Exhibit 10.2
REDEMPTION AND LEASE AGREEMENT
REDEMPTION AND LEASE AGREEMENT (this "Agreement"), dated as of the
23rd day of March, 1999, by and between STEINWAY, INC., a Delaware corporation,
having an address at One Steinway Place, Long Island City, New York 11105
("Steinway"), and 111 WEST 57TH STREET ASSOCIATES, L.P., a New York limited
partnership, having an office c/o Wexford Management LLC, 411 West Putnam
Avenue, Greenwich, Connecticut 06830(the "Partnership").
W I T N E S S E T H :
WHEREAS, simultaneously herewith, Steinway has entered into a certain
Partnership Interest Purchase Agreement (the "Purchase Agreement") with NI
REPROMA INC. ("MP") and MANHATTAN 57TH STREET ASSOCIATES ("NP"), collectively,
as seller ("Seller"), pursuant to which Steinway has agreed to purchase Seller's
interest in the Partnership, consisting of MP's 0.2495% interest as a general
partner in the Partnership (the "Seller GP Interest") and NP's 49.401% interest
as a limited partner in the Partnership (the "Seller LP Interest", and, together
with the Seller GP Interest, the "Interest"), on the terms and conditions set
forth therein; and
WHEREAS, the Partnership is the owner of, INTER ALIA, the fee interest
in certain real property known by the street address of 111 West 57th Street,
New York, New York, as more particularly described in EXHIBIT "A" attached
hereto and made a part hereof (the Partnership's interest in such real property
being referred to herein as the "Property"); and
WHEREAS, simultaneously with the consummation of Steinway's purchase
of the Interest pursuant to the Purchase Agreement, the Partnership desires to
(i) redeem the Interest in exchange for the Partnership conveying to Steinway
fee title to the buildings and improvements situated on the Property (the
"Improvements"), but expressly reserving unto the Partnership fee title to the
land upon which the Improvements are situated (the "Land"), (ii) enter into a
ground lease with Steinway with respect to the Land, (iii) enter into a master
lease with Steinway for the Land and the Improvements, and (iv) extend the term
of Steinway's existing space lease for a portion of the Property (the "Steinway
Space Lease") to December 31, 2008, in each case on the terms and subject to the
conditions set forth herein; and
WHEREAS, Steinway desires to accomplish such redemption and lease
transactions, in each case on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the mutual receipt and legal sufficiency of which the
parties hereto hereby acknowledge, the Partnership and Steinway hereby agree as
follows:
1. REDEMPTION OF THE INTEREST AND CONVEYANCE OF THE IMPROVEMENTS.
a. At the Closing (as defined below) and subject to the terms
and conditions set forth below, Steinway, in complete redemption for the
Interest, will transfer the Interest to the Partnership, in exchange for which
the Partnership will convey fee title to the Improvements to Steinway pursuant
to the Deed (as defined below), reserving unto the Partnership fee title to the
Land. Accordingly, from and after the Closing Date (as defined below), and
after taking into account such redemption of the Interest and conveyance of the
Improvements, Steinway shall no longer possess any interest in the Partnership,
and accordingly, the percentage shares of the remaining partners in the
Partnership shall be adjusted accordingly. The Partnership shall accept the
aforesaid transfer of the Interest at the Closing, subject to the terms and
conditions set forth below.
b. At the Closing, (x) the Partnership shall execute and
deliver to Steinway (i) a release of Steinway from any commitments, obligations
and liabilities of Steinway to the Partnership under and by virtue of the
partnership agreement of the Partnership or Steinway's ownership of the
Interest, whether arising on, before or after the Closing Date, which release
shall be in the form annexed hereto as EXHIBIT "B-1" (the "Partnership
Release"), and (ii) a Form K-1 issued by the Partnership to Steinway showing no
income or loss allocable to Steinway by virtue of Steinway's ownership of the
Interest prior to the redemption of same in accordance with this Agreement, and
(y) Steinway shall execute and deliver to the Partnership a release of the
Partnership from any commitments, obligations and liabilities of the Partnership
to Steinway under and by virtue of the partnership agreement of the Partnership
or Steinway's ownership of the Interest, whether arising on, before or after the
Closing Date, which release shall be in the form annexed hereto as EXHIBIT "B-2"
(the "Steinway Release").
c. At or after the Closing, Jasie, Inc. ("Jasie"), as a general
partner of the Partnership, shall be permitted to enter into such amendments to
the partnership agreement or any certificate of partnership relating to the
partnership, and to any other agreement to which the partnership is a party, as
Jasie shall deem necessary or desirable in order to reflect the redemption of
the Interest and the identity of the
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remaining partners as a result of such redemption.
2. EXECUTION OF THE GROUND LEASE AND THE MASTER LEASE. At the
Closing and subject to the terms and conditions set forth below, simultaneously
with the redemption of the Interest and the conveyance of the Improvements
pursuant to the Deed as contemplated by Section 1 hereof:
a. the Partnership and Steinway will enter into (x) a long term
ground lease substantially in the form annexed hereto as EXHIBIT "D" (the
"Ground Lease"), pursuant to which the Partnership shall demise the Land to
Steinway on the terms and conditions provided therein, (y) an assignment of
leases in the form annexed hereto as EXHIBIT "E", pursuant to which the
Partnership shall assign to Steinway all right, title and interest of the
Partnership in and to any space leases affecting the Land and the Improvements
for the term of the Ground Lease (the "Partnership Lease Assignment") and (z) an
assignment of management, service and maintenance agreements in the form annexed
hereto as EXHIBIT "F", pursuant to which the Partnership shall assign to
Steinway all right, title and interest of the Partnership in and to any
management, service and/or maintenance agreements affecting the Land and the
Improvements for the term of the Ground Lease (the "Partnership Contract
Assignment");
b. the Partnership and Steinway will enter into (x) a master lease
substantially in the form annexed hereto as EXHIBIT "G" (the "Master Lease"),
pursuant to which Steinway shall sublease the Land (subject to the Ground Lease)
and lease the Improvements to the Partnership on the terms and conditions
provided therein, (y) an assignment of leases in the form annexed hereto as
EXHIBIT "H", pursuant to which Steinway shall assign to the Partnership all
right, title and interest of Steinway in and to any space leases affecting the
Land and the Improvements for the term of the Master Lease (the "Steinway Lease
Assignment"), and (z) an assignment of management, service and maintenance
agreements in the form annexed hereto as EXHIBIT "I" pursuant to which Steinway
shall assign to the Partnership all right, title and interest of Steinway in and
to any management, service and/or maintenance agreements affecting the Land and
the Improvements for the term of the Master Lease (the "Partnership Contract
Assignment"); and
c. the Partnership and Steinway will enter into an amendment to the
Steinway Space Lease in the form annexed hereto as EXHIBIT "J" (the "Space Lease
Amendment"), pursuant to which the term of the Steinway Space Lease shall be
extended to December 31, 2008 on the terms and conditions provided therein.
3. APPORTIONMENTS. There shall be no apportionments performed at the
Closing. In addition, except for the conveyance
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of the Improvements to Steinway pursuant to the Deed, (i) Steinway shall not be
entitled to any payments or other consideration on account of the cash or other
assets of the Partnership as of the Closing Date, and (ii) Steinway shall not be
entitled to any payments or other distributions from the Partnership for
revenues that the Partnership collects, regardless of whether such revenues
derive from any period before, on or after the Closing Date, in either case by
virtue of Steinway's purchase or redemption of the Interest, the conveyance of
the Improvements or the consummation of the lease transactions described herein.
The provisions of this Section 3 shall survive the Closing and/or the
termination of this Agreement.
4. CLOSING. The closing of the transactions contemplated herein
(the "Closing") shall take place at the offices of Proskauer Rose LLP, located
at 1585 Broadway, New York, New York 10036 at 10:00 A.M. on such date as may be
mutually agreed upon by the parties, provided, however, that in no event shall
the Closing occur later than March 30, 1999, time being of the essence with
respect to such outside date. For purposes of this Agreement, the term "Closing
Date" shall mean the date on which the Closing shall actually occur.
5. REPRESENTATIONS.
a. IN GENERAL. Steinway shall accept the Improvements (with respect
to the conveyance described above) and the Land (with respect to the Ground
Lease) in their "as is" condition on the Closing Date, subject to any and all
violations of any applicable laws, rules, orders, ordinances, regulations,
statutes, requirements, codes, resolutions and executive orders (including,
without limitation, zoning and environmental laws) of all governmental
authorities, and of any and all of their departments and bureaus, affecting the
Property or the use or occupancy of the Property (collectively, "Legal
Requirements"), regardless of whether such violations have been noted or issued.
Steinway acknowledges and agrees that, except for the representations,
statements or warranties (if any) of the Partnership expressly set forth in this
Agreement, Steinway has not relied, and shall not be entitled to rely, on any
representations, statements, or warranties, express or implied, which may have
been made, or alleged by Steinway to have been made, by or on behalf of the
Partnership or any broker, agent, employee or other representative of the
Partnership, in respect of the Property, the status of title to the Property,
the zoning or other laws, regulations, rules and orders applicable thereto, the
nature and extent of any Impositions (as defined in the Ground Lease), or the
use that may be made of the Property, including, without limitation, any
guarantees, promises, projections, operating expenses, set-ups or other
information
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pertaining to the Property, and any state of facts revealed by any engineering
report, environmental report, financial statements, books and records or other
information provided by the Partnership or any broker, agent, employee or other
representative of the Partnership in connection with Steinway's due diligence
investigation of the Property. Additionally, Steinway acknowledges and agrees
that the Partnership shall not be liable for any latent or patent defects in the
Property.
b. STEINWAY'S REPRESENTATIONS. Steinway hereby represents and
warrants to the Partnership that:
i. ORGANIZATION OF STEINWAY. Steinway is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Steinway has full corporate power to execute and deliver,
and to perform its obligations under, this Agreement and any agreement,
instrument, certificate or other document necessary to effectuate the
transactions contemplated hereby and such execution, delivery and performance
has been duly authorized by all requisite corporate action by or on behalf of
Steinway.
ii. TITLE; CONSENTS. On the Closing Date, Steinway shall
own the Interest free and clear of any and all liens, claims, equities,
encumbrances, security interests, limitations and restrictions of any nature
whatsoever created by Steinway (collectively, "Liens"), and has obtained all
necessary consents to enter into, and be bound by, this Agreement and any other
agreement, instrument, certificate or other document necessary to effectuate the
transactions contemplated hereby. Steinway has the full right, power and
authority to enter into, and be bound by, this Agreement and any other
agreement, instrument, certificate or other document necessary to effectuate the
transactions contemplated hereby.
iii. ENFORCEABILITY. This Agreement has been, and at the
Closing each of this Agreement and any other agreement, instrument, certificate
or other document contemplated hereby will be, duly executed and delivered by
Steinway and either constitutes or will constitute, as the case may be, the
legal, valid and binding obligation of Steinway, enforceable in accordance with
the terms hereof or thereof, as the case may be, subject to applicable
bankruptcy, insolvency, fraudulent transfer, moratorium and similar laws or by
other laws affecting creditors' rights generally.
iv. NO CONFLICTS. The execution, delivery and performance
of Steinway's obligations under this Agreement and any other agreement,
instrument, certificate or other document necessary to effectuate the
transactions contemplated
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hereby: (1) do not, and will not at the Closing, violate or conflict with the
Certificate of Incorporation, bylaws or other governing documents of Steinway;
and (2) do not, and will not at the Closing (with or without the giving of
notice, the passage of time, or both): (a) conflict with, result in the breach
of, constitute a default under, require any consent, approval or waiver which
has not been (or will not at Closing be) received under, or give rise to a right
to accelerate any obligation under, or give rise to a right of termination
under, any agreement or instrument to which Steinway is a party, by which it is
bound or to which any of its assets or properties is subject; or (b) conflict
with, violate or require any consent, approval, waiver, order, authorization,
registration, declaration or filing pursuant to any law, ordinance, injunction,
judgment, order, decree, permit, concession, grant, franchise, license, or other
provision of law or any other governmental requirement or authorization
applicable to Steinway.
c. BY THE PARTNERSHIP. The Partnership hereby represents and
warrants to Steinway that:
i. ORGANIZATION OF THE PARTNERSHIP. The Partnership is a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of New York. The Partnership has full partnership power to
execute and deliver, and to perform its obligations under, this Agreement and
any agreement, instrument, certificate or other document necessary to effectuate
the transactions contemplated hereby and such execution, delivery and
performance has been duly authorized by all requisite partnership action by or
on behalf of the Partnership.
ii. CONSENTS. The Partnership has obtained all necessary
consents to enter into, and be bound by, this Agreement and any other agreement,
instrument, certificate or other document necessary to effectuate the
transactions contemplated hereby. The Partnership has the full right, power and
authority to enter into, and be bound by, this Agreement and any other
agreement, instrument, certificate or other document necessary to effectuate the
transactions contemplated hereby.
iii. ENFORCEABILITY. This Agreement has been, and at the
Closing each of this Agreement and any other agreement, instrument, certificate
or other document contemplated hereby will be, duly executed and delivered by
the Partnership and either constitutes or will constitute, as the case may be,
the legal, valid and binding obligation of the Partnership, enforceable in
accordance with the terms hereof or thereof, as the case may be, subject to
applicable bankruptcy, insolvency, fraudulent transfer, moratorium and similar
laws or by other laws
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affecting creditors' rights generally.
iv. NO CONFLICTS. The execution, delivery and performance
of the Partnership's obligations under this Agreement and any other agreement,
instrument, certificate or other document necessary to effectuate the
transactions contemplated hereby: (1) do not, and will not at the Closing,
violate or conflict with the Business Certificate for Partners, partnership
agreement or other governing documents of the Partnership; and (2) do not, and
will not at the Closing (with or without the giving of notice, the passage of
time, or both): (a) conflict with, result in the breach of, constitute a default
under, require any consent, approval or waiver which has not been (or will not
at Closing be) received under, or give rise to a right to accelerate any
obligation under, or give rise to a right of termination under, any agreement or
instrument to which the Partnership is a party, by which it is bound or to which
any of its assets or properties is subject; (b) conflict with, violate or
require any consent, approval, waiver, order, authorization, registration,
declaration or filing pursuant to any law, ordinance, injunction, judgment,
order, decree, permit, concession, grant, franchise, license, or other provision
of law or any other governmental requirement or authorization applicable to the
Partnership; or (c) result in any Lien on the Property.
6. CONDITION PRECEDENT.
a. The duties and obligations of the parties hereunder are
subject to the simultaneous consummation of the closing contemplated by the
Purchase Agreement.
b. The duties and obligations of the Partnership hereunder are
subject to the Partnership obtaining, on or before the Closing Date, a
commitment for fee mortgage financing encumbering the Partnership's interest in
the Land, which commitment shall be satisfactory to the Partnership in its sole
discretion.
7. DOCUMENTS TO BE DELIVERED AT CLOSING.
a. BY THE PARTNERSHIP. At the Closing, the Partnership shall
execute and deliver, or cause to be executed and delivered on its behalf, to
Steinway:
i. an assignment and assumption in the form annexed as
EXHIBIT "K" hereto, pursuant to which Steinway conveys to the Partnership all of
Steinway's right, title and interest in and to the Interest and the Partnership
assumes all obligations with respect thereto from and after the Closing (the
"Steinway Interest Assignment");
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ii. a bargain and sale deed without covenants for the
Improvements in the form of EXHIBIT "L" attached hereto and made a part hereof
(the "Deed"), pursuant to which the Partnership shall convey fee title to the
Improvements to Steinway, free and clear of any and all Liens other than (w) the
Ground Lease and the Master Lease, (x) any and all space leases, tenancies,
concessions, licenses and occupancies affecting the Property in effect on the
date hereof and entered into by the Partnership from and after the date hereof
in the ordinary course of the Partnership's business (collectively, the
"Leases"), (y) the matters described on EXHIBIT "M" annexed hereto, and (z) any
other exceptions to title which are not listed in the title report issued by
First American Title Insurance Company of New York under Title No. 135NYNY28589,
as last amended on March 18, 1999, which arise prior to the Closing and which
are accepted by Steinway (as hereinafter defined) (the "Permitted
Encumbrances");
iii. the Ground Lease;
iv. a recordable memorandum of ground lease in the form of
EXHIBIT "N" attached hereto and made a part hereof (the "Ground Lease Memo");
v. the Partnership Lease Assignment;
vi. the Partnership Contract Assignment;
vii. the Master Lease;
viii. a recordable memorandum of master lease in the
form of EXHIBIT "O" attached hereto and made a part hereof (the "Master Lease
Memo");
ix. the Space Lease Amendment;
x. the Partnership Release;
xi. the side letter regarding certain capital expenditure
items in the form annexed hereto as EXHIBIT "P" (the "Cap Exp Letter");
xii. a "non-foreign person affidavit" that meets the
requirements of Section 1445(b)(2) of the Internal Revenue Code of 1986, as
amended;
xiii. a certificate of the Partnership, dated as of the
Closing Date, stating that the representations and warranties contained in
Section 5.c. of this Agreement are
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true and correct as of the Closing Date with the same effect as if they were
made at the Closing; and
xiv. any transfer tax returns, affidavits and other
documents required in accordance with Paragraph 31 of the New York State Tax
Law, the New York City Real Property Transfer Tax imposed by the Title II of
Chapter 46 of the Administrative Code of the City of New York and any other tax
payable by reason of conveyance of the Improvements or the execution and
delivery of the Ground Lease (hereinafter, collectively, the "Conveyance Tax
Returns").
b. BY STEINWAY. At the Closing, Steinway shall execute and
deliver, or cause to be executed and delivered on its behalf, to the
Partnership:
i. the Steinway Interest Assignment;
ii. the Ground Lease;
iii. the Ground Lease Memo;
iv. the Master Lease;
v. the Master Lease Memo;
vi. the Steinway Lease Assignment;
vii. the Steinway Contract Assignment;
viii. the Space Lease Amendment;
ix. the Steinway Release;
x. the Cap Exp Letter;
xi. a certificate of Steinway, dated as of the Closing
Date, stating that the representations and warranties contained in Section 5.b.
of this Agreement are true and correct as of the Closing Date with the same
effect as if they were made at the Closing; and
xii. the Conveyance Tax Returns.
c. OTHER. The acceptance of transfer of title to the
Improvements and the execution and delivery of the Ground Lease, the Master
Lease and the Space Lease Amendment by Steinway shall be deemed to be full
performance and discharge of any and all obligations on the part of the
Partnership to be performed pursuant to the provisions of this Agreement, except
where such
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agreements and obligations are specifically stated to survive the Closing.
8. DEFAULT; TERMINATION.
a. STEINWAY'S DEFAULT. If Steinway shall fail or refuse to
perform Steinway's obligations in accordance with this Agreement, then the
parties hereto agree that the Partnership's sole remedy shall be to cause the
Escrow Agent (as defined in the Purchase Agreement) to deliver to Seller and the
Partnership the Downpayment (as defined in the Purchase Agreement), together
with any interest thereon, in the manner provided in the Escrow Agreement, which
may be retained by Seller and the Partnership as liquidated damages, whereupon
this Agreement shall terminate and neither party to this Agreement shall have
any further rights or obligations hereunder (other than any such rights or
obligations that are expressly stated in this Agreement to survive the
termination thereof). The provisions herein contained for liquidated and
agreed-upon damages are bona fide provisions for such and are not a penalty, the
parties agreeing that by reason of the Partnership binding itself to the
conveyance of the Improvements and the consummation of the transactions
contemplated by this Agreement and by reason of the withdrawal of the
Improvements from sale at a time when other parties would be interested in
acquiring same, that the Partnership will have sustained damages if Steinway
defaults, which damages will be substantial but will not be capable of
determination with mathematical precision, and therefore, as aforesaid, this
provision for liquidated and agreed-upon damages has been incorporated in this
Agreement as a provision beneficial to both parties. The parties acknowledge
and agree that a default by Steinway under the Purchase Agreement shall be
deemed to be a default by Steinway hereunder.
b. THE PARTNERSHIP'S DEFAULT. If the conveyance of the
Improvements to Steinway and the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof shall fail to occur due to
a default by the Partnership in the performance of the Partnership's obligations
hereunder or under the Letter Agreement (as defined in the Purchase Agreement),
then Steinway, as Steinway's sole remedy, may either (i) terminate this
Agreement in which event (a) the Partnership shall cause Escrow Agent to return
the Downpayment, together with interest, if any, which has accrued thereon, to
Steinway, (b) the Partnership shall, or shall cause the Class U Partners (as
such term is defined in the Letter Agreement) to, reimburse Steinway for all
reasonable out-of-pocket costs incurred by Steinway to third parties in
connection with the attempted consummation of transactions contemplated in this
Agreement and the Purchase Agreement, but in no event in excess
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of $250,000 (the "Reimbursable Costs"), upon presentation by Steinway of
reasonable supporting documents evidencing the incurrence of such Reimbursable
Costs (it being understood that such obligation to pay the Reimbursable Costs
shall survive the termination of this Agreement), and (c) neither party shall
have any further rights or obligations hereunder (other than any such rights or
obligations that are expressly stated herein to survive the termination hereof),
or (ii) bring an action to seek specific performance of the Partnership's
obligations hereunder in which proceeding no monetary claim is made, or monetary
judgment or other relief is sought or obtained against the Partnership.
c. TERMINATION. In the event that Steinway shall terminate
this Agreement due to the failure of the condition precedent described in
Section 6.a. above (other any such failure arising from a default by Steinway
under the Purchase Agreement) or the Partnership shall terminate this Agreement
due to the failure of any condition precedent described in Paragraph 6 above or
pursuant to Section 10.b. below, (a) the Partnership shall cause Escrow Agent
to return the Downpayment, together with interest, if any, which has accrued
thereon, to Steinway, (b) if said termination results from the Partnership's
failure to fulfill its obligations under the Letter Agreement, the Partnership
shall, or shall cause the Class U Partners to, reimburse Steinway for the
Reimbursable Costs, upon presentation by Steinway of reasonable supporting
documents evidencing the incurrence of such Reimbursable Costs (it being
understood and agreed that this clause (b) does not apply to any failure by the
Partnership to obtain a mortgage commitment as described in Section 6.b. above),
and (c) neither party shall have any further rights or obligations hereunder
(other than any such rights or obligations that are expressly stated herein to
survive the termination hereof).
9. BROKERS.
a. Steinway represents and warrants to the Partnership that
Steinway dealt with no broker, finder or salesperson in connection with this
Agreement, other than Insignia/Edward S. Gordon Co., Inc. (the "Partnership
Broker") and Cushman and Wakefield Inc. (the "Steinway Broker", and together
with the Partnership Broker, the "Broker"). Steinway shall indemnify the
Partnership, and hold the Partnership harmless, from and against, any and all
losses, damages, liabilities, costs and expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Partnership to the
extent arising out of a claim for commission or other compensation made by a
broker, finder or salesperson with whom Steinway dealt in connection herewith,
including, without limitation, the Steinway Broker, but excluding the
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Partnership Broker (other than any claim by the Partnership Broker Relating to
Steinway's failure to pay the $250,000 described in Section 9.c. below).
b. The Partnership represents and warrants to Steinway that the
Partnership dealt with no broker, finder or salesperson in connection with this
Agreement other than Broker. The Partnership shall indemnify Steinway, and hold
Steinway harmless, from and against, any and all losses, damages, liabilities,
costs and expenses (including, without limitation, reasonable attorneys' fees
and disbursements) incurred by Steinway to the extent arising out of a claim for
commission or other compensation made by a broker, finder or salesperson with
whom the Partnership dealt in connection herewith, including, without
limitation, the Partnership Broker (other than any claim by the Partnership
Broker relating to Steinway's failure to pay the $250,000 described in Section
9.c. below), but excluding the Steinway Broker.
c. Steinway shall pay (i) any commission due to the Steinway
Broker pursuant to a separate written agreement between Steinway and the
Steinway Broker, and (ii) Two Hundred Fifty Thousand ($250,000) Dollars towards
the commission due to the Partnership Broker. The Partnership shall pay any
commission due to the Partnership Broker in excess of the Two Hundred Fifty
Thousand ($250,000) Dollars paid by Steinway as provided above pursuant to a
separate written agreement between the Partnership and the Partnership Broker.
d. The provisions of this Article 9 shall survive the Closing
and/or the termination of this Agreement.
10. COVENANTS REGARDING TITLE TO THE PROPERTY.
a. Except as expressly provided in this Article 10, the
Partnership shall have no obligation to remove any exception to title to the
Property on or before the Closing Date.
b. The Partnership hereby covenants and agrees, from and after
the date hereof through the Closing Date, not to create any exception to title
to the Property other than the Permitted Encumbrances. To the extent that
Steinway discovers any title exception (other than those described in the
immediately preceding sentence) which arises from or after the date hereof and
which Steinway is not willing to take title to the Improvements and the Ground
Lease subject to, Steinway shall promptly notify the Partnership in writing, and
the Partnership may, at its election (i) cause such title exception to be
removed as an exception on Steinway's title insurance policy (or cause Steinway
to be insured against the collection of same from the
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Property) on or prior to the Closing, at the Partnership's sole cost and
expense, or (ii) terminate this Agreement, in which event the provisions of
Section 8.c. shall be applicable.
11. CONDEMNATION AND DESTRUCTION.
a. If, prior to the Closing Date, all or a "significant
portion" of the Property is taken by eminent domain (or is the subject of a
pending taking which has not been consummated), the Partnership shall notify
Steinway of such fact and either party shall have the option to terminate this
Agreement upon notice to the other party given not later ten (10) business days
after the date of the Partnership's notice. If this Agreement is terminated as
aforesaid, neither party shall have any further rights or obligations hereunder
(other than any such rights or obligations that are expressly stated in this
Agreement to survive the termination thereof).
b. If neither party elects to terminate this Agreement as
provided in Section 11.a. above, or, if neither party is entitled to terminate
this Agreement pursuant to said Section 11.a., the transactions contemplated
hereby shall be consummated with no abatement of any rents payable pursuant to
the Ground Lease, and at the Closing (i) the Partnership shall assign and turn
over to Steinway, and Steinway shall be entitled to receive and keep, all of the
Partnership's interest in and to any and all awards for such taking by eminent
domain which relate to the Improvements, reserving unto the Partnership any and
all awards for such taking by eminent domain which relate to the Land, and (ii)
the fixed rent payable by the Partnership under the Master Lease shall be
equitably adjusted to reflect the diminution in the value of the Improvements.
c. For purposes of this Agreement, a "significant portion" of
the Property shall be deemed to have been taken if, after giving effect to such
taking, the rentable square footage of the Property shall be reduced by more
than ten (10%) percent.
d. If, prior to the Closing Date, the Improvements, or any part
thereof, is destroyed by fire or other casualty, the Partnership shall promptly
notify Steinway of such fact. Notwithstanding the foregoing, Steinway shall
accept the Property in its then "as is" condition with no abatement of any rents
payable pursuant to the Ground Lease or the Master Lease and with no assignment
by the Partnership to Steinway of any insurance proceeds payable in connection
with such fire or other casualty, provided, however, that subsequent to the
Closing, the Partnership shall promptly comply with its repair and/or
restoration obligations pursuant to the Master Lease.
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12. CONVEYANCE TAXES; OTHER CLOSING COSTS.
a. Steinway shall be solely responsible for, and shall pay in
full at the Closing, the New York State Real Property Transfer Tax imposed by
Paragraph 31 of the New York State Tax Law, the New York City Real Property
Transfer Tax imposed by Title II of Chapter 46 of the Administrative Code of the
City of New York and any other tax payable by reason of the conveyance of the
Improvements to Steinway, and the Partnership shall pay any such tax payable by
reason of the execution and delivery of the Ground Lease.
b. Steinway shall be solely responsible for the cost of any due
diligence performed by Steinway in connection with the consummation of the
transactions contemplated hereby, including, without limitation, any survey and
any engineering or environmental report, any recording charges related to the
Deed or the Ground Lease Memo, any title insurance premiums or other charges,
the fees and expenses of its legal counsel and other advisors and the commission
payable to Broker as provided in Paragraph 9.
c. The Partnership shall be solely responsible for any
recording charges relating to the Master Lease Memo and the fees and expenses of
its legal counsel and other advisors (other than Broker to the extent provided
in Paragraph 9).
13. CONFIDENTIALITY.
a. Steinway agrees that it shall treat any information it has
obtained or may obtain (whether orally, in writing or in any other form) from or
on behalf of the Partnership concerning the Property (such information, as well
as any documents, memoranda, notes and other writings, and any computer data
prepared by Steinway or its agents or representatives based in whole or in part
on such information, is hereinafter referred to as the "Confidential
Information") in accordance with the provisions hereof.
b. The Confidential Information shall not be used or duplicated
by Steinway for any purpose other than evaluating the Property. Steinway shall
keep the Confidential Information strictly confidential and shall not disclose
the Confidential Information to any person; provided, however, the Confidential
Information may be disclosed to (i) Steinway's attorneys, accountants, potential
lenders and other advisors (collectively, "Consultants"), (ii) the directors,
officers, partners and employees of Steinway or any Consultant (all of whom are
collectively referred to as "Related Parties" and
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individually as a "Related Party") who, in Steinway's reasonable judgment, need
to know such information in connection with Steinway's efforts to evaluate the
Property, and (iii) any other person to which disclosure shall be necessary to
effect compliance with any law, rule, regulation or order applicable to
Steinway, provided that in the case of disclosure described in clause (iii),
Steinway shall take all reasonable steps to protect Confidential Information
from further disclosure. Steinway shall inform the Consultants and the Related
Parties of the confidential nature of such information, shall direct the
Consultants and the Related Parties to keep all such information in the
strictest confidence and to use such information only for the purpose of
evaluating the Property. Any disclosures made by the Consultants or the Related
Parties that are prohibited by this Agreement shall be deemed made by, and be
the responsibility of, Steinway.
c. The Partnership and Steinway shall each keep the financial
terms of the transactions contemplated by this Agreement and the Purchase
Agreement strictly confidential (the "Financial Terms"), and shall not disclose
the Financial Terms to any person; provided, however, the Financial Terms may be
disclosed to (i) either party's Consultants, (ii) the Related Parties of the
Partnership and Steinway, and (iii) any other person to which disclosure shall
be necessary (after in each case written notice to the other party) to effect
compliance with any law, rule, regulation or order applicable to such disclosing
party; and, provided further, however, that provisions of this Section 13.c.
shall not apply from and after the date upon which Steinway discloses the
Financial Terms to the Securities Exchange Commission or any similar body as
required by applicable reporting obligation.
d. In the event that this Agreement shall be terminated as
provided herein, at the request of the Partnership, Steinway shall promptly
deliver to the Partnership all written Confidential Information and will not
retain any copies, extracts or other reproductions in whole or in part of such
material.
e. Each party acknowledges that the other party will incur
irreparable damage if any of the provisions of this Paragraph 13 should be
breached. Accordingly, if either party or any of its agents or representatives
breaches or threatens to breach any of the provisions of this Paragraph 13, the
other party shall be entitled, without prejudice to the rights and remedies
otherwise available to it, to an injunction (without any bond or other security
being required therefor) restraining any breach of the provisions of this
Paragraph 13 by the other party or its agents or representatives.
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f. Each party hereby indemnifies, defends and holds the other
party harmless from and against any and all losses, damages, claims,
liabilities, costs and expenses (including attorneys' fees and disbursements)
suffered or incurred by such other party, which arise, in whole or in part, out
of or in connection with the breach of this Paragraph 13 by the indemnifying
party or its Consultants or any Related Party, irrespective of whether or not
authorized by such indemnifying party.
g. The terms of this Paragraph 13 shall survive the termination
of this Agreement.
14. MISCELLANEOUS.
a. FURTHER ASSURANCES. Each of the parties shall cooperate and
take such actions, and execute such other documents as the other parties or any
one of them may reasonably request in order to carry out the transactions
contemplated by this Agreement.
b. NO PARTNERSHIP, ETC. The execution of this Agreement is not
intended to be, nor shall it be construed to be, the formation of a partnership
or joint venture between the parties to this Agreement or their respective
affiliates.
c. NOTICE. All notices, demands, requests, consents,
approvals, reports or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
when delivered by hand (including, without limitation, delivery by any private
or public courier service); (ii) when delivered by first class, certified mail,
return receipt requested, postage prepaid (or when delivery is attempted if such
delivery is refused by recipient); or (iii) when sent by tested telex,
telecopier or other facsimile reproduction equipment, to the following addresses
(or such other address as the recipient party may hereafter specify in the same
manner):
If to Steinway, to it at:
Steinway Musical Instruments, Inc.
800 South Street, Suite 425
Waltham, Massachusetts 02453-1472
Attention: Dennis M. Hanson, Esq.
Fax: (781) 894-9803
with a copy to:
Milbank, Tweed, Hadley & McCloy LLP
16
One Chase Manhattan Plaza
New York, New York 10005
Attention: Barbara J. Briggs, Esq.
Fax: (212) 530-5219
If to the Partnership, to it at:
c/o Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attention: Joseph M. Jacobs
Fax: (203) 862-7320
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attention: Wendy J. Schriber, Esq.
Fax: (212) 969-2900
d. ENTIRE AGREEMENT. This Agreement and the Exhibits annexed
hereto contain the entire agreement and understanding of the parties with
respect to the subject matter hereof, and all prior negotiations, proposals and
agreements (whether written or oral) between them (or their respective
affiliates) relating to the subject matter hereof have been superseded and are
merged in this Agreement.
e. ASSIGNMENT. This Agreement is binding upon and shall inure
to the benefit of the parties and their respective successors and permitted
assigns. Notwithstanding the foregoing, Buyer shall not assign its rights under
this Agreement without (x) obtaining the Partnership's prior written consent
thereto, which consent may be granted or denied by the Partnership in the
Partnership's sole and absolute discretion, (y) obtaining Seller's prior written
consent to the simultaneous assignment of the Purchase Agreement as provided
therein, and (z) assigning the Purchase Agreement to the same assignee
simultaneously with the assignment of this Agreement; provided, however, that
Steinway may simultaneously assign this Agreement and the Purchase Agreement to
an affiliate of Steinway on prior written notice to, but without the consent of,
Seller and the Partnership. Notwithstanding the foregoing, with respect to any
assignment of this Agreement permitted hereunder, no such assignment shall
relieve Steinway of its obligations hereunder and, subsequent to any such
assignment, Steinway's liability hereunder shall continue notwithstanding any
subsequent modification or amendment hereof or the release of any assignee
hereunder from any liability, to all of which Steinway hereby
17
consents in advance.
f. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, such term, provision, covenant or restriction
shall be void or unenforceable only to the extent specifically set forth in any
such holding, and the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated. In the event that any such term,
provision, covenant or restriction is so held to be invalid, void or
unenforceable, the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.
g. WAIVERS, ETC. No failure or delay on the part of any party
hereto in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right of power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement
nor consent to any departure by any party therefrom shall in any event be
effective unless the same shall be in writing, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.
h. GOVERNING LAW. This Agreement shall be construed and
interpreted according to the laws of the State of New York, without reference to
such state's principles governing conflicts of laws.
i. HEADINGS. The headings used herein are for convenience of
reference only, are not part of this Agreement and are not intended to affect
the construction, or to be taken into account in the interpretation, of this
Agreement.
j. COUNTERPARTS; EFFECT. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures were all upon
the same instrument.
[END OF TEXT]
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[EXECUTION PAGE]
IN WITNESS WHEREOF, the parties hereto have executed, or caused this
Agreement to be executed on their behalf, on the day first above written.
THE PARTNERSHIP:
111 WEST 57TH STREET ASSOCIATES, L.P.
By: JASIE, INC., General Partner
By: /s/ Joseph M. Jacobs
-------------------------
Name: Joseph M. Jacobs
Title: President
STEINWAY:
STEINWAY, INC.
By: /s/ Dennis M. Hanson
-------------------------
Name: Dennis M. Hanson
Title: V.P. and C.F.O.