UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 12, 2006
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ONE LIBERTY PROPERTIES, INC.
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(Exact name of Registrant as specified in charter)
Maryland 001-09279 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
(Address of principal executive offices) (Zip code)
516-466-3100
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Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
-- Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
-- Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
-- Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
-- Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
A. Sale of a Single Property
One June 12, 2006, OLP Brooklyn Pavilion, LLC, a joint venture of the registrant
(in which the registrant holds a 50% equity interest) entered into a Contract of
Sale with HID Acquisition Group LLC ("HID"), pursuant to which HID has agreed to
purchase, and OLP Brooklyn Pavilion, LLC has agreed to sell, a real property
improved with a movie theater for $16,000,000. The Contract of Sale was entered
into at arms length.
Consummation of the transaction is conditioned upon satisfaction of specific
terms and conditions and delivery of specific documents as is customary for
transactions of this type, including, without limitation, a current tenant
estoppel certificate with respect to the property. Among the conditions to HID's
obligations to close under the Contract of Sale, the tenant under the property's
lease must not be in default of certain rental obligations and must, subject to
certain exceptions, be operating the theater at the property. The annual rent
under the property's lease is currently $1,128,000.
B. Sale of Nine Properties
On June 14, 2006, eight entities which are wholly-owned by two joint ventures of
the registrant (the registrant holds a 50% equity interest in each joint
venture) and a wholly-owned subsidiary of the registrant (collectively, the
"Sellers") entered into a Contract of Sale with ECM Diversified Income & Growth
Fund, LLC (the "Buyer"), pursuant to which the Buyer has agreed to purchase, and
the Sellers have agreed to sell, nine real properties for an aggregate purchase
price of $151,885,050. Of this amount, approximately $15,227,423 is allocated to
the property owned by registrant's subsidiary, and the balance to the eight
properties owned by the eight entities which are wholly-owned by the two joint
ventures. Each property is improved with a movie theater. The Contract of Sale
was entered into at arms length.
Consummation of the transaction is conditioned upon satisfaction of specific
terms and conditions and delivery of specific documents as is customary for
transactions of this type, including, without limitation, current tenant
estoppel certificates. In addition, Buyer has been afforded a 35-day due
diligence period, pursuant to which Buyer may, in its sole discretion, terminate
the Contract of Sale for any reason. Among the conditions to Buyer's obligations
to close under the Contract of Sale, no default by a Seller or tenant shall
exist with respect to any property lease other than matters known to Buyer
before the expiration of the due diligence period. Currently, the aggregate
annual rent under the leases applicable to the eight properties owned by the
eight entities which are wholly-owned by the two joint ventures is $10,365,000,
and the annual rent under the lease applicable to the property owned by the
registrant's subsidiary is $1,155,000.
Some or all of registrant's gain in connection with these two transactions may
be deferred for income tax purposes by registrant entering into one or more
tax-deferred exchanges under Section 1031 of the Internal Revenue Code of 1985,
as amended, and using the sale proceeds to acquire one or more replacement
properties. However, the registrant can provide no assurance that suitable
replacement properties will be located in accordance with applicable statutory
and regulatory requirements to effectuate the tax-deferred exchange, and even if
such replacement properties are located, the registrant may determine not to
pursue a tax-deferred exchange.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Shell Company Transactions. Not applicable.
(d) Exhibits.
10.1 Contract of Sale, dated as of June 12, 2006, between
OLP Brooklyn Pavilion, LLC and HID Acquisition Group, LLC.
10.2 Contract of Sale, dated as of June 14, 2006, by and
among OLP Chula Vista Corp., OLP Norwalk LLC, OLP
Austell, LLC, OLP Beavercreek LLC, OLP Southlake,
LLC, OLP Roanoke, LLC, OLP Lubbock Venture Limited
Partnership, OLP Live Oak Limited Partnership, OLP
Henrietta, LLC, and ECM Diversified Income & Growth
Fund, LLC.
99.1 Press Release of registrant issued on June 16, 2006.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Date: June 16, 2006 By: /s/ David W. Kalish
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David W. Kalish
Senior Vice President and
Chief Financial Officer
EXHIBIT 10.1
CONTRACT OF SALE
This CONTRACT OF SALE (this "Contract") is made and entered into as of
the 12th day of June, 2006 by and between OLP Brooklyn Pavilion, LLC, a Delaware
limited liability company having an address at 60 Cutter Mill Road, Suite 303,
Great Neck, New York 11021 (the "Seller") and HID Acquisition Group, LLC, a New
York limited liability company having an address at 65 West 36th Street, Suite
1200, New York, New York 10018 (the "Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS Seller is the owner of that certain real property (and all
improvements thereon located) more particularly described on Exhibit A attached
hereto and made a part hereof; and
WHEREAS, Seller desires to sell the Premises (as hereinafter defined)
to Purchaser and Purchaser desires to acquire the Premises from Seller in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the sufficiency of which being hereby acknowledged, the parties
hereto do hereby agree as follows:
1. Purchase Price. Seller agrees to sell and Purchaser agrees to
acquire all of Seller's right, title and interest in and to the Premises for a
purchase price (the "Purchase Price") equal to SIXTEEN MILLION AND NO/100
DOLLARS ($16,000,000.00), payable by Purchaser as follows:
A. $600,000.00 upon the execution and delivery of this
Contract as the nonrefundable (except as specifically set forth herein)
downpayment (the "Downpayment"), by check or by wire transfer of immediately
available funds payable to Escrow Agent (hereafter defined), which sum shall be
held in escrow pursuant to the terms of this Contract; and
B. $15,400,000.00 at the Closing, by wire transfer of
immediately available funds to an account(s) designated by Seller.
2. Premises. For the purposes hereof, "Premises" shall mean (a) that
certain parcel of land commonly known as 187-191 Prospect Park West (a/k/a 188
Prospect Park West a/k/a 496 14th Street), Brooklyn, New York, as more
particularly bounded and described in Exhibit A attached hereto and hereby made
a part hereof (the "Land"), together with (i) the building erected thereon (the
"Building") and any and all other fixtures and improvements erected thereon (the
Building and such other fixtures and improvements being hereinafter collectively
referred to as the "Improvements"); (ii) the land lying in the bed of any
street, highway, road or avenue, opened or proposed, public or private, in front
of or adjoining the Land, to the center line thereof, (iii) any rights of way,
appendages, appurtenances, easements, sidewalks, alleys, gores or strips of land
adjoining or appurtenant to the Land or any portion thereof and used in
conjunction therewith, (iv) any development rights appurtenant to the Land or
any portion thereof, and (v) any unpaid award for damage to the Land or any of
the Improvements by reason of change of grade or closing of any street, road or
avenue, it being understood and agreed that Seller will execute and deliver to
Purchaser on the Closing Date (as hereinafter defined) or thereafter (which
obligation shall survive the Closing (as hereinafter defined), upon reasonable
written request, all proper instruments for the conveyance of such right, title
and interest and for the assignment and collection of any such awards or
payments, without representation or warranty by or recourse to Seller), (b) all
fixtures, machinery, tangible personal property and equipment (excluding
furniture, furnishings, equipment and other personal property of Tenant (as
hereinafter defined) used in connection with or attached or appurtenant to or at
or upon all or any portion of the Land and the Improvements at the date hereof,
including, without limitation, such fire protection, heating, plumbing,
electrical and air conditioning systems as now exist thereat, (c) the interest
of the landlord in and to the Lease (as hereinafter defined) (with the parties
acknowledging that there is no security deposit under the Lease and accordingly
no security deposit to be transferred to Purchaser), and (d) to the extent
assignable, permits and licenses, if any, held solely for use in connection with
all or any portion of the Land and the Improvements.
3. Escrow. Concurrently with the execution of this Contract, Purchaser
has delivered the Downpayment to First American Title Insurance Company of New
York, as escrow agent ("Escrow Agent") in the form required by Paragraph 1.A.
above. Escrow Agent shall deposit the Downpayment into an interest-bearing
account(s) maintained at a federally insured financial institution(s). Escrow
Agent shall deliver the Downpayment in accordance with this Contract, or a joint
instruction signed by Seller and Purchaser, or separate instructions of like
tenor signed by Seller and Purchaser, or a final judgment of a court of
competent jurisdiction. Escrow Agent hereby is authorized and directed to
deliver the Downpayment to Seller if, as and when title closes. If Escrow Agent
shall receive a written request by one party for the release of the escrow,
Escrow Agent will give a copy thereof to the other party. If Escrow Agent shall
not receive an objection from the other party within five (5) business days,
then Escrow Agent shall so release the Downpayment. If Escrow Agent receives an
objection, then Escrow Agent shall continue to hold the Downpayment in
accordance with the terms hereof. Escrow Agent at any time may deposit the
Downpayment with a court of competent jurisdiction, and upon notice to Seller
and Purchaser of such deposit, Escrow Agent shall have no further responsibility
or liability hereunder. Escrow Agent may act upon any instruction or other
writing believed by Escrow Agent in good faith to be genuine and to be signed or
presented by the proper persons. Except as otherwise noted herein, any interest
or income thereon shall be paid to the party entitled to receive the
Downpayment.
Seller and Purchaser acknowledge that Escrow Agent is merely a
stakeholder, and that Escrow Agent shall not be liable for any act or omission
unless taken or suffered in bad faith, in willful disregard of this Contract or
involving gross negligence. Escrow Agent shall not be liable for the failure of
the institution(s) in which the Downpayment has been deposited or for
establishing accounts in excess of applicable guaranty limits. Seller and
Purchaser agree to indemnify and hold Escrow Agent harmless from and against any
and all reasonable costs, claims or expenses incurred in connection with the
performance of the Escrow Agent's duties hereunder, unless such costs, claims or
expenses were occasioned by Escrow Agent's bad faith, willful disregard of this
Contract or Escrow Agent's gross negligence.
Escrow Agent shall not be bound by any agreement between Seller and
Purchaser, whether or not Escrow Agent has knowledge thereof, and Escrow Agent's
only duties and responsibilities shall be to hold, and to dispose of, the
Downpayment and interest earned thereon in accordance with this Contract. Escrow
Agent may consult with counsel, and any opinion of Escrow Agent's counsel shall
be full and complete authorization and protection in respect to any action taken
or omitted by Escrow Agent hereunder in good faith and in reliance upon such
opinion.
All instructions or notices given to the Escrow Agent shall be in
writing and delivered in accordance with the requirements of this Contract. For
purposes of this Paragraph, such instructions and notices shall be deemed
delivered on the date of delivery, if by hand, or on the date of mailing if
mailed, except that no instruction or notice to Escrow Agent shall be deemed
effectively delivered to Escrow Agent until actual receipt thereof by Escrow
Agent.
4. Premises Sold "AS IS".
A. PURCHASER EXPRESSLY UNDERSTANDS AND AGREES AND ACKNOWLEDGES
THAT SELLER WOULD NOT HAVE ENTERED THIS CONTRACT WITHOUT THE EXPRESS PROVISIONS
OF THIS PARAGRAPH 4. IT IS UNDERSTOOD THAT THE PREMISES AND ALL IMPROVEMENTS AND
FIXTURES SHALL BE DELIVERED "AS IS", "WHERE IS" IN THEIR CURRENT CONDITION AND
WITH ALL FAULTS, SUBJECT TO REASONABLE WEAR AND TEAR AND DETERIORATION BETWEEN
NOW AND THE CLOSING DATE. SELLER SHALL NOT BE LIABLE FOR ANY LATENT OR PATENT
DEFECTS IN THE PREMISES. PURCHASER ACKNOWLEDGES THAT, EXCEPT AS MAY BE HEREIN
SPECIFICALLY SET FORTH, NEITHER SELLER NOR ANY OF ITS REPRESENTATIVES,
EMPLOYEES, MEMBERS, OFFICERS, DIRECTORS, SHAREHOLDERS, TRUSTEES, MEMBERS,
PARTNERS, COUNSEL OR AGENTS HAS MADE OR WILL IN THE FUTURE MAKE ANY DISCLOSURES,
REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL CONDITION, STATE OF REPAIR,
TENANCY, INCOME, EXPENSES OR OPERATION OF THE PREMISES. EXCEPTING ONLY THOSE
REPRESENTATIONS (IF ANY) SPECIFICALLY SET FORTH IN THIS CONTRACT, PURCHASER
ACKNOWLEDGES THAT IT HAS NOT RELIED ON ANY REPRESENTATIONS, WARRANTIES OR OTHER
STATEMENTS WHETHER ORAL OR WRITTEN IN ITS DECISION TO ACQUIRE THE PREMISES IN
ACCORDANCE WITH THE TERMS HEREOF. PURCHASER ALSO ACKNOWLEDGES THAT IT HAS NOT
RELIED ON ANY "BROKER SET-UPS" OR ANY OTHER COMMUNICATIONS FROM ANY REAL ESTATE
BROKER, MANAGING AGENT OR SIMILAR PARTY.
IN PARTICULAR, EXCEPT AS MAY BE HEREIN SPECIFICALLY SET FORTH, SELLER
HAS NOT MADE (AND IS UNWILLING TO MAKE) ANY DISCLOSURES, REPRESENTATIONS OR
WARRANTIES IN RESPECT OF (I) THE PHYSICAL CONDITION OF THE PREMISES (INCLUDING,
WITHOUT LIMITATION, IN RESPECT OF THE PRESENCE, NON-PRESENCE OR CONDITION OF
HAZARDOUS MATERIALS (HEREAFTER DEFINED), (II) THE COMPLIANCE OR NON-COMPLIANCE
OF THE PREMISES WITH ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, THOSE
RELATING TO THE PROTECTION OF THE ENVIRONMENT OR THE HEALTH, SAFETY,
ACCESSIBILITY OR WELFARE OF EMPLOYEES, WORKERS OR GUESTS TO THE PREMISES
(INCLUDING BUT NOT LIMITED TO THE OCCUPATIONAL SAFETY AND HEALTH ACT, AS
AMENDED, AND THE AMERICAN WITH DISABILITIES ACT, AS AMENDED)), (III) THE
REVENUES, INCOME OR EXPENSES OF THE PREMISES, (IV) THE ADEQUACY OR INADEQUACY OF
THE UTILITIES, IF ANY, PROVIDED TO THE PREMISES, (V) THE ZONING OF THE PREMISES
OR (VI) ANY OTHER MATTER WHATSOEVER AND WHETHER OR NOT CONCERNING THE PREMISES.
PURCHASER ACKNOWLEDGES THE FOREGOING AND WARRANTS AND REPRESENTS THAT IT (OR ITS
PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY) HAS HAD SUFFICIENT TIME AND
OPPORTUNITY TO INSPECT THE PREMISES AND TO EVALUATE OTHER MATTERS DEEMED
IMPORTANT TO PURCHASER, THAT IT OR ITS PRINCIPAL OFFICER IS EXPERIENCED IN
OWNING REAL PROPERTY SIMILAR TO THE PREMISES AND THAT IT IS REPRESENTED BY
ADVISORS AND COUNSEL OF ITS CHOOSING.
For purposes hereof, "Hazardous Materials" shall mean and refer to
explosives, radioactive materials, asbestos, asbestos-containing materials,
polychlorinated biphenyls, lead, lead-based paint, radon, under and/or above
ground storage tanks, hazardous materials, toxic substances, hazardous wastes,
hazardous substances, mold, petroleum, petroleum based materials or any other
materials or substances which are listed or regulated in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 6901, et seq.), the Resources Conservation and Recovery Act of
1976 (42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.),
the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.), or any other
applicable federal, state or local laws.
B. Purchaser acknowledges there is no "due diligence period"
or similar inspection contingency contained in this Contract and accordingly,
Purchaser acknowledges that it has examined and inspected the Premises and is
satisfied with same in all respects, has reviewed the Lease and is satisfied
with same, has reviewed all applicable laws, ordinances, rules and governmental
regulations (including, but not limited to, those relating to building, zoning
and land use) affecting the Premises and the conformance and non-conformance of
the Premises with same and is satisfied with same and has investigated, examined
and approved the existence, quality, nature, adequacy and physical condition of
utilities serving the Premises.
C. By completing the Closing, without further documentation,
Purchaser, on behalf if itself and all of its officers, directors, members,
managers, trustees, beneficiaries, shareholders, employees, representatives,
successors and assigns, and their affiliates (collectively, the "Releasors"),
will automatically be deemed to have waived and relinquished any and all claims,
rights and remedies Releasors may now or hereafter have against Seller, its
successors, assigns, officers, directors, members, managers, trustees,
beneficiates, shareholders, employees, representatives and their respective
successors, assigns and affiliates (collectively, the "Seller Parties"), whether
known or unknown, which may arise from or be related to this Contract or in any
manner related to the Premises; provided, however, that the release contained
herein shall not be deemed to void the effect of any representations or
warranties made by Seller in this Contract if and to the extent same by their
terms survive Closing. The release contained herein shall survive the Closing
and the recordation of the Deed.
D. Purchaser acknowledges that Seller may have information
concerning the condition of the Premises, including information about its
environmental and/or structural condition including possibly prior environmental
or structural inspection reports but that Seller does not wish to expose itself
to any potential claims (including, without limitation, that any such
information or reports is in any manner deficient or that the information
disclosed is not all of the relevant information that may be available to Seller
on the matter). Accordingly, Purchaser agrees that Seller shall have no
obligation to provide any information regarding the environmental or physical
condition of the Premises. In the event that Seller should elect to provide any
such information notwithstanding the lack of any obligation to do so, Purchaser
acknowledges that any such information may not be all such information available
to Seller on any particular topic and Purchaser hereby waives any claim against
Seller and/or the Seller Parties related to any such information (including
without limitations claims that such information is wrong, is inaccurate, is
incomplete or that Seller knew or should have known that such information is
wrong, is inaccurate and/or is incomplete). Further, Purchaser is hereby
notified that the improvements at the Premises may have been originally
constructed or later renovated at a time when many builders typically used
asbestos containing materials in various parts of buildings (including without
limitation, fire proofing, floor tiles, ceiling tiles and insulation) and
Purchaser should assume that all such materials are asbestos-containing. Seller
is unwilling to make any representations or warranties regarding the presence
(or the condition) of asbestos at the Premises and to the fullest extent
permitted by applicable law, Purchaser hereby waives any such disclosure by
Seller to the extent that any applicable law, rule or regulation could be
construed to require a seller of real property to disclose to a purchaser any
specific information regarding asbestos.
E. This Paragraph 4 shall survive the Closing or earlier
termination of this Contract.
5. Lease; Signage License Agreement.
A. Purchaser acknowledges that Purchaser and its advisors have
had sufficient time and opportunity to examine the lease affecting the Premises
and all amendments thereto attached hereto as Exhibit B (collectively, the
"Lease").
B. Seller further discloses to Purchaser that the Signage
License Agreement attached hereto and made a part hereof as Exhibit C between
Seller, as licensor, and Town Sports International, Inc., as licensee, regarding
the use of a certain billboard sign at the Premises (the "Signage Agreement")
was previously entered into, but a letter dated April 13, 2006 seeking to
terminate such agreement, a copy of which is annexed hereto as Exhibit C-1, has
previously been sent by Seller to licensee thereunder.
C. Seller shall not collect rent under the Lease for a period
of more than thirty (30) days in advance. Seller shall not amend, modify or
extend the term of the Lease, or enter into any agreement granting any party
occupancy rights in the Premises, in each case without the prior written
approval of Purchaser, which approval shall not be unreasonably withheld.
Purchaser's approval or disapproval must be given within five (5) Business Days
(as hereinafter defined) of a Seller's request therefore, and if Purchaser shall
not timely respond to a request, then Purchaser shall be deemed to have approved
Seller's request. Seller shall not terminate or accept a surrender of the Lease
except that Seller may seek to enforce any and all of its rights and remedies in
connection with an event of default by Tenant under the Lease notwithstanding
the foregoing prohibition without affecting Purchaser's obligations hereunder.
6. Title.
A. The Premises are to be sold and conveyed subject only to
the Permitted Exceptions (as hereinafter defined). Purchaser agrees promptly
upon the execution of this Contract to cause title to the Premises to be
examined by Escrow Agent (sometimes referred to herein as the "Title Company")
and shall direct the Title Company to deliver copies the title report prepared
by the Title Company (the "Title Report") to Seller's attorney simultaneously
with the delivery of same to Purchaser. Purchaser further agrees that not later
than the date which is ten (10) Business Days following Purchaser's receipt of a
copy of the Title Report (but in no event later than the date that is thirty
(30) days from the date hereof), Purchaser will furnish to Seller's attorneys a
writing (the "Title Report Objection Notice") specifying any exceptions to title
to the Property set forth in the Title Report which Purchaser believes are not
Permitted Exceptions. Purchaser's failure to deliver the Title Report Objection
Notice to Seller on or prior to 5:00 P.M. on the outside date for the delivery
of the Title Report Objection Notice as set forth in the preceding sentence
shall constitute Purchaser's irrevocable acceptance of the Title Report and
Purchaser shall be deemed to have waived any right to object to any matters set
forth therein. If, after giving the Title Report Objection Notice to Seller, the
Title Company issues continuation reports or other written evidence indicating
any new title defect(s) which are not Permitted Exceptions and which were not
disclosed by the initial Title Report, then this Section 6 shall apply to such
new title defect(s) except that Purchaser shall have ten (10) Business Days
after receipt of such continuation report or other written evidence within which
to send to Seller a supplemental Title Report Objection Notice objecting to such
new defect(s) (failing which such defect(s) shall automatically be deemed to be
Permitted Exceptions). For the purposes of this Contract, the capitalized term
"Business Days" means any day of the year on which banks are not required or
authorized by law to close in New York City.
B. If, on the scheduled Closing Date, Seller is unable to convey to
Purchaser title to the Premises subject to and in accordance with the provisions
of this Contract, Seller shall be entitled, upon written notice delivered to
Purchaser on or prior to the Closing Date, to reasonable adjournments of the
Closing one or more times for a period not to exceed thirty (30) days in the
aggregate to enable Seller to convey such title to the Premises. If Seller does
not so elect to adjourn the Closing, or if at the adjourned date Seller is
unable to convey title subject to and in accordance with the provisions of this
Contract, Purchaser may terminate this Contract by written notice to Seller and
Escrow Agent delivered on or prior to the date that is seven (7) days from the
scheduled or adjourned Closing Date, as the case may be, in which event Escrow
Agent shall repay to Purchaser the Downpayment together with any interest earned
thereon. This Agreement shall thereupon be deemed canceled and become void and
of no further effect, and neither party hereto shall have any obligations of any
nature to the other hereunder or by reason hereof, except for those provisions
which are expressly stated herein to survive such termination. If Seller elects
to adjourn the Closing as provided above, this Contract shall remain in effect
for the period or periods of adjournment, in accordance with its terms. If the
Contract is not terminated by Purchaser pursuant to the foregoing provisions of
this Section 6.B, then Purchaser shall not have the right to refuse to close
hereunder due to the existence of title exceptions that are not Permitted
Exceptions.
C. Seller shall not be required to take or bring any action or proceeding or
any other steps to remove any defect in or objection to title, except that
notwithstanding anything to the contrary contained herein, Seller shall, on or
prior to the Closing Date (as hereinafter defined) discharge or remove of record
or cause to be paid, discharged or removed of record at Seller's sole cost and
expense, all of the following items: (a) mortgages created by Seller or under
which Seller is the current mortgagor, (b) Voluntary Liens (as hereinafter
defined) and (c) other liens encumbering the Property (including judgment liens,
mechanics' liens, and federal, state and municipal tax liens) that are in
liquidated amounts and which may be satisfied solely by the payment of money;
provided, however, that Seller shall not be obligated to discharge or remove of
record or cause to be paid, discharged or removed of record the liens described
in clause (c) above to the extent that any such liens are the result of Tenant's
acts or omissions or are otherwise the responsibility of the Tenant under the
Lease (all of which shall be deemed to be Permitted Exceptions hereunder). The
term "Voluntary Liens" as used herein shall mean liens and other encumbrances
placed on the Property as a result of the acts or omissions of Seller after the
date hereof but shall specifically not include liens and/or other encumbrances
that are created as a result of the acts or omissions of the Tenant under the
Lease or are otherwise the responsibility of the Tenant under the Lease.
Further, Seller shall not be required to remove, satisfy or discharge any ECB or
other violations affecting the Premises, all of which are Tenant's
responsibility pursuant to the Lease and all of which shall be deemed to be
Permitted Exceptions hereunder.
D. The Premises are sold subject to the following
(collectively, the "Permitted Exceptions"):
(i) All covenants, restrictions, easements and agreements of
record affecting the Premises on the date hereof provided same
are not violated by the Improvements and do not materially
adversely affect the use of the Building as a movie theater or
render title to the Premises unmarketable;
(ii) All liens for unpaid municipal charges (including taxes)
not yet due and payable;
(iii) The state of facts which would be shown by an accurate
survey or physical inspection of the Premises provided same do
not render title to the Premises unmarketable;
(iv) De minimis encroachments and projections of walls,
foundations, stoops, cellar steps, areas, cornices, trim or
other improvements or installations onto the Premises or from
such Premises onto adjoining property; party walls and party
wall rights; variations between the record lot lines of the
Premises and those shown on the tax maps; and consents for the
erection and maintenance of any structures on, under or above
any streets, or roads in front of or adjoining the Premises;
and
(v) The Lease and all rights of the Tenant under the Lease.
E. Purchaser agrees to accept a bargain and sale deed with
covenant against grantor's acts (the "Deed") in customary form
and in form satisfactory for recording.
7. Acceptance of Deed. The acceptance of the Deed by Purchaser shall
constitute and be deemed and considered full compliance by Seller with all the
terms and conditions of this Contract on the part of Seller to be performed
except with respect to those expressly stated herein to survive Closing, and
none of the provisions of this Contract shall survive the delivery and
acceptance of the Deed except insofar as may otherwise be expressly and
specifically provided in this Contract.
8. No Financing Contingency. It is expressly understood and agreed that
the obligations of Purchaser hereunder are NOT contingent on Purchaser being
able to secure financing for all or any portion of the Purchase Price.
9. Representations of Seller and Purchaser.
A. Seller represents to Purchaser that the following are true
and correct on the date hereof:
(i) Seller is a limited liability company duly
organized and in good standing in the State of Delaware and
is qualified in and in good standing in the State of New York and has the
requisite power and authority to enter into and to perform the terms of this
Contract.
(ii) The execution and delivery of this Contract and
the consummation of the transactions contemplated
hereby have been duly authorized by all requisite action of Seller. This
Contract constitutes, and each document and instrument contemplated hereby to be
executed and delivered by Seller, when executed and delivered, shall constitute
the legal, valid and binding obligation of Seller enforceable against Seller in
accordance with its respective terms (subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally).
(iii) Neither the execution of this Contract nor the
consummation by Seller of the transactions
contemplated by this Contract will (a) conflict with, or result in a breach of,
the terms, conditions or provisions of, or constitute a default, or result in a
termination of, any agreement or instrument to which Seller is a party, (b)
violate any restriction to which Seller is subject, (c) constitute a violation
of any applicable code, resolution, law, statute, regulation, ordinance,
judgment, rule, decree or order of which Seller is aware, or (d) result in the
creation of any lien, charge, or encumbrance upon the Premises. Seller is not in
default under any agreement or instrument where the liability thereunder might
adversely affect Seller's ability to perform its obligations under this
Contract.
(iv) Seller is not a "foreign person" within the
meaning of Section 1445 of the Internal Revenue Code
1986, as amended, or any regulations promulgated thereunder (collectively, the
"Code").
(v) To Seller's knowledge, there is no pending or
threatened condemnation or eminent domain proceedings
that would affect the Premises.
(vi) There are no actions or proceedings pending with
respect to the Premises and no actions or proceedings
pending against Seller which would in any way adversely affect the Premises or
Seller's ability to perform under this Contract, as the case may be.
(vii) Annexed hereto as Exhibit B is a true and
complete copy of the Lease, which Lease has not otherwise been modified or
amended and is in full force and effect on the date hereof.
(viii) Annexed hereto as Exhibit B-1 is a true and
complete copy of the guaranty of the Lease by Access Integrated Technologies,
Inc. (the "Guaranty"), which Guaranty has not otherwise been modified or
amended and is in full force and effect on the date hereof.
(ix) Except for the Lease annexed hereto as Exhibit
B, there are no written or oral agreements between
Seller and the current tenant of the Premises (the "Tenant").
(x) The Tenant has not asserted to Seller that Seller
is in default under the Lease.
(xi) All work, if any, to be performed by the
landlord under the Lease has been completed. Seller has not
sent any default letters to Tenant alleging any event(s) of default under the
Lease that remain uncured as of the date hereof except as disclosed by those
certain letters annexed hereto as Exhibit F and except that Seller has
informally requested that Tenant cure certain existing ECB and similar
violations affecting the Premises and has also previously requested certain
financial information from Tenant pursuant to section 18.2 of the Lease but same
has not been received to date. Minimum Annual Rent (as defined in the Lease) and
Reserve Fund Payments (as hereinafter defined) have been paid through the date
hereof. Landlord has not received any notice from the Tenant asserting its right
to cancel the Lease or to be released from any of its obligations thereunder or
asserting that Seller as landlord under the Lease has defaulted in performing
any of its obligations under the Lease.
(xii) The copy of the Signage Agreement annexed
hereto as Exhibit C is a true and complete copy of the
Signage Agreement, which has not otherwise been modified or amended. Seller has
sent to the Licensee under the Signage Agreement the letter annexed hereto as
Exhibit C-1.
(xiii) Seller has entered into no leases, licenses or
other occupancy agreements affecting any portion of
the Premises other than the Lease and the Signage Agreement.
(xiv) Pursuant to Section 4.3 of the Lease, Seller is
currently holding (a) the sum of $34,771.84 as a
reserve fund with respect to the payment of impositions against the Premises
(with the next payment of real estate taxes due on July 1, 2006 and accordingly
such amount is to be applied to payment of such impositions (and therefore may
be in a reduced amount at Closing) in accordance with the Lease), and (b) the
sum of $68,824.30 as a reserve fund with respect to premiums for the insurance
required to be maintained by Tenant pursuant to the Lease. Tenant currently pays
to Landlord (x) the monthly amount of $5,000 as a reserve fund payment with
respect to the payment of impositions against the Premises, and (y) the monthly
amount of $11,300 as a reserve fund payment with respect to premiums for the
insurance required to be maintained by Tenant pursuant to the Lease (such
payments being referred to herein as "Reserve Fund Payments").
B. Purchaser represents and warrants to Seller that the
following are true and correct on the date hereof:
(i) Purchaser is a limited liability company duly
organized and in good standing in the State of New York
and is qualified in and in good standing in the State of New York and has the
requisite power and authority to enter into and to perform the terms of this
Contract.
(ii) The execution and delivery of this Contract and
the consummation of the transactions contemplated
hereby have been duly authorized by all requisite action of Purchaser. This
Contract constitutes, and each document and instrument contemplated hereby to be
executed and delivered by Purchaser, when executed and delivered, shall
constitute the legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its respective terms (subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally).
The foregoing representations of Seller and Purchaser shall survive the Closing
for six (6) months.
10. Closing Costs.
A. Purchaser shall pay for all of its costs of closing
including its own attorney fees (except as otherwise expressly provided herein),
all title insurance premiums and title costs, all survey costs (if Purchaser
elects to obtain a survey), all recording fees in connection with recording the
Deed and the Lease Assignment (as hereinafter defined), and all other costs and
expenses customarily borne by purchasers in commercial transactions in New York
City.
B. Seller shall pay for all of its costs of closing including
its own attorney fees (except as may be otherwise provided herein), all
recording fees in connection with recording any required title curative
documents, all New York State and New York City transfer taxes due upon the sale
of the Premises. and all other costs and expenses customarily borne by sellers
in commercial transactions in New York City.
11. Adjustments.
A. The following items shall be apportioned as of 11:59 P.M on
the day preceding the Closing Date (with Seller being deemed to own the Premises
for all periods prior to the Closing Date and with Purchaser being deemed to own
the Premises from and after the Closing Date):
(i) Minimum Annual Rent under the Lease, as and when
collected.
(ii) Real estate taxes, water and sewer charges, and all other
municipal or governmental assessments levied or imposed upon the Premises,
except to the extent same are paid or reimbursed by the Tenant pursuant to the
Lease (in which event same shall not be apportioned between the parties).
B. Any Minimum Annual Rent collected after the Closing by
Seller or Purchaser shall be applied (i) first, in payment of Minimum Annual
Rent owed by the Tenant for the calendar month in which the Closing occurs, (ii)
next, in payment of Minimum Annual Rent owed by the Tenant for any month prior
to the month in which the Closing occurs, and (iii) then in payment of any
Minimum Annual Rent owed by the Tenant for any month after the month in which
the Closing occurs. Each such amount, less any costs of collection (including
reasonable attorneys' fees) reasonably allocable thereto, shall be adjusted and
prorated as provided above, and the party who receives such amount shall
promptly pay over to the other party the portion thereof to which it is so
entitled. The provisions of this Paragraph 11.B shall survive the Closing.
C. Any Reserve Fund Payments received by Seller after the
Closing shall be promptly forwarded to Purchaser (except if sent by Tenant
specifically in reimbursement to Seller for amounts previously advanced by
Seller on Tenant's behalf). The provisions of this Paragraph 11.C shall survive
the Closing.
D. Purchaser agrees to use its good faith efforts to attempt
to collect any delinquent rent after Closing; provided, however, that Purchaser
shall have no obligation to commence any actions or proceedings or to incur any
costs or expenses beyond normal and customary monthly billing statements to
collect any such delinquent rent. Seller shall retain its contract rights as
against the delinquent Tenant for any delinquent rent due to Seller; however, in
connection with same Seller may not seek to terminate the Lease or to dispossess
such Tenant from the Premises.
E. Seller shall retain all Reserve Fund Payments paid by
Tenant to Seller and not applied to the payment of impositions and insurance
premiums as provided for in Section 4.3 of the Lease, and Purchaser shall
receive a credit against the Purchase Price in the amount thereof.
12. Closing Date; Failure to Close
A. Subject to extensions expressly permitted in this Contract,
the closing (the "Closing") shall occur on or before the date that is
seventy-five (75) days after the date of this Contract (the "Closing Date"). The
Closing shall take place at the offices of Seller or through an escrow with the
Escrow Agent or, at Purchaser's election, at the offices of Purchaser's lender's
attorney in the New York metropolitan area. Purchaser shall have the one-time
right to extend the Closing Date on written notice to Seller for up to an
additional fifteen days, after which Purchaser's obligation to close on such
extended Closing Date shall be time of the essence.
B. Notwithstanding anything contained in this Contract to the
contrary it is understood and agreed that if Purchaser shall default in its
obligation to close hereunder, then this Contract shall terminate, neither party
shall have any further obligations to the other (except those expressly stated
herein to survive), and Seller's sole remedy shall be to retain the Downpayment
and any interest earned thereon as its liquidated damages, and Seller waives any
claim for specific performance or any other claim either against the Purchaser
or against any person disclosed or undisclosed. Seller and Purchaser acknowledge
that the amount of damages incurred by Seller as a result of a default by
Purchaser hereunder would be difficult or impossible to accurately predict and
Seller and Purchaser, after consultation with counsel of their own choosing,
agree that the liquidated damages provided for in this Subparagraph 12.B. are
reasonable sums to be used as liquidated damages. Notwithstanding anything to
the contrary set forth in this Contract, in the event Seller shall default
hereunder or in the event of any claim of Purchaser against Seller related to
this Contract or the Premises, Purchaser's sole right shall be to either recover
its Downpayment together with all interest earned thereon, along with
Purchaser's reasonable out-of-pocket title and survey costs, or to seek specific
performance of this Contract, with it being understood that Seller shall in no
event be liable for consequential or other monetary damages.
13. Closing Documents.
A. On the Closing Date, Seller agrees to execute and deliver
to Purchaser, or cause to be executed and delivered to Purchaser, as applicable,
the following documents:
(i) The Deed;
(ii) An assignment and assumption of the Lease in the form
annexed hereto as Exhibit D (the "Lease Assignment");
(iii) A bill of sale in form reasonable acceptable to Seller
and Purchaser;
(iv) A notice of sale to the Tenant under the Lease, advising
of the sale and directing such Tenant to make all further rent
payments to Purchaser as Purchaser may direct;
(v) The original Lease, and Seller's Lease files, and the
original Guaranty;
(vi) An affidavit pursuant to Section 1445 of the Internal
Revenue Code, as amended;
(vii) A New York City Real Property Transfer Tax Return (the
"RPTT") with respect to the conveyance of the Premises;
(viii) A New York State Combined Real Estate Transfer Tax
Return and Credit Line Mortgage Certificate (the "TP-584")
with respect to the conveyance of the Premises;
(ix) A New York State Real Property Transfer Report (the
"RP-5217") with respect to the conveyance of the Premises;
(x) An estoppel certificate from Tenant, in the form annexed
hereto as Exhibit E or in such other form which shall contain
substantially the same information as in such form annexed
hereto as Exhibit E, dated no more than twenty-five (25) days
prior to the Closing (with it being acknowledged and
understood that Seller's failure to deliver such estoppel
certificate shall be a failure of a condition precedent under
this Contract but shall specifically not constitute a default
by Seller nor give rise to any claim by Purchaser against
Seller under this Contract, provided that Seller shall use
commercially reasonable efforts to obtain such an estoppel
certificate from Tenant (with "commercially reasonable
efforts" in this context meaning requesting same from tenant
in writing and following up from time to time with Tenant as
appropriate under the circumstances in order to attempt to
obtain the signed estoppel; and further, if such estoppel
certificate shall disclose a default(s) of the Tenant under
the Lease then same shall nonetheless satisfy the closing
condition that Purchaser receive an estoppel certificate as
herein required);
(xi) A certification that all of Seller's representations and
warranties made in this Contract are true and correct on the
Closing Date (or a certification updating the same in the
event that any of Seller's representations have changed;
provided that if any of such representations have changed in
such a manner as would have a material adverse effect on
Purchaser's position as owner of the Premises, then same shall
be deemed a failure of a condition precedent hereunder and
Purchaser shall not be obligated to close hereunder and shall
have the right to either (a) terminate this Contract and
receive a return of the Downpayment and all interest earned
thereon or (b) waive such condition and close pursuant to this
Contract (with it being acknowledged and understood, however,
that any change in such Seller representations or warranties
to reflect defaults of Tenant under the Lease shall
specifically not be deemed a failure of such condition
precedent); and
(xii) Such other documents, including a customary title
affidavit as may be required by the Title Company, that shall
reasonably be required to consummate the transactions herein
contemplated.
B. On the Closing Date, Purchaser agrees to execute and
deliver to Seller the following:
(i) The balance of the Purchase Price;
(ii) The Lease Assignment;
(iii) The RPTT;
(iv) The TP-584;
(v) The RP-5217;
(vi) A certification that all of Purchaser's representations
and warranties made in this Contract are true and correct on
the Closing Date (or a certification updating the same in the
event that any of Purchaser's representations have changed);
and
(vii) Such other documents, including such evidence of
Purchaser's corporate authority as maybe required by the Title
Company, that shall reasonably be required to consummate the
transactions herein contemplated.
14. Pre-Closing Obligations of Seller. Between the date hereof and the
Closing Date, Seller shall:
A. cause the Tenant to keep the Premises and all parts thereof
in the same state of repair and condition as currently exists; provided that
nothing contained herein shall require Seller to threaten or bring any
litigation or any similar action in order to cause tenant to perform its
obligations under the Lease;
B. not withdraw, settle or compromise any reduction proceeding
affecting real estate taxes assessed against any Premises (if and to the extent
Seller's consent to same is required) without the prior consent of Purchaser
which consent shall not be unreasonably withheld or delayed, and any future
refunds and fees in connection with any such proceeding shall be prorated
between Purchaser and such Seller as of the Closing Date unless the Tenant is
entitled to or responsible for same under the Lease (with this Subparagraph
14.B. surviving the Closing and the delivery of the Deed); and
C. not remove any fixture, equipment or personal property
included in this sale unless the same is replaced with items of at least equal
value prior to the Closing Date.
15. Condemnation. As of the date hereof, Seller has no knowledge of any
pending or threatened condemnation proceedings affecting the Premises or any
part thereof. If prior to the Closing, all or substantially all of the Premises
shall be taken by condemnation, eminent domain or deed in lieu thereof, this
Contract shall be automatically terminated, the Downpayment shall be returned to
Purchaser and thereupon no party shall have any further liability or obligation
to the other except those obligations that are expressly stated herein to
survive. If prior to the Closing Date, a material portion, but less than all, of
the Premises shall be taken by condemnation, eminent domain or deed in lieu
thereof, then either Purchaser or Seller may, at their respective options,
terminate this Contract by sending written notice thereof within thirty (30)
days of the completion of such condemnation or other taking, in which event the
Downpayment shall be returned to Purchaser and thereupon no party shall have any
further liability or obligations to the others hereunder except those
obligations that are expressly stated herein to survive. For purposes hereof, a
portion of the Premises taken shall be deemed "material" only if same shall
result in the cancellation of the Lease and/or the reduction in rent under the
Lease resulting in the loss of five percent (5%) or more of the rent otherwise
payable under the Lease. If this Contract is not terminated pursuant to the
foregoing, then Purchaser shall (a) accept title to the Premises subject to the
condemnation or other taking, and (b) pay in full the Purchase Price and on the
Closing Date the net proceeds of the award or payment (after payment of all
actual out-of-pocket collection costs) shall be assigned without recourse by
Seller to Purchaser and all net monies theretofore received by Seller in
connection with such condemnation or other taking shall be paid over to
Purchaser or allowed as a credit against the Purchase Price hereunder (unless
previously used by such Seller in connection with the repair of the Premises in
connection therewith).
16. Casualty.
A. The risk of loss or damage or destruction to the Premises
by fire or other casualty is assumed by Seller until the Closing, but Seller
shall not be obligated to repair or replace any such loss or damage. In the
event of fire or other casualty, Seller shall have thirty (30) days to notify
Purchaser whether it intends to rebuild, or to cause the Tenant under the Lease
to rebuild, the affected portion of the Premises, but if Seller shall fail to
notify Purchaser of its election within such thirty (30) day period Seller shall
be deemed to have elected not to rebuild. If Seller elects (or is deemed to have
elected) not to repair or replace or cause to be repaired or replaced any such
loss or damage to the affected portion of Premises, then Purchaser shall have
the option of declaring this Contract terminated within thirty (30) days of
Seller's election not to rebuild, in which event Purchaser shall instruct Escrow
Agent to refund the Downpayment to Purchaser, whereupon this Contract and all
rights of Purchaser hereunder and to the Premises shall terminate and neither
Seller nor Purchaser shall have any further claim against the other except those
obligations that are expressly stated herein to survive. If Purchaser shall not
have elected to terminate this Contract as aforesaid, then Purchaser shall close
title in accordance with this Contract and pay in full the Purchase Price,
without any abatement thereof or claim against any Seller for such loss or
damage, and accepting an assignment, without recourse, of the applicable
Seller's rights, if any, to any payments to be made under any applicable hazard
insurance policies, if any, together with any payments under such policies made
to such Seller prior to the Closing not expended to repair or replace such loss,
damage or destruction. If a Seller elects to repair or replace, or cause to be
repaired or replaced, any such loss or damage, then Seller shall be entitled to
reasonable adjournments of the Closing Date in which to perform the work, not
exceeding one hundred twenty (120) days in the aggregate. If Seller elects to
repair or replace, or cause to be repaired or replaced, any such loss or damage
and if such repair is not substantially completed prior to the Closing Date (as
same may be adjourned by Seller pursuant to this Paragraph 16.A.), then
Purchaser shall have the option (to be exercised within ten (10) days after
Seller's notice that such repair was not substantially completed) of either: (a)
declaring this Contract terminated, in which event Seller or Purchaser shall
instruct Escrow Agent to refund the Downpayment to Purchaser, whereupon this
Contract and all rights of Purchaser hereunder and to the Premises shall
terminate and neither party shall have any further claim against the other
except with respect to obligations that are expressly stated herein to survive
or (b) closing title in accordance with this Contract and paying in full the
Purchase Price, without any abatement thereof or claim against any Seller for
such loss or damage, and accepting an assignment, without recourse, of such
Seller's rights, if any, to any payments to be made under any applicable hazard
insurance policies for work not yet completed, together with any payments under
such policies made to such Seller prior to the Closing not expended to repair or
replace such loss, damage or destruction. If Purchaser shall have failed to
timely make an election then it shall be deemed to have chosen the option in (b)
above.
B. If Seller receives a notice or request from any insurance
company or Board of Fire Underwriters (or other organization exercising
functions similar thereto) requesting the performance of any work or alteration
in respect of the Premises prior to the Closing Date, Seller agrees to promptly
send same to Purchaser and to attempt in good faith to cause the tenant under
the Lease to comply therewith; provided, however, that in no event shall Seller
be required to threaten or bring litigation or any similar action or expend any
sums in order to cause such tenant compliance.
17. Assignment; Tenancy in Common
A. Purchaser shall not assign this Contract or any interest
therein except to (i) any affiliate of Purchaser, or (ii) any person(s) who have
previously invested in any real estate transaction with Purchaser or any
affiliate thereof, or (iii) entity(ies) which includes any person(s) who have
previously invested in any real estate transaction with Purchaser or any
affiliate thereof; provided, however, that in all cases affiliates of Purchaser
shall either control the assignee or, if the assignment is to an entity that
will acquire a tenancy-in-common interest in the Premises, the tenants in common
shall sign a management agreement for the Premises with Purchaser or an
affiliate of Purchaser. In no event shall Purchaser be released from any of its
obligations under this Contract as a result of any such assignment. Such written
notice of assignment must be received by Seller no later than five (5) Business
Days prior to the scheduled Closing.
B. Subject to Section 17.A above, in the event that Purchaser
shall assign an interest in this Contract to an entity that will acquire an
interest in the Premises as a tenant in common, or otherwise if requested by
Purchaser (provided that Purchaser or an affiliate of Purchaser will own a
tenancy-in-common interest in the Premises), at the Closing, upon Purchaser's
prior written request, Seller shall convey tenancy-in-common interests in the
Premises as requested by Purchaser, and all documents to be delivered by Seller
at the Closing pursuant to the terms of this Contract shall reflect such
conveyances.
18. Brokers. Purchaser and Seller each represents and warrants that,
except for Massey Knakel Realty Services (the "Broker"): (i) it has not dealt
with any broker in respect of the sale of the Premises to Purchaser and (ii) no
broker brought the Premises to the attention of the Purchaser or was otherwise
involved in the Purchaser's interest in the Premises. Seller agrees to
compensate Broker at Closing pursuant to a separate agreement between Seller and
Broker. Each party shall indemnify, defend and hold harmless the other for any
claims which would constitute a breach of the foregoing representations and
warranties and Seller shall indemnify, defend and hold Purchaser harmless from
any claims as a result of Seller's breach of its covenant herein to compensate
the Broker under separate agreement. The provisions of this Paragraph 18 shall
survive the Closing and the delivery of the Deed or the earlier termination of
this Contract.
19. Section 1031 Tax Deferred Exchange. At the option of either Seller
or Purchaser, each party agrees to cooperate with the other to qualify this
transaction as a like-kind exchange of property described in Section 1031 of the
Internal Revenue Code of 1986, as amended. Seller and Purchaser further agree to
consent to the assignment of this Contract to a "Qualified Intermediary" and/or
take such other action reasonably necessary to qualify this transaction as a
like-kind exchange provided that (i) such exchange shall be at the cost and
expense of the requesting party, (ii) the other party shall incur no liability
as a result of such exchange and (iii) no such assignment of this Contract shall
relieve the requesting party of its obligations under this Contract and the
requesting party shall remain liable for the performance of its obligations
hereunder including, without limitation, the representations, warranties, and
covenants given by it under this Contract.
20. Purchaser's Conditions Precedent.
A. The obligations of Purchaser under this Contract are contingent upon
the satisfaction of each if the Conditions Precedent (hereafter defined) set
forth in subparagraph 20.B below, the failure of any of which shall entitle
Purchaser to elect either of the options contained in subparagraph 20.C below
pursuant to the terms, conditions and requirements of such subparagraph 20.C.
B. As of the Closing Date, (1) no petition shall have been filed by or
against the Tenant under the Lease under the United States Bankruptcy Code
naming such Tenant as debtor and remain undischarged; (2) the Tenant under the
Lease shall not have permanently ceased its operations at the Premises, i.e.,
so-called "going dark" (other than by reason of condemnation or casualty, in
which events Paragraphs 15 and 16, respectively, shall apply), and (3) the
Tenant under the Lease shall not then be in default, beyond applicable notice
and/or cure period(s), in its obligation to pay Minimum Annual Rent (as such
term is defined in the Lease) then due under the Lease (with the foregoing
conditions contained in (1), (2) and (3) being collectively referred to herein
as the "Conditions Precedent" and with each individually constituting a
"Condition Precedent").
C. In the event that any of the foregoing Conditions Precedent is not
satisfied as of the Closing Date, same shall not constitute a default by Seller
under this Contract but shall constitute only a failure of a condition precedent
to Purchaser's obligation to close under this Contract, and Purchaser may, at
its option and as its sole remedy for same, elect any of the following as
applicable:
(x) Purchaser may, within two (2) Business Days after the
originally-scheduled Closing Date (and the originally-scheduled Closing Date
shall automatically be extended for such two (2) Business Day period in order to
give Purchaser time to make its election), elect on written notice to Seller to
terminate this Contract, in which event the Downpayment and all accrued interest
thereon shall be returned to Purchaser and the parties shall have no further
obligations hereunder except such obligations as are expressly stated in this
Contract to survive; or
(y) Purchaser may proceed to Closing hereunder and consummate
the transactions contemplated by this Contract on the Closing Date (as extended
pursuant to (x) above), in which event Purchaser shall be deemed to have waived
the applicable Condition(s) Precedent, and in such event Seller shall have no
liability to Purchaser relating to the failure of the applicable Condition(s)
Precedent (and Purchaser's failure to timely elect either option (x) or (y) in
writing shall be deemed an election of this option (y)).
21. Miscellaneous.
A. If any party shall be required to employ an attorney to
enforce or defend the rights of such party related to this transaction or the
Premises, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs. This Paragraph 21.A shall survive the Closing or
earlier termination of this Contract.
B. This Contract contains the complete agreement between the
parties, supersedes all prior agreements (oral or written) and no term hereof
may be waived or amended except by the written agreement of the party to be
charged by such waiver or amendment. This Contract has been negotiated and shall
not be construed against its drafter. The parties agree that there are no oral
agreements, understandings, representations or warranties which are not
expressly set forth herein.
C. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given (a) when personally delivered with signed delivery receipt
obtained, (b) upon receipt, when sent by Federal Express, United Parcel Service,
or other prepaid reputable overnight courier, or (c) three (3) days after the
date so mailed, if sent by certified mail, return receipt requested, postage
prepaid in all cases addressed to the party to be notified at its address first
above set forth or to such other address as such party shall have specified most
recently by like notice (which change of address shall be effective fifteen (15)
days after notice thereof shall be given to the notified party). Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no notice was given as herein required shall be deemed to be receipt of
the notice sent. The requirement for a signed receipt confirming delivery shall
not be deemed to require that the specific individual to whom the applicable
notice is addressed be the person signing such receipt. Notices to Seller shall
be sent to the attention of Lawrence G. Ricketts, with a copy to Richard M.
Figueroa at Seller's address set forth above. Notices to Purchaser shall be sent
to the attention of Abraham J. Hidary, with a copy to Wachtel & Masyr, LLP, 110
East 59th Street, New York, New York 10022, Attention Morris Missry, Esq.
Notices to Escrow Agent shall be sent to First American Title Insurance Company
of New York, 633 Third Avenue, New York, New York 10017, Attention: Jeffrey S.
Mitzner.
D. The respective attorneys for Seller and Purchaser are
authorized to give any notices required or permitted to be sent hereunder.
E. If requested by Purchaser, Seller shall request that its
existing mortgage lender assign the mortgage affecting the Premises to be
assigned (without recourse) to Purchaser's lender at the Closing, it being
understood and agreed that (i) reference herein to "Purchaser's lender" in no
way imposes a financing contingency on Purchaser's obligation to close under
this Contract and the parties acknowledge that the obligations of Purchaser
hereunder are not contingent on Purchaser being able to secure financing of any
kind, (ii) any request made by Seller on behalf of Purchaser pursuant to this
Section 21.E is made solely as an accommodation to Purchaser and the failure of
Seller's exiting mortgage lender to so assign its mortgage for any reason shall
in no way affect the obligations of Purchaser under this Contract nor shall same
delay in any manner the Closing Date, and (iii) such request, if made by
Purchaser, shall be made at no out-of-pocket cost to Seller and Purchaser shall
be solely responsible for any cost and expense incurred in connection with any
such assignment (such as, by way of example, any attorney's fees charged by
Seller's mortgage lender).
F. This Contract shall not be binding until executed and
delivered by Seller and Purchaser. Once fully executed and delivered, this
Contract shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
G. This Contract shall be governed by and construed in
accordance with the laws of the State of New York.
H. If any provision hereof shall be deemed unenforceable, the
remaining terms of this Contract shall be unaffected thereby and shall remain in
full force and effect.
I. The headings herein are for reference purposes only and
shall not be deemed to affect the interpretation of this Contract.
J. SELLER AND PURCHASER HEREBY WAIVE ANY AND ALL RIGHTS THAT
EITHER MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY DISPUTE CONCERNING THIS
CONTRACT OR THE PREMISES.
K. Each party hereby agrees that in no event shall either
party make or bring any claim for any matter whatsoever against any member,
shareholder, partner, officer, director, trustee, employee, agent,
representative or counsel of or for the other party.
L. Purchaser understands and agrees that it shall not be
permitted to record this Contract or a memorandum hereof and any breach of this
provision shall constitute a default by Purchaser under this Contract in which
event Seller shall be entitled to the Downpayment, this Contract shall be
terminated and Seller shall (notwithstanding any other provisions of this
Contract) be entitled to such remedies as are available in law or equity.
[signature page(s) follow]
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Contract as of the date first hereinabove written.
OLP Brooklyn Pavilion, LLC, as Seller HID Acquisition Group, LLC, as Purchaser
By: OLP-MTC Holdings LLC, Sole Member
By: OLP Movies LLC, Managing Member
By: By:
------------------- --------------------
Print Name: Print Name:
-------------------- ---------------------
Title: Title:
------------------------- ---------------------------
First American Title
Insurance Company of New
York, solely in its
capacity as Escrow Agent
and to agree to the
provisions of Paragraph 3
of this Contract
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
EXHIBIT A
Legal Description
EXHIBIT B
Lease
EXHIBIT B-1
Guaranty
EXHIBIT C
Signage Agreement
EXHIBIT C-1
Letter Terminating Signage Agreement
EXHIBIT D
Assignment and Assumption of Lease
ASSIGNMENT AND ASSUMPTION OF LEASE
ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") made as of
___________ between OLP Brooklyn Pavilion, LLC, a Delaware limited liability
company having an address at 60 Cutter Mil Road, Suite 303, Great Neck, New York
11021 ("Assignor") and HID Acquisition Group, LLC, a New York limited liability
company having an address at 65 West 36th Street, Suite 1200, New York, New York
10018 ("Assignee").
WHEREAS, Assignor is the landlord under that certain Lease Agreement
dated as of August 9, 2002 by and between Assignor, as landlord, and Pritchard
Square Cinema LLC ("Original Tenant"), as tenant, as amended by (i) a First
Amendment to Contract of Sale and Lease Agreement dated as of August 9, 2002
between and among Pritchard Square LLC ("Original Owner"), Assignor and Original
Tenant, (ii) a Second Amendment to Contract of Sale and Lease Agreement dated as
of April 2, 2003 between and among Original Owner, Assignor and Original Tenant,
(iii) a Third Amendment to Contract of Sale and Lease Agreement dated as of
November 1, 2003 between and among Original Owner, Assignor and Original Tenant,
and (iv) a Fourth Amendment to Lease Agreement dated as of February 11, 2005
between Assignor and ADM Cinema Corporation (collectively, the "Lease"),
affecting the building known as 187-191 Prospect Park West (a/k/a 188 Prospect
Park West a/k/a 496 14th Street), Brooklyn, New York (the "Premises"); and
WHEREAS, simultaneously herewith, Assignor has conveyed the Premises
to Assignee.
NOW, THEREFORE, in consideration of the premises, Assignor and Assignee
do hereby agree as follows:
1. Assignor does hereby assign to Assignee all of its right, title and
interest in and to the Lease, including any and all rents payable thereunder.
2. Assignee hereby accepts this Assignment, and assumes and agrees to
be bound by the terms, covenants and conditions of the Lease from and after the
date hereof.
3. Assignor hereby indemnifies and holds Assignee harmless from and
against any and all claims, liabilities, costs and expenses (including, but not
limited to, reasonable attorneys' fees and disbursements) that may be suffered
by Assignee arising out of or pertaining to the period prior to date hereof with
respect to the Lease.
4. Assignee hereby indemnifies and holds Assignor harmless from and
against any and all claims, liabilities, costs and expenses (including, but not
limited to, reasonable attorneys' fees and disbursements) arising out of or
pertaining to the period from and after the date hereof with respect to the
Lease.
5. This Assignment is made without representations or warranties,
expressed or implied, and is without recourse against Assignor in any event
whatsoever except as expressly set forth in that certain Contract of Sale
between Assignor and Assignee dated .
6. This Assignment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Assignment and Assumption of Lease as of the date first hereinabove written.
OLP Brooklyn Pavilion, LLC, as Seller HID Acquisition Group, LLC, as Purchaser
By: OLP-MTC Holdings LLC, Sole Member
By: OLP Movies LLC, Managing Member
By: By:
---------------------------- ----------------------------
Print Name: Print Name:
--------------------- ----------------------
Title: Title:
----------------------------- ---------------------------
EXHIBIT E
Tenant Estoppel Certificate
ESTOPPEL CERTIFICATE
Re: Lease Agreement dated as of August 9, 2002 by and between OLP Brooklyn
Pavilion LLC, as landlord ("Landlord"), and Pritchard Square Cinema LLC
("Original Tenant"), as tenant, as amended by (i) a First Amendment to
Contract of Sale and Lease Agreement dated as of August 9, 2002 between and
among Pritchard Square LLC ("Original Owner"), Landlord and Original
Tenant, (ii) a Second Amendment to Contract of Sale and Lease Agreement
dated as of April 2, 2003 between and among Original Owner, Landlord and
Original Tenant, (iii) a Third Amendment to Contract of Sale and Lease
Agreement dated as of November 1, 2003 between and among Original Owner,
Landlord and Original Tenant, and (iv) a Fourth Amendment to Lease
Agreement dated as of February 11, 2005 between Landlord and ADM Cinema
Corporation (collectively, the "Lease"), affecting the building known as
187-191 Prospect Park West, Brooklyn, New York (the "Premises").
Ladies and Gentlemen:
Tenant understands that Landlord intends to sell the Premises to . In
connection with the foregoing, Tenant hereby certifies to and to its successors
and assigns and to any mortgagee placing a mortgage on the Premises in
connection with the acquisition of the Premises by and any successors and
assigns thereof as follows, in each case as of the date hereof:
1. A true and complete copy of the Lease is attached hereto as
Exhibit A, the Lease is in full force and effect and has not
been otherwise been modified or amended and the Lease
constitutes the only agreement between the Landlord and Tenant
with respect to the Premises.
2. The commencement date of the Lease was August 9, 2002, and the
termination date of the Lease shall be July 31, 2002, with an
option on the part of the Tenant to renew the Lease for two
periods of ten years each.
3. Tenant has no credit, offset or claim against the enforcement
of the Lease or against the obligation to pay rent, by reason
of prepayment or otherwise, under the Lease. Tenant has not
been granted any unexpired free rental or any unexpired
concession in or abatement of rent.
4. All work to be performed by Landlord with respect to the
Premises, if any, has been heretofore completed to the
satisfaction of Tenant and there is no agreement by Landlord
to perform any work in the future.
5. No default exists under the Lease on the part of either
Landlord or Tenant, and there are no circumstances which, with
the passage of time or giving of notice or both, would
constitute an event of default under the Lease by either
Landlord or Tenant.
6. The current Minimum Annual Rent is $1,128,000. The current
monthly amounts payable by Tenant to Landlord pursuant to
Section 4.3 of the Lease is $5,000 for impositions and $11,300
for insurance premiums. Tenant has paid the Minimum Annual
Rent and all additional rent payments provided in the Lease
through and including _________________.
7. Landlord has no further obligation to pay to Tenant any
part of the Landlord Construction Allowance or the Improvement
Holdback (as such terms are defined in the Lease), or to pay
any amount to Tenant in connection with the construction of a
tenth (10th) theater at the Premises.
IN WITNESS WHEREOF, Tenant has executed and delivered
this Estoppel Certificate on the day of , 2006.
ADM CINEMA CORPORATION
By:
-----------------------------
Name:
Title:
EXHIBIT F
EXHIBIT 10.2
CONTRACT OF SALE
OLP Chula Vista Corp.,
OLP Norwalk LLC,
OLP Austell, LLC,
OLP Beavercreek LLC,
OLP Southlake, LLC,
OLP Roanoke, LLC,
OLP Lubbock Venture Limited Partnership,
OLP Live Oak Limited Partnership,
and
OLP Henrietta, LLC
- Seller -
ECM Diversified Income & Growth Fund, LLC
- Purchaser -
as of June 14, 2006
TABLE OF CONTENTS
(continued)
TABLE OF CONTENTS
Page
1. PURCHASE PRICE....................................................2
2. ESCROW............................................................2
3. PREMISES SOLD "AS IS".............................................3
4. LEASES............................................................7
5. TITLE.............................................................8
6. INTENTIONALLY DELETED.............................................10
7. INSPECTIONS.......................................................10
8. REPRESENTATIONS AND WARRANTIES....................................11
9. INTENTIONALLY DELETED.............................................14
10. CONDITIONS PRECEDENT..............................................14
11. CLOSING COSTS.....................................................17
12. CLOSING DATE......................................................19
13. CLOSING DOCUMENTS.................................................20
14. PRE-CLOSING OBLIGATIONS OF SELLER:................................23
15. CONDEMNATION......................................................25
16. CASUALTY..........................................................25
17. ASSIGNMENT........................................................26
18. BROKERS...........................................................27
19. SECTION 1031 TAX DEFERRED EXCHANGE................................27
20. MISCELLANEOUS.....................................................27
CONTRACT OF SALE
This CONTRACT OF SALE (this "Contract") is made and entered into as of
the 14th day of June, 2006 by and among OLP Chula Vista Corp. ("OLP Chula
Vista"), OLP Norwalk LLC ("OLP Norwalk"), OLP Austell ("OLP Austell"), OLP
Beavercreek LLC ("OLP Beavercreek"), OLP Southlake, LLC ("OLP Southlake"), OLP
Roanoke, LLC ("OLP Roanoke"), OLP Lubbock Venture Limited Partnership ("OLP
Lubbock"), OLP Live Oak Limited Partnership ("OLP Live Oak") and OLP Henrietta,
LLC ("OLP Henrietta") each having an office at 60 Cutter Mill Road, Suite 303,
Great Neck, New York 11021, severally, but not jointly, the "Seller", and ECM
Diversified Income & Growth Fund, LLC, a Delaware limited liability company,
having an office at 150 North Wacker Drive, Suite 800, Chicago, Illinois 60606,
as the "Purchaser".
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, OLP Chula Vista is the owner of the "Chula Vista Property"
described on Schedule A-1 hereto; OLP Norwalk is the owner of the "Norwalk
Property" described on Schedule A-2 hereto;OLP Austell is the owner of the
"Austell Property" described on Schedule A-3 hereto; OLP Beavercreek is the
owner of the "Beavercreek Property" described on Schedule A-4 hereto; OLP
Southlake is the owner of the "Southlake Property" described on Schedule A-5
hereto; OLP Roanoke is the owner of the "Roanoke Property" described on Schedule
A-6 hereto; OLP Lubbock is the owner of the "Lubbock Property" described on
Schedule A-7 hereto; OLP Live Oak is the owner of the "Live Oak Property"
described on Schedule A-8 hereto; and OLP Henrietta is the owner of the
"Henrietta Property" described on Schedule A-9 hereto (each of the Chula Vista
Property, Greensboro Property, Norwalk Property, Austell Property, Beavercreek
Property, Southlake Property, Roanoke Property, Lubbock Property, Live Oak
Property and Henrietta Property hereinafter being a "Property" and the
Properties collectively, being the "Premises"). For the purposes described in
this Contract, OLP Live Oak with an address of 60 Cutter Mill Road, Suite 303,
Great Neck, New York 11021 ("Sellers' Representative") shall be a duly
authorized representative of each of the Sellers and all of them. Purchaser
shall have the right to rely upon any consent, direction , authorization or
other action of Sellers' Representative made or done in its capacity as the
Sellers' Representative. Any actions which may be taken hereunder by Sellers'
Representative may also be taken by unanimous direction of all of the Sellers.
Notices or other information delivered to or by Sellers' Representative shall be
deemed delivered to or from (as the case may be) the Seller.
WHEREAS, the "Respective Property" of each Seller shall mean and refer
to the Chula Vista Property in the case of OLP Chula Vista; the Norwalk Property
in the case of OLP Norwalk; the Austell Property in the case of OLP Austell; the
Beavercreek Property in the case of OLP Beavercreek; the Southlake Property in
the case of OLP Southlake; the Roanoke Property in the case of OLP Roanoke; the
Lubbock Property in the case of OLP Lubbock; the Live Oak Property in the case
of OLP Live Oak; and the Henrietta Property in the case of OLP Henrietta.
WHEREAS, each Seller wishes to sell its Respective Property and
Purchaser wishes to acquire the Premises in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the sufficiency of which being hereby acknowledged, the parties
hereto do hereby agree as follows:
Purchase Price. Seller agrees to sell and Purchaser agrees to
acquire the Premises for the sum of One Hundred Fifty-One Million Eight
Hundred Eighty-Five Thousand Fifty Dollars ($151,885,050.00) (the
"Purchase Price") payable as follows:
A. Two Million Dollars ($2,000,000.00) on the Business Day
(which for purposes of this Contract shall mean such days as national banks in
New York City are required to be open for business) following the execution and
delivery of this Contract as the first installment of the nonrefundable (except
as specifically set forth herein) Downpayment (hereinafter defined) (the
"Initial Earnest Money Payment"), by wire transfer or other immediately
available funds payable to First American Title Insurance Company, as escrow
agent ("Escrow Agent"), which sum shall be held in escrow pursuant to the terms
hereof;
B. Two Million Dollars ($2,000,000.00) within two (2) Business
Days after the expiration of the Due Diligence Period as set forth in
Subparagraph 7.B. as the second installment of the nonrefundable (except as
specifically set forth herein) Downpayment (the "Second Earnest Money Payment"),
by wire transfer or other immediately available funds payable to Escrow Agent,
which sum shall be held in escrow pursuant to the terms hereof; and
C. One Hundred Forty-Seven Million Eight Hundred Eighty-Five
Thousand Fifty Dollars ($147,885,050.00), at the Closing, by wire transfer or
other immediately available funds to an account designated by Seller.
Notwithstanding the foregoing, Purchaser and Seller acknowledge that the
Henrietta Property is currently encumbered by a mortgage that will require
defeasance and that such defeasance may require the delivery of the purchase
price for the Henrietta Property (as described on Schedule 5(C)(i) hereto) (the
"Henrietta Allocated Price") by Seller into escrow on the Business Day prior to
the Closing Date. In such event, and subject to the agreement of the title
company insuring the Purchaser and its lender to insure the gap between funding
and the recordation of the Deed for the Henrietta Property, Purchaser agrees to
deliver the Henrietta Allocated Price and such other documentation as is
normally and customarily required into escrow to Escrow Agent on the Business
Day prior to the Closing Date, and the rent, taxes and other income and expenses
as they relate to the Henrietta Property only will be prorated as of one
Business Day prior to the Closing Date. It is expressly understood and agreed
that the obligations of Purchaser hereunder are NOT contingent on Purchaser
being able to secure financing for all or any portion of the Purchase Price.
Purchaser shall have delivered to Escrow Agent, the Initial
Earnest Money Payment in the form required by Subparagraph 1.A. above. Within
two (2) Business Days after the expiration of the Due Diligence Period, if this
Contract is not terminated pursuant to Subparagraph 7.B., Purchaser shall
deliver to the Escrow Agent, the Second Earnest Money Payment in the form
required by Subparagraph 1.B. above (the Initial Earnest Money Payment and
Second Earnest Money Payment [to the extent it is required to be paid] shall
constitute the "Downpayment"). Escrow Agent shall deposit the Downpayment into
an interest-bearing account(s) maintained at a federally insured financial
institution(s). Escrow Agent shall deliver the Downpayment in accordance with
this Contract, or a joint instruction signed by Sellers' Representative and
Purchaser, or separate instructions of like tenor signed by Sellers'
Representative and Purchaser, or a final judgment of a court of competent
jurisdiction; provided, however, that prior to the expiration of the Due
Diligence Period, Escrow Agent shall deliver the Downpayment to Purchaser or its
designee upon the sole order of Purchaser . Escrow Agent hereby is authorized
and directed to deliver the Downpayment to Sellers' Representative at Closing.
If Escrow Agent shall receive a written request by one party for the release of
the escrow, Escrow Agent will give a copy thereof to the other party. If Escrow
Agent shall not receive an objection from the other party within five (5)
business days, then Escrow Agent shall so release the Downpayment. If Escrow
Agent receives an objection, then Escrow Agent shall continue to hold the
Downpayment in accordance with the terms hereof. Escrow Agent at any time may
deposit the Downpayment with a court of competent jurisdiction, and upon notice
to Seller and Purchaser of such deposit, Escrow Agent shall have no further
responsibility or liability hereunder. Escrow Agent may act upon any instruction
or other writing believed by Escrow Agent in good faith to be genuine and to be
signed or presented by the proper persons. Except as otherwise noted herein, any
interest or income thereon shall be paid to the party entitled to receive the
Downpayment; provided that if Seller shall receive the interest at the time of
Closing, such interest shall serve as a credit against the purchase price.
Seller and Purchaser acknowledge that Escrow Agent is merely a
stakeholder, and that Escrow Agent shall not be liable for any act or omission
unless taken or suffered in bad faith, in willful disregard of this Contract or
involving gross negligence. Escrow Agent shall not be liable for the failure of
the institution(s) in which the Downpayment has been deposited or for
establishing accounts in excess of applicable guaranty limits. Seller and
Purchaser agree to indemnify and hold Escrow Agent harmless from and against any
reasonable costs, claims or expenses incurred in connection with the performance
of the Escrow Agent's duties hereunder, unless such costs, claims or expenses
were occasioned by Escrow Agent's bad faith or its willful disregard of this
Contract.
Escrow Agent shall not be bound by any agreement between Seller and
Purchaser, whether or not Escrow Agent has knowledge thereof, and Escrow Agent's
only duties and responsibilities shall be to hold, and to dispose of, the
Downpayment and interest earned thereon in accordance with this Contract. Escrow
Agent may consult with counsel, and any opinion of counsel shall be full and
complete authorization and protection in respect to any action taken or omitted
by Escrow Agent hereunder in good faith and in reliance upon such opinion.
All instructions or notices given to the Escrow Agent shall be in
writing and delivered in accordance with the requirements of this Contract. For
purposes of this Paragraph, such instructions and notices shall be deemed
delivered on the date of delivery, if by hand, or on the date of mailing if
mailed, except that no instruction or notice to Escrow Agent shall be deemed
effectively delivered to Escrow Agent until actual receipt thereof by Escrow
Agent.
Premises Sold "AS IS".
A. PURCHASER EXPRESSLY UNDERSTANDS AND AGREES AND
ACKNOWLEDGES THAT SELLER WOULD NOT HAVE ENTERED THIS
CONTRACT WITHOUT THE EXPRESS PROVISIONS OF THIS PARAGRAPH 3. IT IS UNDERSTOOD
THAT, SUBJECT TO THE TERMS AND CONDITIONS HEREOF AND OF THE DOCUMENTS TO BE
DELIVERED TO PURCHASER AT CLOSING (the "Closing Documents"), THE PREMISES AND
ALL IMPROVEMENTS AND FIXTURES SHALL BE DELIVERED "AS IS", "WHERE IS" IN THEIR
PRESENT CONDITION AND WITH ALL FAULTS, SUBJECT TO REASONABLE WEAR AND TEAR AND
DETERIORATION BETWEEN NOW AND THE CLOSING DATE. SELLER SHALL NOT BE LIABLE FOR
ANY LATENT OR PATENT DEFECTS IN THE PREMISES. PURCHASER ACKNOWLEDGES THAT,
EXCEPT AS HEREIN OR IN THE CLOSING DOCUMENTS, SPECIFICALLY SET FORTH, NEITHER
SELLER NOR ANY OF ITS REPRESENTATIVES, EMPLOYEES, MEMBERS, OFFICERS, DIRECTORS,
SHAREHOLDERS, TRUSTEES, MEMBERS, PARTNERS, COUNSEL OR AGENTS HAS MADE OR WILL IN
THE FUTURE MAKE ANY DISCLOSURES, REPRESENTATIONS OR WARRANTIES AS TO THE
PHYSICAL CONDITION, STATE OF REPAIR, TENANCY, INCOME, EXPENSES OR OPERATION OF
THE PREMISES. EXCEPTING ONLY THOSE REPRESENTATIONS (IF ANY) SPECIFICALLY SET
FORTH IN THIS CONTRACT OR THE CLOSING DOCUMENTS , PURCHASER ACKNOWLEDGES THAT IT
HAS NOT RELIED ON ANY REPRESENTATIONS, WARRANTIES OR OTHER STATEMENTS WHETHER
ORAL OR WRITTEN (AND PURCHASER AGREES THAT IT WILL NOT RELY ON ANY FUTURE
REPRESENTATIONS, WARRANTIES OR STATEMENTS WHETHER ORAL OR WRITTEN) IN ITS
DECISION TO ACQUIRE THE PREMISES IN ACCORDANCE WITH THE TERMS HEREOF. PURCHASER
ALSO ACKNOWLEDGES THAT IT HAS NOT AND AGREES THAT IT WILL NOT IN THE FUTURE RELY
ON ANY "BROKER SET-UPS" OR ANY OTHER COMMUNICATIONS FROM ANY REAL ESTATE BROKER,
MANAGING AGENT OR SIMILAR PARTY.
IN PARTICULAR, EXCEPT AS HEREIN OR IN THE CLOSING DOCUMENTS
SPECIFICALLY SET FORTH, SELLER HAS NOT MADE (AND IS UNWILLING TO MAKE) ANY
DISCLOSURES, REPRESENTATIONS OR WARRANTIES IN RESPECT OF (I) THE PHYSICAL
CONDITION OF THE PREMISES (INCLUDING, WITHOUT LIMITATION, IN RESPECT OF THE
PRESENCE, NON-PRESENCE OR CONDITION OF HAZARDOUS MATERIALS (HEREAFTER DEFINED),
(II) THE COMPLIANCE OR NON-COMPLIANCE OF THE PREMISES WITH ANY PLANS OR
SPECIFICATIONS OR WITH APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, THOSE
RELATING TO THE PROTECTION OF THE ENVIRONMENT OR THE HEALTH, SAFETY,
ACCESSIBILITY OR WELFARE OF EMPLOYEES, WORKERS OR GUESTS TO THE PREMISES
(INCLUDING BUT NOT LIMITED TO THE OCCUPATIONAL SAFETY AND HEALTH ACT, AS
AMENDED, AND THE AMERICAN WITH DISABILITIES ACT, AS AMENDED)), (III) THE
REVENUES, INCOME OR EXPENSES OF THE PREMISES, (IV) THE ADEQUACY OR INADEQUACY OF
THE UTILITIES, IF ANY, PROVIDED TO THE PREMISES, (V) THE ZONING OF THE PREMISES
OR (VI) ANY OTHER MATTER WHATSOEVER AND WHETHER OR NOT CONCERNING THE PREMISES.
PURCHASER ACKNOWLEDGES THE FOREGOING AND WARRANTS AND REPRESENTS THAT IT (OR ITS
PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY) HAS HAD SUFFICIENT TIME AND
OPPORTUNITY (OR THAT THIS CONTRACT PROVIDES FOR SUFFICIENT TIME AND OPPORTUNITY)
TO INSPECT THE PREMISES AND OTHER MATTERS DEEMED IMPORTANT TO PURCHASER, THAT IT
(OR ITS PRINCIPAL OFFICER IF PURCHASER SHALL BE AN ENTITY) IS EXPERIENCED IN
OWNING REAL PROPERTY SIMILAR TO THE PREMISES AND THAT IT IS REPRESENTED BY
ADVISORS AND COUNSEL OF ITS CHOOSING.
For purposes hereof, "Hazardous Materials" shall mean and refer to
explosives, radioactive materials, asbestos, asbestos-containing materials,
polychlorinated biphenyls, lead, lead-based paint, radon, under and/or above
ground storage tanks, hazardous materials, toxic substances, hazardous wastes,
hazardous substances, mold, petroleum, petroleum based materials or any other
materials or substances which are listed or regulated in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 6901, et seq.), the Resources Conservation and Recovery Act of
1976 (42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.),
the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.), or any other
applicable federal, state or local laws.
B. As of the expiration of the Due Diligence Period,
Purchaser will have, or will have had ample
opportunities to have:
(i) Examined and inspected the Premises in all
respects, and by proceeding with this transaction following
the expiration of the Due Diligence Period will be deemed to have
determined that the same is satisfactory to Purchaser in all respects;
(ii) Reviewed the Leases and all other Premises
information and all other instruments, records and documents which Purchaser
deems appropriate or advisable to review in connection with this transaction,
and Purchaser, by proceeding with this transaction following the expiration of
the Due Diligence Period, will be deemed to have determined that the same and
the information and data contained therein and evidenced thereby are
satisfactory to Purchaser in all respects;
(iii) Reviewed all applicable laws, ordinances, rules and
governmental regulations (including, but not limited to, those relating to
building, zoning and land use) affecting the development, use, occupancy or
enjoyment of the Premises and the conformance and non-conformance of the
Premises with same, and Purchaser, by proceeding with this transaction following
the expiration of the Due Diligence Period, will be deemed to have determined
that the same are satisfactory to Purchaser;
(iv) Investigated, examined and approved the presence or
absence of Hazardous Materials, in, on or under the Premises, which
investigations, examinations or audits shall be performed or arranged by
Purchaser, at Purchaser's sole expense, prior to the end of the Due Diligence
Period;
(v) Investigated, examined and approved the quality, nature,
adequacy and physical condition and aspects of the Premises, including, but not
limited to, the structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities and the electrical, mechanical, HVAC, plumbing,
sewage, and utility systems, facilities and appliances, the square footage
within the improvements on the Premises;
(vi) Investigated, examined and approved the quality, nature,
adequacy, and physical condition of soils, geology and any groundwater;
(vii) Investigated, examined and approved the existence,
quality, nature, adequacy and physical condition of utilities serving the
Premises;
(viii) Investigated, examined and approved the zoning or other
legal status of the Premises or any other public or private restrictions on use
of the Premises; and
(ix)Investigated, examined and approved the compliance and
non-compliance of the Premises or its operation with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or entity.
C. By not terminating this Contract at the expiration of the
Due Diligence Period and proceeding to Closing, without further documentation,
Purchaser, on behalf of itself and all of its officers, directors, members,
managers, trustees, beneficiaries, shareholders, employees, representatives,
successors and assigns, and their affiliates (collectively, the "Releasors"),
will automatically be deemed to have waived and relinquished any and all claims,
rights and remedies Releasors may now or hereafter have against Seller, its
successors, assigns, officers, directors, members, managers, trustees,
beneficiates, shareholders, employees, representatives (including the Sellers'
Representative), and their respective successors, assigns and affiliates (the
"Seller Parties"), whether known or unknown, which may arise from or be related
to this Contract or in any manner related to the Premises (including without
limitation any past, present or future presence or existence of Hazardous
Materials on, under or about the Premises, any past present or future violation
of any rules, regulations or laws, now or hereafter enacted relating to the
Premises, the physical or structural condition of the Premises, the financial
performance of the Premises or any other matter or claim in any manner related
to this Contract or the Premises); provided, however, that the release contained
herein shall not be deemed to void the effect of any representations or
warranties of Seller specifically contained in this Contract which
representations or warranties by their terms are specifically set forth to
survive Closing and Purchaser shall not be deemed to have released Seller from
any liability arising on account of the grossly negligent or intentional
misrepresentation or concealment of material information by or on behalf of
Seller. This Paragraph shall survive the Closing and the recordation of the
deeds and will not be deemed merged into the deeds upon recordation thereof. If
requested by Seller, Purchaser agrees to execute a separate release and waiver
at the Closing confirming and acknowledging the foregoing.
D. Purchaser acknowledges that Seller may have information
concerning the condition of the property, including information about its
environmental and/or structural condition including possibly prior environmental
or structural inspection reports. Purchaser also specifically acknowledges that
Seller has agreed, without representation or warranty as to the accuracy or
completeness of such information, to use its good faith efforts to disclose such
information to Purchaser as an accommodation to Purchaser. Purchaser
acknowledges that Seller does not wish to expose itself to any potential claims
(including without limitation that any such information (including without
limitation environmental and building condition reports) is in any manner
deficient or that the information disclosed is not all of the relevant
information that Seller may have on the matter) and Purchaser agrees that it has
or will be having its own environmental and structural reports commissioned by
licensed and insured consultants chosen by Purchaser and that Purchaser will be
relying on those reports in making any assessments or conclusions as to the
environmental and/or physical condition of the Premises. Purchaser agrees that
to the extent Seller provides any such information, any such information may not
be all such information available to Seller on any particular topic. Purchaser
hereby waives any claim against Seller and the Seller Parties related to any
such information as is contained in any of the aforesaid environmental or
structural reports as Seller shall deliver to Purchaser (including without
limitation claims that such information is wrong, is inaccurate, is incomplete
or that Seller knew or should have known that such information is wrong, is
inaccurate and/or is incomplete).
Purchaser is hereby notified that the improvements at the Premises may have been
originally constructed or later renovated at a time when many builders typically
used asbestos containing materials in various parts of buildings (including
without limitation, fire proofing, floor tiles, ceiling tiles and insulation)
and that applicable law requires that Purchaser assume (until it has a full
asbestos survey to specifically show otherwise) that all such materials are
asbestos containing and indeed in all likelihood there is asbestos containing
materials in one or more forms present at the Premises. Seller is unwilling to
make any representations or warranties regarding the presence (or the condition)
of asbestos at the Premises and Purchaser is urged to have a licensed
environmental consultant do a full asbestos survey of the Premises and Seller
agrees that it will provide access to the Premises for this purpose (upon
reasonable prior notice and at reasonable times); to the fullest extent
permitted by applicable law, Purchaser hereby waives any such disclosure by
Seller to the extent that any applicable law, rule or regulation could be
construed to require a seller of real property to disclose to a purchaser any
specific information regarding asbestos.
E. This Paragraph shall survive the Closing or earlier
termination of this Contract.
4. Leases.
A. Purchaser acknowledges that the Due Diligence Period as
provided herein provides Purchaser (and its advisors) sufficient time and
opportunity to examine the leases and other files regarding the occupancy of the
Premises.
B. Each Seller agrees with respect to its Respective Property,
that if the Lease with respect to the Respective Property shall be terminated
for any reason between the date hereof and the end of the Due Diligence Period,
or if Seller becomes aware of a default by any party to such Lease, such Seller
shall notify Purchaser within five (5) Business Days thereof. If the default is
"material", as the Purchaser in its reasonable discretion may determine,
Purchaser shall have the right to terminate this Contract by notice given to
Sellers' Representative within five (5) Business Days after the giving by Seller
of the foregoing notice (whereupon the Downpayment with the interest thereon
shall be returned to Purchaser and the parties shall have no further obligations
to each other hereunder). In the event that Purchaser does not so elect to
terminate, the Property shall not be relet except with the prior approval of
Purchaser; and if Seller shall enter into a new Lease, Purchaser shall be
responsible to reimburse Seller at Closing (and, if any such costs are not yet
paid at the time of Closing, Purchaser will undertake the payment obligation)
for all reasonable costs incurred by any such Seller in connection with any such
new Lease for, among other things, brokerage fees and renovation and tenant
improvement costs as previously disclosed to Purchaser in such Seller's notice
to Purchaser.
C. As a condition to Closing, Sellers shall cause the lessees
at each Respective Property, to execute and deliver to Purchaser and its
lender(s) executed Estoppel Certificates in the form and to the extent required
by the terms of each Lease respectively (the "Estoppel Certificates"). In
addition, Seller will use commercially reasonable efforts to cooperate with
Purchaser in its efforts to obtain SNDA's from tenants and estoppel certificates
from parties to reciprocal easement agreements, cross-parking agreements, cross
maintenance agreements and other similar agreements to which a Property is
subject ("Additional Estoppels"). The foregoing relates only to Seller's
agreement to cooperate with Purchaser's efforts to obtain the Additional
Estoppels. Purchaser's receipt of SNDA's and Additional Estoppels is expressly
not a condition to Closing hereunder.
5. Title.
A. Purchaser acknowledges that Seller has delivered originals
or copies of an existing survey for each Respective Property (the "Existing
Survey"). Purchaser's execution of this Contract shall constitute its
authorization for Escrow Agent to prepare (at the expense of the party as
determined by Subparagraph 11.A) a commitment for title insurance for each
Property, and Purchaser shall promptly cause (at the expense of the party as
determined by Subparagraph 11.A) each existing plat of survey to be updated or a
new plat of survey prepared. Purchaser shall have until expiration of the Due
Diligence Period to notify Seller in writing of any objections it may have to
said materials (whether or not the same have been received), otherwise Purchaser
shall be deemed to have waived any objections it may have to Sellers' current
title to the Premises and the condition of survey thereto and shall be required
in accordance with this Contract to close on its acquisition of the Premises
without offset or abatement. Purchaser agrees to take marketable title subject
only to the Permitted Exceptions (hereafter defined). If Purchaser shall notify
Sellers' representative of an unacceptable condition of title or survey to the
Premises (an "Unpermitted Exception") within the time period provided
hereinabove, then Sellers shall have the option of either terminating this
Contract by notice given to Purchaser within five (5) Business Days after such
notice from Purchaser (in which event the Downpayment with interest thereon
shall be returned to Purchaser and the parties shall have no other liability to
each other) or to attempt to cure such Unpermitted Exception (s); provided that
in the event of Unpermitted Exceptions in the form of a mortgage or other lien
created by the act or omission of Seller, Sellers shall have no such option to
terminate this Contract and shall cause such exception(s) to be removed from
title at or before Closing. Seller shall be entitled, at its option, to
extensions of the Closing Date (hereafter defined) for up to thirty (30) days in
the aggregate to attempt to cure such Unpermitted Exception (s). If Seller shall
have elected to cure such Unpermitted Exception(s ), Seller shall act in good
faith and with all reasonable diligence to cure such Unpermitted Exception(s)
and should Seller not cure such Unpermitted Exception (s) regardless of the
reason (provided, however, that Seller shall be obligated to cure at or before
Closing, any Unpermitted Exception that constitutes a mortgage or other lien
created by the act or omission of Seller [expressly excluding any such mortgages
and/or liens created by or through a tenant or for which, a tenant is
responsible for the payment] of an ascertainable amount), Seller shall give
prompt notice thereof to Purchaser and Purchaser shall then have the option
(exercisable within ten (10) days of Seller's notification thereof to
Purchaser), to close on its purchase of the Premises in accordance with the
terms hereof with no abatement or offset. If Purchaser shall not have timely
exercised its option set forth in the preceding sentence, then this Contract
shall terminate, the Downpayment together with interest thereon shall be
returned to Purchaser and the parties shall have no other liability to each
other.
B. The following shall constitute "Permitted Exceptions"
(i) All covenants, restrictions, easements and agreements of
record on the Closing Date on each Property, and all other matters disclosed by
the Existing Survey or on any updated title, survey and/or due diligence
materials furnished to or reviewed by Purchaser, other than the Unpermitted
Title Exceptions as provided herein;
(ii) All liens for unpaid municipal charges (including taxes)
not yet due and payable; provided, however, that any special assessments
(whenever payable) for improvements completed before the Closing Date shall be
the responsibility of Seller (unless tenant is responsible therefore);
(iii) The state of facts which are shown by a current survey
or Purchaser's inspection of each Property; and
(iv) The Leases and documents, facts and obligations
related thereto, including any liens or other financial obligations in respect
of a Property that are the obligation of a tenant under a Lease.
C. Purchaser shall accept title to the Property subject only
to all the Permitted Exceptions. Any mortgages, liens or financial obligations
in respect of a Property created by the act or omission of Seller (expressly
excluding any such mortgages and/or liens created by or through a tenant or for
which, a tenant is responsible for the payment) which are not Permitted
Exceptions and which first arise from the end of the Due Diligence Period
through Closing ("Seller Financial Defects") and any other title matters created
by the act or omission of Seller (and not the sole act of a party other than
Seller) which are not Permitted Exceptions and which first arise from the end of
the Due Diligence Period through Closing ("Seller Non-Financial Defects")will be
cured by or on behalf of Seller at or before Closing or will be endorsed over by
the Title Insurer at Closing in a manner reasonably acceptable to Purchaser. Any
other title defects (excluding Seller Financial Defects and Seller Non-Financial
Defects) which first arise after the conclusion of the Due Diligence Period and
prior to the Closing Date (as then in effect) are referred to herein as "New
Non-Seller Defects." Seller shall give Purchaser prompt written notice of any
New Non-Seller Defects and Purchaser shall have until the earlier of five (5)
Business Days after its receipt of written notice of each New Non-Seller Defect
within which to notify Seller of any such New Non-Seller Defect to which
Purchaser objects. Seller shall have up to fifteen (15) days from the date of
such Purchaser's notice to have each New Non-Seller Defect to which Purchaser
has objected to in a timely manner deleted or corrected to the reasonable
satisfaction of Purchaser ("New Non-Seller Defect Cure Period") which correction
may be made by waiver of such New Non-Seller Defect or by issuance of a title
endorsement by the Title Insurer, and if the time required for such deletion or
correction extends beyond the Closing Date (as then in effect), then the Closing
Date shall be extended on a day for day basis (with an extension to the next
Business Day if such extension would have resulted in a Closing Date on a day
that is not a Business Day). If within the New Non-Seller Defect Cure Period,
Seller either (1) fails to have any such New Non-Seller Defect deleted or
corrected as aforesaid or (2) notifies Purchaser that it will not delete or
correct any such New Non-Seller Defect, Seller shall not be in default of this
Contract ("Notice of No Cure of New Non-Seller Defect"), and Purchaser may, at
its option, elect either of the following:
(i) Purchaser may, within two (2) Business Days after the
earlier of the end of the New Non-Seller Defect Cure Period or the date of
Notice of No Cure of New Non-Seller Defect (as applicable) to terminate this
Contract as to the affected Property, but not as to any of the other Properties,
in which event the Purchase Price shall be adjusted by an amount equal to the
portion of the Purchase Price allocated to the affected Property as described on
Schedule 5(C)(i) attached hereto; or
(ii) Purchaser may consummate the Closing on the Closing Date
and accept title to the Property (including the affected Property) subject to
all such exceptions to title (in which event, all such exceptions to title shall
be deemed Permitted Exceptions).
If Purchaser fails to make any such election (or fails to elect under (i) above
in a timely manner), Purchaser shall be deemed to have elected option (ii).
(D) Purchaser (or its permitted assignee) agrees to accept a
limited warranty deed (or the local equivalent), in form satisfactory for
recording, for the sale of each Property; in each case subject only to the
Permitted Exceptions or to such other matters as Purchaser is required to (or
agrees to) take title subject (the "Deeds").
6 Acceptance of Deed. The acceptance of the deeds by Purchaser
shall constitute and be deemed and considered full compliance by Seller of all
the terms and conditions of this Contract on the part of Seller to be performed
through the Closing Date; provided, however, that the foregoing shall not be
deemed a waiver by Purchaser of any rights and remedies it may have against
Seller for any breach of this Contract by Seller. It is further expressly agreed
that none of the provisions of this Contract shall survive the delivery and
acceptance of the deeds, except insofar as may herein otherwise be expressly and
specifically provided.
7. Inspections.
A Seller has previously provided to Purchaser the materials set
forth on Schedule 7(A) attached hereto (the "Deliverables") for Purchaser's use
in performing its inspections. Further, Seller agrees to make available to
Purchaser and Purchaser's representatives, for Purchaser's and such Purchaser's
representatives' review at Seller's office all of Seller's files relating to the
Premises (and Purchaser and such representatives will be permitted to copy such
portions of such files as Purchaser may desire in connection with Purchaser's
investigations of the Premises). At Purchaser's cost and expense, Purchaser and
its advisors shall be permitted (subject to the rights of tenants under the
Leases) to inspect the Premises for structural integrity, compliance with
applicable laws, to perform an environmental audit of the Premises, to review
the historical and projected financial information relative to the operations of
the Premises and any other matters (the "Inspections"). Purchaser agrees to
indemnify and hold harmless each Seller from any damage to person or property
that may be caused by the Inspections. Purchaser shall not do any invasive
testing (i.e. conducting borings) without the prior written consent of Sellers'
Representative, which consent shall not be unreasonably withheld. Purchaser will
conduct any Inspections in such a manner as to minimize interference with the
operation of business at each Property, and will notify Sellers' Representative
by telephone not less than 24 hours in advance of any on-site Inspection dates
and times.
B Purchaser shall have through 5:00 p.m. (local New York time)
on July 19, 2006 (the "Due Diligence Period") to notify Sellers' Representative
of its election not to proceed with the acquisition of the Premises, and
Purchaser shall have the right not to proceed with such acquisition for any
reason whatsoever. If Purchaser shall timely notify Sellers' Representative of
its election not to proceed with the acquisition of the Premises, then Purchaser
shall be entitled to simultaneously with such notice terminate this Contract, in
which event the Downpayment and interest thereon shall be returned to Purchaser
and the parties shall have no other liability to each other. If Purchaser shall
fail to notify Sellers' Representative of its desire to terminate this Contract
as aforesaid, then Purchaser shall be deemed to be satisfied with the Premises
and the contingencies set forth in this Paragraph 7.B. shall be deemed
satisfied. In such event, Purchaser shall be required to deliver the Second
Earnest Money Payment as provided in Subparagraph 1.B. above.
8. Representations and Warranties.
A Each Seller hereby represents and warrants as of the date of
this Contract for itself and not the other Sellers, and as to its Respective
Property (as applicable), but not as to any other part of the Premises:
(i) Seller has delivered to Purchaser true, correct and
(except as noted therein) complete copies of the leases relating to each
Respective Property (each a "Lease" and collectively, the "Leases"; and each
Respective Property has a "Respective Lease" associated therewith). To Seller's
Knowledge, there are no oral agreements for occupancy of any part of the
Premises. Seller has not given to, and to Seller's Knowledge has not received
from, any tenant under its Respective Lease any notice of any default that has
not been cured; provided, however, that at such time as a tenant returns an
Estoppel Certificate (to the extent covering the same subject matter as the
foregoing representations and warranties), the foregoing representations and
warranties, as they relate to such tenant shall immediately expire without the
necessity of any further writing or confirmation.
(ii) That it has not and will not collect rent or other
amounts payable under a Lease more than thirty (30) days in advance.
(iii) Each Seller is a limited liability company or limited
partnership, duly organized and validly existing under the laws of the State of
Delaware as to the limited liability companies and the State of Texas as to the
limited partnerships, and is in good standing under the laws of its state of
organization and any state in which said entity owns real property, and has full
power and lawful authority under the respective Seller's organizational
documents to enter into and carry out the terms and provisions of this Contract
and to execute and deliver all documents which are contemplated by this
Contract. All actions necessary to confer such power and authority upon the
persons executing this Contract (and all documents which are contemplated by
this Contract to be executed on behalf of each respective Seller) have been
taken. Each Seller's execution, delivery and performance of this Contract will
not result in any violation of, or default under, or require any notice or
consent under, any of the respective Seller's organizational documents.
(iv) Seller has not entered into any agreement to dispose of
its interest in the Property or any part thereof, except for this Contract.
(v) All of the Service Contracts to which a Seller is a party
that affect any of the Respective Properties are listed on Schedule 8(A)(v)
attached hereto; each Seller has delivered to Purchaser true and complete copies
of all such Service Contracts; and Seller is not in default of any Service
Contract as of the date hereof. All such Service Contracts are cancelable by
Seller upon not more than thirty (30) days notice to the other contract
party(ies). At Purchaser's direction prior to Closing, Seller will terminate
such Service Contracts effective as soon as practicable under the terms of such
Service Contracts after Closing. Except as set forth in the documentation
delivered to Purchaser, there are no contracts or agreements with any labor
union or employee representative, relating to the Premises. Seller acknowledges
that Purchaser is not assuming any obligations or responsibilities under any
union agreements relating to the Premises.
(vi) No Seller has given to, and to Seller's Knowledge, no
Seller has received from, any other party to any agreement recorded against the
Premises any notice of any default that has not been cured or waived.
(vii) Sellers have no employees.
(viii) Except as set forth on Schedule 8(A)(viii) attached
hereto, Sellers have not been served with any litigation which is still pending
against Seller, nor have Sellers been threatened, to Sellers' Knowledge, with
any claim or litigation, with respect to the Premises, which has not been
accepted by Seller's insurance carrier for defense and which could adversely
affect the ownership or operation of the Properties by Purchaser or Seller's
ability to consummate the transactions contemplated under this Contract.
(ix) Except as set forth on Schedule 8(A)(ix) attached hereto
or as may be reflected in other documentation delivered to or made available to
Purchaser for review, Sellers have not received from any governmental authority
written notice of, nor are Sellers, to Sellers' Knowledge, aware of, any
pending, threatened or currently existing material violation of any zoning,
building, fire, or health code or any other statute, ordinance, rule, regulation
which shall not have been corrected prior to Closing.
(x) Seller makes no representations or warranties regarding
the veracity, completeness or accuracy of the Deliverables or the materials made
available to Purchaser at Seller's offices, and Purchaser acknowledges that some
of the documents contained in the Deliverables and/or the materials made
available to Purchaser at Seller's offices may have missing or incomplete pages,
information, exhibits, etc.. Seller represents that it has not intentionally
withheld or concealed any part of any document included in the Deliverables or
the materials made available to Purchaser for its review at Seller's offices.
There are no leasing brokerage agreements, leasing commission agreements or
other agreements providing for the payment of any amount for leasing activities
with respect to the Property binding on the Property or Purchaser to which
Seller is a party except as set forth on Schedule 8(A)(x).
(xi) Except as disclosed in the Environmental Reports and to
Seller's Knowledge, Seller has not received from any governmental authority any
written notice of any violations of Environmental Laws. To Seller's Knowledge,
there are no underground storage tanks located at the Premises. The term
"Environmental Reports" shall mean any environmental assessments, reports or
other environmental information relating to the Premises (or to any Property)
which have been delivered to or made available to Purchaser for review. The term
"Environmental Laws" includes without limitation the Resource Conservation and
Recovery Act and CERCLA and other federal laws governing the environment as in
effect on the date of this Contract together with their implementing regulations
and guidelines as of the date of this Contract, and all state, regional, county,
municipal and other local laws, regulations and ordinances that are equivalent
or similar to the federal laws recited above or that purport to regulate
Hazardous Materials. The term "Hazardous Materials" includes petroleum,
including crude oil or any fraction thereof, natural gas, natural gas liquids,
liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural
gas or such synthetic gas), and any substance, material waste, pollutant or
contaminant listed or defined as hazardous or toxic under any Environmental Law.
When used in this Contract, the term "Seller's Knowledge" shall mean
and be limited to the actual knowledge of Lawrence Ricketts. Sellers
represent and warrant that the aforesaid individual has responsibility
for oversight of the Premises and is the person employed by Sellers who
is most likely to have knowledge of and receive notices or other
information referred to in the foregoing representations and warranties
with respect to the Premises. Notwithstanding anything herein to the
contrary, the aforementioned individual shall (whether prior to or
after Closing) not have any personal liability or obligation whatsoever
with respect to any matters set forth in this Contract or with respect
to any of Sellers' representations having become untrue, inaccurate or
incomplete in any respect.
B Purchaser hereby represents and warrants that it is a limited
liability company duly organized and validly existing under the laws of the
State of Delaware and is in good standing under the laws of the State of
Delaware, and has full power and lawful authority under its organizational
documents to enter into and carry out the terms and provisions of this Contract
and to execute and deliver all documents which are contemplated by this
Contract. All actions necessary to confer such power and authority upon the
persons executing this Contract (and all documents which are contemplated by
this Contract to be executed on behalf of Purchaser have been taken. Purchaser's
execution, delivery and performance of this Contract will not result in any
violation of, or default under, or require any notice or consent under, any of
the Purchaser's organizational documents.
Through Closing, the parties shall promptly notify each other of any
information that causes a representation or warranty made by it to become no
longer true (a "Pre-Closing Disclosure"). The foregoing shall not excuse a party
from any negligent or other wrongful misrepresentation or breach of warranty
that was untrue when made.
It is understood and agreed that any representation or warranty of any
party contained herein will survive the Closing only for a period of one (1)
year from the date of Closing.
INTENTIONALLY DELETED
10. CONDITIONS PRECEDENT
A. Purchaser's Conditions Precedent. The obligations of Purchaser
under this Contract are contingent upon any one or more of the following, the
failure of any of which shall, upon written notice by Purchaser to Sellers'
Representative, render this Contract null and void except for those obligations
which expressly survive termination of this Contract, in which event the
Downpayment and interest thereon shall be refunded to Purchaser:
(i) Each and every representation and warranty of Sellers set
forth in this Contract shall be materially true and correct as of Closing, as
modified by any Pre-Closing Disclosures. If a representation of Seller is
limited to Seller's knowledge, and the factual matter represented to (as
modified by any Pre-Closing Disclosures) is not materially true and correct,
then in such event there shall be a failure of this condition precedent. If a
Seller makes any material Pre-Closing Disclosure to Purchaser, the substance of
which was not actually known to Purchaser as of the date hereof, Purchaser shall
have the right to terminate this Contract by delivering written notice thereof
to Seller on or before the earlier of (i) the Closing, or (ii) the fifth (5th)
Business Day after Purchaser receives written notice of such Pre-Closing
Disclosure (and if such day is after the scheduled Closing Date, Closing shall
be extended accordingly). If Purchaser does not terminate this Contract pursuant
to its rights under this section, then such representations and warranties shall
be deemed modified to conform them to the Pre-Closing Disclosure.
(ii) No Seller or tenant or other party is in default of any
obligations under its Respective Lease as of Closing, other than matters known
to Purchaser at the end of the Due Diligence Period.
(iii) No Seller shall be in default of any of its obligations
hereunder in any material respect. No Seller shall be in default of its
obligations under any document recorded against the Premises such that such
defaults materially adversely affect the operation or nature of the Premises.
(iv) Purchaser shall have received the executed Estoppel
Certificates (or updates thereto) dated not more than twenty (20) days prior to
the Closing Date. In furtherance thereof, at such time as Seller deems
reasonable and necessary, Seller shall send the Estoppel Certificates to the
applicable parties and shall use commercially reasonable efforts to obtain the
Estoppel Certificates, provided that Seller shall not be required to pay any
amounts to the parties signatory thereto or initiate litigation against said
parties in order to obtain said Estoppel Certificates. Any modification from an
Estoppel Certificate shall be acceptable to Purchaser if said modifications are
acceptable to Purchaser in its commercially reasonable judgment exercised in
good faith. In the event Seller is unable to provide to Purchaser the Estoppel
Certificates (either in the form specified herein or with such modifications as
are acceptable pursuant hereto), Purchaser may either (1) terminate the Contract
within five (5) Business Days of notice from Seller that it will not be able to
obtain one or more of the Estoppel Certificates prior to Closing, and upon such
termination, Purchaser will receive the Downpayment and interest thereon or (2)
consummate the transaction contemplated by this Contract notwithstanding
Purchaser's failure to receive the Estoppel Certificates, in which event
Purchaser shall be deemed to have waived the condition contained in this
section. (and Purchaser's failure to make an election in writing prior to
Closing shall be deemed an election of option (2)).
(v) There shall be no violation of zoning, building, fire or
health codes or any other statutes, ordinances, rules, regulations or orders
applicable to a Property other than matters existing as of the end of the Due
Diligence Period. There shall be no material adverse change in the environmental
or physical condition of a Property from the condition of such Property existing
on the last day of the Due Diligence Period and for which it is not the
responsibility of a tenant under a Lease to cure or remedy and which either (i)
materially affects the operation of the Property as a motion picture theater, or
(ii) when aggregated with the cost of correcting all other violations described
in this section costs in excess of $250,000 to correct (a "Material Change"). In
the event of the existence of such a Material Violation, Seller may extend the
Closing Date for up to thirty (30) days ("Material Change Cure Period"), within
which time, Seller may either (1) cure, remedy, insure over or otherwise remove
such Material Change in a manner reasonably acceptable to Purchaser, or (2)
notify Purchaser that it will not cure, remedy, insure over or remove such
Material Change ("Notice of No Cure of Material Change"). In the event of a
Material Change as described above (and after Sellers' opportunity to cure as
provided above), Seller shall not be in default hereunder as a result of such
Material Change, and Purchaser may, at its option, elect any of the following as
applicable:
(a) Purchaser may, within five (5) Business Days
after the earlier of the end of the Material
Change Cure Period or the date of the Notice of
No Cure of Material Change (as applicable) to
terminate this Contract as to the affected
Property, but not as to any of the other
Properties, in which event the Purchase Price
shall be reduced by an amount equal to the
portion of the Purchase Price allocated to the
affected Property as described on Schedule
5(C)(i) attached hereto; or
(b) Purchaser may consummate the transaction
contemplated by this Contract on the Closing Date
notwithstanding the Material Change, in which
event Purchaser shall be deemed to have waived
the condition contained in this section (and
Purchaser's failure to elect option (i) or (ii)
above in writing in the time required in (a)
above shall be deemed an election of this option
(ii)).
(vi) From the end of the Due Diligence Period through the
Closing Date, (1) no petition shall be filed by or against any tenant under a
Lease or any guarantor thereof under the United States Bankruptcy Code or the
laws of any other jurisdiction naming such tenant or guarantor as debtor; (2) no
tenant under a Lease shall have ceased its operations at the Respective Property
(other than by reason of casualty or condemnation); or (3) no tenant (or
guarantor) under a Lease will be in default of its material payment obligations
under such Lease, or any material non-payment obligations beyond all applicable
cure periods under such Lease (each of the foregoing, a "Major Default"). In the
event of a Major Default, Seller may upon notice to Purchaser given within five
(5) days after Seller's becoming aware of such Major Default, extend the Closing
Date for up to thirty (30) days ("Major Default Cure Period"), within which
time, Seller may either (1) cure, remedy or otherwise remove such Major Default,
or (2) notify Purchaser that it will not cure, remedy or remove such Major
Default ("Notice of No Cure of Major Default"). In the event of a Major Default
as described above (and after Sellers' opportunity to cure as provided above),
Seller shall not be in default hereunder as a result of such Major Default, and
Purchaser may, at its option, elect any of the following as applicable:
(a) Purchaser may, within five (5) Business Days
after the earlier of the end of the Major Default
Cure Period or the date of the Notice of No Cure
of Major Default (as applicable), terminate this
Contract as to the affected Property, but not as
to any of the other Properties, in which event
the Purchase Price shall be reduced by an amount
equal to the portion of the Purchase Price
allocated to the affected Property as described
on Schedule 5(C)(i) attached hereto; or
(b) Purchaser may consummate the transaction
contemplated by this Contract on the Closing Date
notwithstanding the Major Default, in which event
Purchaser shall be deemed to have waived the
condition contained in this section (and
Purchaser's failure to elect option (i) or (ii)
above in writing in the time required in (a)
above shall be deemed an election of this option
(ii)).
B. Sellers' Conditions Precedent. The obligations of Sellers
under this Contract are contingent upon any one or more of the following, the
failure of which shall, upon written notice by Sellers' Representative to
Purchaser, render this Contract null and void, except for those obligations
which expressly survive termination of this Contract, in which event the
Downpayment and interest thereon will be paid to Seller:
(i) Purchaser shall not be in default under any of its
obligations hereunder in any material respect.
C. Notwithstanding anything to the contrary herein contained,
in the event that (through no fault of Purchaser) the provisions of this
Contract relating to the obtaining of Estoppel Certificates (Paragraph 4.C), or
the condition of title (Paragraph 5) are not satisfied at Closing, then
Purchaser may elect to acquire the Properties other than the affected
Property(ies), in which event the Purchase Price shall be reduced by an amount
equal to the portion of the Purchase Price allocated to the affected Property as
described on Schedule 5(C)(i) attached hereto. In such event, Purchaser shall
notify Seller of its election as aforesaid on or before the Closing Date then in
effect, and the Closing Date shall be extended, as necessary, to occur not
sooner than five (5) days thereafter.
D. Waiver(s) of Conditions Precedent. Any condition precedent
to the Closing hereunder may be waived by the party for whose benefit such
condition exists (such election being at the sole and absolute discretion of
such party), with any such condition being deemed waived in the event that the
Closing occurs and provided further that, in such event, the other party shall
have no liability to the waiving party related to the matter(s) so waived.
E. Cooperation by Purchaser and Sellers. Sellers and Purchaser
agree to provide their reasonable cooperation and exercise reasonable efforts in
connection with obtaining any consents, approvals, estoppel certificates or
other documentation or to facilitate actions necessary to consummate the
transactions contemplated in this Contract, such cooperation to include
providing such reasonable financial and other information regarding themselves
and/or their affiliates as required by third parties and being available to meet
with third parties, such third parties to include governmental agencies and
municipalities.
F. Failure of Conditions Precedent not a Default. Subject to
the provisions of Article 12, the failure of any of the conditions precedent to
Closing set forth in this Article 10 shall not, solely by virtue of such
failure, constitute a default by either Purchaser or Seller. Subject to the
provisions of Article 12, in the event that a condition precedent to either or
both of Seller's or Purchaser's obligation to close the transaction has not been
satisfied as of Closing (as the same may be adjourned pursuant to Section 10.5
or otherwise provided in this Contract), the party whose condition has not been
satisfied may terminate this Contract by written notice to the other party as
provided in Section 10.A or 10.B, as applicable.
11. Closing Costs.
A. Purchaser shall pay for all of its costs of closing
including its own attorney fees. Seller shall pay for all of its costs of
closing including its own survey costs and attorney fees. Title insurance
premiums, transfer taxes and other amounts shall be paid by Seller and/or
Purchaser in accordance with applicable local customs.
B. The following shall be apportioned with respect to the
Premises, based on the number of days Sellers and Purchaser each own the
Premises in the month in which the Closing occurs, as of 12:01 a.m. on the
Closing Date, as if Purchaser were vested with title to the Properties during
the entire Closing Date:
(i) all collected rents and other sums received under Leases
("Rents") (including prepaid Rents);
(ii) to the extent not required by the Leases to be paid or
reimbursed by the tenants thereunder, taxes and assessments (including, without
limitation, personal property taxes on any personal property, rent taxes and
real estate taxes and assessments) levied against the Premises;
(iii) to the extent not required by the Leases to be paid or
reimbursed by the tenants thereunder, pre-payments and accrued amounts due under
any Service Contracts, to the extent assumed by Purchaser pursuant to this
Contract;
(iv) to the extent not required by the Leases to be paid or
reimbursed by the tenants thereunder, water, sewer, gas, electricity, telephone
and other utility and fuel charges for which Seller is liable, if any; such
charges to be apportioned at Closing on the basis of the most recent meter
reading occurring prior to Closing (which Seller shall use reasonable efforts to
cause to be read not more than two (2) days prior to Closing) or, if unmetered,
on the basis of a current bill for each such utility;
(v) to the extent not required by the Leases to be paid or
reimbursed by the tenants thereunder, amounts paid or payable (a) under any
reciprocal easement agreement, joint operating agreement, party wall agreement,
or other agreement between the owner of any of the Premises and any other
property owners or parties, or (b) under any agreement assigned by the
Assignments of Property Agreements;
(vi) percentage or overage rent payable by the tenant under
any of the Leases; and
(vii) all other items of revenue and expense pertaining to the
Premises (other than insurance premiums which shall not be prorated).
C. Nondelinquent Rent collected by Seller after Closing
attributable to periods from and after Closing shall be promptly remitted to
Purchaser. Delinquent Rent collected by Seller and Purchaser after the date of
Closing shall be delivered by the recipient as follows: within fifteen (15) days
after the receipt thereof, Seller and Purchaser agree that all Rent received by
Seller or Purchaser shall be applied first to then current Rents, and then to
delinquent Rents, in inverse order of maturity (that is, in the order of the
past due amount attributable to the payment period closest to the date payment
is received first, then the past due amount attributable to the payment period
next closest to the date payment is received second, etc.). Seller retains the
right to pursue those who become delinquent between the date of this Contract
and Closing) for payment of delinquent rent, provided that Seller shall not have
the right to pursue eviction proceedings against said tenants or to terminate
any Lease or any rights to possession thereunder Purchaser agrees to use its
good faith efforts to attempt to collect such delinquencies.
Purchaser and Seller agree to prorate real estate taxes and assessments
for the period for which such taxes are assessed, regardless of when payable.
Any taxes to be paid at or prior to Closing shall be prorated based upon the
amounts actually paid, with Purchaser being charged and Seller being credited at
Closing with that portion of such taxes and assessments which relates to the
period on or after the Closing Date. If taxes and assessments for the fiscal
year in which Closing occurs have been determined but have not been paid before
Closing, Seller shall be charged and Purchaser credited at Closing with an
amount equal to that portion of such taxes and assessments which relates to the
period before the Closing Date and Purchaser shall pay the taxes and assessments
prior to their becoming delinquent. If the actual taxes and assessments are not
known at Closing, the proration shall be based upon the most recent assessed
values and tax rates. To the extent that the actual taxes and assessments paid
differ from the amount apportioned at Closing, the parties shall make all
necessary adjustments by appropriate payments between themselves within sixty
(60) days of the issuance of final tax bills.
To the extent the Respective Leases do not require the tenant to pay
special assessments, each Seller shall be responsible to pay the installments of
any special assessments that are due and payable through the Closing Date with
respect to its Respective Property and the Purchaser shall be responsible for
the installments for the periods following the Closing Date.
At Closing, (A) Sellers shall credit to the account of Purchaser the
amount of all cash security deposits (together with interest required to be paid
thereon under the respective agreements to which they relate or under applicable
law), (B) Purchaser shall credit to the account of Seller all refundable cash or
other deposits posted with utility companies serving the Premises which are duly
assigned to Purchaser at Closing, and (C) Seller shall credit to the account of
Purchaser the amount of any Rents that Seller has received as of Closing and
that are attributable to the period on or after the Closing Date.
Some or all of the Sellers, as landlords under the Leases, are
currently collecting from tenants additional rent to cover taxes, insurance,
utilities, maintenance and other operating costs and expenses incurred by
Sellers in connection with the ownership, operation, maintenance and management
of the Premises (such expenses, collectively "Expenses" and such collections,
collectively "Collections"). Non-delinquent Collections for the month in which
Closing occurs shall be prorated in the same manner as other Rents. Subsequent
to Closing, but no later than January 31, 2007, (or, in the case of Expenses and
Collections relating to real estate taxes, within sixty (60) days after receipt
of the final tax bill(s), as the case may be, if later) (the "Reproration
Dates"), Purchaser shall use reasonable efforts to calculate adjustments for
Expenses incurred and Collections received for the year of Closing and shall
prepare and present to Seller a calculation of the Collections received and
Expenses incurred by each of Seller and Purchaser attributable to each party's
period of ownership, and shall cooperate with Seller in calculating any
readjustments necessary. The parties shall make the appropriate adjusting
payment between them within 30 days after presentment to Seller of Purchaser's
calculation; provided, however, that in the event that either Purchaser or
Seller owes the other an adjusting payment with respect to collections, the
party owing said adjusting payment shall make such adjusting payment only to the
extent that it has received payments of collections from the applicable tenants.
Either party may inspect the other's books and records related to the Premises
to confirm the calculation.
Either party shall be entitled to a post-Closing adjustment for any
proration or adjustment that was estimated at Closing or is incorrect provided
written notice thereof is given to the other party within one (1) year of
Closing, or, if later, with respect to real estate taxes only, within sixty (60)
days after receipt of final tax bills.
12. Closing Date.
A. The parties agree that, subject to express provisions
contained herein which allow for an adjustment to the date of Closing, the
closing (the "Closing") shall occur on or before August 1, 2006 (the "Closing
Date"). The Closing shall take place at the offices of the Escrow Agent. If
Purchaser shall have failed or been unable to close on or by the Closing Date
due to the breach of this Contract by it, then this Contract shall terminate,
neither party shall have any further obligations to the other and Seller shall
be entitled to retain the entire Downpayment and any interest earned thereon.
B. Notwithstanding any other provision to the contrary set
forth in this Contract, it is understood and agreed that in the event of any
default on the part of Purchaser in the performance of its material obligations
hereunder, Seller shall look to the Downpayment in accordance with the terms
hereof as its liquidated damages and waives any claim for specific performance
or any other claim either against the Purchaser or against any person disclosed
or undisclosed. Notwithstanding any other provision to the contrary set forth in
this Contract, in the event any Seller shall default hereunder in the
performance of its material obligations hereunder, (or in the event of any
pre-Closing claim of Purchaser against any Seller related to this Contract or
the Premises), Purchaser's sole right shall be to either recover its Downpayment
and interest thereon or to seek specific performance of this Contract, with it
being understood that no Seller shall in any event ever be liable for
consequential or other monetary damages in respect of this Contract, its
Respective Property, the Premises or the transaction contemplated hereby;
provided, however, that in the event such default is the result of Sellers'
willful failure to perform its material obligations as required hereunder,
Seller will be responsible for the reimbursement of the Purchaser's actual and
reasonable out-of-pocket costs incurred in connection with this Contract. Seller
and Purchaser acknowledge that the amount of damages of Seller occasioned by a
default of Purchaser hereunder would be difficult or impossible to accurately
predict and Seller and Purchaser, after consultation with counsel of their own
choosing, agree that the liquidated damages provided for in this Paragraph 12.B.
are reasonable sums to be used as liquidated damages.
13. Closing Documents.
A. Seller's Closing Deliveries. On the business day prior to
the Closing Date, Sellers shall deposit with Escrow Agent for delivery to
Purchaser on the Closing Date each of the following (duly executed by Sellers,
if applicable):
(i) a Deed for each of the Properties, subject only
to the Permitted Exceptions.
(ii) two counterparts of a bill of sale for each
Property;
(iii) a letter to each of the tenants under the
Leases, advising them of the sale of the Respective Property;
(iv) a letter to each of the other parties to the
Service Contracts, advising them of the sale of the Respective Property;
(v) any and all affidavits, undertakings,
certificates or other documents customarily required by the Escrow Agent in
order to cause it to issue the owner's policy of title insurance on the Closing
Date;
(vi) two counterparts of an Assignment and
Assumption of Leases and Security Deposits for each Property, which shall
assign the Leases and Security Deposits, to Purchaser;
(vii) two counterparts of an Assignment and
Assumption of Service Contracts (the "Assignment of Contracts") for each
Property;
(viii) two counterparts of an Assignment of the
Intangible Personal Property (the "Assignment of
Intangibles") for each Property;
(ix) all of the original Leases and Service
Contracts in Sellers' possession;
(x) to the extent in the possession or control of
Seller (or its agents), all keys and passcards for the Premises, with
identification of the lock to which each such item relates;
(xi) Sellers' affidavits stating, under penalty of
perjury, Sellers' U.S. taxpayer identification number and that Seller is not a
foreign person within the meaning of Section 1445 of the Internal Revenue Code
(and any similar affidavit that may be required under state law);
(xii) evidence of termination of any property
management, leasing and/or brokerage agreements for the Premises with entity
affiliated with Seller or any other agreement which Purchaser is not assuming
hereunder ;
(xiii) any licenses, permits, warranties,
guaranties, plans and specifications related to the Premises in the possession
or control of any Seller;
(xiv) a certificate updating Sellers'
representations and warranties under Subparagraph 8.A. as of the Closing Date;
(xv) evidence of Sellers' authority to consummate
the transactions contemplated herein, in a form reasonably satisfactory to
Escrow Agent;
(xvi) all other documents reasonably and
customarily required in order to perfect the conveyance, transfer and assignment
of the Premises to Purchaser;
B. Purchaser's Closing Deliveries. Except as otherwise
provided below, on the Business Day prior to the Closing Date, Purchaser shall
deposit with Escrow Agent for delivery to Seller on the Closing Date each of the
following (duly executed by Purchaser, if applicable):
(i) the Cash Balance (to be deposited on the
Closing Date);
(ii) two counterparts of each Assignment of Leases;
(iii) two counterparts of each Assignment of
Contracts;
(iv) two counterparts of each Assignment of
Intangibles;
(v) a certificate updating Purchaser's
representations and warranties under Subparagraph 8.B. as of
the Closing Date;
(vi) all other documents reasonably and customarily
required in order to perfect the conveyance,
transfer and assignment of the Premises to Purchaser;
C. Joint Closing Deliveries. On the Closing Date, Purchaser
and Seller shall deliver to the other duly executed counterparts of
(i) a closing statement prepared in accordance with
Subparagraph 11.B.,
(ii) any transfer tax declarations, change of
ownership forms or other similar instruments as may be
required by law, and
(iii) the Estoppel Certificates.
D. Form of Documents. The parties shall agree upon the form
of the documents required hereinabove in this Article during the Due Diligence
Period.
14. Pre-Closing Obligations Of Seller. Between the date of
this Contract and the earlier of the Closing Date or termination of this
Contract:
A. To the extent of each Seller's obligation under the
Respective Lease (and expressly excluding any obligations of the tenants under
the Leases), Sellers shall manage, maintain and operate the Premises in
accordance with existing business practices and keep the Premises and the
Tangible Personal Property in substantially their existing condition and repair,
ordinary wear and tear excepted, but in no event shall Sellers be obligated to
expend in the aggregate for capital repairs, replacements or improvements to the
Premises in excess of $100,000 between the date hereof and the Closing Date,
other than as may be required under applicable law. It is understood that the
provisions of the preceding sentence shall not apply to any repair or capital
improvement project in progress as of the last day of the Due Diligence Period,
which projects Seller shall continue to prosecute with due diligence until the
Closing Date. The extent and scope of any repairs to be made by Seller shall be
determined by Seller in its reasonable discretion consistent with its existing
business practices. With respect to repairs of a material nature that are not of
an emergency-type nature, as a courtesy, Seller shall attempt to contact
Purchaser to consult with Purchaser on Seller's proposed repairs.
B. Seller shall not offer to sell, or sell, mortgage,
pledge, hypothecate or otherwise transfer or dispose of all or any part of the
Premises or any interest therein to any party but Purchaser. Seller shall not
initiate, consent to, approve or otherwise take any action with respect to
zoning, tax assessment or any other governmental rules or regulations presently
applicable to all or any part of the Premises.
C. Seller shall not terminate (except in the course of
exercising default remedies thereunder) or materially modify, extend, amend or
renew any existing Lease, Service Contract or recorded agreement affecting the
Properties, except that (i) Seller may enter into any Service Contracts in the
ordinary course of business provided such Service Contract terminates on or
prior to the Closing Date, and (ii) Seller may enter into Service Contracts in
connection with an emergency situation (such as a natural disaster) or with
respect to emergency-type repairs, even if such Service Contracts terminate
after the Closing Date, provided that Seller shall give notice to Purchaser
reasonably promptly of any such emergency Service Contracts.
D. Sellers shall maintain in full force and effect
their existing insurance coverages with respect to the Premises.
E. From and after the date hereof, Sellers shall provide to
Purchaser, promptly upon the receipt thereof, copies of notices of material
defaults received from any tenant under any of the Leases.
F. Sellers shall, to the extent consistent with its past
practice, perform material obligations arising between the date of this Contract
and Closing under material agreements affecting the Properties.
G. Sellers shall not remove Tangible Personal Property from
the Premises unless such property is replaced with similar property of equal or
greater value.
H. Sellers shall, to the extent consistent with its past
practice, maintain any licenses or permits held by Sellers in connection with
the Properties as of the date hereof.
I. Sellers shall use commercially reasonable efforts to
obtain any required consents from third parties required for the assignment to
Purchaser of any assignable warranties, guaranties, licenses or permits
pertaining to the Premises, provided that Seller shall not be required to pay
any amounts to said third parties or initiate or threaten to initiate any
litigation against said third parties in order to obtain said consents.
Purchaser shall give Sellers written notice of such required consents within ten
(10) Business Days after the date of this Contract.
J. Sellers shall not withdraw, settle or compromise any
reduction proceeding affecting real estate taxes assessed against any Property
without the prior consent of Purchaser which consent shall not be unreasonably
withheld or delayed. If a Seller (as opposed to a tenant) has appealed the real
estate taxes for its Respective Property, then Purchaser agrees to continue to
use such Seller's appeal firm for the years currently under review. Any future
refunds and fees of such counsel shall be prorated between Purchaser and such
Seller as of the Closing Date, to the extent a tenant is not permitted by the
terms of a Respective Lease to retain such refunds. This Subparagraph 14.J.
shall survive the Closing and the delivery of the deeds and ground lease
assignment.
K. Sellers will cooperate in a commercially reasonable
manner with Purchaser's efforts to obtain written evidence from and to the
extent of any applicable state and municipal authorities that Sellers' have no
delinquent state or city tax or other liabilities with respect to the Premises
for which Purchaser will be responsible after Closing ("Bulk Sales
Certificates"). Sellers shall be responsible for payment of any amounts shown to
be due to any applicable authorities pursuant to the Bulk Sales Certificates.
L. Sellers will cooperate in a commercially reasonable
manner with Purchaser's efforts to obtain any necessary consent to the transfer
of any Guarantees and Warranties from the issuer of such warranty or guaranty;
provided, however that Sellers shall have no obligation to incur any expense or
liability in order to obtain such consents and the procurement of such consents
shall not be a condition to Purchaser's obligations under this Agreement.
15. Condemnation.
A. Each Seller represents and warrants as to its Respective
Property that, as of the date hereof, it has no knowledge of any pending or
contemplated condemnation proceedings affecting its Respective Property or any
part thereof.
B. If prior to the Closing, any Property (or a material
portion thereof) shall be taken by condemnation, eminent domain or deed in lieu
thereof (or written threat or notice of such taking shall be made by any
governmental authority), this Contract shall be automatically terminated, the
Downpayment and interest thereon shall be returned to Purchaser and thereupon no
party shall have any further liability or obligation to the other. For purposes
hereof, a partial condemnation or other taking shall be deemed material only if
same shall result in cancellation of Leases and/or reductions in Rents under
Leases in the aggregate resulting in the loss of five percent (5%) or more of
the aggregate Rents currently provided for in the most recent rent roll for such
Property. If this Contract is not terminated, Seller shall not make any
settlement or other agreement relating to such action without the prior written
consent of Purchaser and Purchaser shall (a) accept title to the Premises
subject to the condemnation or other taking, and (b) pay in full the purchase
price and on the Closing Date the net proceeds of the award or payment shall be
assigned by the applicable Seller to Purchaser and net monies theretofore
received by such Seller in connection with such condemnation or other taking
shall be paid over to Purchaser or allowed as a credit against the purchase
price hereunder (unless previously used by such Seller in connection with the
repair of the Premises in connection therewith). This Paragraph shall govern to
the extent inconsistent with any applicable law.
16. Casualty.
A. The risk of loss or damage or destruction to the Premises
by fire or other casualty is assumed by Seller (with respect to their Respective
Properties) until the Closing, but, except as specifically set forth in this
Paragraph, no Seller shall be obligated to repair or replace any such loss or
damage. In the event of fire or other casualty , Seller shall have ten (10)
Business Days to notify Purchaser whether it intends to rebuild the affected
portion of the Premises, but if Seller shall fail to notify Purchaser of its
election within such ten (10) Business Day period Seller shall be deemed to have
elected not to rebuild. If Seller elects (or is deemed to have elected) not to
repair or replace any such loss or damage to the affected portion of Premises
then Purchaser shall have the option of declaring this Contract terminated
within thirty (30) days of Seller's election not to rebuild, in which event
Purchaser shall instruct Escrow Agent to refund to Purchaser, the Downpayment
and interest thereon whereupon this Contract and all rights of Purchaser
hereunder and to the Premises shall terminate and neither Seller nor Purchaser
shall have any further claim against the other; provided that if Purchaser shall
not have elected to terminate this Contract as aforesaid then Purchaser shall
close title in accordance with this Contract and pay in full the Purchase Price,
without any abatement thereof or claim against any Seller for such loss or
damage, and accepting an assignment, without recourse, of the applicable
Seller's rights, if any, to any payments to be made under any applicable rent
loss and hazard insurance policies, if any, together with any payments under
such policies made to such Seller prior to the Closing and not expended to
repair or replace such loss, damage or destruction, plus the amount of any
deductible from its coverage. If a Seller elects to repair or replace any such
loss or damage, Sellers shall be entitled to reasonable adjournments of the
Closing Date in which to perform the work, not exceeding sixty (60) days in the
aggregate. If a Seller elects to repair or replace any such loss or damage to
its Respective Property, Seller shall act in good faith and use reasonable
efforts to repair or replace any such loss or damage, and if such loss or damage
is not repaired (substantial completion thereof) prior to the Closing Date, as
adjourned by such Seller pursuant to this Paragraph 16.A., Purchaser shall have
the option (to be exercised within ten (10) days of Seller's notice thereof to
Purchaser) of: (a) declaring this Contract terminated, in which event Seller or
Purchaser shall instruct Escrow Agent to refund to Purchaser, the Downpayment
and interest thereon whereupon this Contract and all rights of Purchaser
hereunder and to the Premises shall terminate and no Seller nor the Purchaser
shall have any further claim against the other or (b) closing title in
accordance with this Contract and paying in full the Purchase Price, without any
abatement thereof or claim against any Seller for such loss or damage, and
accepting an assignment, without recourse, of such Seller's rights, if any, to
any payments to be made under any applicable hazard insurance policies for work
not yet completed, together with any payments under such policies made to such
Seller prior to the Closing not expended to repair or replace such loss, damage
or destruction, plus the amount of any deductible from its coverage; provided
that if Purchaser shall have failed to timely make an election it shall be
deemed to have chosen (b) above. Notwithstanding the foregoing, if the cost of
the repairs and replacements is less than $200,000 as to any particular
Property, as determined by an independent third party professional chosen by the
parties, Purchaser shall close title with a credit against the purchase price in
such amount which shall not exceed $200,000 with respect to any Property and
Seller shall retain the rights to the insurance proceeds, if any, in respect of
such casualty. This Paragraph 16.A. shall govern to the extent inconsistent with
any applicable law.
B. If any Seller receives a notice or request from any
insurance company or Board of Fire Underwriters (or other organization
exercising functions similar thereto) requesting the performance of any work or
alteration in respect of its Respective Property prior to the Closing Date, it
agrees to promptly send same to Purchaser and to attempt in good faith to comply
therewith (or cause its tenant under a Respective Lease to comply therewith);
provided, however, that in the event the compliance shall cost more than
$100,000.00 for all affected Properties in the aggregate, then such Seller shall
have the option not to so comply (and not cause its tenant under a Respective
Lease to comply), in which event Purchaser shall have the option to either close
on its acquisition of the Premises (without exception for the affected
Property(ies)) with a $100,000.00 credit against the purchase price or to
rescind this Contract and in such case the Downpayment shall be returned to
Purchaser and thereafter the parties shall have no further obligation to each
other. Nothing contained herein may be construed as requiring any Seller to
threaten or bring litigation or any similar action in order to "cause" a tenant
to perform its obligations under a Respective Lease.
17. Assignment. Purchaser will not, without the prior written
consent of Seller' Representative (which consent may be withheld in the absolute
discretion of the Seller and/or the Sellers' Representative), sell, assign or
transfer its interest in this Contract; provided, however, that Purchaser shall
have the right, without it being released from its liabilities hereunder, to
assign this Contract to entities which are controlled by, controlling, or under
common control with, Purchaser. The sale of more than a 50% interest in
Purchaser shall be deemed an assignment requiring the consent of Sellers'
Representative as set forth in the preceding sentence. Any purported assignment
of this Contract in violation of this Paragraph 17 shall be ineffective and void
ab initio and shall constitute a default hereunder by Purchaser, in which event
this Contract shall terminate, the parties shall have no further obligations
against the other and the Escrow Agent shall remit the Downpayment with interest
thereon to Sellers' Representative.
18. Brokers. Purchaser and Seller each represents and warrants
that, except for Transwestern Carey Winston L.L.C. d/b/a Transwestern Commercial
Services ("Broker"): (i) it has not dealt with any broker in respect of the sale
of the Premises to Purchaser and (ii) no broker brought the Premises to the
attention of the Purchaser or was otherwise involved in the Purchaser's interest
in the Premises. Purchaser agrees to compensate Broker at Closing as per a
separate agreement. Each party shall indemnify, defend and hold harmless the
other for any claims which would constitute a breach of the foregoing
representations and warranties and Purchaser shall indemnify, defend and hold
Seller and Sellers' Representative harmless from any claims as a result of
Purchaser's breach of its covenant herein to compensate the Broker under
separate agreement. The provisions of this Paragraph shall survive the Closing
and the delivery of the Deeds or the other termination of this Contract.
19. Section 1031 Tax Deferred Exchange. At the option of either
Sellers' Representative (and Sellers, as to any of the Properties) or Purchaser,
each party agrees to cooperate with the other to qualify this transaction (or a
portion hereof) as a like-kind exchange of property described in Section 1031 of
the Internal Revenue Code of 1986, as amended. Each Seller and Purchaser further
agree to consent to the assignment of this Contract to a "Qualified
Intermediary" and/or take such other action reasonably necessary to qualify this
transaction as a like-kind exchange provided that (i) such exchange shall be at
the cost and expense of the requesting party, (ii) the other party shall incur
no liability as a result of such exchange and (iii) no such assignment of this
Contract shall relieve the requesting party of its obligations under this
Contract and the requesting party shall remain liable for the performance of its
obligations hereunder including, without limitation, the representations,
warranties, and covenants given by it under this Contract.
20. Miscellaneous.
A. If any party shall be required to employ an attorney to
enforce or defend the rights of such party related to this transaction or the
Premises, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs. This Paragraph 20.A. shall survive the Closing or
earlier termination of this Contract.
B. This Contract contains the complete agreement between the
parties, supersedes all prior agreements (oral or written) and no term hereof
may be waived or amended except by the written agreement of the party to be
charged by such waiver or amendment. This Contract has been negotiated and shall
not be construed against its drafter. The parties agree that there are no oral
agreements, understandings, representations or warranties which are not
expressly set forth herein.
C. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given if delivered by hand or sent by United States registered or
certified mail, return receipt requested, or sent by Federal Express, United
Parcel Service or other reputable overnight delivery service, or by electronic
mail to Seller or Sellers' Representative (for the attention of Lawrence
Ricketts) at the address set forth above or by e-mail to larry_r@1liberty.com,
with a copy to Mark H. Lundy at its address set forth above or by e-mail to
mark_l@gouldlp.com, with an additional copy to Bryan Cave LLP, 1200 Main Street,
Suite 3500, Kansas City, Missouri 64105, Attn: Christopher J. Fisher (e-mail,
cjfisher@bryancave.com), or at such other addresses as it may designate by
notice hereunder and to Purchaser at its address set forth above, Attn: Shelby
Pruett or by e-mail to spruett@ecm-funds.com with a copy to DLA Piper , 203
North La Salle, Suite 1900, Chicago, Illinois 60601, Attn: Mark Yura (e-mail
mark.yura@dlapiper.com), or at such other addresses as it may designate by
notice hereunder. The address for Escrow Agent is First American Title Insurance
Company, 633 3rd Avenue, New York, New York 10017, Attn: Jeffrey S. Mitzner.
D. The respective attorneys for Seller, Sellers'
Representative and Purchaser are authorized to give and receive any notices
required or permitted to be sent hereunder and are permitted to agree on
adjournments of the Closing Date.
E. No Seller will be deemed to have made any representation,
warranty or covenant under this Contract with respect to any Property other than
its Respective Property, or with respect to any Lease other than its Respective
Lease .
F. This Contract shall not be binding until executed and
delivered by Seller and Purchaser. Once fully executed and delivered, this
Contract shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
G. This Contract shall be governed by and construed in
accordance with the laws of the State of New York.
H. If any provision hereof shall be deemed unenforceable,
the remaining terms of this Contract shall be unaffected thereby and shall
remain in full force and effect.
I. The headings herein are for reference purposes only and
shall not be deemed to affect the interpretation of this Contract.
J. SELLER AND PURCHASER HEREBY WAIVE ANY AND ALL RIGHTS THAT
EITHER MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY DISPUTE CONCERNING THIS
CONTRACT OR THE PREMISES.
K. Each Seller and Purchaser expressly understands and
agrees and acknowledges that neither party would have entered this Contract
without the express provisions of this Subparagraph 20.K, except as specifically
permitted under Subparagraph 20.Lof this Contract, in no event shall either
party ever be liable to the other party for consequential, compensatory or any
other monetary damages (other than the Sellers' liquidated damages provided
herein or the amounts payable pursuant to Subparagraph 12.B. hereof) in respect
of this Contract, the Premises or the transaction contemplated hereby. In
addition, each party hereby agrees that in no event shall either party make or
bring any claim for any matter whatsoever against any member, shareholder,
partner, officer, director, trustee, employee, agent, representative or counsel
of or for the other party. Each party acknowledges that it agrees to this
Subparagraph 20.K and that it has consulted with counsel of its own choosing in
so agreeing. This Subparagraph 20.K. shall survive the Closing or earlier
termination of this Contract.
L. Purchaser understands and agrees that it shall not be
permitted to record this Contract or a memorandum hereof and any breach of this
provision shall constitute a default by Purchaser under this Contract in which
event Seller shall be entitled to the Downpayment, this Contract shall be
terminated and Seller shall (notwithstanding any other provisions of this
Contract) be entitled to such remedies as are available in law or equity.
M. Time is of the essence hereunder.
N. One Liberty Properties, Inc, a Maryland corporation
affiliated with Sellers, by execution of this Contract hereby agrees to be
liable for the post-Closing obligations of Sellers (and each of them).
[signature page(s) follow]
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Contract as of the date first hereinabove written.
OLP Chula Vista Corp., as Seller OLP Roanoke, LLC, as Seller
Tax ID # Tax ID #
--------------------- --------------------
By: By:
-------------------------- --------------------------
Print Name:
------------------ Its: [Member/Manager]
Title:
---------------------- By:
-----------------------------
Print Name:
---------------------
Title:
--------------------------
OLP Norwalk LLC, as Seller OLP Henrietta, LLC, as Seller
Tax ID # Tax ID #
----------------- ---------------------
By: By:
--------------------------- --------------------------
Its: [Member/Manager] Its: [Member/Manager]
By: By:
--------------------- ---------------------------
Print Name: Print Name:
--------------- -------------------
Title: Title:
------------------ ------------------------
OLP Austell LLC, as Seller OLP Lubbock Venture Limited Partnership,
as Seller
y: By:
--------------------------- --------------------------
Its: [Member/Manager] Its: [Member/Manager]
By: By:
--------------------- ---------------------------
Print Name: Print Name:
--------------- -------------------
Title: Title:
------------------ ------------------------
OLP Beavercreek, LLC, as Seller OLP Live Oak Limited Partnership,as Seller
Tax ID # Tax ID #
--------------------- ----------------------
By: By:
--------------------------- --------------------------
Its: [Member/Manager] Its: [Member/Manager]
By: By:
--------------------- ---------------------------
Print Name: Print Name:
--------------- -------------------
Title: Title:
------------------ ------------------------
OLP Southlake LLC, as Seller
Tax ID #
---------------------
By:
-------------------------
Its: [Member/Manager]
By:
---------------------
Print Name:
--------------
Title:
------------------
One Liberty Properties, Inc., a Maryland ECM Diversified Income & Growth
corporation, solely for the purpose of Fund, LLC, as Purchaser
agreeing to be responsible for any Tax ID #
post-Closing liabilities of the Sellers, ----------------------
as provided in Subparagraph 20. N. hereof By:
---------------------------
Its: [Member/Manager]
By: By:
--------------------- ---------------------------
Print Name: Print Name:
--------------- -------------------
Title: Title:
------------------ ------------------------
First American Title Insurance Company,
solely in its capacity as Escrow Agent
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Schedule 7(A) to Contract of Sale
Leases and Lease Related Documents:
CHULA VISTA:
-----------
Lease dated March 10, 1997 First Lease Amendment dated February 4, 1998 Second
Lease Amendment dated January 21, 2004 Third Lease Amendment dated as of March
1, 2004 Assignment of Lease Dated November 3, 1997 Exhibits to Lease Dated March
1997
NORWALK:
Agreement for Termination of Certain Portions of Disposition and Development
Agreement dated: May 8, 1996
Guaranty Dated June 13, 1995
Lease Dated as of February 8,1995 Lease Part 2-Dated as of February 8, 1995
Certificate of Occupancy Dated May 10,1996
Disposition and Development Agreement Dated April 26, 1994
Parking Agreement Dated June 14, 1995
Ground Lease Agreement Dated March 30, 1995
Ground Lease Dated May 15, 1995
AUSTELL:
Lease dated as of April 13, 1998. First Amendment to Lease, dated as of June 29,
1998. Completion Certificate, dated as of January 18, 2000.
BEAVERCREEK:
Lease dated July 25, 1997.
Lease Modification Agreement No. 1 dated September 10, 1998
Lease Modification Agreement No. 2 dated May 17, 2002
ROANOKE:
Lease dated as of May 11, 1999.
First Amendment dated July __, 1999.
Second Amendment of Lease Dated February 26, 2003
Reciprocal Easement Agreement Dated April 25, 2000
Guaranty: Consolidated Theatres Holdings, G.P., pursuant to Guaranty of
Lease dated as of May 11, 1999.
SOUTHLAKE:
Lease dated as of October 4, 1996.
First Amendment dated as of May 14, 2002.
LUBBOCK:
Lease Dated January 6, 1998
Letter Agreement dated December 2, 1998
Lease Commencement Agreement dated January 18, 1999
Landlord's Agreement Dated April 30, 2003
LIVE OAK:
--------
Lease Dated May 28, 1998
Contingency and Development Agreement dated May 28, 1998 First Amendment to
Lease dated as of September 4, 1998
First Amendment to Contingency and Development Agreement dated as of August 28,
1998 Second Amendment to Lease dated as of March 1, 2000 Second Amendment to
Contingency and Development Agreement date as of March 1, 2000 Assignment,
Assumption, Consent and Release Agreement dated as of March 27, 2001
HENRIETTA:
Lease Dated April 18, 1996
Lease Modification Agreement dated June 21, 1996
Lease Modification Agreement No. 2 dated October 31, 1996
Zoning Reports:
Regal Live Oak 18-Live Oak, TX - PZR - 11/11/2002 Regal Henrietta 18- Henrietta,
NY - PZR - 11/11/2002 Cinemark Tinseltown Lubbock,TX - PZR - 10/16/2002 Regal
Austell 22-Cobb County, GA - PZR - 3/29/2002 Regal Fairfield Commons
20-Beavercreek, OH - PZR - 6/19/2002 Consolidate Valley View Grande 16-Roanoke,
VA - PZR - 8/5/2002 AMC Norwalk 20-Norwalk, CA - PZR - 6/4/2002 Regal
Theater-Chula Vista, CA - PZR - 3/3/2004 AMC Southlake Pavilion 24 - Morrow, GA
- PZR - 4/11/02
Environmental Reports:
AMC Norwalk - Phase 1 prepared by Hayden Environmental dated February 7, 2001
Regal Live Oak - Phase 1 prepared by EMG dated 11/22/02 - 97215 Regal Henrietta
- Phase 1 prepared by EMG dated 10/31/02 - 97216 Cinemark - Lubbock - Phase 1
prepared by EMG dated 11/21/02 - 97217 Regal Austell - Phase 1 prepared by
United Consulting dated 4/1/02 - 971195-10 Regal Beavercreek - Phase 1 prepared
by Geotechnical Consultants Inc. dated 1/8/2002 - 01-E-09756 AMC - Southlake -
Phase 1 prepared by EMG dated 4/22/02 - 91671 Consolidated Roanoke - Phase 1
prepared by EMG dated 7/25/02 - 94204 Regal Chula Vista - Phase 1 prepared by
SECOR dated 1/28/04 - B3OT.90089.00.0001
Surveys:
Consolidated Roanoke
Date: July 29,2002 prepared by Mattern & Craig Consulting Engineers-Surveyors
AMC Southlake
Date: January 11,2002 prepared by Travis Pruitt & Associates, Inc
Regal Austell
Date:June 10,2002 prepared by W.K. Dickson
Regal Beavercreek
Date: February 20,2002 prepared by NCI-Northwest Consultants, Inc
Regal Chula Vista
Date: November 4, 2004 prepared by O.K.O Engineering
Cinemark Lubbock
Date: December 11, 2002 prepared by Abacus Engineering
Regal Henrietta
Date: December 13, 1996 prepared by Costich Engineering
Regal Live Oak
Date: December 02, 2002 prepared by Macina-Bose-Copeland & Assoc., Inc
AMC Norwalk
Date:July 08, 2002 prepared by Development Resource Consultants (DRC)
Schedule A-1 to Contract of Sale
Chula Vista Legal Description
See following pages
Schedule A-2 to Contract of Sale
Norwalk Legal Description
See following page(s)
Schedule A-3 to Contract of Sale
Austell Legal Description
See following page
Schedule A-4 to Contract of Sale
Beavercreek Legal Description
See following pages
Schedule A-5 to Contract of Sale
Southlake Legal Description
See following page
Schedule A-6 to Contract of Sale
Roanoke Legal Description
See following page
Schedule A-7 to Contract of Sale
Lubbock Legal Description
See following page
Schedule A-8 to Contract of Sale
Live Oak Legal Description
See following pages
Schedule A-9 to Contract of Sale
Henrietta Legal Description
See following page
Schedule 8(A)(v) to Contract of Sale
1. (Beavercreek Property): agreement with Vicar Security, dated September 20,
2004 (security services).
2. (Beavercreek Property): agreement with Louderback Family Investments Inc.,
dated May 17, 2002 (landscaping and other common area maintenance, snow removal,
etc.).
3. (Southlake Property): Management and Security Agreement with Thomas
Enterprises Inc., dated June 27, 2002 (landscaping and other common area
maintenance, snow removal, etc.).
Schedule 8(A)(viii) to Contract of Sale
NONE
Schedule 8(A)(ix) to Contract of Sale
(Southlake Property): As disclosed in further detail in information and
correspondence previously sent to Buyer, Seller has received written notice that
the two "AMC" signs in connection with the Southlake Property and located on
property not owned by Seller are not permitted by the City Sign Code; an
easement for one of such signs has been obtained and sent for recordation and an
easement for the other is in process of being signed and delivered for
recordation (and both of which shall be Permitted Exceptions under the Contract
to which this Schedule is attached).
Schedule 8(A)(x) to Contract of Sale
NONE.
EXHIBIT 99.1
ONE LIBERTY PROPERTIES, INC.
60 Cutter Mill Road - Suite 303
Great Neck, New York 11021
www.onelibertyproperties.com
Telephone 516.466.3100
Telecopier 516.466.3132
ONE LIBERTY JOINT VENTURES AND ONE LIBERTY ENTER INTO
CONTRACTS TO SELL TEN MOVIE THEATER PROPERTIES
Great Neck, New York - June 15, 2006 - One Liberty Properties, Inc. (NYSE:OLP)
today announced that a contract has been executed by entities wholly-owned by
two joint ventures of OLP (in which OLP holds a 50% equity interest) to sell to
a single buyer eight properties and by a wholly-owned subsidiary of OLP to sell
to the same buyer one property for an aggregate consideration of $161,885,050.
Of such amount, approximately $146,657,627 has been allocated to the eight
properties owned by the entities wholly-owned by the joint ventures and
approximately $15,227,423 has been allocated to the property owned by the OLP
subsidiary. Each property is improved with a movie theater. One Liberty also
announced that a contract of sale has been executed with a different purchaser,
pursuant to which an additional movie theater property, owned by an entity
wholly-owned by one of our joint ventures, is to be sold for a consideration of
$16,000,000.
Consummation of the transactions is conditioned upon the fulfillment of specific
terms and conditions and delivery of specific documents as is customary for
transactions of this type, including, among other terms and conditions, the
delivery of current tenant estoppel certificates for each of the properties.
Additionally, the contract of sale with respect to the nine properties provides
the buyer with a 35-day due diligence period pursuant to which the buyer may, in
its sole discretion, terminate the contract of sale.
Some or all of One Liberty's gain in connection with these two transactions may
be deferred for income tax purposes by One Liberty entering into one or more
tax-deferred exchanges under Section 1031 of the Internal Revenue Code of 1985,
as amended, and using the sale proceeds to acquire one or more replacement
properties. There can be no assurance that the transactions, or either of them,
will be completed, or, if completed, that suitable replacement properties will
be located in accordance with statutory and regulatory requirements applicable
to tax-deferred exchanges.
One Liberty is a New York-based real estate investment trust that specializes in
the acquisition and ownership of a diversified portfolio of real estate
properties under long term net leases. One Liberty's leases generally provide
for contractual rent increases with all operating expenses and most of property
related expenses paid by the tenant. For more information on One Liberty, please
visit our website at www.onelibertyproperties.com.
Caution Concerning Forward-Looking Statements: Materials included in this
release may contain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
could cause actual results to be materially different from historical results or
from any future results expressed or implied by such forward-looking statements.
Statements that include the words "may," "will," "would," "could," "should,"
"believes," "estimates," "projects," "potential," "expects," "plans,"
"anticipates," "intends," "continues," "forecast," "designed," "goal," or the
negative of those words or other comparable words should be considered uncertain
and forward-looking.
Contact: Mark Lundy - 516.466.3100