UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 21, 2004
ONE LIBERTY PROPERTIES, INC.
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(Exact name of Registrant as specified in charter)
Maryland 001-09279 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On December 21, 2004 Elpans LLC, a wholly-owned subsidiary of Registrant
("Seller"), entered into a Contract of Sale with A.P. Development L.L.C.
("Buyer"), pursuant to which Seller agreed to sell and Buyer agreed to purchase
the unused development or "air" rights relating to Seller's property located at
300 Gold Street, Brooklyn, New York (the "Property"). In addition, Buyer and
Seller agreed to certain procedures and restrictions in respect of the
development of Buyer's adjacent property and the redevelopment of Seller's
Property, which is set forth in a Zoning Lot and Development Agreement which is
to be executed at closing. The purchase price under the Contract of Sale is
$11,000,000. Buyer has deposited with Seller's counsel an escrow deposit of
$500,000 and is required to post an additional $500,000 escrow deposit by
December 31, 2004 and an additional $500,000 escrow deposit by February 15,
2005. The Contract of Sale provides that there are specified conditions that are
required to be satisfied prior to closing; Registrant has no assurance that such
conditions will be satisfied or that even if such conditions are satisfied that
the closing will occur. The Contract of Sale provides that the closing is
scheduled for June 30, 2005.
If Buyer defaults in its obligation to close on the transaction or in the event
that Buyer fails to pay when due any of the additional escrow deposits, then
Seller's right shall be to receive from the escrow agent the escrow deposit(s)
paid to date and to terminate the Contract of Sale; Seller has no cause of
action for damages or specific performance against Buyer.
The Property is currently improved with an office building leased on a long-term
basis and adjacent parking area. Seller will retain the Property post-closing.
Seller's ability to expand or modify the existing building following the closing
will be restricted pursuant to the terms of the Zoning Lot and Development
Agreement to be executed at closing.
Seller anticipates that the gain in connection with this transaction will be
deferred for income tax purposes by entering into a 1031 tax-deferred exchange
and using the sale proceeds to acquire one or more replacement properties.
Seller, to date, has not identified replacement properties and can make no
assurance that it will be able to locate suitable replacement properties in the
event that the closing does occur. Further, Seller has not yet determined the
amount of gain it would receive upon the closing of the transaction.
Caution Concerning Forward-Looking Statements: Materials included in this filing
may contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that could
cause actual results to be materially different from historical results or from
any future results expressed or implied by such forward-looking statements.
Statements that include the words "may," "will," "would," "could," "should,"
"believes," "estimates," "projects," "potential," "expects," "plans,"
"anticipates," "intends," "continues," "forecast," "designed," "goal," or the
negative of those words or other comparable words should be considered uncertain
and forward-looking.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statement of Businesses Acquired. Not Applicable.
(b) Proforma Financial Information. Not Applicable.
(c) Exhibits. The Contract of Sale dated as of December 21, 2004 between
Elpans LLC and A.P. Development L.L.C which includes as an exhibit the
form of Zoning Lot and Development Agreement between Elpans LLC and
A.P. Development L.L.C. to be executed at closing.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Date: December 22, 2004 By: /s/ Mark H. Lundy
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Mark H. Lundy
Vice President and Secretary
AGREEMENT OF PURCHASE AND SALE
AGREEMENT dated as of this 21st day of December, 2004 (this "Agreement"),
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between Elpans LLC ("Seller"), a New York limited liability company , having an
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address at 60 Cutter Mill Road, Great Neck, New York 11021 and A.P. Development
L.L.C. ("Purchaser"), a New York limited liability company, having an address at
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8720 139th Street, Briarwood, New York 11435.
R E C I T A L S:
WHEREAS, Seller is the owner in fee simple of that certain parcel of land lying
and being in the City and State of New York, County of Kings, designated as Lot
5 in Block 133 on the Tax Map of the City of New York and known by street
address as 300 Gold Street, Brooklyn, New York, which land is more particularly
described in Exhibit A annexed hereto (the "Seller's Property"), together with
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the building and improvements thereon (the "Seller's Improvements"), the
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Seller's Property and Seller's Improvements herein being referred to
collectively as "Seller's Premises";
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WHEREAS, pursuant to an Agreement of Purchase and Sale dated June 14, 2004,
Purchaser is the contract vendee of that certain parcel of land lying and being
in the City and State of New York, County of Kings, designated as Lot 1 in Block
133 in the County of Kings on the Tax Map of the City of New York and known by
street address as 147 Flatbush Avenue, Brooklyn, New York, which land is more
particularly described in Exhibit B annexed hereto (the "Purchaser's Property"),
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together with the building and improvements thereon or to be constructed
thereon, including without limitation the New Purchaser Building (as hereinafter
defined) (the "Purchaser's Improvements"), the Purchaser's Property and
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Purchaser's Improvements being herein referred to collectively as the
"Purchaser's Premises";
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WHEREAS, Purchaser desires to construct a new building (the "New Purchaser
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Building") on Purchaser's Property with a bulk (as hereinafter defined) in
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excess of the bulk presently permitted to be constructed on Purchaser's Premises
under the Zoning Resolution (as hereinafter defined) if Purchaser's Property is
considered a single separate and single zoning lot (as hereinafter defined);
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to purchase
from Seller, the Excess Floor Area Development Rights and the Bonus Floor Area
Development Rights attributable to Seller's Premises (both as hereinafter
defined) (together, the "Conveyance Floor Area Development Rights") for the use
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and benefit of Purchaser's Premises, and in furtherance thereof Seller, and any
other party in interest (as hereinafter defined) to Seller's Premises and the
Conveyance Floor Area Development Rights, will join with Purchaser and any other
Party in Interest to Purchaser's Premises in executing and recording a
Declaration (or waiver of its right to execute a Declaration) that Seller's
Premises and Purchaser's Premises shall thereafter constitute a single zoning
lot for the purpose of Section 12-10 of the Zoning Resolution (the "Combined
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Zoning Lot");
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WHEREAS, Seller's Premises and Purchaser's Premises are contiguous for a minimum
of ten (10) feet along the northern lot line of Seller's Premises; and
WHEREAS, in connection with the creation of the Combined Zoning Lot, Seller and
Purchaser wish to restrict their respective Premises in accordance with the
provisions of a Zoning Lot Development Agreement (as hereinafter defined) which
sets forth their rights and obligations with respect to the operation of their
respective Premises.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, it is hereby agreed as follows:
1. Definitions. Defined terms used in this Agreement shall, unless the context
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otherwise requires, have the following meaning:
(a) "bulk," "dwelling unit," "floor area," "floor area ratio," "lot coverage,"
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"zoning lot," "party in interest," and "use" shall have the meanings set
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forth in Section 12-10 of the Zoning Resolution as of the date hereof.
(b) "Business Day" means any day other than a Saturday, Sunday or other day on
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which commercial banks are authorized to be closed in the State of New
York.
(c) "Bonus Floor Area Development Rights" shall mean any Floor Area Development
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Rights appurtenant to Seller's Property as of the date hereof which are
available for use in a building constructed on the Combined Zoning Lot
through provision of an amenity or other public benefit on Developer's
Land, elsewhere on the Combined Zoning Lot, or off the Combined Zoning Lot
in accordance with the provisions of the Zoning Resolution; provided,
however, that Bonus Floor Area Development Rights shall not include any
Floor Area Development Rights appurtenant to Seller's Property which arise
or are authorized after the date hereof by amendment to, or revision of,
the Zoning Resolution or any other applicable law, rule or regulation.
(d) "Declaration" shall refer to a Declaration of Zoning Lot Restrictions in
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substantially the form annexed hereto as Exhibit C.
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(e) "Excess Floor Area Development Rights" shall mean those Floor Area
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Development Rights (other than Bonus Floor Area Development Rights)
appurtenant to Seller's Property that are in excess of those which are
utilized by the improvements presently located on such parcel, and
accordingly are available for transfer pursuant to the Zoning Resolution,
provided, however, Excess Floor Area Development Rights shall not include
any such rights which arise or are authorized after the date hereof by
amendment to, or revision of, the Zoning Resolution or any other applicable
law, rule or regulation.
(f) "Floor Area Development Rights" shall mean the rights, as determined in
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accordance with the Zoning Resolution, which are appurtenant to a zoning
lot, to develop such zoning lot by erecting thereon a structure or
structures with (i) a total floor area determined by multiplying the area
of the zoning lot by the maximum allowable floor area ratio for structures
in such zoning district or districts in which such zoning lot is located
and (ii) any other bulk, density and other development rights appurtenant
to the Combined Zoning Lot permitted under the Zoning Resolution.
(g) "Fund" shall mean the sum of the First Deposit, the Second Deposit and the
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Third Deposit (all as thereinafter defined) being held by the Escrow Agent
(as defined in Section 3 of this Agreement), together with any income
earned thereon, in accordance with the terms of the Section 17 of this
Agreement.
(h) "Retained Floor Area Development Rights" shall mean (1) the Floor Area
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Development Rights utilized in Seller's Improvements as of the date hereof
and (2) any rights which arise or are created after the date hereof which,
if they arose or were created before the date hereof, would be Excess Floor
Area Development Rights or Bonus Floor Area Development Rights .
(i) "Zoning Lot Development Agreement" or "ZLDA" shall refer to an instrument
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substantially in the form annexed hereto as Exhibit D.
(j) "Zoning Resolution" shall mean the Zoning Resolution of the City of New
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York, effective as of December 15, 1961, as amended from time to time.
(k) The recitals, schedules and exhibits annexed hereto, and the capitalized
terms defined therein, are hereby incorporated by reference into the body
of this Agreement as if the same were fully set forth herein.
2. Purchase and Sale. (a) (i) Seller agrees to sell to Purchaser and Purchaser
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agrees to purchase, upon the terms and conditions set forth in this Agreement,
the Conveyance Floor Area Development Rights, and (ii) Seller agrees to grant to
Purchaser a perpetual easement for light, air and view over the Seller's
Premises as set forth in the ZLDA (the "Easement").
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(b) Notwithstanding anything herein to the contrary, it is understood and
agreed that Seller is retaining for its benefit (i) the Retained Floor Area
Development Rights, and (ii) any Floor Area Development Rights pertaining
to Seller's Property created or granted on or after the date hereof for any
reason, including by amendment of the Zoning Resolution.
3. Purchase Price: The purchase price (the "Purchase Price") for the
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Conveyance Floor Area Development Rights and the Easement shall be Eleven
Million Dollars ($11,000,000). The Purchase Price shall be payable as
follows:
(i) (A) Five Hundred Thousand Dollars ($500,000) shall be paid herewith (the
"First Deposit") to Herrick, Feinstein, LLP ("Escrow Agent"), the receipt
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of which is hereby acknowledged; (B) Five Hundred Thousand Dollars
($500,000) shall be paid to the Escrow Agent on December 31, 2004 (the
"Second Deposit"); (C) Five Hundred Thousand Dollars ($500,000) shall be
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paid to the Escrow Agent on February 15, 2004 (the "Third Deposit"). The
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First Deposit, the Second Deposit and the Third Deposit, together with
interest accrued thereon, shall be credited against the Purchase Price at
the Closing (hereinafter defined), or paid to Seller or Purchaser in
accordance with the applicable provisions of this Agreement. TIME SHALL BE
OF THE ESSENCE WITH RESPECT TO THE PAYMENT OF THE SECOND DEPOSIT AND THE
FIRST DEPOSIT.
(ii) The balance of the Purchase Price shall be paid to Seller on the Closing
Date(hereinafter defined) by wire transfer of immediately available funds
to such account as Seller may direct in wiring instructions to be provided
by Seller to Purchaser not less than five (5) Business Days prior to the
Closing Date.
Seller and Purchaser, as appropriate, shall at Closing execute, acknowledge and
deliver all forms required by the other party to effectuate the intent of this
Section, including (if at the Closing) the documents and instruments referred to
in Section 6 of this Agreement and a Form W-9.
4. Closing. The consummation of the transactions provided for in this Agreement
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(the "Closing") shall take place at the offices of Herrick, Feinstein LLP, 2
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Park Avenue, New York, New York at 10:00 a.m. on June 30, 2005; AS TO WHICH DATE
TIME SHALL BE OF THE ESSENCE. The date on which Closing occurs is hereinafter
referred to as the "Closing Date."
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5. Parties in Interest. Purchaser shall within ten (10) days of the date hereof
order, and promptly upon Purchaser's receipt thereof cause to be delivered to
Seller, a true and complete copy of, a Parties in Interest Certification (the
"Parties in Interest Certification") issued by Fidelity National Title Insurance
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Company (the "Title Company"), certifying the metes and bounds description of
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the Combined Zoning Lot and the identity of all parties in interest with respect
to the Seller's Property and the Purchaser's Property. The parties in interest
with respect to the Seller's Property as shown on the Parties in Interest
Certification, and any person or entity that after the date hereof becomes a
party in interest with respect to the Seller's Property in any amended or
subsequent Parties in Interest Certification issued by the Title Company, are
referred to herein as the "Seller's Parties in Interest," and the parties in
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interest with respect to the Purchaser's Property as shown on the Parties in
Interest Certification, and any person or entity that after the date hereof
becomes a party in interest with respect to the Purchaser's Property in any
amended or subsequent Parties in Interest Certification issued by the Title
Company, are referred to herein as the "Purchaser's Parties in Interest."
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6. Deliveries. (a) At the Closing, Seller shall deliver to Purchaser the
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following:
(i) A Waiver of Execution of Declaration of Zoning Lot Restrictions and
Subordination to Zoning Lot Development Agreement, substantially in the
form attached hereto as Exhibit E, ("Waiver"), which Waiver shall be
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executed and acknowledged by each of the Seller's Parties in Interest other
than Seller.
(ii) An affidavit made pursuant to Section 1445(b)(2) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), by an individual
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who is an authorized signatory of Seller stating that Seller is not a
"foreign person" within the meaning thereof.
(iii)Any instrument, agreement or other document as may be required by the
Title Company in order for the Title Company to be ready, willing and able
to issue at standard rates, a so-called "air rights endorsement" to any
policy of title insurance that Purchaser may have or obtain that insures
Purchaser's acquisition of the Conveyance Floor Area Development Rights,
the grant to Purchaser of the Easement and the effectiveness of the ZLDA
and the Declaration, which endorsement shall be substantially in the form
attached hereto as Exhibit F (the "Endorsement").
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(iv) A certificate of Seller that the representations and warranties set forth
in Section 8 of this Agreement are true and correct as of the Closing Date.
(v) True and correct copies of the Certificate of Formation of Seller and of a
Certificate of Good Standing for Seller.
(vi) Any other document or instrument required to be delivered or payment
required to be made by Seller at or prior to the Closing pursuant to the
provisions of this Agreement, and any other document reasonably requested
by Purchaser or the Title Company to consummate or evidence the
transactions contemplated herein, or to confirm any of the provisions of
this Agreement.
(b) At the Closing, Purchaser shall deliver to Seller the following:
(i) A Waiver executed and acknowledged by each of the Purchaser's Parties in
Interest other than Purchaser.
(ii) The payment required on account of the Purchase Price in accordance with
Section 2 hereof.
(iii)A certificate of Purchaser that the representations and warranties set
forth in Section 8 of this Agreement are true and correct as of the Closing
Date.
(iv) True and correct copies of the Certificate of Formation of Purchaser and of
a Certificate of Good Standing for Purchaser.
(v) Any other document or instrument required to be delivered or payment
required to be made by Purchaser at the Closing pursuant to the provisions
of this Agreement, and any other document as may be reasonably requested by
Seller or the Title Company to consummate or evidence the transactions
contemplated herein, or to confirm any of the provisions of this Agreement.
(c) At the Closing, Seller and Purchaser shall deliver to the Title Company the
following:
(i) The ZLDA executed and acknowledged by Seller and Purchaser, with any
changes and additions as may be required by the Title Company or a
governmental authority having jurisdiction over the Conveyance Floor Area
Development Rights, provided that any such changes and additions made to
the form shall not adversely effect the rights or obligations of either
Seller or Purchaser.
(ii) A Declaration executed and acknowledged by Seller and Purchaser, with any
changes and additions as may be required by the Title Company or a
governmental authority having jurisdiction over the Conveyance Floor Area
Development Rights, provided that any such changes and additions made to
the form shall not adversely effect any rights or obligations of either
Seller or Purchaser.
(iii)The Waivers delivered by Purchaser and Seller pursuant to subsections (a)
and (b) of this Section 6.
(iv) The Real Property Transfer Tax Return required by Chapter 21 of Title 11 of
the Administrative Code of the City of New York and the regulations issued
pursuant to the authority thereof (the "NYC Transfer Tax Law") executed and
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acknowledged by Seller and Purchaser.
(v) The New York State Real Estate Transfer Tax Return and Credit Line Mortgage
Certificate required by Article 31 of the New York State Tax Law (the "NYS
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Transfer Tax Law") executed by Seller and Purchaser.
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(d) Notwithstanding anything herein to the contrary, neither Seller nor
Purchaser shall be required to deliver a Waiver executed by any of the Seller's
Parties in Interest or the Purchaser's Parties in Interest who have executed the
ZLDA, the Declaration and any other document required to be signed by them in
order to consummate the transactions contemplated by this Agreement.
7. Conditions to Closing. The obligation of Purchaser to consummate the
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transaction contemplated hereby is subject to the fulfillment of the following
conditions:
(a) All representations and warranties of Seller contained in this Agreement
shall have been true in all respects when made and shall be true in all
respects at and as of the Closing Dateas if such representations and
warranties were made at and as of the Closing Date, and Seller shall have
performed and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by
Seller prior to the Closing Date.
(b) The Title Company shall be ready, willing and able to issue the
Endorsement.
(c) Seller shall have made all of the deliveries provided for in this
Agreement. If any of the foregoing conditions set forth in this Section 6
are not satisfied on the Closing Date, Purchaser may either (i) waive any
such condition and proceed with the Closing, in which event Seller shall be
obligated to consummate the Closing, or (ii) terminate this Agreement, in
which event the Fund shall be promptly returned to Purchaser and, upon the
return of the Fund, the parties hereto shall be relieved of all obligations
and liabilities under this Agreement (other than those expressly stated to
survive the termination of this Agreement).
8. Representations and Warranties.
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(a) Seller represents and warrants to Purchaser as follows:
(i) Seller is a New York limited liability company, duly organized, validly
existing and in good standing under the laws of the State of New York, and
has the legal authority and power to perform all of its obligations
hereunder.
(ii) Seller is not a "foreign person" within the meaning of Section 1445 of the
Code.
(iii)Seller holds fee simple title to Seller's Premises and the Conveyance
Floor Area Development Rights, and Seller has not previously transferred,
assigned, encumbered, sold or leased any portion of the Conveyance Floor
Area Development Rights or any interest therein, nor is there now in effect
any agreement, other than this Agreement, that purports to or gives an
option to transfer, assign, encumber, sell or lease any portion of the
Conveyance Floor Area Development Rights or any interest therein.
(iv) There is no litigation pending, or, to the best of Seller's knowledge,
threatened, against Seller which, if adversely determined, would prohibit
or delay Seller from transferring any portion of the Conveyance Floor Area
Development Rights to Purchaser.
(v) Seller has not received any notice and has no knowledge of any pending or
threatened condemnation or similar proceeding affecting any portion of the
Seller's Property.
(vi) Seller has approved and authorized this Agreement and the transaction
contemplated herein, and no other person's consent or approval is required;
and each person executing and delivering this Agreement and all documents
to be executed and delivered in connection herewith has the power and
authority to execute and deliver same.
(vii)The consummation of the transaction contemplated by this Agreement will
not conflict with or result in a breach of any of the terms of any
agreement or instrument to which Seller is a party or by which Seller is
bound or constitute a default thereunder.
(viii) There are no applications for construction or alteration permits in
respect of Seller's Property or Seller's Building made by Seller now
pending before the New York City Department of Buildings or any other
governmental authority having jurisdiction over Seller's Premises that
would have an adverse effect on Seller's ability to transfer the Conveyance
Floor Area Development Rights and grant the Easement to Purchaser or
Purchaser's ability to use the Conveyance Floor Area Development Rights or
the Easement.
Seller shall promptly notify Purchaser after Seller has knowledge that any of
Seller's representations and warranties become untrue.
(b) Purchaser represents and warrants to Seller as follows:.
(i) Purchaser is not a "foreign person" within the meaning of Section 1445 of
the Code;
(ii) Purchaser has approved and authorized this Agreement the transaction
described herein, and no other person's consent or approval is required;
and each person executing and delivering this Agreement and all documents
to be executed and delivered in connection herewith has the power and
authority to execute and deliver same. Purchaser shall promptly notify
Seller after Purchaser has knowledge that any of Purchaser's
representations and warranties become untrue.
9. Approvals; Obligations of Seller and Purchaser. Purchaser shall have the
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right prior to the Closing Date to make application to any governmental
authority for such licenses, permits, approvals, certificates, rulings or
amendments as are necessary, appropriate and/or desirable (collectively
"Approvals") for the development on an "as of right basis" of the New Purchaser
Building and the transfer and use of the Conveyance Floor Area Development
Rights. Seller agrees, at Purchaser's sole cost and expense, to cooperate with
Purchaser in all reasonable respects in the utilization by Purchaser of the
Conveyance Floor Area Development Rights in connection with the development of
the New Purchaser Building, to give all necessary consents in connection with
the filing and prosecution of applications for the Approvals required therefore,
and to execute such documents and applications and to furnish such information
as may be reasonably requested by Purchaser in connection with such
applications. Purchaser shall not apply for any variance from the use or bulk
provisions of the Zoning Resolution or any special permit under the Zoning
Resolution applicable to the New Purchaser Building without the prior written
consent of Seller.
10. Seller's Covenants. Seller covenants to Purchaser that from and after the
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date hereof and continuing through the Closing Date, that subject to that
certain lease (the "NYC Lease"), dated as of October 16, 2002, made by and
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between Seller, as landlord and The City of New York, Department of Citywide
Administrative Services Division of Real Estate Services:
(a) Seller shall not take or permit any action that would adversely affect the
Conveyance Floor Area Development Rights, Seller's ability to transfer the
Conveyance Floor Area Development Rights and grant the Easement to
Purchaser or Purchaser's ability to use the Excess Development Rights and
the Easement. Without limiting the generality of the foregoing, Seller
shall not at any time prior to Closing, use, encumber, sell, lease or
transfer the Subject Floor Area Development Rights, nor shall Seller take
any action that results in the creation of a new Party in Interest, unless
such new Party in Interest, at the time such interest is created, executes,
acknowledges and delivers a Waiver to Seller and Purchaser for delivery to
the Title Company at the Closing.
(b) Seller shall not subdivide Seller's Property into two or more zoning lots
or combine the Seller's Property with a zoning lot other than the zoning
lot in which the Purchaser's Property is located.
(c) Seller shall not apply for, or execute any documents consenting to, any
changes in the provisions of the Zoning Resolution affecting the Seller's
Property, other than as may be requested by Purchaser or as may be required
by law.
11. Purchaser's Covenants. Purchaser covenants to Seller that from and after the
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date hereof and continuing through the Closing Date:
(a) Purchaser shall not subdivide Purchaser's Property into two or more zoning
lots or combine the Purchaser's Property with a zoning lot other than the
zoning lot in which the Purchaser's Property is located.
(b) Purchaser shall not apply for, or execute any documents consenting to, any
changes in the provisions of the Zoning Resolution affecting the
Purchaser's Property, other than as may be requested by Seller or as may be
required by law.
12. Further Assurances. Seller and Purchaser shall upon the request of the other
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party, from time to time, do such things and execute and deliver such
instruments, agreements and documents which are necessary or convenient in order
to evidence or confirm any of the agreements of the parties hereunder or to
effectuate any of the provisions of this Agreement. The provisions of this
Section 12 shall survive the Closing.
13. Condemnation. If, prior to Closing, any governmental authority or other
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entity having condemnation authority shall institute an eminent domain
proceeding or give any notice of intent to institute such proceeding with regard
to any portion of the Seller's Premises or the Conveyance Floor Area Development
Rights that would materially affect the Conveyance Floor Area Development Rights
or Seller's ability to transfer the Conveyance Floor Area Development Rights to
Purchaser or grant the Easement to Purchaser, and the same is not dismissed in a
final determination for which all appeal periods have passed on or before ten
(10) days prior to the Closing Date, then Seller shall promptly notify Purchaser
thereof, and either Seller or Purchaser shall be entitled to terminate this
Agreement on notice given to the other, in which event the Fund shall be
promptly returned to Purchaser, and upon the return of the Fund, the parties
hereto shall have no further obligations or liabilities to each other (other
than those that are expressly stated to survive the termination of this
Agreement). If this Agreement is not terminated pursuant to the foregoing
sentence, then Purchaser may, at its election, purchase the Conveyance Floor
Area Development Rights remaining after such condemnation in accordance with the
provisions of this Agreement, but with a reduction in the Purchase Price equal
to $79.71 for each square foot of Excess Floor Area Development Rights taken in
such condemnation both Seller and Purchaser.
14. Casualty. This Agreement shall not be affected by any damage, by casualty or
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otherwise, to the Seller's Property. In the event of a casualty or other damage
to the Seller's Property, Seller shall promptly notify Purchaser thereof. Seller
shall not use any of the Conveyance Floor Area Development Rights nor encroach
into the Easement in the restoration, repair or replacement of the Seller's
Property or rebuild or reconstruct the existing improvements on the Seller's
Property in any manner that would decrease or otherwise affect, to Purchaser's
detriment, the Conveyance Floor Area Development Rights or the Easement.
15. Taxes and Other Costs. All state, city, county and municipal transfer,
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documentary stamp, and other similar taxes and charges payable in connection
with the transfer of the Conveyance Floor Area Development Rights and grant the
Easement to Purchaser (including, without limitation, under the NYC Transfer Tax
Law and the NYS Transfer Tax Law) shall be paid by Seller at the Closing. All
state, city, county and municipal recording charges in connection with recording
the Declaration, the ZLDA, and any required Waivers shall be paid by Purchaser
at the Closing. The provisions of this Section 15 shall survive the Closing.
16. Brokerage. Each party hereto represents and warrants to the other that it
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has not dealt with any broker or finder in connection with the transaction which
is the subject of this Agreement. Purchaser and Seller each covenant and agree
to indemnify and hold harmless the other from and against any and all claims,
liabilities, damages, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) arising out of or in connection with
any claim by any person claiming any fee or commission with respect to this
Agreement, the negotiation of this Agreement or the transaction which is the
subject of this Agreement based upon the acts of the indemnifying party. The
provisions of this Section 16 shall survive the Closing or any termination of
this Agreement.
17. Default. (a) If Purchaser defaults in any of its obligations under this
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Agreement, including without limitation, the failure, for any reason whatsoever,
to pay the balance of the Purchase Price on or before the Closing Date, with
time of the essence, then Seller's sole remedy shall be to terminate this
Agreement and receive, as liquidated damages, all monies then held in the Fund.
The parties hereto agree that the damages of Seller would be difficult or
impossible to determine with mathematical precision and therefore the provisions
of this Section 17 represent an agreed measure of damages and are not to be
deemed a forfeiture or penalty. Upon delivery of the Fund to Seller, the parties
hereto shall be relieved of all further obligations and liabilities under this
Agreement.
(b) In the event Seller shall be in default in its obligations under this
Agreement and the Closing does not take place as a result thereof, then, as its
sole and exclusive remedies, (x) Purchaser shall be entitled to terminate this
Agreement, in which event the Fund will be promptly returned to Purchaser and,
upon the return of the Fund, the parties hereto shall have no further
obligations or liabilities to each other (other than those that are expressly
stated to survive the termination of this Agreement); or (y) Purchaser may bring
an action in specific performance to compel both the transfer of the Conveyance
Floor Area Development Rights and the Easement and the performance by Seller of
its obligations set forth in this Agreement, provided, however, if, despite
Seller's commercially reasonably efforts, without the expenditure of funds other
than administrative expenses, Seller is unable to deliver any required Waiver,
Purchaser shall not have the right to bring an action for specific performance
based solely on such failure.
18. Escrow. The Fund shall be held in escrow by Escrow Agent in accordance with
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the terms and conditions set forth below.
(a) Escrow Agent shall invest the Fund in savings accounts, treasury bills,
certificates of deposit or in other money market instruments, and shall not
be liable for any losses suffered in connection with any such investment.
Any reasonable and customary out-of-pocket fees or charges incurred by the
financial institution holding the Fund and in connection with such
investment shall be paid out of the Fund after any payment required to be
paid pursuant to Section 18(h) below, but before any other payments shall
be required to be made from the Fund.
(b) After deducting any amounts pursuant to Section 18(a) above and any amounts
due Escrow Agent hereunder pursuant to Section 18(h) below:
(i) the balance of the Fund shall be the property of and shall be paid over to:
(1) Seller, at the Closing, in accordance with the provisions hereof, or upon a
default by Purchaser, beyond any applicable notice or cure periods, in any
of its material obligations under this Agreement.
(2) Purchaser, if, prior to payment over to Seller as provided in clause (i)
above, Purchaser shall be entitled to return of the Fund pursuant to the
terms and conditions hereof; or
(3) as may otherwise be provided in Section 18(c) below.
(c) Except in connection with the Closing hereunder as provided below, to
obtain a payment of the Fund as provided above, a party ("Requesting
----------
Party") shall deliver or mail to Escrow Agent at 2 Park Avenue, New York,
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New York 10016, Attention: Jeffrey H. Kaufman, Esq., and to the other party
pursuant to Section 16 hereof, a notice that Requesting Party is entitled
to a payment out of the Fund as provided above.
(d) If Escrow Agent does not receive a notice from the other party objecting to
the payment of the Fund to Requesting Party within five (5) days of the
delivery of such notice from Requesting Party, then Escrow Agent shall,
after deducting any amounts pursuant to Section 18(a) above and any amounts
due Escrow Agent pursuant to Section 18(h) hereunder, pay over the balance
of the Fund to Requesting Party. If, within five (5) days after the
delivery of such notice Escrow Agent shall have received a statement from
the other party that Requesting Party is not entitled thereto pursuant to
the provisions hereof, and directing Escrow Agent not to deliver to
Requesting Party the balance of the Fund, then Escrow Agent shall, at its
sole option, either:
(i) deliver to the court the balance of the Fund after first deducting any
amounts pursuant to Section 18(a) above and any amounts due to Escrow Agent
pursuant to Section 18(h) hereunder, or
(ii) retain the balance of the Fund until one of the following shall have
occurred:
(A) The other party shall have failed within thirty (30) days after
delivery or mailing, as the case may be, of Requesting Party's notice,
to commence an action in a court of competent jurisdiction against
Requesting Party to resolve why the Requesting Party shall not be
entitled to the payment of the Fund. Such action shall be deemed to
have been commenced by serving a summons and complaint on Requesting
Party, and delivering to Escrow Agent a copy thereof, together with an
affidavit of service within such thirty (30)-day period, in which event
Escrow Agent shall, except to the extent provided below, pay over the
Fund to Requesting Party;
(B) There shall have been served upon Escrow Agent an order or judgment
duly entered in a court of competent jurisdiction setting forth the
manner in which the Fund is to be paid out and delivered, in which
event Escrow Agent shall, except to the extent provided below, deliver
the balance of the Fund as set forth in such order or judgment; or
(C) The parties shall have delivered to Escrow Agent a statement executed
by both of the parties setting forth the manner in which the Fund is to
be paid out and delivered, in which event Escrow Agent shall, except to
the extent provided below, deliver the balance of the Fund as set forth
in such statement.
Before making a payment pursuant to clauses (A), (B) and (C) above, Escrow
Agent shall first deduct any amount pursuant to Section 18(a) above, and any
amounts due Escrow Agent pursuant to Section 18(h) hereunder.
(e) Escrow Agent shall not be liable to either Seller or Purchaser in
connection with its performance as Escrow Agent hereunder other than for
its gross negligence or willful misconduct. Purchaser and Seller shall
jointly and severally indemnify and hold harmless Escrow Agent from any and
all claims, liabilities, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) arising out of or in
connection with the escrow (including, without limitation, the collection
of any amounts due or payable to Escrow Agent), and any actions of Escrow
Agent in connection therewith, other than Escrow Agent's gross negligence
or willful misconduct. Seller and Purchaser shall each have the right to
make a claim against the other to the extent that either Seller or
Purchaser is required to indemnify and hold harmless Escrow Agent as
provided above.
(f) Upon delivery of the balance of the Fund as provided in Sections 18(b) and
18(c) above, Escrow Agent shall be relieved of all liability,
responsibility or obligation with respect to or arising out of the Fund.
(g) Escrow Agent shall be entitled to rely upon the truth and accuracy of any
statement from Purchaser or Seller without any independent investigation or
verification by Escrow Agent.
(h) Escrow Agent shall be entitled to retain attorneys of its choice, including
itself, in connection with any dispute regarding the disbursement of the
Fund and to charge reasonable fees and disbursements of any such attorneys
and any amounts due Escrow Agent under Section 18(d) above against the
Fund, and, notwithstanding anything to the contrary contained herein, any
such amounts shall be paid by Escrow Agent out of the Fund before any other
payments shall be required to be made from the Fund. Escrow Agent shall be
entitled to rely on advice of its attorneys, and Escrow Agent shall not be
liable to either Purchaser or Seller for any action taken in good faith
reliance on such advice.
(i) Escrow Agent may represent Purchaser in any dispute or action related
hereto, including any litigation arising out of this Agreement.
(j) Purchaser represents that its tax identification number is ________.
19. Notices. All notices and other communications required to be given hereunder
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shall be in writing, signed by the party giving the same or by its attorneys,
and shall be deemed to have been duly given if: (i) personally delivered with
proof of delivery thereof, or (ii) delivered to an overnight delivery service
with receipt for delivery, or (iii) three (3) days after the date deposited in
the United States mail, postage prepaid, certified with return receipt
requested, or (iv) transmitted by facsimile, provided that such facsimile
transmission is confirmed within one Business Day thereafter in the manner set
forth in either clause (i), (ii) or (iii) of this sentence; provided, however,
that the time period in which a response to any such notice or other
communication must be given shall commence on the date of receipt thereof.
Personal delivery to a party or to any officer, partner, member, agent or
employee of such party at the address set forth herein shall constitute receipt.
Rejection or other refusal to accept or inability to deliver because of changed
address of which no notice has been received shall also constitute receipt. Any
notice or other communication shall be addressed to the respective parties as
follows:
if to Purchaser: A.P. Development L.L.C.
c/o United Homes
8720 139th Street
Briarwood, New York 11435
Attention: Ron Hershco
with copies to: Lawrence I. Andelsman, P.C.
114 Old Country Road
Mineola, New York 11501
Facsimile:
Paul D. Selver, Esq.
Paul Hastings Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Facsimile: (212) 230-7759
if to Seller: Elpans, LLC
c/o One Liberty Properties, Inc.
60 Cutter Mill Road
Great Neck, New York 11021
Attn: Jeffrey Fishman
with a copy to: Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10016
Attention: Jeffrey H. Kaufman, Esq.
Facsimile: (212) 592-1500
if to Escrow Agent: Herrick, Feinstein, LLP
2 Park Avenue
New York, New York 10016
Attention: Jeffrey H. Kaufman, Esq.
Facsimile: (212) 592-1500
or to such other address or party as either party may have furnished to the
other in writing in accordance herewith, except that notices of change of
address or addresses shall only be effective upon receipt.
20. Assignment. This Agreement may not be assigned without the prior
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written consent of the other party, except that Purchaser may assign its rights
under this Agreement to an entity that is wholly owned by Ron Hershco and/or
Dean Palin (or by another entity that is wholly owned by either or both of them)
without first obtaining Seller's consent thereto, provided that (i) Purchaser
gives Seller notice of such assignment and (ii) such assignee assumes all of the
obligations and liabilities of Purchaser.
21. Miscellaneous.
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(a) This Agreement (including the Exhibits hereto) constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof
and supercedes all prior understandings and may not be amended,
supplemented, modified or cancelled except pursuant to the terms hereof or
by an instrument in writing signed by the parties hereto.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto, their successors and, subject to Section 20 above, assigns.
(c) If any term or provision of this Agreement or the application thereof to
any persons or circumstances 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 enforceable to the
fullest extent permitted by law. The parties shall use all reasonable
efforts to replace the illegal, void or unenforceable provision by a valid
and enforceable provision the effect of which is the closest possible to
the intended effect of the illegal, void or unenforceable provision.
(d) The interpretation, enforcement and performance of this Agreement shall be
governed by the laws of the State of New York applicable to agreements made
and to be performed wholly within such State.
(e) The failure of any party hereto at any time to insist upon strict
performance of or to enforce any of the provisions of this Agreement shall
in no way be construed as a waiver of any of such provisions or the right
of any party thereafter to enforce each and every such provision. No waiver
of any breach of this Agreement shall be held to be a waiver of any other
or subsequent breach.
(f) The section headings used herein are for reference purposes only and do not
control or affect the meaning or interpretation of any term or provision
hereof.
(g) This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the
same instrument.
(h) The representations, warranties and agreements of the parties contained
herein are intended solely for the benefit of the party to whom such
representations, warranties or agreements are made and the successors and
assigns of such party, and shall confer no rights hereunder, whether legal
or equitable, in any other party, and no other party shall be entitled to
rely thereon.
(i) Except as expressly provided or limited to the contrary herein or in
any instrument delivered pursuant hereto, the representations, warranties,
obligations, covenants, agreements, undertakings and indemnifications of the
parties contained herein or in any instrument required to be delivered pursuant
hereto shall not survive the Closing or termination of this Agreement (and,
accordingly, no claim concerning the same may arise after the Closing or
termination of this Agreement, as the case may be).
(j) This Agreement shall not be construed more strictly against one party than
against the other merely by virtue of the fact that it may have been
prepared primarily by counsel for one of the parties, it being recognized
that both the Purchaser and Seller have contributed substantially and
materially to the preparation of this Agreement.
(k) Each party hereby waives, irrevocably and unconditionally, trial by jury in
any action brought on, under or by virtue of or relating in any way to this
Agreement or any of the documents or certificates executed in connection
herewith, the properties, or any claims, defenses, rights of set-off or
other actions pertaining hereto or to any of the foregoing.
(l) It is understood that the terms and conditions of this Agreement shall be
fully non-recourse to the parties hereto, other than their respective
ownership rights in Seller's Premises, the Conveyance Floor Area
Development Rights, and Purchaser's Premises.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
as of the day and year first above written.
Seller:
Elpans LLC
By: /ss/ Mark H. Lundy
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Name: Mark H. Lundy
Title: Vice President of Member
Purchaser:
A.P. Development L.L.C.
By: /ss/ Ron Hershco
----------------
Name: Ron Herscho
Title: Managing Member
The undersigned hereby agrees to hold the
Fund in escrow in accordance with the
provisions of Section 17 of this
Agreement:
HERRICK FEINSTEIN, LLP
By: /ss/ Jeffrey H. Kaufman
------------------------
Jeffrey H. Kaufman
Partner
EXHIBIT A
Seller's Property
EXHIBIT B
Purchaser's Property
EXHIBIT C
Declaration of Zoning Lot Restrictions
EXHIBIT D
Zoning Lot Development Agreement
ZONING LOT AND DEVELOPMENT AGREEMENT
AGREEMENT made as of this __ day of June, 2005 (this "Agreement"), between
Elpans, LLC a New York limited liability company, having an address at 60 Cutter
Mill Road, Great Neck New York 11021 ("Seller") and A.P. Development L.L.C., a
______ limited liability company, having an address at 8720 139th Street,
Briarwood, New York 11435 ("Developer").
R E C I T A L S:
A. Seller is the owner of certain land known by the street address 300 Gold
Street, Brooklyn, New York, also known as Tax Lot __ in Block 133 on the Tax Map
of the City of New York, County of Kings, more particularly described in Exhibit
A annexed hereto and made a part hereof, together with the improvements thereon
(said land being herein referred to as "Seller's Land," and said improvements,
together with any future replacements thereof being herein referred to as
"Seller's Building," and Seller's Land and Seller's Building being herein
referred to as "Seller's Property").
B. Developer is the owner of certain lands adjacent to Seller's Land, known by
the street address 147 Flatbush Avenue, Brooklyn,, New York, also known as Tax
Lot 1 in Block 133 on the Tax Map of the City of New York, County of Kings, more
particularly described in Exhibit B annexed hereto and made a part hereof,
together with the improvements thereon (said land being herein referred to as
"Developer's Land", said existing improvements being herein referred to as
"Developers Existing Building", and Developer's Existing Building, together with
any future replacements thereof or additions thereto whether made by Developer
or Developer's successors or assigns, and including without limitation
Developer's Proposed Building [as hereinafter defined], being herein referred to
collectively as "Developer's Building").
C. Developer intends to demolish Developer's Existing Building and construct a
new building or buildings and improvements upon all or a portion of Developer's
Land (said new or buildings and improvements, together with any further
replacements thereof or additions thereto whether made by Developer or
Developer's successors or assigns, being herein referred to collectively as
"Developer's Proposed Building" and Developer's Land and Developer's Building
being herein referred to collectively as "Developer's Property").
D. Developer's Proposed Building will contain more Floor Area Development Rights
(as hereinafter defined) than may be developed on Developer's Land so long as
Developer's Land remains a single and separate zoning lot (as hereinafter
defined); there are Floor Area Development Rights appurtenant to Seller's Land
which are not used in Seller's Building as of the date hereof and are therefore
available for transfer to the Developer's Land and use in Developer's Proposed
Building; and, pursuant to the procedures established in Section 12-10 the
Zoning Resolution (as hereinafter defined), Seller's unused Floor Area
Development Rights may be transferred to Developer for use in Developer's
Proposed Building through the merger of Seller's Land and Developer's Land in a
single zoning lot (such single zoning lot being herein referred to as the
"Combined Zoning Lot").
E. By execution as of the date hereof and contemporaneously herewith of a
Declaration of Zoning Lot Restrictions substantially in the form annexed hereto
as Exhibit C (the "Declaration"), Developer and Seller have utilized the
procedure available pursuant to Section 12-10 of the Zoning Resolution to
combine the Developer's Land and the Seller's Land so as to create a new,
combined zoning lot (the "Combined Zoning Lot") for the purpose of making
available the Seller Excess Floor Area Development Rights (as hereinafter
defined) for incorporation into and use in Developer's Proposed Building;
F. Developer has caused all parties in interest (as hereinafter defined) to the
Developer's Land and Seller has caused all parties in interest to Seller's Land,
all as shown on the Parties-in-Interest Certification of ________________ Title
Insurance Company, a copy of which is annexed hereto as Exhibit D, to join in
the Declaration or to waive their respective rights to execute the Declaration;
and
G. The parties hereto wish to set forth certain agreements with respect to their
rights and obligations in and to the Combined Zoning Lot and other matters, and
wish to provide to the maximum extent possible for each to exercise its rights
in the future without having to seek any consent, approval or other action from
the other.
NOW THEREFORE, in consideration of the foregoing and Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 "Bonus Floor Area Development Rights" shall mean any bonus
Floor Area Development Rights appurtenant to the Combined Zoning Lot which may
be available for use in a building constructed thereon for inclusion in a
building constructed thereon through the provision of an amenity or other public
benefit on Developer's Land, elsewhere on the Combined Zoning Lot, or off the
Combined Zoning Lot in accordance with the provisions of the Zoning Resolution;
provided, however, that Bonus Floor Area Development Rights shall not include
any Floor Area Development Rights pertaining to Seller's Property which arise or
are created after December __, 2004 for any reason, including amendment to or
revision of the Zoning Resolution.
Section 1.2 "Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized to be closed in the State of
New York.
Section 1.3 "Developer Floor Area Development Rights" shall mean the Floor
Area Development Rights appurtenant to the Developer Land as of the date hereof,
together with the Excess Floor Area Development Rights and the Bonus Floor Area
Development Rights (both as defined herein) appurtenant to Seller's Land and
Developer's Land.
Section 1.4 "dwelling unit," "floor area," "floor area ratio," "lot
coverage," "zoning lot," "parties in interest," "use" and "bulk" shall have the
meanings set forth in Section 12-10 of the Zoning Resolution.
Section 1.5 "Excess Floor Area Development Rights" shall mean all Floor
Area Development Rights (other than Bonus Floor Area Development rights)
pertaining to Seller's Land which are in excess of the Retained Floor Area
Development Rights as of the date hereof, and accordingly, are available for
transfer pursuant to the Zoning Resolution. The parties have agreed that the
Excess Floor Area Development Rights include, without limitation, 138,500 square
feet of floor area and 175 dwelling units.
Section 1.6 "Floor Area Development Rights" shall mean the rights, as
determined in accordance with the Zoning Resolution, which are appurtenant to a
zoning lot, to develop such zoning lot by erecting thereon a structure or
structures with a total floor area determined (i) by multiplying the area of the
zoning lot by the maximum allowable floor area ratio for structures in the
zoning district or districts in which such zoning lot is located, and (ii) any
bulk and density rights permitted under the Zoning Resolution and which may be
authorized to be developed by the appropriate agency of the City of New York
from time to time.
Section 1.7 "Governmental Agency" shall mean any public benefit
corporation, commission, board, agency, or instrumentality of the United States,
the State of New York and the City of New York, including without limitation the
New York City Departments of Buildings, City Planning, Environmental Protection,
and Housing Preservation and Development and the New York City Planning
Commission, Board of Standards and Appeals and Landmarks Preservation
Commission.
Section 1.8 "Lease" shall mean that certain lease dated October 16, 2002
between Seller, as landlord, and The City Of New York, Department of Citywide
Administrative Services, Division of Real Estate Services, as tenant.
Section 1.9 "Retained Floor Area Development Rights" shall mean (i) all
Floor Area Development Rights pertaining to Seller's Land that are utilized in
the building and other improvements thereon, all as of the date hereof and (ii)
all Floor Area Development Rights pertaining to Seller's Land which arise or are
created after December __, 2004 and which, if they had arisen or were created on
or before December __, 2004, would be Excess Floor Area Development Rights or
Bonus Floor Area Development Rights.
Section 1.10 Section 1.10 "Zoning Resolution" shall mean the Zoning
Resolution of the City of New York, effective as of December 15, 1961, as
amended from time to time.
ARTICLE II
GRANT OF EXCESS DEVELOPMENT RIGHTS AND EASEMENT
Section 2.1 Seller hereby grants, transfers and conveys to Developer, its
successors and assigns, all of the Excess Floor Area Development Rights and all
Bonus Floor Area Development Rights, to the extent permitted by applicable law,
to have and to hold with the right to use or convey the Excess Floor Area
Development Rights and the Bonus Floor Area Development Rights. It is understood
that the Bonus Floor Area Development Rights appurtenant to Seller's Land are
being conveyed without any further compensation or consideration to Seller and
that, in the event that Developer utilizes any of said Bonus Floor Area
Development Rights, Developer shall be solely responsible for all expenses and
obligations incurred in connection with generating and incorporating said Bonus
Floor Area Development Rights into the Developer's Proposed Building.
Accordingly, it is understood and agreed that neither Seller nor any person or
entity claiming by, under or through Seller shall have any right, title or
interest in or to the Excess Floor Area Development Rights and the Bonus Floor
Area Development Rights, and that Seller is retaining for its benefit, and
Developer shall no rights in and to, the Retained Floor Area Development Rights.
Section 2.2 Notwithstanding the provisions of Section 2.1 of this
Agreement, (a) Seller shall not use any Retained Floor Area Development Rights
in excess of the Floor Area Development Rights used in Seller's Building on the
date hereof if such use adversely affects the availability to or use by
Developer of all or any portion of the Excess Floor Area Development Rights or
the Bonus Floor Area Development Rights, and Developer shall not use any Floor
Area Development Rights in excess of the amount of Developer Floor Area
Development Rights as of the date hereof if such use adversely affects the
availability to or use by Seller of all or any portion of the Floor Area
Development Rights used in Seller's Building on the date hereof.
Section 2.3 Seller hereby grants, transfers and conveys to Developer an
exclusive perpetual easement for light, air and view over and above Seller's
Building (the "Easement") as hereinafter provided. Except as and to the extent
required by the Lease and by applicable laws, rules and regulations and for the
accommodation of available and commercially reasonable technology No building,
structure, devices or equipment will be constructed, installed, altered,
replaced or allowed on Seller's Property, at a height above the present height
of the roof except for parapets, bulkheads,_________________________[LIST OTHER
SPECIFIC STRUCTURES, DEVICES AND EQUIPMENT] as they now exist on Seller's
Building as depicted on the survey annexed hereto as Exhibit E (the "Existing
Survey") and as shown in the copies of photographs annexed hereto as Exhibit F
(each being an "Existing Obstruction"); provided, that, except to the extent
required to accommodate such available and commercially reasonable technology,
any such permitted new, altered or replacement building, structure, device or
equipment: (a) shall be of substantially the same or of lesser height than the
Existing Obstruction it alters or replaces; (b) shall have substantially the
same or a smaller footprint than the Existing Obstruction it alters or replaces;
(c) shall occupy substantially the same or a smaller volume of space than the
Existing Obstruction it alters or replaces; and (d) shall be located in
substantially the same location or more distant from Developer's Property than
the Existing Obstruction it replaces.
ARTICLE III
CONSTRUCTION ON THE COMBINED ZONING LOT/COOPERATION OF THE PARTIES
Section 3.1 Developer covenants that prior to the commencement of any
demolition, construction and other work in connection with Developer's Proposed
Building, Developer shall procure from a responsible insurance carrier liability
insurance coverage, in an amount not less than Fifteen Million Dollars
($15,000,000), against the risk of physical damage to Seller's Property and
personal injury and death from such work and maintain such insurance until the
issuance of a temporary certificate of occupancy for Developer's Proposed
Building. The foregoing insurance shall name Seller as additional insured (as
its interest may appear). Upon request from Seller, Developer shall deliver
certificate(s) of such insurance to Seller, which certificate(s) shall also
provide that such policies shall not be canceled or terminated until at least
twenty (20) days after notifying Seller of such cancellation or termination. If
the liability insurance required to be procured by Developer pursuant to this
Section 3.1 is terminated or lapses for any reason, then Seller shall have the
right to procure such liability insurance at the cost and expense of Developer,
together with interest thereon at a rate equal to the prime rate from time to
time at Citibank, N.A. plus 3% (the "Interest Rate").
Section 3.2 In connection with any work on Developer's Property (including,
without limitation, the construction of Developer's Proposed Building),
Developer shall, at its sole cost and expense, observe strictly and punctually
the obligations set forth in subdivisions (a) to (e) inclusive:
(a) Use and cause all persons and entities and their respective employees
or subcontractors performing work at or supplying materials to Developer's
Property to use such means of demolition, excavation and construction and
procedures therefor as are commercially reasonable to protect against any
physical damage to Seller's Building or to the utilities serving Seller's
Property;
(b) Use and cause all persons and entities and their respective employees
or subcontractors performing work at or supplying materials to Developer's
Property to use such commercially reasonable means of demolition, excavation and
construction and procedures therefor as may be required so that the work will
not prevent, unreasonably interfere with, disrupt, or obstruct the present use
of Seller's Property;
(c) Comply with all applicable codes and laws with respect to (i)
protection against physical damage to Seller's Building or to utilities serving
Seller's Property; (ii) protection against unreasonable material disruption or
interference with the use of or access to Seller's Property; and (iii) the
making of repairs to Seller's Property or to utilities serving Seller's Property
in the event of any physical damage thereto; and
(d) If notwithstanding the foregoing provisions, Developer damages Seller's
Building or the utilities serving Seller's Property in connection with the
demolition, excavation, construction or other work on Developer's Property,
including, without limitation, the construction of Developer's Proposed
Building, Seller may repair or remedy such damage at the sole cost and expense
of Developer as provided below. Seller shall promptly give notice to Developer
of any such damage so that Developer or its insurance agent or adjuster may
inspect any such damage. If Seller incurs any costs and expenses in connection
with the repair and restoration of any damage to Seller's Building or the
utilities serving Seller's Property caused by Developer, then within thirty (30)
days after demand (which demand shall include reasonable documentation
evidencing the costs and expenses incurred by Seller), Developer shall pay to
Seller or shall cause its insurance carrier to pay to Seller any and all
reasonable out-of-pocket costs and expenses incurred by Seller, together with
interest thereon from and after the due date at the Interest Rate until paid in
full. In no event shall Seller be responsible for the payment of any deductible
to any insurance carrier of Developer. As used in this Section 3.2(d), the terms
"Seller's Building" and "Seller's Property" shall include, without limitation,
all interior as well as structural and exterior portions of Seller's Building,
all vaults under the sidewalks adjacent to Seller's Land, and all fixtures,
installations and items of personal property that are at anytime located within,
or are at any time on or attached to, the exterior of Seller's Building.
Section 3.3 Developer and Seller agree that Developer shall have the rights
set forth in this Section 3.3 during the construction of Developer's Proposed
Building.
(a) As Developer desires to provide for the safety of the occupants the
Seller's Property, and the protection of property of all parties during the
construction of the Developer's Proposed Building, Seller hereby grants to
Developer certain easements of access onto Seller's Property (the "Seller's
Construction Easements") for (i) the attachment of foundation and building
supports and shoring to and bracing Seller's Building; (ii) the erection of a
scaffold as required by the Building Code of the New York City ("Building
Code"), a sidewalk bridge as required by the Building Code or such other
temporary structure over the roof, facade and other portions of Seller's
Building as is necessary to protect such building from debris during the
construction of the Developer's Proposed Building, including access by personnel
only (and not by construction or protection materials, construction equipment or
tools other than small, handheld tools) to the interior of the Seller's Building
for purposes of installing, maintaining and removing protection on the roof of
the Seller's Building; and (iii) the maintenance, repairing and replacement of
such attachments; and (iv) the conduct of a "Preconstruction Survey" to
document, by use of photography or video and other means, existing conditions;
provided same shall not involve any invasive testing, borings, or samplings, at
such time as may be reasonably agreed upon by Developer and Seller.
(b) In connection with and during the construction of Developer's Proposed
Building, Developer may desire to install scaffolding and/or hang rigging on or
in the airspace above Seller's Building. Seller hereby consents to such activity
and grants Developer a license to utilize the roof of and the airspace above
Seller's Building; provided that (i) Developer shall give Seller ten (10)
Business Days notice of its intent to do so and otherwise comply with the
provisions of Section 3.3 (c) of this Agreement in connection therewith.
(c) Developer shall provide construction protection to Seller's Building,
shall exercise the Seller's Construction Easements and shall install scaffolding
and/or hang rigging pursuant to Section 3.3(b) of this Agreement: (i) in
accordance with all applicable legal requirements and in a prompt, safe and
efficient manner; (ii) in a manner so as not to unreasonably interfere with the
structural integrity and the use, occupancy or enjoyment of the Seller's
Building, (iii) taking such precautions as may be necessary or appropriate to
prevent damage to adjacent or adjoining property; and (iv) in accordance with
good construction practices and in a manner customary for such improvements or
work.
(d) In connection with, and during the construction of the Developer's
Proposed Building, Developer intends to operate a crane or like equipment on
Developer's Land or the street or sidewalk adjacent to Developer's Land, which
may, from time to time, encroach upon the Seller's Property and/or the air space
above the Seller's Building. Seller hereby consents to such encroachment;
provided that Developer gives Seller ten (10) days notice prior to operating
such crane and provided that the crane or other equipment, (i) shall be operated
in a good and workmanlike manner and in accordance with all applicable legal
requirements (including, without limitation, the obtaining of and compliance
with all required permits and other governmental approvals), (ii) shall not
touch the Seller's Building, and (iii) shall not block or unreasonably interfere
with any means of ingress to or egress from Seller's Building. Developer shall
remove the crane or other equipment from Developer's Land or the street or
sidewalk adjacent thereto at its sole cost and expense as soon as reasonably
practicable after completion of construction of the Developer's Proposed
Building.
(e) It is understood and agreed that the agreements and undertakings of
Seller in this Section 3.3 are subject to the provisions of the Lease and that
Seller shall not be deemed in default hereof because it is unable to provide any
one or more of the easements described herein if the Lease does not permit
Seller to grant such easement(s) so long as Seller has made commercially
reasonable efforts to persuade its tenant under the Lease to cooperate in
providing such easement(s) and/or made commercially reasonable efforts to devise
alternative means of providing them.
Section 3.4 Seller covenants that prior to the commencement of any
demolition, construction and other work in connection with the alteration or
replacement of Seller's Building, Seller shall procure from a responsible
insurance carrier liability insurance coverage, in an amount not less than and
amount equal to the product of Fifteen Million Dollars ($15,000,000) multiplied
by the increase in the Consumer Price Index for all urban consumers in the New
York-New Jersey-Long Island Metropolitan Statistical Area (or, if such index is
no longer published, a mutually acceptable index) between December 2004 and the
date on which Seller files an application for such alteration or replacement,
against the risk of physical damage to Developer's Property (including without
limitation Developer's Proposed Building) and personal injury and death from
such work and maintain such insurance until the issuance of a new or amended
temporary certificate of occupancy such alteration or replacement. The foregoing
insurance shall name Developer as additional insured (as its interest may
appear). Upon request from Developer, Seller shall deliver certificate(s) of
such insurance to Developer, which certificate(s) shall also provide that such
policies shall not be canceled or terminated until at least twenty (20) days
after notifying Developer of such cancellation or termination. If the liability
insurance required to be procured by Seller pursuant to this Section 3.1 is
terminated or lapses for any reason, then Developer shall have the right to
procure such liability insurance at the cost and expense of Seller, together
with interest thereon at a rate equal to the Interest Rate.
Section 3.5 In connection with any work on Seller's Property (including,
without limitation, the alteration or replacement of Seller's Building), Seller
shall, at its sole cost and expense, observe strictly and punctually the
obligations set forth in subdivisions (a) to (e) inclusive:
(a) Use and cause all persons and entities and their respective employees
or subcontractors performing work at or supplying materials to Seller's Property
to use such means of demolition, excavation and construction and procedures
therefor as are commercially reasonable to protect against any physical damage
to Developer's Building or to the utilities serving Developer's Property;
(b) Use and cause all persons and entities and their respective employees
or subcontractors performing work at or supplying materials to Seller's Property
to use such commercially reasonable means of demolition, excavation and
construction and procedures therefor as may be required so that the work will
not prevent, unreasonably interfere with, disrupt, or obstruct the use of
Developer's Property;
(c) Comply with all applicable codes and laws with respect to (i)
protection against physical damage to Developer's Building or to utilities
serving Developer's Property; (ii) protection against unreasonable material
disruption or interference with the use of or access to Developer's Property;
and (iii) the making of repairs to Developer's Property or to utilities serving
Developer's Property in the event of any physical damage thereto; and
(d) If notwithstanding the foregoing provisions, Seller damages Developer's
Building or the utilities serving Developer's Property in connection with
demolition, excavation, construction or other work on Seller's Property,
including, without limitation, the alteration or replacement of Seller's
Building, Developer may repair or remedy such damage at the sole cost and
expense of Seller as provided below. Developer shall promptly give notice to
Seller of any such damage so that Seller or its insurance agent or adjuster may
inspect any such damage. If Developer incurs any costs and expenses in
connection with the repair and restoration of any damage to Developer's Building
or the utilities serving Developer's Property caused by Seller, then within
thirty (30) days after demand (which demand shall include reasonable
documentation evidencing the costs and expenses incurred by Developer), Seller
shall pay to Developer or shall cause its insurance carrier to pay to Developer
any and all reasonable out-of-pocket costs and expenses incurred by Developer,
together with interest thereon from and after the due date at the Interest Rate
until paid in full. In no event shall Developer be responsible for the payment
of any deductible to any insurance carrier of Seller. As used in this Section
3.5 (d), the terms "Developer's Building" and "Developer's Property" shall
include, without limitation, all interior as well as structural and exterior
portions of Developer's Building, all vaults under the sidewalks adjacent to
Developer's Land, and all fixtures, installations and items of personal property
that are at anytime located within, or are at any time on or attached to, the
exterior of Developer's Building.
Section 3.6 Developer and Seller agree that Seller shall have the rights
set forth in this Section 3.6 during the alteration or replacement of Seller's
Building.
(a) As Seller desires to provide for the safety of the occupants the
Developer's Property, and the protection of property of all parties during the
alteration or replacement of the Seller's Building, Developer hereby grants to
Seller certain easements of access onto Developer's Property (the "Developer's
Construction Easements") for (i) the attachment of foundation and building
supports and shoring to and bracing Developer's Building; (ii) the erection of a
scaffold as required by the Building Code of the New York City ("Building
Code"), a sidewalk bridge as required by the Building Code or such other
temporary structure over the roof, facade and other portions of Developer's
Building as is necessary to protect such building from debris during the
alteration or replacement of Seller's Building, including access by personnel
only (and not by construction or protection materials, construction equipment or
tools other than small, handheld tools) to the interior of the Developer's
Building for purposes of installing, maintaining and removing protection on the
roof of the Developer's Building; and (iii) the maintenance, repairing and
replacement of such attachments; and (iv) the conduct of a "Preconstruction
Survey" to document, by use of photography or video and other means, existing
conditions; provided same shall not involve any invasive testing, borings, or
samplings, at such time as may be reasonably agreed upon by Developer and
Seller.
(b) In connection with and during the alteration or replacement of Seller's
Building, Seller may desire to install scaffolding and/or hang rigging on or in
the airspace above Developer's Building. Developer hereby consents to such
activity and grants Seller a license to utilize the roof of and the airspace
above Developer's Building; provided that (i) Seller shall give Developer ten
(10) Business Days notice of its intent to do so and otherwise comply with the
provisions of Section 3.6 (c) of this Agreement in connection therewith.
(c) Seller shall provide construction protection to Developer's Building,
shall exercise the Seller's Construction Easements and shall install scaffolding
and/or hang rigging pursuant to Section 3.6(b) of this Agreement: (i) in
accordance with all applicable legal requirements and in a prompt, safe and
efficient manner; (ii) in a manner so as not to unreasonably interfere with the
structural integrity and the use, occupancy or enjoyment of the Developer's
Building, (iii) taking such precautions as may be necessary or appropriate to
prevent damage to adjacent or adjoining property; and (iv) in accordance with
good construction practices and in a manner customary for such improvements or
work.
(d) In connection with, and during the alteration or replacement of
Seller's Building, Seller may operate a crane or like equipment on Seller's Land
or the street or sidewalk adjacent to Seller's Land, which may, from time to
time, encroach upon the Developer's Property and/or the air space above the
Developer's Building. Developer hereby consents to such encroachment; provided
that Seller gives Developer ten (10) days notice prior to operating such crane
and provided that the crane or other equipment, (i) shall be operated in a good
and workmanlike manner and in accordance with all applicable legal requirements
(including, without limitation, the obtaining of and compliance with all
required permits and other governmental approvals), (ii) shall not touch the
Developer's Building, and (iii) shall not block or unreasonably interfere with
any means of ingress to or egress from Developer's Building. Seller shall remove
the crane or other equipment from Seller's Land or the street or sidewalk
adjacent thereto at its sole cost and expense as soon as reasonably practicable
after completion of alteration or replacement of Seller's Building.
(e) It is understood and agreed that the agreements and undertakings of
Developer in this Section 3.6 are subject to the provisions of any leases or
other occupancy agreements affecting Developer's Property as of the period
during which Seller is altering or replacing Seller's Building and that
Developer shall not be deemed in default hereof because it is unable to provide
any one or more of the easements described herein if any of such leases or
occupancy agreements does not permit Developer to grant such easement(s) so long
as Developer has made commercially reasonable efforts to persuade its tenant(s)
or occupant(s) under such leases or occupancy agreements to cooperate in
providing such easement(s) and/or made commercially reasonable efforts to devise
alternative means of providing them.
Section 3.7 (a) Developer shall indemnify and hold the Seller harmless from
and against any and all costs, losses, liabilities and claims (including
reasonable attorneys' fees and expenses) for injury or death to persons or
damage to property arising out of any work on Developer's Property and the
construction of Developer's Proposed Building.
(b) Seller shall indemnify and hold Developer harmless from and against all
costs, losses, liabilities and claims (including reasonable attorneys fees and
expenses) for injury or death to persons or damage to property arising out of
any work on Seller's Property and Seller's Building, including any Alteration or
Rebuilding (both as hereinafter defined) thereof.
Section 3.8 (a) Seller covenants and agrees that no new buildings,
improvements, alterations or additions ("Alterations") shall be constructed or
allowed to exist on Seller's Property, and no reconstruction, replacement, or
rebuilding ("Rebuilding"), whether following a casualty or otherwise, shall be
undertaken of the Seller's Building if such Alteration or Rebuilding or any
portion thereof (i) creates a non-compliance with any requirement of the Zoning
Resolution, the Building Code or any other applicable laws in effect at the time
of such Alteration or Rebuilding, (ii) utilizes any Floor Area Development
Rights in excess of the Retained Floor Area Development Rights, or (iii)
encroaches into the Easement.
(b) Seller covenants and agrees not to create or permit to exist, a
violation of the Zoning Resolution or any building code, fire code, or other
law, ordinance or regulation in effect with respect to Seller's Property which
would (a) materially delay, hinder or prevent issuance of a building or other
work permit or a Certificate of Occupancy for the Developer's Proposed Building
or any other building existing or to be constructed on Developer's Land, (b)
prevent the issuance of a building permit or any other permit or approval
required by law to alter, repair, maintain, build or rebuild any building on the
Combined Zoning Lot, or (c) create a new, or increase any existing,
non-conforming use or non-compliance under the Zoning Resolution with respect to
the Seller's Property (any one of which shall be a "Violation").
(i) If at any time hereafter there exists any Violation on the Seller's
Property, Seller shall commence a cure within thirty (30) days after receiving
notice of the same from Developer, and shall proceed diligently and continuously
to make all reasonable efforts to cure, remove and discharge of record the same
as rapidly as possible.
(ii) In the event that the Seller does not commence such cure and proceed
diligently and continuously with such cure as required by this Section 3.5,
Developer shall have the right to cure such Violation at the expense and for the
account of Seller (and, if necessary, in the name of Seller) and Seller will
execute and deliver such documents as may be required in connection therewith,
it being agreed that Developer shall have a license to have access to Seller's
Property for the purpose of effecting such cure; provided however Developer
covenants and agrees that such access and cure (i) shall only occur after notice
to Seller, (ii) except in the event of an emergency as reasonably determined by
Developer, shall only occur at reasonable times, and (iii) shall not
unreasonably interfere with Seller's use and occupancy of Seller's Building; and
provided, further, that during the period of such access and cure, Developer
shall procure and maintain liability insurance, naming Seller (and any mortgagee
of Seller's Property of which Developer has notice) as an additional insured, in
the form and in the amount customarily carried in connection with the access and
cure of such Violation. In addition, Developer may, at its option, maintain any
action permitted at law or in equity or by statute against Seller with respect
to such Violation, including, without limitation, an action for injunctive
relief to compel Seller to cure such Violation.
(iii) If Developer is compelled or elects to expend any sum of money or do
any acts which require the payment of money by reason of complying with,
remedying or curing a Violation on the Seller's Property, Seller shall, upon
demand, promptly reimburse Developer all such sums together with interest
thereon at the prime rate of Citibank, compounded monthly, from the date of such
expenditure. Such expenses shall be limited to reasonable and customary
third-party expenses which are necessary to cure such Violations. Seller
reserves the right to contest such Violations and reserves the right to contest
any expenditures made by Developer to cure such Violations.
Section 3.9 (a) Developer covenants and agrees that no Alterations shall be
constructed or allowed to exist on the Developer's Property, and no Alteration
or Rebuilding of the Developer's Proposed Building, whether following a casualty
or otherwise, shall be undertaken if such Alteration or Rebuilding (i) creates a
non-compliance with any requirement of the Zoning Resolution, the Building Code
or any other applicable laws in effect at the time of such Alteration or
Rebuilding that materially affects the Seller's Property or Seller's rights as
set forth in this Agreement, or (ii) utilizes any of the Retained Floor Area
Development Rights.
(b) Developer covenants and agrees not to create or permit to exist a
Violation with respect to the Developer's Property.
(i) If at any time hereafter there exists any Violation on the Developer's
property, Developer shall commence a cure within thirty (30) days after
receiving notice of the same from Seller and shall proceed diligently and
continuously to make all reasonable efforts to cure, remove and discharge of
record the same as rapidly as possible.
(ii) In the event that Developer does not commence such cure and proceed
diligently and continuously with such cure as required by this Section 3.6,
Seller shall have the right to cure such Violation at the expense and for the
account of Developer (and if necessary, in the name of Developer) and Developer
will execute and deliver such documents as may be required in connection
therewith, it being agreed that Seller shall have a license to have access to
the Developer's Property for the purpose of effecting such cure; provided
however Seller covenants and agrees that such access and cure (i) shall only
occur after notice to Developer, (ii) except in the event of an emergency as
reasonably determined by Seller, shall only occur at reasonable times, and (iii)
shall not unreasonably interfere with Developer's use and occupancy of the
Developer's Proposed Building; and provided, further, that during the period of
such access and cure, Seller shall procure and maintain liability insurance,
naming Developer (and any mortgagee of the Developer's Property of which Seller
has notice) as an additional insured, in the form and in the amount customarily
carried in connection with the access and cure of such Violation. In addition,
Seller may, at its option, maintain any action permitted at law or in equity or
by statute against Developer with respect to such Violation , including, without
limitation, an action for injunctive relief to compel Developer to cure such
Violation.
(iii) If Seller is compelled or elects to expend any sum of money or do any acts
which require the payment of money by reason of complying with, remedying or
curing a Violation on the Developer's Property, Developer shall, upon demand,
promptly reimburse Seller all such sums together with interest thereon at the
prime rate of Citibank, compounded monthly, from the date of such expenditure.
Such expenses shall be limited to reasonable and customary third party expenses
which are necessary to cure such Violations. Developer reserves the right to
contest such Violations and reserves the right to contest any expenditures made
by Seller to cure such Violations.
Section 3.10 Except to comply with the applicable requirements of any
Governmental Agencies to note and effectuate the Combined Zoning Lot, Developer
and Seller agree that construction plans and specifications for, and
applications for certificates of occupancy of, any building on Developer's Land
shall be separate and independent from those for any building on Seller's Land
and that construction plans and specifications for, and applications for
certificates of occupancy of, any building on Seller's Land shall be separate
and independent from those for any building on Developer's Land; and that any
such plans, specifications and applications shall be so filed with the
Department of Buildings of the City of New York, as to obtain separate "new
building" and/or "alteration" numbers.
Section 3.11 Seller and Developer agree that for real property tax purposes
Seller's Property and Developer's Property shall be, and shall continue to be
treated as, separate and independent lots, plots and parcels. Seller and
Developer expect that the assessed valuation of, and the taxes imposed against,
Seller's Property and Developer's Property shall be determined on a basis which
treats Seller's Property and Developer's Property as separate and independent
tax lots and which may incorporate within Developer's Property the Excess Floor
Area Development Rights and the Bonus Floor Area Development Rights conveyed to
Developer under this Agreement. Developer agrees, at its sole cost, to promptly
make all applications required, if and to the extent so required, to cause
Developer's Property (including, without limitation, Developer's Proposed
Building, the Excess Floor Area Development Rights and the Bonus Floor Area
Development Rights) and Seller's Property to continue to be treated as separate
tax lots or, if they are merged into one tax lot, to obtain an apportionment of
the taxes and tax lien between Developer's Property (including the Excess Floor
Area Development Rights and the Bonus Floor Area Development Rights) and
Seller's Property. Each party agrees hereafter to execute such documents as may
reasonably be required in support of the separateness of Seller's Property and
Developer's Property as tax lots, or if they should not be classified by
applicable government authority as separate tax lots, in support of an
apportionment of the taxes and tax lien between Seller's Property and
Developer's Property, taking into account the acquisition by Developer of the
Excess Floor Area Development Rights and the Bonus Floor Area Development
Rights; provided that all costs and expenses in connection with the
apportionment of such taxes shall be the responsibility of Developer. Seller and
Developer also agree that they will not hereafter do anything to oppose either
such separate tax lots or such apportionments of taxes and tax liens.
Section 3.12 Developer and Seller agree, each with the other, that they
will cooperate with each other in all reasonable respects to carry out the
intent of the foregoing paragraphs and that further they will cooperate with
each other in the future use and development of the Combined Zoning Lot so that
each of them can utilize its rights under this Agreement. Without limiting the
generality of the foregoing, Seller and Developer agree that each shall consent
to, authorize or join in any application or applications which either may deem
necessary or desirable to any Governmental Agency (each, an "Application") and,
upon the request of the other, furnish the party making such request with all
additional consents, information, documents and instruments required to
effectuate the conveyance and use of the Excess Floor Area Development Rights,
the Bonus Floor Area Development Rights and the Easement as provided in this
Agreement and to gain approval of each such Application. Unless otherwise
specifically set forth herein, the party making the request shall pay the other
party's reasonable costs or expenses in furnishing such applications, consents,
information, documents and other instruments.
Section 3.13 Developer and Seller agree that neither shall make any
application to any Governmental Agency which would reasonably be anticipated to
affect rights of the other party as a participant in the Combined Zoning Lot
without prior written notice to such other party.
Section 3.14 Notwithstanding anything herein to the contrary, Developer and
Seller acknowledge and agree that this Agreement and the Declaration are
intended solely to create the Combined Zoning Lot, to transfer to Developer the
Excess Floor Area Development Rights and the Bonus Floor Area Development
Rights, to grant to Developer the Easement, to regulate the rights and
obligations of the parties hereto and to impose the restrictions upon Seller's
Property as set forth in Article 1 hereof, and that, except as herein
specifically set forth, each party hereto retains full ownership and control
over its own property.
Section 3.15 (a) If, following a validly enacted amendment of the Zoning
Resolution reducing the Floor Area Development Rights ascribable to the Combined
Zoning Lot (a "Downzoning"), only one of the buildings on the Combined Zoning
Lot suffers a casualty and cannot lawfully be restored to its former bulk, then
any Rebuilding of such building undertaken on the Premises shall be limited to
the lesser of (i) the Floor Area Development Rights allocated to the Land on
which the building that suffered the casualty was formerly situated or (ii) the
amount of Floor Area Development Rights available at such time which would not
reduce or otherwise adversely affect the Floor Area Development Rights
incorporated into or attributable to any other buildings on the Combined Zoning
Lot which did not suffer any casualty.
(b) If, following a Downzoning, more than one of the Buildings on the
Combined Zoning Lot suffers a casualty and such Buildings cannot be lawfully
restored to their former bulk, then any Rebuilding undertaken on the Combined
Zoning Lot shall be limited by such Downzoning such that each parcel of Land
shall be entitled to its pro rata share of the Floor Area Development Rights
(exclusive of any Bonus Floor Area Development Rights) available after taking
into account any buildings remaining on the Combined Zoning Lot following such
casualty. The pro rata share of Floor Area Development Rights for each parcel of
land shall be determined by multiplying the Floor Area Development Rights
(exclusive of Bonus Floor Area Development Rights) then unused on the Combined
Zoning Lot by a fraction that has a denominator equal to the Floor Area
Development Rights (exclusive of Bonus Floor Area Development Rights)
appurtenant to the Combined Zoning Lot as of the date of this Agreement and has
a numerator equal to either the Developer Floor Area Development Rights (to
determine Developer's pro rata share) or the Floor Area Development Rights
utilized in Seller's Building as of the date hereof (to determine Seller's pro
rata share). Developer shall have the right to utilize any Bonus Floor Area
Development Rights then available for use in addition to its pro rata share.
(c) If a validly enacted amendment of the Zoning Resolution increases the
Floor Area Development Rights ascribable to the Combined Zoning Lot or any
portion thereof (an "Upzoning"), then Seller shall be entitled to any additional
Floor Area Development Rights ascribable to the Seller's Property and Developer
shall be entitled to any additional Floor Area Development Rights ascribable to
the Developer's Property.
Section 3.16 Seller agrees to cause the Certificate of Occupancy for the
Seller's Building to be amended so as to indicate the existence or future
existence of the Combined Zoning Lot, provided that (i) the application
therefore shall be prepared by Developer at Developer's expense and forwarded to
Seller for Seller's execution and (ii) Developer shall pay any permit or
application fees imposed on such application. In the event that Developer has
forwarded such application for a change in Certificate of Occupancy to Seller
and Seller has not executed such applications within ten (10) Business Days of
receipt thereof, then Developer shall have the right to make such application in
its own name, on behalf of Seller and to execute and deliver to the agency
reviewing such application a statement stating that the Developer is authorized
to file such application on behalf of Seller.
Section 3.17 In compliance with Section 13 of the Lien Law, Seller
covenants that it will receive consideration for the conveyance of the Excess
Development Rights under this Agreement 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 Seller's Building and will apply the same first to the payment of the
cost of Seller's Building before using any part of the total of the same for any
other purpose.
ARTICLE IV
REMEDIES
Section 4.1 The parties hereto agree that in the event of any breach or
threatened breach of this Agreement by any party, the non-defaulting party shall
have the right to any remedy available at law or equity, including, without
limitation, injunctive relief, provided that neither party shall have the right
to terminate this Agreement or the Declaration without the written consent of
the other party. In any action or proceeding brought under or pursuant to this
Agreement, the losing party shall pay the reasonable legal fees and other
expenses of the prevailing party upon receipt of a bill or statement to the
other party therefor.
Section 4.2 Notwithstanding anything to the contrary contained herein,
Developer shall look only to Seller's interest in Seller's Property (or the
proceeds thereof) and Seller shall look only to Developer's interest in
Developer's Property (or the proceeds thereof) for the satisfaction of the
remedies of Developer or Seller, as the case may be, for the collection of a
judgment (or other judicial process) requiring the payment of money by the other
party in the event of any default hereunder by such other party, and no other
property or assets of either party or its principals, disclosed or undisclosed,
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of the other party's remedies hereunder. Notwithstanding the
foregoing provisions of this Section, however, Seller and Developer each reserve
the right to the remedies of specific performance and injunction.
ARTICLE V
MISCELLANEOUS
Section 5.1 Except as stated in this Agreement, the exhibits and schedules
annexed hereto, this Agreement contains all the promises, agreements,
conditions, inducements and understandings between parties relative to the
matters stated herein and therein, and there are no oral promises, agreements,
conditions, understandings, inducements, warranties or representations,
expressed or implied, between the parties other than as set forth herein and
therein. This Agreement may not be modified, amended, changed or terminated
orally, but only by an instrument signed by both parties hereto.
Section 5.2 The Article headings are inserted for convenience only and
shall not affect the construction of this Agreement.
Section 5.3 All of the grants, interests, covenants, agreements and
conditions contained in this Agreement: (i) shall run with the lands and
buildings affected; (ii) shall, subject to the provisions of this Agreement,
inure to the benefit of and be binding upon each party to this Agreement and
such party's successors and assigns as long as they respectively have any
interest in Seller's Property or Developer's Property, as the case may be; and
(iii) shall, to the extent rights hereunder are assigned to the holder of any
mortgage encumbering Developer's Property or Seller's Property, or any interest
therein, be enforceable by such holder or any assignee thereof after default
under any such mortgage.
Section 5.4 Notwithstanding anything herein to the contrary, the respective
interests of Seller and Developer shall not merge or be deemed to have been
merged hereunder or otherwise by reason of the common ownership of Developer's
Property and Seller's Property.
Section 5.5 This Agreement shall be recorded in the Conveyances Section of
the Office of the City Register for New York County.
Section 5.6 This Agreement shall be construed and interpreted in accordance
with the internal laws of the State of New York without giving effect to
principles of conflicts of law.
Section 5.7 Any failure by a party hereto (collectively and/or individually
referred to as the "non-waiving party") to insist upon the strict performance by
the other party hereto of any of the provisions of this Agreement shall not be
deemed a waiver of any of the provisions hereof, and the non-waiving party,
notwithstanding such failure, shall have the right thereafter to insist upon the
strict performance by the other party of any and all of the provisions of this
Agreement to be performed by the other party.
Section 5.8 All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural as the identity of
the person or persons may require. The terms "herein," "hereof," or "hereunder"
or similar terms used in this Agreement refer to this entire Agreement and not
to the particular provision in which the term is used unless a contrary intent
is expressly set forth.
Section 5.9 This Agreement may be executed in several counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
Section 5.10 No breach by any party to this Agreement of this Agreement or
any agreement ancillary hereto shall have any effect on the treatment of the
Combined Zoning Lot as one zoning lot for purposes of the Zoning Resolution, and
the Combined Zoning Lot shall be treated as one zoning lot unless and until such
zoning lot is hereafter subdivided in accordance with the provisions of the
Zoning Resolution and this Agreement.
Section 5.11 Seller agrees, to execute, acknowledge and deliver such
further instruments, and take such other or further actions as may be reasonably
required in order for Developer to incorporate the Excess Floor Area Development
Rights and the Bonus Floor Area Development Rights appurtenant to Seller's Land
into the Developer's Proposed Building.
Section 5.12 The parties executing this Agreement agree that any party who
shall acquire any interest whatsoever in the Combined Zoning Lot, whether from a
party hereto or its legal representatives, successors or assigns, shall be bound
by and subordinate to the provisions of this Agreement, and any future
modifications hereto without having executed such future modifications, to the
same extent that it would have been had it been a signatory to this Agreement,
or any such future modifications thereto.
ARTICLE VI
NOTICES
Section 6.1 All notices and other communications required to be given
hereunder shall be in writing, signed by the party giving the same or by its
attorneys, and shall be deemed to have been duly given if: (i) personally
delivered with proof of delivery thereof, or (ii) delivered to an overnight
delivery service with receipt for delivery, or (iii) deposited in the United
States mail, postage prepaid, certified with return receipt requested, or (iv)
transmitted by facsimile, provided that such facsimile transmission is confirmed
within one business day thereafter in the manner set forth in either clause (i),
(ii) or (iii) of this sentence; provided, however, that the time period in which
a response to any such notice, election, demand or request must be given shall
commence on the date of receipt thereof. Notwithstanding the foregoing, any
notice required to be given to Developer in accordance with this Agreement,
shall not be deemed to have been given unless such notice has been sent in the
manner set forth in clause (iii) above (unless such manner is no longer
available). Personal delivery to a party or to any officer, partner, member,
agent or employee of such party at said address shall constitute receipt.
Rejection or other refusal to accept, or inability to deliver because of changed
address of which no notice has been received, shall also constitute receipt. Any
notice or other communication shall be addressed to the respective parties as
follows:
if to Seller: ELPANS, LLC
c/o One Liberty Properties, Inc.
60 Cutter Mill Road
Great Neck, New York 11021
Attention: Jeffrey Fishman
with copy to: Herrick, Feinstein LLP
2 Park Avenue
New York, New York 10016
Attention: Jeffrey H. Kaufman, Esq.
if to Developer: A.P. Development L.L.C.
c/o United Homes
8720 139th Street
Briarwood, New York 11435
Attention: Ron Hershco
with copies to: Lawrence I. Andelsman, P.C.
114 Old Country Road
Mineola, New York 11501
Attention: Lawrence I. Andelsman, Esq.
Paul D. Selver, Esq.
Paul, Hastings, Janofsky &
Walker, LLP
75 East 55th Street
New York, New York 10022
ARTICLE VII
ESTOPPEL CERTIFICATES
Section 7.1 Upon the reasonable request from Seller (but not more than
twice in a one (1) year period), Developer shall, within twenty (20) days of
such request from Seller, furnish to Seller or Seller's designee a written
statement, stating the following: (i) that this Agreement is then in full force
and effect; (ii) that this Agreement has not been modified or amended by the
parties hereto (or if modified or amended, setting forth all such modifications
and amendments); (iii) whether or not Developer has served any written notice of
default to Seller under this Agreement (and if served, whether or not such
default remains uncured); and (iv) that the written statement may be relied upon
by said designee.
Section 7.2 Upon the reasonable request from Developer (but not more than
twice in a one (1) year period), Seller shall, within twenty (20) days of such
request from Developer, furnish to Developer or Developer's designee a written
statement, stating the following: (i) that this Agreement is then in full force
and effect; (ii) that this Agreement has not been modified or amended by the
parties hereto (or if modified or amended, setting forth all such modifications
and amendments); (iii) whether or not Seller has served any written notice of
default to Developer under this Agreement (and if served, whether or not such
default remains uncured); and (iv) that the written statement may be relied upon
by said designee.
Section 7.3 The statements described in this Article VII shall act as a
waiver of any claim by the party furnishing such certificate to the extent such
claim is based upon facts that are known or should reasonably have been known to
such party and that are contrary to those asserted in such statement, but only
to the extent such claim is against a bona fide encumbrancer or purchaser for
value without knowledge of facts contrary to those contained in such statement
and who has acted in reasonable reliance upon such statement. Such statement
shall in no event subject the party furnishing it to any liability whatsoever
(except for fraud), notwithstanding the negligent or inadvertent failure of such
party to disclose correct or relevant information.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the day and year first above written.
Seller:
ELDANS LLC
By: ____________________________________
Name:
Title
Developer:
By:_____________________________________
Name:
Title
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ______ day of February in the year 2005, 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/she executed the same in
his/her capacity, and that by his/her 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 February in the year 2005, 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/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
____________________________________
Notary Public
EXHIBIT A
Seller's Property
EXHIBIT B
Developer's Property
EXHIBIT C
Declaration
EXHIBIT D
Parties in Interest Certification
Exhibit E
Existing Survey
Exhibit F
Photographs
EXHIBIT E
Waiver of Execution of Declaration of Zoning Lot Restrictions
and Subordination of Mortgage
SCHEDULE A
.
SCHEDULE B
EXHIBIT F
Air-Rights Endorsement