title-and-survey-review-letter.docx

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

title-and-survey-review-letter.docx DOCUMENT Real Estate

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CALDERWOOD & HARKNESS LLP 280 Park Avenue New York, NY 10017 Telephone: (212) 506-7000 Facsimile: (212) 506-7001 www.calderwoodharkness.com

April 13, 2023

VIA EMAIL AND OVERNIGHT COURIER

Archer & Towne Title Company

Attn: Philip Moreno, Title Officer

60 East 42nd Street, Suite 1840 New York, NY 10165

Re: Title and Survey Review — The Linden at Gramercy Park Property Address: 245 East 21st Street, New York, NY 10010 Block 899, Lot 42, Borough of Manhattan, City of New York Title Commitment No.: AT-2023-MN-0041872 Date of Title Commitment: April 11, 2023 Calderwood & Harkness LLP Matter No.: 1026-00004 Proposed Insured (Owner's Policy): Gramercy Linden PropCo LLC Proposed Insured (Lender's Policy): Pinnacle Fidelity Bank, N.A.

Dear Mr. Moreno:

1. Introduction and Purpose

Calderwood & Harkness LLP represents Briarwood Family Office LLC ("Briarwood"), the managing member of Gramercy Linden JV LLC, a Delaware limited liability company, which is the sole member and parent entity of Gramercy Linden PropCo LLC, a New York limited liability company (the "Purchaser"), in connection with the Purchaser's acquisition of the improved real property located at 245 East 21st Street, New York, New York 10010, designated as Block 899, Lot 42 on the Tax Map of the Borough of Manhattan, City of New York, and commonly known as "The Linden at Gramercy Park" (the "Property").

The Property is being acquired from Linden Gramercy Holdings LLC, a New York limited liability company (the "Seller"), pursuant to that certain Purchase and Sale Agreement, dated March 15, 2023, by and between Seller and Purchaser (as may be amended, the "PSA"), at a purchase price of Forty Million and 00/100 Dollars ($40,000,000.00). The acquisition is being financed, in part, with the proceeds of a senior mortgage loan in the principal amount of Twenty-Six Million and 00/100 Dollars ($26,000,000.00) (the "Loan") to be made by Pinnacle Fidelity Bank, N.A. (the "Lender") to Purchaser (Loan No. PFB-CRE-2023-05741), pursuant to a loan commitment letter issued by the Lender dated April 7, 2023 (the "Loan Commitment").

This letter constitutes our review, on behalf of Purchaser, of Title Commitment No. AT-2023-MN-0041872 (the "Commitment"), issued by Archer & Towne Title Company (the "Title Company"), dated April 11, 2023, together with the related ALTA/NSPS Land Title Survey of the Property described more fully in Section 6 below (the "Survey"). We had the benefit of reviewing the preliminary title search results circulated in late March 2023 in anticipation of the formal Commitment, and we have now completed our review of the Commitment itself as issued.

The purpose of this letter is to (a) identify those title exceptions appearing in Schedule B of the Commitment that must be removed, cured, or affirmatively insured over as a condition to closing, (b) request specific title endorsements required by both the Purchaser and the Lender, (c) set forth our review and objections with respect to matters shown on the Survey, and (d) confirm certain additional requirements that must be satisfied in connection with the issuance of the Owner's and Lender's title insurance policies at closing.

We note that the due diligence period under the PSA expires on April 14, 2023. Accordingly, the timely resolution of the matters identified herein is critical. The target closing date under the PSA is May 30, 2023, and we are working to ensure that all title and survey matters are resolved well in advance of that date. We respectfully request that the Title Company provide a written response to all objections and requests contained in this letter within five (5) business days of receipt.

2. Title Policies Required

2.1 Owner's Title Insurance Policy

We request that the Title Company issue an ALTA Owner's Policy of Title Insurance (2006 Form, or the New York equivalent thereof) insuring fee simple title to the Property in favor of the Purchaser, in the following amount and on the following terms:

Named Insured: Gramercy Linden PropCo LLC, a New York limited liability company

Policy Amount: $40,000,000.00

Effective Date: The date and time of recording of the bargain and sale deed conveying title to the Property from Seller to Purchaser with the Office of the City Register of the City of New York, New York County

The Owner's Policy shall be subject only to those exceptions specifically approved and accepted by Purchaser as set forth herein or as may be subsequently agreed upon in writing. All standard or printed exceptions shall be deleted or modified as set forth in Section 5 below, and the Owner's Policy shall include the endorsements requested in Section 7 below.

2.2 Lender's Title Insurance Policy

We further request that the Title Company issue an ALTA Loan Policy of Title Insurance (2006 Form) insuring the lien of the mortgage and related loan documents to be granted by the Purchaser in favor of the Lender, in the following amount and on the following terms:

Named Insured: Pinnacle Fidelity Bank, N.A., its successors and/or assigns

Policy Amount: $26,000,000.00

Loan No.: PFB-CRE-2023-05741

Effective Date: The date and time of recording of the mortgage and related loan documents with the Office of the City Register of the City of New York, New York County

The Lender's Policy must satisfy all title insurance requirements set forth in the Loan Commitment dated April 7, 2023, and the Lender's title requirements letter accompanying the Loan Commitment (collectively, the "Lender's Title Requirements"). We will provide a copy of the Lender's Title Requirements under separate cover to the extent not already in the Title Company's possession. The Lender's Policy shall include all endorsements specified in Section 7.2 below and any additional endorsements that may be required pursuant to the Lender's closing instructions.

3. Review of Schedule A

3.1 Legal Description

We request that the Title Company confirm that the legal description set forth in Schedule A of the Commitment accurately and completely describes the Property located at 245 East 21st Street, New York, New York 10010, designated as Block 899, Lot 42, on the Tax Map of the Borough of Manhattan, City of New York. We further request that the Title Company confirm that the legal description in the Commitment matches, in all material respects, the legal description set forth on the Survey. To the extent that there are any discrepancies between the legal description in the Commitment and the metes and bounds or other description depicted on the Survey, we request that such discrepancies be reconciled and corrected prior to the issuance of the final Owner's and Lender's Policies. Any revised legal description should be circulated to our office and to the Lender's counsel for review and approval prior to incorporation into the final policies.

3.2 Vesting. We request confirmation that Schedule A of the Commitment reflects that fee simple title to the Property is currently vested in Linden Gramercy Holdings LLC, a New York limited liability company, as sole owner. It is our understanding that the Seller acquired the Property in or around 2005, for an approximate purchase price of $18,500,000.00, pursuant to a bargain and sale deed recorded with the Office of the City Register of the City of New York, New York County. We request confirmation that the vesting deed from Seller's predecessor(s)-in-interest to Seller is properly of record and forms an unbroken link in the chain of title.

To the extent that there are any irregularities, gaps, or ambiguities in the chain of title — including, without limitation, any defective or missing acknowledgments, improperly executed conveyance instruments, or unrecorded intermediate conveyances — we request that the Title Company identify such issues and provide a plan for resolution prior to closing. If corrective instruments are required, Seller must execute and deliver the same at or prior to closing as a condition to the Purchaser's obligation to close.

3.3 Proposed Insured and Policy Amounts

We request that the Title Company confirm that Schedule A of the Commitment correctly reflects the following:

Owner's Policy: Named Insured: Gramercy Linden PropCo LLC Policy Amount: $40,000,000.00

Lender's Policy: Named Insured: Pinnacle Fidelity Bank, N.A. Policy Amount: $26,000,000.00

If the named insureds or policy amounts are not currently reflected in the Commitment, we request that the Commitment be revised to incorporate the foregoing.

4. Review of Schedule B — Part I (Requirements)

4.1 Standard Requirements

We acknowledge the standard requirements set forth in Schedule B, Part I of the Commitment, including, without limitation, the requirements for (a) the recording of a bargain and sale deed (or such other form of conveyance instrument as may be appropriate) conveying fee simple title to the Property from Seller to Purchaser, (b) the payment of all applicable transfer taxes, and (c) the satisfaction and discharge of record of all existing mortgages, deeds of trust, security interests, and other monetary liens encumbering the Property.

With respect to the satisfaction of existing indebtedness, we understand that the Property is currently encumbered by one or more mortgages or other security instruments in favor of Seller's existing lender(s). All such existing mortgages and security interests must be satisfied and discharged of record at or prior to closing, from Seller's share of the closing proceeds. We request that the Title Company confirm receipt of a payoff letter or payoff statement from each existing lender, together with confirmation that arrangements have been made for the recording of appropriate satisfaction or discharge instruments promptly following closing. No exception for any existing mortgage lien shall survive closing or appear as an exception in the final Owner's or Lender's Policies.

4.2 Transfer Tax Requirements

We request that the Title Company confirm its calculation of the applicable transfer taxes in connection with the conveyance of the Property, based on the purchase price of $40,000,000.00, as follows:

(a) New York City Real Property Transfer Tax (RPTT): Based on a purchase price of $40,000,000.00 and a transfer tax rate of 2.625% applicable to conveyances of real property where the consideration exceeds $500,000 and the property is classified as other than a one-, two-, or three-family dwelling, the estimated NYC RPTT is $1,050,000.00. Pursuant to the PSA, the NYC RPTT is the obligation of the Seller.

(b) New York State Real Estate Transfer Tax: Based on a purchase price of $40,000,000.00 and a transfer tax rate of $2.00 per $500 of consideration (or fraction thereof), the estimated NYS Transfer Tax is $160,000.00. Pursuant to the PSA, the NYS Transfer Tax is the obligation of the Seller.

(c) New York State Mansion Tax (Additional Transfer Tax): Based on a purchase price of $40,000,000.00 and the applicable rate of 0.375% for transactions at or above the $25,000,000 threshold, the estimated Mansion Tax is $150,000.00. Pursuant to the PSA, the Mansion Tax is the obligation of the Purchaser.

We request confirmation that the Title Company will prepare and file the applicable NYC RPT returns (Form NYC-RPT) and the New York State Combined Real Estate Transfer Tax Return (Form TP-584) on behalf of the parties at closing, and that the Title Company will arrange for the payment of all transfer taxes from the closing proceeds in accordance with the closing statement approved by the parties.

4.3 Entity Authority Requirements

Schedule B, Part I of the Commitment sets forth certain requirements relating to the organizational authority of the parties. We request confirmation that the following will satisfy such requirements:

(a) Seller — Linden Gramercy Holdings LLC:

(i) A current Certificate of Good Standing for Linden Gramercy Holdings LLC issued by the New York Secretary of State, dated not more than thirty (30) days prior to closing;

(ii) A certified copy of the operating agreement of Linden Gramercy Holdings LLC, or such relevant excerpts thereof as may be required, together with a resolution or consent of the members authorizing the sale and conveyance of the Property, duly executed by Marcus Steinfeld in his capacity as Managing Member; and

(iii) Such additional evidence of authority as the Title Company may reasonably require to confirm that the execution and delivery of the conveyance documents by Mr. Steinfeld on behalf of Seller has been duly authorized.

(b) Purchaser — Gramercy Linden PropCo LLC:

(i) A certified copy of the Certificate of Formation of Gramercy Linden PropCo LLC, as filed with the New York Secretary of State;

(ii) A current Certificate of Good Standing for Gramercy Linden PropCo LLC issued by the New York Secretary of State, dated not more than thirty (30) days prior to closing;

(iii) A certified copy of the operating agreement of Gramercy Linden PropCo LLC, or such relevant excerpts thereof as may be required, together with a resolution or consent of the sole member authorizing the acquisition of the Property and the execution and delivery of the loan documents in connection with the Loan; and

(iv) Confirmation that Gramercy Linden PropCo LLC is a wholly owned subsidiary of Gramercy Linden JV LLC, a Delaware limited liability company (EIN: 93-4128765), together with such evidence of the organizational structure as the Title Company may reasonably require.

We request confirmation from the Title Company that the foregoing will satisfy the entity authority requirements set forth in the Commitment. To the extent that additional documentation is required, please advise us at your earliest convenience so that we may arrange for the preparation and delivery of such documents prior to closing.

4.4 Gap Coverage

We request that the Title Company provide full "gap" coverage — that is, insurance covering the period between the effective date of the last title search underlying the Commitment and the date and time of recording of the deed and mortgage at closing. The gap coverage should insure against any liens, encumbrances, or other matters affecting the Property that may be filed or recorded during the gap period. This is a standard requirement in New York commercial real estate transactions, and we request confirmation that the Title Company will provide such coverage without exception or qualification.

5. Review of Schedule B — Part II (Exceptions)

5.1 Standard/Printed Exceptions — Objections and Requests for Deletion

The Commitment contains certain standard or "printed" exceptions in Schedule B, Part II. We object to the following standard exceptions and request that they be deleted or modified as indicated below:

5.1.1 Survey Exception. We object to the standard survey exception, which excepts from coverage "shortages in area" or similar language relating to matters that would be disclosed by an accurate survey of the Property. An ALTA/NSPS Land Title Survey of the Property has been prepared and delivered to the Title Company (see Section 6 below for details). In light of the delivery and review of the Survey, we request that the standard survey exception be deleted in its entirety and replaced, if necessary, with specific references to the survey matters actually shown on the Survey, each of which is addressed in Section 6 below.

If the Title Company is unwilling to delete the survey exception entirely, we request, at a minimum, that the exception be modified to read: "Matters shown on the ALTA/NSPS Land Title Survey dated [date of Survey], prepared by [surveyor], Job No. [job number]," with each such matter specifically enumerated and cross-referenced to the corresponding exception in Schedule B, Part II.

5.1.2 Parties in Possession Exception. We object to the standard exception for "rights of tenants and parties in possession not shown by the public records." As currently drafted, this exception is overly broad and would except from coverage a wide range of potential claims, including options to purchase, rights of first refusal, and other interests that could materially affect the Purchaser's title to the Property.

The Property is a Class A multifamily residential building containing two hundred twelve (212) residential rental units and two (2) ground-floor retail units comprising approximately 4,800 combined square feet. Current occupancy is approximately 96.2% as of the most recent rent roll dated January 2023. All tenants are in possession under unrecorded leases or rental agreements. None of the residential leases contain options to purchase, rights of first refusal, or any other rights to acquire an interest in the Property.

We request that the standard parties-in-possession exception be modified to read as follows:

"Rights of residential and commercial tenants, as tenants only, under unrecorded leases, with no options to purchase, rights of first refusal, or other rights to acquire any interest in the land."

5.1.3 Mechanic's Lien Exception. We object to the standard exception for unfiled mechanic's liens or claims arising from labor or materials furnished to the Property. We understand that the Property underwent a major gut renovation in approximately 2017–2018. Given that more than four (4) years have elapsed since the completion of that renovation, the statutory lien period under New York Lien Law for all work performed in connection with that renovation should have expired. We request that the Title Company confirm that the statutory lien period has expired with respect to all construction and renovation work completed in 2018 or earlier.

We further request that the Title Company either (a) delete the mechanic's lien exception in its entirety, or (b) provide affirmative coverage against unfiled mechanic's liens, in each case subject to the Title Company's receipt of a lien waiver affidavit from Seller in form and substance reasonably satisfactory to the Title Company. If any construction, alteration, or renovation work has been performed at the Property subsequent to the 2017–2018 renovation, we request that the Title Company advise us immediately and provide copies of all lien waivers, lien releases, and final payment affidavits from all contractors, subcontractors, materialmen, and laborers who performed work at or furnished materials to the Property.

5.1.4 Tax Lien Exception. We object to the standard exception for unpaid real estate taxes, water and sewer charges, and assessments not yet due and payable. We request deletion of this exception upon the Title Company's confirmation that all real estate taxes, water charges, sewer charges, and governmental assessments affecting the Property are current and paid in full through the closing date, with appropriate prorations to be made at closing in accordance with the PSA.

We note that the calendar year 2022 real estate taxes for the Property were approximately $1,420,000.00. We request that the Title Company confirm the current payment status of all real estate taxes and water/sewer charges, including confirmation that there are no delinquencies, arrearages, or penalties outstanding. We further request that the Title Company advise us as to whether any tax certiorari proceedings are currently pending with respect to the Property's assessed valuation, and, if so, provide details of such proceedings, including the docket number, the tax years under review, and the status of any refund claims.

5.2 Specific/Special Exceptions — Analysis and Objections

In addition to the standard exceptions addressed above, the Commitment contains a number of specific or "special" exceptions in Schedule B, Part II. We address each category of specific exceptions below and set forth our objections and requests for resolution.

5.2.1 Real Estate Tax Liens. To the extent that the Commitment reflects any open or delinquent real estate tax liens, water or sewer liens, or other governmental charges constituting liens against the Property, we object to each such exception. All such liens must be satisfied in full at or prior to closing, and the corresponding exceptions must be deleted from the final policies. We request that the Title Company confirm the current tax lot designation for the Property as Block 899, Lot 42, Borough of Manhattan, and provide a current tax search reflecting the payment status of all real estate taxes, water charges, and sewer charges through the most recent billing period.

5.2.2 Existing Mortgage(s). We request that the Title Company identify all existing mortgages, deeds of trust, assignments of leases and rents, security agreements, and other security instruments currently of record that encumber the Property in favor of Seller's existing lender(s). We understand that the Property is currently subject to one or more mortgage liens securing Seller's existing indebtedness.

All existing mortgages and security interests must be satisfied and discharged of record at closing from Seller's share of the closing proceeds. We request that the Title Company (a) confirm receipt of a current payoff statement from each existing lender, setting forth the total amount required to satisfy the outstanding indebtedness as of the anticipated closing date, including per diem interest accruals, and (b) confirm that arrangements have been made for the preparation, execution, and recording of satisfaction, discharge, and/or release instruments with respect to each existing mortgage and security interest promptly following closing. We further request that the Title Company arrange for the recording of the applicable New York State Form TP-584 and NYC RPT with respect to any assignment or satisfaction of existing mortgage indebtedness to the extent required.

We object to any exception for existing mortgage liens that would survive closing. No such exception shall appear in the final Owner's or Lender's Policies.

5.2.3 Easements and Restrictions of Record. We request that the Title Company identify each recorded easement, right-of-way, and restrictive covenant affecting the Property as set forth in Schedule B, Part II of the Commitment. For each such exception, we request that the Title Company provide us with a complete, legible copy of the underlying recorded instrument, including all exhibits, amendments, and modifications.

Upon receipt and review of such instruments, we will evaluate whether each easement or restriction materially and adversely affects the use, operation, or value of the Property as a Class A multifamily residential building with ground-floor retail. Such evaluation will include, without limitation, an assessment of the impact of any utility easements, party wall agreements, air rights restrictions, light and air easements, access easements, and similar encumbrances.

We object to any easement or restriction of record that would impair the Purchaser's intended use of the Property as a multifamily residential building with ground-floor commercial/retail space, or that would materially and adversely affect the value of the Property. For any such objectionable exception, we request that the Title Company either (a) remove the exception from the final policies, or (b) provide affirmative insurance that the easement or restriction does not materially interfere with the use of the Property for its current and intended purposes.

For those easements that, upon our review, are determined to be standard utility or service easements that do not adversely affect the Property, we will accept such exceptions subject to our review and approval of the underlying instruments. We reserve the right to raise additional objections upon review of any instrument not yet provided.

5.2.4 Zoning Lot Restrictions / Declarations. We request that the Title Company identify any zoning lot merger agreements, declarations of zoning lot restrictions, restrictive declarations filed with the New York City Department of City Planning or Department of Buildings, or similar instruments affecting the Property or the zoning lot of which the Property forms a part. In addition, we request identification of any recorded agreements relating to the transfer of development rights ("TDR"), including any zoning lot development agreements or similar instruments.

Please provide complete copies of all such instruments. We will evaluate their impact on the Property, including any implications for the Property's existing zoning classification, floor area ratio, development potential, and any non-conforming use or non-complying bulk status that may apply. To the extent that any such instrument would restrict or limit the current use or operation of the Property, we object and request removal of the exception or affirmative insurance in a form satisfactory to Purchaser and its counsel.

5.2.5 Building/Housing Code Violations. To the extent that the Commitment reflects any open building code violations issued by the New York City Department of Buildings ("DOB") or housing code violations issued by the New York City Department of Housing Preservation and Development ("HPD"), we object to such exceptions. Open violations of this nature could constitute title defects or give rise to liens that would take priority over the Purchaser's interest in the Property.

We request that the Seller cure all open DOB and HPD violations prior to closing, or, alternatively, that the Title Company provide affirmative insurance against any loss or damage arising from such violations. We further request that the Title Company provide or arrange for a current search of DOB and HPD records for the Property, including a report of all open violations, complaints, permits, and certificates of occupancy. The results of such search should be provided to our office promptly upon receipt.

5.2.6 Judgments and Liens Against Seller. We request that the Title Company identify any and all judgments, federal tax liens, state tax liens, or UCC financing statement filings of record against (a) Linden Gramercy Holdings LLC, the Seller, and (b) Marcus Steinfeld, individually or in any capacity, to the extent that such liens or judgments may constitute encumbrances against the Property.

We object to all such exceptions. Any judgment liens, tax liens, or UCC financing statements that constitute liens or encumbrances against the Property must be satisfied, released, terminated, or bonded at or prior to closing, at Seller's sole cost and expense. The corresponding exceptions must be deleted from the final policies. We request that the Title Company advise us of the nature, amount, and holder of each such lien or judgment so that we may coordinate with Seller's counsel regarding satisfaction and discharge.

5.2.7 Covenants, Conditions, and Restrictions. We request identification of any covenants, conditions, and restrictions ("CC&Rs") or other recorded restrictions affecting the Property, in addition to those addressed in Sections 5.2.3 and 5.2.4 above. We object to any CC&R or recorded restriction that would restrict, limit, or prohibit the current multifamily residential and ground-floor retail use of the Property.

We request that the Title Company provide affirmative insurance (by endorsement or otherwise) that the Property is not currently in violation of any recorded covenants, conditions, or restrictions affecting the Property, and that the existing use of the Property as a multifamily residential building with ground-floor retail does not violate any such covenants or restrictions. If the Title Company is unable to provide such affirmative insurance, please advise us of the specific concern and the basis for any refusal.

5.2.8 Other Specific Exceptions. To the extent that the Commitment contains any additional specific exceptions not addressed in the foregoing subsections — including, without limitation, any exceptions for pending litigation or lis pendens notices, environmental liens, landmark or historic preservation restrictions, or other matters — we object to each such exception and request either (a) removal of the exception from the final policies, or (b) affirmative insurance satisfactory to Purchaser and Lender that such exception does not materially and adversely affect the Purchaser's fee simple title to or the Lender's mortgage lien on the Property.

With respect to any exception for landmark or historic preservation restrictions, we request that the Title Company advise us as to whether the Property or any portion thereof is designated as a New York City landmark, is located within a historic district, or is subject to any restrictions imposed by the New York City Landmarks Preservation Commission. If the Property is subject to such restrictions, we request copies of all applicable designations and restriction documents.

With respect to any exception for pending litigation, we request copies of all complaints, lis pendens filings, or other court documents reflected in the Commitment, together with a summary of the current status of each such action.

6. Survey Review

6.1 Survey Identification

We have reviewed the ALTA/NSPS Land Title Survey of the Property (the "Survey") prepared by Hargrove & Associates, P.C., Licensed Land Surveyors, 14 Penn Plaza, Suite 2205, New York, New York 10122, dated March 22, 2023, last revised April 5, 2023, Job No. HA-2023-0317. The Survey was prepared for the benefit of Purchaser, Lender, and the Title Company and bears the certification of Daniel R. Hargrove, P.L.S., New York License No. 050824.

We confirm that the Survey has been prepared in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, as adopted and effective February 23, 2021. We further confirm that the following Table A optional items have been included on the Survey, as required by both Purchaser and Lender:

Items 1, 2, 3, 4, 5, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13, 14, 16, 17, 18, 19, and 20.

A copy of the Survey has been delivered to the Title Company. We request that the Title Company confirm receipt of the Survey and advise us of any additional requirements with respect to the form, content, or certification of the Survey.

6.2 Survey Matters Requiring Resolution

Based on our review of the Survey, we have identified the following matters that require resolution, clarification, or affirmative insurance from the Title Company:

6.2.1 Encroachments. We request that the Title Company review the Survey and identify all encroachments depicted thereon, including, without limitation, (a) any encroachments of improvements located on the Property onto adjacent properties or onto public rights-of-way, sidewalks, or setback areas, and (b) any encroachments of improvements located on adjacent properties onto the Property. The Survey appears to depict certain minor encroachments, including projecting architectural features, signage, and HVAC equipment.

For any encroachments identified on the Survey, we request that the Title Company provide affirmative encroachment coverage by endorsement to both the Owner's and Lender's Policies, insuring against loss arising from such encroachments. To the extent that any encroachment is material — that is, it would adversely affect the use, structural integrity, or value of the Property — we request that Seller cure the encroachment prior to closing or provide evidence of a license, easement, or other agreement permitting the encroachment. We reserve the right to object to any material encroachment that cannot be adequately addressed through affirmative title insurance coverage.

6.2.2 Boundary Discrepancies. We request that the Title Company compare the boundaries of the Property as shown on the Survey with the legal description set forth in Schedule A of the Commitment. Any gaps, overlaps, or discrepancies between the survey boundary and the record legal description must be reconciled and corrected. If the metes and bounds description in the Commitment does not close or does not accurately describe the boundaries depicted on the Survey, the legal description in the Commitment must be revised to match the Survey, and the corrected legal description must be incorporated into the final policies.

6.2.3 Setback Violations. We request that the Title Company and the surveyor identify any building setback violations, zoning yard violations, or other non-compliances with applicable zoning bulk regulations as shown on the Survey. To the extent that any portion of the existing improvements encroaches into required front, side, or rear yard setback areas, or exceeds the maximum permitted lot coverage or floor area ratio, we request (a) confirmation as to whether such non-compliance constitutes a pre-existing, legal non-conforming condition, and (b) affirmative zoning coverage by endorsement, as further described in Section 7 below.

6.2.4 Easement Locations. We request that the Title Company confirm that all recorded easements identified in Schedule B, Part II of the Commitment are accurately depicted on the Survey, with their respective locations, dimensions, and benefited/burdened parcels clearly identified. To the extent that the Survey depicts any easements, rights-of-way, or other encumbrances that are not reflected as exceptions in the Commitment, we request that such matters be added to the Commitment and that the Title Company advise us as to their nature, origin, and potential impact on the Property.

Additionally, to the extent that any easement reflected in the Commitment is not depicted on the Survey, we request that the surveyor investigate and determine the location of such easement, or that the Title Company confirm that the easement is of a nature that does not have a fixed, ascertainable location on the ground (e.g., a blanket easement).

6.2.5 Access and Curb Cuts. We request confirmation that the Survey depicts legal and physical access from the Property to East 21st Street, which is a dedicated and accepted public street in the City of New York. The Survey should clearly depict all curb cuts, driveways, pedestrian entrances, and vehicular access points serving the Property. To the extent that any access issue is identified — including, without limitation, any obstruction of access, encroachment into the public right-of-way, or reliance on access over adjacent private property — we request that the Title Company advise us immediately and provide appropriate access coverage by endorsement.

6.2.6 Flood Zone Determination. We note the FEMA flood zone designation shown on the Survey. We request that the Title Company confirm the applicable flood zone classification for the Property based on the current FEMA Flood Insurance Rate Map (FIRM) for the Borough of Manhattan. If the Property, or any portion thereof, is located within a Special Flood Hazard Area (Zone A, AE, or equivalent), we note that the Lender will require the Purchaser to obtain and maintain a flood insurance policy in accordance with the terms of the Loan documents and applicable federal law, including the National Flood Insurance Act and the Flood Disaster Protection Act. We request that the Title Company advise us of the current flood zone designation so that the parties may make appropriate arrangements for flood insurance coverage, if required, prior to closing.

7. Endorsements Requested

7.1 Owner's Policy Endorsements

We request that the following endorsements be issued in connection with the Owner's Policy, to the extent available under New York law and the Title Company's underwriting guidelines:

(a) Comprehensive/Zoning Endorsement (ALTA 9 Series): A zoning endorsement confirming (i) the Property's current zoning classification under the New York City Zoning Resolution, (ii) the permitted use of the Property as multifamily residential with ground-floor retail/commercial space, and (iii) confirmation that the existing improvements comply with the applicable zoning requirements, or, if applicable, that the Property has a legally recognized non-conforming use or non-complying bulk status. This endorsement should include coverage under ALTA Forms 9.1 (Land Under Development), 9.2 (Completed Structure), and/or 9.3 (Non-Conforming Use), as applicable.

(b) Access Endorsement: An endorsement confirming that the Property has legal and physical access to and from East 21st Street, a dedicated and accepted public street.

(c) Contiguity Endorsement: An endorsement confirming that the Property consists of a single, contiguous parcel, with no gaps or gores, if applicable.

(d) Tax Lot / Tax Parcel Endorsement: An endorsement confirming that the Property comprises a single tax lot, designated as Block 899, Lot 42, on the Tax Map of the Borough of Manhattan, and is separately assessed for real estate tax purposes.

(e) Survey Endorsement: An endorsement based upon and referencing the ALTA/NSPS Land Title Survey, deleting the standard survey exception and substituting the specific survey matters shown on the Survey.

(f) Encroachment Endorsement: An endorsement insuring against loss or damage arising from any encroachments identified on the Survey, including encroachments of the improvements onto adjacent properties or public rights-of-way and encroachments of adjacent improvements onto the Property.

(g) Restrictions, Encroachments, Minerals Endorsement (ALTA 9.1, 9.2, 9.3): As applicable, endorsements insuring against loss arising from violations of recorded restrictions, encroachments, and mineral reservations, to the extent not covered by the endorsements described above.

(h) Fairway / Same-as-Survey Endorsement: An endorsement insuring that the boundaries of the Property as described in the legal description in the policy are coterminous with the boundaries of the Property as depicted on the Survey.

(i) Environmental Protection Lien Endorsement (ALTA 8.1): An endorsement insuring against any environmental protection liens recorded or filed against the Property having priority over the Purchaser's insured interest.

(j) Subdivision Endorsement: An endorsement confirming that the Property is a legally subdivided lot in compliance with all applicable subdivision laws and regulations.

(k) Non-Imputation Endorsement: An endorsement providing that knowledge of any prior owner, member, manager, or principal of the Purchaser or any of its affiliates shall not be imputed to the Purchaser for purposes of the Owner's Policy.

(l) Doing Business Endorsement: An endorsement confirming that the Title Company's authority to transact title insurance business in the State of New York will not be impaired during the coverage period of the policy.

(m) Additional Endorsements: Any additional endorsements customarily required or available in connection with New York City commercial real estate transactions of this size and nature, including, without limitation, any endorsements required by Purchaser's counsel in the exercise of its reasonable judgment.

7.2 Lender's Policy Endorsements

We request that the following endorsements be issued in connection with the Lender's Policy, in addition to all endorsements required by Pinnacle Fidelity Bank, N.A. pursuant to the Lender's Title Requirements:

(a) All endorsements described in Section 7.1 above (to the extent applicable to a loan policy);

(b) Comprehensive / Zoning Endorsement (ALTA 9 Series): As described in Section 7.1(a);

(c) Variable Rate Endorsement: An endorsement insuring against loss arising from the invalidity or unenforceability of the insured mortgage due to any adjustable or variable interest rate provisions in the Loan documents;

(d) Revolving Credit / Future Advance Endorsement: An endorsement insuring the priority of the insured mortgage lien with respect to any revolving credit or future advance provisions in the Loan documents, if applicable;

(e) Last Dollar Endorsement: An endorsement providing that the Title Company will not assert that any policy loss is limited to the difference between the full insured amount and the value of the insured estate or interest;

(f) Usury Endorsement: An endorsement insuring against loss arising from the invalidity or unenforceability of the insured mortgage due to any claim of usury;

(g) First Loss Endorsement: An endorsement providing that, in the event of a claim, the Lender's loss will be payable without any reduction for the value of any remaining insured estate or interest;

(h) Tie-In Endorsement: To the extent the Property comprises or is deemed to comprise multiple parcels, an endorsement providing for aggregation of coverage;

(i) Doing Business Endorsement: As described in Section 7.1(l);

(j) Additional Lender Endorsements: Any additional endorsements specified in the Lender's closing instructions or otherwise required by Pinnacle Fidelity Bank, N.A.

The Loan details for inclusion in the Lender's Policy endorsements are as follows:

Loan Amount: $26,000,000.00 Loan No.: PFB-CRE-2023-05741 Borrower: Gramercy Linden PropCo LLC Lender: Pinnacle Fidelity Bank, N.A.

We request that the Title Company provide us with a pro forma of each endorsement for our review and approval prior to closing.

8. Additional Title Requirements

8.1 UCC Search

We request that the Title Company conduct a current Uniform Commercial Code search (or confirm that a current UCC search has been conducted) against each of the following parties, in the applicable jurisdictions:

(i) Linden Gramercy Holdings LLC (Seller) — New York Department of State, and New York County (Manhattan);

(ii) Marcus Steinfeld (individually) — New York Department of State, New York County (Manhattan), and such other jurisdictions as may be appropriate based on his known addresses; and

(iii) Any prior owners appearing in the chain of title for the Property within the applicable search period.

Any existing UCC financing statements that constitute liens or encumbrances against the Property, the improvements thereon, or any fixtures or personal property located at the Property must be terminated at or prior to closing, and UCC-3 Termination Statements must be filed of record. We request that the Title Company provide us with copies of all UCC financing statements identified in the search results, together with the names and contact information of the respective secured parties, so that we may coordinate with Seller's counsel regarding the preparation and filing of termination statements.

8.2 Litigation / Judgment Search

We request that the Title Company conduct (or confirm that it has conducted) current litigation, judgment, and bankruptcy searches against each of the following parties:

(i) Linden Gramercy Holdings LLC (Seller);

(ii) Marcus Steinfeld (individually and in his capacity as Managing Member of Seller); and

(iii) Such additional parties as the Title Company deems necessary or appropriate based on its review of the chain of title.

Such searches should cover the relevant state and federal courts, including the United States District Court for the Southern District of New York, the New York State Supreme Court (New York County), and the United States Bankruptcy Court for the Southern District of New York. We object to any adverse results, including any outstanding judgments, pending litigation, bankruptcy filings, or lis pendens notices. All adverse matters must be cleared, satisfied, released, or otherwise resolved to the satisfaction of the Title Company, Purchaser, and Lender prior to closing.

8.3 FIRPTA / Non-Foreign Status

Section 1445 of the Internal Revenue Code requires that a transferee withhold tax on the disposition of a United States real property interest by a foreign person unless the transferor provides a certificate of non-foreign status. The PSA requires Seller to deliver, at closing, a certificate of non-foreign status in accordance with Treasury Regulations Section 1.1445-2(b), confirming that Seller is not a "foreign person" within the meaning of IRC Section 1445. We note that the Title Company may require delivery of this certificate as a condition to the disbursement of closing proceeds. We request confirmation from the Title Company as to whether this is a disbursement requirement and, if so, confirmation that the certificate form to be used is acceptable.

8.4 Municipal Search / Departmental Searches

We request that the Title Company provide, or arrange for the preparation and delivery of, current New York City departmental searches with respect to the Property, including searches of the records of the following agencies:

(i) New York City Department of Buildings (DOB): Confirming the status of all building permits, certificates of occupancy, temporary certificates of occupancy, open applications, and open violations;

(ii) New York City Department of Housing Preservation and Development (HPD): Confirming the status of all housing code violations, emergency repair charges, and lead paint orders;

(iii) New York City Environmental Control Board (ECB): Confirming the status of all open ECB violations and outstanding fines;

(iv) New York City Department of Environmental Protection (DEP): Confirming the status of all water and sewer charges and any open violations; and

(v) Fire Department of the City of New York (FDNY): Confirming the status of all fire code violations and open inspections.

The results of these departmental searches should be provided to our office and to the Lender's counsel promptly upon receipt. Any open violations that could constitute title defects or give rise to lien claims must be identified so that appropriate cure or affirmative insurance can be arranged prior to closing.

9. Escrow Matters

We confirm that Archer & Towne Title Company is serving as escrow agent for the earnest money deposit in the amount of Two Million and 00/100 Dollars ($2,000,000.00) (the "Deposit"), pursuant to the escrow provisions of the PSA dated March 15, 2023. The Deposit was delivered to the Title Company by Purchaser upon execution of the PSA.

We request confirmation of the following:

(a) That the Title Company has received the Deposit in full and that the Deposit is being held in a segregated, interest-bearing escrow account at a federally insured depository institution;

(b) The current balance of the escrow account, including any accrued interest;

(c) That the Deposit became non-refundable upon the expiration of the due diligence period on April 14, 2023, in accordance with the terms of the PSA; and

(d) Confirmation of the escrow instructions governing the disbursement of the Deposit at closing, including the allocation of any interest earned on the Deposit between Seller and Purchaser in accordance with the PSA.

Please provide written confirmation of the foregoing at your earliest convenience.

10. Response and Timeline

We respectfully request that the Title Company provide a comprehensive written response to all objections, requests, and inquiries set forth in this letter within five (5) business days of the date hereof. Given that the due diligence period under the PSA expires on April 14, 2023, the timely resolution of the matters identified herein is essential.

The target closing date under the PSA is May 30, 2023. We are committed to working cooperatively with the Title Company, Seller's counsel, and the Lender's counsel to resolve all outstanding title and survey matters well in advance of closing. To the extent that the Title Company requires additional information, documentation, or clarification from Purchaser or its counsel in order to address the matters raised herein, please contact the undersigned immediately.

We hereby reserve all rights of the Purchaser under the PSA with respect to title objections and Seller's obligation to cure title defects, including, without limitation, the right to terminate the PSA in the event of a material, uncured title defect in accordance with the terms thereof.

Nothing in this letter shall constitute a waiver of any title objection not specifically addressed herein. Purchaser expressly reserves the right to raise additional objections upon review of any updated title search, continuation search, supplemental reports, or additional recorded instruments that come to Purchaser's attention. Purchaser further reserves the right to require compliance with any additional title requirements that may be imposed by the Lender or its counsel subsequent to the date of this letter.

11. Copies and Contact Information

We request that the Title Company provide complete, legible copies of all recorded instruments referenced as exceptions in Schedule B, Parts I and II of the Commitment, to the extent not already provided. Such copies should include all exhibits, schedules, amendments, and modifications to each instrument. All documents should be delivered to our office electronically (in PDF format) and, if requested, in hard copy.

All correspondence, responses, and documentation related to the matters addressed in this letter should be directed to:

Grace Nakamura Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017 Telephone: (212) 506-7224

Email: gnakamura@calderwoodharkness.com

With a copy to:

Angela Fontaine, Partner Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017 Telephone: (212) 506-7108

Email: afontaine@calderwoodharkness.com

Please reference Calderwood & Harkness LLP Matter No. 1026-00004 in all correspondence.

We appreciate your prompt attention to these matters and look forward to working with you toward a successful closing. Please do not hesitate to contact me should you have any questions.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Grace Nakamura Lead Associate, Real Estate Group

cc (via email):

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

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

Douglas Fairchild, Esq. Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017

Sandra Kim Pinnacle Fidelity Bank, N.A. 383 Madison Avenue New York, NY 10179

Nadia Kowalski, Esq. Whitfield Archer & Crane LLP One Federal Street, Suite 3600 Boston, MA 02110

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

CALDERWOOD & HARKNESS LLP 280 Park Avenue New York, NY 10017 Telephone: (212) 506-7000 Facsimile: (212) 506-7001 www.calderwoodharkness.com
April 13, 2023
VIA EMAIL AND OVERNIGHT COURIER
Archer & Towne Title Company
Attn: Philip Moreno, Title Officer
60 East 42nd Street, Suite 1840 New York, NY 10165
Re: Title and Survey Review — The Linden at Gramercy Park Property Address: 245 East 21st Street, New York, NY 10010 Block 899, Lot 42, Borough of Manhattan, City of New York Title Commitment No.: AT-2023-MN-0041872 Date of Title Commitment: April 11, 2023 Calderwood & Harkness LLP Matter No.: 1026-00004 Proposed Insured (Owner's Policy): Gramercy Linden PropCo LLC Proposed Insured (Lender's Policy): Pinnacle Fidelity Bank, N.A.
Dear Mr. Moreno:
1. Introduction and Purpose
Calderwood & Harkness LLP represents Briarwood Family Office LLC ("Briarwood"), the managing member of Gramercy Linden JV LLC, a Delaware limited liability company, which is the sole member and parent entity of Gramercy Linden PropCo LLC, a New York limited liability company (the "Purchaser"), in connection with the Purchaser's acquisition of the improved real property located at 245 East 21st Street, New York, New York 10010, designated as Block 899, Lot 42 on the Tax Map of the Borough of Manhattan, City of New York, and commonly known as "The Linden at Gramercy Park" (the "Property").
The Property is being acquired from Linden Gramercy Holdings LLC, a New York limited liability company (the "Seller"), pursuant to that certain Purchase and Sale Agreement, dated March 15, 2023, by and between Seller and Purchaser (as may be amended, the "PSA"), at a purchase price of Forty Million and 00/100 Dollars ($40,000,000.00). The acquisition is being financed, in part, with the proceeds of a senior mortgage loan in the principal amount of Twenty-Six Million and 00/100 Dollars ($26,000,000.00) (the "Loan") to be made by Pinnacle Fidelity Bank, N.A. (the "Lender") to Purchaser (Loan No. PFB-CRE-2023-05741), pursuant to a loan commitment letter issued by the Lender dated April 7, 2023 (the "Loan Commitment").
This letter constitutes our review, on behalf of Purchaser, of Title Commitment No. AT-2023-MN-0041872 (the "Commitment"), issued by Archer & Towne Title Company (the "Title Company"), dated April 11, 2023, together with the related ALTA/NSPS Land Title Survey of the Property described more fully in Section 6 below (the "Survey"). We had the benefit of reviewing the preliminary title search results circulated in late March 2023 in anticipation of the formal Commitment, and we have now completed our review of the Commitment itself as issued.
The purpose of this letter is to (a) identify those title exceptions appearing in Schedule B of the Commitment that must be removed, cured, or affirmatively insured over as a condition to closing, (b) request specific title endorsements required by both the Purchaser and the Lender, (c) set forth our review and objections with respect to matters shown on the Survey, and (d) confirm certain additional requirements that must be satisfied in connection with the issuance of the Owner's and Lender's title insurance policies at closing.
We note that the due diligence period under the PSA expires on April 14, 2023. Accordingly, the timely resolution of the matters identified herein is critical. The target closing date under the PSA is May 30, 2023, and we are working to ensure that all title and survey matters are resolved well in advance of that date. We respectfully request that the Title Company provide a written response to all objections and requests contained in this letter within five (5) business days of receipt.
2. Title Policies Required
2.1 Owner's Title Insurance Policy
We request that the Title Company issue an ALTA Owner's Policy of Title Insurance (2006 Form, or the New York equivalent thereof) insuring fee simple title to the Property in favor of the Purchaser, in the following amount and on the following terms:
Named Insured: Gramercy Linden PropCo LLC, a New York limited liability company
Policy Amount: $40,000,000.00
Effective Date: The date and time of recording of the bargain and sale deed conveying title to the Property from Seller to Purchaser with the Office of the City Register of the City of New York, New York County
The Owner's Policy shall be subject only to those exceptions specifically approved and accepted by Purchaser as set forth herein or as may be subsequently agreed upon in writing. All standard or printed exceptions shall be deleted or modified as set forth in Section 5 below, and the Owner's Policy shall include the endorsements requested in Section 7 below.
2.2 Lender's Title Insurance Policy
We further request that the Title Company issue an ALTA Loan Policy of Title Insurance (2006 Form) insuring the lien of the mortgage and related loan documents to be granted by the Purchaser in favor of the Lender, in the following amount and on the following terms:
Named Insured: Pinnacle Fidelity Bank, N.A., its successors and/or assigns
Policy Amount: $26,000,000.00
Loan No.: PFB-CRE-2023-05741
Effective Date: The date and time of recording of the mortgage and related loan documents with the Office of the City Register of the City of New York, New York County
The Lender's Policy must satisfy all title insurance requirements set forth in the Loan Commitment dated April 7, 2023, and the Lender's title requirements letter accompanying the Loan Commitment (collectively, the "Lender's Title Requirements"). We will provide a copy of the Lender's Title Requirements under separate cover to the extent not already in the Title Company's possession. The Lender's Policy shall include all endorsements specified in Section 7.2 below and any additional endorsements that may be required pursuant to the Lender's closing instructions.
3. Review of Schedule A
3.1 Legal Description
We request that the Title Company confirm that the legal description set forth in Schedule A of the Commitment accurately and completely describes the Property located at 245 East 21st Street, New York, New York 10010, designated as Block 899, Lot 42, on the Tax Map of the Borough of Manhattan, City of New York. We further request that the Title Company confirm that the legal description in the Commitment matches, in all material respects, the legal description set forth on the Survey. To the extent that there are any discrepancies between the legal description in the Commitment and the metes and bounds or other description depicted on the Survey, we request that such discrepancies be reconciled and corrected prior to the issuance of the final Owner's and Lender's Policies. Any revised legal description should be circulated to our office and to the Lender's counsel for review and approval prior to incorporation into the final policies.
3.2 Vesting.  We request confirmation that Schedule A of the Commitment reflects that fee simple title to the Property is currently vested in Linden Gramercy Holdings LLC, a New York limited liability company, as sole owner. It is our understanding that the Seller acquired the Property in or around 2005, for an approximate purchase price of $18,500,000.00, pursuant to a bargain and sale deed recorded with the Office of the City Register of the City of New York, New York County. We request confirmation that the vesting deed from Seller's predecessor(s)-in-interest to Seller is properly of record and forms an unbroken link in the chain of title.
To the extent that there are any irregularities, gaps, or ambiguities in the chain of title — including, without limitation, any defective or missing acknowledgments, improperly executed conveyance instruments, or unrecorded intermediate conveyances — we request that the Title Company identify such issues and provide a plan for resolution prior to closing. If corrective instruments are required, Seller must execute and deliver the same at or prior to closing as a condition to the Purchaser's obligation to close.
3.3 Proposed Insured and Policy Amounts
We request that the Title Company confirm that Schedule A of the Commitment correctly reflects the following:
Owner's Policy: Named Insured: Gramercy Linden PropCo LLC Policy Amount: $40,000,000.00
Lender's Policy: Named Insured: Pinnacle Fidelity Bank, N.A. Policy Amount: $26,000,000.00
If the named insureds or policy amounts are not currently reflected in the Commitment, we request that the Commitment be revised to incorporate the foregoing.
4. Review of Schedule B — Part I (Requirements)
4.1 Standard Requirements
We acknowledge the standard requirements set forth in Schedule B, Part I of the Commitment, including, without limitation, the requirements for (a) the recording of a bargain and sale deed (or such other form of conveyance instrument as may be appropriate) conveying fee simple title to the Property from Seller to Purchaser, (b) the payment of all applicable transfer taxes, and (c) the satisfaction and discharge of record of all existing mortgages, deeds of trust, security interests, and other monetary liens encumbering the Property.
With respect to the satisfaction of existing indebtedness, we understand that the Property is currently encumbered by one or more mortgages or other security instruments in favor of Seller's existing lender(s). All such existing mortgages and security interests must be satisfied and discharged of record at or prior to closing, from Seller's share of the closing proceeds. We request that the Title Company confirm receipt of a payoff letter or payoff statement from each existing lender, together with confirmation that arrangements have been made for the recording of appropriate satisfaction or discharge instruments promptly following closing. No exception for any existing mortgage lien shall survive closing or appear as an exception in the final Owner's or Lender's Policies.
4.2 Transfer Tax Requirements
We request that the Title Company confirm its calculation of the applicable transfer taxes in connection with the conveyance of the Property, based on the purchase price of $40,000,000.00, as follows:
(a) New York City Real Property Transfer Tax (RPTT): Based on a purchase price of $40,000,000.00 and a transfer tax rate of 2.625% applicable to conveyances of real property where the consideration exceeds $500,000 and the property is classified as other than a one-, two-, or three-family dwelling, the estimated NYC RPTT is $1,050,000.00. Pursuant to the PSA, the NYC RPTT is the obligation of the Seller.
(b) New York State Real Estate Transfer Tax: Based on a purchase price of $40,000,000.00 and a transfer tax rate of $2.00 per $500 of consideration (or fraction thereof), the estimated NYS Transfer Tax is $160,000.00. Pursuant to the PSA, the NYS Transfer Tax is the obligation of the Seller.
(c) New York State Mansion Tax (Additional Transfer Tax): Based on a purchase price of $40,000,000.00 and the applicable rate of 0.375% for transactions at or above the $25,000,000 threshold, the estimated Mansion Tax is $150,000.00. Pursuant to the PSA, the Mansion Tax is the obligation of the Purchaser.
We request confirmation that the Title Company will prepare and file the applicable NYC RPT returns (Form NYC-RPT) and the New York State Combined Real Estate Transfer Tax Return (Form TP-584) on behalf of the parties at closing, and that the Title Company will arrange for the payment of all transfer taxes from the closing proceeds in accordance with the closing statement approved by the parties.
4.3 Entity Authority Requirements
Schedule B, Part I of the Commitment sets forth certain requirements relating to the organizational authority of the parties. We request confirmation that the following will satisfy such requirements:
(a) Seller — Linden Gramercy Holdings LLC:
(i) A current Certificate of Good Standing for Linden Gramercy Holdings LLC issued by the New York Secretary of State, dated not more than thirty (30) days prior to closing;
(ii) A certified copy of the operating agreement of Linden Gramercy Holdings LLC, or such relevant excerpts thereof as may be required, together with a resolution or consent of the members authorizing the sale and conveyance of the Property, duly executed by Marcus Steinfeld in his capacity as Managing Member; and
(iii) Such additional evidence of authority as the Title Company may reasonably require to confirm that the execution and delivery of the conveyance documents by Mr. Steinfeld on behalf of Seller has been duly authorized.
(b) Purchaser — Gramercy Linden PropCo LLC:
(i) A certified copy of the Certificate of Formation of Gramercy Linden PropCo LLC, as filed with the New York Secretary of State;
(ii) A current Certificate of Good Standing for Gramercy Linden PropCo LLC issued by the New York Secretary of State, dated not more than thirty (30) days prior to closing;
(iii) A certified copy of the operating agreement of Gramercy Linden PropCo LLC, or such relevant excerpts thereof as may be required, together with a resolution or consent of the sole member authorizing the acquisition of the Property and the execution and delivery of the loan documents in connection with the Loan; and
(iv) Confirmation that Gramercy Linden PropCo LLC is a wholly owned subsidiary of Gramercy Linden JV LLC, a Delaware limited liability company (EIN: 93-4128765), together with such evidence of the organizational structure as the Title Company may reasonably require.
We request confirmation from the Title Company that the foregoing will satisfy the entity authority requirements set forth in the Commitment. To the extent that additional documentation is required, please advise us at your earliest convenience so that we may arrange for the preparation and delivery of such documents prior to closing.
4.4 Gap Coverage
We request that the Title Company provide full "gap" coverage — that is, insurance covering the period between the effective date of the last title search underlying the Commitment and the date and time of recording of the deed and mortgage at closing. The gap coverage should insure against any liens, encumbrances, or other matters affecting the Property that may be filed or recorded during the gap period. This is a standard requirement in New York commercial real estate transactions, and we request confirmation that the Title Company will provide such coverage without exception or qualification.
5. Review of Schedule B — Part II (Exceptions)
5.1 Standard/Printed Exceptions — Objections and Requests for Deletion
The Commitment contains certain standard or "printed" exceptions in Schedule B, Part II. We object to the following standard exceptions and request that they be deleted or modified as indicated below:
5.1.1 Survey Exception.  We object to the standard survey exception, which excepts from coverage "shortages in area" or similar language relating to matters that would be disclosed by an accurate survey of the Property. An ALTA/NSPS Land Title Survey of the Property has been prepared and delivered to the Title Company (see Section 6 below for details). In light of the delivery and review of the Survey, we request that the standard survey exception be deleted in its entirety and replaced, if necessary, with specific references to the survey matters actually shown on the Survey, each of which is addressed in Section 6 below.
If the Title Company is unwilling to delete the survey exception entirely, we request, at a minimum, that the exception be modified to read: "Matters shown on the ALTA/NSPS Land Title Survey dated [date of Survey], prepared by [surveyor], Job No. [job number]," with each such matter specifically enumerated and cross-referenced to the corresponding exception in Schedule B, Part II.
5.1.2 Parties in Possession Exception.  We object to the standard exception for "rights of tenants and parties in possession not shown by the public records." As currently drafted, this exception is overly broad and would except from coverage a wide range of potential claims, including options to purchase, rights of first refusal, and other interests that could materially affect the Purchaser's title to the Property.
The Property is a Class A multifamily residential building containing two hundred twelve (212) residential rental units and two (2) ground-floor retail units comprising approximately 4,800 combined square feet. Current occupancy is approximately 96.2% as of the most recent rent roll dated January 2023. All tenants are in possession under unrecorded leases or rental agreements. None of the residential leases contain options to purchase, rights of first refusal, or any other rights to acquire an interest in the Property.
We request that the standard parties-in-possession exception be modified to read as follows:
"Rights of residential and commercial tenants, as tenants only, under unrecorded leases, with no options to purchase, rights of first refusal, or other rights to acquire any interest in the land."
5.1.3 Mechanic's Lien Exception.  We object to the standard exception for unfiled mechanic's liens or claims arising from labor or materials furnished to the Property. We understand that the Property underwent a major gut renovation in approximately 2017–2018. Given that more than four (4) years have elapsed since the completion of that renovation, the statutory lien period under New York Lien Law for all work performed in connection with that renovation should have expired. We request that the Title Company confirm that the statutory lien period has expired with respect to all construction and renovation work completed in 2018 or earlier.
We further request that the Title Company either (a) delete the mechanic's lien exception in its entirety, or (b) provide affirmative coverage against unfiled mechanic's liens, in each case subject to the Title Company's receipt of a lien waiver affidavit from Seller in form and substance reasonably satisfactory to the Title Company. If any construction, alteration, or renovation work has been performed at the Property subsequent to the 2017–2018 renovation, we request that the Title Company advise us immediately and provide copies of all lien waivers, lien releases, and final payment affidavits from all contractors, subcontractors, materialmen, and laborers who performed work at or furnished materials to the Property.
5.1.4 Tax Lien Exception.  We object to the standard exception for unpaid real estate taxes, water and sewer charges, and assessments not yet due and payable. We request deletion of this exception upon the Title Company's confirmation that all real estate taxes, water charges, sewer charges, and governmental assessments affecting the Property are current and paid in full through the closing date, with appropriate prorations to be made at closing in accordance with the PSA.
We note that the calendar year 2022 real estate taxes for the Property were approximately $1,420,000.00. We request that the Title Company confirm the current payment status of all real estate taxes and water/sewer charges, including confirmation that there are no delinquencies, arrearages, or penalties outstanding. We further request that the Title Company advise us as to whether any tax certiorari proceedings are currently pending with respect to the Property's assessed valuation, and, if so, provide details of such proceedings, including the docket number, the tax years under review, and the status of any refund claims.
5.2 Specific/Special Exceptions — Analysis and Objections
In addition to the standard exceptions addressed above, the Commitment contains a number of specific or "special" exceptions in Schedule B, Part II. We address each category of specific exceptions below and set forth our objections and requests for resolution.
5.2.1 Real Estate Tax Liens.  To the extent that the Commitment reflects any open or delinquent real estate tax liens, water or sewer liens, or other governmental charges constituting liens against the Property, we object to each such exception. All such liens must be satisfied in full at or prior to closing, and the corresponding exceptions must be deleted from the final policies. We request that the Title Company confirm the current tax lot designation for the Property as Block 899, Lot 42, Borough of Manhattan, and provide a current tax search reflecting the payment status of all real estate taxes, water charges, and sewer charges through the most recent billing period.
5.2.2 Existing Mortgage(s).  We request that the Title Company identify all existing mortgages, deeds of trust, assignments of leases and rents, security agreements, and other security instruments currently of record that encumber the Property in favor of Seller's existing lender(s). We understand that the Property is currently subject to one or more mortgage liens securing Seller's existing indebtedness.
All existing mortgages and security interests must be satisfied and discharged of record at closing from Seller's share of the closing proceeds. We request that the Title Company (a) confirm receipt of a current payoff statement from each existing lender, setting forth the total amount required to satisfy the outstanding indebtedness as of the anticipated closing date, including per diem interest accruals, and (b) confirm that arrangements have been made for the preparation, execution, and recording of satisfaction, discharge, and/or release instruments with respect to each existing mortgage and security interest promptly following closing. We further request that the Title Company arrange for the recording of the applicable New York State Form TP-584 and NYC RPT with respect to any assignment or satisfaction of existing mortgage indebtedness to the extent required.
We object to any exception for existing mortgage liens that would survive closing. No such exception shall appear in the final Owner's or Lender's Policies.
5.2.3 Easements and Restrictions of Record.  We request that the Title Company identify each recorded easement, right-of-way, and restrictive covenant affecting the Property as set forth in Schedule B, Part II of the Commitment. For each such exception, we request that the Title Company provide us with a complete, legible copy of the underlying recorded instrument, including all exhibits, amendments, and modifications.
Upon receipt and review of such instruments, we will evaluate whether each easement or restriction materially and adversely affects the use, operation, or value of the Property as a Class A multifamily residential building with ground-floor retail. Such evaluation will include, without limitation, an assessment of the impact of any utility easements, party wall agreements, air rights restrictions, light and air easements, access easements, and similar encumbrances.
We object to any easement or restriction of record that would impair the Purchaser's intended use of the Property as a multifamily residential building with ground-floor commercial/retail space, or that would materially and adversely affect the value of the Property. For any such objectionable exception, we request that the Title Company either (a) remove the exception from the final policies, or (b) provide affirmative insurance that the easement or restriction does not materially interfere with the use of the Property for its current and intended purposes.
For those easements that, upon our review, are determined to be standard utility or service easements that do not adversely affect the Property, we will accept such exceptions subject to our review and approval of the underlying instruments. We reserve the right to raise additional objections upon review of any instrument not yet provided.
5.2.4 Zoning Lot Restrictions / Declarations.  We request that the Title Company identify any zoning lot merger agreements, declarations of zoning lot restrictions, restrictive declarations filed with the New York City Department of City Planning or Department of Buildings, or similar instruments affecting the Property or the zoning lot of which the Property forms a part. In addition, we request identification of any recorded agreements relating to the transfer of development rights ("TDR"), including any zoning lot development agreements or similar instruments.
Please provide complete copies of all such instruments. We will evaluate their impact on the Property, including any implications for the Property's existing zoning classification, floor area ratio, development potential, and any non-conforming use or non-complying bulk status that may apply. To the extent that any such instrument would restrict or limit the current use or operation of the Property, we object and request removal of the exception or affirmative insurance in a form satisfactory to Purchaser and its counsel.
5.2.5 Building/Housing Code Violations.  To the extent that the Commitment reflects any open building code violations issued by the New York City Department of Buildings ("DOB") or housing code violations issued by the New York City Department of Housing Preservation and Development ("HPD"), we object to such exceptions. Open violations of this nature could constitute title defects or give rise to liens that would take priority over the Purchaser's interest in the Property.
We request that the Seller cure all open DOB and HPD violations prior to closing, or, alternatively, that the Title Company provide affirmative insurance against any loss or damage arising from such violations. We further request that the Title Company provide or arrange for a current search of DOB and HPD records for the Property, including a report of all open violations, complaints, permits, and certificates of occupancy. The results of such search should be provided to our office promptly upon receipt.
5.2.6 Judgments and Liens Against Seller.  We request that the Title Company identify any and all judgments, federal tax liens, state tax liens, or UCC financing statement filings of record against (a) Linden Gramercy Holdings LLC, the Seller, and (b) Marcus Steinfeld, individually or in any capacity, to the extent that such liens or judgments may constitute encumbrances against the Property.
We object to all such exceptions. Any judgment liens, tax liens, or UCC financing statements that constitute liens or encumbrances against the Property must be satisfied, released, terminated, or bonded at or prior to closing, at Seller's sole cost and expense. The corresponding exceptions must be deleted from the final policies. We request that the Title Company advise us of the nature, amount, and holder of each such lien or judgment so that we may coordinate with Seller's counsel regarding satisfaction and discharge.
5.2.7 Covenants, Conditions, and Restrictions.  We request identification of any covenants, conditions, and restrictions ("CC&Rs") or other recorded restrictions affecting the Property, in addition to those addressed in Sections 5.2.3 and 5.2.4 above. We object to any CC&R or recorded restriction that would restrict, limit, or prohibit the current multifamily residential and ground-floor retail use of the Property.
We request that the Title Company provide affirmative insurance (by endorsement or otherwise) that the Property is not currently in violation of any recorded covenants, conditions, or restrictions affecting the Property, and that the existing use of the Property as a multifamily residential building with ground-floor retail does not violate any such covenants or restrictions. If the Title Company is unable to provide such affirmative insurance, please advise us of the specific concern and the basis for any refusal.
5.2.8 Other Specific Exceptions.  To the extent that the Commitment contains any additional specific exceptions not addressed in the foregoing subsections — including, without limitation, any exceptions for pending litigation or lis pendens notices, environmental liens, landmark or historic preservation restrictions, or other matters — we object to each such exception and request either (a) removal of the exception from the final policies, or (b) affirmative insurance satisfactory to Purchaser and Lender that such exception does not materially and adversely affect the Purchaser's fee simple title to or the Lender's mortgage lien on the Property.
With respect to any exception for landmark or historic preservation restrictions, we request that the Title Company advise us as to whether the Property or any portion thereof is designated as a New York City landmark, is located within a historic district, or is subject to any restrictions imposed by the New York City Landmarks Preservation Commission. If the Property is subject to such restrictions, we request copies of all applicable designations and restriction documents.
With respect to any exception for pending litigation, we request copies of all complaints, lis pendens filings, or other court documents reflected in the Commitment, together with a summary of the current status of each such action.
6. Survey Review
6.1 Survey Identification
We have reviewed the ALTA/NSPS Land Title Survey of the Property (the "Survey") prepared by Hargrove & Associates, P.C., Licensed Land Surveyors, 14 Penn Plaza, Suite 2205, New York, New York 10122, dated March 22, 2023, last revised April 5, 2023, Job No. HA-2023-0317. The Survey was prepared for the benefit of Purchaser, Lender, and the Title Company and bears the certification of Daniel R. Hargrove, P.L.S., New York License No. 050824.
We confirm that the Survey has been prepared in accordance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, as adopted and effective February 23, 2021. We further confirm that the following Table A optional items have been included on the Survey, as required by both Purchaser and Lender:
Items 1, 2, 3, 4, 5, 6(a), 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(a), 13, 14, 16, 17, 18, 19, and 20.
A copy of the Survey has been delivered to the Title Company. We request that the Title Company confirm receipt of the Survey and advise us of any additional requirements with respect to the form, content, or certification of the Survey.
6.2 Survey Matters Requiring Resolution
Based on our review of the Survey, we have identified the following matters that require resolution, clarification, or affirmative insurance from the Title Company:
6.2.1 Encroachments.  We request that the Title Company review the Survey and identify all encroachments depicted thereon, including, without limitation, (a) any encroachments of improvements located on the Property onto adjacent properties or onto public rights-of-way, sidewalks, or setback areas, and (b) any encroachments of improvements located on adjacent properties onto the Property. The Survey appears to depict certain minor encroachments, including projecting architectural features, signage, and HVAC equipment.
For any encroachments identified on the Survey, we request that the Title Company provide affirmative encroachment coverage by endorsement to both the Owner's and Lender's Policies, insuring against loss arising from such encroachments. To the extent that any encroachment is material — that is, it would adversely affect the use, structural integrity, or value of the Property — we request that Seller cure the encroachment prior to closing or provide evidence of a license, easement, or other agreement permitting the encroachment. We reserve the right to object to any material encroachment that cannot be adequately addressed through affirmative title insurance coverage.
6.2.2 Boundary Discrepancies.  We request that the Title Company compare the boundaries of the Property as shown on the Survey with the legal description set forth in Schedule A of the Commitment. Any gaps, overlaps, or discrepancies between the survey boundary and the record legal description must be reconciled and corrected. If the metes and bounds description in the Commitment does not close or does not accurately describe the boundaries depicted on the Survey, the legal description in the Commitment must be revised to match the Survey, and the corrected legal description must be incorporated into the final policies.
6.2.3 Setback Violations.  We request that the Title Company and the surveyor identify any building setback violations, zoning yard violations, or other non-compliances with applicable zoning bulk regulations as shown on the Survey. To the extent that any portion of the existing improvements encroaches into required front, side, or rear yard setback areas, or exceeds the maximum permitted lot coverage or floor area ratio, we request (a) confirmation as to whether such non-compliance constitutes a pre-existing, legal non-conforming condition, and (b) affirmative zoning coverage by endorsement, as further described in Section 7 below.
6.2.4 Easement Locations.  We request that the Title Company confirm that all recorded easements identified in Schedule B, Part II of the Commitment are accurately depicted on the Survey, with their respective locations, dimensions, and benefited/burdened parcels clearly identified. To the extent that the Survey depicts any easements, rights-of-way, or other encumbrances that are not reflected as exceptions in the Commitment, we request that such matters be added to the Commitment and that the Title Company advise us as to their nature, origin, and potential impact on the Property.
Additionally, to the extent that any easement reflected in the Commitment is not depicted on the Survey, we request that the surveyor investigate and determine the location of such easement, or that the Title Company confirm that the easement is of a nature that does not have a fixed, ascertainable location on the ground (e.g., a blanket easement).
6.2.5 Access and Curb Cuts.  We request confirmation that the Survey depicts legal and physical access from the Property to East 21st Street, which is a dedicated and accepted public street in the City of New York. The Survey should clearly depict all curb cuts, driveways, pedestrian entrances, and vehicular access points serving the Property. To the extent that any access issue is identified — including, without limitation, any obstruction of access, encroachment into the public right-of-way, or reliance on access over adjacent private property — we request that the Title Company advise us immediately and provide appropriate access coverage by endorsement.
6.2.6 Flood Zone Determination.  We note the FEMA flood zone designation shown on the Survey. We request that the Title Company confirm the applicable flood zone classification for the Property based on the current FEMA Flood Insurance Rate Map (FIRM) for the Borough of Manhattan. If the Property, or any portion thereof, is located within a Special Flood Hazard Area (Zone A, AE, or equivalent), we note that the Lender will require the Purchaser to obtain and maintain a flood insurance policy in accordance with the terms of the Loan documents and applicable federal law, including the National Flood Insurance Act and the Flood Disaster Protection Act. We request that the Title Company advise us of the current flood zone designation so that the parties may make appropriate arrangements for flood insurance coverage, if required, prior to closing.
7. Endorsements Requested
7.1 Owner's Policy Endorsements
We request that the following endorsements be issued in connection with the Owner's Policy, to the extent available under New York law and the Title Company's underwriting guidelines:
(a) Comprehensive/Zoning Endorsement (ALTA 9 Series): A zoning endorsement confirming (i) the Property's current zoning classification under the New York City Zoning Resolution, (ii) the permitted use of the Property as multifamily residential with ground-floor retail/commercial space, and (iii) confirmation that the existing improvements comply with the applicable zoning requirements, or, if applicable, that the Property has a legally recognized non-conforming use or non-complying bulk status. This endorsement should include coverage under ALTA Forms 9.1 (Land Under Development), 9.2 (Completed Structure), and/or 9.3 (Non-Conforming Use), as applicable.
(b) Access Endorsement: An endorsement confirming that the Property has legal and physical access to and from East 21st Street, a dedicated and accepted public street.
(c) Contiguity Endorsement: An endorsement confirming that the Property consists of a single, contiguous parcel, with no gaps or gores, if applicable.
(d) Tax Lot / Tax Parcel Endorsement: An endorsement confirming that the Property comprises a single tax lot, designated as Block 899, Lot 42, on the Tax Map of the Borough of Manhattan, and is separately assessed for real estate tax purposes.
(e) Survey Endorsement: An endorsement based upon and referencing the ALTA/NSPS Land Title Survey, deleting the standard survey exception and substituting the specific survey matters shown on the Survey.
(f) Encroachment Endorsement: An endorsement insuring against loss or damage arising from any encroachments identified on the Survey, including encroachments of the improvements onto adjacent properties or public rights-of-way and encroachments of adjacent improvements onto the Property.
(g) Restrictions, Encroachments, Minerals Endorsement (ALTA 9.1, 9.2, 9.3): As applicable, endorsements insuring against loss arising from violations of recorded restrictions, encroachments, and mineral reservations, to the extent not covered by the endorsements described above.
(h) Fairway / Same-as-Survey Endorsement: An endorsement insuring that the boundaries of the Property as described in the legal description in the policy are coterminous with the boundaries of the Property as depicted on the Survey.
(i) Environmental Protection Lien Endorsement (ALTA 8.1): An endorsement insuring against any environmental protection liens recorded or filed against the Property having priority over the Purchaser's insured interest.
(j) Subdivision Endorsement: An endorsement confirming that the Property is a legally subdivided lot in compliance with all applicable subdivision laws and regulations.
(k) Non-Imputation Endorsement: An endorsement providing that knowledge of any prior owner, member, manager, or principal of the Purchaser or any of its affiliates shall not be imputed to the Purchaser for purposes of the Owner's Policy.
(l) Doing Business Endorsement: An endorsement confirming that the Title Company's authority to transact title insurance business in the State of New York will not be impaired during the coverage period of the policy.
(m) Additional Endorsements: Any additional endorsements customarily required or available in connection with New York City commercial real estate transactions of this size and nature, including, without limitation, any endorsements required by Purchaser's counsel in the exercise of its reasonable judgment.
7.2 Lender's Policy Endorsements
We request that the following endorsements be issued in connection with the Lender's Policy, in addition to all endorsements required by Pinnacle Fidelity Bank, N.A. pursuant to the Lender's Title Requirements:
(a) All endorsements described in Section 7.1 above (to the extent applicable to a loan policy);
(b) Comprehensive / Zoning Endorsement (ALTA 9 Series): As described in Section 7.1(a);
(c) Variable Rate Endorsement: An endorsement insuring against loss arising from the invalidity or unenforceability of the insured mortgage due to any adjustable or variable interest rate provisions in the Loan documents;
(d) Revolving Credit / Future Advance Endorsement: An endorsement insuring the priority of the insured mortgage lien with respect to any revolving credit or future advance provisions in the Loan documents, if applicable;
(e) Last Dollar Endorsement: An endorsement providing that the Title Company will not assert that any policy loss is limited to the difference between the full insured amount and the value of the insured estate or interest;
(f) Usury Endorsement: An endorsement insuring against loss arising from the invalidity or unenforceability of the insured mortgage due to any claim of usury;
(g) First Loss Endorsement: An endorsement providing that, in the event of a claim, the Lender's loss will be payable without any reduction for the value of any remaining insured estate or interest;
(h) Tie-In Endorsement: To the extent the Property comprises or is deemed to comprise multiple parcels, an endorsement providing for aggregation of coverage;
(i) Doing Business Endorsement: As described in Section 7.1(l);
(j) Additional Lender Endorsements: Any additional endorsements specified in the Lender's closing instructions or otherwise required by Pinnacle Fidelity Bank, N.A.
The Loan details for inclusion in the Lender's Policy endorsements are as follows:
Loan Amount: $26,000,000.00 Loan No.: PFB-CRE-2023-05741 Borrower: Gramercy Linden PropCo LLC Lender: Pinnacle Fidelity Bank, N.A.
We request that the Title Company provide us with a pro forma of each endorsement for our review and approval prior to closing.
8. Additional Title Requirements
8.1 UCC Search
We request that the Title Company conduct a current Uniform Commercial Code search (or confirm that a current UCC search has been conducted) against each of the following parties, in the applicable jurisdictions:
(i) Linden Gramercy Holdings LLC (Seller) — New York Department of State, and New York County (Manhattan);
(ii) Marcus Steinfeld (individually) — New York Department of State, New York County (Manhattan), and such other jurisdictions as may be appropriate based on his known addresses; and
(iii) Any prior owners appearing in the chain of title for the Property within the applicable search period.
Any existing UCC financing statements that constitute liens or encumbrances against the Property, the improvements thereon, or any fixtures or personal property located at the Property must be terminated at or prior to closing, and UCC-3 Termination Statements must be filed of record. We request that the Title Company provide us with copies of all UCC financing statements identified in the search results, together with the names and contact information of the respective secured parties, so that we may coordinate with Seller's counsel regarding the preparation and filing of termination statements.
8.2 Litigation / Judgment Search
We request that the Title Company conduct (or confirm that it has conducted) current litigation, judgment, and bankruptcy searches against each of the following parties:
(i) Linden Gramercy Holdings LLC (Seller);
(ii) Marcus Steinfeld (individually and in his capacity as Managing Member of Seller); and
(iii) Such additional parties as the Title Company deems necessary or appropriate based on its review of the chain of title.
Such searches should cover the relevant state and federal courts, including the United States District Court for the Southern District of New York, the New York State Supreme Court (New York County), and the United States Bankruptcy Court for the Southern District of New York. We object to any adverse results, including any outstanding judgments, pending litigation, bankruptcy filings, or lis pendens notices. All adverse matters must be cleared, satisfied, released, or otherwise resolved to the satisfaction of the Title Company, Purchaser, and Lender prior to closing.
8.3 FIRPTA / Non-Foreign Status
Section 1445 of the Internal Revenue Code requires that a transferee withhold tax on the disposition of a United States real property interest by a foreign person unless the transferor provides a certificate of non-foreign status. The PSA requires Seller to deliver, at closing, a certificate of non-foreign status in accordance with Treasury Regulations Section 1.1445-2(b), confirming that Seller is not a "foreign person" within the meaning of IRC Section 1445. We note that the Title Company may require delivery of this certificate as a condition to the disbursement of closing proceeds. We request confirmation from the Title Company as to whether this is a disbursement requirement and, if so, confirmation that the certificate form to be used is acceptable.
8.4 Municipal Search / Departmental Searches
We request that the Title Company provide, or arrange for the preparation and delivery of, current New York City departmental searches with respect to the Property, including searches of the records of the following agencies:
(i) New York City Department of Buildings (DOB): Confirming the status of all building permits, certificates of occupancy, temporary certificates of occupancy, open applications, and open violations;
(ii) New York City Department of Housing Preservation and Development (HPD): Confirming the status of all housing code violations, emergency repair charges, and lead paint orders;
(iii) New York City Environmental Control Board (ECB): Confirming the status of all open ECB violations and outstanding fines;
(iv) New York City Department of Environmental Protection (DEP): Confirming the status of all water and sewer charges and any open violations; and
(v) Fire Department of the City of New York (FDNY): Confirming the status of all fire code violations and open inspections.
The results of these departmental searches should be provided to our office and to the Lender's counsel promptly upon receipt. Any open violations that could constitute title defects or give rise to lien claims must be identified so that appropriate cure or affirmative insurance can be arranged prior to closing.
9. Escrow Matters
We confirm that Archer & Towne Title Company is serving as escrow agent for the earnest money deposit in the amount of Two Million and 00/100 Dollars ($2,000,000.00) (the "Deposit"), pursuant to the escrow provisions of the PSA dated March 15, 2023. The Deposit was delivered to the Title Company by Purchaser upon execution of the PSA.
We request confirmation of the following:
(a) That the Title Company has received the Deposit in full and that the Deposit is being held in a segregated, interest-bearing escrow account at a federally insured depository institution;
(b) The current balance of the escrow account, including any accrued interest;
(c) That the Deposit became non-refundable upon the expiration of the due diligence period on April 14, 2023, in accordance with the terms of the PSA; and
(d) Confirmation of the escrow instructions governing the disbursement of the Deposit at closing, including the allocation of any interest earned on the Deposit between Seller and Purchaser in accordance with the PSA.
Please provide written confirmation of the foregoing at your earliest convenience.
10. Response and Timeline
We respectfully request that the Title Company provide a comprehensive written response to all objections, requests, and inquiries set forth in this letter within five (5) business days of the date hereof. Given that the due diligence period under the PSA expires on April 14, 2023, the timely resolution of the matters identified herein is essential.
The target closing date under the PSA is May 30, 2023. We are committed to working cooperatively with the Title Company, Seller's counsel, and the Lender's counsel to resolve all outstanding title and survey matters well in advance of closing. To the extent that the Title Company requires additional information, documentation, or clarification from Purchaser or its counsel in order to address the matters raised herein, please contact the undersigned immediately.
We hereby reserve all rights of the Purchaser under the PSA with respect to title objections and Seller's obligation to cure title defects, including, without limitation, the right to terminate the PSA in the event of a material, uncured title defect in accordance with the terms thereof.
Nothing in this letter shall constitute a waiver of any title objection not specifically addressed herein. Purchaser expressly reserves the right to raise additional objections upon review of any updated title search, continuation search, supplemental reports, or additional recorded instruments that come to Purchaser's attention. Purchaser further reserves the right to require compliance with any additional title requirements that may be imposed by the Lender or its counsel subsequent to the date of this letter.
11. Copies and Contact Information
We request that the Title Company provide complete, legible copies of all recorded instruments referenced as exceptions in Schedule B, Parts I and II of the Commitment, to the extent not already provided. Such copies should include all exhibits, schedules, amendments, and modifications to each instrument. All documents should be delivered to our office electronically (in PDF format) and, if requested, in hard copy.
All correspondence, responses, and documentation related to the matters addressed in this letter should be directed to:
Grace Nakamura Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017 Telephone: (212) 506-7224
Email: gnakamura@calderwoodharkness.com
With a copy to:
Angela Fontaine, Partner Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017 Telephone: (212) 506-7108
Email: afontaine@calderwoodharkness.com
Please reference Calderwood & Harkness LLP Matter No. 1026-00004 in all correspondence.
We appreciate your prompt attention to these matters and look forward to working with you toward a successful closing. Please do not hesitate to contact me should you have any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Grace Nakamura Lead Associate, Real Estate Group
cc (via email):
Elliot J. Briarwood Briarwood Family Office LLC 450 Park Avenue, 31st Floor New York, NY 10022
Angela Fontaine, Esq. Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017
Douglas Fairchild, Esq. Calderwood & Harkness LLP 280 Park Avenue New York, NY 10017
Sandra Kim Pinnacle Fidelity Bank, N.A. 383 Madison Avenue New York, NY 10179
Nadia Kowalski, Esq. Whitfield Archer & Crane LLP One Federal Street, Suite 3600 Boston, MA 02110
David Ochoa, Esq. Reedmore & Pratt LLP 575 Madison Avenue, 20th Floor New York, NY 10022

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