	
 

	
Attention:
 Jonathan L. Mechanic, Esq.

	
 

	
Facsimile:
 (212) 859-4000

	
 

	
 

	
If to Fuchs:

	
c/o RFR
 Holding LLC

	
 

	
390 Park
 Avenue, 3rd Floor

	
 

	
New York,
 New York 10022

	
 

	
Facsimile:
 (212) 308-5090

	
 

	
 

	
and a copy
 to:

	
Fried,
 Frank, Harris, Shriver & Jacobson LLP

	
 

	
One New York
 Plaza

	
 

	
New York,
 New York 10004

	
 

	
Attention:
 Jonathan L. Mechanic, Esq.

	
 

	
Facsimile:
 (212) 859-4000

	
 

	
 

	
If to
 Purchaser:

	
c/o
 Sotheby’s

	
 

	
1334 York
 Avenue

	
 

	
New York,
 New York 10022

	
 

	
Attention:
 William S. Sheridan

	
 

	
Facsimile:
 (845) 613-7412

	
 

	
 

	
and a copy
 to:

	
Stroock
 & Stroock & Lavan LLP

	
 

	
180 Maiden
 Lane

	
 

	
New York,
 New York 10038

	
 

	
Attention: Peter G. Koffler, Esq.

	
 

	
Facsimile:
 (212) 806-2686

or to such
changed address or facsimile number as a party hereto shall designate to the
other parties hereto from time to time in writing.

          (c)
Any Notice so sent by national overnight delivery service, or personal delivery
shall be deemed given on the date of receipt or refusal as indicated on the
return receipt, or the receipt of the national overnight delivery service or
personal delivery service. Any Notice sent by facsimile transmission shall be
deemed given when received as confirmed by the telecopier electronic
confirmation receipt. A Notice may be given either by a party or by such
party’s attorney. Guarantor or Purchaser may designate, by not less than five
(5) business days’ notice given to the others in accordance with the terms of
this Section 3, additional or substituted parties to whom Notices should
be sent hereunder.

          (d)
No delay on the part of Purchaser in exercising any power or right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any power or right hereunder or the failure to exercise same in any instance
preclude other or further exercise thereof or the exercise of any other power
or right; nor shall Purchaser be liable for exercising or failing to exercise
any such power or right; the rights and remedies hereunder expressly specified
are cumulative and not exclusive of any rights or remedies which Purchaser may
or will otherwise have.

          (e)
In the event that Purchaser shall receive any payments on account of any of the
obligations hereby guaranteed, whether directly or indirectly, and it shall
subsequently be determined that such payments were for any reason improper, or
a claim shall be made against Purchaser that the same were improper, and
Purchaser either voluntarily or pursuant to court order shall return the same,
Guarantor shall be liable, with the same effect as if the said payments had
never been paid to or received by Purchaser, for the amount of such repaid or
returned payments, notwithstanding the fact that payments may theretofore have
been credited on account of the obligations hereby guaranteed.

          (f)
This Guaranty may not be modified or amended except by a writing duly executed
by the parties hereto.

          (g)
In the event that Purchaser, for any reason whatsoever, shall deem it necessary
to refer this Guaranty to an attorney for the enforcement thereof or of any
rights hereunder, by suit or otherwise, there shall be immediately due from
Guarantor to Purchaser, in addition to the sums guaranteed by Guarantor under
this Guaranty, reasonable attorneys’ fees and actual disbursements, together
with all costs and expenses of such action, which costs, expenses, fees and
disbursements shall be added to and deemed part of the Guaranteed Obligations
hereunder; provided, however, that no such amounts shall be due to Purchaser if
a court of competent jurisdiction (sustained on appeal, if any) conclusively
enters judgment in Guarantor’s favor on all claims.

          (h)
In the event that any provision of this Guaranty or the application thereof to
Guarantor or any circumstance in the jurisdiction governing this Guaranty
shall, to any extent, be invalid or unenforceable under any applicable statute,
regulation, or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to
conform to such statute, regulation or rule of law, and the remainder of this
Guaranty and the application of any such invalid or unenforceable provision to
parties, jurisdictions, or circumstances other than to whom or to which it
shall be held invalid or 

unenforceable,
shall not be affected thereby nor shall same affect the validity or
enforceability of any other provision of this Guaranty.

Section 4. Joint
and Several Liability. Rosen and Fuchs hereby acknowledge and agree that
each of Rosen and Fuchs shall be and remain jointly and severally liable
hereunder as Guarantor.

Section 5. Subject
to Certain Limitations in Contract. Purchaser acknowledges and agrees that
the Contract contains certain limitations as to when the Guaranteed Obligations
become due and payable by Seller and, notwithstanding anything herein to the
contrary, including without limitation the terms and provisions of Section
1(c) hereof, Purchaser’s right to pursue payment or performance of the
Guaranteed Obligations from Guarantor shall at all times be subject to such
limitations.

Section 6. Arbitration.
Any actions arising out of this Guaranty, including, without limitation, the
resolution of any disputes as to whether either Guarantor has defaulted in or
breached any of its obligations under this Guaranty, shall be, at the request
of either party, resolved by binding arbitration conducted in New York City,
with John Zuccotti serving as sole arbitrator, subject to and in accordance
with the terms of this Section 6. If John Zuccotti is unable or
unwilling to serve as arbitrator, each party shall, within three (3) business
days following notice to both parties from John Zuccotti or his designated
representative of his unavailability, designate one (1) arbitrator of its
choosing, and the two (2) designated arbitrators shall, within three (3)
business days of their appointment, designate a third arbitrator who shall be
an attorney having at least ten (10) years of commercial real estate experience
(John Zuccotti or such panel of three (3) arbitrators, the “Arbitrator”).
If the Arbitrator consists of a panel of three (3) arbitrators, all decisions
of the Arbitrator shall require agreement by at least two (2) of such three
(3). Any such arbitration will be commenced by service of the claimant’s demand
for arbitration upon counsel for the respondent. Simultaneously with or
promptly following serving its demand for arbitration, the claimant shall send
a copy of such demand to John Zuccotti together with a request that John
Zuccotti serve as the arbitrator with respect thereto. Any answer to the demand
for arbitration will be served on counsel for the claimant within five (5)
business days after service of the demand, and any reply to any counterclaim
asserted in the answer will be served on counsel for the respondent and the
Arbitrator within three (3) business days after service of the answer.
Claimant’s demand for arbitration, any answer to such demand and any reply to
such answer, shall be served on the Arbitrator simultaneously with service on
opposing counsel, unless the Arbitrator has yet to be determined at such time.
Within ten (10) business days after service of the demand for arbitration or
appointment of a panel of three (3) arbitrators, whichever is later, the
Arbitrator will give the parties’ counsel notice of the time, date and place of
the arbitration hearing, such hearing to be scheduled to begin within ten (10)
business days after such notice. The arbitration will be conducted subject to
Rules E-1, E-3, E-5, E-8 and E-9 of the Expedited Procedures of the Commercial
Arbitration Rules of the American Arbitration Association, it being understood
that the provisions of this Section 6 shall supersede any conflicting or
inconsistent provision of such Rules. At the Arbitrator’s discretion, the
Arbitrator may direct the production of documents in advance of the hearing. In
the event that either party fails to timely designate its alternate arbitrator
within the required three (3) business day period, and such failure is not
cured within two (2) business after written notice thereof, the other party may
designate such third arbitrator.

          IN
WITNESS WHEREOF, the undersigned has executed this Guaranty to be effective as
of the date and year written above.

	
 

	
 

	
 

	
GUARANTOR

	
 

	
 

	
 

	

	
 

	
ABY ROSEN

	
 

	
 

	
 

	

	
 

	
MICHAEL FUCHS

	
 

	
 

	
 

	
PURCHASER

	
 

	
 

	
 

	
SOTHEBY’S,

	
 

	
a Delaware corporation

	
 

	
 

	
 

	
By:

	
 

	

	
 

	
   Name:

	
 

	
   Title:

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the _____ day of _____________ in the year 2008, before me, the undersigned, a
notary public in and for said state, personally appeared Aby Rosen, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Notary
 Public

	
 

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the _____ day of _____________ in the year 2008, before me, the undersigned, a
notary public in and for said state, personally appeared Michael Fuchs,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Notary
 Public

	
 

	
 

	
 

	
STATE OF NEW
 YORK

	
)

	
 

	
): ss.:

	
COUNTY OF
 NEW YORK

	
)

          On
the _____ day of ___________ in the year 2008, before me, the undersigned, a
notary public in and for said state, personally appeared __________, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Notary
 Public

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