AGREEMENT OF SALE
THIS AGREEMENT OF SALE is made this _____ day of ________________, 2006
(the "Effective Date"), between Net Lease Advisors, LLC, a New Jersey limited
liability company having an address at ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer") and Air Industries Machining Corp., a New York
corporation, having an address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Seller").
In consideration of the covenants and provisions contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Agreement to Sell and Purchase. Seller agrees to sell to Buyer, and Buyer
agrees to purchase from Seller, subject to the terms and conditions of this
Agreement, that certain tract or piece of land known as ▇▇▇▇-▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ as more fully described by
metes and bounds in the legal description attached hereto as Exhibit "A," being
all of the property owned by Seller in that location, together with all right,
title, and interest of Seller in and to any land lying in the bed of any
highway, street, road, or piece of land and any easements and appurtenances
pertaining thereto (including, without limitation, all easements, licenses and
right, title and interest of Seller in and to adjacent streets, alleys and
rights of way and all right, title and interest, if any, to any award for any
taking by condemnation or by reason of a change of grade of any street or
highway) (the "Real Property"), all the buildings and other improvements situate
thereon, including all sign structures, fixtures and systems used in connection
with the Real Property and all intangible property related to the Improvements
and all warranties related to the Improvements (the "Improvements"), all
personal property used in connection with operation and maintenance of the
Improvements, but specifically excluding Seller's machinery, equipment and
furnishings used in the operation of its business (the "Personal Property") and
all of the Seller's right, title and interest in and to all surveys and similar
items within Seller's possession and/or control, including but not limited to,
zoning reports, concurrency exemption certificates, soil condition test reports,
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market appraisals, value appraisals, utility availability, access, approvals,
permits, environmental reports, studies or audits and any related documentation,
development orders, any easements or cross-easement agreements, impact fee
agreements and information, water/sewer capacity reservation agreements, site
plans, development rights, engineering plans and construction drawings and plans
(collectively the "Reports"). The Real Property, the Improvements, the Personal
Property and the Reports are collectively called the "Property".
2. Purchase Price. The purchase price for the Property is Six Million two
hundred thousand and 00/100 Dollars ($6,200,000.00) (the "Purchase
Price"), payable as follows:
(a) a deposit of Fifty Thousand and 00/100 Dollars ($50,000.00) (the
"Deposit") shall be due and payable on or before that date which is
three (3) business days following the Effective Date; provided,
however, that if the Deposit is not delivered to the Escrowee (as
hereinafter defined) by that date which is five (5) business days
following the Effective Date, then this Agreement shall
automatically terminate and the parties hereto shall be relieved of
all further obligations and liability to the other. The Deposit
shall be held in escrow in accordance with the terms hereof, in an
interest bearing account. Upon closing of title to the Property
("Closing"), all interest accrued on the Deposit shall be credited
to Buyer. In the event that this Agreement is terminated for any
reason other than a default by Buyer, all interest accrued on the
Deposit shall be paid to Buyer. The Deposit shall be applied against
the Purchase Price at Closing subject to the earlier termination of
this Agreement as provided herein, in which event the Deposit may be
refundable, pursuant to the terms and provisions hereof; and
(b) the balance of the Purchase Price, in the amount of Six Million One
hundred fifty Thousand and 00/100 Dollars ($6,150,000) shall be paid
at Closing, subject to the prorations and adjustments set forth in
this Agreement, by bank check, certified funds, or wire transfer to
Seller's designated bank account on the date of Closing.
(c) (i) The Deposit shall be drawn to the order of, delivered to and held
by Seller's attorney ("Escrowee"), the Escrowee shall hold the proceeds thereof
in escrow in a special bank account (or as otherwise agreed in writing by
Seller, Buyer and Escrowee) until the Closing or sooner termination of this
Agreement and shall pay over or apply such proceeds in accordance with the terms
of this section. Escrowee will hold such proceeds in an interest-bearing
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account, and any interest earned thereon shall be paid to the same party
entitled to the escrowed proceeds, and the party receiving such interest shall
pay any income taxes thereon. The tax identification numbers of the parties are
shall be furnished to Escrowee upon request. At the Closing, such proceeds and
the interest thereon, if any, shall be paid by Escrowee to Seller. If for any
reason the Closing does not occur and either party makes a written demand upon
Escrowee for payment of such amount, Escrowee shall give written notice to the
other party of such demand. If Escrowee does not receive a written objection
from the other party to the proposed payment within 5 business days after the
giving of such notice, Escrowee is hereby authorized to make such payment. If
Escrowee does receive such written objection within such 5 day period or if for
any other reason Escrowee in good faith shall elect not to make such payment,
Escrowee shall continue to hold such amount until otherwise directed by written
instructions from the parties to this contract or a final judgment of a court.
However, Escrowee shall have the right at any time to deposit the escrowed
proceeds and interest thereon, if any, with the clerk of the Supreme Court of
the county in which the Land is located. Escrowee shall give written notice of
such deposit to Seller and Purchaser. Upon such deposit Escrowee shall be
relieved and discharged of all further obligations and responsibilities
hereunder.
(ii) The parties acknowledge that Escrowee is acting solely as a
stakeholder at their request and for their convenience, that Escrowee shall not
be deemed to be the agent of either of the parties, and that Escrowee shall not
be liable to either of the parties for any act or omission on its part unless
taken or suffered in bad faith, in willful disregard of this contract or
involving gross negligence. Seller and Purchaser shall jointly and severally
indemnify and hold Escrowee harmless from and against all costs, claims and
expenses, including reasonable attorneys' fees, incurred in connection with the
performance of Escrowee's duties hereunder, except with respect to actions or
omissions taken or suffered by Escrowee in bad faith, in willful disregard of
this contract or involving gross negligence on the part of Escrowee.
(iii) Escrowee has acknowledged agreement to these provisions by signing
in the place indicated on the signature page of this contract.
(iv) If Escrowee is Seller's attorney, Escrowee or any member of its firm
shall be permitted to act as counsel for Seller in any dispute as to the
disbursement of the Deposit or any other dispute between the parties whether or
not Escrowee is in possession of the Deposit and continues to act as Escrowee.
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(v) Escrowee may act or refrain from acting in respect of any matter
referred to in this section 2(c) in full reliance upon and with the advice of
counsel which may be selected by it (including any member of its firm) and shall
be fully protected in so acting or refraining from action upon the advice of
such counsel.
3. Closing; Closing Date. The Closing shall be held on that date which is not
more than forty-five (45) business days immediately following the
expiration date of the Due Diligence Period as defined in Section 6 below
(or on the next business day thereafter if such date is not a business
day), or on such earlier date as Buyer shall designate by at least five
(5) days' advance written notice to Seller (the "Closing Date"). The
Closing shall take place at the office of the attorneys for the Seller at
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, or, upon reasonable prior
written notice to the Seller, the offices of the Buyer's lender or its
counsel, provided such offices are in the New York, or such other place as
is agreed to by the parties. At Buyer's option, the Closing may be
conducted by escrow, through the Title Company, or other escrow agent
selected by Buyer.
4. Condition of Title.
(a) Within ten (10) days after the Effective Date (the date this
Agreement has been executed by the last of Buyer and Seller),
Seller, at its sole cost and expense, shall provide Buyer and
Buyer's attorney with: (a) a current standard commitment to issue an
owner's policy of title insurance (1992 ALTA Form B), (the "Title
Commitment"), issued by the First American Title Company or other
nationally recognized title insurance company licensed to conduct
business in the State of New York (the "Title Company") and hard
copies of all title exceptions; and (b) a current ALTA/ACSM Land
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Title As-Built survey of the Property, which has been certified to
Buyer and such other parties as Buyer may request. Title to the
Property shall be good and marketable: (i) free and clear of all
liens, restrictions, easements, encumbrances, claims or liens by
contractors, subcontractors, mechanics and materialmen, leases,
financing statements or other personal property liens or
encumbrances and other title objections, other than those exceptions
as set forth on the Title Commitment and approved by Buyer (the
"Permitted Exceptions") and to the standard printed exceptions in an
ALTA form of policy, and (ii) insurable as aforesaid at ordinary
rates. Seller shall pay and discharge all liens at Closing or before
Closing, at Seller's option; if Seller fails to do so, Buyer shall
have the option, at its election, to pay and discharge such liens
out of the Purchase Price.
(b) If Buyer determines, in its sole and absolute discretion, prior to
the expiration of the "Due Diligence Period" (as defined in Section
6(b) below), that there are defects to title such that title to the
Property cannot be conveyed to Buyer at Closing in accordance with
the requirements of this Agreement for a reason other than the
existence of any lien which cannot be paid at Closing, Seller shall
take reasonable action to cure the defect, and at Buyer's option,
the Closing Date may be postponed for a reasonable time, not
exceeding fifteen (15) days, to permit Seller to correct the title
defect. If the title defect is of such a nature that it is not
capable of being corrected within the fifteen (15) day cure period,
then provided Seller shall have been proceeding diligently to effect
a cure of the title defect, Seller shall have an additional time
period of not exceeding fifteen (15) additional days, in which to
complete its cure. If Seller fails or refuses to correct the title
defect within the time periods set forth above, Buyer shall have the
option: (i) of taking such title as Seller can convey without any
abatement of the Purchase Price; or (ii) of terminating Buyer's
obligations under this Agreement, in which event, the Deposit and
all interest accrued on the Deposit shall be returned to Buyer and
the parties shall have no further obligations to each other except
those which by their terms shall specifically survive the
termination of this Agreement. Survey issues raised by Buyer are to
be treated pursuant to this paragraph 4(b) as if they are title
defects.
5. Seller's Representations, Covenants, Warranties and Indemnity.
(a) Seller represents, warrants, and covenants to Buyer that the
following statements are true and correct as follows as of the date
of this Agreement, and will remain true and correct as of the
Closing Date:
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(i) Seller has no knowledge of, and has received no notice from any
governmental authority stipulating that any assessments or charges
for any public improvements have been made against the Property
which remain unpaid, no improvements to the Property or any roads or
facilities abutting the Property have been made or ordered for which
a lien, assessment, or charge can be filed or made and Seller has no
knowledge of, and has received no notice of any plans for
improvements by any governmental or quasi-governmental authority
which might result in a special assessment against the Property.
(ii) Seller is not a party to any management, employment, service,
equipment, supply, maintenance, water, sewer, or other utility or
concession agreements escrows or bonds with respect to or affecting
the Property (collectively, "Service Contracts") which will burden
the Property or be binding upon Buyer after Closing in any manner
whatsoever, except for instruments of record and those agreements
set forth on Exhibit "B". At Closing, Seller shall to Buyer assign
to Buyer those Service Contracts which Buyer has elected to
continue.
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(iii) Seller is a duly existing corporation incorporated and in good
standing in the State of New York, the Guarantor is a duly existing
corporation incorporated and in good standing in State of Delaware,
and is qualified to do business and in good standing in the State of
New York. Seller has the power and authority to enter in this
Agreement and to consummate the transactions herein contemplated and
Guarantor has the power and authority to enter into the Guarantee.
This Agreement and all documents executed by Seller or Guarantor, as
applicable, which are to be delivered to Buyer at Closing: (A) are
duly authorized, executed and delivered by Seller or Guarantor, as
applicable and are enforceable in accordance with their terms; (B)
are the legal, valid and binding obligations of Seller or Guarantor,
as applicable. Neither Seller nor Guarantor is bankrupt or insolvent
and no bankruptcy, insolvency or reorganization proceeding is
contemplated by Seller or Guarantor.
(iv) Seller is not a "foreign person" as contemplated by Section 1445 of
the Internal Revenue Code.
(v) No brokerage or leasing commissions or other compensation is or will
be due or payable to any person, firm, corporation, or other entity
with respect to or on account of any leases or occupancy agreements
affecting the Property or any extensions or renewals thereof, if
any.
(vi) There are no tenants, licensees or other occupants of the Property
except for Seller, and no party has any right or option to acquire
or lease the Property or any portion thereof.
(vii) Neither the execution and delivery of this Agreement, or any
documents required in connection with the Closing, nor compliance
with the terms and conditions of this Agreement by Seller, nor the
consummation of the Sale, constitutes or will constitute a violation
or breach of the Articles of Incorporation or By-Laws of Seller, or
of any agreement or other instrument to which Seller is a party, to
which it is subject or by which it is bound.
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(viii) To Seller's knowledge the present use of the Property is in
compliance with applicable zoning classifications. Neither Seller
nor the Property is in violation of: (a) any law, statute, code,
regulation of any governmental agency or authority applicable to the
Property; or (b) any building or occupancy permit; or (c) any
condition, easement, right-of-way, covenant, agreement or
restriction of record applicable to the Property, including without
limitation any applicable building, land use or environmental laws.
(ix) There is no pending or, to the best of Seller's knowledge,
threatened condemnation of any portion of the Property or other
enforcement action brought or threatened by any governmental agency
or official for violation in of any laws, rules, regulations or
ordinances to which the Property is subject.
(x) No litigation is presently pending with respect to the Property, nor
to the best of the Seller's knowledge has any litigation been filed,
or threatened in writing, affecting the Seller's ability to
consummate the transaction contemplated by this Agreement.
(xi) Seller holds fee simple title to and is the sole owner of the
Property.
(xii) Except as expressly set forth in the environmental reports provided
to Buyer as attached hereto as Exhibit "C" (the "Environmental
Report") and subject to subparagraph (xiii) below, (i) the Seller is
in compliance with all applicable Environmental Laws; (ii) the
Seller has not transported from, stored or disposed of any Hazardous
Materials from or upon the Premises in contravention of applicable
Environmental Laws; (iii) there has not occurred, nor is there
presently occurring, a Release of any Hazardous Materials on, into
or beneath the surface of the Property except in compliance with
applicable Environmental Laws; (iv) the Seller has not transported
or disposed of, or allowed or arranged for any third parties to
transport or dispose of, any Hazardous Material to or at a site
which, pursuant to CERCLA, has been placed on the National
Priorities List; (v) the Seller has not received written notice that
it is a potentially responsible party for a federal or state
environmental cleanup site or for corrective action under RCRA; and
(vi) the Seller has not undertaken (or been requested to undertake)
any response or remedial actions at the request of any federal,
state or local governmental entity;
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(xiii) In connection with complying with the recommendations contained in
the Phase I Environmental Site Assessment, dated October 12, 2005
(the "Phase I"), (1) Seller represents and warrants that (A) the
storm drains located on the Real Property have been drained and
cleaned, and, if required by Buyer's lender, such storm drains shall
be tested by Seller at Seller's sole cost, (B) the two 1,000-gallon
fuel oil storage tanks located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ have
been registered and tested for tightness, the results of which are
to be made available to Buyer by June 12, 2006, however, if it is
determined the tightness test has not been complete, Seller shall
conduct the tightness test and provide Buyer the results of which by
June 12, 2006, and (C) the 3,000-gallon underground storage tank
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ has been removed in accordance
with applicable regulations; and (2) Seller covenants that (V)
Seller shall clean the area around the storm drains located on the
Real Property prior to recertification of the Phase I, or any
additional Phase I Environmental Site Assessment being conducted on
Real Property by Buyer, (W) Seller shall place all drums located in
or on the Real Property on spill pallets prior to recertification of
the Phase I, or any additional Phase I Environmental Site Assessment
being conducted on Real Property by Buyer, (X) Seller shall clean
the floors of all the buildings located on the Real Property, using
a spill absorbent material, prior to recertification of the Phase I,
or any additional Phase I Environmental Site Assessment being
conducted on the Real Property by Buyer, (Y) Seller shall clean up
the area of the Real Property where salvageable metal pieces are
stored prior to recertification of the Phase I, or any additional
Phase I Environmental Site Assessment being conducted on Real
Property by Buyer, and (Z) Seller shall undertake to renew the
permit for the 1100-gallon drum storage unit located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
For purposes of this Agreement:
"Environmental Laws" shall mean any and all federal, state, local and
foreign statutes, laws, codes, regulations, ordinances, rules, judgments,
injunctions, orders, decrees, permits, franchises or licenses relating to
pollution, hazardous substances, hazardous wastes, petroleum or otherwise
relating to protection of the environment, natural resources or human health,
including but not limited to: the Clean Air Act; Clean Water Act; Resource
Conservation and Recovery Act ("RCRA"); Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"); Emergency Planning and Community
Right-to-Know Act; Federal Insecticide, Fungicide and Rodenticide Act; Safe
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Drinking Water Act; Toxic Substances Control Act; Hazardous Materials
Transportation Act; Occupational Safety and Health Act; and Endangered Species
Act of 1973, each as amended.
"Hazardous Materials" means any substance in amounts and concentrations
that: (i) require reporting, investigation, removal or remediation under any
Environmental Law; (ii) are regulated as a "hazardous waste," "hazardous
substance" or "pollutant" or "contaminant" under any Environmental Law; (iii)
cause a nuisance, trespass or other tortious condition or poses a hazard to the
health or safety of persons; or (iv) contain gasoline, diesel fuel or other
petroleum fuels, PCBs, asbestos or urea formaldehyde foam insulation.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the environment of any Hazardous Material (including the abandonment or
discarding of barrels, containers, and other closed receptacles containing any
Hazardous Material).
(xiv) There are no tax abatements or exemptions affecting the
Property.
(xv) During the period of Seller's ownership of the Property: (A)
none of the Property has been excavated by Seller; (B) no landfill was
deposited on, or taken from, the Property by Seller; and (C) no
construction debris or other debris (including, without limitation, rocks,
stumps, or concrete) was buried upon any of the Property and to Seller's
best knowledge known of the foregoing occurred prior to Seller's taking
title to the Property.
(xvi) A permanent unconditional certificate of occupancy for the
improvements has been issued by the appropriate governmental authority and
is in full force and effect.
(xvii) The Property has direct and continuous ingress and egress to
and from a dedicated county road and there is no action, pending or
threatened that would impair or curtail such ingress or egress
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The representations and warranties of Seller contained in this Section 5
shall survive Closing and the delivery of the deed.
(b) Seller shall indemnify, defend and hold Buyer harmless from and
against any and all claims, actions, judgments, liabilities, suits, liens,
damages, penalties, fines, costs and reasonable attorneys' fees (whether or not
a suit is commenced and including any appeal), foreseen or unforeseen, asserted
against, imposed on or suffered or incurred by Buyer (or the Property) directly
or indirectly arising out of or in connection with any breach of the warranties,
representations and covenants set forth in this Section 5 made as of the date of
this Agreement. The warranties and representations set forth in this Section 5
shall be deemed remade as of Closing and updated if necessary, and all of such
warranties and representations, as so remade and updated, and the indemnity
obligation set forth in this Section 5 shall survive Closing and the delivery of
the deed. In the event any of Seller's warranties and representations are prior
to Closing known to be inaccurate in a circumstance that is material and adverse
to Buyer and not otherwise permitted herein, and if Buyer shall be unwilling to
waive same and close this transaction without abatement of the Purchase Price or
allowance of any kind, Buyer's sole remedy shall be to terminate this Agreement
by giving written notice thereof to Seller, and thereupon the Deposit (and all
interest accrued thereon) shall be refunded to Buyer and neither party shall
have any further rights or obligations hereunder, except for those rights and
obligations which by their terms specifically survive the termination of this
Agreement.
Except as set forth in Section 5(a) hereof Seller has not made and does
not make any representations or warranties as to the physical condition, rents,
leases, income, expenses, zoning or legality of occupancy of the Property, stays
of title or any other matter or thing affecting or relating to the Property and
Buyer acknowledges that no such representations and warranties have been made
and Buyer further agrees to take the property "as is" in its present physical
condition subject to reasonable wear and tear and normal depreciation between
the date hereof and the Closing date. Seller shall not be liable or bound in any
way for any verbal or written statements, representations or information
pertaining to the property furnished by any real estate broker or agent thereof
or employee of Seller or any other person. All prior and contemporaneous
representations, statements, understanding and agreements between the parties
with respect to the subject matter hereof are merged into this Agreement.
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6. Conditions of Buyer's Obligations. The obligation of Buyer under this
Agreement to purchase the Property from Seller is contingent upon and
subject to the satisfaction at Closing of each of the following conditions
(any one of which my be waived in whole or in part by Buyer at or prior to
Closing):
(a) All of the representations and warranties by Seller set forth in
this Agreement shall be true and correct at and as of the date of
this Agreement and as of the Closing Date in all respects as though
such representations and warranties were made at and as of the
Closing Date, and Seller shall have timely performed, observed, and
complied with all covenants, agreements, and conditions required by
this Agreement to be performed on its part prior to or as of
Closing.
(b) Buyer shall have a period from the Effective Date through the date
that is thirty (30) business days thereafter (the "Due Diligence
Period") to conduct due diligence investigations and analysis of the
Property and all information pertaining to the Property. Seller
shall permit Buyer and its representatives to have access to the
Property during regular business hours in order to conduct its due
diligence investigations, subject to the notice requirement set
forth in subparagraph (iii) below.
(i) Buyer shall have the right, but not the obligation, to perform
any and all inspections, investigations and tests deemed
appropriate by Buyer in its sole discretion including, but
limited to of the following:
(A) Inspect all physical aspects of the Property, including
without limitation, all operating systems, structural
components and related service contracts, building approvals,
plans and specifications and all occupancy certificates and
permits;
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(B) Investigate all zoning, code and governmental
requirements;
(C) Review existing environmental reports and studies in
Seller's possession or control;
(D) Review preliminary title reports and surveys;
(E) Review the financial statements of Seller and of ▇▇▇▇▇
Industries Incorporated, a Delaware corporation ("Guarantor"),
which is to guarantee all of Seller's obligations as tenant
pursuant to the Lease (as hereinafter defined).
(F) Review of all agreements relating to the use, operation
and occupancy of the Property, including, without limitation,
financial and operating statements, leases, occupancy
agreements, equipment or other rental agreements, maintenance
agreements, service agreements and any and all other contracts
with third parties.
(ii) If Buyer, in its sole and absolute discretion, determines that
the Property is unsuitable for purchase for any reason whatsoever,
and Buyer notifies Seller and Title Company of Buyer's election to
terminate before 5:00 p.m. on the last day of the Due Diligence
Period, this Agreement thereupon shall become void, the Deposit
shall be returned to Buyer forthwith with interest and there shall
be no further obligation or liability on either of the parties
hereto. Upon receipt of notice of termination under this
subparagraph, Title Company shall immediately deliver the Deposit
and accrued interest to Buyer.
(iii) Buyer shall notify Seller twenty-four (24) hours in advance of
any time that it intends to be on site conducting its due diligence
investigations and shall restore the Property to its original
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condition at the conclusion of the Due Diligence Period. Buyer shall
endeavor to conduct its due diligence investigations in a matter
that does not unreasonably disrupt the business operations of Seller
at the Property.
(iv) Prior to any contractor retained by Buyer or such contractor's
representatives entering upon the Property, Buyer shall deliver, or
cause its contractors to deliver, a public liability policy naming
Seller as a named insured with a combined single limit in case of
death or injury or property damage of not less than $3,000,000.
Buyer shall keep the property free and clear and any and all liens
and will indemnify, defend and hold Seller harmless from any and all
claims and liabilities asserted against Seller as a result of any
inspections, investigations, and entry by Buyer, its agents,
employees or representatives. If any inspection or test disturbs the
Property, Buyer will restore the Property to substantially the same
condition as existed prior to any such inspection or test. The
obligations of Buyer under this section shall survive the
termination of this Agreement.
(c) Within five (5) days of the Effective Date, Seller shall deliver to
Buyer any and all of the following materials:
(i) The most recent survey of the Property (the "Survey") prepared
by a registered and licensed surveyor;
(ii) Copies of the floor plans of all buildings on the Property,
together with copies of all other plans and specifications of the
Property and the Improvements and any appraisals of the Property or
any portion thereof, to the extent that such plans and
specifications are in Seller's possession;
(iii) Copies of all Service Contracts;
(iv) Copies of all environmental, engineering, soil, hydrology and
other reports in Seller's possession or under Seller's control with
respect to the Property;
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(v) Copies of the latest title policy with respect to the Property;
(vi) Certified financial statements of (A) the Seller for the three
(3) years prior to the Effective Date and (B) the Guarantor for the
one year prior to the Effective Date;
(vii) Copies of all tax bills relating to the Property;
(viii) Copies of all permits and approvals relating to the Property,
including, without limitation, all zoning approvals, building or
construction permits and certificates of occupancy.
(ix) all Reports and any other agreement(s) directly or indirectly
affecting or impacting the Premises and any and all other documents
or correspondence that impact or affect the Premises, the value of
the Premises or the business being conducted on the Premises
(d) At Closing, Seller shall deliver to Buyer duly executed originals of
the following:
(i) A bargain and sale deed in the usual and customary form with
covenant's against grantor's act duly executed and acknowledged by
Seller and in proper form for recording (the "Deed").
(ii) Originals of the following instruments (or copies if originals
are unavailable), all certified by Seller as true and correct to the
best knowledge of Seller:
(A) Each ▇▇▇▇ of current real estate taxes, sewer charges and
assessments, water charges, and other utilities, together with
proof of payment thereof (to the extent same have been paid);
15
(B) All assigned guaranties and warranties relating to the
improvements and equipment therein, if any; and
(C) All documents listed in Section 6(c) above.
(iii) An assignment of all Service Contracts which Buyer has elected
to assume and a termination of any Service Contracts Buyer has
not elected to assume.
(v) An affidavit of title in favor of Buyer and the Title Company in
the form customarily used by the Title Company.
(vi) The original Lease, and the original Lease Guaranty (as defined
in Section 16 below)
(vii) An estoppel certificate from Seller, as tenant pursuant to the
Lease, dated not more than fifteen (15) days prior to the Closing
Date and in form and substance acceptable to the Buyer and its
Lender, if any and an estoppel certificate from Guarantor relative
to the Guarantee in form and substance acceptable to Buyer and its
Lender, if any.
viii Such other documents as reasonably may be required by the
Buyer, its counsel or the Title Company in order to consummate
this transaction accordance with this Agreement, including,
without limitation, all necessary corporate authorizations,
approvals and resolutions, and a certificate confirming that
Seller is not a foreign person or entity that would be subject
to withholding.
ix a closing statement
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x Satisfactions of any and all liens, encumbrances and other
conditions to be satisfied and extinguished upon Closing and
any necessary corrective title instruments;
xi A sworn affidavit of Seller authorizing the sale of the
Property, an incumbency certificate and a certificate stating
that all representations contained herein were true and
correct when made and are true, correct and restated as of the
time of Closing and that each representation and warranty
shall survive the Closing and the purchase and sale
transaction contemplated in this Agreement and a sworn
affidavit from Guarantor authorizing the execution of the
Lease Guaranty;
xii there shall not have been any adverse change in environmental
condition, physical condition or title of the Property, no
event or condition shall have occurred which has or might
reasonably have a material adverse effect on the Property and
the Property shall be free of any hazardous substances
(e) (i) Seller will have paid, prior to the Closing Date, all taxes
and assessments for commenced or completed improvements, including
assessments payable in installments, which are to become due and
payable, or a lien upon the Property, except for taxes for the
current year, which shall be prorated in accordance with this
Agreement. No special assessments have been levied against the
Property. No work has been performed at the Property or is in
progress, and no materials have been furnished to the Property other
than ordinary and usual maintenance and repair work. If any lien for
any such work is filed before or after Closing, Seller shall
promptly discharge the same.
(ii) Seller will not further sell, encumber, convey, assign or
contract to sell, convey, assign or pledge, all or any part of the
Property, nor restrict the use of all or any part of the Property,
nor take or cause to be taken any action in conflict with this
Agreement at any time between the date of this Agreement and: (A)
Closing, or (B) the earlier termination of this Agreement pursuant
to its terms.
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(iii) During the period between the Effective Date and the
Closing Date, Seller shall: (A) comply with all applicable
governmental laws, codes and requirements (including, without
limitation, Environmental Laws) and the terms and conditions of all
agreements affecting the Property; (B) continue to operate,
maintain, use and repair the Property in a manner consistent with
Seller's current practices, including, without limitation,
maintaining all insurance coverage as now currently exists and/or
may be required by the terms of any mortgages affecting the
Property; (C) promptly inform Buyer in writing of any event
adversely affecting the ownership, use, occupancy operation or
management of the Property; (D) not enter into any new or amend any
existing service agreements or maintenance agreements or other
agreements affecting the Property that would be binding upon Buyer
following Closing, unless Buyer has specifically consented in
writing to same; and (E) not create any manner of lien or
encumbrance upon the Property, without the express prior written
consent of Buyer which consent may be withheld at Buyer's sole
discretion.
(iv) Buyer shall have received from a Title Company an ALTA
Owner's fee policy of title insurance for the Property, or in the
alternative an irrevocable commitment for the issuance thereof,
insuring title to the Property in the name of Buyer and in an amount
not less than the Purchase Price. The policy shall be consistent
with the Title Commitment referred to above, subject only to the
Permitted Exceptions set forth on Exhibit B and to the standard
printed exceptions in an ALTA form of policy. and which shall
include such endorsements as Buyer shall request
(v) The Property shall be free of any and all municipal and
other liens and there shall be no open permits effecting the
Property;
(vi) There shall not have been any material adverse change in
environmental condition, physical condition or title of the
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Property, no event or condition shall have occurred which has or
might reasonably have a material adverse effect on the Property and
the Property shall be free of any hazardous substances.
(f) Seller and Buyer shall enter into the Lease (as defined in
Section 16 below).
(g) As of the Closing Date, there shall exist no pending action,
lawsuit or proceeding with respect to Seller, Guarantor or the
Property before any court, administrative agency or tribunal which
seeks to restrain or prohibit the consummation of the sale of the
Property as contemplated by this Agreement.
(h) Notwithstanding anything contained in this Agreement to the
contrary, Buyer, in its sole and absolute discretion, shall have the
right to terminate this Agreement after the expiration of the Due
Diligence Period and receive the return of the Deposit (plus all
accrued interest) (i) if there occurs any change or alteration in
the environmental condition of the Property that occurs after the
expiration of the Due Diligence Period and is not a result of the
direct actions of Buyer or (ii) if there is a material adverse
change in the financial condition of the Guarantor.
7. Possession. Possession of the Property shall be given to Buyer at Closing
unoccupied and free of any liens, subject only to the tenancy with the
Seller pursuant to the Lease, as more particularly set forth and described
in Section 16 below.
8. Apportionments.
(a) Real estate taxes, assessments, utilities, operating expenses,
and other apportionable income and expenses are not to be
pro-rated inasmuch as these shall be the responsibility of
Seller as Tenant under the Lease .
(b) All real property transfer taxes, stamp fees and taxes, and
escrow fees, if any, imposed on or in connection with this
transaction shall be paid by Seller. All other costs of
closing shall be paid for by either Buyer or Seller, according
to the customary practices for commercial real estate closings
in the Bay Shore, New York area.
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(c) Seller shall pay all rollback taxes pertaining to the
Property, if any.
(d) Each party shall pay for the fees of its own attorneys.
9. Condemnation. Seller covenants and warrants that Seller has not received
any notice of any pending or threatened condemnation proceeding or other
proceeding in the nature of eminent domain in connection with the
Property. If prior to Closing any such proceeding is commenced or any
change is made, or proposed to be made, to the current means of ingress
and egress to the Property or the roads or driveways adjoining the
Property, or to change such ingress or egress or to change the grade
thereof, Seller agrees immediately to notify Buyer thereof. Buyer then
shall have the right, at Buyer's option, to terminate this Agreement by
giving written notice to Seller within thirty (30) days after receipt of
such notice. If Buyer does not so terminate this Agreement, Buyer shall
proceed to Closing pursuant to this Agreement as if no such proceeding had
commenced and will pay Seller the full Purchase Price in accordance with
this Agreement. Seller shall assign to Buyer all of its right, title, and
interest in and to any compensation for such condemnation. As long as
Buyer has elected to proceed with the Agreement and pay the full Purchase
Price for the Property, Seller shall not negotiate or settle any claims
for compensation prior to Closing, and Buyer shall have the sole right (in
the name of Buyer or Seller or both) to negotiate for, to agree to, and to
contest all offers and awards.
10. Default by Buyer. If Buyer, without the right to do so and in default of
its obligation hereunder, fails to complete Closing, the Deposit and all
accrued interest shall be paid to Seller. Such payment of the Deposit and
all accrued interest to Seller shall be deemed to be liquidated damages
for Buyer's default. Seller hereby waives any right to pursue any other
remedy permitted at Law or in equity against Buyer.
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11. Default by Seller. If Seller, without the right to do so and in default of
its obligations hereunder, fails to complete Closing, the Deposit and all
accrued interest shall be returned to Buyer, and Seller shall reimburse
Buyer for all of Buyer's reasonable costs incurred in connection with this
transaction, including, without limitation, costs of title and survey,
costs of inspections and environmental reviews, cost of Buyer's
consultants and attorneys, up to a maximum of $25,000. In addition, Buyer
may exercise any remedies available to it at law or in equity, including,
but not limited to, specific performance.
12. Risk of Loss. Seller shall bear the risk of all loss or damage to the
Property from all causes, other than the willful acts or negligence of
Buyer, its agents, contractors, and/or representatives, until Closing. If
the Property or any part thereof is damaged by fire or other casualty
prior to Closing which would cost in excess of $50,000.00 to repair (as
determined by an insurance adjuster selected by the insurance carriers),
Seller shall promptly notify Buyer thereof and Buyer, at its option, may
terminate this Agreement by written notice to Seller given on or before
the earlier of: (i) twenty (20) days following the date that Buyer
receives notice of such casualty; or (ii) the Closing Date (provided,
however, that in the event that Buyer has less than twenty (20) days in
which to respond, the Closing Date shall be adjourned to the extent
necessary in order to provide Buyer with a twenty (20) day response
period). In the event of such termination, this Agreement shall be of no
further force and effect and, except for those obligations which by their
terms shall survive the termination of this Agreement, neither party shall
thereafter have any further obligation under this Agreement, and Seller
shall promptly return the Deposit and all accrued interest to Buyer. If
Buyer does not elect to terminate this Agreement or the cost of repair is
determined by the selected adjusters to be less than $50,000.00, then the
Closing shall take place as herein provided without abatement of the
Purchase Price, and Seller shall assign and transfer to Buyer at the
Closing, without warranty or recourse, all of Seller's right, title and
interest to the insurance proceeds paid or payable to Seller on account of
such fire or casualty. Seller shall pay or credit to Buyer the amount of
the deductible of any of Seller's applicable insurance policies.
13. Brokerage. Buyer represents and warrants to Seller and Seller represents
and warrants to Buyer that each dealt with no broker, agent, finder, or
other intermediary in connection with this sale and purchase other than
▇▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Inc. Seller shall be solely responsible for all
commissions due to Broker pursuant to a separate agreement, and such
21
commissions shall be payable out of Seller's closing proceeds if and when
Closing takes place. Seller agrees to pay any other real estate broker or
other intermediary claiming a commission in connection with this sale and
purchase or the Lease, and Buyer shall have no liability or obligation in
connection therewith. Seller agrees to indemnify, defend, and hold Buyer
harmless from and against the claims of any and all brokers and other
intermediaries claiming a commission in connection with this sale and the
leaseback of the property pursuant to the Lease. These covenants and
indemnities shall survive the Closing and the delivery of the Deed or the
sooner termination of this Agreement.
14. Notices. All notices, requests, and other communications under this
Agreement shall be in writing and shall be delivered: (i) in person; (ii)
by registered or certified mail, return receipt requested; (iii) by
recognized overnight delivery service providing positive tracking of items
(for example, Federal Express); or (iv) by facsimile, with the original to
follow as provided in (ii) or (iii) above, addressed as follows or at such
other address of which Seller or Buyer shall have given notice as herein
provided:
If intended for Seller:
Air Industries Machining, Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Chairman
With a copy to:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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If intended for Buyer:
Net Lease Advisors, LLC
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇@▇▇▇.▇▇▇
And to: Single-Tenant Financial Corp
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Att: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
All such notices, requests, and other communications shall be deemed to
have been sufficiently given for all purposes hereof one (1) day after
overnight delivery and three (3) days after deposit of the notice in the
U.S. mail. Notices by the parties may be given on their behalf by their
respective attorneys.
15. Further Assurance. After Closing, at Buyer's sole cost and expense, Seller
shall execute, acknowledge, and deliver, for no further consideration, all
reasonable forms of assignments, transfers, deeds, and other documents as
Buyer may reasonably request to vest in Buyer and perfect Buyer's right,
title, and interest in and to the Property.
16. Lease Execution. The parties acknowledge and agree that as a condition to
their respective obligations hereunder, Buyer shall lease to Seller, and
Seller shall lease as tenant, from Buyer, effective the Closing, the
entire Property and improvements located thereon pursuant to the terms and
provisions of that certain lease agreement which shall be substantially in
the form attached hereto and made a part hereof as Exhibit "D" (the
"Lease"). At Closing, Buyer and Seller shall fully execute and deliver to
the other, the Lease, as same may have been amended, in a mutually
agreeable form, and such delivery shall be a material obligation of Buyer
23
and Seller under this Agreement. All of Seller's obligations as tenant
pursuant to the Lease shall be unconditionally guaranteed by the Guarantor
pursuant to the terms and provisions of a guaranty agreement, which shall
be substantially in the form attached hereto and made a part hereof as
Exhibit "E" (the "Lease Guaranty").
17. Miscellaneous.
(a) The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe, or limit the scope or
intent of this Agreement or any of the provisions hereof.
(b) Buyer shall have the right to assign this Agreement without Seller's
consent. The assignee shall sign an assignment and assumption of
this Agreement, by which the assignee agrees to undertake all of
Buyer's obligations pursuant to this Agreement. Buyer shall provide
written notice of such assignment to Seller, and Seller agrees to
convey the Property directly to Buyer's assignee. Time is of the
essence with respect to this Agreement.
(c) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, executor,
administrators, legal representatives, successors, and assigns.
(d) This Agreement, including the exhibits attached hereto, contains the
whole agreement as to the Property between Seller and Buyer, and
there are no other terms, obligations, covenants, representations,
statements, or conditions, oral or otherwise of any kind whatsoever
concerning this sale and purchase, except for the Lease, upon the
execution of same. This Agreement shall not be altered, amended,
changed, or modified except in writing executed by the parties
hereto.
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(e) This Agreement shall be construed in accordance with the laws of the
State of New York.
(f) All of the parties hereto are experienced and sophisticated in
business and understand the terms and conditions set forth herein.
Each of the parties hereto has sought or has knowingly waived its
opportunity to seek the advice of independent legal counsel prior to
entering into this Agreement. Should any provision of this Agreement
require judicial interpretation, it is agreed the Court interpreting
or construing such provision shall not apply any presumption that
the terms hereof shall be more strictly construed against one party
by reason of any rule of construction which might otherwise require
or permit this document to be construed more strictly against the
party who itself or through its agents prepared this document.
(g) In the event of termination of this Agreement by either party for
any reason, then, upon the return of the Deposit to Buyer, plus all
interest accrued thereon, this Agreement shall terminate and the
parties shall have no further rights or obligations with respect to
the other, except for those provisions of this Agreement which, by
their terms, specifically survive the Closing or sooner termination
of this Agreement.
(h) Neither this Agreement nor any provision may be changed, waived,
discharged or terminated orally, but only by a written agreement
signed by both Buyer and Seller.
(i) The waiver by any party of any breach or default by any other party
under any of the terms of this Agreement, shall not be deemed to be,
nor shall the same constitute, a waiver of any subsequent breach or
default in the part of any party. This Agreement shall be construed
and enforced under the laws of the state of Florida. Whenever a date
specified herein shall fall on a Saturday, Sunday or legal holiday,
the date shall be extended to the next succeeding business day.
25
(j) Any dispute that may arise relative to this Agreement shall be
resolved by submitting the same to binding Arbitration to be
conducted under the authority of the American Arbitration
Association, the parties agreeing to submit jurisdiction of such
dispute(s) to such body pursuant to its rules and regulations. The
prevailing party in any proceeding shall be entitled to recover from
the other party, in addition to any damages or other relief granted
as a result of such proceeding, all costs and expenses of such
proceeding and reasonable attorneys' fees as fixed by the
Arbitrator(s). A single member panel shall be employed and the venue
for any Arbitration shall be New York.
18. Exhibits. The following exhibits are attached to and made a part of this
Agreement:
Exhibit "A" - Metes and Bounds Description of the Property
Exhibit "B" - List of Service Contracts
Exhibit "C" - Environmental Matters
Exhibit "D" - Form of Lease
Exhibit "E" - Form of Lease Guaranty
19. Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall be an original and all of which, taken together, shall constitute
one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
26
IN WITNESS WHEREOF, intending to be legally bound, the parties have caused
this Agreement to be duly executed, under seal, as of the day and year first
written above.
WITNESS/ATTEST: SELLER:
Air Industries Machining, Corp.
A New York Corporation
By:
------------------------------ -----------------------------------
Name
------------------------------
Title:
----------------------------
BUYER:
NET LEASE ADVISORS, LLC
A New Jersey Limited Liability Company
By:
------------------------------ -----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
ESCROW RECEIVED AND CONDITIONS OF
ESCROW ACCEPTED:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇ LLP, AS ESCROW AGENT
--------------------------------
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