AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY Interior Design Building: 306 East 61st Street
Exhibit
10.6
AGREEMENT
FOR PURCHASE AND SALE OF REAL PROPERTY
Interior
Design Building: ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
THIS
AGREEMENT (this “Agreement”)
is made this 21st day of
January, 2010 (the “Effective
Date”), by and between AMERICAN REALTY CAPITAL II, LLC (“Buyer”),
and URBAN DEVELOPMENT PARTNERS (61), LLC (“Seller”).
In
consideration of the mutual promises set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. Terms
and Definitions. The terms listed below shall have the
respective meaning given them as set forth adjacent to each term.
(a) “Base
Purchase Price”
shall mean Thirty Two Million Two Hundred Fifty Thousand and No/00
($32,250,000).
(b) “Brokers” shall mean TQS Partners,
acting as Seller’s agent.
(c) “Closing” shall mean the consummation
of the transaction contemplated hereby, which shall take place at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ on
March 29, 2010 (the “Initial
Closing Date”). Notwithstanding the foregoing, if Seller has
not secured the written consent of the Lender (as defined herein) under the Loan
(as defined herein), Buyer or Seller may extend Closing for up to eighty five
(85) days from the Initial Closing Date to allow Seller time to obtain such
written consent. If (i) at the end of such eighty five (85) day
period Seller has still not secured the written consent of the Lender under the
Loan, or (ii) during such eighty five (85) day period a Material Adverse Change
shall have occurred, then Buyer shall have the right to terminate this Agreement whereupon Escrow Agent shall
refund the ▇▇▇▇▇▇▇ Money to Buyer and thereafter neither party shall have any
further rights, obligations or liabilities hereunder, except as otherwise
expressly set forth herein.
Buyer
shall have the right, in its sole and absolute discretion to extend the Closing
Date (as such date may be extended in accordance with this Agreement) (the
“Closing
Extension Option”) for up to thirty (30) days, TIME BEING OF THE ESSENCE
WITH RESPECT TO BUYER’S OBLIGATION TO CLOSE ON SUCH DATE, by (i) providing
written notice of such extension to Seller prior to the Initial Closing Date and
(ii) delivering the Additional ▇▇▇▇▇▇▇ Money to the Escrow Agent on or before
the Initial Closing Date and in no event less than three (3) business days after
Seller’s receipt of Buyer’s notice to extend the Initial Closing
Date.
(d) “Closing
Date” shall mean the Initial Closing Date,
as such date may be extended in accordance with this Agreement. Anything
contained herein to the contrary notwithstanding, in no event shall the Closing
Date occur after June 21, 2010.
(e) “Due
Diligence Period”
shall mean the period beginning on the Effective Date and extending until 11:59
PM EST on the date that is thirty five (35) days thereafter. Seller
shall deliver to Buyer substantially all of the Due Diligence Materials (as
defined herein) within five (5) business days after this Agreement is fully
executed. If Buyer determines that any Due Diligence
Materials are missing, Buyer shall, within two (2) business days after the
expiration of said five (5) business day period, deliver to Seller a list
setting forth the Due Diligence Materials Buyer is missing. Seller
shall deliver to Buyer all of the Due Diligence Materials set forth on such list
within ten (10) business days after receipt of such list from Buyer or an
explanation of why any such information is not available.
(f) “▇▇▇▇▇▇▇
Money” shall mean
collectively, and as applicable, the Initial ▇▇▇▇▇▇▇ Money and the Additional
▇▇▇▇▇▇▇ Money. “Initial
▇▇▇▇▇▇▇ Money” shall mean Five Hundred Thousand Dollars and No/00
($500,000) and all interest accrued thereon. The Initial ▇▇▇▇▇▇▇
Money shall be delivered to Escrow Agent within one (1) business day after the
later of (i) Buyer’s receipt of a fully executed copy of this Agreement and (ii)
the Effective Date. The ▇▇▇▇▇▇▇ Money shall be deposited in escrow
with the Escrow Agent in accordance with this Agreement. If Buyer
elects to exercise the Closing Extension Option, then Buyer shall deliver an
additional Five Hundred Thousand Dollars and No/00 ($500,000) and all interest
accrued thereon (the “Additional
▇▇▇▇▇▇▇ Money”) in accordance with the terms hereof.
(g) “Leases” shall mean those certain
leases with respect to the Property between Seller (or Seller’s predecessor in
interest), as landlord, and the various tenants (each a “Tenant”),
as each may be amended.
(h) “Material
Adverse Change”
shall mean a material adverse change to the business and operations of the
Property (taken as a whole).
(i) “Property” shall mean, collectively (a)
that certain real property located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, being more particularly described on Exhibit A, attached
hereto and incorporated herein (the “Real
Property”) together with all buildings and other improvements located
thereon (collectively, the “Improvements”);
(b) all right, title and interest of Seller under the Leases and all security
deposits (if any) that Seller is holding pursuant to the Leases (subject to the
terms thereof); (c) all right, title and interest of Seller in all machinery,
furniture, equipment and items of personal property of Seller attached or
appurtenant to, located on or used in the ownership, use, operation or
maintenance of the Property or the Improvements (collectively, the “Personalty”);
(d) all right, title and interest of Seller, if any, to any unpaid award for (1)
any taking or condemnation of the Property or any portion thereof, or (2) any
damage to the Property or the Improvements by reason of a change of grade of any
street or highway; (e) all easements, licenses, rights and appurtenances
relating to any of the foregoing; and (f) any and all right, title and interest
of Seller in and to any warranties, tradenames, logos (including any federal or
state trademark or tradename registrations), or other identifying name or ▇▇▇▇
now used in connection with the Real Property and/or the Improvements, but
expressly excluding any such property to the extent owned by any Tenant (the
“Intangible
Property”).
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(j) “Seller’s
Notice Address”
shall be as follows, except as same may be changed pursuant to the Notice
section herein:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Urban
Development Partners (61), LLC
▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel. No.:
(▇▇▇) ▇▇▇-▇▇▇▇
and a
copy to:
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel. No.:
(▇▇▇) ▇▇▇-▇▇▇▇
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(k) “Buyer’s
Notice Address”
shall be as follows, except as same may be changed pursuant to the Notice
section herein:
▇▇▇▇▇▇▇
▇▇▇▇▇▇
American
Realty Capital II, LLC
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel. No.:
(▇▇▇) ▇▇▇-▇▇▇▇
and
to:
▇▇▇▇▇
▇▇▇▇▇▇▇▇
American
Realty Capital II, LLC
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel. No.:
(▇▇▇) ▇▇▇-▇▇▇▇
(l) “Escrow
Agent” shall mean
Chicago Title Insurance Company, Suite 1325, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Telephone:
▇▇▇-▇▇▇-▇▇▇▇.
2. Purchase and Sale of the
Property. Subject to and in accordance with the terms of this
Agreement, Seller agrees to sell to Buyer and Buyer agrees to purchase from
Seller the Property.
3. Purchase
Price and Payment.
(a) The
purchase price (“Purchase
Price”) to be paid by Buyer to Seller for the Property is the aggregate
of (i) the Base Purchase Price, plus (ii) Buyer’s Closing Costs (as defined in
Section 4 of this Agreement below.
(b) All
amounts payable by Buyer to Seller under this Agreement, after adjustment for
assumption of the Loan, unless otherwise specified, shall be paid by wire
transfer of immediately available funds to the Escrow Agent on the Closing
Date.
4. Proration of Expenses
and Payment of Costs and Recording Fees.
(a) All
real estate taxes, water and sewer use charges, and any other charges and
assessments constituting a lien on the Property (collectively “Taxes and
Assessments”) shall be prorated between Buyer and Seller as
follows:
(i) Seller
shall be responsible for that portion of the Taxes and Assessments equal to (x)
the total of the Taxes and Assessments due and payable during the calendar year
in which the Closing occurs, multiplied by (y) a fraction,
the numerator of which shall be the number of days in such calendar year prior
to the Closing Date, and the denominator of which shall be 365; and
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(ii) Buyer
shall be responsible for that portion of the Taxes and Assessments equal to (x)
the total such taxes due and payable during the calendar year in which the
Closing occurs, multiplied by (y) a fraction,
the numerator of which shall be the number of days in such calendar year
occurring on and subsequent to the Closing Date, and the denominator of which
shall be 365.
(b) All
rents (including operating expense and real estate tax contributions or
reimbursements and similar charges (collectively, “Tenant
Pass-Throughs”)), credits, security deposits and set-offs due or required
to be paid under or by reason of the Leases shall be adjusted pro-rata by
appropriate credit to the Seller or Buyer (as the case may be) on the Closing
Date. If, at the Closing Date, any Tenant is in arrears in the
payment of rents, Seller will disclose the same to Buyer in writing or on the
Rent Roll and such amounts shall not be adjusted on the Closing
Date. Prior to the Closing Date, Seller shall use Seller’s current
business practices to collect such arrearages. Buyer shall use
reasonable efforts to collect any such arrearages after the Closing Date, and
Buyer shall turn over to Seller the arrearages so collected, less the reasonable
cost of collection thereof, if any; provided, however, Buyer shall only be
obligated to do so for a period of ninety (90) days after the Closing
Date. After such ninety (90) day period, Seller may seek to collect
the arrearages by legal action. All rents collected by Buyer after
the Closing Date (except for amounts specifically billed and paid as end of year
reconciliation payments for Tenant Pass-Throughs, which shall be separately
accounted for and allocated, pro rata, between Seller and Buyer as their
interest may appear) shall be first applied to rents payable after the Closing
Date and only the excess thereof shall be paid over to Seller on account of the
arrearages. To the extent that items to be apportioned hereunder may
be required to be paid directly by a Tenant under its Lease,
same shall not be apportioned, provided, however, that such items shall have
been paid by such Tenant currently through the month including the Closing
Date. In addition, Seller shall (i) account to and turn over to Buyer
any and all security deposits paid by existing Tenants (“Tenant Security
Deposits”), or (ii) provide Buyer a credit against the Purchase Price in
the amount of the Tenant Security Deposits. The provisions of this
subparagraph (b) shall survive Closing and the delivery of the Deed and the
Assignments (each, as defined below), and shall survive the expiration of this
Agreement.
(c) Accrued
payments of debt service on account of the Loan shall be prorated as of the date
immediately preceding the Closing Date together with a credit or debit for all
escrows and reserves held by Lender or to be held by Lender pursuant to the
Loan.
(d) Seller
shall pay or be charged with the following costs and expenses in connection with
this transaction which costs shall be referred to as “Seller’s
Closing Costs”:
(i)
Any and all state and local transfer taxes on the sale and transfer of the
Property shall be paid by Seller;
(ii) All
costs and expenses incurred by Lender or any other third party (other than Buyer
or any assignee of Buyer permitted under this Agreement) in connection with the
Loan Assumption (as defined herein) shall be paid by the Seller, including any
assumption fee or legal costs associated therewith, that are not paid by the
Lender provided, however, in the event
the Seller has the opportunity to pay a commercially reasonable fee to Lender to
accelerate the Loan Assumption approval process (the “Acceleration
Fee”), Seller agrees to pay the Acceleration Fee in an amount not to
exceed Four Thousand Dollars and No/00 ($4,000) and Buyer shall reimburse Seller
for any such Acceleration Fee.
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(iii) Broker’s
commission payments (for both leasing and sales commissions earned), in
accordance with Section 23 of this Agreement; and
(iv) Any
costs incurred in connection with the release of exceptions to title that are
not “Permitted Exceptions” (as defined herein), including, but not limited to,
prepayment penalty fees and recording fees for documents providing for the
release of the Property from the such exceptions.
Seller’s
Closing Costs shall be capitalized and are deemed to be included in the Base
Purchase Price for the Property.
(e) Buyer
shall pay or be charged with the following costs and expenses in connection with
this transaction, which costs shall be referred to as “Buyer’s
Closing Costs”:
(i) 100%
of all Owner’s Title Insurance policy premiums, including any endorsements
issued in connection with such policies; and
(ii) Buyer
shall pay for the cost of its own survey, Phase 1 environmental study and due
diligence investigations.
Buyer’s
Closing Costs shall be paid or reimbursed by Seller and shall be added to the
Base Purchase Price to establish the Purchase Price for the Property, and Buyer
shall pay for any and all costs resulting from such increase in Purchase Price,
including, without limitation, any additional transfer taxes paid by Seller on
account thereof, to the effect that Seller’s payment of Buyer Closing Costs is
economically neutral to Seller.
(f)
Each party shall pay its own legal fees incidental to the negotiation, execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
(g) Fuel
oil shall be measured the day prior to the Closing Date and shall be prorated
between Buyer and Seller as of the Closing Date.
(h) Salaries,
payroll taxes and fringe benefits payable to employees.
(i)
All other items customarily apportioned in connection with sales of retail,
office and showroom buildings.
5. Title. At
Closing, Seller agrees to convey to Buyer fee simple marketable title to the
Property by bargain and sale deed with covenants against grantor’s acts, in the
form attached hereto as Exhibit B, free and clear of all liens, defects of
title, conditions, easements, assessments, restrictions, and encumbrances except
Permitted Exceptions.
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6. Examination of
Property. Seller and Buyer hereby agree as
follows:
(a) Buyer
shall order a title commitment (the “Title
Commitment”) from Escrow Agent promptly after the date
hereof. All matters shown in the Title Commitment with respect to
which Buyer fails to object prior to the expiration of the Due Diligence Period
shall be deemed “Permitted
Exceptions”; provided, however, Permitted Exceptions shall not include
and Seller shall be obligated to cure or remove any mechanic’s lien or any
monetary lien or any deeds of trust, mortgages, or other loan documents secured
by the Property, except for taxes and special assessments not yet due and
payable, or any mortgage and related documents executed in connection with the
Loan Assumption. If any matter not revealed in the Title Commitment
is discovered by Buyer or by the Escrow Agent and is added to the Title
Commitment by the Escrow Agent at or prior to Closing, Buyer shall have until
the earlier of (i) ten (10) days after Buyer’s receipt of the updated, revised
Title Commitment showing the new title exception, together with a legible copy
of any such new matter, or (ii) the Closing Date, to provide Seller with written
notice of its objection to any such new title exception (an “Objection”). If
Seller does not, within thirty (30) days of receipt of notice of an Objection,
remove or cure such Objection, Buyer may terminate this Agreement, in which case
the ▇▇▇▇▇▇▇ Money shall be returned to Buyer. In addition, if such
Objection was caused by an act of Seller or by reason of Seller’s refusal to act
Seller shall reimburse Buyer for all out of pocket costs and expenses incurred
hereunder and neither party shall have any further obligation hereunder, except
as otherwise expressly set forth herein.
(b) Within
the time period set forth in Section 1(e), Seller shall have provided to Buyer
copies of the following documents and materials pertaining to the Property to
the extent within Seller’s possession or reasonably obtainable by Seller or
Seller’s counsel: (i) a complete copy of all Leases affecting the Property and
all amendments thereto; (ii) a copy of the survey of the Property; (iii) a copy
of all architectural plans and specifications and construction drawings and
contracts for improvements constructed and located on the Property; (iv) a copy
of Seller’s title insurance policy relating to the Property; (v) a copy of the
certificate of occupancy for the Property; (vi) a copy of all environmental,
engineering and physical condition reports for the Property; (vii) copies of the
Property’s real estate tax bills for the current and prior three (3) tax years;
(viii) copies of any and all operating statement for the Property for the years
2007, 2008 and 2009; (ix) all service contracts and certificates of insurance
which affect the Property; (x) a copy of any management agreement relating to
the management of the Property;and (xi) copies of the material loan documents
for the Loan (collectively, the “Due
Diligence Materials”). To the extent in Seller’s possession,
Seller shall deliver any other documents relating to the Property reasonably
requested by Buyer within three (3) business days following such
request. Additionally, during the term of this Agreement, Buyer, its
agents and designees, shall have the right to enter the Property for the
purposes of inspecting the Property, and making surveys, environmental and
appraisal inspections, mechanical and structural engineering studies; provided,
however, that such activities by or on behalf of Buyer on the Property shall not
damage the Property nor interfere with the conduct of business by any Tenant
under the Leases; and provided further, however, that Buyer shall indemnify and
hold Seller harmless from and against any and all claims or damages to the
extent resulting from the activities of Buyer on the Property. Buyer
shall repair any and all damage caused, in whole or in part, by Buyer and return
the Property to its condition prior to such damage, which obligation shall
survive Closing or any termination of this Agreement. Buyer shall
deliver to Seller an insurance policy which shall contain a contractual
indemnity provision covering such indemnity. Seller shall reasonably
cooperate with the efforts of Buyer and Buyer’s representatives to inspect the
Property. After the Effective
Date, Buyer shall be permitted to speak and/or meet with any two (2) Tenants
whose leases expire in 2011 in connection with Buyer’s due diligence, provided
that Seller shall have the right, either in person or by his designee, to
accompany Buyer at all times at any such meeting and participate in any
conference calls between Buyer and such Tenants Buyer shall give
Seller reasonable written notice (which in any event shall not be less than two
(2) business days) before entering the Property, and Seller may have a
representative present during any and all examinations, inspections and/or
studies on the Property. Notwithstanding the foregoing, Buyer may not
conduct a Phase 2 environmental inspection without the prior consent of Seller,
which may be withheld or granted in Seller’s sole discretion. Buyer
shall have the unconditional right, for any reason or no reason, to terminate
this Agreement by giving written notice thereof to Seller prior to the
expiration of the Due Diligence Period, in which event this Agreement shall
become null and void, Buyer shall receive a refund of the ▇▇▇▇▇▇▇ Money, and all
rights, liabilities and obligations of the parties under this Agreement shall
expire, except as otherwise expressly set forth herein. If Buyer does
not deliver to Seller prior to the expiration of the Due Diligence Period a
written notice stating that it waives its right to terminate this Agreement,
then Buyer shall be deemed to have elected to terminate this Agreement, for any
reason or no reason at all.
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(c) Seller
shall use good faith efforts to obtain an estoppel certificate from each Tenant
substantially in the form attached hereto as Exhibit F-1 (the
“Tenant
Estoppel Certificate”) prior to the Closing Date. Seller shall
promptly deliver to Buyer photocopies of the executed Tenant Estoppel
Certificates when Seller receives the same. Within five (5) business
days following the date that Buyer has received complete copies of the Leases,
Buyer may propose modifications or additions to the Tenant Estoppel
Certificate.
(d) If
Seller is unable to timely obtain a Tenant Estoppel Certificate from 100% of the
Tenants (based on building square footage) prior to the Closing Date, Seller
agrees at the request of Buyer to deliver to Buyer prior to the Closing Date a
Seller Estoppel in substantially the form attached as Exhibit F-2 (a “Seller
Estoppel”) for such missing Tenant Estoppel Certificates relating to its
premises, provided that Buyer shall not be required to accept a Seller Estoppel
for more than 25% of the Tenants. If Seller delivers a Seller
Estoppel, and if thereafter a Tenant Estoppel Certificate is received from the
Tenant under the Lease covered by such Seller Estoppel, then such Tenant
Estoppel Certificate shall be substituted for the applicable Seller Estoppel and
Seller shall have no further liability thereunder, provided that the Tenant
Estoppel Certificate contains no material changes from the Seller Estoppel, or
if materially changed, is otherwise acceptable to Buyer. The
provisions of this Section shall survive the Closing.
7. Risk of
Loss/Condemnation. Upon an occurrence of a casualty,
condemnation or taking, Seller shall notify Buyer in writing of
same. Until Closing, the risk of loss or damage to the Property,
except as otherwise expressly provided herein, shall be borne by
Seller. In the event all or any portion of the Property is damaged in
any casualty or condemned or taken (or notice of any condemnation or taking is
issued) so that: (a) any Tenant has a right of termination or
abatement of rent under the Leases, or (b) with respect to any casualty, if the
cost to repair such casualty would exceed $500,000, or (c) with respect to any
condemnation, any Improvements or access to the Property or more than five
percent (5%) of the Property is (or will be) condemned or taken, then, Buyer may
elect to terminate this Agreement by providing written notice of
such termination to Seller within ten (10) business days after Buyer’s receipt
of notice of such condemnation, taking or damage, upon which termination the
▇▇▇▇▇▇▇ Money shall be returned to Buyer and neither party hereto shall have any
further rights, obligations or liabilities under this Agreement, except as
otherwise expressly set forth herein. With respect to any
condemnation or taking (of any notice thereof), if Buyer does not elect to
cancel this Agreement as aforesaid, there shall be no abatement of the Purchase
Price and Seller shall assign to Buyer at the Closing the rights of Seller to
the awards, if any, for the condemnation or taking, and Buyer shall be entitled
to receive and keep all such awards (net of all reasonable third party costs and
expenses expended or incurred by Seller in order to obtain such
proceeds). With respect to a casualty, if Buyer does not elect to
terminate this Agreement or does not have the right to terminate this Agreement
as aforesaid, there shall be no abatement of the Purchase Price and Seller shall
assign to Buyer at the Closing the rights of Seller to the proceeds under
Seller’s insurance policies covering such Property with respect to such damage
or destruction (or pay to Buyer any such proceeds received prior to Closing) and
pay to Buyer the amount of any deductible with respect thereto, and
Buyer shall be entitled to receive and keep any monies received from such
insurance policies.
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8. ▇▇▇▇▇▇▇ Money
Disbursement. The ▇▇▇▇▇▇▇ Money shall be held by Escrow Agent,
in trust, and disposed of only in accordance with the following
provisions:
(a) Escrow
Agent shall invest the ▇▇▇▇▇▇▇ Money in a money market account with Citizens
Bank, and shall promptly provide Buyer and Seller with confirmation of the
investments made.
(b) If
the Closing occurs, Escrow Agent shall deliver the ▇▇▇▇▇▇▇ Money to, or upon the
instructions of, Seller and Buyer on the Closing Date to be applied as part
payment of the Purchase Price. If for any reason the Closing does not
occur, Escrow Agent shall deliver the ▇▇▇▇▇▇▇ Money to Seller or Buyer only upon
receipt of a written demand therefor from such party, subject to the following
provisions of this clause (b). Subject to the last sentence of this
clause (b), if for any reason the Closing does not occur and either party makes
a written demand (the “Demand”) upon Escrow Agent for payment of the ▇▇▇▇▇▇▇
Money, Escrow Agent shall give written notice to the other party of the Demand
within one business day after receipt of the Demand. If Escrow Agent
does not receive a written objection from the other party to the proposed
payment within five (5) business days after the giving of such notice by Escrow
Agent, Escrow Agent is hereby authorized to make the payment set forth in the
Demand. If Escrow Agent does receive such written objection within
such period, Escrow Agent shall continue to hold such amount until otherwise
directed by written instructions signed by Seller and Buyer or a final judgment
of a court. Notwithstanding the foregoing provisions of this clause
(b) if Buyer delivers a notice to Escrow Agent stating that Buyer has terminated
this Agreement on or prior to the expiration of the Due Diligence Period, then
Escrow Agent shall immediately return the ▇▇▇▇▇▇▇ Money to Buyer without the
necessity of delivering any notice to, or receiving any notice from
Seller.
(c) The
parties acknowledge that Escrow Agent is acting solely as a stakeholder at their
request and for their convenience, that Escrow Agent shall not be deemed to be
the agent of either of the parties, and that Escrow Agent shall not be liable to
either of the parties for any action or omission on its part taken or made in
good faith, and not in disregard of this
Agreement, but shall be liable for its negligent acts and for any liabilities
(including reasonable attorneys’ fees, expenses and disbursements) incurred by
Seller or Buyer resulting from Escrow Agent’s mistake of law respecting Escrow
Agent scope or nature of its duties. Seller and Buyer shall jointly
and severally indemnify and hold Escrow Agent harmless from and against all
liabilities (including reasonable attorneys’ fees, expenses and disbursements)
incurred in connection with the performance of Escrow Agent’s duties hereunder,
except with respect to actions or omissions taken or made by Escrow Agent in bad
faith, in disregard of this Agreement or involving negligence on the part of
Escrow Agent. Escrow Agent has executed this Agreement in the place
indicated on the signature page hereof in order to confirm that Escrow Agent has
received and shall hold the ▇▇▇▇▇▇▇ Money in escrow, and shall disburse the
▇▇▇▇▇▇▇ Money pursuant to the provisions of this Section 8.
9
9. Default
(a) In
the event that Seller is ready, willing and able to close in accordance with the
terms and provisions hereof, and Buyer defaults in the performance of any of its
obligations under this Agreement, Seller shall be entitled to, as its sole and
exclusive remedy to either: (i) if Buyer is willing to proceed to
Closing, waive such default and proceed to Closing in accordance with the terms
and provisions hereof; or (ii) declare this Agreement to be terminated, and
Seller shall be entitled to immediately receive all of the ▇▇▇▇▇▇▇ Money as
liquidated damages as and for Seller’s sole remedy. Upon such
termination, neither Buyer nor Seller shall have any further rights, obligations
or liabilities hereunder, except as otherwise expressly provided
herein. Seller and Buyer agree that (a) actual damages due to Buyer’s
default hereunder would be difficult and inconvenient to ascertain and that such
amount is not a penalty and is fair and reasonable in light of all relevant
circumstances, (b) the amount specified as liquidated damages is not
disproportionate to the damages that would be suffered and the costs that would
be incurred by Seller as a result of having withdrawn the Property from the
market, and (c) Buyer desires to limit its liability under this Agreement to the
amount of the ▇▇▇▇▇▇▇ Money paid in the event Buyer fails to complete
Closing. Seller hereby waives any right to recover the balance of the
Purchase Price, or any part thereof, and the right to pursue any other remedy
permitted at law or in equity against Buyer. In no event under this
Section or otherwise shall Buyer be liable to Seller for any punitive,
speculative or consequential damages.
(b) In
the event that Seller defaults in the performance of any of its obligations
under this Agreement, Buyer may, as its sole and exclusive remedy,
either: (i) waive any unsatisfied conditions and proceed to Closing
in accordance with the terms and provisions hereof without any abatement in the
payment of the Purchase Price; (ii) terminate this Agreement by delivering
written notice thereof to Seller no later than Closing, upon which termination
the ▇▇▇▇▇▇▇ Money shall be refunded to Buyer, Seller shall pay to Buyer all of
the out-of-pocket costs and expenses incurred by Buyer in connection with this
Agreement, which return and payment shall operate to terminate this Agreement
and release Seller and Buyer from any and all liability hereunder, except those
which are specifically stated herein to survive any termination hereof; (iii)
enforce specific performance of Seller’s obligations hereunder; or
(iv) by notice to Seller given on or before the Closing Date, extend the Closing
Date for a period of up to thirty (30) days (the “Closing
Extension Period”) to permit Seller to remedy any such default, and the
“Closing Date” shall be moved to the last day of the Closing Extension Period,
AS TO WHICH DATE, TIME IS OF THE ESSENCE. If Buyer so extends the
Closing Date, then Seller may, but shall not be obligated to, cause said
conditions to be satisfied during the Closing Extension Period. If
Seller does not cause said conditions to be satisfied during the Closing
Extension Period, then Buyer shall have the remedies set forth in Section
9(b)(i) through (iii) above.
10
10. Closing. The
Closing shall consist of the execution and delivery of documents by Seller and
Buyer, as set forth below, and delivery by Buyer to Seller of the Purchase Price
in accordance with the terms of this Agreement. Seller shall deliver
to Buyer or to Escrow Agent, as directed by Buyer, for the benefit of Buyer at
Closing the following executed documents:
(a) a
Bargain and Sale Deed With Covenants Against Grantor’s Acts in the form attached
hereto as Exhibit B (the “Deed”);
(b) an
Assignment of Leases and Security Deposits, in the form attached hereto as
Exhibit C (the “Assignment
of Leases”);
(c) Intentionally
Deleted.
(d) an
Assignment of Contracts, Permits, Licenses and Warranties in the form of Exhibit
E (the “Assignment
of Contracts”; together with the Assignment of Leases, the “Assignments”);
(e) the
original Tenant Estoppel Certificates (or Seller’s Estoppel, as applicable) as
required by this Agreement, and reflect no defaults under the
Leases;
(f) Intentionally
Deleted;
(g) a
settlement statement setting forth the Purchase Price, all prorations and other
adjustments to be made pursuant to the terms hereof, and the funds required for
Closing as contemplated hereunder;
(h) all
transfer tax statements, declarations and filings as may be necessary or
appropriate for purposes of recordation of the deed;
(i) good
standing certificates and corporate resolutions or member or partner consents,
as applicable, and such other documents as reasonably requested by Escrow
Agent;
(j) to
the extent in Seller’s possession, originals of the warranties set forth on
Exhibit H;
(k) to
the extent not previously delivered to Buyer, the Leases, bearing the original
signatures of the landlord and tenant thereunder, or a copy thereof bearing an
original certification of the related Tenant confirming that the copy is true,
correct and complete; the leasing files; and copies of all books and records
applicable to the Property which are identified by Buyer by written notice to
Seller and reasonably necessary for the orderly transition of operation of the
Property;
11
(l) a
certificate pursuant to Section 1445 of the Internal Revenue Code of 1986, as
amended, or the regulations issued pursuant thereto, certifying the non foreign
status of Seller;
(m) an
owner’s title affidavit as to mechanics’ liens and possession and other matters
in customary form reasonably acceptable to Seller and Escrow Agent;
(n) Intentionally
Deleted;
(o) letter
to each Tenant in form of Exhibit G attached hereto;
(p) the
Loan Assumption signed by the Lender and Seller;
(q) Intentionally
Deleted; and
(r) such
other instruments as are reasonably required by Escrow Agent to effectuate the
Closing in accordance with the terms hereof.
At
Closing, Buyer shall instruct Escrow Agent to deliver the ▇▇▇▇▇▇▇ Money to
Seller which shall be applied to the Purchase Price, shall wire transfer the
balance of the Purchase Price to Seller and shall execute and deliver execution
counterparts of the closing documents referenced in clauses (b), (d), (g), (h),
(o) and (p) set forth above.
11. Representation by
Seller. For the purpose of inducing Buyer to enter into this
Agreement and to consummate the sale and purchase of the Property in accordance
herewith, Seller makes the following representations and warranties to Buyer as
of the date hereof and as of the Closing Date.
(a) Seller
is duly organized (or formed), validly existing and in good standing under the
laws of its state of organization, and to the extent required by law, the State
in which the Property is located. Seller has the power and authority
to execute and deliver this Agreement and all closing documents to be executed
by Seller, and to perform all of Seller’s obligations hereunder and
thereunder. Neither the execution and delivery of this Agreement and
all closing documents to be executed by Seller, nor the performance of the
obligations of Seller hereunder or thereunder will result in the violation of
any law or any provision of the organizational documents of Seller or will
conflict with any order or decree of any court or governmental instrumentality
of any nature by which Seller is bound;
(b) Except
as set forth on Schedule 11 attached hereto and made a part hereof, Seller has
not received any written notice of any current or pending litigation,
condemnation proceeding or tax appeals affecting Seller or the Property and
Seller does not have any knowledge of any proposed or pending condemnation
proceeding, pending litigation or tax appeals against Seller or the Property;
Seller has not initiated, nor is Seller participating in, any action for a
change or modification in the current subdivision, zoning or other land use
permits for the Property;
(c) Except
as set forth on Schedule 11, Seller has not entered into any contracts,
subcontracts or agreements (including agreements for any brokerage or leasing
commissions) affecting the Property which will be binding upon Buyer after the
Closing other than the Leases;
12
(d) Except
for violations cured or remedied on or before the Closing Date, Seller has not
received any written notice from (or delivered any notice to) any governmental
authority regarding any violation of any law applicable to the Property and
Seller does not have knowledge of any such violations;
(e) Intentionally
Deleted.
(f) Intentionally
Deleted.
(g) There
are no occupancy rights, leases or tenancies affecting the Property other than
the Leases or subleases identified on Exhibit I attached
hereto. Neither this Agreement nor the consummation of the
transactions contemplated hereby is subject to any first right of refusal or
other purchase right in favor of any other person or entity; and apart from this
Agreement, Seller has not entered into any written agreements for the purchase
or sale of the Property, or any interest therein which has not been
terminated;
(h) Intentionally
Deleted.
(i) To
Seller’s knowledge, except as set forth in the environmental reports previously
delivered by Seller to Buyer, no hazardous substances have been generated,
stored, released, or disposed of on or about the Property in violation of any
law, rule or regulation applicable to the Property which regulates or controls
matters relating to the environment or public health or safety (collectively,
“Environmental
Laws”). Seller has not received any written notice from (nor
delivered any notice to) any federal, state, county, municipal or other
governmental department, agency or authority concerning any petroleum product or
other hazardous substance discharge or seepage. For purposes of this
Subsection, “hazardous substances” shall mean any substance or material which is
defined or deemed to be hazardous or toxic pursuant to any Environmental
Laws. To Seller’s knowledge, there are no underground storage tanks
located on the Property; and
(j) Exhibit
H attached hereto is a true, correct and complete listing of all warranties in
effect for the Property (the “Warranties”).
The
representations and warranties of Seller in clause (a), (b), (c), (d), (g) and
(i) above shall survive Closing for a period of one (1) year.
12. Representations
by
Buyer. Buyer represents and warrants to, and covenants with,
Seller as follows:
(a) Buyer
is duly formed, validly existing and in good standing under the laws of
Delaware, is authorized to consummate the transaction set forth herein and
fulfill all of its obligations hereunder and under all closing documents to be
executed by Buyer, and has all necessary power to execute and deliver this
Agreement and all closing documents to be executed by Buyer, and to perform all
of Buyer’s obligations hereunder and thereunder. This Agreement and
all closing documents to be executed by Buyer have been duly authorized by all
requisite corporate or other required action on the part of Buyer and are the
valid and legally binding obligation of Buyer, enforceable in accordance with
their respective terms. Neither the execution and delivery of this
Agreement and all closing documents to be executed by Buyer, nor the performance
of the obligations of Buyer hereunder or thereunder will result in the violation
of any law or any provision of the organizational documents of Buyer or will
conflict with any order or decree of any court or governmental instrumentality
of any nature by which Buyer is bound.
13
The
representations and warranties of Buyer shall survive Closing for a period of
one (1) year.
13. Conditions Precedent
to Buyer’s Obligations. Buyer’s obligation to pay the Purchase
Price, and to accept title to the Property, shall be subject to compliance by
Seller with the following conditions precedent on and as of the Closing
Date:
(a) Seller
shall deliver to Buyer on or before the Closing the items set forth in Section
10 above;
(b) Except
as set forth on Schedule 13 attached hereto and made a part hereof and any
immaterial changes made thereto by reason of a change in circumstances between
the Effective Date and the Closing Date which is not the result of a default by
Seller of its obligations hereunder, each Tenant shall be in possession of the
premises demised under their respective Leases and paying full and unabated rent
under their respective Leases and no Tenant shall have assigned or sublet the
premises demised under their respective Lease;
(c) The
representations and warranties of Seller contained in this Agreement shall have
been true when made and shall be true in all material respects at and as of the
Closing Date as if such representations and warranties were made at and as of
the Closing, and Seller shall have performed and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by Seller prior to or at the
Closing;
(d) Intentionally
Deleted;
(e) Intentionally
Deleted;
(f) Approval
by Lender for the Loan Assumption.
In the
event that the foregoing conditions precedent have not been satisfied as of
Closing, Buyer shall have the rights and remedies set forth in Section 9(b) or
elsewhere in this Agreement.
14. Conditions Precedent
to Seller’s Obligations. Seller’s obligation to deliver title
to the Property shall be subject to compliance with the following conditions
precedent on and as of the Closing Date or the waiver thereof by
Seller:
(a) Escrow
Agent shall deliver the ▇▇▇▇▇▇▇ Money; and
14
(b) Buyer
shall deliver to Seller on the Closing Date the remainder of the Purchase Price
subject to adjustment of such amount pursuant to Section 2 hereof;
and
(c) The
representations and warranties of Buyer contained in this Agreement shall have
been true when made and shall be true in all material respects at and as of the
Closing Date as if such representations and warranties were made at and as of
the Closing, and Buyer shall have performed and complied in all material
respects with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by Buyer prior to or at the
Closing.
15. Notices. Unless
otherwise provided herein, all notices and other communications which may be or
are required to be given or made by any party to the other in connection
herewith shall be in writing and shall be deemed to have been properly given and
received on the date: (i) delivered in person to an adult at the address set out
in Section 1, (ii) that is three (3) days after such notice or communication is
deposited in the United States mail, registered or certified, return receipt
requested, postage prepaid, or (iii) that is one day after such notice or
communication is deposited with a nationally recognized overnight courier, to
the addresses set out in Section 1, or at such other addresses as specified by
written notice delivered in accordance herewith. Notwithstanding the
foregoing, Seller and Buyer agree that notice may be given on behalf of each
party by the counsel for each party and notice by such counsel in accordance
with this Section 15 shall constitute notice under this Agreement.
16. Seller
Covenants. Seller agrees that it: (a) shall
continue to operate and manage the Property in the same manner in which Seller
has previously operated and maintained the Property; (b) shall, subject to
Section 7 hereof and subject to reasonable wear and tear, maintain the Property
in the same condition as exists on the date hereof; and (c) shall
not: (i) amend any of the Leases in any manner, nor enter into any
new lease, license agreement or other occupancy agreement with respect to the
Property without the prior written consent of Buyer, which will not be
unreasonably withheld; (ii) consent to an assignment of the Leases or a sublease
of the premises demised thereunder or a termination or surrender thereof without
Buyer’s prior written consent, which, after the expiration of the Due Diligence
Period may be withheld in Buyer’s sole discretion; (iii) terminate any of the
Leases nor release any guarantor of or security for the Leases unless required
by the express terms of any of the Leases without Buyer’s prior written consent,
which, after the expiration of the Due Diligence Period may be withheld in
Buyer’s sole discretion; and/or (iv) cause, permit or consent to an alteration
of the premises demised thereunder without Buyer’s prior written consent, which,
after the expiration of the Due Diligence Period may be withheld in Buyer’s sole
discretion (unless such consent is non-discretionary). Seller shall
promptly inform Buyer in writing of any material event adversely affecting the
ownership, use, occupancy or maintenance of the Property, whether insured or
not.
17. Performance on
Business Days. A "business day" is a day which is not a
Saturday, Sunday or legal holiday recognized by the Federal
Government. Furthermore, if any date upon which or by which action is
required under this Agreement is not a business day, then the date for such
action shall be extended to the first day that is after such date and is a
business day.
15
18. Entire
Agreement. This Agreement constitutes the sole and entire
agreement among the parties hereto and no modification of this Agreement shall
be binding unless in writing and signed by all parties
hereto. No prior agreement or understanding pertaining to the
subject matter hereof (including, without limitation, any letter of intent
executed prior to this Agreement) shall be valid or of any force or effect from
and after the date hereof.
19. Severability.
If any provision of this Agreement, or the application thereof to any
person or circumstance (except with respect to the payment of the Purchase
Price), shall be invalid or unenforceable, at any time or to any extent, then
the remainder of this Agreement, or the application of such provision to persons
or circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby. Each provision of this Agreement shall
be valid and enforced to the fullest extent permitted by law
20. No Representations or
Warranties. Buyer hereby acknowledges, understands and agrees
that it has an opportunity to inspect the Property as set forth in Section 6
herein, and except as set forth in this Agreement, the Property shall be
conveyed at Closing to Buyer in “as-is” condition with no representation or
warranties whatsoever.
21. Applicable
Law. This Agreement shall be construed under the laws of the
State of New York.
22. Tax-Deferred
Exchange. Buyer and Seller respectively acknowledge that the
purchase and sale of the Property contemplated hereby may be part of a separate
exchange (an “Exchange”)
being made by each party pursuant to Section 1031 of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated with respect
thereto. In the event that either party (the “Exchanging
Party”) desires to effectuate such an exchange, then the other party (the
“Non-Exchanging
Party”) agrees to cooperate fully with the Exchanging Party in order that
the Exchanging Party may effectuate such an exchange; provided, however, that
with respect to such Exchange (a) all additional costs, fees and expenses
related thereto shall be the sole responsibility of, and borne by, the
Exchanging Party; (b) the Non-Exchanging Party shall incur no additional
liability as a result of such exchange; (c) the contemplated exchange shall not
delay any of the time periods or other obligations of the Exchanging Party
hereby, and without limiting the foregoing, the scheduled date for Closing shall
not be delayed or adversely affected by reason of the Exchange; (d) the
accomplishment of the Exchange shall not be a condition precedent or condition
subsequent to the Exchanging Party's obligations under the Agreement; and (e)
the Non-Exchanging Party shall not be required to hold title to any land other
than the Property for purposes of the Exchange. The Exchanging Party
agrees to defend, indemnify and hold the Non-Exchanging Party harmless from any
and all liability, damage or cost, including, without limitation, reasonable
attorney's fees that may result from Non-Exchanging Party's cooperation with the
Exchange. The Non-Exchanging Party shall not, by reason of the Exchange, (i)
have its rights under this Agreement, including, without limitation, any
representations, warranties and covenants made by the Exchanging Party in this
Agreement (including but not limited to any warranties of title, which, if
Seller is the Exchanging Party, shall remain warranties of Seller), or in any of
the closing documents (including but not limited to any warranties of title,
which, if Seller is the Exchanging Party, shall remain warranties of Seller)
contemplated hereby, adversely affected or diminished in any manner, or (ii) be
responsible for compliance with or deemed to have warranted to the Exchanging
Party that the Exchange complies with Section 1031 of the Code.
16
23. Broker’s
Commissions. Buyer and Seller each hereby represent that,
except for the Brokers, there are no other brokers involved or that have a right
to proceeds in this transaction. Seller shall be responsible for
payment of commissions to the Broker pursuant to a separate written agreement
executed by Seller. Seller and Buyer each hereby agree to indemnify
and hold the other harmless from all loss, cost, damage or expense (including
reasonable attorneys' fees at both trial and appellate levels) incurred by the
other as a result of any claim arising out of the acts of the indemnifying party
(or others on its behalf) for a commission, finder's fee or similar compensation
made by any broker, finder or any party who claims to have dealt with such party
(except that Buyer shall have no obligations hereunder with respect to any claim
by Broker). The representations, warranties and indemnity obligations
contained in this section shall survive the Closing or the earlier termination
of this Agreement.
24. Assignment. Buyer,
without the consent of Seller, may assign its rights under this Agreement,
provided, however, that no such assignment shall relieve Buyer of any of its
obligations hereunder until Closing is complete and provided further that such
assignment will not frustrate, delay or otherwise have an adverse effect on the
completion of the Loan Assumption. Without relieving Buyer of any
liability under the contractual nature of this Agreement, and without assigning
all or any portion of this Agreement, it is understood and agreed to by Seller
that Buyer intends to take title in the name of a wholly owned bankruptcy remote
special purpose entity. Notwithstanding the foregoing and without
further consent by Seller, it is understood and agreed to by Buyer and Seller
that Buyer intends to assign its rights and obligations under this Agreement to
the American Realty Capital New York Recovery REIT, Inc. or a subsidiary
thereof; provided however, that no such assignment shall relieve Buyer of any of
its obligations hereunder until Closing is complete. Any other
assignment by Buyer shall require Seller’s prior written consent which consent
shall not be unreasonably withheld.
25. Attorneys’
Fees. In any action between Buyer and Seller as a result of
failure to perform or a default under this Agreement, the prevailing party shall
be entitled to recover from the other party, and the other party shall pay to
the prevailing party, the prevailing party’s attorneys’ fees and disbursements
and court costs incurred in such action.
26. Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become a binding agreement when
one or more counterparts have been signed by each of the parties and delivered
to the other party. A facsimile or photostatic copy of an executed
counterpart or signature page to this Agreement shall be given the same effect
as the original.
27. Anti-Terrorism. Neither
Buyer or Seller, nor any of their affiliates, are in violation of any
Anti-Terrorism Law (as hereinafter defined) or engages in or conspires to engage
in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law. “Anti-Terrorism Laws” shall mean any laws relating to
terrorism or money laundering, including: Executive Order No. 13224; the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or
may hereafter be, renewed, extended, amended or replaced; the applicable laws
comprising or implementing the Bank Secrecy Act; and the applicable laws
administered by the United States Treasury Department’s Office of Foreign Asset
Control (as any of the foregoing may from time to time be amended, renewed,
extended, or replaced).
17
28. Loan
Assumption.
(a) Notwithstanding
anything contained in this Agreement to the contrary, Buyer shall have no
obligation to purchase the Property unless and until (and subject to any of
Buyer’s termination rights contained in this Agreement) Seller has secured from
the existing mortgagee of the Property (the “Lender”)
approval for an assumption of the loan secured by the Property (the “Loan
Assumption” and “Loan”
respectively) to be executed by Buyer at Closing, which shall have:
(i) an
original principal balance of not less than Fourteen Million Five Hundred
Thousand Dollars and No/00 ($14,500,000);
(ii) an
annual interest rate of not more than six and two tenths percent
(6.20%);
(iii) an
annual debt service of not more than One Million One Hundred Sixty Four Thousand
Nine Hundred Sixteen and No/00 ($1,164,916);
(iv) cash
escrow balances fully funded by Seller of not less than Five Hundred Thousand
Dollars and No/00 ($500,000);
(v) a
maturity date on or after November 1, 2012; and
(vi) no
requirement for personal recourse liability from any shareholder, owner, officer
or employee of Buyer.
Seller
shall be responsible for any and all fees and expenses of Lender or any other
third party (other than Buyer or any assignee of Buyer permitted under this
Agreement) in connection with the Loan Assumption; provided, however Buyer shall
pay Four Thousand Dollars and No/00 ($4,000) to Lender in connection with the
Acceleration Fee. Notwithstanding anything to the contrary contained
in this Agreement, if the Loan Assumption is not completed on or before the date
that is one hundred fifteen (115) days after the end of the Due Diligence
Period, Buyer shall have the right to terminate this Agreement and receive a
full refund of the ▇▇▇▇▇▇▇ Money and thereafter neither party shall have any further
rights, obligations or liabilities hereunder, except as otherwise expressly set
forth herein.
18
(b) Buyer
and Seller shall use commercially reasonable efforts, including without
limitation, the furnishing of all commercially reasonable documents, executed
forms, instruments, and other materials requested by Lender, in a timely manner,
to obtain the consent of the Lender to:
(i) the
transfer of the Property to Buyer or a bankruptcy remote, special purpose entity
to be formed by Buyer to purchase the Property as permitted pursuant and subject
to the provisions of Section 24 (the
“Buyer
Entity”) the governance of which may involve an independent director(s)
or other person who is not employed by Buyer or an affiliate of
Buyer,
(ii) the
assumption by Buyer or the Buyer Entity of the Loan with no change or
modification in the terms of the Loan; and
(iii) a
release of Seller and/or its affiliates from all liabilities arising under the
Loan for periods after Closing, including, without limitation, any liability
under any guaranty or indemnity executed by Seller and/or its affiliates in
favor of Lender relating to the Loan; provided, however, that notwithstanding
anything in this Agreement to the contrary, Seller acknowledges that Buyer will
propose the Buyer Entity (which entity Buyer agrees shall be formed and
established to qualify as bankruptcy remote, special purpose entities in
compliance with the customary requirements for so-called “securitized loans”) to
the Lender to assume the Loan and Buyer will determine in its sole and absolute
discretion the entity it will offer to the Lender to provide guarantees of
non-recourse carve outs and any required environmental or other
indemnity. If Lender consents to the assumption of the Loan in
accordance with the provisions of this Section, the Buyer Entity shall assume
and agree to pay and perform at Closing the Loan obligations that arise from and
after the Closing, in each case subject to the prorations and adjustments
provided for in this Agreement.
29. No
Recording. The parties hereto agree that neither this
Agreement nor any memorandum or notice hereof shall be recorded. Any
recordation or attempted recordation by Buyer shall constitute a default by
Buyer.
[SIGNATURES
APPEAR ON THE FOLLOWING PAGES]
19
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first set forth above.
BUYER:
AMERICAN
REALTY CAPITAL II, LLC
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By:
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Name:
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Title:
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[signature pages
continue]
SELLER:
URBAN
DEVELOPMENT PARTNERS (61), LLC
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By:
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Name:
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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Title:
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Authorized
Signatory
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[signature pages
continue]
THE
UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS
AGREEMENT RELATING TO TITLE INSURER AND THE DEPOSIT.
ESCROW
AGENT:
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By:
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Name:
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Title:
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EXHIBITS
AND SCHEDULES
|
Exhibit
A
|
-
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Real
Property
|
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Exhibit
B
|
-
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Form
of Bargain and Sale Deed With Covenants
|
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Exhibit
C
|
-
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Form
of Assignment of Leases and Security Deposits
|
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Exhibit
D
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-
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[Intentionally
Deleted]
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Exhibit
E
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-
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Form
of Assignment of Contracts, Permits, Licenses and
Warranties
|
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Exhibit
F-1
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-
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Form
of Tenant Estoppel Certificate
|
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Exhibit
F-2
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-
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Form
of Seller Estoppel
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Exhibit
G
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-
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Form
of Tenant Notice
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Exhibit
H
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-
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Warranties
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Exhibit
I
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Leases
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Schedule
11
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Exceptions
to Seller Representations
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Schedule
13
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Exceptions
to Conditions Precedent
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EXHIBIT
A
LEGAL
DESCRIPTION OF PROPERTY
A-1
EXHIBIT
B
FORM
OF BARGAIN AND SALE DEED WITH COVENANTS AGAINST GRANTOR’S ACTS
THIS
INDENTURE, made on the _____ day of ______________, 2010, by and between
___________________________________, a ___________________________ ("Grantor"),
and ________________________________________, a ______________, whose address is
________________________________ ("Grantee").
WITNESSETH, that Grantor in
consideration of the sum of Ten Dollars ($10.00) and other good and valuable
consideration paid by the Grantee, the receipt and sufficiency of which is
hereby acknowledged by Grantor, does hereby grant and release and assign forever
unto Grantee, and the [heirs], successors and assigns of Grantee, those certain
plot, piece or parcel of land situate lying and being in the City of New York,
County of the New York, State of New York , known as and by the street address
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, as more particularly bounded and described in Exhibit A attached hereto and
made a part hereof (the “Land”).
TOGETHER with all right, title
and interest of Grantor in and to any and all buildings and improvements located
on the Land (the “Improvements”);
TOGETHER with all right, title
and interest, it any, of Grantor in and to any easements, rights of way,
privileges, benefits, appurtenances, hereiditments, strips, gaps and gores, and
any and all other rights, if any, thereon or in any way pertaining thereto,
including, without limitation, any land lying in the bed of
any streets and roads abutting the above-described property to the
center lines thereof (the foregoing rights, together with the Land and the
Improvements being hereinafter referred to, collectively, as the “Premises”);
TO HAVE AND TO HOLD the
Premises herein granted, or mentioned and intended so to be, unto Grantee, and
the successors and assigns of Grantee, forever.
AND the Grantor covenants that
the Grantor has not done or suffered anything whereby the said premises have
been encumbered in any way whatever, except as aforesaid [need exhibit approved by
Buyer setting forth any encumbrances such as encroachments reflected on
survey].
AND Grantor, in compliance
with Section 13 of the Lien Law, covenants that Grantor will receive the
consideration for this conveyance and will hold the right to receive such
consideration as a trust fund to be applied first for the purpose of paying the
cost of improvements and will apply the same first to the payment of the cost of
improvements before using any part of the total of the same or any other
purpose.
[SIGNATURE
PAGE FOLLOWS]
B-1
IN
WITNESS WHEREOF, Grantor has duly executed this deed the day and year first
above written.
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GRANTOR:
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URBAN
DEVELOPMENT PARTNERS (61), LLC,
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a
Connecticut limited liability company
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By:
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| Name: | |||
| Title: | |||
On the ___ day of _______ in the year
2010 before me, the undersigned personally appeared ______________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
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Signature
and Office of individual
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taking
acknowledgment
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B-2
Exhibit
“A”
TO
BARGAIN AND SALE DEED
(Add
legal description of Real Property)
B-3
BARGAIN
AND SALE DEED WITH
COVENANT AGAINST GRANTOR’S
ACTS
Urban
Development Partners (61), LLC
TO
[_______________]
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Block: ____
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Lot: ____
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County:
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Address:
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▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
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| RECORD AND RETURN TO: | ||||
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Attention:
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B-4
EXHIBIT
C
FORM
OF ASSIGNMENT OF LEASES AND SECURITY DEPOSIT
______________________________
("Assignor"),
in consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid and
other good and valuable consideration, the receipt of which is hereby
acknowledged, hereby assigns, transfers, sets over and conveys to
______________________________ ("Assignee"),
all of Assignor's right, title and interest in and to those certain Leases
between Assignor and the tenants listed on Exhibit A attached hereto (the “Leases”),
including any and all security deposits thereunder.
Subject
to the limitations set forth below, Assignor does hereby agree to defend,
indemnify and hold harmless Assignee from any liability, damages (excluding
speculative damages, consequential damages and lost profits), causes of action,
expenses and reasonable attorneys' fees incurred by Assignee by reason of the
failure of Assignor to have fulfilled, performed and discharged all of the
various commitments, obligations and liabilities of the lessor, or landlord
under and by virtue of the Leases prior to the date of this
Assignment.
Subject
to the limitations set forth below, Assignee does hereby agree to defend,
indemnify and hold harmless Assignor from any liability, damages (excluding
speculative damages, consequential damages and lost profits), causes of action,
expenses and reasonable attorneys' fees incurred by Assignor by reason of the
failure of Assignee to have fulfilled, performed and discharged all of the
various commitments, obligations and liabilities of the lessor, or landlord
under and by virtue of the Leases after the date of this
Assignment.
IN
WITNESS WHEREOF, Assignor has executed this Assignment this ______ day of
______________, 20__, which Assignment is effective this date.
| ASSIGNOR: | |||
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By:
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| Name: | |||
| Title: | |||
C-1
Exhibit
A
TO
ASSIGNMENT OF LEASES AND SECURITY DEPOSIT
(Add
description of Leases)
C-2
EXHIBIT
D
[Intentionally
Deleted]
D-1
EXHIBIT
E
FORM
OF ASSIGNMENT OF CONTRACTS,
PERMITS,
LICENSES AND WARRANTIES
THIS
ASSIGNMENT, made as of the ___ day of ________, 2006, by _________________, a
__________________________ (“Assignor”), to _____________________________, a
__________________________________________(“Assignee”).
W I T N E
S S E T H:
WHEREAS,
by Agreement of Purchase and Sale (the “Purchase
Agreement”) dated as of ________, 2006, between Assignor and Assignee,
Assignee has agreed to purchase from Assignor as of the date hereof, and
Assignor has agreed to sell to Assignee, that certain property located at
________________________ (the “Property”);
and
WHEREAS,
Assignor desires to assign to Assignee as of the date hereof all of Assignor’s
right, title and interest in contracts, permits, trademarks, licenses and
warranties held by Assignor in connection with the Property, including without
limitation any and all guaranties of leases relating to the Property
(collectively, the “Contracts”).
NOW
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Assignor hereby assigns, sets over and transfers unto Assignee to
have and to hold from and after the date hereof all of the right, title and
interest of Assignor in, to and under the Contracts. Assignor agrees
without additional consideration to execute and deliver to Assignee any and all
additional forms of assignment and other instruments and documents that may be
reasonably necessary or desirable to transfer or evidence the transfer to
Assignee of any of Assignor's right, title and interest to any of the
Contracts.
Assignor
does hereby agree to defend, indemnify and hold harmless Assignee from any
liability, damages (excluding speculative damages, consequential damages and
lost profits), causes of action, expenses and reasonable attorneys' fees
incurred by Assignee by reason of the failure of Assignor to have fulfilled,
performed and discharged all of the various commitments, obligations and
liabilities of the Assignor under and by virtue of the Contracts prior to the
date of this Assignment.
Assignee
does hereby agree to defend, indemnify and hold harmless Assignor from any
liability, damages (excluding speculative damages, consequential damages and
lost profits), causes of action, expenses and reasonable attorneys' fees
incurred by Assignor by reason of the failure of Assignee to have fulfilled,
performed and discharged all of the various commitments, obligations and
liabilities of the Assignee under and by virtue of the Contracts after the date
of this Assignment.
This
Assignment shall be governed by the laws of the State of _____________,
applicable to agreements made and to be performed entirely within said
State.
E-1
IN
WITNESS WHEREOF, Assignor has duly executed this Assignment as of the date first
above written.
| ASSIGNOR: | |||
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By:
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| Name: | |||
| Title: | |||
E-2
EXHIBIT
F-1
FORM
OF TENANT ESTOPPEL
The
undersigned hereby certifies to American Realty Capital, LLC (“Buyer”),
___________________ (“Lender”)
and their respective successors and assigns as follows:
1. The
undersigned is the tenant under that certain [Lease Agreement] dated as of
_________ __, ____, [as amended by [insert any modifications to Lease]
([collectively,] the “Lease”)
by and between _________________________ (“Landlord”)
and _________________________ (“Tenant”),
pursuant to which Tenant leases that real property located at
_________________________________________ (the “Premises”).
2. Except
as set forth above, the Lease has not been modified, changed, altered,
supplemented or amended in any respect, nor have any provisions thereof been
waived.
3. The
Lease is valid and in full force and effect on the date hereof. The Lease
represents the entire agreement between Landlord and Tenant with respect to the
Premises and the land on which the Premises are situated.
4. Tenant
is not entitled to, and has made no agreement with Landlord or its agents or
employees concerning, free rent, partial rent, rebate of rent payments, credit
or offset or reduction in rent, or any other type of rental concession
including, without limitation, lease support payments, lease buy-outs, or
assumption of any leasing or occupancy agreements of Tenant other than with
respect to condemnation or casualty provisions.
5. The
initial term of the Lease began on __________ __, _____ and expires on ________
__, 20__. The Rent Commencement Date was __________ __,
____. Tenant has accepted possession of the Premises and is open for
business. Tenant has not sublet all or a portion of the Premises to
any sublessee and has not assigned, transferred or encumbered any of its rights
or interests under the Lease.
6. Tenant
has no outstanding options or rights to renew or extend the term of the
Lease. Tenant has no outstanding expansion options, other options,
rights of first refusal or rights of first offer to purchase the Premises or any
part thereof and/or the land on which the Premises are situated, or rights of
first offer to lease with respect to all or any part of the
Premises.
7. The
[Base Annual Rent] payable under the Lease is $____________ ($_________
monthly). Such [Base Annual Rent] payable under the Lease shall be
adjusted during the initial term of the Lease as follows: (a) from ___________,
20__ to and including ______________, 20__, the Base Annual Rent shall be
$_______ ($_______ monthly), (b) from ___________, 20___ to and including
____________, 20___ the Base Annual Rent shall be $________ ($________ monthly);
[and from __________, 20__ to and including __________, 20___ the fixed annual
minimum rent shall be $_________ ($__________ monthly)]. Such rent has been paid
through and including the month of ____________, 200_. Additional rent under the
Lease has been paid through and including the month of __________,
200_. No such rent (excluding security deposits) has been paid
more than one (1) month in advance of its due date.
F-1
8. Tenant's
security deposit, if any, is $_________________ (if none, please state
“none”).
9. No
event has occurred which has not been cured and no condition exists that
constitutes, or that with the giving of notice or the lapse of time or both,
would constitute, a default by Tenant or, to the best knowledge of Tenant,
Landlord under the Lease. Tenant has no existing defenses or offsets against the
enforcement of the Lease by Landlord.
10. (a) All
required contributions by Landlord to Tenant on account of Tenant's improvements
have been received by Tenant and all of Tenant's tenant improvements have been
completed in accordance with the terms of the Lease.
(b) Landlord
has satisfied all its obligations to Tenant arising out of or incurred in
connection with the construction of the tenant improvements on the Premises and
no off-set exists with respect to any rents or other sums payable or to become
payable by the Tenant under the Lease.
11. The
undersigned is duly authorized to execute this Certificate on behalf of
Tenant.
Dated:
____________, 200_
TENANT:
____________________,
a ________________
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By:
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Name:
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Title:
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F-2
EXHIBIT
F-2
FORM
OF SELLER ESTOPPEL
_____________________,
2010
________________________________
________________________________
________________________________
Re:
_________________________
Ladies
and Gentlemen:
You or
your assigns intend to acquire fee title to the referenced building (the “Property”)
from the undersigned Seller. This Seller’s Certificate is being delivered in
connection with such acquisition and may be relied upon by you, any lender or
mortgagee making a loan to the addressee secured by the Property or secured by a
direct or indirect equity interest in the addressee, each of their respective
successors and assigns, including a purchaser of an interest in any such loan,
and any person claiming by or through any of them (each, a “Recipient”). Accordingly,
Seller as of the date hereof certifies to each Recipient as
follows:
1. The
Lease has not been amended, modified, supplemented or extended, except for the
amendments listed above, if any, and, to the knowledge of Landlord, is in full
force and effect as of the date hereof. To the knowledge of Landlord,
there are no other agreements, whether written or oral, between Landlord and
Tenant affecting the Premises or Tenant’s obligation to pay rentals under the
Lease.
2. The
term of the Lease commenced
on .
3. The
term of the Lease expires
on .
4. Tenant
has paid to Landlord all rent and other sums due under the Lease through
__________________.
5. The
current monthly base or minimum rent payable under the Lease is ___________ and
the current estimated monthly payments on account of Tenant’s proportionate
share of operating or similar expenses is ____________.
6. Tenant
has paid to Landlord a security deposit of $ that Landlord continues to hold for
Tenant’s obligations under the Lease.
F-1
7. To
the knowledge of Landlord, Tenant has no existing charge, lien, claim or right
against Landlord, as of the date hereof, to any free rent, rental concessions,
rental abatement or offset against rents or any other charges due or to become
due under the Lease, except as
follows: _________________________________________________________.
8. To
the knowledge of Landlord, neither Landlord nor Tenant is in default in any
respect under any terms of the Lease, and no state of facts exist which, with
the passage of time or the giving of notice, or both, would constitute a default
under the Lease by either Landlord or Tenant.
9. Seller’s
liability under this Seller’s Certificate shall be subject to the provisions of
that certain Purchase and Sale Agreement and Escrow Instructions dated
____________, 2010 (the “Purchase
Agreement”), between Seller, as Seller, and ________________, as Buyer
and shall extend for a period of the earlier of (i) six (6) years and (ii) the
stated expiration of the Lease.
Dated:
____________, 200_
SELLER:
____________________,
a ________________
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By:
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Name:
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Title:
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F-2
EXHIBIT
G
FORM
OF NOTICE TO TENANT
TO: [Tenant]
Re: Notice
of Change of Ownership of ______________________________
Ladies
and Gentlemen:
YOU ARE
HEREBY NOTIFIED AS FOLLOWS:
That as
of the date hereof, the undersigned has transferred, sold, assigned, and
conveyed all of its right, title and interest in and to the above-described
property, (the “Property”)
to [INSERT NAME OF BUYER] (the “New
Owner”) and assigned to New Owner, all of the undersigned’s right, title
and interest under that certain Lease, dated _________, between ________as
tenant and ____________as landlord (the “Lease”),
together with any security deposits or letters of credit held
thereunder.
Accordingly,
New Owner is the landlord under the Lease and future notices and correspondence
with respect to your leased premises at the Property should be made to the New
Owner at the following address:
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You will
receive a separate notification from New Owner regarding the new address for the
payment of rent. In addition, to the extent required by the Lease,
please amend all insurance policies you are required to maintain pursuant to the
Lease to name New Owner as an additional insured thereunder and promptly provide
New Owner with evidence thereof.
| Very truly yours, | |||
| [PRIOR LANDLORD) | |||
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By:
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| Name: | |||
| Title: | |||
G-1
EXHIBIT
H
LIST
OF WARRANTIES
None.
H-1
EXHIBIT
I
LEASES
I-1
SCHEDULE
11
EXCEPTIONS TO SELLER’S
REPS
11(a):
Pending Litigation
Para ▇▇▇▇
v Urban Partners et. Al.- Tenant employee injured hand. Case settled
in December.
11(c):
Contracts
Donnolly
Mechanical Air Conditioning Contract.
Management
Agreement with CBRE.
Schedule 11-1
SCHEDULE
13
EXCEPTIONS TO CONDITIONS
PRECEDENT
▇▇▇▇▇
▇▇▇▇▇▇▇▇ sublet to Nials ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇ merged into ▇▇▇▇ ▇▇▇▇
▇▇▇
▇’▇▇▇▇▇ Inc. assigned to ▇▇▇ ▇’▇▇▇▇▇ LLC
Schedule 13-1