REAL ESTATE PURCHASE AND SALE AGREEMENT
by and between
Eight Farm Springs Road Associates, LLC as "Seller"
and
Farm Springs Road LLC as "Buyer"
Dated as of February 1, 2008
Counsel for Buyer: Counsel for Seller:
Eric Rubenstein David R. Glissman
Ruskin, Moscou & Faltischek MacDermid, Reynolds & Glissman, P.C.
1425 RexCorp Plaza 86 Farmington Avenue
East Tower, 15th Floor Hartford, CT 06105
Uniondale, New York 11556-1425
Ph (516)-663-6513 Ph (860) 278-1900
Fax (516) 663-6713 Fax (860) 547-1191
Email: erubenstein@rmfpc.com Email: dglissman@mrglaw.com
REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT ("Agreement"), made and delivered effective as of February
1, 2008, by and between EIGHT FARM SPRINGS ROAD ASSOCIATES, LLC, a Connecticut
limited liability company, having an office c/o ESCO Realty, Inc., 330 Whitney
Avenue, Suite 450, Holyoke, Massachusetts 01040 (the "Seller") and FARM SPRINGS
ROAD LLC, a New York limited liability company with an address of c/o GTJ REIT,
INC., 444 Merrick Road, Lynbrook, New York 11563 (the "Buyer").
SECTION 1. Agreement of Buyer and Seller.
1.1. Agreement. Seller agrees to sell and convey to Buyer, and Buyer agrees
to purchase from Seller, all of Seller's right, title and interest in and to
that certain real property commonly known as 8 Farm Springs Road, situated in
the Town of Farmington, County of Hartford, and State of Connecticut, which
property is more particularly described in Exhibit A attached hereto,
incorporated herein and made a part hereof (the "Premises"), together with all
of Seller's right, title and interest, if any, in and to any improvements
thereon and appurtenances thereto and any land lying in the bed of any street,
road or avenue, opened or proposed, adjacent to the Premises, to the center line
thereof, and all right, title and interest of Seller in and to any award made or
to be made in lieu thereof and in and to any unpaid award for damage to the
Premises by reason of change of grade of any street.
SECTION 2. Date and Place of Closing.
2.1. Date, Time and Location. Delivery of the Deed of conveyance,
assignment of the Lease, payment of the Purchase Price and consummation of the
transaction herein set forth (collectively the "Closing") shall occur on March
3, 2008 at 10:00 a.m. (Hartford, Connecticut local time), at the offices of
LandAmerica Title Insurance Company located at 175 Capital Boulevard - Suite 100
Rocky Hill, CT 06067 ("Escrow Agent"). The Closing shall occur in escrow at
Escrow Agent's office utilizing the services of Escrow Agent as the transaction
escrow agent. Buyer and Seller agree to share equally and pay such share at time
of Closing, the cost of the Escrow Agent for the performance of the escrow
services. Buyer shall be solely responsible for all costs associated with Escrow
Agent's title services including, without limitation, search and bring-down
fees, title commitment fees, recording fees and title insurance premiums. All
transaction documents and funds required by this Agreement to be paid and
delivered in order for Escrow Agent to consummate the Closing shall be paid and
delivered by each of the parties to the Escrow Agent not later than close of
Escrow Agent's business on the Business Day immediately preceding the date of
Closing (and for purposes of this Agreement, a "Business Day" shall mean a
Monday, Tuesday Wednesday, Thursday or Friday in which the banks in Hartford,
Connecticut are generally open for business); such payment and documents to be
sufficient in amount and form as is necessary to comply with each party's
obligations hereunder. Each of the Seller's and Buyer's legal counsel shall
prepare escrow instructions for the Escrow Agent directing said Escrow Agent as
to the assemblage and distribution of each of said documents and funds
consistent with the terms and conditions of this Agreement. The transaction
herein contemplated shall be consummated by Escrow Agent on the aforesaid
Closing date in accordance with said escrow instructions and this Agreement
except that if said escrow instructions shall be inconsistent with the terms and
conditions of this Agreement, the terms and conditions of this Agreement shall
control and the parties shall be bound hereby. Seller represents that its lender
has instructed it to give it fourteen (14) Days prior notice of the Closing
(collectively the "Pre-Payment Notice Loan Obligation"). Without limitation to
any other rights or remedies of Seller hereunder for a breach by Buyer of its
obligations hereunder, Seller shall have the right and power on not less than
three (3) Business Days notice to Buyer to reschedule the Closing to a date
determined by Seller which shall be not later than the earlier of (i) the
expiration date of any loan commitment obtained by Buyer for financing of
Buyer's purchase of the Premises or (ii) Thirty One (31) Days following the date
previously scheduled for Closing (and for purposes of this Agreement, the term
"Days" shall mean any day of the week). Notwithstanding the foregoing, the
parties hereby agree that if required pursuant to Seller's Pre-Payment Notice
Loan Obligation, Seller shall have the right to further adjourn the Closing to
the earliest date after the date established pursuant to the preceding sentence
as shall be necessary to comply with Seller's payoff obligations. TIME IS OF THE
ESSENCE TO THE DATE OF CLOSING AND TO THE FUNDING OF SELLER'S PAYOFF TO ITS
LENDER ON OR BEFORE 2:00PM LOCAL NORTH CAROLINA TIME.
SECTION 3. Purchase Price and Manner of Payment.
3.1 Purchase Price. Buyer shall pay to Seller as full consideration for the
Premises the total sum of Twenty Three Million Three Hundred Thousand and 00/100
($23,300,000.00) Dollars ("Purchase Price").
3.2 Manner of Payment. Subject to such adjustments as are provided for
under this Agreement, Buyer shall pay the Purchase Price to Seller as follows:
3.2.1 Initial Deposit. Buyer has deposited an initial deposit with
Escrow Agent of Two Million Three Hundred Thousand and 00/100
($2,300,000.00) Dollars (the "Deposit").
3.2.2 Balance Due. The sum of Twenty One Million and 00/100
($21,000,000.00) Dollars, constituting the balance of the Purchase Price
("Balance Due"), shall be paid to Seller at time of Closing by wire
transfer of immediately available funds in an account designated by Seller.
The Balance Due together with the Deposit, less any disbursements
authorized by Seller pursuant to Seller's counsel's escrow instructions,
must be received and deposited to Seller's designated account as aforesaid,
no later than 2:59 pm Springfield, Massachusetts time and the Seller's loan
payoff must be received by Seller's lender by no later than 2:00pm, North
Carolina local time, in order for said funds to be deemed received by
Seller. The Balance Due together with Deposit, less authorized
disbursements as aforesaid, must be received by Seller and its lender as
aforesaid as and when required hereby in order for the Closing to be deemed
consummated.
3.3 Escrow Agreement. The Deposit shall be placed in escrow, and shall be
held and disbursed, pursuant to this Agreement as modified by the Escrow Rider
attached hereto as Exhibit 3.3 which Seller and Buyer agree to execute and
deliver concurrent with the execution and delivery of this Agreement. The Escrow
Agent shall place the Deposit in an interest bearing account utilizing the
taxpayer identification number of the Buyer and except in the case of a default
by Buyer hereunder entitling Seller to receive the Deposit with interest accrued
thereon, Buyer shall receive the benefit of the interest earned thereon as a
credit against the Purchase Price if paid to Seller or by receiving same upon
termination of the Escrow Account.
SECTION 4. Representations and Warranties of Seller.
4.1 Seller's Representations and Warranties. Seller represents and warrants
to Buyer as of the date hereof that:
a. The Hartford Fire Insurance Company (the "Tenant") is the sole tenant
at the Premises, and occupies same pursuant to a written lease dated
November 15, 1996, as amended pursuant to a first amendment dated July
2, 1997 (collectively, the "Lease"), a true copy of which Lease is
annexed herein as Exhibit 4.1(a). The parties acknowledge that the
Tenant has referenced in a prior estoppel certificate a December 30,
1996 letter as amending the Lease which Seller has been unable to
obtain a copy of and as to which Seller makes no representation. Buyer
shall have the right to terminate this Agreement and receive a refund
of the Deposit together with accrued interest thereon hereunder as its
sole remedy if said letter modifies the Lease in a materially adverse
manner, as determined by the Buyer in its discretion, provided notice
of such termination is given to Seller no later than Five (5) Days
following Buyer's receipt of a copy thereof but in no case later than
the date of Closing.
b. Seller has no knowledge of any individual or entity being in
possession of or occupying any portion of the Premises except the
Tenant, pursuant to the Lease (although Seller makes no representation
as to any parties occupying same by or through the Tenant).
c. The rents set forth in the Lease are currently being charged and
collected for the periods set forth in the Lease.
d. The Lease is in full force and effect without modification.
e. Seller has received no security deposit from Tenant under the Lease.
f. Seller has not granted, nor does Seller have any actual knowledge of,
any option agreements or rights of first refusal with respect to the
purchase of the Premises or any other unexpired rights in favor of
third persons to purchase or otherwise acquire the Premises or any
portion of the Premises or any interest in the Premises or any
interest in Seller and no third persons will obtain such right or
option as a result of the execution of this Agreement on account of
any agreement to which Seller is a party or of which Seller has actual
knowledge.
g. Intentionally left blank.
h. Tenant is not more than 30 days in arrears with respect to the payment
of rent.
i. There are no leasing commissions due or to become due with respect to
any lease or renewal thereof, including but not limited to the Lease,
to which Seller is a party.
j. No written notice of default or breach on the part of the landlord
under any lease, including but not limited to the Lease, has been
received by Seller or its agents or attorneys from any tenant,
individual or entity, including but not limited to the Tenant which
remains outstanding and uncured (except that Buyer acknowledges Seller
has advised Buyer of Tenant's initial claim that Seller was obligated
to make certain repairs to the Premises as more particularly set forth
in a letter dated July 10, 2007 from Grubb & Ellis on behalf of Tenant
to Seller and the Tenant's undertaking in connection therewith as set
forth in the letter from Grubb & Ellis dated November 26, 2007).
k. Seller has received no actual notice that there are currently any
residential tenants occupying any portion of the Premises.
l. Seller has not entered into any oral agreements or service and
maintenance agreements with respect to the Premises that will be
binding upon the Buyer as a successor to Seller's ownership interest
therein and there are no other contracts or other obligations relating
to the Premises which will be applicable after Closing to which Seller
is a party other than those set forth in this Agreement, the Lease and
as of record may appear.
m. Seller has no knowledge of any action, suit, proceeding, litigation or
known investigation pending which may materially adversely affect the
Premises or the Seller, and Seller does not have knowledge of any
threatened or pending governmental investigation involving Seller or
any of its products or services, including inquiries, citations, or
complaints by any Federal, State or local governmental or
administrative body or the Premises.
n. Seller has not commenced any tax reduction proceedings with respect to
all or any portion of the Premises and (although Seller makes no
representation as to any actions of the Tenant including, without
limitation, any tax appeals filed by Tenant, which Seller has not
received written notice of from the Tenant).
o. Intentionally left blank.
p. Seller has received no notice from any governmental agency that the
Premises is the subject of any condemnation proceedings.
q. Intentionally left blank.
r. Intentionally left blank.
s. Seller represents that it is not a foreign person as such term is
defined in the Foreign Investment in Real Property Tax Act.
t. The execution and delivery by Seller of this Agreement and all
documents to be executed and delivered pursuant hereto by Seller and
the performance by Seller of its obligations hereunder and thereunder
have been duly and validly authorized by all necessary action on the
part of the Seller, and no further vote, approval or consent of any
other party is required.
u. There are no governmental approvals required for or in connection with
the valid execution and delivery of or compliance with this Agreement
by Seller although Seller makes no representation or warranty
concerning any permits or approvals associated with the Premises and
what, if any, transfer requirements may be associated therewith.
v. The execution and performance of this Agreement by Seller or any of
its members will not result in a breach of or constitute a default or
violation under (i) any agreement or other document to or by which
Seller is a party or is bound or any of its respective properties is
subject; or (ii) any statute, decree, judgment, order or rule of any
court or governmental authority which is binding on Seller, although
Seller makes no representation or warranty concerning any permits or
approvals associated with the Premises and what, if any, transfer
requirements may be associated therewith.
w. Intentionally left blank.
x. Seller has not conveyed or entered into any agreement to transfer any
excess development rights which may be appurtenant to the Premises in
their current condition under any zoning resolution or other law
applicable thereto.
y. Seller has not filed any application to effect a rezoning of the
Premises which remains pending, although Seller makes no
representation or warranty concerning any actions of the Tenant,
including, without limitation, any applications the Tenant may have
pending.
z. Seller has not received any written notice from the Tenant that Tenant
will not extend the term of the Lease, but Seller makes no
representation as to any course of action which Tenant may ultimately
elect to take, including without limitation, a failure to extend the
term of its Lease.
All the representations and warranties of Seller contained in this Section
4.1 shall be deemed to be conditions to the performance by Buyer of Buyer's
obligations hereunder. Any material breach of such warranties and
representations shall allow Buyer the right to cancel this Agreement and receive
a return of the Deposit and accrued interest, plus the cost of Buyer's title
searches, due diligence investigation, environmental investigations, survey and
reasonable attorneys fees.
All of the representations and, warranties set forth in this Section 4.1
shall be deemed made by Seller to Buyer as of the date of this Agreement and
also as of the date of Closing and solely in the case of those made as of the
date hereof and not those remade as of Closing, shall survive the Closing for a
period of one year although Buyer's remedy for a breach by Seller of the remade
representations shall be limited as follows: (a) if Seller is unable to remake a
representation as of Closing because of a change in facts or circumstances
occurring on or after the date hereof which was not caused by a breach by Seller
of any covenant contained in this Agreement, then Buyer's sole remedy for a
breach of the remade representation or warranty shall be to terminate this
Agreement prior to Closing and receive a refund of the Deposit together with
interest accrued thereon and Buyer hereby unconditionally and irrevocably
releases and discharges Seller from any other claim, liability and remedy on
account thereof, accepting this limited remedy as Buyer's sole and exclusive
remedy; and (b) if Seller is unable to remake a representation as of Closing
because of a change in facts or circumstances occurring on or after the date
hereof which was caused by a breach by Seller of any covenant contained in this
Agreement, then without limitation to any other remedy afforded Buyer under this
Agreement for a breach by Seller of a covenant herein contained, Buyer shall
have the remedies set forth in the immediately preceding paragraph for a breach
of Seller representation. In all cases, Buyer shall have no right or remedy if
the breach of the representation or warranty is immaterial.
4.2 Seller's Further Obligations. Seller covenants to Buyer that from and
after the date hereof:
a. Intentionally left blank.
b. Except for the "STC Certificate" as hereinafter defined, Seller shall
not hereafter willingly and voluntarily record any declaration,
covenant, restriction or easement of record or any mortgage, lien,
pledge, or other encumbrances encumbering title to the Premises other
than those permitted hereunder (although nothing herein shall prohibit
Seller from complying with any obligation to do so under the Lease
provided Seller receives Buyer's prior consent which consent Buyer
agrees to not unreasonably withhold, condition or delay).
c. Seller shall not hereafter enter into any leases for the Premises, or
grant any extension or renewal of the Lease without Buyer's consent
(although this provision shall not be deemed to limit any right of the
Tenant to extend or renew, or preclude Seller from consenting thereto
if obligated to do so under the Lease provided that, in those cases
where its consent is requested, Seller shall first give notice thereof
to Buyer and obtain Buyer's prior consent which shall not be
unreasonably withheld, conditioned or delayed).
d. Seller shall not make, or consent to any request by Tenant for, any
applications for building or alteration permits or zoning changes,
although this provision shall not be deemed to limit any right of the
Tenant to so do or to require Seller to so do, or preclude Seller from
consenting thereto, if obligated to do so under the Lease, provided
that, in those cases where its consent is requested, Seller shall
first give notice thereof to Buyer and obtain Buyer's prior written
consent which shall not be unreasonably withheld, conditioned or
delayed.
e. Seller shall not hereafter consent to any request by Tenant to perform
alterations to the Premises although this provision shall not be
deemed to limit (i) any right of the Tenant to so do or to require
Seller to so do, or preclude Seller from consenting thereto, if
obligated to do so under the Lease, provided that Seller shall, in
those cases where its consent is requested, first give notice thereof
to Buyer and obtain Buyer's prior written consent which shall not be
unreasonably withheld, conditioned or delayed and (ii) Tenant from
performing the Premises repair work referenced above in connection
with the Grubb & Ellis letter dated November 26, 2007. Seller assumes
no obligation in connection with, and shall have no liability or
obligation to Buyer, for or with respect to any work or alterations
performed by the Tenant as this covenant is limited solely to the
actions of the Seller as landlord.
f. Intentionally left blank.
g. Intentionally left blank.
h. Seller shall not enter into any new construction, management,
maintenance or service contracts which might become the obligation of
Buyer nor modify, amend, supplement, cancel, accept the surrender of
or renew any such contracts which exist at present and to which Seller
is a party without Buyer's prior written consent.
i. Seller shall not hereafter commit to enter into or make any brokerage
agreement with respect to the leasing of any portion of the Premises.
j. Seller shall not willfully and voluntarily take any action which will
cause any of the Seller's covenants in this Agreement to be violated
or any of Seller's representations or warranties in this Agreement
become untrue.
k. Seller shall promptly inform Buyer in writing of any material event
affecting ownership or title to the Premises of which Seller receives
actual notice but Seller shall have no such obligation as to any such
material events that Buyer shall become aware of.
l. Seller shall maintain, at its expense, its current insurance coverage
with policy limits of no less than the amounts set forth on the
insurance certificate annexed hereto as Exhibit 4.2(l) through the
date of expiration of the current policy, subject, however, to any
actions of the insurer and the terms of said policy or policies (but
in no case less than what is required of Seller pursuant to the
Lease). Buyer acknowledges that the Seller's current policy or
policies expire on or about March 7, 2008 and Seller covenants that it
shall renew said policy or obtain coverage substantially similar
thereto (but in no case less than what is required of Seller pursuant
to the Lease) and shall maintain said policy in full force and effect
throughout the balance of the term of this Agreement, subject,
however, to any actions of the insurer and terms of said policy or
policies (but in no case less than what is required of Seller pursuant
to the Lease).
All the covenants of Seller contained in this Section 4.2 shall be deemed
to be conditions to the performance by Buyer of Buyer's obligations hereunder.
Any material breach of or failure to materially perform such covenants shall
allow Buyer the right to cancel this Agreement and receive a return of the
Deposit and accrued interest, plus the cost of Buyer's title searches, due
diligence investigation, environmental investigation, survey and reasonable
attorneys fees.
SECTION 4A. Representations and Warranties of Buyer.
To induce Seller to enter into this Agreement, Buyer represents and
warrants to Seller that:
4A.1 No Reliance; Independent Investigation. Buyer and Seller agree,
acknowledge and represent that, except as otherwise set forth in this Agreement,
Buyer is entering into this Agreement and shall perform all of its obligations
hereunder and consummate the transaction contemplated by this Agreement solely
in reliance on and as a result of Buyer's own investigations and efforts
(including Buyer's inspection of the Premises and such other investigations,
examinations and inspections as Buyer has chosen to make or has made) and at
Buyer's sole risk, cost and expense, including, without limitation, the risk
that Buyer's inspection of the Premises and such other investigations,
examinations and inspections may not reveal any or all adverse or existing
conditions, aspects or attributes of the Premises. Buyer acknowledges that
Seller has afforded Buyer the opportunity for full and complete investigation,
examination and inspection of the Premises. Buyer acknowledges that this
paragraph was a negotiated part of this Agreement and serves as an essential
component of consideration for the same. Without limiting the generality of the
foregoing, the parties specifically acknowledge that Buyer has had an
opportunity to fully inspect the Premises, including, but not limited to, the
physical condition of the Premises (including all environmental concerns), and
the Purchase Price has been negotiated to eliminate all claims, whether known or
unknown, relating to the condition of the Premises and all aspects and
attributes thereof, including, without limitation, all environmental matters.
Consequently, Buyer hereby, on behalf of itself and all those claiming by or
through it, irrevocably and unconditionally releases Seller from, and this
clause bars all past, present or future claims, whether or not presently known,
which could be brought by Buyer and all those claiming by or through Buyer,
concerning, the condition of the Premises and all aspects and attributes
thereof, specifically including, without limitation, all claims pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, and any other Environmental Laws. Notwithstanding the parties' intent
that all such claims be barred, should a court of competent jurisdiction deem
otherwise, this subsection and other similar provisions of this Agreement are
intended by the parties to serve, and shall serve, as the overwhelming, primary
factor in any equitable apportionment of damages under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, and any
other Environmental Laws. This provision shall not be deemed, however, to
release Seller from any covenants contained in this Agreement or in any
documents executed and delivered at time of Closing. The provisions of this
subsection shall survive the Closing and the delivery of the Deed or any
expiration or termination of this Agreement. Notwithstanding the above, nothing
herein shall be deemed to release Seller from its own fraud intended to induce
Buyer to enter into this Agreement.
4A.2 Existence of Buyer. Buyer exists as a limited liability company under
the laws of the State of New York.
4A.3 Power and Authority. Buyer has full power and authority to execute and
deliver this Agreement and perform all of its obligations under this Agreement;
4A.4 Due Authorization. This Agreement has been duly authorized, executed
and delivered by Buyer and constitutes a legal, valid and binding agreement of
Buyer, enforceable against Buyer in accordance with its terms and Buyer has
obtained the consent of all entities and parties (whether private or
governmental) necessary to bind Buyer to this Agreement;
4A.5 No Financing or Evaluation. Buyer acknowledges that the Closing is not
conditioned upon Buyer obtaining third party financing to consummate the Closing
or satisfying any evaluation contingency. This Agreement contains NO Financing
Contingency or Evaluation Contingency.
4A.6 ERISA. Buyer is not acquiring the Premises with the assets of an
employee benefit plan as defined in Section 3 (d) of the Employee Retirement
Income Security Act of 1974.
SECTION 5. Seller's Closing Obligations.
At Closing, Seller shall deliver the following to Buyer:
5.1 Special Warranty Deed. A fully executed, witnessed and acknowledged
Special Warranty Deed in the form attached hereto as Exhibit 5.1.
5.2 Conveyance Taxes. Properly completed and executed state and municipal
conveyance tax statements for filing with the appropriate Town Clerk, together
with checks, at Seller's expense, to the order of the appropriate officers in
payment of such taxes.
5.3 Lease Assignment. An assignment of the Lease in the form of Exhibit 5.3
attached hereto pursuant to which Seller shall assign, and Buyer shall assume,
the Lease.
5.4 Title Certificate. A certification signed by Seller and in the form of
Exhibit 5.4 affirming, that no work has been performed at or materials supplied
to the Premises within the ninety (90) Day period preceding the Closing other
than such matters for which the payment of the cost thereof shall be the
responsibility of Seller (or properly executed lien waivers of the same in lieu
thereof, where applicable) and that there are no tenant's in possession except
pursuant to the Lease and, subject to the limitations on Seller's obligation set
forth in Section 12.24 below, a certification signed by Tenant as required
pursuant to Section 4 or the First Lease Amendment. Seller shall take exception
on said certification for any work for or materials provided to the Tenant, and
or any actions of the Buyer and its consultants and advisors.
5.5 Foreign Investment for Real Property Tax Act. Affidavit signed by
Seller in the form of Exhibit 5.5 regarding the Foreign Investment In Real
Property Tax Act.
5.6 Evidence of Authority. A certificate of legal existence for Seller
dated within 30 Days of Closing and an authorizing resolution of Seller
authorizing the transactions herein contemplated and identifying the individual
authorized to execute and deliver documents on the part of the Seller.
5.7 Keys. Such keys, security codes and access cards to the Premises as
Seller shall have possession of.
5.8 No Further Assurances. Except as otherwise set forth in this Agreement,
Seller shall have no obligation whatsoever to execute, deliver, or provide to
Buyer any additional instrument, document or item.
5.9 Original Lease. To the extent in Seller's actual possession, an
original of the Lease and any Tenant records. If Seller's original Lease shall
be lost or damaged, Seller shall provide Buyer with a true, accurate and
complete copy thereof so certified by the Seller.
5.10 Intentionally left blank.
5.11 Documents. Any other documents required or contemplated by this
Agreement to be delivered by Seller or, as to delivery of documents, any other
documents reasonably and customarily required to be delivered by a seller in
connection with the sale of real property in Farmington, Connecticut or
otherwise reasonably requested by Buyer, in order to effectuate the provisions
of this Agreement provided that the same shall in no manner result in any
additional cost, liability or obligation on the part of the Seller, nor alter in
any manner the rights and obligations of the Seller as set forth herein.
5.12 Warranties. Any warranties on any equipment, if in Seller's
possession.
5.13 Letter to Tenant. A letter to Tenant advising of the sale of the
Premises to Buyer and directing payment of rent and other charges to Buyer. 5.14
STC Certificates. Attached hereto as Schedule
5.14 are copies of certain STC certificates (collectively the "STC
Certificate"). Seller agrees that at time of Closing, Seller shall deliver
original certified copies thereof and Buyer agrees that it shall instruct its
title insurance company to record same on the land records of the Town of
Farmington concurrent with recording of the Deed and other transaction
documents.
5.15 Past Due Rent. Notwithstanding anything to the contrary, all rents and
additional rents shall be apportioned as and when collected. All rents collected
from and after the date of Closing shall be apportioned in the following order
of priority: (i) first to any month or months following the month in which the
Closing occurs until Buyer is current in the collection of its rent; (ii) then
to the month in which the Closing occurs; and (iii) then to the payment of
arrears, if any, due Seller. To the extent that additional rent has accrued but
is not billable or payable prior to Closing, Seller shall cooperate with Buyer
to assist Buyer in remitting bills to tenants in a timely manner, and if, as and
when payment of additional rent is actually collected by Buyer, Buyer shall
remit to Seller sums applicable to the period prior to the date of Closing. If
less than the full amount due is collected, the deficiency shall be borne by the
Buyer and Seller in the same ratio as then respective ownership periods bear to
the period covered by such additional rent. Seller shall turn over any rent
checks received by Seller after Closing for periods after the Closing, endorsed
to Buyer, without recourse. This paragraph shall survive Closing.
SECTION 6. Condition of Premises.
6.1 Condition of Premises. Except as otherwise set forth in this Agreement,
the Premises shall be sold and conveyed strictly on an "as is", "where is" and
"with all defects" basis, without representation, warranty or covenant, express,
implied or statutory, of any kind whatsoever, including, without limitation,
representation, warranty or covenant as to condition (structural, environmental,
mechanical or otherwise), past or present use, construction, development, lease
performance, investment potential, tax ramifications or consequences, income,
compliance with law, habitability, tenancies, merchantability or fitness or
suitability for any purpose, all of which are hereby expressly disclaimed.
Except as otherwise set forth in this Agreement, Buyer acknowledges that Seller
has made no representations, warranties or covenants as to the compliance of the
Premises with any federal, state, municipal or local statutes, laws, rules,
regulations or ordinances, including, without limitation, those pertaining to
construction, rent control, building and health codes, land use (or permits
issued in connection therewith), zoning, lead paint, urea formaldehyde,
asbestos, Environmental Conditions (as hereinafter defined), hazardous or toxic
wastes or substances, Hazardous Materials, pollutants, contaminants, other
environmental matters or any other matter.
6.2 Environmental Matters.
a. For purposes of this Agreement, the term "Environmental Laws" shall
mean all federal, state and local laws, rules, ordinances,
regulations, governmental, administrative or judicial orders or
decrees or other legal requirements of any kind governing pollution or
contamination of the environment, occupational health and safety or
protection of human health or the environment, presently in effect and
hereafter adopted, including, but not limited to, the Federal Water
Pollution Control Act, 33 U.S.C. sections 1231-1387 (the "FWPCA"); the
Resource Conservation and Recovery Act, 42 U.S.C. sections 6901-6991
("RCRA"); the Clean Air Act, 42 U.S.C. sections 7401-7642 (the "CAA");
the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. sections 6901-9675 ("CERCLA");; the Clean Water Act, 33
U.S.C.A. sections 1251 et seq.; the Clean Air Act, 42 U.S.C.A.
sections 7401
et seq.; and all other laws and regulations relating to emissions,
spills, leaks, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the
manufacture, possession, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials. Seller's has
at all times since Seller began operating the Premises, operated the
Premises in substantial compliance with all environmental permits and
Environmental Laws applicable the Premises.
b. For purposes of this Agreement, the term "Hazardous Materials" shall
mean all chemical, biological, organic, inorganic or infectious
pollutants, contaminants, hazardous, flammable or toxic substances,
material or wastes or whatever kind or nature, whether liquid, solid
or gaseous, including without limitation, pollutants, contaminants,
substances, materials or wastes regulated under, defined, listed or
included in any Environmental Laws, and for purposes of this
Agreement, shall include any "hazardous substance," or "hazardous
waste," as defined in the Environmental Laws, petroleum and petroleum
products, natural gas or synthetic gas, material that is a source,
special nuclear or by-product material, as defined by the Atomic
Energy Act of 1954, 42 U.S.C.A. H 3011 et seq., and the regulations
promulgated thereto and "hazardous chemical," as defined in 29 C.F.R.
Part 1910. The foregoing notwithstanding, "Hazardous Materials" shall
not include institutional size cleaning and building maintenance
products; provided, however, that Seller's use, handling and storage
of such materials are reasonably necessary for the proper operation
the Premises and Seller's use, handling, storage and disposal of such
materials are in compliance with all applicable laws, including,
without limitation, applicable Environmental Laws.
c. For purposes of this Agreement, "Release" shall mean any discharge,
spill, leak, pumping, pouring, emitting, emptying, injection or
dumping.
d. For purposes of this Agreement, "Environmental Conditions" shall mean
any environmental contamination or pollution of, or the Release of
Hazardous Materials into, surface soils, subsurface soils, sewage
systems, surface water, groundwater, land or air occurring or existing
on or before the date of Closing or the existence of any Storage Areas
(as defined below).
e. For purposes of this Agreement, the term "Governmental Authority"
includes the United States, the state, county, city, and political
subdivisions in which the Premises are located or that exercise
jurisdiction over the Premises, and any agency, court, department,
commission, board, bureau or instrumentality or any of them that
exercises jurisdiction over the Premises.
f. Seller represents, warrants and covenants to Buyer that to Seller's
best knowledge:
i. Seller has not, with respect to the Premises: (1) entered
into or been subject to any consent decree, compliance
order, or administrative order; (2) received notice under
the citizen suit provision of any Environmental Laws; (3)
received any request for information, notice, demand letter,
administrative inquiry, or formal or informal complaint or
claim or suit from any governmental agency with respect to
any Environmental Condition; or (4) been subject to or
threatened with any governmental or citizen action.
SECTION 7. Deed, Permitted Title Exceptions and Defects.
7.1 Condition of Title. Seller shall convey such title as Seller has in and
to the Premises subject to, and without limitation: (a) any and all provisions
of any ordinance, municipal regulation, or public law; (b) any declarations,
restrictions, covenants, matters and easements of record; (c) any state of facts
which an accurate survey or personal inspection of the Premises might reveal;
(d) current property taxes (subject to adjustment pursuant to Section 10) and
(e) the Lease and the tenant(s) in possession thereunder. It is agreed that if
on or after February 1, 2008, there shall be a change in the provisions of any
ordinance, municipal regulation or public law which shall have the effect of
prohibiting Tenant from using the Premises or of giving Tenant the right to
terminate its Lease, Buyer shall have the right to terminate this Agreement and
receive a refund of its Deposit together with interest accrued thereon,
providing notice of such termination is given within fifteen (15) Days following
Buyer's receipt of actual notice thereof, but in no case later than the date of
Closing.
7.2 Title Objection. If a title examination by Buyer as of time of Closing
discloses that title to the Premises is subject to encumbrances and defects not
of record or in existence as of the date of this Agreement and as a result
thereof, title is unmarketable (such event herein called a "Title Objection"),
Buyer shall promptly notify Seller, and Seller may, at its option, exercise such
efforts as it, in its sole discretion, deems appropriate to remove, remedy or
comply with such Title Objection and Seller shall be entitled to an adjournment
of the Closing for a period not to exceed thirty (30) Days, and the Closing
shall be adjourned to such date as is established by the Seller. No matter shall
be deemed to be a defect in title if, under the Standards of Title of the
Connecticut Bar Association, such matter does not render title unmarketable. If
Seller does not remove, remedy or comply with such Title Objection as of Closing
(as the same may have been adjourned although Seller shall have no obligation to
so adjourn), Buyer shall have, as Buyer's sole and exclusive remedy, the right
and obligation to choose one of the following remedies:
7.2.1 Close Transaction. Close the transaction on the terms herein
provided and accepting, in full satisfaction of the Seller's obligation
with respect to conveying title hereunder, such title to the Premises as
the Seller can convey subject to such Title Objection; provided, however,
that if such Title Objection shall be a lien or other encumbrance which can
be removed, remedied or cured by the payment of a liquidated sum of money,
then Seller shall be obligated to pay up to a cumulative total amount of
$500,000 to cause such Title Objection to be removed, remedied or cured but
Seller shall have no obligation to pay any sum in excess thereof nor take
any action other than to pay, in total for all Title Objections, up to
$500,000 (this provision shall not be applicable, however, to taxes,
assessments, sewer use, fire district taxes and other governmental
assessments which first accrue on or after the date hereof, each of which
shall be adjusted in accordance with this Agreement); or
7.2.2 Terminate Agreement. Terminate this Agreement.
7.3 Prompt Exercise of Option. The Buyer shall select one of the above
remedies as its sole and exclusive remedy promptly but in no event later than
fifteen (15) Days following notice from Seller that it is unable or unwilling to
cure such Title Objections, by delivering written notice of the Buyer's election
to the Seller, but in no case later than the date of Closing as herein
established. Failure of Buyer to make an election by written notice to the
Seller within said fifteen (15) Day period (or if earlier, as of the date of
Closing) shall be deemed to be an election by the Buyer to proceed pursuant to
the remedy set forth in Section 7.2.1 above.
7.4 Termination. If Buyer shall elect to terminate this Agreement under
Section 7.2.2, Seller shall promptly instruct the Escrow Agent to refund to
Buyer the Deposit together with interest accrued thereon, whereupon this
Agreement shall cease, terminate and come to an end, and neither party shall
have any further rights against or obligations to the other by virtue of this
Agreement (subject, however, to any obligations of Buyer under this Agreement
which shall expressly survive such termination).
7.5 No Warranty. Except as otherwise provided in this Agreement, no
provision herein shall be deemed to constitute a representation or warranty of
Seller, or impose any obligation on Seller with respect to the condition or
status of title to the Premises.
7.6 Seller's Section 4.2(b) Covenant. The preceding limitation on Buyer's
remedies in connection with a Title Objection shall not be deemed to limit, in
any manner, Buyer's remedy for a breach by Seller of its covenant set forth in
Section 4.2(b) above, as to which Buyer shall have the above rights or, at its
election, the rights afforded it under this Agreement for a breach of said
covenant contained in Section 4.2(b) above.
SECTION 8. Destruction and Condemnation.
8.1 Destruction and Condemnation. Subject to the provisions of Section 8.2
below, in the event that any of the Premises are materially or wholly destroyed
or damaged, by reason of fire, storm, accident or other casualty and are not
restored to their present condition (ordinary wear and tear excepted) prior to
the time of Closing, or should all or a material part of the Premises be taken
by eminent domain or conveyed by Seller to a governmental or quasi governmental
authority legally threatening condemnation thereof, this Agreement may be
terminated at the sole election of the Buyer upon written notice to the Seller
at any time prior to the Closing (and if earlier, not later than thirty (30)
Days following Buyer's receipt of notice from Seller of such taking, conveyance
or casualty), in which case the Seller shall refund the Deposit together with
accrued interest thereon, whereupon this Agreement shall be deemed terminated
and neither party shall have any further obligation or liability to the other,
except that Buyer and Seller shall remain liable under any obligation contained
in this Agreement which expressly survives the termination of this Agreement.
8.2 Immaterial. In the event that the Premises is damaged or destroyed by
fire or other casualty or taken by eminent domain proceedings prior to Closing,
then unless the cost of repair or value of the taken portion is, as reasonably
determined by Seller's insurance adjustor or the condemning authority, greater
than 5% of the Purchase Price and the tenant under the Lease shall have the
right to terminate the Lease on account thereof, such taking or casualty shall
not be deemed material for purposes of this Agreement. Notwithstanding the
foregoing, the term "material" as used in this Section 8 shall include, but not
be limited to any taking or casualty which materially interferes with ingress
and egress to or from the Premises or the buildings situated thereon or which
reduces the amount of parking available at the Premises.
8.3 Proceeds. Should such election or notice of termination not be made
pursuant to Section 8.1 or should such casualty or condemnation be deemed
immaterial, then this Agreement shall remain in full force and effect without
reduction to the Purchase Price and the Seller shall turn over to the Buyer at
the time of the Closing all monies paid to and actually received by Seller by
reason of such damage or loss or such eminent domain proceedings, and the Seller
shall further assign and transfer to the Buyer all right, title and interest in
and to any additional money that may be payable under such insurance policies or
by reason of such casualty or eminent domain proceedings to the extent such sums
relate to the Premises in each case, however, subject to the rights of the
Tenant under the Lease.
SECTION 9. Adjustments.
9.1 Custom of Bar Association. Subject to the provisions of this Section 9,
all adjustments to the Purchase Price for property taxes, water and sewer
charges, fuel, fire district taxes, governmental assessments, rents, alarm
charges (if any) and other charges against the Premises will be made as of the
time of the Closing in accordance with the regularly accepted practices of the
Hartford County Bar Association. No adjustment shall be made for those items
which the tenant pays directly to the charging authority nor to the extent the
Seller has been reimbursed by the Tenant therefor. For purposes hereof, rents
shall be adjusted based upon rents actually received only and shall be adjusted
only to the extent the Seller shall have received the same from the Tenant.
Seller shall be solely responsible for any and all recording fees related to the
recording of any instruments required by this Agreement to release any existing
mortgages or other liens or encumbrances on the Premises that must be released
by Seller in connection with the Closing. Buyer shall assume and pay as partial
consideration for the Premises but subject to adjustment as herein provided, the
taxes and other adjustment items assessed but not yet payable.
9.2 Special Provisions Concerning Conveyance Taxes; Real Property Taxes;
Operating Expenses. Seller shall, to the extent required in connection with the
recording of the Deed, pay all conveyance taxes imposed upon the Seller by the
State of Connecticut and the Town in which the Premises is located. Adjustment
for Real Estate Taxes shall be in accordance with local custom and the Seller
represents that the Tenant under the Lease reimburses Seller for such taxes
monthly, in arrears, and Seller represents that Seller has paid such taxes for
the period January 1, 2008 through and including June 30, 2008. Buyer shall
reimburse Seller for said taxes prorated based upon the period of time between
the Closing and June 30, 2008, with further adjustment for the month in which
the Closing occurred to the extent that the Tenant shall have made its monthly
reimbursement payment to Seller therefor. The Seller represents that the Tenant
under the Lease reimburses Seller monthly, in arrears, for insurance carried by
the Seller. Seller represents it prepaid the insurance for the period ending on
or about March 7, 2008 and agrees it shall cancel said insurance as of the
Closing and reimburse Buyer at time of Closing for the prorated portion
following the Closing of the Tenant's monthly payment for the month in which the
Closing shall occur to the extent received by Seller (otherwise Buyer shall so
reimburse Seller upon Buyer's receipt of said payment) and if the Closing shall
be extended (although Buyer has no such right to require that it be extended)
and Seller renews or replaces said policy, then the adjustment herein shall be
applied to the new policy, premium and rent as aforesaid as of time of Closing.
Seller represents that it has paid the January 1, 2008 sewer use tax and was
reimbursed by the Tenant under the Lease therefor and the parties agree that no
adjustment shall be made for the said sewer use tax. The Seller represents that
utilities are not in Seller's name (but rather in Tenant's name or some party
affiliated with the Tenant) and based on Seller's representation, the parties
agree that no adjustment shall be made therefor at time of Closing. Seller shall
deliver commercially reasonable documentation evidencing the representations
contained in this Section 9.2 promptly upon request by Buyer.
SECTION 10. Confidentiality.
Buyer agrees to hold in confidence, until the Closing (except to the extent
disclosure is required by law), any information or data relating to this
Agreement, the Premises and the Lease obtained by Buyer. To the extent that the
Buyer shall be obligated by applicable law to report any such information to any
party, Buyer shall give Ten (10) Business Days prior notice thereof (or the
maximum period legally permitted if the notification Buyer is obligated to make
must be made in less than such Ten (10) Business Days) and Seller shall have the
right to take such action as is legally permissible to postpone or not make such
disclosure, or to make such disclosure, in each case in a manner that will
relieve the Buyer from its obligation to do so. Buyer shall have no right to
communicate with tenants of the Premises or governmental or quasi-governmental
authorities without the prior consent of the Seller and then only upon such
terms as Seller shall reasonably establish. Notwithstanding the foregoing, Buyer
shall have the right to reveal such information or data relating to this
Agreement, the Premises and the Lease to Buyer's due diligence providers,
lenders, shareholders, officers, and director, attorneys, accountants, tax
advisors and contractors as shall be reasonably necessary so as to conduct
Buyer's due diligence investigation and to facilitate this transaction although
Buyer shall instruct such parties to maintain such information in confidence.
The provisions hereof shall survive the termination of this Agreement, but not
the consummation of the Closing hereunder.
SECTION 11. Defaults and Remedies.
11.1. Buyer's Default. Because (i) anticipated damages hereunder are
uncertain in amount and difficult to prove, (ii) the parties hereto wish to
liquidate said damages in advance, and (iii) the Deposit paid pursuant to this
Agreement is not greatly disproportionate to the damage reasonably anticipated
in the event of Buyer's default, it is further agreed that if the Buyer defaults
in the performance of Buyer's obligations pursuant to this Agreement, Seller's
sole and exclusive remedy shall be to cancel this Agreement and retain the
Deposit together with interest accrued thereon as liquidated damages provided
however, that before Buyer shall be deemed in default hereof, Seller shall give
Buyer written notice thereof and an opportunity to cure the same not to exceed
the earlier to occur of the date of Closing or ten (10) Days following the date
of such notice (or such shorter period as is reasonable in the case of an
emergency or if the possibility of liability to Seller shall exist) but in no
case beyond the date of Closing and only to the extent that the funding time for
Seller's loan payoff can be achieved on that date (unless Buyer shall pay the
"Excess Payoff Cost" as hereinafter defined as an additional cost of cure in
which case the cure period may be extended the full ten days including the
portion thereof which extends beyond the date and time of Closing necessary to
pay the loan off in a timely fashion), and if Buyer shall cure such default
within said period and shall pay to Seller the Excess Payoff Cost if applicable,
then Buyer shall not be deemed in default hereof. In order for Buyer to extend
the aforesaid cure period for the full ten days inclusive of the portion thereof
which extends beyond the date of Closing and the wire time on the date of
Closing, Buyer must pay to Seller, in addition to all other sums due Seller
hereunder and as an additional cost of cure, the difference between what Seller
would have been obligated to pay its mortgage lender as a full payoff of the
loan had the loan been paid off on March 3, 2008 on or before 2:00 pm North
Carolina time as required by this Agreement and the actual cost of the payoff
when finally made (such excess cost being referred to herein as the "Excess
Payoff Cost") which sum shall be due and payable together with and as and when
the payment of the Purchase Price is required to be made pursuant hereto. In no
case shall the Excess Payoff Cost be a negative number. The payoff amounts
utilized for the aforesaid Excess Payoff Cost calculation shall be as
established by the said mortgage lender in its payoff letter to the Seller. The
Buyer also acknowledges and agrees that Seller shall have the right in such case
to reschedule the Closing for a date in which its loan may be repaid taking into
consideration any advance notice required by its lender, but not later than
thirty one (31) Days after the expiration of the ten (10) Day cure period.
11.2 Seller's Default. In the event of a default by Seller, Buyer's
remedies for any breach of this Agreement by Seller shall include without
limitation the return of the Deposit and accrued interest thereon, plus the cost
of Buyer's title searches, due diligence investigation, environmental
investigation and survey, an action for breach of any representation, warranty
or covenant by Seller contained in this Agreement or an action for specific
performance together with an award for the costs of bringing such action
subject, nevertheless, to any express limitation thereon contained elsewhere in
this Agreement; provided however, that before Seller shall be deemed in default
hereof, Buyer shall give Seller written notice thereof and an opportunity to
cure the same not to exceed the earlier to occur of the date of Closing or ten
(10) Days following the date of such notice (or such shorter period as is
reasonable in the case of an emergency or if the possibility of liability to
Buyer shall exist) and if Seller shall cure such default within said period,
then Seller shall not be deemed in default hereof. This Section 11.2 shall
survive the termination of this Agreement.
SECTION 12. Miscellaneous.
12.1. Entire Agreement. This Agreement (including any Riders, Exhibits and
Schedules attached hereto) contains the entire agreement by and between the
parties concerning this transaction, and supersedes any and all previous
agreements, written or oral, between said parties and concerning this
transaction.
12.2. Survival. It is explicitly agreed between the parties that except as
otherwise set forth in this Agreement to the contrary, the representations,
warranties and indemnifications contained herein shall merge in the Deed, and
shall not survive the execution and performance of this Agreement and delivery
of the Deed. The preceding shall not limit other provisions in this Agreement
relating to survival.
12.3. Modification.There may be no modification of this Agreement except in
writing, and signed by the parties hereto.
12.4. Inurement.The rights and obligations contained herein shall inure to
the benefit of and be binding upon the successors and assigns of the parties
hereto.
12.5. Severability.It is understood and agreed by the parties that if any
part, term or provision of this Agreement is held by any court to be invalid,
illegal or in conflict with any applicable law, the validity of the remaining
portions or provisions of this Agreement shall not be affected and the rights
and obligations of the parties shall be construed and enforced as if this
Agreement did not contain the particular part, term or provision held to be
invalid, illegal, or in conflict with the applicable law.
12.6. Waiver.No waiver of any breach of any agreement or provision
contained in this Agreement shall be deemed a waiver of any preceding or
succeeding breach thereof or of any other agreement or provision contained in
this Agreement. No extensions of time for performance of any obligations or acts
shall be deemed an extension of time for performance of any other obligations or
acts.
12.7. Connecticut Law Governs.This Agreement shall be governed by,
interpreted under, and construed and enforced exclusively in accordance with the
provisions hereof and the laws of the State of Connecticut applicable to
agreements made and to be performed wholly within the State of Connecticut.
12.8. Terminology.All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine or neuter, and to the singular or plural, as
the identity of the parties may require.
12.9. Captions.The captions to Sections of this Agreement are for
convenience of reference only, and shall not be deemed to affect the
interpretation, meaning or construction of any of the provisions of this
Agreement.
12.10. Multiple Originals.This Agreement shall be executed in four
duplicate counterparts, each of which when executed and delivered shall be
deemed an original.
12.11. Drafting Roles.The parties agree that each has played a material
role in the negotiation and drafting of this Agreement, and that the document
shall not be construed against any party merely because of that party's role in
the drafting thereof.
12.12. Ejusdem Generis.The rule of ejusdem generis shall not be applied to
limit the generality of a term when followed by specific examples.
12.13. Notice.Any notice required hereunder shall be effective upon receipt
or rejection if sent certified mail, return receipt requested, or via an
overnight courier service, if addressed to either Buyer or Seller at the
following addresses:
If to Buyer: Jerome S. Cooper
c/o GTJ REIT, Inc.
444 Merrick Road, Suite 370
Lynbrook, NY 11563
Fax: (718) 739-3361
with a copy to: Paul Cooper
c/o Lighthouse Real Estate Ventures, Inc.
60 Hempstead Avenue
West Hempstead, NY 11552
Fax: (516) 693-5501
with a copy to: Eric C. Rubenstein, Esq.
Ruskin Moscou Faltisheck, P.C.
1425 RexCorp Plaza, East Tower, 15th Floor
Uniondale, New York 11556-1425
Fax: 516-663-6713
If to Seller, to: Eight Farm Springs Associates, LLC
c/o ESCO Realty, Inc.
330 Whitney Avenue, Suite 450
Holyoke, Massachusetts 01040
Attention: Edward K. Savides
Fax: 413-533-8883
with a copy to: AFI, Inc.
2150 Post Road
Fairfield, Connecticut 06430
Attention: Anthony F. Izzo
Fax: 203-256-1503
with a copy to: David R. Glissman, Esq.
MacDermid, Reynolds & Glissman, P.C.
86 Farmington Avenue
Hartford, CT 06105
Fax: 860-547-1191
The addresses and person to whom notice is to be given may be changed by a
notice from the applicable party complying with the terms hereof. Any notice
which is not delivered after the second attempt to deliver and any notice which
is expressly rejected by the recipient or its office shall be deemed "rejected"
for purposes hereof. A notice executed by a party's attorney given in accordance
with the terms hereof shall be deemed valid notice on behalf of such party.
12.14. Recording.Buyer agrees that Buyer shall not record this Agreement or
any notice or memorandum hereof, and should Buyer so record, Buyer shall at
Seller's option be deemed in default hereof and this Agreement shall, at
Seller's option and by instrument unilaterally executed by Seller and recorded,
be terminated and shall not be an encumbrance upon title to the Premises. Buyer
shall be responsible for all actual and consequential damages resulting from any
such recording by Buyer.
12.15. Attorney's Fees. In the event of any litigation arising out of this
Agreement, the prevailing party shall be entitled to reasonable attorney's fees
and costs.
12.16. No Partnership.Nothing contained in this Agreement shall be
construed to create a partnership or joint venture between the parties or their
successors in interest.
12.17. Assignment.Buyer shall not assign this Agreement without the prior
written consent of Seller, provided that Buyer shall have the right to form an
entity to acquire title to the Premises and assign this Agreement thereto at
time of Closing and in such case, Buyer and such assignee shall be jointly and
severally liable hereunder. No such assignment shall be valid until Seller
receives notice thereof and the assignee assumes this Agreement and agrees to be
jointly and severally bound with Buyer hereunder in a signed writing prepared by
the Seller. Any assignment in violation of the terms hereof shall be deemed null
and void.
12.18. Broker. Buyer and Seller represent and warrant to each other that
neither has dealt with any broker or other intermediary in connection with this
transaction other than CB Richard Ellis, Inc. ("Seller's Broker"). Buyer and
Seller shall indemnify, defend and save each other harmless against any costs,
claims or expenses (including reasonable attorney's fees) arising out of the
breach on their respective parts of any representation, warranty or agreement
contained in this Section 12.18. Seller agrees to pay, pursuant to a separate
agreement between Seller and Seller's Broker, the commission payable to Seller's
Broker, if and when the Closing shall be consummated and the Purchase Price is
received by the Seller, and shall indemnify, defend and hold Buyer harmless with
respect thereto. This Section 12.18 shall survive the Closing.
12.19. Patriot Act/Buyer. Buyer represents, warrants and covenants that
neither Buyer nor any of its partners, officers, directors, members or
shareholders (i) is listed on the Specially Designated Nationals and Blocked
Persons List maintained by the Office of Foreign Asset Control, Department of
the Treasury ("OFAC") pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079
(Sept. 25, 2001) ("Order") and all applicable provisions of Title III of the USA
Patriot Act (Public Law No. 107-56 (October 26, 2001)); (ii) is listed on the
Denied Persons List and Entity List maintained by the United States Department
of Commerce; (iii) is listed on the List of Terrorists and List of Disbarred
Parties maintained by the United States Department of State, (iv) is listed on
any list or qualification of "Designated Nationals" as defined in the Cuban
Assets Control Regulations 31 C.F.R. Part 515; (v) is listed on any other
publicly available list of terrorists, terrorist organizations or narcotics
traffickers maintained by the United States Department of State, the United
States Department of Commerce or any other governmental authority or pursuant to
the Order, the rules and regulations of OFAC (including, without limitation, the
Trading with the Enemy Act, 50 U.S.C. App. 1-44; the International Emergency
Economic Powers Act, 50 U.S.C. sections 1701-06; the unrepealed provision of the
Iraqi Sanctions Act, Publ.L. No. 101-513; the United Nations Participation Act,
22 U.S.C. ss. 2349 aa-9; The Cuban Democracy Act, 22 U.S.C. sections 60-01-10;
The Cuban Liberty and Democratic Solidarity Act, 18.U.S.C. sections 2332d and
233; and The Foreign Narcotic Kingpin Designation Act, Publ. L. No. 106-201, all
as may be amended from time to time); or any other applicable requirements
contained in any enabling legislation or other Executive Orders in respect of
the Order (the Order and such other rules, regulations, legislation or orders
are collectively called the "Orders"); (vi) is engaged in activities prohibited
in the Orders; or (vii) has been convicted, pleaded nolo contendere, indicted,
arraigned or custodially detained on charges involving money laundering or
predicate crimes to money laundering, drug trafficking, terrorist-related
activities or other money laundering predicate crimes or in connection with the
Bank Secrecy Act (31 U.S.C. sections 5311 et. seq.). Buyer shall indemnify and
hold Seller harmless from and against all losses, damages, liabilities, cost and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) that are incurred by Seller and/or its affiliates that derive from a
claim made by a third party against Seller and/or its affiliates arising or
alleged to arise from a misrepresentation made by Buyer in this Section or a
breach of any covenant to be performed by Buyer pursuant to this Section. The
provisions of this subsection shall survive Closing.
12.20. Patriot Act/Seller. Seller represents, warrants and covenants that
neither Seller nor any of its members (i) is listed on the Specially Designated
Nationals and Blocked Persons List maintained by OFAC) pursuant to the Order and
all applicable provisions of Title III of the USA Patriot Act (Public Law No.
107-56 (October 26, 2001)); (ii) is listed on the Denied Persons List and Entity
List maintained by the United States Department of Commerce; (iii) is listed on
the List of Terrorists and List of Disbarred Parties maintained by the United
States Department of State, (iv) is listed on any list or qualification of
"Designated Nationals" as defined in the Cuban Assets Control Regulations 31
C.F.R. Part 515; (v) is listed on any other publicly available list of
terrorists, terrorist organizations or narcotics traffickers maintained by the
United States Department of State, the United States Department of Commerce or
any other governmental authority or pursuant to the Order, the rules and
regulations of OFAC (including, without limitation, the Trading with the Enemy
Act, 50 U.S.C. App. 1-44; the International Emergency Economic Powers Act, 50
U.S.C. sections 1701-06; the unrepealed provision of the Iraqi Sanctions Act,
Publ.L. No. 101-513; the United Nations Participation Act, 22 U.S.C. ss. 2349
aa-9; The Cuban Democracy Act, 22 U.S.C. sections 60-01-10; The Cuban Liberty
and Democratic Solidarity Act, 18.U.S.C. sections 2332d and 233; and The Foreign
Narcotic Kingpin Designation Act, Publ. L. No. 106-201, all as may be amended
from time to time); or any other applicable requirements contained in any
enabling legislation or other Executive Orders in respect of the Order (vi) is
engaged in activities prohibited in the Orders; or (vii) has been convicted,
pleaded nolo contendere, indicted, arraigned or custodially detained on charges
involving money laundering or predicate crimes to money laundering, drug
trafficking, terrorist-related activities or other money laundering predicate
crimes or in connection with the Bank Secrecy Act (31 U.S.C. sections 5311 et.
seq.). Seller shall indemnify and hold Buyer harmless from and against all
losses, damages, liabilities, cost and expenses (including, without limitation,
reasonable attorneys' fees and expenses) that are incurred by Buyer and/or its
affiliates that derive from a claim made by a third party against Buyer and/or
its affiliates arising or alleged to arise from a misrepresentation made by
Seller in this Section or a breach of any covenant to be performed by Seller
pursuant to this Section. The provisions of this subsection shall survive
Closing.
12.21 Tax Deferred Exchange. Buyer hereby acknowledges that the Seller may
elect to complete an Internal Revenue Code Section 1031 tax deferred exchange in
connection with the transaction contemplated by this Agreement (such election
may be with respect to all of the Premises or only a portion thereof). The
parties agree that the Seller's rights and/or obligations under this Agreement
may be assigned or partially assigned to an intermediary of the Seller's choice
for the purpose of completing such an exchange, and that the Seller may take and
require the Buyer, at Seller's sole cost and expense to take such other actions
as are reasonably required to consummate such an exchange. Buyer agrees to
cooperate with the Seller and the intermediary in a manner reasonably necessary
to complete the exchange provided that such cooperation does not cause Buyer to
incur any additional liability, does not delay the transaction contemplated
herein and does not cost Buyer any additional sum which Seller does not agree to
pay on Buyer's behalf.
12.22 Condition of Premises at Closing and Interim Management. Except as
otherwise provided for above concerning Casualty and Condemnation, Seller shall
convey the Premises and Buyer shall acquire and assume the same in their then
condition as of Closing. Seller has no obligation to deliver the same in "broom
clean" condition, nor shall Seller have any obligation to remove any item
therefrom. Buyer acknowledges and accepts the possibility that some items,
aspects or components of the Premises may not be in good or working condition,
or in the same condition as when inspected by the Buyer and Seller shall have no
obligation to Buyer in connection therewith. There shall be no reduction to the
Purchase Price therefor. Seller shall continue to operate and manage the
Premises as applicable as it has previously so operated and managed the same and
Buyer shall have no rights or claims in connection therewith. Notwithstanding
the foregoing, Seller shall have no obligation to make any repairs or capital
improvements between the date of this Agreement and Closing nor take any action
that would cause Seller to incur financial obligation which Seller is unwilling
in its discretion to incur. Notwithstanding the preceding, if as of the date of
Closing, there shall be a material adverse change in the condition of the
Premises from that which exists as of the date hereof and the Tenant is not
obligated under its Lease to repair same, or if the Tenant shall be in default
of the Lease pursuant to Section 12 thereof, then Buyer shall have the right,
but not the obligation, to terminate this Agreement and receive a refund of its
Deposit together with interest accrued thereon whereupon neither Seller nor
Buyer shall have any further obligation or liability to the other hereunder
except for such obligations of the Buyer which shall expressly survive the
termination of this Agreement. The failure to so terminate shall constitute
Buyer's election to proceed with the Closing subject to such default and without
further obligation on the part of the Seller. Seller shall, throughout the term
of this Agreement, promptly provide Buyer with copies of any notices received
from Tenant or sent by Seller to Tenant.
12.23 Due Diligence Materials. The parties acknowledge that Seller has
assembled and made available to Buyer certain documentation concerning the
Premises, including, without limitation, various third party reports. All
materials made available to the Buyer or its representatives are collectively
referred to herein as "Confidential Information". Except as otherwise provided
in this Agreement, neither Seller nor any of its partners and managing partners,
nor any of its or their officers, directors, shareholders, employees, agents,
advisors, contractors, professionals or any others associated therewith make any
representations or warranties of any kind or type with respect to the
Confidential Information or any other matter with respect to the Premises ,
including, without limitation, the adequacy, completeness or accuracy of any of
the Confidential Information. Buyer agrees that it has no right to rely on such
Confidential Information and it shall independently verify any and all
information contained therein to the extent desired by Buyer. Buyer hereby
unconditionally and irrevocably releases Seller and its partners and managing
partners, and their officers, directors, shareholders, employees, agents,
advisors, contractors, professionals or any others associated therewith and its
and their respective heirs, successors and assigns, from any and all claims now
or hereafter arising in connection with the Confidential Information, including,
without limitation, any claims associated with Buyer's reliance upon the same
(although the preceding reference to reliance shall in no manner be construed as
permitting or consenting to any such reliance). Buyer shall promptly upon the
termination of this Agreement, return all the Confidential Information to Seller
such that following termination, neither Buyer nor any other party associated
with Buyer shall have any Confidential Information.
12.24 Tenant Estoppel and Tenant Affidavit. Seller agrees to deliver an
Estoppel Certificate in the form of Schedule 12.24 attached hereto to Tenant and
request that Tenant execute and deliver same to Seller for delivery to Buyer
(the "Estoppel Certificate"). Seller agrees to request that Tenant execute and
deliver a title affidavit as required of Tenant pursuant to Section 4 of the
First Lease Amendment or in lieu thereof as contemplated by said Section 4, to
execute and deliver the indemnity or other agreement referenced therein
(collectively referred to as the "Tenant Title Affidavit"). If at time of
Closing, or prior thereto upon notice to Buyer from Seller, Seller is unable to
deliver the (i) Estoppel Certificate in form materially similar to that attached
hereto as Schedule 12.24 without materially adverse information reported thereon
and (ii) applicable Tenant Title Affidavit sufficient to permit the Buyer's
title insurance company to take no exception for mechanics liens on Buyer's and
its lender's, if any, title insurance policy, then Buyer shall have the right,
but not the obligation, to terminate this Agreement and receive a refund of the
Deposit paid hereunder together with interest accrued thereon provided that
notice of such termination is made and given not later than the earlier to occur
of the Closing or ten (10) Days following Seller's notice to Buyer that it will
not deliver the Tenant Title Affidavit or Estoppel Certificate in compliance
herewith. If Buyer shall fail to give such notice of termination as and when
required hereby, then this provision shall be null and void and Buyer shall
proceed to consummate the Closing without the benefit of the applicable
instrument. It is expressly understood and agreed that Seller shall have no
liability or obligation to Buyer in connection with the Estoppel Certificate and
Tenant Title Affidavit other than to make such delivery and request as
aforesaid.
12.25. Post Closing Audit. Seller covenants and agrees (i) to provide to
Buyer its income and expense statement for 2007 within 30 days after the Closing
and (ii) to provide reasonable access to Buyer and its accountants and auditors
to Seller's books and records for the purpose of auditing (as and to the extent
required under applicable securities laws and regulations) Seller's income and
expense statements for the Premises for the years 2005, 2006 and 2007, all at
Buyer's sole cost and expense, which covenants shall survive the Closing.
12.26 SUBMISSION OF THIS AGREEMENT FOR DISCUSSION ONLY. THE SUBMISSION BY
SELLER TO BUYER OF THIS AGREEMENT IN UNSIGNED FORM SHALL BE DEEMED TO BE A
SUBMISSION SOLELY FOR BUYER'S CONSIDERATION AND NOT FOR ACCEPTANCE AND
EXECUTION. SUCH SUBMISSION SHALL HAVE NO BINDING FORCE AND EFFECT, SHALL NOT
CONSTITUTE AN OPTION OR OFFER OR ACCEPTANCE OF ANY OFFER, AND SHALL NOT CONFER
ANY RIGHTS UPON BUYER OR IMPOSE ANY OBLIGATIONS UPON SELLER IRRESPECTIVE OF ANY
RELIANCE THEREON, CHANGE OF POSITION OR PARTIAL PERFORMANCE. THE SUBMISSION BY
SELLER OF THIS AGREEMENT FOR EXECUTION BY BUYER AND THE ACTUAL EXECUTION AND
DELIVERY THEREOF BY BUYER TO SELLER SHALL SIMILARLY HAVE NO BINDING FORCE AND
EFFECT ON SELLER UNLESS AND UNTIL SELLER SHALL HAVE EXECUTED THIS AGREEMENT AND
THE DEPOSIT SHALL HAVE BEEN RECEIVED BY THE ESCROW AGENT AND A COUNTERPART
HEREOF SHALL HAVE BEEN DELIVERED TO BUYER. SELLER EXPRESSLY RESERVES THE RIGHT
TO CONTINUE TO MARKET THE PREMISES THROUGHOUT THE TERM HEREOF BUT AGREES THAT IT
SHALL NOT EXECUTE ANY PURCHASE AND SALE AGREEMENTS WITH ANY OTHER PARTY PRIOR TO
THE DATE ESTABLISHED HEREIN FOR CLOSING.
SIGNATURE PAGE TO FOLLOW
IN WITNESS WHEREOF, the Buyer and Seller have duly executed this Real
Estate Purchase and Sale Agreement on the date first above mentioned.
SELLER:
Eight Farm Springs Road Associates, LLC
By: Eight Farm Corporation, its managing
member
BY: /s/ Edward K. Savides
--------------------------------------
Edward K. Savides, its President
Signatures Continued on Next Page
Signature Page for Real Estate Purchase and Sale Agreement
By and Between
Eight Farm Spring Road Associates, LLC and Farm Springs Road LLC
Continued
BUYER:
Farm Springs Road LLC
By GTJ REIT, Inc.
its sole member
By: /s/ Jerome Cooper
--------------------------
Jerome Cooper, President
EXHIBITS HAVE NOT BEEN INCLUDED