SALE AGREEMENT

EXHIBIT 10.1

 

DSM Nutritional Products Building

45 Waterview Plaza

Parsippany, New Jersey

 

SALE AGREEMENT

 

by and between

 

FALK US PROPERTY INCOME FUND, L.P.

 

as Seller,

 

and

 

ONE LIBERTY PROPERTIES, INC.

 

as Purchaser

SALE AGREEMENT

 

THIS SALE AGREEMENT (this “Agreement”) is made and entered into by and between FALK US PROPERTY INCOME FUND, L.P., a Delaware limited partnership (hereinafter referred to as “Seller”) and ONE LIBERTY PROPERTIES, INC., a real estate investment trust incorporated under the laws of the State of Maryland, and its permitted assign (hereinafter referred to as “Purchaser”) to be effective as of the date on which the last of Seller and Purchaser execute this Agreement and a fully executed counterpart hereof is received by the other party or its attorney via facsimile or e-mail (the “Effective Date”).

 

AGREEMENT

 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser and Seller agree as follows:

 

SECTION 1

DEFINITIONS

 

For purposes of this Agreement, each of the following terms, when used herein with an initial capital letter, shall have the following meaning:

 

1.1 Additional Earnest Money . If applicable, the sum of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00) to be paid by Purchaser to Escrow Agent in accordance with Section 9.3 below should Purchaser elect to proceed with the transaction after expiration of the Due Diligence Period, together with all interest earned thereon.

 

1.2 As-Built Survey . An update of the Initial Survey, sufficient to cause the Title Company to provide extended coverage as to matters of survey.

 

1.3 Broker . Sonnenblick-Goldman Company.

 

1.4 Building . The building known as the DSM Nutritional Products Building located at 45 Waterview Plaza, Parsippany, New Jersey.

 

1.5 Business Day . Monday through Friday excluding bank holidays on which national banking associations are authorized to be closed.

 

1.6 Closing . The Closing and consummation of the purchase and sale of the Property as contemplated by this Agreement.

 

1.7 Closing Date . The date upon which Closing occurs.

 

1.8 Commercially Reasonable Efforts . Such action (or inaction) as would be taken (or not taken, as the case may be) in good faith by a reasonably prudent businessperson in the conduct of his or her own affairs.

1.9 Commission Agreement . Any agreement whereby Seller is obligated to pay a Leasing Commission in connection with the Lease.

 

1.10 Condemnation Proceeding . This term shall have the meaning ascribed thereto in Section 14.2 hereof.

 

1.11 Due Diligence Period . The period commencing on the Effective Date and ending at 6:00 p.m. Eastern Standard Time on September 6, 2005.

 

1.12 Earnest Money . Collectively, the Good Faith Deposit and, if paid, the Additional Earnest Money. Purchaser may, at its discretion, deliver an irrevocable standby letter of credit or letters of credit in lieu of the Earnest Money in the amount of the Earnest Money to be issued in favor of Seller, in form and substance satisfactory to Seller and Purchaser, in which event, (i) any reference in this Agreement to refund or return of the Earnest Money shall mean return of such letter(s) of credit, (ii) any reference to payment of the Earnest Money to Seller shall mean that Seller shall be entitled to draw upon the letter(s) of credit and retain all proceeds thereof; and (iii) such letter(s) of credit shall be returned to Purchaser at Closing without any credit against the Purchase Price for the amount(s) of such letters of credit.

 

1.13 Environmental Report . A Phase 1 environmental assessment audit (and, if Purchaser reasonably deems necessary, a Phase 2 environmental audit), both to be conducted by Purchaser’s environmental engineer, at Purchaser’s expense, with respect to the Property.

 

1.14 Escrow Agent . First American Title Insurance Company of New York, 407 S. Warren Street, Syracuse, New York 13202 Attn: William Bradt, Esq., Vice President (e-mail: wbradt@firstam.com ) Telephone 1- 800-679-4718, Facsimile: 888-722-4081.

 

1.15 Evidence of Authority . Evidence of authority for execution and performance of this Agreement by Purchaser and Seller, including (i) necessary resolutions or consents, (ii) a certificate duly executed by a secretary or other reasonably acceptable representative of Seller with respect to the offices or titles held by the Persons who executed this Agreement and will execute documents on behalf of Purchaser and Seller required or contemplated by this Agreement, and (iii) Certificates of Existence as to Purchaser and Seller relative to the state in which each of them was formed, all issued not earlier than ten (10) days prior to the date of Closing.

 

1.16 Existing Survey . The existing ATLA/ASCM as built survey of the Land and Improvements to be delivered to Purchaser as part of the Submission Items required by Section 9.1 below.

 

1.17 Good Faith Deposit . The sum of Five Hundred Thousand and No/100 Dollars ($500,000.00) to be deposited with Escrow Agent in accordance with Section 3 below, together with all interest earned thereon.

 

1.18 Hazardous Substances . All hazardous waste, hazardous substances, extremely hazardous substances, hazardous constituents, hazardous materials, toxic substances, or related substances or materials, whether solids, liquids or gases as each of these terms are defined under

 

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all applicable federal or state statutes and regulations including, but not limited to, (A) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., (B) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801 et seq., (C) the Resource, Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901 et seq., (D) the Clean Water Act, as amended, 33 U.S.C. § 1251 et seq., (E) the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. § 2601 et seq., (F) the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq., (G) any so-called “superfund” or “superlien” law or (H) any other current or prior federal, state or local statute, law, ordinance, code, rule, regulation, order, decree or regulation, relating to or imposing liability or standards of conduct concerning such waste, substance or material. Hazardous Substances include, but are not limited to, polychlorinated biphenyls (commonly known as PCBs), asbestos, radon, urea formaldehyde, petroleum products (including gasoline and fuel oil), toxic substances, hazardous chemicals, spent solvents, sludge, ash, containers with hazardous waste residue, spent solutions from manufacturing processes, pesticides, explosives, organic chemicals, inorganic pigments and other similar substances, but Hazardous Substances shall not include cleaning supplies, paint and other substances that are otherwise Hazardous Substances as long as the same are used, stored and disposed of in the ordinary course of business and in compliance with applicable Legal Requirements.

 

1.19 Improvements . The Building and other improvements and facilities constructed on the Land.

 

1.20 Insurance Requirements . All terms of any insurance policy, all requirements of the issuer of any insurance policy, and all orders, rules, regulations and other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) incorporated into any insurance policy applicable to or affecting the Property or any part thereof or any use or condition thereof.

 

1.21 Intangible Property . To the extent transferable, all of Seller’s right, title and interest in and to any intangible property now or hereafter owned by Seller, if any, and used in connection with or relating to the ownership, use, development, operation, management, occupancy, maintenance or leasing of the Land, the Improvements and/or the Personal Property, including, but not limited to, the Permits and any interest of Seller in any trade names, service marks, trademarks, and logos used by Seller in the operation and identification of the Property (except that Seller makes no representation of warranty as to its right to use or transfer the common name of the Building), the Survey, the Warranties, all public and private contract rights and development or usage rights of Seller solely with respect to the Land, the Improvements and/or the Building and the Plans and Specifications.

 

1.22 Land . A parcel of land being more particularly described on Exhibit “A” attached hereto and incorporated herein by reference and appurtenant easements thereto, together with all of Seller’s right, title and interest (whether now owned or hereafter acquired) in and to all easements, rights of way, strips and gores of land, tenements, hereditaments and appurtenances, reversions, remainders, privileges, licenses and other rights and benefits belonging to, running with or in any way relating thereto, and together with all right, title and interest of Seller, if any, in and to any land lying in the bed of any street, road or highway, open or proposed, in front of, abutting or adjoining the Land.

 

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1.23 Lease . That certain Lease, dated as of January 1, 1997, between Bellemead Development Corporation and Hoffman-LaRoche, Inc., as assigned to Roche Vitamins, Inc. and further assigned to Tenant effective as of September 30, 2003, together with that certain First Amendment to Lease, effective as of May 1, 2005, between Seller and Tenant.

 

1.24 Leasing Commissions . All brokerage commissions, finder’s fees, referral fees and other similar compensation payable by Seller in connection with the Lease.

 

1.25 Legal Requirements . All laws, statutes, codes, acts, ordinances, orders,

 

1.26 judgments, decrees, injunctions, rules, regulations, Permits, licenses, authorizations, directions and requirements of governmental authorities or quasi-governmental authorities, which now or at any time hereafter exercise jurisdiction over the Property, or any use, operation or condition thereof, including, but not limited to, the Americans With Disabilities Act of 1990 and all regulations promulgated pursuant thereto and concurrency requirements, if any, which apply to the Property or Purchaser immediately after the Closing.

 

1.27 Manager . The Gale Company.

 

1.28 Monetary Lien . Any mortgage, deed of trust, security deed, lien, monetary judgment, security interest, past due tax or assessment or other similar encumbrance of a monetary nature entered into or consented to by Seller and arising against the Property or any portion of the Property.

 

1.29 Operating Agreements . All service, equipment, supply, security, maintenance, concession, pest control, employment and collective bargaining agreements, equipment leases, advertising contracts, vending machine contracts and other such agreements (and any amendments, modifications or supplements thereto) now existing or hereafter entered into by Seller or by any other authorized Person on Seller’s behalf with respect to or affecting the Property or any portion thereof (excluding the Lease, the management agreement with Manager, any Commission Agreements and the Permitted Exceptions) (except that nothing contained herein shall require Seller to cause any Tenant to terminate any Operating Agreements to which Seller is not a party, and nothing contained herein shall require Seller to assign or Purchaser to assume any Operating Agreement entered into solely by any Tenant).

 

1.30 Owner’s Title Policy . An ALTA Owner’s Extended Coverage Policy of Title Insurance (Form 1990, as amended 1992) issued by the Title Company, pursuant to the Title Commitment, together with such endorsements as Purchaser may reasonably require. The Owner’s Title Policy shall insure marketability of title in fee simple absolute in the amount of the Purchase Price, subject only to the Permitted Exceptions and free from the standard exceptions for matters of survey (except for matters shown on the As-Built Survey or the Title Commitment as approved by Purchaser), parties in possession (except for Tenant as a Tenant only under the Lease) and mechanics’ and materialmen’s liens.

 

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1.31 Permits . The certificates of use and occupancy with respect to the Building and all other consents, notices of completion, environmental and utility permits and approvals, authorizations, variances, waivers, licenses, permits (including conditional use permits), certificates and zoning and other approvals from any governmental or quasi-governmental authority necessary, issued or granted with respect to the Property now or prior to Closing.

 

1.32 Permitted Exceptions . Those matters identified or referred to in Section 5.3 as “Permitted Exceptions.”

 

1.33 Person . Any individual, sole proprietorship, partnership, limited partnership, joint venture, general partnership, trust, unincorporated organization, association, corporation, institution, entity, party or government (whether national, federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

 

1.34 Personal Property . The tangible personal property owned by Seller, if any, located on or used primarily in connection with the Land or the Improvements.

 

1.35 Plans and Specifications . The final plans and specifications for the Improvements.

 

1.36 Property . Seller’s interest in the following property:

 

1.36.1 The Land;

 

1.36.2 The Improvements;

 

1.36.3 The Personal Property;

 

1.36.4 The landlord’s rights under the Lease; and

 

1.36.5 The Seller’s rights under the Surviving Contracts, the Warranties, the Permits and the other Intangible Property.

 

1.37 Purchase Price . Purchase Price shall have the meaning ascribed thereto in Section 4 hereof.

 

1.38 Rental Payments . Rental Payments shall have the meaning ascribed thereto in Section 11.2 hereof.

 

1.39 Submission Items . The due diligence submission items delivered or to be delivered to Purchaser by Seller as more particularly described in Section 9.1 below.

 

1.40 Survey . Collectively, (i) the Existing Survey and (ii) the As-Built Survey.

 

1.41 Surviving Contracts . The Operating Agreements which Purchaser does not elect to cancel and agrees to assume, such election to be made on or before the expiration of the Due Diligence Period; provided that the management agreement with Manager shall be terminated as

 

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of the Closing Date under all circumstances. If Purchaser fails to make an election to assume an Operating Agreement as provided above, Purchaser shall be deemed to have elected not to assume such Operating Agreement.

 

1.42 Tenant . DSM Nutritional Products, Inc.

 

1.43 Tenant Deposits . If applicable, security or other monetary deposits of Tenant under the Lease.

 

1.44 Tenant Estoppel Certificate . An estoppel certificate substantially in the form required by the Lease, to be obtained from and executed by Tenant, including a statement by Tenant that, to Tenant’s knowledge, neither Landlord nor Tenant is in default under the Lease.

 

1.45 Title Commitment . The title commitment to be obtained in accordance with Section 5.1 below.

 

1.46 Title Company . First American Title Insurance Company (by Majestic Abstract Corp., as agent) or other reputable title insurance company doing business in the State of New Jersey.

 

1.47 Utility Deposits . All deposits for utility services provided to the Property, exclusive of utility deposits posted by the Tenants.

 

1.48 Voluntary Lien . Any lien or other encumbrance affecting title to the property (other than Permitted Exceptions and Monetary Liens) that Seller has knowingly and intentionally placed on the Property after the Effective Date.

 

1.49 Warranties . All assignable guarantees, warranties, and indemnities now existing or existing prior to Closing relating to the construction, operation and/or use of the Improvements or the Personal Property and in effect at the time of Closing.

 

SECTION 2

PURCHASE AND SALE

 

2.1 Covenant to Buy and Sell . For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser shall purchase the Property from Seller, and Seller shall sell, convey, transfer and assign the Property to Purchaser, subject to and in accordance with the terms and conditions of this Agreement.

 

SECTION 3

EARNEST MONEY

 

3.1 Good Faith Deposit . Within two (2) Business Days after the Effective Date, Purchaser shall deliver the Good Faith Deposit to Escrow Agent.

 

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3.2 Additional Earnest Money . Concurrently with Purchaser’s delivery of the Acceptance Notice as provided in Section 9.3 below, if applicable, Purchaser shall deliver the Additional Earnest Money to Escrow Agent.

 

3.3 Earnest Money Escrow Agreement . The Earnest Money (which includes the Good Faith Deposit and, if applicable, the Additional Earnest Money) shall be held pursuant to an Earnest Money Escrow Agreement in the form attached hereto as Schedule 3.3 .

 

3.4 Earnest Money Applied to Purchase Price . The Earnest Money shall be applied to Purchase Price at Closing or returned to Purchaser upon termination of this Agreement for any reason other than Purchaser’s wrongful failure to close the purchase of the Property under this Agreement. If applicable, any letter(s) of credit posted as Earnest Money shall be returned to Purchaser at Closing or upon termination of this Agreement for reasons other than Purchaser’s default.

 

SECTION 4

PURCHASE PRICE

 

4.1 Purchase Price . The purchase price for the Property (herein referred to as the “Purchase Price”) shall be Thirty Million and No/100 Dollars ($30,000,000.00). The Purchase Price shall be due and payable in immediately available funds at Closing, less the amount of the Earnest Money, subject to any adjustments and prorations required pursuant to the terms of this Agreement.

 

SECTION 5

TITLE

 

5.1 Initial Searches . Within three Business Days after the Effective Date, Purchaser shall order a Standard Form Commitment for the Owner’s Title Policy, with legible copies of all exceptions listed therein (the “Title Commitment”) issued by the Title Company covering the Land and the Improvements, pursuant to which the Title Company shall agree to issue the Owner’s Title Policy to Purchaser at Closing. Title to the Property shall be insurable at not more than ordinary or promulgated rates by the Title Company pursuant to the Owner’s Title Policy; provided, however, that if the Title Company has committed to insure over any title defect, such defect and affirmative insurance coverage shall be subject to Purchaser’s approval in its reasonable discretion. The Owner’s Title Policy shall insure against all mechanics’ liens, shall have full survey coverage and shall have deleted therefrom all “printed standard exceptions.” At or prior to Closing, Seller shall deliver such affidavits and agreements as may be reasonably required by the Title Company in order to issue the Owner’s Title Policy in accordance with this Agreement.

 

5.2 Survey . Purchaser shall, at Purchaser’s expense, cause the Initial Survey to be updated to satisfy the requirements of the Title Company, to be delivered to Seller, Purchaser and the Title Company not later than the last day of the Due Diligence Period.

 

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5.3 Permitted Title Exceptions . The sale of the Property shall be subject to the following:

 

5.3.1 The Lease and the rights of Tenant under the Lease;

 

5.3.2 The lien of all ad valorem real estate taxes, special improvement district and general assessments for the calendar year in which Closing occurs, subject to proration as herein provided, and for subsequent years which are not yet due and payable; and

 

5.3.3 Any items shown on the Title Commitment and/or on the Survey, as approved or deemed approved by Purchaser pursuant to this Agreement.

 

The above items described in this Section 5.3 are herein collectively referred to as the “Permitted Exceptions”.

 

5.4 Objections to Title/Survey . Purchaser shall have until the date that is the earlier of (i) five (5) Business Days after receipt of the Title Commitment and the As-Built Survey, or (ii) the last day of the Due Diligence Period within which to object in writing to any matters shown on the Title Commitment or As-Built Survey. Seller shall have until the later of (i) the Closing Date or (ii) five (5) Business Days after receipt of such written objections (the “Cure Period”) to cure or cause to be cured Purchaser’s objections to Purchaser’s reasonable satisfaction (with Closing being extended accordingly); provided that Seller shall indicate its intentions as to whether it will commit to cure any such objections within five (5) Business Days after Seller’s receipt of the same. If Seller fails to respond within such five (5) Business Day period or in the event Seller is unable or unwilling to so cure such objections prior to expiration of the Cure Period, Purchaser may (A) waive such objections, or (B) terminate this Agreement by written notice to Seller, in which event the Earnest Money shall be returned to Purchaser and neither Purchaser nor Seller shall have any further obligations hereunder, except obligations that expressly survive termination of this Agreement.

 

5.5 Cure of Certain Liens . Notwithstanding Section 5.4 above, if the Title Commitment reveals the existence of a Voluntary Lien or a Monetary Lien, then Seller shall, at or prior to Closing, remove any such Voluntary Lien, or remove, pay or bond over any amount due in satisfaction of such Monetary Lien (or, subject to Purchaser’s reasonable approval, otherwise cause the same to be removed as an exception in the Title Commitment). If one or more Monetary Liens have not been satisfied at or before the Closing Date, then Purchaser is hereby authorized to satisfy such Monetary Liens from the proceeds of the Purchase Price at Closing.

 

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SECTION 6

SELLER’S REPRESENTATIONS AND WARRANTIES

 

Seller represents, warrants and covenants to Purchaser on and as of the Effective Date as follows (it being a condition to closing but not a covenant that such representations and warranties of Seller shall be true and correct in all material respects as of the Closing Date as set forth in Section 10.4.1(C) below):

 

6.1 Organization, Power and Authority . Seller is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware. Seller is duly qualified to do business in the State of New Jersey and has all necessary power to execute and deliver this Agreement and perform all of its obligations hereunder. The execution, delivery and performance of this Agreement by Seller: (A) have been duly and validly authorized by all necessary action on the part of Seller and its partners, (B) do not conflict with or result in a violation of any applicable partnership agreement or other organizational documents, or of any judgment, order or decree of any court or arbiter in any proceeding to which Seller is a party or by which any one of them is bound, and (C) to Seller’s knowledge, do not conflict with or constitute a breach of, or constitute a default under, any contract, agreement or other instrument by which Seller or the Property is bound or to which Seller is a party.

 

6.2 No Conflict with Laws . To Seller’s knowledge, the execution and delivery of this Agreement by Seller and the performance by Seller of its obligations hereunder will not conflict with or result in a breach of any law, order, judgment, writ, injunction or decree of any court or governmental instrumentality having jurisdiction over the Property.

 

6.3 No Hazardous Substances on Property . Seller has no knowledge that: (A) Hazardous Substances have been discharged, disbursed, released, stored, treated, generated, disposed of, or allowed to escape on, in, or under the Property in violation of any applicable Legal Requirements; (B) asbestos or asbestos containing materials have been installed, used, incorporated into, or disposed of on the Property in violation of applicable Legal Requirements; (C) PCBs have been located on or in the Property, whether in electrical transformers, fluorescent light fixtures with ballasts, cooling oils, or otherwise, in violation of applicable Legal Requirements; and (D) underground storage tanks are located on the Property, except as shown in environmental assessment obtained by Seller in connection with its purchase of the Property (copies of which have been furnished to Seller).

 

6.4 Litigation . Seller has not received written notice, nor does Seller have actual knowledge, of any pending or threatened litigation or administrative proceeding that is adverse to Seller and would affect its ability to perform under this Agreement.

 

6.5 Condemnation . To Seller’s knowledge, there is no condemnation or eminent domain proceeding pending or threatened against the Property (or any portion thereof).

 

6.6 Lease . As of the Effective Date:

 

6.6.1 To Seller’s knowledge, the Lease is in full force and effect;

 

6.6.2 Seller has provided to Purchaser a full and complete copy of the Lease from Seller’s files, which, to Seller’s knowledge, is a full and complete copy of the Lease.

 

6.6.3 Seller has neither sent written notice to Tenant, nor received any written notice from Tenant, claiming that Tenant or Seller, as the case may be, is in default under the Lease;

 

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6.6.4 Seller has not received any Tenant Deposits other than those, if any, set forth in the Lease; and

 

6.6.5 Seller has no knowledge of any Leasing Commission due with respect to the current term of the Lease or upon the exercise of any renewal or expansion option set forth in the Lease.

 

6.6.6 Tenant has not paid any rent, fees or other charges for more than one month in advance.

 

6.7 No Violation Notice . To Seller’s knowledge, Seller has not received written notice:

 

6.7.1 from any federal, state, county or municipal authority alleging any fire, health, safety, building, pollution, environmental, zoning or other violation of law in respect of the Property or any part thereof, which has not been entirely corrected; or

 

6.7.2 from any insurance company or bonding company of any defects or inadequacies in the Property or any part thereof, which would adversely affect the insurability of the same or threatened termination of any policy of insurance or bond.

 

6.8 Actual Knowledge . As used in this Agreement or in any Schedule attached or to be attached hereto, any reference to “knowledge” with respect to Seller shall mean the current, actual knowledge of Daniel T. Borger (as seller’s primary asset manager), without any duty to investigate or inquire other than inquiry of Kal Hazer, the employee of Manager who has primary responsibility for management for the Property. In that regard, Daniel Borger has served as Seller’s primary North American asset manager since Seller’s purchase of the Property and Kal Hazer has been the employee of Manager with primary responsibility for the Property for at least five (5) years.

 

6.9 As-Is Sale . EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE SALE OF THE PROPERTY IS AND WILL BE MADE ON AN “AS IS”, “WHERE IS,” AND “WITH ALL FAULTS” BASIS, WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY REPRESENTATION OR WARRANTY CONCERNING TITLE TO THE PROPERTY, THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING THE CONDITION OF THE SOIL OR THE IMPROVEMENTS), THE ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR AFFECTING THE PROPERTY), THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND REGULATIONS (INCLUDING ZONING AND BUILDING CODES OR THE STATUS OF DEVELOPMENT OR USE RIGHTS RESPECTING THE COMPANY PROPERTY), THE FINANCIAL CONDITION OF SELLER OR ANY TENANT OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING ANY INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHTS OR CLAIMS ON, AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF. PURCHASER ACKNOWLEDGES THAT SELLER DOES NOT MAKE ANY REPRESENTATION OR

 

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WARRANTY REGARDING THE OFFERING MEMORANDUM PREPARED BY BROKER FOR THE PROPERTY AND THAT SELLER SHALL NOT HAVE ANY LIABILITY FOR ANY ERROR, OMISSION OR INACCURACY THEREIN. PURCHASER FURTHER ACKNOWLEDGES THAT, DURING THE DUE DILIGENCE PERIOD, PURCHASER WILL EXAMINE, REVIEW AND INSPECT ALL MATTERS THAT IN PURCHASER’S JUDGMENT BEAR UPON THE COMPANY AND THE COMPANY PROPERTY AND ITS VALUE AND SUITABILITY FOR PURCHASER’S PURPOSES. EXCEPT AS TO MATTERS SPECIFICALLY SET FORTH IN THIS AGREEMENT: (A) PURCHASER WILL ACQUIRE SELLER’S INTEREST SOLELY ON THE BASIS OF ITS OWN PHYSICAL AND FINANCIAL EXAMINATIONS, REVIEWS AND INSPECTIONS OF THE PROPERTY AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE OWNER’S POLICY, AND (B) WITHOUT LIMITING THE FOREGOING, PURCHASER WAIVES ANY RIGHT IT OTHERWISE MAY HAVE AT LAW OR IN EQUITY, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SEEK DAMAGES FROM SELLER IN CONNECTION WITH THE CONDITION OF THE PROPERTY, INCLUDING ANY RIGHT OF CONTRIBUTION UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT. SELLER IS UNDER NO DUTY TO MAKE ANY AFFIRMATIVE DISCLOSURES OR INQUIRY REGARDING ANY MATTER WHICH MAY OR MAY NOT BE KNOWN TO SELLER, AND PURCHASER, FOR ITSELF AND FOR ITS SUCCESSORS AND ASSIGNS, HEREBY EXPRESSLY WAIVES AND RELEASES SELLER AND ITS PARTNERS FROM ANY SUCH DUTY THAT OTHERWISE MIGHT EXIST.

 

6.10 No Seller Duty to Cure . Any reports, repairs or work required by Purchaser are the sole responsibility of Purchaser, and Purchaser agrees that there is no obligation on the part of Seller to make any changes, alterations or repairs to the Property or to cure any violations of Law or to comply with the requirements of any insurer.

 

6.11 Release of Seller . Except as expressly provided in this Section 6.11 , Purchaser, for Purchaser and Purchaser’s successors and assigns, hereby releases Seller and its partners from, and waives all claims and liability for or attributable to, the following:

 

6.11.1 any and all statements or opinions heretofore or hereafter made, or information furnished, by Seller, Broker, Manager or any of their representatives; and

 

6.11.2 any and all losses, costs, claims, liabilities, expenses, demands or obligations of any kind or nature whatsoever attributable to the Property, whether arising or accruing before, on or after the Closing Date and whether attributable to events or circumstances which have heretofore or may hereafter occur, including, without limitation, all losses, costs, claims, liabilities, expenses, demands and obligations with respect to the structural, physical, or environmental condition of the Property;

 

provided , however , that the release and waiver set forth in this Section 6.12 is not intended and shall not be construed to affect or impair any rights or remedies that Purchaser may have against Seller as a result of a breach of any of Seller’s warranties or of any covenant of Seller expressly set forth in this Agreement to the extent the same expressly survive Closing or as a result of Seller’s fraud.

 

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6.12 Survival . The foregoing representations, warranties and covenants of Seller in this Section (except Sections 6.1, 6.2 and 6.4) should survive the Closing for six (6) months.

 

6.13 Closing Constitutes Waiver . Notwithstanding and without limiting the foregoing, if any of the representations or warranties of Seller contained in this Agreement or in any certificate delivered in connection herewith are materially false or inaccurate, or Seller is in material breach or default of any of its obligations under this Agreement, but Purchaser nonetheless closes the transactions hereunder and purchases the Property, then (i) Seller shall have no liability or obligation respecting such false or inaccurate representations or warranties or other breach or default (and any cause of action resulting therefrom shall terminate upon the Closing) in the event and to the extent that on or prior to the Closing, Purchaser shall have had actual knowledge of the false or inaccurate representations or warranties or other breach or default, and (ii) to the extent the due diligence materials furnished or made available to Purchaser contain provisions or information that are inconsistent with the foregoing representations and warranties (unless Seller had actual knowledge of such inconsistency and failed to disclose the same to Purchaser), such representations and warranties being deemed modified to the extent necessary to eliminate such inconsistency and to conform such representations and warranties to such due diligence materials.

 

SECTION 7

PURCHASER’S REPRESENTATIONS AND WARRANTIES

 

7.1 Authority . Purchaser represents and warrants to Seller that Purchaser is a Delaware limited partnership, duly organized and validly existing under the laws of the State of New Jersey and has all necessary power to execute and deliver this Agreement and perform all of its obligations hereunder. The execution, delivery and performance of this Agreement by Purchaser, (A) has been duly and validly authorized by all necessary action on the part of Purchaser, (B) does not conflict with or result in a violation of Purchaser’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which Purchaser is a party, and (C) to Purchaser’s knowledge, does not conflict with or constitute a breach of, or constitute a default under, any contract, agreement or other instrument by which Purchaser is bound or to which Purchaser is a party.

 

7.2 No Conflict with Laws . To Purchaser’s knowledge, the execution and delivery of this Agreement by Purchaser and the performance by Purchaser of its obligations hereunder will not conflict with or result in a breach of any law, order, judgment, writ, injunction or decree of any court or governmental instrumentality having jurisdiction over Purchaser.

 

7.3 No Bankruptcy . Purchaser is not a party to any voluntary or involuntary proceedings under any applicable laws relating to insolvency, bankruptcy, moratorium or other laws affecting creditors rights to the extent that such laws may be applicable to Purchaser and impair Purchaser’s ability to perform this Agreement.

 

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7.4 Litigation . Purchaser has not received written notice, nor does Purchaser have any actual knowledge, of any litigation, proceeding or action that would or could have an adverse effect upon Purchaser or upon Purchaser’s ability to perform under this Agreement.

 

7.5 Survival . The foregoing representations and warranties of Purchaser shall not survive the Closing.

 

SECTION 8

SELLER’S COVENANTS

 

8.1 Notices of Violation . As soon as Seller has actual knowledge, Seller shall provide Purchaser with written notice of any violation of any Legal Requirements or Insurance Requirements affecting the Property, any service of process which relates to the Property or which affects Seller’s ability to perform its obligations under this Agreement or any allegations of a material default received from any Tenant. If Seller is unwilling or unable to remove such violation or comply with such notices by or before Closing, and the cost curing such violation or complying with such notice exceeds $100,000.00, Purchaser shall have the option to (a) waive such notification and proceed to close without reduction in the Purchase Price; (b) terminate this Agreement and receive a return of the Earnest Money unless after receipt of notice of termination from Purchaser, Seller elects to reinstate this Agreement by committing in writing to cure such violation or comply with such notice, at Seller’s sole cost and expense, as soon as reasonably possible after the Closing Date and in connection therewith Seller shall deposit with Purchaser cash or other security reasonably satisfactory to Purchaser to cover the estimated cost to cure such violation or comply with such notice.

 

8.2 Lease Obligations . Seller shall use Commercially Reasonable Efforts to comply with all of the landlord’s obligations under the Lease. Seller will not enter into any lease with regard to the Property, and will not amend, modify or cancel any of the Lease, unless Purchaser has given its prior written consent, such consent not to be unreasonably withheld.

 

8.3 Employees . Seller shall not hire any employees (and none are currently employed) with respect to the ownership, maintenance, repair, use, operation or enjoyment of the Property whose employment is not terminable by Seller, without penalty, payment or expense, at or prior to Closing.

 

8.4 Operating Agreements . Seller shall not, without Purchaser’s written consent, which consent shall not be unreasonably withheld or delayed, enter into or consent to any Operating Agreements (except those which are terminable without premium, cost, expense or penalty on not more than thirty (30) days’ notice). Seller shall submit to Purchaser a copy of any proposed Operating Agreement, together with such information regarding the proposed Operating Agreement as is reasonably available to Seller and as Purchaser may reasonably request. Purchaser shall respond to the same within seven (7) days after receipt of the request, and shall be deemed to have approval the same unless written objection or disapproval is given within such seven (7) day period.

 

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8.5 Tenant Estoppel Certificates . Seller shall good faith efforts to obtain a Tenant Estoppel Certificate from Tenant at least three (3) Business Days prior to Closing. Obtaining such Tenant Estoppel Certificate shall be a condition to Closing as set forth in Section 10.1.4(a) below, but, as long as Seller uses good faith efforts, Seller shall not be in default under this Agreement and Purchaser’s sole remedy for failure of such condition shall be termination of this Agreement and receipt of a refund of the Earnest Money.

 

SECTION 9

PURCHASER’S DUE DILIGENCE AND INSPECTION OF PROPERTY

 

9.1 Outstanding Deliveries by Seller for Initial Diligence . Seller has delivered to Purchaser certain due diligence submissions requested by Purchaser. Seller shall deliver to Purchaser the additional Submission Items (if any) set forth on Schedule 9.1 attached hereto not later than five (5) Business Days after the Effective Date.

 

9.2 Inspection of Property . Purchaser or its appointed agents or independent contractors shall have, at all reasonable times prior to the Closing and subject to the rights of the Tenant under the Lease, the privilege of going upon the Land and in the Improvements, at Purchaser’s sole cost and expense, contacting the Tenant, inspecting, examining, testing, appraising and surveying the Property; provided that Purchaser shall not deal directly with Tenant without affording Seller the opportunity to have a representative present. In exercising the privileges granted pursuant to this Section, Purchaser shall use Commercially Reasonable Efforts to avoid interfering with the use and enjoyment of the Property by any Tenant, and Purchaser shall substantially restore the Property to the condition existing prior to such activities on the Property. No physically invasive testing may be undertaken without the prior written consent of Seller. In consideration of Purchaser’s right to inspect the Property as described in this Section, Purchaser agrees to indemnify, defend and hold Seller and Tenant harmless from any actions, suits, liens, claims, damages, expenses (including reasonable attorneys’ fees), losses and liabilities for damage to personal property or personal or bodily injury arising from or attributable to any acts performed in exercising Purchaser’s rights under this Section 9.2 (including, without limitation, any rights or claims of materialmen or mechanics to liens on the Property, but excluding any matter to the extent arising primarily out of the negligence or misconduct of Seller and excluding damages resulting from Purchaser’s discovery of any adverse conditions). Prior to entry on the Property, Purchaser shall provide evidence of liability insurance reasonably satisfactory to Seller and naming Seller and its mortgagee as an additional insured. This agreement to indemnify Seller shall survive the Closing and any termination of this Agreement.

 

9.3 Due Diligence Period . Purchaser shall have the right to terminate this Agreement prior to the expiration of the Due Diligence Period if Purchaser elects not to proceed with the purchase for any reason or no reason by delivering written notice to Seller (the “Acceptance Notice”). If Purchaser fails to deliver an Acceptance Notice prior to the expiration of the Due Diligence Period, this Agreement shall automatically terminate and the Good Faith Deposit shall be refunded to Purchaser.

 

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SECTION 10

CLOSING

 

10.1 Closing Date . The Closing shall be held during regular business hours on or before September 15, 2005; provided, that Purchaser shall have the right to extend the Closing Date for up to two (2) additional Business Days if (a) Purchaser is prevented from closing on September 15, 2005 for reasons that are wholly outside of Purchaser’s control, (b) Purchaser sends written notice of extension not later than September 13, 2005, with a representation as to the specific cause for delay. The Closing shall be a so called “New York style closing” held at the offices of Herrick, Feinstein LLP, Purchaser’s counsel, located at 2 Park Avenue, New York, New York 10016, and the exact time and Closing Date shall be selected by Purchaser by written notice to delivered to Seller not less than five (5) days prior to the date so selected.

 

10.2 Delivery; Possession . At Closing, Seller shall deliver to Purchaser the items required of Seller under this Agreement, and Purchaser shall deliver to Seller the Purchase Price (after making the adjustments and prorations as provided herein), together with the other items required of Purchaser under this Agreement. Seller shall deliver possession of the Property to Purchaser, subject only to the Permitted Exceptions and the Surviving Contracts, at the time of Closing. Subject to Section 14 and 15 below, risk of loss shall remain with Seller until Closing.

 

10.3 Closing Costs .

 

10.3.1 Seller’s Costs . Seller shall pay (A) the fees and expenses of Seller’s attorneys, (B) all charges for releases of applicable documents evidencing or securing Seller’s financing, (C) one-half (1/2) of any intangible tax, grantee or grantor tax, transfer tax and deed stamps payable in connection with the transfer of the Property or the recording of the Deed, and (D) one-half of all escrow charges.

 

10.3.2 Purchaser’s Costs . Purchaser shall pay (A) any costs incurred by Purchaser in preparing and performing its due diligence investigations, including, without limitation, the cost of environmental or engineering investigations in addition to those undertaken in connection with the Environmental Report and other reports made available to Purchaser, (B) the fees and expenses of Purchaser’s attorneys, (C) one-half (1/2) of any indexing fee, intangible tax, grantor or grantee tax, transfer tax, deed stamps or other governmental charges payable in connection with the transfer of the Property or recording of the Deed, (D) the cost of the Title Commitment and the Title Policy, (E) the cost of the As-Built Survey, and (F) one-half of all escrow charges.

 

10.3.3 Other Costs . Any other costs not specifically provided for in Section 10.3.1 and Section 10.3.2 hereof shall be paid by the party who incurred those costs, or if neither party is charged with incurring any such costs, then by the party customarily assessed for such costs in the place where the Property is located.

 

10.3.4 Survival . The provisions of this Section 10.3 shall survive the Closing.

 

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10.4 Conditions to Closing .

 

10.4.1 Purchaser’s Conditions to Closing . The obligation of Purchaser to consummate the purchase the Property is expressly conditioned upon the fulfillment or satisfaction of each of the following conditions on or before the Closing Date:

 

(A)

Purchaser shall have received the Tenant Estoppel Certificate;

 

(B)

Seller shall have performed each material undertaking, covenant and agreement to be performed by Seller under this Agreement, including, but not limited to, delivery of all items and documents required under Section 12 below;

 

(C)

Each representation and warranty made in this Agreement by Seller shall be true and correct in all material respects as of the Closing Date, except due to changes in facts and circumstances disclosed to Purchaser, it being agreed that failure of a representation or warranty to be true and correct due to a change in the facts or circumstances (not caused by Seller’s willful or intentional misconduct) shall not constitute a default by Seller under this Agreement but shall merely be deemed a failure of condition if the cost to cure such change in fact or circumstance, or the aggregate decrease in the value of the Property is more than $100,000.00; and

 

(D)

Purchaser shall have received the Owner’s Title Policy, or in lieu of issuance of the foregoing at Closing,