1026-00004 · Client in this engagement is Briarwood Family Office LLC · Closing

pre-closing-letter-to-sellers-counsel.docx DOCUMENT Real Estate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

280 Park Avenue New York, New York 10017

Telephone: (212) 554-8000 Facsimile: (212) 554-8001

Email: gnakamura@calderwoodharkness.com

May 26, 2023

VIA EMAIL AND FEDERAL EXPRESS

David Ochoa, Esq. Partner, Real Estate Reedmore & Pratt LLP 575 Madison Avenue, 20th Floor New York, New York 10022

Re: Closing of Sale of The Linden at Gramercy Park, 245 East 21st Street, New York, New York 10010 (Block 899, Lot 42, Borough of Manhattan)

Seller: Linden Gramercy Holdings LLC

Purchaser: Gramercy Linden PropCo LLC

Purchase and Sale Agreement dated March 15, 2023 (the "PSA")

Calderwood & Harkness LLP Matter No. 1026-00004

Dear David:

1. Introduction and Purpose of Letter

As you know, this firm represents Gramercy Linden PropCo LLC (the "Purchaser"), a wholly owned subsidiary of Gramercy Linden JV LLC, in connection with the acquisition of The Linden at Gramercy Park, the mixed-use residential and retail property located at 245 East 21st Street, New York, New York 10010 (Block 899, Lot 42, Borough of Manhattan) (the "Property"), from Linden Gramercy Holdings LLC (the "Seller"), pursuant to the terms and conditions of that certain Purchase and Sale Agreement dated March 15, 2023 (as may be amended or modified from time to time, the "PSA"). The purchase price for the Property, as set forth in the PSA, is Forty Million Dollars ($40,000,000.00). Unless otherwise defined herein, capitalized terms used in this letter shall have the meanings ascribed to them in the PSA.

We are writing in advance of the anticipated closing of the transaction contemplated by the PSA in order to address several matters that require prompt attention and coordination between our respective clients and their advisors. Specifically, the purpose of this letter is to:

(a) confirm the anticipated closing date and closing logistics;

(b) confirm the requirement for a bring-down of Seller's representations and warranties as a condition precedent to Purchaser's obligation to close;

(c) identify outstanding pre-closing deliverables that remain to be delivered by Seller and request their timely completion;

(d) set forth proposed closing mechanics, including escrow arrangements and wire transfer instructions; and

(e) confirm the parties' respective responsibilities with respect to prorations, adjustments, and transfer tax obligations.

As you are aware, the target closing date under the PSA was originally May 30, 2023. However, the parties have mutually agreed to extend the closing date to June 5, 2023 in order to accommodate final lender requirements from Pinnacle Fidelity Bank, N.A. ("Lender"), which is providing the senior acquisition financing for the transaction. We understand that your client has consented to this extension, and we appreciate Seller's cooperation in this regard. We ask that you confirm this understanding at your earliest convenience if you have not already done so in writing.

We have organized this letter into several sections for ease of reference and to facilitate your review with your client. We respectfully request that you address each item identified herein and provide us with a written response no later than May 31, 2023, as further described in Section 9 below.

2. Bring-Down of Seller's Representations and Warranties

2.1 General Bring-Down Requirement

Pursuant to Section 9.2(a) of the PSA, as a condition precedent to Purchaser's obligation to consummate the closing of the transaction, Seller is required to deliver to Purchaser at the closing a certificate (the "Bring-Down Certificate") executed by a duly authorized representative of Seller, confirming that all of the representations and warranties made by Seller in Article VI of the PSA remain true, correct, and complete in all material respects as of the closing date, with the same force and effect as if such representations and warranties had been made on and as of the closing date. This bring-down requirement applies to all of Seller's representations and warranties, except to the extent that any such representation or warranty expressly relates to an earlier specified date, in which case such representation or warranty shall be true, correct, and complete in all material respects as of such earlier date.

The Bring-Down Certificate is a fundamental closing deliverable, and Purchaser's obligation to close is expressly conditioned upon the receipt of a satisfactory Bring-Down Certificate at or prior to the closing. We therefore ask that you and your client give careful attention to this requirement and promptly advise us of any facts, circumstances, or developments that may affect the accuracy of any of Seller's representations and warranties as of the anticipated closing date.

2.2 Specific Representations to Be Brought Down

Without limiting the generality of the foregoing, we specifically request that Seller confirm the continuing truth, accuracy, and completeness of each of the following representations and warranties set forth in the PSA:

(i) Authority and Due Organization. Seller has represented and warranted that Linden Gramercy Holdings LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of New York, and that Seller has the full right, power, and authority to execute and deliver the PSA and all documents required to be executed and delivered by Seller at the closing, and to consummate the transactions contemplated thereby. Additionally, Seller has represented that Marcus Steinfeld, in his capacity as Managing Member of Linden Gramercy Holdings LLC, has the requisite authority to execute and deliver the closing documents on behalf of Seller without the need for further consent or approval from any other member, manager, or third party. We request confirmation that these representations remain accurate as of the closing date.

(ii) Title to the Property. Seller has represented and warranted that Seller holds good and marketable fee simple title to the Property, free and clear of all liens, mortgages, pledges, security interests, encumbrances, easements, restrictions, and other title exceptions, other than the Permitted Exceptions specifically enumerated in Schedule B of the PSA. We request confirmation that no additional liens, encumbrances, or exceptions to title have arisen or been created since the date of the PSA, and that title to the Property remains as represented therein.

(iii) No Litigation or Proceedings. Seller has represented and warranted that there are no pending or, to Seller's knowledge, threatened actions, suits, litigation, arbitrations, condemnation proceedings, or governmental proceedings of any kind affecting the Property or Seller's ability to consummate the transactions contemplated by the PSA. We request confirmation that this representation remains accurate and that no such actions, proceedings, or threats thereof have arisen since the date of the PSA.

(iv) No Material Defaults Under Leases, Contracts, or Agreements. Seller has represented and warranted that, as of the date of the PSA, there are no material defaults by Seller or, to Seller's knowledge, by any tenant or counterparty under any lease, contract, or agreement affecting the Property. We request confirmation that no material defaults have occurred or are continuing as of the closing date, and that no notice of default has been given or received by Seller since the date of the PSA.

(v) Operating Statements, Rent Rolls, and Financial Condition. Seller has represented and warranted that the operating statements and rent rolls previously delivered to Purchaser in connection with Purchaser's due diligence investigation of the Property, including without limitation the rent roll dated January 2023 reflecting an occupancy rate of approximately 96.2% across 212 residential units and 2 retail units (comprising approximately 4,800 square feet of ground-floor retail space), are true, correct, and complete in all material respects. We request confirmation that these operating statements and rent rolls remain accurate in all material respects as of the closing date, and that there has been no material adverse change in the occupancy, rental income, financial condition, or physical condition of the Property since the date of the PSA. Please advise if any residential units have been vacated since the date of the PSA or if any retail tenant has provided notice of intent to vacate, terminate, or otherwise modify its lease obligations.

(vi) Environmental Conditions. Seller has represented and warranted that, to Seller's knowledge, there are no undisclosed environmental conditions affecting the Property that would give rise to any liability or obligation under applicable environmental laws. This representation was made consistent with the findings of the Phase I Environmental Site Assessment report no. REC-2023-0287, prepared by Ridgecrest Environmental Consultants LLC under the direction of Dr. Karen Ishikawa, which identified no recognized environmental conditions ("RECs"), controlled recognized environmental conditions, or historical recognized environmental conditions at the Property. We request confirmation that no environmental conditions have arisen, been discovered, or come to Seller's attention since the date of the PSA that would be inconsistent with the Phase I ESA findings or that would otherwise constitute an environmental liability affecting the Property.

(vii) Compliance with Laws. Seller has represented and warranted that the Property and its use and operation are in compliance with all applicable federal, state, and local laws, rules, regulations, orders, and ordinances, including without limitation all applicable zoning laws, building codes, fire codes, and health and safety regulations. We request confirmation that no violation notices, orders, or citations have been issued with respect to the Property since the date of the PSA, and that Seller has not received notice of any pending or contemplated enforcement action affecting the Property.

(viii) No Employees; No Collective Bargaining Agreements. Seller has represented and warranted that no employees of Seller are located at or assigned to the Property, and that Seller is not a party to any collective bargaining agreement or union contract with respect to the operation or maintenance of the Property. We request confirmation that this remains the case as of the closing date.

(ix) No Bankruptcy or Insolvency Proceedings. Seller has represented and warranted that no petition in bankruptcy, proceeding for reorganization, arrangement for the benefit of creditors, or receivership proceeding has been filed by, against, or with respect to Seller, and that no such proceeding is pending, contemplated, or threatened. We request confirmation that this representation remains accurate as of the closing date.

The foregoing list is intended to highlight certain key representations and warranties but is not intended to be exhaustive. Seller's Bring-Down Certificate must address all representations and warranties set forth in Article VI of the PSA, and we reserve Purchaser's right to require confirmation of the accuracy of any and all such representations and warranties at the closing.

2.3 Form of Bring-Down Certificate

We respectfully request that Seller's counsel prepare and circulate a draft of the Bring-Down Certificate for Purchaser's review and comment no later than May 31, 2023, which is at least five (5) business days before the anticipated closing date of June 5, 2023. We believe that early circulation of the draft certificate will allow the parties sufficient time to review and negotiate any necessary revisions, thereby avoiding delays at the closing itself.

The Bring-Down Certificate should be in a form reasonably acceptable to Purchaser and should be executed by Marcus Steinfeld in his capacity as Managing Member of Linden Gramercy Holdings LLC. If Seller anticipates updating, qualifying, or modifying any of its representations and warranties in the Bring-Down Certificate, we ask that you notify us immediately so that Purchaser can evaluate any such changes and determine whether the conditions precedent to closing have been satisfied.

3. Outstanding Pre-Closing Deliverables from Seller

We have been monitoring the status of Seller's pre-closing deliverables under the PSA and wish to bring to your attention several items that remain outstanding as of the date of this letter. Timely completion and delivery of these items is essential to ensuring that the closing can proceed as scheduled on June 5, 2023.

3.1 Estoppel Certificates — Retail Tenants

Pursuant to Section 7.3(b) of the PSA, Seller is required to deliver to Purchaser, at or prior to the closing, tenant estoppel certificates executed by each retail tenant occupying space at the Property. As you are aware, the Property contains two (2) ground-floor retail units comprising approximately 4,800 square feet in the aggregate.

As of the date of this letter, Purchaser has not received executed estoppel certificates from either of the two retail tenants. This is a matter of significant concern for both Purchaser and Lender. We request that Seller use commercially reasonable efforts to cause both retail tenants to execute and deliver estoppel certificates in the form attached as Exhibit B to the PSA, or in such other form as is reasonably acceptable to Purchaser, no later than May 31, 2023 — five (5) business days before the anticipated closing date.

We note that Pinnacle Fidelity Bank, N.A. has confirmed, through its Vice President of Commercial Real Estate Lending, Sandra Kim, that delivery of estoppel certificates from all commercial tenants at the Property is a condition precedent to the Lender's funding of the senior loan under Loan No. PFB-CRE-2023-05741. Failure to obtain executed retail tenant estoppel certificates in a timely manner could jeopardize the Lender's ability to fund the loan and, consequently, Purchaser's ability to close on the scheduled date. We therefore urge your client to give this item the highest priority.

3.2 Estoppel Certificates — Residential Tenants

Section 7.3(a) of the PSA requires Seller to deliver to Purchaser tenant estoppel certificates from tenants occupying not less than eighty percent (80%) of the leased residential units at the Property. We acknowledge receipt of a number of residential tenant estoppel certificates to date, and we are in the process of reviewing and tabulating the responses received. We request that Seller provide us with a current accounting of the residential estoppel certificates that have been executed and returned, and identify any shortfall relative to the eighty percent (80%) threshold. If additional estoppel certificates are needed to satisfy this requirement, we ask that Seller take prompt action to obtain the requisite number of executed certificates before the closing date.

Please forward any additional residential estoppel certificates received by Seller or Seller's property manager to our attention as soon as they become available.

3.3 Seller's FIRPTA Certificate

Pursuant to Section 9.3(d) of the PSA, Seller is required to deliver to Purchaser at the closing a certificate of non-foreign status in accordance with Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulation § 1.1445-2(b)(2). The certificate must state that Linden Gramercy Holdings LLC (Employer Identification Number: 20-6438172) is not a "foreign person" as that term is defined in Section 1445(f)(3) of the Code, and must include such additional information as is required by applicable Treasury Regulations, including Seller's name, address, and taxpayer identification number.

We request that Seller deliver an executed FIRPTA affidavit and certificate of non-foreign status to Purchaser's counsel at or prior to the closing. As you are undoubtedly aware, in the absence of delivery of a qualifying certificate of non-foreign status, Purchaser will be required under Section 1445 of the Code to withhold and remit to the Internal Revenue Service a portion of the purchase price equal to fifteen percent (15%) of the amount realized on the disposition, which would result in a withholding of approximately $6,000,000. We trust that this will not be necessary, but we raise the issue to ensure that the certificate is prepared and executed in a timely manner.

3.4 Transfer Tax Returns

The transfer of the Property will give rise to the following transfer tax obligations:

(a) New York City Real Property Transfer Tax (NYC RPTT). The estimated NYC RPTT is One Million Fifty Thousand Dollars ($1,050,000.00), calculated at the rate of 2.625% of the $40,000,000.00 purchase price (the applicable rate for conveyances of real property in New York City where the consideration exceeds $500,000 and the property is not a one-, two-, or three-family dwelling). Pursuant to Section 10.4(a) of the PSA, the NYC RPTT is the responsibility of and shall be paid by Seller, which is customary for commercial real estate transactions in New York City.

(b) New York State Real Estate Transfer Tax. The estimated New York State Real Estate Transfer Tax is One Hundred Sixty Thousand Dollars ($160,000.00), calculated at the rate of $2.00 per $500.00 of consideration (or fractional part thereof), applied to the $40,000,000.00 purchase price. Pursuant to Section 10.4(b) of the PSA, the New York State Real Estate Transfer Tax is the responsibility of and shall be paid by Seller.

(c) Additional Tax on Transfers of Real Property (the "Mansion Tax"). The estimated Mansion Tax is One Hundred Fifty Thousand Dollars ($150,000.00), calculated at the rate of 0.375% of the $40,000,000.00 purchase price, which is the applicable rate for transfers where the consideration is at least $25,000,000 but less than $50,000,000. Pursuant to Section 10.4(c) of the PSA, the Mansion Tax is the responsibility of and shall be paid by Purchaser.

We request that Seller's counsel prepare and circulate drafts of the applicable transfer tax returns, including the New York City Real Property Transfer Tax Return (NYC RPT Return) and the New York State Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax (Form TP-584), for joint review, comment, and execution at or prior to the closing. We note that all transfer tax returns must be filed with the New York City Register and/or the Office of the City Register, New York County, at the time of recording of the deed, and we ask that the returns be finalized no later than two (2) business days before the closing date to permit timely review.

3.5 Seller's Organizational and Authority Documents

In order to satisfy the requirements of both the PSA and the title company, Seller is required to deliver the following organizational and authority documents at or prior to the closing:

(a) A certificate of good standing for Linden Gramercy Holdings LLC issued by the New York State Department of State, Division of Corporations, dated within thirty (30) days of the closing date;

(b) A certified copy of the Operating Agreement of Linden Gramercy Holdings LLC, or such relevant portions thereof as evidence the authority of Marcus Steinfeld, as Managing Member, to execute and deliver the closing documents on behalf of Seller, together with any amendments or modifications thereto; and

(c) Resolutions or consents of the members of Linden Gramercy Holdings LLC expressly authorizing the sale, transfer, and conveyance of the Property to Purchaser in accordance with the terms of the PSA, and authorizing Marcus Steinfeld to execute and deliver all closing documents on behalf of Seller.

We request that these documents be delivered to our office and to Archer & Towne Title Company no later than June 1, 2023, in order to allow the title company sufficient time to review and approve such documents prior to the closing.

3.6 Additional Seller Deliverables

In addition to the items specifically addressed above, Seller is required to deliver the following documents and items at the closing. We request that Seller's counsel prepare and circulate drafts of the following for Purchaser's review and comment at the earliest practicable date:

(a) Bargain and Sale Deed. An executed bargain and sale deed with covenants against grantor's acts, in proper statutory form for recording in the Office of the City Register, New York County, conveying fee simple title to the Property to Gramercy Linden PropCo LLC, subject only to the Permitted Exceptions.

(b) Bill of Sale. A bill of sale transferring all personal property, fixtures, equipment, and tangible assets located at the Property and owned by Seller, to the extent included in the sale under the PSA.

(c) Assignment and Assumption of Leases. An assignment and assumption agreement covering all residential and retail leases in effect at the Property as of the closing date, pursuant to which Seller assigns its landlord interest in and to such leases to Purchaser, and Purchaser assumes Seller's obligations thereunder arising from and after the closing date.

(d) Assignment and Assumption of Contracts. An assignment and assumption agreement covering all service contracts and other agreements affecting the Property that are to be assumed by Purchaser at the closing, as identified in the PSA and the schedules thereto.

(e) Seller's Title Affidavit. An affidavit of title executed by Marcus Steinfeld, as Managing Member of Linden Gramercy Holdings LLC, in the form required by Archer & Towne Title Company (referencing title commitment no. AT-2023-MN-0041872, Philip Moreno, Title Officer), to permit the title company to remove the standard printed exceptions from the owner's title policy, including without limitation exceptions for parties in possession other than tenants under recorded leases, mechanic's liens, and unpaid taxes and assessments.

(f) Updated Rent Roll. An updated rent roll certified by Seller as true, correct, and complete, dated as of a date no earlier than five (5) business days before the closing date (i.e., no earlier than May 29, 2023), reflecting the current occupancy, rental rates, lease terms, and arrearages for all residential and retail units at the Property.

(g) Tenant Notification Letters. Letters addressed to each residential and retail tenant at the Property, executed by Seller, advising such tenants of the change in ownership of the Property and directing future rent payments and correspondence to Purchaser or its designated property manager, Summit Property Group LLC (Attention: Diana Castillo, Senior Vice President, Property Management, 315 West 36th Street, 4th Floor, New York, New York 10018). We are enclosing herewith a proposed form of tenant notification letter (Enclosure 5) for Seller's review and comment.

(h) Keys, Access Cards, Codes, and Building Records. All keys, access cards, security codes, building records, plans, specifications, warranties, guarantees, permits, licenses, and certificates of occupancy in Seller's possession or control relating to the Property.

We ask that you provide us with a comprehensive status update on each of the foregoing deliverables at your earliest convenience, and in any event no later than May 31, 2023.

4. Proposed Closing Mechanics

4.1 Closing Date and Location

The anticipated closing date is June 5, 2023. The closing will be conducted via escrow through Archer & Towne Title Company, located at 60 East 42nd Street, Suite 1840, New York, New York 10165 (Attention: Philip Moreno, Title Officer; telephone: (212) 867-4500; email: pmoreno@archertowne.com). We anticipate that all closing documents and funds will be submitted into escrow in advance of the closing date, and that the closing itself will be effected through the release of documents and disbursement of funds by the escrow agent upon receipt of mutual closing instructions from the parties' respective counsel.

Unless the parties otherwise agree, no in-person attendance at the offices of the title company or escrow agent will be required. We ask, however, that both parties and their respective counsel be available by telephone and email throughout the closing day to address any issues that may arise during the closing process and to provide timely authorization for the release of escrow.

4.2 Escrow Arrangements

Archer & Towne Title Company will serve as escrow agent for the closing. All closing documents to be executed and delivered by the parties, together with all closing funds, will be deposited into escrow in accordance with the terms of a closing escrow agreement to be prepared and circulated by Calderwood & Harkness LLP. We anticipate circulating a draft of the closing escrow agreement under separate cover within the next several business days, and we will provide a copy to your office as well as to the title company.

The escrow agent will hold all documents and funds in escrow pending receipt of mutual written closing instructions from both Purchaser's counsel (Calderwood & Harkness LLP) and Seller's counsel (Reedmore & Pratt LLP). The parties' respective counsel will provide closing instructions only after confirming that all conditions precedent to closing under the PSA have been satisfied (or waived, as applicable).

Upon confirmation that all conditions have been satisfied and receipt of mutual closing instructions, the escrow agent will:

(a) cause the bargain and sale deed and the mortgage and security agreement in favor of Pinnacle Fidelity Bank, N.A. to be recorded with the Office of the City Register, New York County, together with all required transfer tax returns and ancillary instruments;

(b) disburse all closing funds in accordance with the approved closing settlement statement, including payment of Seller's net sale proceeds, transfer taxes, title insurance premiums, recording fees, and other closing costs; and

(c) issue the owner's title insurance policy in the amount of Forty Million Dollars ($40,000,000.00) in favor of Gramercy Linden PropCo LLC and the loan title insurance policy in the amount of Twenty-Six Million Dollars ($26,000,000.00) in favor of Pinnacle Fidelity Bank, N.A., in each case subject only to the Permitted Exceptions and such other matters as are approved by Purchaser and Lender.

4.3 Earnest Money Deposit Credit

The PSA provides for an earnest money deposit in the amount of Two Million Dollars ($2,000,000.00), representing five percent (5%) of the $40,000,000.00 purchase price. This deposit was delivered to and has been held in escrow by Archer & Towne Title Company since the execution of the PSA on March 15, 2023. The deposit became non-refundable upon the expiration of the due diligence period on April 14, 2023, subject to the terms and conditions of the PSA.

At the closing, the earnest money deposit in the amount of $2,000,000.00, together with any interest earned thereon during the escrow period, will be credited against the purchase price and released from escrow to Seller (or applied to the settlement as reflected in the closing settlement statement). We ask that the title company provide a statement of interest accrued on the deposit prior to the closing date for inclusion in the settlement calculations.

4.4 Sources of Funds — Wire Transfers

The balance of the purchase price, after credit for the earnest money deposit, will be funded from the following sources:

(a) Senior Loan Proceeds. Pinnacle Fidelity Bank, N.A. will fund the senior acquisition loan in the principal amount of Twenty-Six Million Dollars ($26,000,000.00) pursuant to Loan No. PFB-CRE-2023-05741. The loan proceeds will be net of the origination fee of One Hundred Ninety-Five Thousand Dollars ($195,000.00) (calculated at 0.75% of the loan amount), yielding net loan proceeds of approximately Twenty-Five Million Eight Hundred Five Thousand Dollars ($25,805,000.00) to be wired directly to the escrow account held by Archer & Towne Title Company.

(b) Equity Contributions. The members of Gramercy Linden JV LLC will fund equity contributions in the aggregate amount of Fourteen Million Dollars ($14,000,000.00), allocated as follows among the members:

• Briarwood Family Office LLC: $7,000,000.00

• Cedarpoint Capital Partners LLC: $4,200,000.00

• Halcyon Ridge Investments LP: $2,800,000.00

These equity contributions will be wired to the escrow account held by Archer & Towne Title Company.

(c) Earnest Money Deposit Credit. The $2,000,000.00 earnest money deposit already held by Archer & Towne Title Company will be credited against the purchase price, as described in Section 4.3 above.

The aggregate of net loan proceeds ($25,805,000.00), equity contributions ($14,000,000.00), and the earnest money deposit credit ($2,000,000.00) totals approximately $41,805,000.00, which amount will be sufficient to fund the $40,000,000.00 purchase price and estimated closing costs of approximately One Million Eight Hundred Fifty Thousand Dollars ($1,850,000.00), inclusive of transfer taxes (Seller's and Purchaser's respective shares), title insurance premiums, recording fees, attorneys' fees, and lender fees and costs. Any excess funds held by the escrow agent after disbursement of all amounts reflected in the closing settlement statement will be returned to Purchaser.

We request that Seller provide wire instructions for receipt of Seller's net sale proceeds at least three (3) business days before the closing date (i.e., by June 1, 2023). Purchaser will separately provide Seller with wire instructions for any Seller credits or adjustments that may be owed by Seller to Purchaser. All wire instructions should be confirmed by telephone callback to a pre-designated contact.

4.5 Closing Settlement Statement

Calderwood & Harkness LLP will prepare and circulate a draft closing settlement statement reflecting all sources and uses of funds (including the purchase price, prorations, credits, adjustments, and closing costs) no later than May 31, 2023 for review and comment by Seller's counsel. We ask that you review the draft settlement statement promptly and provide any comments or proposed revisions within two (2) business days of receipt, so that a final settlement statement can be agreed upon prior to the closing date.

The settlement statement will reflect the $40,000,000.00 purchase price and all adjustments required under the PSA, including the prorations and allocations described in Section 5 below.

5. Prorations and Adjustments

The PSA provides for the following prorations and adjustments, all of which are to be calculated as of 12:01 a.m. Eastern Time on the closing date (June 5, 2023), with Seller being responsible for the period through and including June 4, 2023, and Purchaser being responsible for the period beginning on and including June 5, 2023:

5.1 Real Estate Taxes

Real estate taxes for the Property will be prorated as of the closing date based on the most recent available tax bill. The current annual real estate taxes for the Property are approximately One Million Four Hundred Twenty Thousand Dollars ($1,420,000.00). Seller shall be responsible for the portion of real estate taxes attributable to the period through and including June 4, 2023, and Purchaser shall be responsible for the portion attributable to the period from and after June 5, 2023. If real estate taxes for the current tax year have been paid by Seller in advance for a period extending beyond the closing date, Seller shall receive a credit at closing for any prepaid taxes allocable to the post-closing period. Conversely, if real estate taxes are unpaid and accrued as of the closing date, Purchaser shall receive a credit for the pre-closing portion and shall be responsible for payment of the taxes when due.

5.2 Rents and Other Income

Collected rents for the month of June 2023 shall be prorated as of the closing date. Seller shall receive a credit for the portion of collected rents attributable to the period through and including June 4, 2023 (i.e., four days of June), and Purchaser shall be entitled to the portion of collected rents attributable to the period from and after June 5, 2023.

With respect to rents that are delinquent or uncollected as of the closing date, the parties shall follow the procedures set forth in the PSA. Specifically, any rents collected by Purchaser after the closing that are attributable to periods prior to the closing date shall be remitted to Seller; provided, however, that Purchaser shall have the right to first apply any post-closing collections to current amounts due and owing by such tenants before remitting any excess to Seller. Purchaser shall use commercially reasonable efforts to collect rents owed for periods prior to the closing but shall have no obligation to commence legal proceedings or eviction actions against any tenant on behalf of Seller.

5.3 Security Deposits

All residential and retail tenant security deposits held by Seller (or by Seller's property manager on Seller's behalf), together with any interest required to be paid or credited thereon under applicable New York law, shall be transferred to Purchaser at the closing or credited against the purchase price on the closing settlement statement. Seller shall deliver to Purchaser a schedule of all security deposits held as of the closing date, broken down by tenant and unit, including the amount of each deposit, any interest accrued thereon, and the current depository institution and account in which such deposits are maintained.

5.4 Utility Charges, Insurance, and Operating Expenses

Utility charges, including water and sewer charges, electricity (to the extent not directly metered to tenants), gas, and any other utility services, shall be prorated as of the closing date based on final meter readings where available. Where final meter readings are not available as of the closing date, the proration shall be estimated based on the most recent billing period and the parties shall adjust such proration upon receipt of final invoices as part of the post-closing true-up process described in Section 8 below.

Seller's property insurance policies covering the Property shall not be assigned to Purchaser at the closing. Purchaser is making arrangements to obtain its own property and liability insurance coverage through Beacon Meridian Insurance Group (Alan Fitzpatrick, Broker), with property coverage to be underwritten by Northern Continental Assurance Company and general liability coverage to be underwritten by Consolidated Mutual Indemnity Co., each effective as of the closing date. Seller shall be entitled to cancel its existing insurance policies and receive any refund of unearned premiums.

All other operating expenses, including service contracts being assumed by Purchaser, management fees, and other recurring costs of operating the Property, shall be prorated as of the closing date in accordance with the terms of the PSA. We will include detailed calculations of all prorations in the draft closing settlement statement to be circulated by May 31, 2023.

5.5 Transfer Taxes

The parties' respective transfer tax obligations are summarized as follows:

The above allocations are as set forth in Section 10.4 of the PSA. Seller's transfer tax obligations total $1,210,000.00 and Purchaser's Mansion Tax obligation totals $150,000.00. These amounts will be reflected on the closing settlement statement and will be paid through escrow at the closing.

6. Title and Survey Matters

We refer to that certain title insurance commitment no. AT-2023-MN-0041872 issued by Archer & Towne Title Company, dated April 11, 2023 (the "Title Commitment"), as well as the updated ALTA/NSPS land title survey of the Property. As you are aware, our office submitted a title and survey review letter identifying certain title objections and survey matters requiring resolution prior to closing. We understand that the parties have agreed upon the required cures, endorsements, and affirmative coverages necessary to address these objections, subject to Seller's performance of its obligations at or prior to the closing.

We confirm that Seller is required to deliver at the closing all instruments necessary to cure any title objections that have not been expressly waived by Purchaser, including without limitation any payoff letters, lien releases, satisfactions of mortgage, or other discharge instruments necessary to remove any monetary liens or encumbrances from title to the Property that are not Permitted Exceptions.

We request that Seller's counsel confirm, at the earliest practicable date and in any event no later than May 31, 2023, (i) the identity of any outstanding liens or encumbrances affecting the Property that will be satisfied or discharged from Seller's closing proceeds at the closing, and (ii) the status of obtaining payoff letters and related discharge instruments from the holders of any such liens or encumbrances. All payoff letters and discharge instruments should be delivered to Archer & Towne Title Company no later than the closing date so that the title company can arrange for recording of such instruments simultaneously with the recording of the deed.

7. Lender Requirements

As discussed throughout this letter, Purchaser's acquisition of the Property is being financed in part with a senior mortgage loan in the principal amount of $26,000,000.00 from Pinnacle Fidelity Bank, N.A. (Sandra Kim, Vice President, Commercial Real Estate Lending). We are working closely with Lender's counsel to finalize the loan documents and to ensure that all conditions to funding are satisfied prior to the closing.

Certain of Lender's conditions to closing and funding require Seller's cooperation, and we respectfully request Seller's timely assistance with the following:

(a) Retail Tenant Estoppel Certificates. As previously noted in Section 3.1 above, delivery of executed estoppel certificates from all commercial tenants at the Property is a condition precedent to Lender's funding of the loan. We reiterate our request that Seller use commercially reasonable efforts to obtain these certificates promptly.

(b) Assignment of Warranties and Guarantees. Lender may require Seller to execute an assignment of any transferable warranties, guarantees, or indemnification agreements relating to the construction, renovation, or maintenance of the Property (including, without limitation, any roof warranties, elevator maintenance guarantees, or HVAC system warranties). We ask that Seller advise us of any such warranties or guarantees that are in Seller's possession and cooperate in the execution of any reasonable assignment instruments.

(c) Lender-Required Title Endorsements. Lender may require certain additional title insurance endorsements beyond those already contemplated by the Title Commitment, including without limitation a zoning endorsement (ALTA 3.1), a survey endorsement (ALTA 25), and a comprehensive endorsement. To the extent that any such endorsements require Seller's cooperation or execution of additional affidavits or instruments, we request Seller's cooperation in connection therewith.

We request that Seller's counsel coordinate with Pinnacle Fidelity Bank's outside counsel on any Lender requirements that directly or indirectly affect Seller, and that you advise us promptly of any issues or concerns. The Lender's counsel can be reached through Ms. Kim's office at Pinnacle Fidelity Bank, 383 Madison Avenue, New York, New York 10179.

8. Post-Closing Obligations

We note for the record that certain obligations of Seller survive the closing of the transaction under the PSA. Specifically, Seller's indemnification obligations under Section 11.2 of the PSA, Seller's obligations to cooperate with the post-closing true-up of prorations under Section 10.5 of the PSA, and certain other surviving covenants set forth in the PSA, continue in full force and effect following the closing.

The PSA provides that the post-closing proration true-up shall be completed within thirty (30) days following the closing date, i.e., by July 5, 2023. We will coordinate with your office to prepare and finalize the true-up reconciliation within that timeframe.

Purchaser expressly reserves all of its rights under the PSA with respect to post-closing adjustments, indemnification, and the survival of Seller's representations, warranties, and covenants, and nothing in this letter shall be deemed a waiver of any such rights.

9. Requested Response and Contact Information

We respectfully request that Reedmore & Pratt LLP confirm receipt of this letter and provide a comprehensive written response addressing the status of each outstanding deliverable and open item identified herein no later than May 31, 2023. In particular, we request David Ochoa's written confirmation that Seller will be prepared to close on June 5, 2023 and that Seller does not anticipate any impediment to the timely satisfaction of the conditions precedent to closing.

For purposes of coordination of the pre-closing deliverables and closing logistics, the primary points of contact at our firm are as follows:

Grace Nakamura, Lead Associate, Real Estate Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017 Telephone: (212) 554-8217

Email: gnakamura@calderwoodharkness.com

Rafael Dominguez, Working Associate, Real Estate Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017 Telephone: (212) 554-8319

Email: rdominguez@calderwoodharkness.com

Angela Fontaine, Partner, Real Estate (available for escalation) Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017 Telephone: (212) 554-8102

Email: afontaine@calderwoodharkness.com

Please do not hesitate to contact Grace or Rafael at any time to discuss any of the matters addressed in this letter. We look forward to working with you and your client toward a smooth and timely closing.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Grace Nakamura Lead Associate, Real Estate

C&H Matter No. 1026-00004

cc (via email):

Elliot J. Briarwood Briarwood Family Office LLC 450 Park Avenue, 31st Floor New York, New York 10022

Angela Fontaine, Esq. Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017

Philip Moreno, Title Officer Archer & Towne Title Company 60 East 42nd Street, Suite 1840 New York, New York 10165

Sandra Kim, Vice President, CRE Lending Pinnacle Fidelity Bank, N.A. 383 Madison Avenue New York, New York 10179

Enclosures:

Enclosure 1: Draft Closing Escrow Agreement (to follow under separate cover)

Enclosure 2: Form of Bring-Down Certificate (to follow)

Enclosure 3: Purchaser's Wire Instructions (confidential — to be transmitted separately under secure cover)

Enclosure 4: Preliminary Closing Settlement Statement (draft) (to follow by May 31, 2023)

Enclosure 5: Form of Tenant Notification Letter (enclosed herewith for Seller's review and comment)

This letter and all enclosures are confidential and may be subject to the attorney-client privilege and/or the work product doctrine. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.

Transfer Tax	Estimated Amount	Responsible Party
NYC Real Property Transfer Tax (2.625%)	$1,050,000.00	Seller
NYS Real Estate Transfer Tax ($2.00/$500)	$160,000.00	Seller
Additional "Mansion Tax" (0.375%)	$150,000.00	Purchaser
Total Transfer Taxes	$1,360,000.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
280 Park Avenue New York, New York 10017
Telephone: (212) 554-8000 Facsimile: (212) 554-8001
Email: gnakamura@calderwoodharkness.com
May 26, 2023
VIA EMAIL AND FEDERAL EXPRESS
David Ochoa, Esq. Partner, Real Estate Reedmore & Pratt LLP 575 Madison Avenue, 20th Floor New York, New York 10022
Re: Closing of Sale of The Linden at Gramercy Park, 245 East 21st Street, New York, New York 10010 (Block 899, Lot 42, Borough of Manhattan)
Seller: Linden Gramercy Holdings LLC
Purchaser: Gramercy Linden PropCo LLC
Purchase and Sale Agreement dated March 15, 2023 (the "PSA")
Calderwood & Harkness LLP Matter No. 1026-00004
Dear David:
1. Introduction and Purpose of Letter
As you know, this firm represents Gramercy Linden PropCo LLC (the "Purchaser"), a wholly owned subsidiary of Gramercy Linden JV LLC, in connection with the acquisition of The Linden at Gramercy Park, the mixed-use residential and retail property located at 245 East 21st Street, New York, New York 10010 (Block 899, Lot 42, Borough of Manhattan) (the "Property"), from Linden Gramercy Holdings LLC (the "Seller"), pursuant to the terms and conditions of that certain Purchase and Sale Agreement dated March 15, 2023 (as may be amended or modified from time to time, the "PSA"). The purchase price for the Property, as set forth in the PSA, is Forty Million Dollars ($40,000,000.00). Unless otherwise defined herein, capitalized terms used in this letter shall have the meanings ascribed to them in the PSA.
We are writing in advance of the anticipated closing of the transaction contemplated by the PSA in order to address several matters that require prompt attention and coordination between our respective clients and their advisors. Specifically, the purpose of this letter is to:
(a) confirm the anticipated closing date and closing logistics;
(b) confirm the requirement for a bring-down of Seller's representations and warranties as a condition precedent to Purchaser's obligation to close;
(c) identify outstanding pre-closing deliverables that remain to be delivered by Seller and request their timely completion;
(d) set forth proposed closing mechanics, including escrow arrangements and wire transfer instructions; and
(e) confirm the parties' respective responsibilities with respect to prorations, adjustments, and transfer tax obligations.
As you are aware, the target closing date under the PSA was originally May 30, 2023. However, the parties have mutually agreed to extend the closing date to June 5, 2023 in order to accommodate final lender requirements from Pinnacle Fidelity Bank, N.A. ("Lender"), which is providing the senior acquisition financing for the transaction. We understand that your client has consented to this extension, and we appreciate Seller's cooperation in this regard. We ask that you confirm this understanding at your earliest convenience if you have not already done so in writing.
We have organized this letter into several sections for ease of reference and to facilitate your review with your client. We respectfully request that you address each item identified herein and provide us with a written response no later than May 31, 2023, as further described in Section 9 below.
2. Bring-Down of Seller's Representations and Warranties
2.1 General Bring-Down Requirement
Pursuant to Section 9.2(a) of the PSA, as a condition precedent to Purchaser's obligation to consummate the closing of the transaction, Seller is required to deliver to Purchaser at the closing a certificate (the "Bring-Down Certificate") executed by a duly authorized representative of Seller, confirming that all of the representations and warranties made by Seller in Article VI of the PSA remain true, correct, and complete in all material respects as of the closing date, with the same force and effect as if such representations and warranties had been made on and as of the closing date. This bring-down requirement applies to all of Seller's representations and warranties, except to the extent that any such representation or warranty expressly relates to an earlier specified date, in which case such representation or warranty shall be true, correct, and complete in all material respects as of such earlier date.
The Bring-Down Certificate is a fundamental closing deliverable, and Purchaser's obligation to close is expressly conditioned upon the receipt of a satisfactory Bring-Down Certificate at or prior to the closing. We therefore ask that you and your client give careful attention to this requirement and promptly advise us of any facts, circumstances, or developments that may affect the accuracy of any of Seller's representations and warranties as of the anticipated closing date.
2.2 Specific Representations to Be Brought Down
Without limiting the generality of the foregoing, we specifically request that Seller confirm the continuing truth, accuracy, and completeness of each of the following representations and warranties set forth in the PSA:
(i) Authority and Due Organization. Seller has represented and warranted that Linden Gramercy Holdings LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of New York, and that Seller has the full right, power, and authority to execute and deliver the PSA and all documents required to be executed and delivered by Seller at the closing, and to consummate the transactions contemplated thereby. Additionally, Seller has represented that Marcus Steinfeld, in his capacity as Managing Member of Linden Gramercy Holdings LLC, has the requisite authority to execute and deliver the closing documents on behalf of Seller without the need for further consent or approval from any other member, manager, or third party. We request confirmation that these representations remain accurate as of the closing date.
(ii) Title to the Property. Seller has represented and warranted that Seller holds good and marketable fee simple title to the Property, free and clear of all liens, mortgages, pledges, security interests, encumbrances, easements, restrictions, and other title exceptions, other than the Permitted Exceptions specifically enumerated in Schedule B of the PSA. We request confirmation that no additional liens, encumbrances, or exceptions to title have arisen or been created since the date of the PSA, and that title to the Property remains as represented therein.
(iii) No Litigation or Proceedings. Seller has represented and warranted that there are no pending or, to Seller's knowledge, threatened actions, suits, litigation, arbitrations, condemnation proceedings, or governmental proceedings of any kind affecting the Property or Seller's ability to consummate the transactions contemplated by the PSA. We request confirmation that this representation remains accurate and that no such actions, proceedings, or threats thereof have arisen since the date of the PSA.
(iv) No Material Defaults Under Leases, Contracts, or Agreements. Seller has represented and warranted that, as of the date of the PSA, there are no material defaults by Seller or, to Seller's knowledge, by any tenant or counterparty under any lease, contract, or agreement affecting the Property. We request confirmation that no material defaults have occurred or are continuing as of the closing date, and that no notice of default has been given or received by Seller since the date of the PSA.
(v) Operating Statements, Rent Rolls, and Financial Condition. Seller has represented and warranted that the operating statements and rent rolls previously delivered to Purchaser in connection with Purchaser's due diligence investigation of the Property, including without limitation the rent roll dated January 2023 reflecting an occupancy rate of approximately 96.2% across 212 residential units and 2 retail units (comprising approximately 4,800 square feet of ground-floor retail space), are true, correct, and complete in all material respects. We request confirmation that these operating statements and rent rolls remain accurate in all material respects as of the closing date, and that there has been no material adverse change in the occupancy, rental income, financial condition, or physical condition of the Property since the date of the PSA. Please advise if any residential units have been vacated since the date of the PSA or if any retail tenant has provided notice of intent to vacate, terminate, or otherwise modify its lease obligations.
(vi) Environmental Conditions. Seller has represented and warranted that, to Seller's knowledge, there are no undisclosed environmental conditions affecting the Property that would give rise to any liability or obligation under applicable environmental laws. This representation was made consistent with the findings of the Phase I Environmental Site Assessment report no. REC-2023-0287, prepared by Ridgecrest Environmental Consultants LLC under the direction of Dr. Karen Ishikawa, which identified no recognized environmental conditions ("RECs"), controlled recognized environmental conditions, or historical recognized environmental conditions at the Property. We request confirmation that no environmental conditions have arisen, been discovered, or come to Seller's attention since the date of the PSA that would be inconsistent with the Phase I ESA findings or that would otherwise constitute an environmental liability affecting the Property.
(vii) Compliance with Laws. Seller has represented and warranted that the Property and its use and operation are in compliance with all applicable federal, state, and local laws, rules, regulations, orders, and ordinances, including without limitation all applicable zoning laws, building codes, fire codes, and health and safety regulations. We request confirmation that no violation notices, orders, or citations have been issued with respect to the Property since the date of the PSA, and that Seller has not received notice of any pending or contemplated enforcement action affecting the Property.
(viii) No Employees; No Collective Bargaining Agreements. Seller has represented and warranted that no employees of Seller are located at or assigned to the Property, and that Seller is not a party to any collective bargaining agreement or union contract with respect to the operation or maintenance of the Property. We request confirmation that this remains the case as of the closing date.
(ix) No Bankruptcy or Insolvency Proceedings. Seller has represented and warranted that no petition in bankruptcy, proceeding for reorganization, arrangement for the benefit of creditors, or receivership proceeding has been filed by, against, or with respect to Seller, and that no such proceeding is pending, contemplated, or threatened. We request confirmation that this representation remains accurate as of the closing date.
The foregoing list is intended to highlight certain key representations and warranties but is not intended to be exhaustive. Seller's Bring-Down Certificate must address all representations and warranties set forth in Article VI of the PSA, and we reserve Purchaser's right to require confirmation of the accuracy of any and all such representations and warranties at the closing.
2.3 Form of Bring-Down Certificate
We respectfully request that Seller's counsel prepare and circulate a draft of the Bring-Down Certificate for Purchaser's review and comment no later than May 31, 2023, which is at least five (5) business days before the anticipated closing date of June 5, 2023. We believe that early circulation of the draft certificate will allow the parties sufficient time to review and negotiate any necessary revisions, thereby avoiding delays at the closing itself.
The Bring-Down Certificate should be in a form reasonably acceptable to Purchaser and should be executed by Marcus Steinfeld in his capacity as Managing Member of Linden Gramercy Holdings LLC. If Seller anticipates updating, qualifying, or modifying any of its representations and warranties in the Bring-Down Certificate, we ask that you notify us immediately so that Purchaser can evaluate any such changes and determine whether the conditions precedent to closing have been satisfied.
3. Outstanding Pre-Closing Deliverables from Seller
We have been monitoring the status of Seller's pre-closing deliverables under the PSA and wish to bring to your attention several items that remain outstanding as of the date of this letter. Timely completion and delivery of these items is essential to ensuring that the closing can proceed as scheduled on June 5, 2023.
3.1 Estoppel Certificates — Retail Tenants
Pursuant to Section 7.3(b) of the PSA, Seller is required to deliver to Purchaser, at or prior to the closing, tenant estoppel certificates executed by each retail tenant occupying space at the Property. As you are aware, the Property contains two (2) ground-floor retail units comprising approximately 4,800 square feet in the aggregate.
As of the date of this letter, Purchaser has not received executed estoppel certificates from either of the two retail tenants. This is a matter of significant concern for both Purchaser and Lender. We request that Seller use commercially reasonable efforts to cause both retail tenants to execute and deliver estoppel certificates in the form attached as Exhibit B to the PSA, or in such other form as is reasonably acceptable to Purchaser, no later than May 31, 2023 — five (5) business days before the anticipated closing date.
We note that Pinnacle Fidelity Bank, N.A. has confirmed, through its Vice President of Commercial Real Estate Lending, Sandra Kim, that delivery of estoppel certificates from all commercial tenants at the Property is a condition precedent to the Lender's funding of the senior loan under Loan No. PFB-CRE-2023-05741. Failure to obtain executed retail tenant estoppel certificates in a timely manner could jeopardize the Lender's ability to fund the loan and, consequently, Purchaser's ability to close on the scheduled date. We therefore urge your client to give this item the highest priority.
3.2 Estoppel Certificates — Residential Tenants
Section 7.3(a) of the PSA requires Seller to deliver to Purchaser tenant estoppel certificates from tenants occupying not less than eighty percent (80%) of the leased residential units at the Property. We acknowledge receipt of a number of residential tenant estoppel certificates to date, and we are in the process of reviewing and tabulating the responses received. We request that Seller provide us with a current accounting of the residential estoppel certificates that have been executed and returned, and identify any shortfall relative to the eighty percent (80%) threshold. If additional estoppel certificates are needed to satisfy this requirement, we ask that Seller take prompt action to obtain the requisite number of executed certificates before the closing date.
Please forward any additional residential estoppel certificates received by Seller or Seller's property manager to our attention as soon as they become available.
3.3 Seller's FIRPTA Certificate
Pursuant to Section 9.3(d) of the PSA, Seller is required to deliver to Purchaser at the closing a certificate of non-foreign status in accordance with Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulation § 1.1445-2(b)(2). The certificate must state that Linden Gramercy Holdings LLC (Employer Identification Number: 20-6438172) is not a "foreign person" as that term is defined in Section 1445(f)(3) of the Code, and must include such additional information as is required by applicable Treasury Regulations, including Seller's name, address, and taxpayer identification number.
We request that Seller deliver an executed FIRPTA affidavit and certificate of non-foreign status to Purchaser's counsel at or prior to the closing. As you are undoubtedly aware, in the absence of delivery of a qualifying certificate of non-foreign status, Purchaser will be required under Section 1445 of the Code to withhold and remit to the Internal Revenue Service a portion of the purchase price equal to fifteen percent (15%) of the amount realized on the disposition, which would result in a withholding of approximately $6,000,000. We trust that this will not be necessary, but we raise the issue to ensure that the certificate is prepared and executed in a timely manner.
3.4 Transfer Tax Returns
The transfer of the Property will give rise to the following transfer tax obligations:
(a) New York City Real Property Transfer Tax (NYC RPTT). The estimated NYC RPTT is One Million Fifty Thousand Dollars ($1,050,000.00), calculated at the rate of 2.625% of the $40,000,000.00 purchase price (the applicable rate for conveyances of real property in New York City where the consideration exceeds $500,000 and the property is not a one-, two-, or three-family dwelling). Pursuant to Section 10.4(a) of the PSA, the NYC RPTT is the responsibility of and shall be paid by Seller, which is customary for commercial real estate transactions in New York City.
(b) New York State Real Estate Transfer Tax. The estimated New York State Real Estate Transfer Tax is One Hundred Sixty Thousand Dollars ($160,000.00), calculated at the rate of $2.00 per $500.00 of consideration (or fractional part thereof), applied to the $40,000,000.00 purchase price. Pursuant to Section 10.4(b) of the PSA, the New York State Real Estate Transfer Tax is the responsibility of and shall be paid by Seller.
(c) Additional Tax on Transfers of Real Property (the "Mansion Tax"). The estimated Mansion Tax is One Hundred Fifty Thousand Dollars ($150,000.00), calculated at the rate of 0.375% of the $40,000,000.00 purchase price, which is the applicable rate for transfers where the consideration is at least $25,000,000 but less than $50,000,000. Pursuant to Section 10.4(c) of the PSA, the Mansion Tax is the responsibility of and shall be paid by Purchaser.
We request that Seller's counsel prepare and circulate drafts of the applicable transfer tax returns, including the New York City Real Property Transfer Tax Return (NYC RPT Return) and the New York State Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax (Form TP-584), for joint review, comment, and execution at or prior to the closing. We note that all transfer tax returns must be filed with the New York City Register and/or the Office of the City Register, New York County, at the time of recording of the deed, and we ask that the returns be finalized no later than two (2) business days before the closing date to permit timely review.
3.5 Seller's Organizational and Authority Documents
In order to satisfy the requirements of both the PSA and the title company, Seller is required to deliver the following organizational and authority documents at or prior to the closing:
(a) A certificate of good standing for Linden Gramercy Holdings LLC issued by the New York State Department of State, Division of Corporations, dated within thirty (30) days of the closing date;
(b) A certified copy of the Operating Agreement of Linden Gramercy Holdings LLC, or such relevant portions thereof as evidence the authority of Marcus Steinfeld, as Managing Member, to execute and deliver the closing documents on behalf of Seller, together with any amendments or modifications thereto; and
(c) Resolutions or consents of the members of Linden Gramercy Holdings LLC expressly authorizing the sale, transfer, and conveyance of the Property to Purchaser in accordance with the terms of the PSA, and authorizing Marcus Steinfeld to execute and deliver all closing documents on behalf of Seller.
We request that these documents be delivered to our office and to Archer & Towne Title Company no later than June 1, 2023, in order to allow the title company sufficient time to review and approve such documents prior to the closing.
3.6 Additional Seller Deliverables
In addition to the items specifically addressed above, Seller is required to deliver the following documents and items at the closing. We request that Seller's counsel prepare and circulate drafts of the following for Purchaser's review and comment at the earliest practicable date:
(a) Bargain and Sale Deed. An executed bargain and sale deed with covenants against grantor's acts, in proper statutory form for recording in the Office of the City Register, New York County, conveying fee simple title to the Property to Gramercy Linden PropCo LLC, subject only to the Permitted Exceptions.
(b) Bill of Sale. A bill of sale transferring all personal property, fixtures, equipment, and tangible assets located at the Property and owned by Seller, to the extent included in the sale under the PSA.
(c) Assignment and Assumption of Leases. An assignment and assumption agreement covering all residential and retail leases in effect at the Property as of the closing date, pursuant to which Seller assigns its landlord interest in and to such leases to Purchaser, and Purchaser assumes Seller's obligations thereunder arising from and after the closing date.
(d) Assignment and Assumption of Contracts. An assignment and assumption agreement covering all service contracts and other agreements affecting the Property that are to be assumed by Purchaser at the closing, as identified in the PSA and the schedules thereto.
(e) Seller's Title Affidavit. An affidavit of title executed by Marcus Steinfeld, as Managing Member of Linden Gramercy Holdings LLC, in the form required by Archer & Towne Title Company (referencing title commitment no. AT-2023-MN-0041872, Philip Moreno, Title Officer), to permit the title company to remove the standard printed exceptions from the owner's title policy, including without limitation exceptions for parties in possession other than tenants under recorded leases, mechanic's liens, and unpaid taxes and assessments.
(f) Updated Rent Roll. An updated rent roll certified by Seller as true, correct, and complete, dated as of a date no earlier than five (5) business days before the closing date (i.e., no earlier than May 29, 2023), reflecting the current occupancy, rental rates, lease terms, and arrearages for all residential and retail units at the Property.
(g) Tenant Notification Letters. Letters addressed to each residential and retail tenant at the Property, executed by Seller, advising such tenants of the change in ownership of the Property and directing future rent payments and correspondence to Purchaser or its designated property manager, Summit Property Group LLC (Attention: Diana Castillo, Senior Vice President, Property Management, 315 West 36th Street, 4th Floor, New York, New York 10018). We are enclosing herewith a proposed form of tenant notification letter (Enclosure 5) for Seller's review and comment.
(h) Keys, Access Cards, Codes, and Building Records. All keys, access cards, security codes, building records, plans, specifications, warranties, guarantees, permits, licenses, and certificates of occupancy in Seller's possession or control relating to the Property.
We ask that you provide us with a comprehensive status update on each of the foregoing deliverables at your earliest convenience, and in any event no later than May 31, 2023.
4. Proposed Closing Mechanics
4.1 Closing Date and Location
The anticipated closing date is June 5, 2023. The closing will be conducted via escrow through Archer & Towne Title Company, located at 60 East 42nd Street, Suite 1840, New York, New York 10165 (Attention: Philip Moreno, Title Officer; telephone: (212) 867-4500; email: pmoreno@archertowne.com). We anticipate that all closing documents and funds will be submitted into escrow in advance of the closing date, and that the closing itself will be effected through the release of documents and disbursement of funds by the escrow agent upon receipt of mutual closing instructions from the parties' respective counsel.
Unless the parties otherwise agree, no in-person attendance at the offices of the title company or escrow agent will be required. We ask, however, that both parties and their respective counsel be available by telephone and email throughout the closing day to address any issues that may arise during the closing process and to provide timely authorization for the release of escrow.
4.2 Escrow Arrangements
Archer & Towne Title Company will serve as escrow agent for the closing. All closing documents to be executed and delivered by the parties, together with all closing funds, will be deposited into escrow in accordance with the terms of a closing escrow agreement to be prepared and circulated by Calderwood & Harkness LLP. We anticipate circulating a draft of the closing escrow agreement under separate cover within the next several business days, and we will provide a copy to your office as well as to the title company.
The escrow agent will hold all documents and funds in escrow pending receipt of mutual written closing instructions from both Purchaser's counsel (Calderwood & Harkness LLP) and Seller's counsel (Reedmore & Pratt LLP). The parties' respective counsel will provide closing instructions only after confirming that all conditions precedent to closing under the PSA have been satisfied (or waived, as applicable).
Upon confirmation that all conditions have been satisfied and receipt of mutual closing instructions, the escrow agent will:
(a) cause the bargain and sale deed and the mortgage and security agreement in favor of Pinnacle Fidelity Bank, N.A. to be recorded with the Office of the City Register, New York County, together with all required transfer tax returns and ancillary instruments;
(b) disburse all closing funds in accordance with the approved closing settlement statement, including payment of Seller's net sale proceeds, transfer taxes, title insurance premiums, recording fees, and other closing costs; and
(c) issue the owner's title insurance policy in the amount of Forty Million Dollars ($40,000,000.00) in favor of Gramercy Linden PropCo LLC and the loan title insurance policy in the amount of Twenty-Six Million Dollars ($26,000,000.00) in favor of Pinnacle Fidelity Bank, N.A., in each case subject only to the Permitted Exceptions and such other matters as are approved by Purchaser and Lender.
4.3 Earnest Money Deposit Credit
The PSA provides for an earnest money deposit in the amount of Two Million Dollars ($2,000,000.00), representing five percent (5%) of the $40,000,000.00 purchase price. This deposit was delivered to and has been held in escrow by Archer & Towne Title Company since the execution of the PSA on March 15, 2023. The deposit became non-refundable upon the expiration of the due diligence period on April 14, 2023, subject to the terms and conditions of the PSA.
At the closing, the earnest money deposit in the amount of $2,000,000.00, together with any interest earned thereon during the escrow period, will be credited against the purchase price and released from escrow to Seller (or applied to the settlement as reflected in the closing settlement statement). We ask that the title company provide a statement of interest accrued on the deposit prior to the closing date for inclusion in the settlement calculations.
4.4 Sources of Funds — Wire Transfers
The balance of the purchase price, after credit for the earnest money deposit, will be funded from the following sources:
(a) Senior Loan Proceeds. Pinnacle Fidelity Bank, N.A. will fund the senior acquisition loan in the principal amount of Twenty-Six Million Dollars ($26,000,000.00) pursuant to Loan No. PFB-CRE-2023-05741. The loan proceeds will be net of the origination fee of One Hundred Ninety-Five Thousand Dollars ($195,000.00) (calculated at 0.75% of the loan amount), yielding net loan proceeds of approximately Twenty-Five Million Eight Hundred Five Thousand Dollars ($25,805,000.00) to be wired directly to the escrow account held by Archer & Towne Title Company.
(b) Equity Contributions. The members of Gramercy Linden JV LLC will fund equity contributions in the aggregate amount of Fourteen Million Dollars ($14,000,000.00), allocated as follows among the members:
•  Briarwood Family Office LLC: $7,000,000.00
•  Cedarpoint Capital Partners LLC: $4,200,000.00
•  Halcyon Ridge Investments LP: $2,800,000.00
These equity contributions will be wired to the escrow account held by Archer & Towne Title Company.
(c) Earnest Money Deposit Credit. The $2,000,000.00 earnest money deposit already held by Archer & Towne Title Company will be credited against the purchase price, as described in Section 4.3 above.
The aggregate of net loan proceeds ($25,805,000.00), equity contributions ($14,000,000.00), and the earnest money deposit credit ($2,000,000.00) totals approximately $41,805,000.00, which amount will be sufficient to fund the $40,000,000.00 purchase price and estimated closing costs of approximately One Million Eight Hundred Fifty Thousand Dollars ($1,850,000.00), inclusive of transfer taxes (Seller's and Purchaser's respective shares), title insurance premiums, recording fees, attorneys' fees, and lender fees and costs. Any excess funds held by the escrow agent after disbursement of all amounts reflected in the closing settlement statement will be returned to Purchaser.
We request that Seller provide wire instructions for receipt of Seller's net sale proceeds at least three (3) business days before the closing date (i.e., by June 1, 2023). Purchaser will separately provide Seller with wire instructions for any Seller credits or adjustments that may be owed by Seller to Purchaser. All wire instructions should be confirmed by telephone callback to a pre-designated contact.
4.5 Closing Settlement Statement
Calderwood & Harkness LLP will prepare and circulate a draft closing settlement statement reflecting all sources and uses of funds (including the purchase price, prorations, credits, adjustments, and closing costs) no later than May 31, 2023 for review and comment by Seller's counsel. We ask that you review the draft settlement statement promptly and provide any comments or proposed revisions within two (2) business days of receipt, so that a final settlement statement can be agreed upon prior to the closing date.
The settlement statement will reflect the $40,000,000.00 purchase price and all adjustments required under the PSA, including the prorations and allocations described in Section 5 below.
5. Prorations and Adjustments
The PSA provides for the following prorations and adjustments, all of which are to be calculated as of 12:01 a.m. Eastern Time on the closing date (June 5, 2023), with Seller being responsible for the period through and including June 4, 2023, and Purchaser being responsible for the period beginning on and including June 5, 2023:
5.1 Real Estate Taxes
Real estate taxes for the Property will be prorated as of the closing date based on the most recent available tax bill. The current annual real estate taxes for the Property are approximately One Million Four Hundred Twenty Thousand Dollars ($1,420,000.00). Seller shall be responsible for the portion of real estate taxes attributable to the period through and including June 4, 2023, and Purchaser shall be responsible for the portion attributable to the period from and after June 5, 2023. If real estate taxes for the current tax year have been paid by Seller in advance for a period extending beyond the closing date, Seller shall receive a credit at closing for any prepaid taxes allocable to the post-closing period. Conversely, if real estate taxes are unpaid and accrued as of the closing date, Purchaser shall receive a credit for the pre-closing portion and shall be responsible for payment of the taxes when due.
5.2 Rents and Other Income
Collected rents for the month of June 2023 shall be prorated as of the closing date. Seller shall receive a credit for the portion of collected rents attributable to the period through and including June 4, 2023 (i.e., four days of June), and Purchaser shall be entitled to the portion of collected rents attributable to the period from and after June 5, 2023.
With respect to rents that are delinquent or uncollected as of the closing date, the parties shall follow the procedures set forth in the PSA. Specifically, any rents collected by Purchaser after the closing that are attributable to periods prior to the closing date shall be remitted to Seller; provided, however, that Purchaser shall have the right to first apply any post-closing collections to current amounts due and owing by such tenants before remitting any excess to Seller. Purchaser shall use commercially reasonable efforts to collect rents owed for periods prior to the closing but shall have no obligation to commence legal proceedings or eviction actions against any tenant on behalf of Seller.
5.3 Security Deposits
All residential and retail tenant security deposits held by Seller (or by Seller's property manager on Seller's behalf), together with any interest required to be paid or credited thereon under applicable New York law, shall be transferred to Purchaser at the closing or credited against the purchase price on the closing settlement statement. Seller shall deliver to Purchaser a schedule of all security deposits held as of the closing date, broken down by tenant and unit, including the amount of each deposit, any interest accrued thereon, and the current depository institution and account in which such deposits are maintained.
5.4 Utility Charges, Insurance, and Operating Expenses
Utility charges, including water and sewer charges, electricity (to the extent not directly metered to tenants), gas, and any other utility services, shall be prorated as of the closing date based on final meter readings where available. Where final meter readings are not available as of the closing date, the proration shall be estimated based on the most recent billing period and the parties shall adjust such proration upon receipt of final invoices as part of the post-closing true-up process described in Section 8 below.
Seller's property insurance policies covering the Property shall not be assigned to Purchaser at the closing. Purchaser is making arrangements to obtain its own property and liability insurance coverage through Beacon Meridian Insurance Group (Alan Fitzpatrick, Broker), with property coverage to be underwritten by Northern Continental Assurance Company and general liability coverage to be underwritten by Consolidated Mutual Indemnity Co., each effective as of the closing date. Seller shall be entitled to cancel its existing insurance policies and receive any refund of unearned premiums.
All other operating expenses, including service contracts being assumed by Purchaser, management fees, and other recurring costs of operating the Property, shall be prorated as of the closing date in accordance with the terms of the PSA. We will include detailed calculations of all prorations in the draft closing settlement statement to be circulated by May 31, 2023.
5.5 Transfer Taxes
The parties' respective transfer tax obligations are summarized as follows:
The above allocations are as set forth in Section 10.4 of the PSA. Seller's transfer tax obligations total $1,210,000.00 and Purchaser's Mansion Tax obligation totals $150,000.00. These amounts will be reflected on the closing settlement statement and will be paid through escrow at the closing.
6. Title and Survey Matters
We refer to that certain title insurance commitment no. AT-2023-MN-0041872 issued by Archer & Towne Title Company, dated April 11, 2023 (the "Title Commitment"), as well as the updated ALTA/NSPS land title survey of the Property. As you are aware, our office submitted a title and survey review letter identifying certain title objections and survey matters requiring resolution prior to closing. We understand that the parties have agreed upon the required cures, endorsements, and affirmative coverages necessary to address these objections, subject to Seller's performance of its obligations at or prior to the closing.
We confirm that Seller is required to deliver at the closing all instruments necessary to cure any title objections that have not been expressly waived by Purchaser, including without limitation any payoff letters, lien releases, satisfactions of mortgage, or other discharge instruments necessary to remove any monetary liens or encumbrances from title to the Property that are not Permitted Exceptions.
We request that Seller's counsel confirm, at the earliest practicable date and in any event no later than May 31, 2023, (i) the identity of any outstanding liens or encumbrances affecting the Property that will be satisfied or discharged from Seller's closing proceeds at the closing, and (ii) the status of obtaining payoff letters and related discharge instruments from the holders of any such liens or encumbrances. All payoff letters and discharge instruments should be delivered to Archer & Towne Title Company no later than the closing date so that the title company can arrange for recording of such instruments simultaneously with the recording of the deed.
7. Lender Requirements
As discussed throughout this letter, Purchaser's acquisition of the Property is being financed in part with a senior mortgage loan in the principal amount of $26,000,000.00 from Pinnacle Fidelity Bank, N.A. (Sandra Kim, Vice President, Commercial Real Estate Lending). We are working closely with Lender's counsel to finalize the loan documents and to ensure that all conditions to funding are satisfied prior to the closing.
Certain of Lender's conditions to closing and funding require Seller's cooperation, and we respectfully request Seller's timely assistance with the following:
(a) Retail Tenant Estoppel Certificates. As previously noted in Section 3.1 above, delivery of executed estoppel certificates from all commercial tenants at the Property is a condition precedent to Lender's funding of the loan. We reiterate our request that Seller use commercially reasonable efforts to obtain these certificates promptly.
(b) Assignment of Warranties and Guarantees. Lender may require Seller to execute an assignment of any transferable warranties, guarantees, or indemnification agreements relating to the construction, renovation, or maintenance of the Property (including, without limitation, any roof warranties, elevator maintenance guarantees, or HVAC system warranties). We ask that Seller advise us of any such warranties or guarantees that are in Seller's possession and cooperate in the execution of any reasonable assignment instruments.
(c) Lender-Required Title Endorsements. Lender may require certain additional title insurance endorsements beyond those already contemplated by the Title Commitment, including without limitation a zoning endorsement (ALTA 3.1), a survey endorsement (ALTA 25), and a comprehensive endorsement. To the extent that any such endorsements require Seller's cooperation or execution of additional affidavits or instruments, we request Seller's cooperation in connection therewith.
We request that Seller's counsel coordinate with Pinnacle Fidelity Bank's outside counsel on any Lender requirements that directly or indirectly affect Seller, and that you advise us promptly of any issues or concerns. The Lender's counsel can be reached through Ms. Kim's office at Pinnacle Fidelity Bank, 383 Madison Avenue, New York, New York 10179.
8. Post-Closing Obligations
We note for the record that certain obligations of Seller survive the closing of the transaction under the PSA. Specifically, Seller's indemnification obligations under Section 11.2 of the PSA, Seller's obligations to cooperate with the post-closing true-up of prorations under Section 10.5 of the PSA, and certain other surviving covenants set forth in the PSA, continue in full force and effect following the closing.
The PSA provides that the post-closing proration true-up shall be completed within thirty (30) days following the closing date, i.e., by July 5, 2023. We will coordinate with your office to prepare and finalize the true-up reconciliation within that timeframe.
Purchaser expressly reserves all of its rights under the PSA with respect to post-closing adjustments, indemnification, and the survival of Seller's representations, warranties, and covenants, and nothing in this letter shall be deemed a waiver of any such rights.
9. Requested Response and Contact Information
We respectfully request that Reedmore & Pratt LLP confirm receipt of this letter and provide a comprehensive written response addressing the status of each outstanding deliverable and open item identified herein no later than May 31, 2023. In particular, we request David Ochoa's written confirmation that Seller will be prepared to close on June 5, 2023 and that Seller does not anticipate any impediment to the timely satisfaction of the conditions precedent to closing.
For purposes of coordination of the pre-closing deliverables and closing logistics, the primary points of contact at our firm are as follows:
Grace Nakamura, Lead Associate, Real Estate Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017 Telephone: (212) 554-8217
Email: gnakamura@calderwoodharkness.com
Rafael Dominguez, Working Associate, Real Estate Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017 Telephone: (212) 554-8319
Email: rdominguez@calderwoodharkness.com
Angela Fontaine, Partner, Real Estate (available for escalation) Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017 Telephone: (212) 554-8102
Email: afontaine@calderwoodharkness.com
Please do not hesitate to contact Grace or Rafael at any time to discuss any of the matters addressed in this letter. We look forward to working with you and your client toward a smooth and timely closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Grace Nakamura Lead Associate, Real Estate
C&H Matter No. 1026-00004
cc (via email):
Elliot J. Briarwood Briarwood Family Office LLC 450 Park Avenue, 31st Floor New York, New York 10022
Angela Fontaine, Esq. Calderwood & Harkness LLP 280 Park Avenue New York, New York 10017
Philip Moreno, Title Officer Archer & Towne Title Company 60 East 42nd Street, Suite 1840 New York, New York 10165
Sandra Kim, Vice President, CRE Lending Pinnacle Fidelity Bank, N.A. 383 Madison Avenue New York, New York 10179
Enclosures:
Enclosure 1: Draft Closing Escrow Agreement (to follow under separate cover)
Enclosure 2: Form of Bring-Down Certificate (to follow)
Enclosure 3: Purchaser's Wire Instructions (confidential — to be transmitted separately under secure cover)
Enclosure 4: Preliminary Closing Settlement Statement (draft) (to follow by May 31, 2023)
Enclosure 5: Form of Tenant Notification Letter (enclosed herewith for Seller's review and comment)
This letter and all enclosures are confidential and may be subject to the attorney-client privilege and/or the work product doctrine. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.
Transfer Tax | Estimated Amount | Responsible Party
NYC Real Property Transfer Tax (2.625%) | $1,050,000.00 | Seller
NYS Real Estate Transfer Tax ($2.00/$500) | $160,000.00 | Seller
Additional "Mansion Tax" (0.375%) | $150,000.00 | Purchaser
Total Transfer Taxes | $1,360,000.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

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