AGREEMENT OF SALE
THIS AGREEMENT OF SALE (hereinafter referred to as the "Agreement"), made
this 28th day of October, 1998, by and between:
WILLCO ASSOCIATES-1, L.L.C., a New Jersey limited liability company, having
an address at 236 Sussex Drive, Manhasset, New York 11030, Attn.: Alfred C.
Kruger, Managing Member (hereinafter referred to as the "Seller"),
AND
CUNNINGHAM GRAPHICS INTERNATIONAL, INC., a New Jersey corporation, having a
mailing address at 629 Grove Street, Jersey City, New Jersey 07310, Attn.:
Michael R. Cunningham, President, Chief Executive Officer, (hereinafter referred
to as the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller is the owner of real property located in the City of
Jersey City, County of Hudson and State of New Jersey, known as 5 Burma Road,
Jersey City, New Jersey, and currently described on the tax map of the City of
Jersey City, New Jersey as Block 2154.3 - Lot 66, all as more particularly set
forth in Exhibit "A" attached hereto and made a part hereof (hereinafter
referred to as the "Land"), together with (i) a certain building located on the
Land; and (ii) all fixtures located in the building or on the Land and
appurtenances affixed thereto, including, but not limited to, heating apparatus,
plumbing, electrical and air conditioning systems, (hereinafter the buildings,
other improvements and fixtures are referred to as the "Improvements" and the
Land and Improvements are collectively referred to as the "Premises"); and
WHEREAS, Buyer desires to purchase the Premises from the Seller and the
Seller desires to sell the Premises to the Buyer, subject, however, to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, the Buyer and the Seller hereby covenant and agree as follows:
1. PREMISES. The Seller hereby covenants and agrees to sell and convey to
the Buyer, and the Buyer hereby covenants and agrees to purchase from the
Seller, upon the terms, covenants, conditions and agreements hereinafter set
forth, all of the Seller's right, title and interest in and to the Premises.
2. PURCHASE PRICE.
(i) The Buyer hereby agrees to pay, in consideration of the delivery by the
Seller to the Buyer of a Deed of Bargain and Sale with Covenants Against
Grantor's Acts describing the Premises (hereinafter referred to as the "Deed"),
a purchase price in the amount of Six Million Thirty Five Thousand
($6,035,000.00) Dollars, subject to the adjustments hereinafter set forth,
(hereinafter referred to as "Purchase Price").
3. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by the Buyer
to the Seller as follows:
(i) Upon the execution of this Agreement, the sum of Three Hundred One
Thousand Seven Hundred Fifty ($301,750.00) Dollars (the "Escrow Deposit"),
payable by check to the order of the attorney trust account of the Escrow Agent
(as defined below), the receipt of which is hereby acknowledged, subject to
collection. The Escrow Deposit shall be held in escrow in an interest-bearing
attorney trust account with Roberta S. Weisinger, Esq. attorney for the Seller,
as "Escrow Agent" upon the terms and conditions set forth in paragraph 4 of this
Agreement; and
(ii) Upon the execution of this Agreement, an additional sum of Three
Hundred One Thousand Seven Hundred Fifty ($301,750.00) Dollars (the "Additional
Escrow Deposit"), payable by check to the order of the attorney trust account of
the Escrow Agent, the receipt of which is hereby acknowledged, subject to
collection. The Additional Escrow Deposit shall be held in an interest-bearing
attorney trust account with the Escrow Agent upon the terms and conditions set
forth in paragraph 4 of this Agreement; and
(iii) Upon closing of title and delivery of the Deed, the balance of the
Purchase Price, subject to the adjustments set forth
2
herein, the latter sum to be paid in accordance with the provisions of Section
10(b)(i).
4. ESCROW. (a) The Escrow Deposit and Additional Escrow Deposit shall be
commingled and deposited by the Escrow Agent in an interest-bearing, attorney
trust account in a bank reasonably selected by Escrow Agent to be maintained and
disbursed in accordance with the provisions hereof. If, prior to expiration of
the Inspection Period, as such term is defined in paragraph 7(a) of this
Agreement, the Escrow Agent receives the Inspection Termination together with
the Inspection Report(s), as such terms are defined in paragraph 7(a) of this
Agreement, then within five (5) days of receipt thereof, the Escrow Agent shall
refund the Escrow Deposit and Additional Escrow Deposit together with one-half
(1/2) of the interest accrued thereon, to the Buyer. If, upon expiration of the
Inspection Period, as such term is defined in paragraph 7(a) of this Agreement,
the Escrow Agent has not received the Inspection Termination and/or Inspection
Report(s) then and in that event, the Escrow Agent shall continue to hold the
Escrow Deposit and Additional Escrow Deposit in escrow for the benefit of the
Seller, subject to the right of the Buyer to have the Escrow Deposit and
Additional Escrow Deposit returned to the Buyer, only if, prior to expiration of
the Environment Due Diligence Period, as defined in paragraph 7(b) of this
Agreement, or Extended Environmental Due Diligence Period, if applicable, as
defined in paragraph 7(b)(i) of this Agreement, the Escrow Agent has received
the Environmental Termination, together with the Environmental Certification and
Environmental Study (all as defined in paragrpah 7(b) of this Agreement). If,
prior to expiration of the Environmental Due Diligence Period, or prior to
expiration of the Extended Environmental Due Diligence Period, if applicable,
the Escrow Agent receives the (Final) Environmental Certification, (Final)
Environmental Study and the (Final) Environmental Termination as defined in
paragraph 7(b) or 7(b)(i), if applicable, of this Agreement, then within five
(5) days of receipt thereof,
3
the Escrow Agent shall refund the Escrow Deposit and Additional Deposit together
with one-half (1/2) of the interest accrued thereon to the Buyer.
If, upon expiration of the Environmental Due Diligence Period or Extended
Environmental Due Diligence Period, the Escrow Agent has not received the
Inspection Termination together with the Inspection Reports, then within five
(5) days after expiration of the Environmental Due Diligence Period or the
Extended Environmental Due Diligence Period, the Escrow Agent shall deliver the
Escrow Deposit and Additional Escrow Deposit together with one-half (1/2) of the
interest accrued thereon to the Seller.
(b) Without the consent of the Buyer and Seller, the Escrow Agent shall not
release the Escrow Deposit to any party. In the event that any party requests in
writing that the Escrow Agent deliver the Escrow Deposit and/or the Additional
Escrow Deposit to such party, the Escrow Agent shall make a written request for
the consent of the other party and in such written request notify such party
that unless an objection is made in writing to the release of the Escrow Deposit
and/or the Additional Escrow Deposit, within ten (10) days of the non-consenting
party's receipt of such notice, the Escrow Deposit and/or the Additional Escrow
Deposit will be released to the party requesting the Escrow Deposit and/or
Additional Escrow Deposit. If the Escrow Agent receives a written objection to
the release of the Escrow Deposit and/or the Additional Escrow Deposit, the
Escrow Agent shall make no disbursement of the Escrow Deposit and/or the
Additional Escrow Deposit until so authorized in a writing, signed by both the
Buyer and Seller or by a final non-appealable order of a court of competent
jurisdiction, and in either of such events, Escrow Agent shall then disburse the
Escrow Deposit and/or the Additional Escrow Deposit in accordance with the
notice or the order, as applicable. No fee or other charges shall be payable to
Escrow Agent by the Buyer unless an interpleader is filed by Escrow Agent, in
which event Buyer shall pay such fees as directed by the Court. Escrow Agent
shall not be liable to either party hereunder for any act
4
undertaken in good faith and without fraud or gross negligence on its part. The
parties acknowledge that the Escrow Agent is acting in this capacity solely as a
stakeholder for the convenience of the parties. In the event of any conflict,
the Escrow Agent may institute an interpleader action with respect to the Escrow
Deposit and/or the Additional Escrow Deposit. The parties acknowledge and agree
that notwithstanding the Escrow Agent's role as Escrow Agent, that the Escrow
Agent is counsel to the Seller and may continue to be counsel to the Seller in
the event of any dispute, including litigation relating to the Escrow Deposit
and/or Additional Deposit or relating to any other matter.
5. PERMITTED ENCUMBRANCES. The Premises shall be sold and conveyed subject
to the following "permitted encumbrances":
(a) Zoning and building regulations, ordinances and requirements
adopted by any authority having jurisdiction which relate to the Premises;
(b) Terms, Covenants, Conditions and Restrictions in Deed Book 2906,
Page 443 and Deed Book 3051, Page 382, provided that the title company
shall provide affirmative insurance against forfeiture or reversion of
title;
(c) Easement, Conditions and Rights in Deed Book 3051, Page 382;
(d) The non-exclusive right to use, maintain and repair the railroad
track spur situated in the easement parcel;
(e) Easement in Deed Book 3376, Page 698; and
(f) Easement for the construction, operation,maintenance, repair and
replacement of a railroad spur track and a connecting switch along, across
and over the following described parcel as set forth in Deed Book 3133,
Page 598:
Starting at a point in the northerly line of Statue of Liberty Drive,
distant 224 feet westerly for the intersection formed by said
northerly line of Statue of Liberty Drive with the westerly line of
Edward J. Hart Road; running, thence northerly and parallel to said
westerly line of Edward J. Hart Road, north 36 degrees 15 minutes
39.51 seconds east 358.31 feet to a point, said point being the point
of place of beginning of the parcel herein described; thence
(1) Northerly and parallel to said westerly line of Edward J. Hart
Road north 36 degrees 15 minutes 39.51 seconds east 30.28 feet to a
point; thence
(2) Westerly, north 63 degrees 16 minutes 48 seconds west 268.48 feet
to its intersection with the extension of a line located 18 feet
southerly and parallel to the southerly face of a certain concrete
warehouse standing on Plot 1D, Block 2154, Tax Map of the City of
Jersey City and belonging to Distribution & Export Merchandising,
Inc.: Thence
5
(3) Easterly and along the extension of the line located 18 feet
southerly from the southerly face of the aforementioned warehouse,
south 53 degrees 45 minutes 10 seconds east 120.08 feet to a point;
thence
(4) Continuing easterly south 63 degrees 16 minutes 48 seconds east
145.96 feet to the point or place of beginning.
6. TITLE. As reasonably promptly possible after the execution hereof, the
Buyer shall order a title insurance commitment ("Commitment") for the Premises
from a title company licensed to do business in the State of New Jersey at
regular rates ("Title Company") and a survey ("Survey") of the Property showing
the title matters set forth in the Commitment. Seller shall convey fee simple
title to Buyer, at the time of closing, which shall be insurable and marketable.
For purposes of this Agreement, "marketable title" shall be deemed to be such a
title as a Title Company shall insure at standard rates and subject only to
those "permitted encumbrances" set forth in Paragraph 5 above (such matters,
collectively, "Permitted Encumbrances"). Prior to the expiration of the
Inspection Period, Buyer shall furnish a copy of the Commitment and Survey to
the Seller and give notice (the "Notice") to Seller of any exceptions to title
("Objections") which are not Permitted Encumbrances. Failure to give notice to
Seller of any Objections which are not Permitted Encumbrances prior to the
expiration of the Inspection Period, as such term is defined in Paragraph 7(a)
of this Agreement, shall be deemed a waiver by Buyer of any right to object to
the condition of title to the Premises. Provided that Buyer provides Notice to
Seller of any objections, which are not Permitted Encumbrances within the time
period set forth above, then and in that event, Seller shall use commercially
reasonable and diligent efforts to cause any such Objections to be removed as
title exceptions. In the event that Seller cannot deliver title without
reference to the Objections after using commercially reasonable efforts to do
so, then Buyer reserves the right to terminate this Agreement, in which event
the sole remaining obligations hereunder shall be upon Escrow Agent to return
the Escrow Deposit and Additional Escrow Deposit to Buyer.
6
Buyer shall give Seller a reasonable period from the date of delivery of Notice
to the Seller of any objections which are not Permitted Encumbrances, to cure
such title matter. Nothing contained in this paragraph 6 shall limit the Buyer's
right to object to any lien or encumbrance affecting the Premises first created
by Seller after the expiration of the Inspection Period. Notwithstanding the
provisions of this paragraph 6, the Seller shall pay off any monetary
encumbrance against the Premises on or before the date of Closing out of the
cash then payable and provide recordable instruments of release and discharge of
such encumbrances in form and substance reasonably satisfactory to the Title
Company, provided, that, with respect to any encumbrance held by any
institutional lender, the delivery of pay-off letters from the institutional
lender shall be satisfactory. The Seller shall pay the cost of canceling or
discharging any such encumbrances or may provide Buyer with a credit at closing
for the cost of canceling of any such encumbrance.
7. CONDITIONS PRECEDENT. The Buyer's obligation to close title to the
Premises shall be conditioned and contingent upon the following:
(a) Inspection Period: Upon the date of execution of this Agreement and
continuing for a period of forty-five (45) days thereafter (the "Inspection
Period"), the Buyer shall have the right to enter onto the Premises in order to
perform inspections and/or investigations of the physical condition of the land
and building, including without limitation, inspection and/or investigation of
structural, mechanical, electrical, plumbing, HVAC and other systems and to
conduct such other investigations and inquiries and meet with such governing
authorities, for the purpose, without limitation of gaining approval of
employment programs by the New Jersey Economic Development Authority, to obtain
all required governmental approvals and/or permits and/or to obtain utility
company agreements or for any other purpose as Buyer, in its sole and absolute
discretion, determines necessary. At any time prior to the expiration of the
Inspection Period, the
7
Buyer, may terminate this Agreement ("Inspection Termination"), for any reason
by delivering all written reports evidencing inspections and/or investigations
(the "Inspection Reports") and a written notice of Inspection Termination to the
Seller and Escrow Agent, whereupon the Escrow Deposit and Additional Deposit
shall be returned to the Buyer in accordance with the provisions of paragraph
4(a) of this Agreement and all rights and obligations with respect to
performance by the Buyer and the Seller hereunder shall be null and void.
Failure by the Buyer to provide the Inspection Report(s) and Inspection
Termination to Seller prior to the expiration of the Inspection Period, TIME
BEING OF THE ESSENCE, shall be deemed a waiver of any right of termination that
Buyer may have pursuant to this provision.
(b) Environmental Due Diligence Period: Upon the date of execution of this
Agreement and continuing for a period of sixty (60) days thereafter (the
"Environmental Due Diligence Period"), the Buyer shall have the right, subject
to the provisions of paragraph 7(b)(ii), to perform tests and soil borings,
observe, measure or otherwise study or review the Premises or any part thereof
for the purpose of conducting a Phase I environmental audit of the Premises,
wetlands review, ground water monitoring and/or underground storage tank
testing, if applicable ("Environmental Study(ies)"). Subject to the provisions
of paragraph 7(b)(i) below, in the event the results of any Environmental Study
result in environmental conditions which exceed allowable governmental
standards, as certified to Seller by Buyer's environmental engineer ("Engineer's
Certification") then and in that event Buyer may, prior to expiration of the
Environmental Due Diligence Period, either: (i) terminate this Agreement by
delivering the Engineer's Certification together with the Environmental Study
and a notice of termination to the Seller and Escrow Agent ("Environmental
Termination"), in which case, the Escrow Deposit and Additional Deposit shall be
returned to the Buyer in accordance with the provisions of paragraph 4(a) of
this Agreement and all rights and
8
obligations with respect to performance by the Buyer and the Seller hereunder
shall be null and void. Failure by the Buyer to deliver the Engineer's
Certification, Environmental Study and Environmental Termination to Seller and
the Escrow Agent prior to expiration of the Environmental Due Diligence Period,
TIME BEING OF THE ESSENCE, shall be deemed a waiver of any right of termination
that Buyer may have pursuant to this provision; or (ii) deliver to Seller and
Escrow Agent, prior to expiration of the Environmental Due Diligence Period, the
Engineer's Certification together with a copy of the Environmental Study and a
written request of Seller to remediate the environmental condition to a level
which is at or below allowable governmental standards ("Remediation Request").
Provided that Buyer has, delivered to Seller and the Escrow Agent, the
Engineer's Certification together with the Environmental Study and the
Remediation Request, as provided above, Seller shall have thirty (30) days to
review and respond to Buyer's Remediation Request, provided that Seller
shallduring the thirty (30) day period, act in a diligent manner in pursuing its
own investigation in order to determine whether it is willing or able to comply
with the Remediation Request then and in that event should Seller determine that
it requires an extension of the above thirty (30) day period, then Buyer shall
extend such time period for a reasonable period of time for Seller to complete
its investigation. If, at any time Seller provides written notice to Buyer in
which it refuses to comply with the terms of the Remediation Request, then and
in that event, Buyer may terminate this Agreement by delivering a notice of
termination to the Seller and Escrow Agent within five (5) days of receipt of
Seller's notice of its refusal to remediate the environmental condition to a
level which is at or below allowable governmental standards, whereupon, the
Escrow Deposit and Additional Deposit shall be returned to the Buyer in
accordance with the provisions of paragraph 4(a) of this Agreement and all
rights and obligations with respect to performance by the Buyer and Seller
hereunder shall be null and void. Failure by Buyer to deliver a notice of
termination to the Seller and the
9
Escrow Agent within the five (5) day period discussed above, TIME BEING OF THE
ESSENCE, shall be deemed a waiver of any right of termination that Buyer may
have pursuant to this provision. In the event Seller agrees to the terms of the
Remediation Request, Seller shall use commercially reasonable and diligent
efforts to comply with the Remediation Request and Buyer shall give Seller a
reasonable period of time to comply with the terms of the Remediation Request.
(i) In the event the results of any Environmental Study result in
environmental conditions which exceed allowable governmental standards, as
evidenced by Buyer's Engineer's Certification or if the results of such
Environmental Study are inconclusive, then and in that event, Buyer may elect,
(in lieu of delivering to Seller the Environmental Termination or the
Remediation Request as discussed in paragraph 7(b) above), to extend the
Environmental Due Diligence Period for an additional thirty (30) day period in
order to continue further Environmental Studies ("Extended Environmental Due
Diligence Period"). In order to exercise any right to extend the Environmental
Due Diligence Period, Buyer must, prior to expiration of the Environmental Due
Diligence Period, deliver to the Escrow Agent: (1) a written request to extend
the Environmental Due Diligence for a period not to exceed thirty (30) days
("Extension Request"); and (2) a certification from Buyer's environmental
engineer which either: (a) sets forth the specific environmental condition which
exceeds allowable governmental standards; or (b) sets forth the portion of the
Environmental Study which is inconclusive (the "Extension Engineer's
Certification"); together with (3) a non-refundable check made payable to the
order of the Seller in the amount of Forty Thousand ($40,000.00) Dollars (the
"Extension Check"). Provided that Buyer has delivered the Extension Request, the
Extension Engineer's Certification and the Extension Check then and in such
event, the Environmental Due Diligence Period shall be extended for an
additional thirty (30) day period, for the sole purpose of Buyer further
studying the information contained in the
10
Extension Engineer's Certification and for no other purpose. It being
specifically understood that any issue not raised in the Extension Engineer's
Certification shall be deemed waived by Buyer.
In the event that the results of Buyer's further study of the information
contained in the Extension Engineer's Certification results in environmental
conditions which exceed allowable governmental standards ("Final Environmental
Study(ies), as certified to Seller by Buyer's environmental engineer ("Final
Engineer's Certification") then and in such event Buyer may, prior to expiration
of the Extended Environmental Due Diligence Period either: (i) terminate this
Agreement by delivering the Final Engineers Certification together with the
Final Environmental Study and a notice of Environmental Termination to the
Seller and the Escrow Agent, in which case the Escrow Deposit and Additional
Deposit shall be returned to the Buyer in accordance with the provisions of
paragraph 4(a) of this Agreement and all rights and obligations with respect to
performance by the Buyer and the Seller hereunder shall be null and void.
Failure by the Buyer to timely deliver the Final Engineer's Certification and
the Final Environmental Study and a notice of Environmental Termination to
Seller and the Escrow Agent, prior to expiration of the Extended Environmental
Due Diligence Period, TIME BEING OF THE ESSENCE, shall be deemed a waiver of any
right of Termination that Buyer may have pursuant to this provision; or (ii)
deliver to Seller and the Escrow Agent the Final Engineer's Certification
together with a copy of the Final Environmental Study and a Remediation Request.
If after delivery of the Final Engineer's Certification, Final Environmental
Study and Remediation request from Buyer to the Seller and the Escrow Agent,
Seller refuses to comply with the terms of the Remediation Request then and in
that event, Buyer may terminate this Agreement by delivering a Notice of
Termination to the Seller and Escrow Agent within five (5) days of receipt of
Seller's notice of its refusal to remediate the environmental
11
condition to a level which is at or below allowable governmental standards,
whereupon, the Escrow Deposit and Additional Deposit shall be returned by the
Escrow Agent to the Buyer in accordance with the provisions of paragraph 4(a) of
this Agreement and all rights and obligations with respect to performance by the
Buyer, Seller and the Escrow Agent hereunder shall be null and void. Failure by
Buyer to deliver a Notice of Termination to the Seller and Escrow Agent within
the five (5) day period discussed above, TIME BEING OF THE ESSENCE, shall be
deemed a waiver of any right of termination that Buyer may have pursuant to this
provision. In the event Seller agrees to the terms of the Remediation Request,
Seller shall use commercially reasonable and diligent efforts to comply with the
Remediation Request and Buyer shall give Seller a reasonable period of time to
comply with the terms of the Remediation Request.
(ii) Buyer hereby agrees that prior to its entry onto the Premises to
perform Environmental Studies, Buyer shall have delivered to Seller evidence of
liability insurance in an amount of not less than $1,000,000.00 naming the
Seller as additional insured.
(c) Non-Applicability.
Seller has previously received within the last six (6) months from the
Department of Environmental Protection, pursuant to the Industrial Site Recovery
Act ("ISRA"), a determination that ISRA is not applicable to the Premises
("Non-Applicability Determination") and Seller shall deliver the Certificate of
Non-Applicability to Buyer. Seller shall make an additional application for a
Non-Applicability Determination upon expiration of the Environmental Due
Diligence Period, if necessary, with respect to this transaction.
8. LOSS OR DAMAGE. (a) The Seller is responsible for any damage to the
Premises beyond ordinary wear and tear until the Closing. If the Premises is
damaged by fire, vandalism, storm, flood or any other casualty between the date
of this Agreement and the Closing, the parties shall obtain an estimate of the
cost of
12
restoring the Premises from an established contractor of their choice. If, there
is any damage or injury caused to the Premises and the estimate to restore same
is in excess of $100,000.00, then either Buyer or Seller may terminate this
Agreement by written notice to the other given within ten (10) days after the
damage occurs, which termination by Seller may be negated by Buyer electing by
written notice to Seller given within ten (10) days after receipt of Seller's
notice of termination, to accept the Premises without reduction in the Purchase
Price. In the event that the cost of restoring the damage to the Premises is
less than $100,000.00 or if in excess thereof and this Agreement is not
terminated by either the Buyer or the Seller, the Buyer shall close in
accordance with this Agreement and pay the entire Purchase Price less a credit
in an amount equal to the cost of completing the restoration as estimated by the
contractor or agreed to by the parties, but in no event shall such credit exceed
the sum of $100,000.00. If, pursuant to this paragraph, this Agreement is so
terminated, there shall be no further obligations hereunder, except that Escrow
Agent shall return the Escrow Deposit and Additional Escrow Deposit to Buyer
within five (5) days of written notice of termination.
(b) In the event any proceeding or negotiation is instituted which results
or may result in a taking or condemnation of the Premises or any portion
thereof, the Seller shall promptly notify the Buyer thereof, describing the
nature and extent thereof. The Buyer may then, at its sole election, at any time
prior to the tenth (10th) day after it receives notice of such proceedings and
negotiations, terminate this Agreement by written notice to the Seller,
whereupon neither party shall have any further right against the other hereunder
and the Escrow Agent shall within five (5) days return the Escrow Deposit to the
Buyer. In the event that this Agreement is not terminated by Buyer by reason of
such taking, then and in that event, the sale of the Premises shall be
consummated as herein provided and the Seller shall assign to the Buyer on the
Closing Date all of the Seller's rights, title and
13
interest pertaining to all awards payable by reason thereof and shall pay over
to the Buyer all amounts theretofore received by the Seller in connection with
such taking.
9. CLOSING.
(a) The closing and transfer of title to the Premises pursuant to this
Agreement shall take place on or prior to the thirtieth (30th) day from the
expiration of the Environmental Due Diligence Period (or Extended Environmental
Due Diligence Period, if applicable) which date shall be memorialized by the
parties upon execution of the Contract of Sale.
(b) The closing and transfer of title to the Premises shall take place at
the offices of Jack Wind, Esq., Margulies, Wind, Herrington & Knopf, 15 Exchange
Place, Jersey City, New Jersey 07302 (the "Buyer's Attorney"), or such other
place as may be agreed to by the Buyer and Seller.
10. DEED AND OTHER DOCUMENTS/ITEMS.
(a) At the Closing, Seller shall deliver to Buyer the following:
(i) A Bargain and Sale Deed containing a covenant against the
grantor's acts, duly signed and acknowledged, conveying the Premises in fee
simple, free of all liens and encumbrances, except the Permitted
Encumbrances;
(ii) A check payable to the Clerk of Hudson County in full payment of
the New Jersey Realty Transfer Tax or, in the alternative, an allowance to
Buyer by way of credit for the amount;
(iii) A check payable to the Real Estate Brokers, as such term is
hereinafter defined or, in the alternative, an allowance to Buyer by way of
credit for the amount;
(iv) Keys;
(v) Tax bills for the Premises for the tax year in which the Closing
occurs;
(vi) Duly executed Affidavit of Title in form requested by the Title
Company;
(vii) Duly executed FIRPTA Affidavit in form reasonably acceptable to
the Seller and the Buyer; and
14
(viii) A letter of non-applicability as set forth in Section 7(c)
hereof or, if necessary.
(b) At the Closing, Buyer shall deliver to the Seller the following:
(i) The balance of the Purchase Price in bank funds, certified funds,
New Jersey Attorney's Trust Account check or by wire transfer to the
account designated by Seller in writing.
11. LIQUIDATED DAMAGES/REMEDIES.
(a) The Buyer and the Seller covenant and agree that it would be difficult
to determine and quantify the Seller's damages in the event of the Buyer's
default and failure to complete the purchase of the Premises pursuant to this
Agreement. The Buyer and the Seller therefore covenant and agree that if the
Buyer fails to make the payments to the Seller as herein provided or fails to
perform the covenants and agreements contained in this Agreement in good faith
the same shall constitute a default hereunder and this Agreement, at the option
of the Seller, as its sole and exclusive remedy shall become null and void, and
the Seller shall be entitled to the Escrow Deposit and Additional Deposit
previously paid to the Escrow Agent, which amounts may be paid to Seller by the
Escrow Agent in accordance with Paragraph 4 of this Agreement as liquidated
damages for such failure or breach.
(b) In the event Seller is unable to transfer the Property to Buyer for any
reason then the sole obligation of Seller shall be to refund to Buyer the Escrow
Deposit and Additional Deposit.
12. REAL ESTATE BROKER. The Seller and the Buyer each warrant and represent
to one another that no real estate broker was involved in any way in introducing
them to each other and in procuring this Agreement, except for Insignia/Edward
S. Gordon (hereinafter referred to as the "Broker"). The Seller agrees to pay a
commission to the Broker, upon closing and transfer of title an amount equal to
4.0% of the Purchase Price to the Broker (the "Commission"). In no event shall
the commission be deemed earned, payable or due unless and until the closing and
transfer of title
15
to the Premises from Seller to Buyer. Should there be asserted against either
Seller or Buyer any claim for a brokerage commission, finders fee or similar fee
other than as described in this paragraph 12, as the result of any actual or
alleged agreement, written or oral, or any action made or undertaken by the
other party, then such other party shall indemnify, protect, defend and save
harmless the Seller or Buyer, as the case may be, from any liability, damages,
losses, costs and expenses related thereto, including reasonable attorneys fees.
In case any action shall be brought against the Seller or the Buyer for an
alleged brokerage commission or finders fee and in respect to which indemnity
may be sought against either of them, the party against whom such action was
brought shall promptly notify the other party in writing and the indemnifying
party shall assume the defense thereof, including the employment of counsel
selected by the indemnifying party (which counsel shall be reasonably
satisfactory to the indemnified party), the payment of all costs and expenses
and the right to negotiate and consent to settlement. Upon reasonable
determination made by the indemnified party, the indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof; provided, however, that the indemnified party shall pay the
costs and expenses incurred in connection with the employment of separate
counsel. The indemnifying party shall not be liable for any settlement of any
such action effected without its consent, but if settled with its consent, or if
there is a final judgment for the claimant in any such action, the indemnifying
party agrees to indemnify and save harmless the indemnified party against whom
such action was brought from and against any loss or liability by reason of such
settlement or judgment. The provisions of this Paragraph 12 shall survive the
closing of title and/or termination of this Agreement and shall not merge into
the Deed.
13. ADJUSTMENTS, APPORTIONMENTS AND EXPENSES AT CLOSING.
13.1 The following shall be apportioned between the Seller and the Buyer as
of the Closing Date:
16
(i) Real estate taxes on the basis of the calendar year for which
assessed, except that if the closing and transfer of title to the Premises
shall occur on a date prior to the time that the final tax rate for the
year of the closing is fixed, the apportionment of taxes shall be based
upon the taxes as then assessed; and
(ii) Charges of public or private utilities, if any, shall not be
adjusted but shall be paid by Seller based upon a current reading to be
obtained by Seller.
13.2 All unpaid municipal assessments against the Premises for work or
improvements completed on or before the Closing Date shall be paid in full by
the Seller or allowed as a credit against the Purchase Price. If the work or
improvement is not completed by the Closing Date, then only the Buyer shall be
responsible for any assessment installment payable after that date. If the
improvement is completed by the Closing Date but the amount of the assessment
has not yet been determined, the Seller shall pay a reasonably estimated amount
at closing. When the amount of the charge is finally determined, the Seller
shall pay any deficiency to the Buyer or the Buyer shall refund any excess
payment back to the Seller. The Seller represents and warrants that the Seller
has received no notice of any assessment affecting the Premises and that to the
best of the Seller's knowledge, no assessment is proposed or planned. The
provisions of this paragraph 13.2 shall survive the closing of title and shall
not merge into the Deed.
13.3 ERRORS IN APPORTIONMENTS. If after the Closing, the parties discover
any error in adjustments and apportionments, the same shall be corrected as soon
after the discovery as possible. The provisions of this Section 13.3 shall
survive the Closing, except that no adjustment shall be made later than six (6)
months after the Closing, unless prior to such date the party seeking the
adjustment shall have delivered a written notice to the other specifying the
nature and basis for such claim.
14. PHYSICAL CONDITION OF THE PREMISES.
17
14.1 The Buyer acknowledges that it has made or has reserved in this
Agreement the right to make whatever investigation, inspection and examination
of the physical nature and condition of the Premises that it desires, including
without limitation, the building and the heating, plumbing and electrical
systems. However, the Buyer realizes that the Premises are being sold in an "AS
IS" condition, provided, however, Seller shall deliver the Premises in
broom-clean condition. The Buyer further acknowledges that, except as expressly
provided herein, the Seller has not made any statements, claims or guaranties as
to the value or condition of the Premises. The Buyer fully realizes that, except
as expressly provided herein, the Seller does not assume any responsibility or
liability on account of any such physical condition. The Seller shall deliver
possession of the Premises in vacant condition. In addition, the Premises shall
be in the same condition on the Closing Date, as it is on the date of this
Agreement, deterioration from ordinary and reasonable usage and exposure to the
elements excepted.
15. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Seller, hereby represents, warrants and covenants the following which,
shall be deemed made by Seller to Buyer also as of the Closing Date:
(i) Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of New Jersey,
and has full power and authority to perform its obligations hereunder.
(ii) The execution and delivery of this Agreement by Seller, the
performance by Seller of its covenants and agreements hereunder and the
consummation by Seller of the transactions contemplated hereby have been or
will be duly authorized by all necessary action. When executed and
delivered by Seller, this Agreement shall constitute a valid and legally
binding obligation of Seller enforceable against Seller in accordance with
its terms, except as may be limited by bankruptcy, insolvency or other law
affecting generally the enforceability of creditors right and by
18
limitation on the availability of equitable remedies.
(iii) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will violate any
provision of the certificate of formation or by-laws of Seller or any law,
rule, regulation, writ, judgment, injunction, decree, determination, award
or other order of any court, government, or governmental agency or
instrumentality, domestic or foreign, or conflict with or result in any
breach of any of the terms of or the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature pursuant to the terms of any contract or
agreement to which Seller is a party or by which Seller is bound.
(iv) Seller has no knowledge, nor has Seller received any notes or
notices of violations of law or municipal ordinances, environmental laws,
orders or requirements noted in or issued by any governmental department
having authority with respect to the Premises, other than those notified in
writing to Buyer by Seller prior to the date hereof.
(v) To the best of Seller's knowledge, Seller has no knowledge or
notice of any application for any zoning change or pending zoning ordinance
amendment which would affect the Premises.
(vi) To the best of Seller's knowledge, there are no underground
storage tanks on any portion of the Premises.
(vii) The Seller is not a "foreign person" under the Foreign
Investment in Real Property Tax Act of 1980 ("FIRPTA") and upon
consummation of the transaction contemplated hereby, the Buyer will not be
required to withhold from the Purchase Price any withholding tax.
(viii) Prior to the Closing the Seller shall not cause or permit the
Property to be used to generate, manufacture, refine, transport, treat,
store, handle, dispose, transfer, produce or process Regulated Substances
or other dangerous toxic substances, or solid waste, except under prior
written consent of the Buyer, which permission may not be arbitrarily
withheld.
(ix) To the best of Seller's knowledge, the Property has not
19
been used to generate, manufacture, refine, transport, treat, store,
handle, dispose, transfer, produce or process Regulated Substances, or
other dangerous toxic substances, or solid waste.
(x) The Property has not been, is not now being and will not be used
as a "Major Facility", as such term is defined in N.J.S.A. 58:10-23.11b(1).
(xi) No lien has attached to any real property, revenues or other
personal property interest of Seller located in the State of New Jersey,
including any real property owned, leased, used and/or occupied by Seller,
pursuant to CERCLA or as a result of the provision of the Spill Act, nor
does the Seller have any knowledge of any facts which could give rise to
such an expenditure or lien.
(xii) Seller has not received either in writing or verbally any
Enforcement Notice nor is it aware of any facts which might result in any
Enforcement Notice with respect to the Property. of any facts which could
give rise to such an expenditure or lien.
(xiii) No informational request has been issued to Seller pursuant to
section 104 of CERCLA or any other federal, state or local environmental
law, ordinance, regulation or rule.
(xiv) Seller has not received a written notice of intention to
commence suit pursuant to the New Jersey Environmental Rights Act
(N.J.S.A.) 2A:35A-1 et seq.
(xv) If Seller obtains knowledge prior to the Closing of the assertion
of any lien, as set forth in subsections herein, or an Enforcement Notice,
or obtains knowledge of facts which may give rise to such lien or
Enforcement Notice, whether written or oral, it shall immediately notify
the Buyer in writing.
16. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Buyer, hereby represents, warrants and covenants the following which,
shall be deemed made by Buyer to Seller also as of the Closing Date:
(i) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of New
20
Jersey, and has full power and authority to perform its obligations under
this Agreement.
(ii) The execution and delivery of this Agreement by Buyer, the
performance by Buyer of its covenants and agreements hereunder and the
consummation by Buyer of the transactions contemplated hereby have been or
will be duly authorized by all necessary action of its Board of Directors.
When executed and delivered by Buyer, this Agreement shall constitute a
valid and legally binding obligation of Buyer enforceable against Buyer in
accordance with its terms, except as may be limited by bankruptcy,
insolvency or other law affecting generally the enforceability of creditors
right and by limitation on the availability of equitable remedies.
(iii) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will violate any
provision of the certificate of incorporation or by-laws of Seller or any
law, rule, regulation, writ, judgment, injunction, decree, determination,
award or other order of any court, government, or governmental agency or
instrumentality, domestic or foreign, or conflict with or result in any
breach of any of the terms of or the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature pursuant to the terms of any contract or
agreement to which Buyer is a party or by which Buyer is bound.
(iv) Buyer has all of the financial resources necessary to perform its
obligations under this Agreement and purchase the Premises.
17. NOTICES. Any notices, demands, requests, statements or consents
required, permitted or appropriate hereunder shall be in writing and shall be
served upon the respective parties by certified mail, return receipt requested,
to the following addresses:
If to Seller:
Willco Associates-1, L.L.C.
236 Sussex Drive
Manhasset, New York 11030
Attn.: Alfred C. Kruger, Managing Partner
21
With a copy to:
Roberta S. Weisinger, Esq.
440 Sylvan Avenue, Suite 110
Englewood Cliffs, New Jersey 07632
If to Buyer:
Cunningham Graphics International, Inc.
629 Grove Street
Jersey City, New Jersey 07310
Attn.: Michael R. Cunningham, President,
Chief Executive Officer
With a copy to:
Jack Wind, Esq.
Margulies, Wind, Herrington & Knopf
15 Exchange Place
Jersey City, New Jersey
Such notices shall be deemed delivered when mailed in the manner above
provided and shall be evidenced by a postal receipt.
18. MERGER. Upon delivery of the Deed hereunder, this Agreement shall merge
into the Deed and the parties shall have no further liability hereunder except
as to those obligations, if any, which it is expressly provided shall survive
the delivery of the Deed.
19. RECORDATION OF AGREEMENT. The Buyer covenants and agrees that it shall
not record this Agreement, or a copy or memorandum thereof. The recording or
attempted recording of the same by the Buyer shall be a default hereunder by the
Buyer, terminating this Agreement and entitling the Seller to damages, and
injunctive relief to remove the document from record.
20. ASSIGNMENT. The Buyer may not assign its obligations under this
Agreement. Notwithstanding anything to the contrary in the immediately preceding
sentence, the Buyer shall have the right to assign its rights and obligations
under this Agreement to any entity which is an affiliate of the Buyer without
the consent of Seller, provided, however that the assignment of this Agreement
shall not in any way release the named Buyer from its obligations hereunder. For
purposes hereof, the term "affiliate" shall mean any corporation which controls,
is controlled by or is in common
22
control with the Buyer.
21. NEW JERSEY LAW GOVERNS. This Agreement shall be construed in accordance
with and governed by the laws of the State of New Jersey.
22. CAPTIONS. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
23. SEVERABILITY. In the event any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
24. MODIFICATIONS IN WRITING. The modification, amendment, supplementation
or waiver of any provisions of this Agreement or consent to any departure by the
Buyer or the Seller therefrom, shall in no event be effective unless the same
shall be in writing and signed by the Buyer and the Seller. Any such
modification, amendment, supplementation, waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
25. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective successors, assigns, heirs, legal
representatives and executors.
26. FURTHER ASSURANCES. From time to time after the Closing Date, the
Seller and the Buyer, without charge or expense to the other, shall perform such
other acts, and shall execute and acknowledge and shall furnish such other
instruments, documents, materials and information, as the other may reasonably
request in order to confirm the consummation of the transaction provided for in
this Agreement.
27. ENTIRE AGREEMENT. This Agreement embodies and constitutes the entire
understanding between the Buyer and the Seller with respect to the sale and
purchase provided for herein, and all prior agreements, understandings,
representations
23
and statements, oral or written are merged into this Agreement.
28. WILLCO-2 PROPERTY. The parties hereto recognize that simultaneously
herewith Buyer and Willco Associates-2, L.L.C. are entering into an Agreement
for the sale and purchase of the property located at 1 Thomas F. McGovern Drive,
Jersey City, New Jersey and currently described on the tax map of the City of
Jersey City, New Jersey as Block 2154.3, Lot 65 ("Willco 2 Property") and that
the sale of the Premises is contingent upon the sale of the Willco 2 Property.
Additionally, the parties hereto agree that a default by the Seller under the
terms of the Agreement of Sale for the Willco 2 Property shall be deemed a
default by the Seller hereunder and that the default by the Buyer under the
terms of the Agreement of Sale for the Willco 2 Property shall be a default by
the Buyer hereunder and in the event of a valid termination of the Contract of
Sale for the Willco 2 Property this Contract shall also be deemed terminated.
Similarly, all remedies available pursuant to this Agreement of Sale shall be
applicable to the Agreement of Sale for the Willco 2 Property.
IN WITNESS WHEREOF, the Buyer and the Seller have caused this Agreement to
be executed and delivered by their respective duly authorized corporate officer,
all as of the day and year first above written.
SELLER:
ATTEST: _____________________ WILLCO ASSOCIATES-1, L.L.C.,
a New Jersey limited liability company
By: _______________________________________
Alfred C. Kruger, Managing Partner
BUYER:
ATTEST: _____________________ CUNNINGHAM GRAPHICS INTERNATIONAL, INC.,
a New Jersey Corporation
By: _______________________________________
Michael R. Cunningham, President,
Chief Executive Officer
24