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CONTRACT OF SALE – OFFICE, COMMERCIAL AND MULTI-FAMILY RESIDENTIAL
PREMISES. This form was originally prepared by the Committee on Real Property Law of the Association of the Bar of the City of New York. This form may have been altered by the user and any such alterations may not be apparent. To view or download the original unaltered text of this form and an introduction to this form, visit the Real Estate Forms site at the Reports/Publications/ Forms link at www.nycbar.org.
Contract of Sale – Office, Commercial and Multi-Family Residential Premises
Between
___________________________________________ (“Seller”)
and
___________________________________________ (“Purchaser”)
dated _____________
Premises:
Street Address: City or Town: County: State: New York
-i-
Table of Contents
Section 1. Sale of Premises and Acceptable Title.........................................................
Section 2. Purchase Price, Acceptable Funds, Existing Mortgages, Purchase Money Mortgage, Escrow of Downpayment and Foreign Persons............................................................................................
Section 3. The Closing..................................................................................................
Section 4. Representations and Warranties of Seller ....................................................
Section 5. “As Is” Condition, No Representations Not Expressly Set Out in Contract, Representations and Warranties of Purchaser....................................................................................................
Section 6. Seller’s Obligations as to Leases ...............................................................
Section 7. Responsibility for Violations .....................................................................
Section 8. Destruction, Damage or Condemnation.....................................................
Section 9. Covenants of Seller ....................................................................................
Section 10. Seller’s Closing Obligations ......................................................................
Section 11. Purchaser’s Closing Obligations................................................................
Section 12. Apportionments..........................................................................................
Section 13. Objections to Title, Failure of Seller or Purchaser to Perform and Vendee’s Lien .....................................................................................
Section 14. Broker ........................................................................................................
Section 15. Notices .......................................................................................................
Section 16. Limitations on Survival of Representations, Warranties, Covenants and other Obligations ...............................................................
Section 17. Due Diligence Period.................................................................................
Section 18. Miscellaneous Provisions ..........................................................................
SCHEDULES
Schedule A. DESCRIPTION OF PREMISES ............................................................ A-
Schedule B. PERMITTED EXCEPTIONS..................................................................B-
Schedule C. PURCHASE PRICE ................................................................................C-
Schedule D. MISCELLANEOUS ............................................................................... D-
Schedule E. RENT SCHEDULE .................................................................................E-
Schedule F. FORM OF ESTOPPEL LETTER............................................................ F-
Schedule G. INSURANCE POLICIES ....................................................................... G-
Contract of Sale -- Office, Commercial and Multi-Family Residential Premises
CONTRACT OF SALE (“Contract”) dated _______________ between ___________________________ (“Seller”) and _____________________________ (“Purchaser”).
Seller and Purchaser hereby covenant and agree as follows:
Section 1. Sale of Premises and Acceptable Title
§1.01. Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, at the price and upon the terms and conditions set forth in this contract: (a) the parcel of land more particularly described in Schedule A attached hereto (“Land”); (b) all buildings and improvements situated on the Land (collectively, “Building”); (c) all right, title and interest of Seller, if any, in and to the land lying in the bed of any street or highway in front of or adjoining the Land to the center line thereof and to any unpaid award for any taking by condemnation or any damage to the Land by reason of a change of grade of any street or highway; and (d) the appurtenances and all the estate and rights of Seller in and to the Land and Building (collectively, the “Premises”). For purposes of this contract, “appurtenances” shall include all right, title and interest of Seller, if any, in and to (i) streets, easements, rights-of-way and vehicle parking rights used in connection with the Premises; (ii) any strips or gores of land between the Land and abutting or adjacent properties; (iii) the leases, licenses and occupancy agreements for space in the Building, and all guarantees thereof, as shown on Schedule E attached hereto and any leases entered into by Seller between the date of this contract and the Closing (as hereinafter defined); (iv) the Service Contracts (as hereinafter defined); (v) plans, specifications, architectural and engineering drawings, prints, surveys, soil and substrata studies relating to the Premises in Seller’s possession, whether or not stored, managed or contained on computer software or hardware; (vi) all operating manuals and books, data and records regarding the Premises and its component systems in Seller’s possession; (vii) all licenses, permits, certificates of occupancy and other approvals issued by any state, federal or local authority relating to the use, maintenance or operation of the Premises or the fixtures, machinery or equipment included in this sale to the extent that they may be transferred or assigned; (viii) all warranties or guaranties, if any, applicable to the Premises, to the extent such warranties or guaranties are assignable; (ix) all tradenames, trademarks, servicemarks, logos, copyrights and good will relating to or used in connection with the operation of the Premises and (x) air rights and development rights. This sale also includes all trade fixtures and all equipment, machinery, materials, supplies and other personal property attached or appurtenant to the Building or located at and used in the operation or maintenance of the Land or Building to the extent same are owned by Seller or any affiliate of Seller (the “Personal Property”). The street address of the Premises is set forth on Schedule D attached hereto.
§1.02. Seller shall convey and Purchaser shall accept fee simple title to the Premises in accordance with the terms of this contract, subject only to: (a) the matters set forth in Schedule B attached hereto (collectively, “Permitted Exceptions”); and (b) such
other matters as the title insurer specified in Schedule D attached hereto (or if none is so specified, then any title insurer licensed to do business by the State of New York) shall be willing to omit as exceptions to coverage or to except with insurance against collection out of or enforcement against the Premises.
Section 2. Purchase Price, Acceptable Funds, Existing Mortgages, Purchase Money Mortgage, Escrow of Downpayment and Foreign Persons
§2.01. Purchaser shall pay Seller the purchase price (“Purchase Price”) set forth in Schedule C attached hereto, subject to the terms and conditions of this contract. Seller and Purchaser acknowledge that no portion of the Purchase Price is allocated to the Personal Property, if any, transferred pursuant to this contract.
§2.02. Except for the Downpayment (hereinafter defined), all monies payable under this contract, unless otherwise specified in this contract, shall be paid by (a) certified checks of Purchaser or any person making a loan to Purchaser drawn on any bank or trust company having a banking office in the City of New York and which is a member of the New York Clearing House Association or (b) official bank checks drawn by any such banking institution, except that uncertified checks of Purchaser payable to the order of Seller up to the amount of $2,500 shall be acceptable for sums payable to Seller at the Closing, or (c) with respect to the portion of the Purchase Price payable at the Closing, at Seller’s election, by wire transfer of immediately available federal funds to an account designated by Seller not less than three business days prior to the Closing.
§2.03. (a) If Schedule C provides for the acceptance of title by Purchaser subject to one or more existing mortgages (collectively, “Existing Mortgage(s)”), the amounts specified in Schedule C with reference thereto may be approximate and the following shall apply:
(i) If at the Closing the aggregate principal amount of the Existing Mortgage(s), as reduced by payments required thereunder prior to the Closing, is less than the aggregate amount of the Existing Mortgage(s) as specified in Schedule C, the difference shall be added to the monies payable by Purchaser at the Closing, unless otherwise expressly provided herein.
(ii) If any of the documents constituting the Existing Mortgage(s) or the note(s) secured thereby prohibits or restricts the conveyance of the Premises or any part thereof without the prior consent of the holder or holders thereof (“Mortgagee(s)”) or confers upon the Mortgagee(s) the right to accelerate payment of the indebtedness or to change the terms of the Existing Mortgage(s) if a conveyance is made without consent of the Mortgagee(s), Seller shall notify such Mortgagee(s) of the proposed conveyance to Purchaser within 10 days after execution and delivery of this contract, requesting the consent of such Mortgagee(s) thereto. Seller and Purchaser shall furnish the Mortgagee(s) with such information as may reasonably be required in connection with such request and shall otherwise cooperate with such Mortgagee(s) and with each other in an effort expeditiously to procure such consent, but neither shall be obligated to make any payment to obtain such consent. If such Mortgagee(s) shall fail or refuse to grant such consent in
on demand and without charge therefor, execute, acknowledge and deliver any agreement or agreements reasonably required by the mortgagor to confirm such subordination.
(c) The Purchase Money Mortgage shall contain the following additional provisions:
(i) “The mortgagor or any owner of the mortgaged premises shall have the right to prepay the entire unpaid indebtedness secured by this mortgage, together with accrued interest, but without penalty, at any time on or after [ insert the day following the last day of the fiscal year of the mortgagee in which the Closing occurs or, if a Prepayment Date is specified in Schedule D, the specified Prepayment Date ], on not less than 10 days’ written notice to the holder hereof.”
(ii) “Notwithstanding anything to the contrary contained herein, the obligation of the mortgagor for the payment of the indebtedness and for the performance of the terms, covenants and conditions contained herein and in the note secured hereby is limited solely to recourse against the property secured by this mortgage, and in no event shall the mortgagor or any principal of the mortgagor, disclosed or undisclosed, be personally liable for any breach of or default under the note or this mortgage or for any deficiency resulting from or through any proceedings to foreclose this mortgage, nor shall any deficiency judgment, money judgment or other personal judgment be sought or entered against the mortgagor or any principal of the mortgagor, disclosed or undisclosed, but the foregoing shall not adversely affect the lien of this mortgage or the mortgagee’s right of foreclosure. Notwithstanding the provisions of this subparagraph (ii), mortgagor shall be personally liable to mortgagee for losses due to:
(A) fraud or intentional or willful misrepresentation;
(B) mortgagor’s misapplication or misappropriation of rents or other income received by mortgagor after the occurrence of an event of default.
(C) mortgagor’s misapplication or misappropriation of tenant security deposits or rents collected more than (1) month in advance;
(D) the misapplication or the misappropriation of insurance proceeds or condemnation awards;
(E) mortgagor’s failure to pay real estate taxes, water charges or sewer rents (except to the extent that sums sufficient to pay such amounts have been deposited in escrow with mortgagee pursuant to the terms hereof) but only to the extent that the mortgaged premises generates sufficient income to pay the same when due;
(F) any act of intentional waste or arson by mortgagor, or any officer, director, member or general partner of mortgagor;
(G) subject to the rights of the holder of any superior mortgage, mortgagor’s failure following any event of default to deliver to mortgagee on demand all rents and other income and books and records relating to the mortgaged premises;
(H) damage to the mortgaged premises arising from the intentional misconduct or gross negligence of mortgagor, or any officer, director, member or general partner of mortgagor.”
(iii) “In addition to performing its obligations under Section 274-a of the Real Property Law, the mortgagee, if other than one of the institutions listed in Section 274-a, agrees that, within 10 days after written request by the mortgagor, but not more than twice during any period of 12 consecutive months, it will execute, acknowledge and deliver without charge a certificate of reduction in recordable form (a) certifying as to (1) the then unpaid principal balance of the indebtedness secured hereby, (2) the maturity date thereof, (3) the rate of interest, (4) the last date to which interest has been paid and (5) the amount of any escrow deposits then held by the mortgagee, and (b) stating, to the actual knowledge of the mortgagee, whether there are any alleged defaults hereunder and, if so, specifying the nature thereof.”
(iv) The additional provisions, if any, specified in a rider hereto.
§2.06. (a) All sums paid on account of the Purchase Price prior to the Closing (collectively, “Downpayment”) shall be paid by good check or checks drawn to the order of and delivered to Seller’s attorney or another escrow agent designated in writing by the parties (“Escrowee”). The Escrowee shall hold the proceeds thereof in escrow in a special bank account at _____________ located at _____________ (or as otherwise agreed in writing by Seller, Purchaser and Escrowee) until the Closing or sooner termination of this contract and shall pay over or apply such proceeds in accordance with the terms of this section. Escrowee shall hold such proceeds in an interest-bearing account, and such interest shall be paid to the same party entitled to the Downpayment, and the party receiving such interest shall pay any income taxes thereon. Escrowee shall not be responsible for any interest on the Downpayment except as is actually earned, or for the loss of any interest resulting from the withdrawal of the Downpayment prior to the date interest is posted thereon or for any loss caused by the failure, suspension, bankruptcy or dissolution of the institution in which the Downpayment is deposited. The tax identification numbers of the parties are set forth in Schedule D. Each of the parties, upon Escrowee’s request, shall promptly furnish to Escrowee a completed and executed Form W-9, together with such other information as Escrowee shall reasonably require. At the Closing, such proceeds and the interest thereon, if any, shall be paid by Escrowee to Seller. If for any reason the Closing does not occur and either party makes a written demand upon Escrowee for payment of such amount, Escrowee shall give written notice to the other party of such demand. If Escrowee does not receive a written objection from the other party to the proposed payment within 10 business days after the giving of such notice, Escrowee is hereby authorized to make such payment. If Escrowee does receive such written objection within such 10 day period or if for any other reason Escrowee in good faith shall elect not to make such payment, Escrowee shall continue to hold such amount until otherwise directed by written instructions from the parties to this contract or a final and non-appealable judgment of a court. However, Escrowee shall have the right at any time to deposit the escrowed proceeds and interest thereon, if any, with the clerk of the Supreme Court of the county in which the Premises is located. Escrowee shall give written notice of such deposit to Seller and Purchaser. Upon such deposit Escrowee shall be
Section 3. The Closing
§3.01. Except as otherwise provided in this contract, the closing of title pursuant to this contract (“Closing”) shall take place on the scheduled date and at the time of closing specified in Schedule D (the actual date of the Closing being herein referred to as “Closing Date”) at the place specified in Schedule D.
Section 4. Representations and Warranties of Seller
Seller represents and warrants to Purchaser as follow:
§4.01. Seller is the sole owner of the Premises and has not granted any option to purchase the Premises or any right of first refusal or right of first offer to purchase the Premises.
§4.02. If the Premises are encumbered by an Existing Mortgage(s), no written notice has been received from the Mortgagee(s) asserting that a default or breach exists thereunder which remains uncured and no such notice shall have been received and remain uncured on the Closing Date. If Schedule C provides for the acceptance of title by Purchaser subject to one or more Existing Mortgages, Seller represents and warrants that Seller has delivered to Purchaser true and complete copies of the Existing Mortgage(s) and the promissory notes secured thereby, and that same have not been modified or amended except as shown in such documents.
§4.03. The information concerning written leases, written licenses and written occupancy agreements (which together with all amendments and modifications thereof are collectively referred to as “Leases”) and any tenancies or occupancies in the Premises not arising out of the Leases (collectively, “Tenancies”; and each, individually, a “Tenancy”) set forth in Schedule E attached hereto (“Rent Schedule”) is accurate as of the date set forth therein or, if no date is set forth therein, as of the date hereof, and there are no Leases or Tenancies of any space in the Premises other than those set forth therein and any subleases or subtenancies. Except as otherwise set forth in the Rent Schedule or elsewhere in this contract:
(a) all of the Leases are in full force and effect;
(b) none of the Leases has been modified, amended or extended;
(c) no renewal or extension options or options for additional space have been granted to tenants, occupants or licensees;
(d) no tenant, occupant or licensee has an option to purchase the Premises or a right of first refusal or first offer with respect to a sale of the Premises;
(e) the rents and fees set forth are being collected on a current basis and there are no arrearages in excess of one month;
(f) no tenant, occupant or licensee is entitled to rental concessions or abatements for any period subsequent to the scheduled date of Closing, other than an abatement by reason of a casualty disclosed to Purchaser that occurred after the date of execution and delivery of this contract;
(g) Seller has not sent written notice to any tenant, occupant or licensee claiming that such tenant is in default, which default remains uncured;
(h) no action or proceeding instituted against Seller by any tenant, occupant or licensee of all or part of the Premises is presently pending in any court or other tribunal, except with respect to claims involving personal injury or property damage which are covered by insurance;
(i) there are no security deposits other than those set forth in the Rent Schedule;
(j) the Rent Schedule accurately sets out all security deposits held by Seller with respect to the Leases and Tenancies;
(k) true and complete copies of the Leases have been delivered to Purchaser or its counsel and initialed by representatives of Purchaser and Seller;
(l) the tenants, occupants and licensees under the Leases and Tenancies are in actual possession of the space demised;
(m) to Seller’s actual knowledge, Seller has performed all of the landlord’s obligations under the Leases and Tenancies;
(n) Seller has received no notice(s) of any default of the landlord under the Leases that remains pending;
(o) to Seller’s actual knowledge, no action or proceeding, voluntary or involuntary, is pending against any tenant, licensee or occupant under any bankruptcy or insolvency act; and
(p) no leasing commissions are due or owing with respect to any of the Leases or Tenancies and all leasing commissions have been paid in full with respect to all of the Leases and Tenancies, except to the extent any brokerage agreements may provide for payment of a commission in case of any renewal, extension or expansion of space.
If any Leases which have been exhibited to and initialed by Purchaser or its representative contain provisions that are inconsistent with the foregoing representations and warranties, such representations and warranties shall be deemed modified to the extent necessary to eliminate such inconsistency and to conform such representations and warranties to the provisions of the Leases.
§4.04. If the Premises or any part thereof are subject to the New York City Rent Stabilization Law, Seller is and on the Closing Date will be a member in good standing of
§4.08. The schedule of service, maintenance, supply and management contracts (“Service Contracts”) attached hereto as Exhibit I lists all such contracts affecting the Premises, and the information set forth therein is accurate as of the date set forth therein or, if no date is set forth therein, as of the date hereof.
§4.09. The copy of the certificate of occupancy for the Premises attached hereto as Schedule J is a true copy of the original and such certificate has not been amended or superseded, but Seller makes no representation as to compliance with any such certificate.
§4.10. (a) As of the date of this contract: The assessed valuation of the Land and Building and the real estate taxes set forth in Schedule D, if any, are the assessed valuation of the Premises and the real estate taxes payable with respect thereto for the fiscal year(s) indicated in such schedule (subject to any abatements that may become applicable after the date of this contract and any increases or changes in real estate taxes resulting from a retroactive change in the tax rate). Except as otherwise set forth in Schedule D, there are no tax abatements or exemptions affecting the Premises as of the date of this contract.
(b) There are no pending proceedings or appeals to correct or reduce the assessed valuation of the Premises.
§4.11. Except as otherwise set forth in a schedule attached hereto, if any, if the Premises are used for residential purposes, (i) each apartment contains a range and a refrigerator, and all of the ranges and refrigerators and all of the items of personal property (or replacements thereof) listed in such schedule, if any, are and on the Closing Date will be owned by Seller free of liens and encumbrances other than the lien(s) of the Existing Mortgage(s), if any, and (ii) all apartments have been painted within the last three years.
§4.12. The Personal Property, as of the Closing Date, is owned by Seller free of liens and encumbrances other than the lien(s) of the Existing Mortgage(s), if any.
§4.13. To Seller’s knowledge no incinerator, compactor, boiler or other burning equipment on the Premises is being operated in violation of applicable law. If copies of a certificate or certificates of operation therefor have been exhibited to and initialed by Purchaser or its representative, such copies are true copies of the originals.
§4.14. Except as otherwise set forth in Schedule D, to Seller’s knowledge, no assessment payable in annual installments, or any part thereof, has become a lien on the Premises.
§4.15. Seller is not a “foreign person” as defined in the Code Withholding Section.
§4.16. Seller is a ________________ that has been duly organized and is in good standing under the laws of the state of its formation.
§4.17. Seller has taken all necessary action to authorize the execution, delivery and performance of this contract and has the power and authority to execute, deliver and perform this contract and consummate the transaction contemplated hereby. The person
signing this contract on behalf of Seller is authorized to do so. Assuming this contract has been duly authorized, executed and delivered by each of the other party(ies) to this contract, this contract and all obligations of Seller hereunder are the legal, valid and binding obligations of Seller, enforceable in accordance with the terms of this contract, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
§4.18. The execution and delivery of this contract and the performance of its obligations hereunder by Seller will not conflict with any provision of any law or regulation to which Seller is subject or any agreement or instrument to which Seller is a party or by which it is bound or any order or decree applicable to Seller or result in the creation or imposition of any lien on any of Seller’s assets or property which would materially and adversely affect the ability of Seller to carry out the terms of this contract. Seller has obtained any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery or performance by Seller of this contract.
§4.19. The Premises constitute one tax lot.
§4.20. Seller has not received written notice of and has no knowledge of any action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Seller with respect to the Premises which if adversely determined could have a material adverse effect on the Premises or interfere with the consummation of the transaction contemplated by this contract.
§4.21. Seller is not a, and is not acting directly or indirectly for or on behalf of any, person, group, entity or nation named by any Executive Order of the United States Treasury Department as a terrorist, “Specifically Designated National and Blocked Persons,” or other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control and Seller is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly, on behalf of any such person, group, entity, or nation.
§4.22. To Seller’s knowledge, there are no underground fuel storage tanks at the Premises.
§4.23. Seller has received no notice of and has no knowledge of any actual or proposed taking in condemnation of all or any part of the Premises.
§4.24. Seller has been known by no other name for the past ten (10) years except: __________.
§4.25. The representations and warranties of Seller set forth in §§ 4.03, 4.04, 4.05, 4.07, 4.08, 4.10(b), 4.11, 4.12, 4.13, 4.18, 4.20 and 4.21 as restated as of the Closing shall survive the Closing for a period of [ one year ] (the “Survival Period”). None of
(b) Purchaser has taken all necessary action to authorize the execution, delivery and performance of this contract and has the power and authority to execute, deliver and perform this contract and the transaction contemplated hereby. The person signing this contract on behalf of Purchaser is authorized to do so. Assuming this contract has been duly authorized, executed and delivered by each of the other party(ies) to this contract, this contract and all obligations of Purchaser hereunder are the legal, valid and binding obligations of Purchaser, enforceable in accordance with the terms of this contract, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(c) The execution and delivery of this contract and of any note and Purchase Money Mortgage required hereunder and the performance of its obligations hereunder by Purchaser will not conflict with any provision of any law or regulation to which Purchaser is subject or any agreement or instrument to which Purchaser is a party or by which it is bound or any order or decree applicable to Purchaser, and will not result in the creation or imposition of any lien on any of Purchaser’s assets or property which would materially and adversely affect the ability of Purchaser to carry out the terms of this contract. Purchaser has obtained any consent, approval, authorization or order of any court or governmental agency or body required for the execution, delivery or performance by Purchaser of this contract.
(d) Purchaser is a _______________ that has been duly organized and is in good standing under the laws of the state of its formation.
(e) To Purchaser’s knowledge, there is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Purchaser which, if adversely determined, could individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this contract.
(f) Purchaser is not a, and is not acting directly or indirectly for or on behalf of any, person, group, entity or nation named by Executive Order of the United States Treasury Department as a terrorist, “Specifically Designated National and Blocked Person,” or other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control and Purchaser is not engaged in this transaction, directly or indirectly, on behalf of, or instigating or facilitating this transaction, directly or indirectly, on behalf of any such person, group, entity or nation.
(g) The representations and warranties of Purchaser set forth in this Section 5 are made as of the date of this contract and are restated as of the Closing and shall survive the Closing for a period of [ one year ], except that the representation in §5.02(d) shall not survive the Closing.
For purposes of this §5.02, the phrase “to Purchaser’s knowledge” shall mean the actual knowledge of ______________ without any special investigation.
Section 6. Seller’s Obligations as to Leases
§6.01. Unless otherwise provided in a schedule attached to this contract, Seller shall not, between the date of this contract and the Closing, without Purchaser’s prior written consent, which consent shall not be unreasonably withheld or delayed: (a) amend, renew or extend any Lease in any respect, except to the extent required by law or by the express terms of such Lease; (b) grant a written lease to any person or entity occupying space without a Lease (except as required by law); (c) terminate any lease or Tenancy except by reason of a default by the tenant thereunder; (d) consent to the assignment of a Lease or subletting by any tenant except as required by the terms of the applicable Lease or by law or (e) permit anyone to use or occupy any space pursuant to an oral agreement except pursuant to the Tenancies. Seller shall not, without Purchaser’s consent (which may be granted or denied at Purchaser’s discretion) enter into any lease or other occupancy agreement with any person or entity directly or indirectly affiliated with or related to Seller, Seller’s managing agent, or any principal of Seller or Seller’s managing agent (a “Related Lease Transaction”).
§6.02. Unless otherwise provided in a schedule attached to this contract, Seller shall not, between the date of this contract and the Closing, permit the occupancy of, or enter into any new lease, occupancy agreement or license agreement for, space in the Building which is presently vacant or which may hereafter become vacant, without first giving Purchaser written notice of the identity of the proposed tenant, occupant or licensee, together with (a) either a copy of the proposed lease, occupancy agreement or license agreement, or a summary of the terms thereof in reasonable detail and (b) a statement of the amount of the brokerage commission, if any, payable in connection therewith and the terms of payment thereof.
If (y) Purchaser objects to such proposed lease, occupancy agreement or license agreement and notifies Seller of its objection within seven business days after receipt of Seller’s notice, or (z) such lease, occupancy agreement or license agreement constitutes a Related Transaction, Seller shall not enter into the proposed lease, occupancy agreement or license agreement. If clause (y) applies and the prospective tenant, licensee or occupant would have commenced paying rent or a license fee prior to the Closing Date if Purchaser had not objected, Purchaser shall pay to Seller at the Closing, in the manner specified in §2.02, (A) the rent, additional rent and other charges that would have been payable under the proposed lease, occupancy agreement or license agreement from the date on which the tenant’s, occupant’s or licensee’s obligation to pay rent would have commenced if Purchaser had not so objected until the Closing Date, less (B) the Reletting Expenses (hereinafter defined), as amortized over the period commencing on the proposed rent commencement date of such lease or agreement and ending on the proposed expiration date of such lease or agreement and apportioned as of the Closing Date. The “Reletting Expenses” shall equal the amount of the brokerage commission, any construction allowance or other monetary payment to be made to the proposed tenant, occupant or licensee, and the reasonable cost of decoration or other work required to be performed by the landlord under the terms of the proposed lease, occupancy agreement or license agreement to prepare the premises for the tenant’s, occupant’s or licensee’s occupancy.
Purchaser pursuant to §10.01, (b) claims made against Purchaser pursuant to §7-107 of the New York General Obligations Law (“GOL”) with respect to funds for which Seller was not liable, and (c) claims made pursuant to §7-108 of the GOL by tenants to whom Purchaser failed to give the written notice specified in §7-108(2)(c) of the GOL within thirty days after the Closing Date. The foregoing indemnity and agreement shall survive the Closing and shall be in lieu of any escrow permitted by §7-108(d) of the GOL, and Purchaser hereby waives any right it may have to require any such escrow.
Section 7. Responsibility for Violations
§7.01. Except as provided in §7.02 and §7.03, all notes or notices of violations of law or governmental ordinances, orders or requirements which were noted or issued prior to the date of this contract by any governmental department, agency or bureau having jurisdiction as to conditions affecting the Premises and all liens which have attached to the Premises prior to the Closing pursuant to the Administrative Code of the City of New York, if applicable, shall be removed or complied with by Seller and Seller shall pay any fines or penalties imposed by reason of any such violations. If such removal or compliance or payment of fines or penalties, as applicable, has not been completed prior to the Closing, Seller shall pay to Purchaser at the Closing the reasonably estimated unpaid cost, including the reasonable fees of Purchaser’s attorney, architect and expediter, to effect or complete such removal or compliance and any penalties imposed for non-compliance, and Purchaser shall be required to accept title to the Premises subject thereto, except that Purchaser shall not be required to accept such title and may terminate this contract if (a) Purchaser’s institutional lender reasonably refuses to provide financing by reason thereof or (b) the Building is a multiple dwelling and either (i) such violation is rent impairing and causes rent to be unrecoverable under Section 302-a of the Multiple Dwelling Law or (ii) a proceeding has been validly commenced by tenants and is pending with respect to such violation for a judgment directing deposit and use of rents under Article 7-A of the Real Property Actions and Proceedings Law. All such notes or notices of violations noted or issued on or after the date of this contract shall be the sole responsibility of Purchaser.
§7.02. If the reasonably estimated aggregate cost to remove or comply with any violations or liens which Seller is required to remove or comply with pursuant to the provisions of §7.01 shall exceed the Maximum Amount specified in Schedule D, Seller shall have the right to cancel this contract, unless Purchaser elects to accept title to the Premises subject to all such violations or liens, in which event Purchaser shall be entitled to a credit of an amount equal to the Maximum Amount against the monies payable at the Closing.
§7.03. Seller’s failure to remove or fully comply with any violations which a tenant unaffiliated with Seller is required to remove or comply with pursuant to the terms of its lease by reason of such tenant’s use or occupancy shall not be an objection to title or a breach of Seller’s obligations under this Section 7. Purchaser shall accept the Premises subject to all such violations without any liability of Seller with respect thereto or any abatement of or credit against the Purchase Price, except that if Purchaser’s institutional lender reasonably refuses to provide financing by reason of a violation described in this
Section, Purchaser shall not be required to accept the Premises subject thereto and Purchaser shall have the right to terminate this contract.
§7.04. If this contract is terminated by Purchaser or Seller pursuant to this Section 7, such termination shall be subject to the provisions of §13.07.
§7.05. If required, Seller, upon written request by Purchaser, shall promptly furnish to Purchaser written authorizations to make any necessary searches for the purposes of determining whether notes or notices of violations have been noted or issued with respect to the Premises or liens have attached thereto.
Section 8. Destruction, Damage or Condemnation
§8.01. Damage by Casualty.
(a) Damage Not in Excess of [$_____________]. If, prior to the Closing, there shall occur damage to the Premises caused by fire or other casualty which would cost less than [$____________] (the “Casualty Threshold”) to repair, as reasonably determined by an engineer selected by Seller and reasonably satisfactory to Purchaser, and such fire or other casualty does not adversely affect the lobby, building-wide systems, or common areas and the continued operation of the balance of the Premises not damaged and does not give rise to rent abatement or termination rights of lessees under leases covering more than ___% (the “Percentage”) of the rentable square feet of the Building, then Purchaser shall not have the right to terminate this contract by reason thereof, but Seller shall assign to Purchaser at the Closing, by written instrument in form and substance reasonably satisfactory to Purchaser, all of the insurance proceeds payable on account of any such fire or casualty, shall deliver to Purchaser any such proceeds actually paid to Seller, and shall afford to Purchaser at Closing a credit against the balance of the Purchase Price in an amount equal to any deductible. If the limit of Seller=s insurance policy with respect to a casualty at the Premises is less than the cost of restoration, then Buyer shall be entitled to a further reduction in the Purchase Price in an amount equal to the difference between the cost of restoration and the limit of such insurance policy (less the deductible). The proceeds of rent interruption insurance, if any, shall on the Closing Date be appropriately apportioned between Purchaser and Seller.
(b) Damage in Excess of [$______________]. If prior to the Closing there shall occur damage to the Premises caused by fire or other casualty which would cost an amount equal to the Casualty Threshold or more to repair, as reasonably determined by an engineer selected by Seller and reasonably satisfactory to Purchaser, or the damage affects the lobby, building-wide systems, or common areas or the continued operation of the balance of the Premises not damaged or gives rise to rent abatement or termination rights of lessees under leases covering more than the Percentage of the rentable square feet of the Building, then Purchaser may elect to terminate this contract by notice given to Seller and Escrowee within ten (10) days after Seller has given Purchaser notice that such damage occurred, or at the Closing, whichever is earlier, upon which termination, Escrowee shall deliver the Downpayment to Purchaser, this contract shall thereupon be null and void and neither party hereto shall thereupon have any further obligation to the other, except for
