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ACCOUNT AND CONTROL AGREEMENT
This ACCOUNT AND CONTROL AGREEMENT, is made as of February 13,
2004 (this AGREEMENT), by and among GERMAN
AMERICAN CAPITAL CORPORATION, a
Maryland corporation (LENDER), having an
office at 60 Wall Street, New York, New
York 10005, 731 OFFICE ONE LLC, a Delaware
limited liability company (BORROWER),
having an address for notice purposes c/o
Alexander's Inc., 888 Seventh Avenue,
New York, New York 10019 and JP MORGAN
CHASE, a New York banking organization
(CASH MANAGEMENT BANK), having an office at
4 New York Plaza, 13th Floor, New
York, New York 10004.
WHEREAS, Borrower is a party to that certain Loan and Security
Agreement, dated as of the date hereof, (as
amended, supplemented or otherwise
modified from time to time, the Loan
Agreement), pursuant to which Borrower
agreed to establish and maintain certain
Collateral Accounts (as defined herein)
as further collateral for a loan (the LOAN)
from Lender to Borrower;
WHEREAS, as required by the Loan Agreement, and in order to
further effectuate the security interest
granted to Lender thereunder, Borrower
established pursuant to the Loan Agreement,
the Collateral Accounts with Cash
Management Bank and, pursuant to the Loan
Agreement, has granted to Lender a
perfected first priority security interests
therein, which Collateral Accounts
are described on SCHEDULE 1A and 1B
attached hereto; and
WHEREAS, as a condition to making the Loan, Lender is
requiring Borrower and Cash Management Bank
to deliver this Agreement to further
effectuate the terms of the Loan
Agreement.
NOW, THEREFORE, in consideration of foregoing premises, the
establishment of the Collateral Accounts,
Ten Dollars ($10.00) paid in hand and
other good and valuable consideration, the
receipt and sufficiency of which are
hereby acknowledged, the parties hereto
agree as follows:
1.
DEFINITIONS. Capitalized terms used but not otherwise defined
herein
shall have the respective meanings given
thereto in the Loan Agreement, unless
otherwise expressly provided herein. All
references to sections shall be deemed
to be references to sections of this
Agreement, unless otherwise indicated. In
the event that the Uniform Commercial Code
as in effect in the State of New York
is revised subsequent to the date hereof,
all references herein to sections of
the UCC shall be deemed to be references to
the successor provisions and
requirements.
APPROVED BANK shall mean a bank or other financial institution
which
has a minimum long-term unsecured debt rating of at least "A" and
a
minimum short-term unsecured debt rating of at least "A-1" by each
of
the Rating Agencies (one of which must be S&P), or if any such
bank or
other financial institution is not rated by all the Rating
Agencies,
then a minimum long-term rating of at least "A" and a minimum
short-term unsecured debt rating of at least "A-1", or their
respective
equivalents, by two of the Rating Agencies, but in any event one of
the
two Rating Agencies shall be S&P.
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COLLATERAL ACCOUNTS shall mean the accounts specified on SCHEDULES
1A
and 1B hereto and any other account established by the Cash
Management
Bank pursuant to and in accordance with the provisions of this
Agreement or the Loan Agreement.
ELIGIBLE ACCOUNT shall mean (i) a segregated trust account or
accounts
maintained with the corporate trust department of a federal
depository
institution or state-chartered depository institution subject
to
regulations regarding fiduciary funds on deposit similar to Title
12 of
the Code of Federal Regulations Section 9.10(b) which, in either
case,
has corporate trust powers, acting in its fiduciary capacity or
(ii) a
segregated account maintained at an Approved Bank.
PERMITTED INVESTMENTS shall mean the following, subject to
qualifications hereinafter set forth:
(i)
obligations of, or obligations guaranteed as to principal
and interest by, the U.S. government or any agency or
instrumentality
thereof, when such obligations are backed by the full faith and
credit
of the United States of America;
(ii)
federal funds, unsecured certificates of deposit, time
deposits, banker's acceptances, and repurchase agreements
having
maturities of not more than 365 days of any bank, the short-term
debt
obligations of which are rated A-1+ (or the equivalent) by each of
the
Rating Agencies, it being understood that the A-1+ benchmark rating
and
other benchmark ratings in this Agreement are intended to be
the
ratings, or the equivalent of ratings, issued by S&P
(iii)
deposits that are fully insured by the Federal Deposit
Insurance Corp.;
(iv)
debt obligations that are rated AA (or the equivalent)
by each of the Rating Agencies;
(v) commercial
paper rated A - 1+ (or the equivalent) by
each of the Rating Agencies;
(vi)
investment in money market funds rated AAm or AAm - G
(or the equivalent) by each of the Rating Agencies; and
(vii) such
other investments as to which Lender shall have
received a Rating Agency Confirmation.
Notwithstanding the foregoing, PERMITTED INVESTMENTS (i) shall
exclude
any security with the S&P's "r" symbol (or any other Rating
Agency's
corresponding symbol) attached to the rating (indicating high
volatility or dramatic fluctuations in their expected returns
because
of market risk), as well as any mortgage-backed securities and
any
security of the type commonly known as "strips"; (ii) shall not
have
maturities in excess of one year; (iii) shall be limited to
those
instruments that have a predetermined fixed dollar of principal due
at
maturity that cannot vary or change; and (iv) shall exclude any
investment where the right to receive principal and interest
derived
from the underlying investment provides a yield to maturity in
excess
of 120% of the yield to maturity at par
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of such underlying investment. Interest may either be fixed or
variable, and any variable interest must be tied to a single
interest
rate index plus a single fixed spread (if any), and move
proportionately with that index. No investment shall be made
which
requires a payment above par for an obligation if the obligation
may be
prepaid at the option of the issuer thereof prior to its maturity.
All
investments shall mature or be redeemable upon the option of the
holder
thereof on or prior to the earlier of (x) three months from the
date of
their purchase or (y) the Business Day preceding the day before
the
date such amounts are required to be applied hereunder.
UCC shall mean the Uniform Commercial Code as in effect from time
to
time in the State of New York.
2.
ESTABLISHMENT AND MAINTENANCE OF THE COLLATERAL ACCOUNTS. The
Cash
Management Bank hereby confirms and agrees
that:
a.
DEPOSIT ACCOUNT. It has established the Collection Account
identified on SCHEDULE 1A hereto in the name specified in
SCHEDULE 1A (such account(s) being referred to herein as the
DEPOSIT ACCOUNT). The Collection Account has been established
and shall be maintained by Cash Management Bank as a "deposit
account" as such term is defined in Section 9-102(a)(29) of
the UCC.
b.
SECURITIES ACCOUNTS.
i. It
has established the Holding Account and the
Sub-Accounts as required pursuant to the Loan
Agreement, identified on SCHEDULE 1B hereto in the
names specified in SCHEDULE 1B (such account and the
sub-accounts referred to in SCHEDULE 1B hereof being
referred to herein as the SECURITIES ACCOUNTS). The
Holding Account and the Sub-Accounts will be, if
established pursuant to the Loan Agreement,
maintained by Cash Management Bank as one or more
"securities accounts" as such term is defined in
Section 8-501(a) of the UCC. The Sub-Accounts (i) may
be ledger or book entry accounts and need not be
actual accounts, (ii) shall be linked to the Holding
Account and (iii) shall be an Eligible Account to
which certain funds shall be allocated and from which
disbursements shall be made pursuant to the terms of
this Agreement. Except for any funds credited to the
Deposit Account, all property delivered to the Cash
Management Bank pursuant to the Loan Agreement and
all Permitted Investments shall be credited to the
Holding Account or one of the Sub-Accounts on the
Business Day following any deposit into the Deposit
Account. Each item of property (whether investment
property, financial asset, security, instrument, cash
or otherwise) credited to the Securities Accounts
shall be treated as a "financial asset" within the
meaning of Section 8-102(a)(9) of the UCC. All
securities or other property underlying any
"financial assets" (as defined in Section 8-102(a)(9)
of the UCC) credited to the Securities Accounts shall
be registered in the name of Cash Management Bank,
indorsed to Cash Management Bank or indorsed in blank
or credited to a securities account in the name of
the
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Cash Management Bank. In no case shall any financial
asset credited to the Collateral Accounts be
registered in the name of Borrower, payable to the
order of Borrower or specially endorsed to Borrower
except to the extent the foregoing have been
specially endorsed to Cash Management Bank or in
blank.
c.
CHANGES TO ACCOUNTS. It shall not change the name or account
number of any Collateral Account without the express written
consent of the Lender.
3.
PERMITTED INVESTMENTS. Any amounts held in any of the
Securities
Accounts shall be invested, liquidated and
reinvested in Permitted Investments
and disbursed as directed in writing by
Lender in accordance with this Agreement
(or in accordance with such other
instructions as Borrower may from time to time
direct, which other instructions from
Borrower shall be countersigned by Lender,
unless an Event of Default shall have
occurred and be continuing, in which event
all amounts held in any of the Securities
Accounts shall be invested, liquidated
and reinvested at Lender's direction in
Lender's sole discretion); provided,
however, that the maturity of an adequate
portion of the Permitted Investments
on deposit in the Securities Accounts shall
be no later than the Business Day
immediately preceding the date on which
such funds are required to be withdrawn
therefrom pursuant to this Agreement and no
Permitted Investment shall be
liquidated at a loss at the direction of
Borrower except to the extent necessary
to make a required payment to Lender on a
Payment Date. All Permitted
Investments shall identify Lender as the
secured party having the benefit of a
collateral assignment of such Permitted
Investments. Amounts held in the
Securities Accounts may be commingled for
purposes of purchasing Permitted
Investments and Cash Management Bank shall
maintain a record of amounts
allocated to each Securities Account. In no
event shall Lender or Cash
Management Bank have any responsibility or
liability for the types of
investments that Borrower may direct Lender
to direct Cash Management Bank to
make, nor shall they have any duty or
responsibility to confirm that the same
are in fact Permitted Investments.
4.
CONTROL OF ACCOUNTS.
a.
RIGHTS OF LENDER. Borrower hereby irrevocably authorizes
Lender to exercise any and all rights of Borrower in respect
of the Collateral Accounts and to give Cash Management Bank
instructions, directions and entitlement orders in respect of
the Collateral Accounts as Lender shall deem necessary or
desirable in order to effectuate the provisions of this
Agreement and the Loan Agreement, provided that such
instructions are in accordance with the terms and provisions
hereof and of the Loan Agreement. Borrower hereby irrevocably
authorizes and instructs Cash Management Bank to execute any
such instructions, directions or entitlement orders Cash
Management Bank receives from Lender. Cash Management Bank
shall, subject to the terms of this Agreement, treat Lender as
entitled to exercise the rights that comprise any financial
asset credited to the Collateral Accounts. Cash Management
Bank acknowledges that it has received instructions to
transfer, and Cash Management Bank covenants that it shall
transfer, on a daily basis, all collected funds held in the
Collection Account to the Holding Account. Borrower is
responsible for monitoring the services provided hereunder and
shall notify Cash Management Bank of any errors within thirty
(30)
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calendar days after receipt of any report, statement or other
material containing or reflecting the error including an
account analysis statement, or such greater time period as may
be required by law.
b.
LENDER CONTROL AND PERFECTION. Notwithstanding any other
provision of this Agreement, in addition to and not in
limitation of Lender's other rights: (i) with respect to each
Collateral Account that is a "securities account" within the
meaning of Section 8-501 of the UCC (including without
limitation the Securities Accounts and to the extent that
notwithstanding the intention of the parties the Deposit
Account is determined to be a securities account, the Deposit
Account), the Cash Management Bank shall comply with all
"entitlement orders" (as defined in the UCC) issued by the
Lender in accordance with the provisions of Section 4.a.
hereof without further consent by the Borrower or any other
Person; (ii) with respect to each Collateral Account that is a
"deposit account" within the meaning of Section 9-102(a)(29)
of the UCC (including, without limitation, the Deposit Account
and to the extent that notwithstanding the intention of the
parties any of the Securities Accounts are determined to be a
deposit account, the Securities Accounts), the Cash Management
Bank shall comply with all instruction issued by the Lender in
accordance with the provisions of Section 4.a. hereof
directing the disposition of funds in such accounts without
further consent by the Borrower or any other Person; and (iii)
except for the Borrower's right to select Permitted
Investments to the extent specified in Section 3 hereof, the
Cash Management Bank shall not honor any request of Borrower
for the withdrawal, transfer or other disposition of any
funds, investment
property or other assets on deposit or
credited to any Collateral Account without the express prior
consent of Lender. The Cash Management Bank has not and will
not without Lender's prior express written consent enter into
any agreement or understanding with any other Person relating
to the Collateral Accounts. For purposes of perfecting the
Lender's security interest, the Cash Management Bank confirms
that any property (including, without limitation, Permitted
Investments) held by it is held as agent for the Lender.
c.
DESIGNATION OF SERVICER. Borrower and Cash Management Bank
each hereby acknowledge that Lender has appointed and
designated GMAC Commercial Mortgage Corporation (SERVICER), as
agent of Lender, to administer and service the Loan and to
exercise Lender's rights under this Agreement and the Loan
Agreement. Lender may appoint and designate a replacement
servicer to execute Lender's rights with respect to the
Collateral Accounts at any time by delivering a notice of such
replacement, on or prior to the effective date of such
replacement, to Borrower and Cash Management Bank and Borrower
and Cash Management Bank shall recognize such replacement.
5.
ACCOUNT FEES; WAIVER OF SET-OFF AND LIENS; ADVERSE CLAIMS.
a.
ACCOUNT FEES. The Borrower hereby agrees to pay the Cash
Management Bank reasonable compensation for the services to be
rendered hereunder, as such fees are identified in SCHEDULE 2.
Borrower shall separately pay the fees and expenses
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identified in the invoice and Cash Management Bank shall not
charge the Collateral Accounts for such fee.
b.
WAIVER OF CLAIMS. In no event shall Cash Management Bank
obtain whether by agreement, operation of law or otherwise a
security interest in any of the Collateral Accounts or any
security entitlement or funds credited thereto, and to the
extent permitted by applicable law, Cash Management Bank
hereby agrees that such security interest shall be null and
void. To the extent any such security interest arises by
operation of law and cannot be waived, the Cash Management
Bank hereby subordinates such security interest to the
security interest of the Lender. Cash Management Bank hereby
waives all existing and future claims, rights of set-off and
liens, including, without limitation, banker's liens, against
the Collateral Accounts and all items and proceeds thereof
that come into Cash Management Bank's possession in connection
with the Collateral Accounts and all securities entitlements
or funds credited thereto; provided, that Cash Management Bank
shall have the right to charge the Collateral Accounts for (i)
all items deposited in, and credited to, the Collateral
Accounts after
