x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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46-4380248
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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405 Park Ave., 15
th
Floor, New York, NY
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10022
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(Address of principal executive offices)
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(Zip Code)
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(212) 415-6500
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(Registrant's telephone number, including area code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Page
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June 30,
2014 |
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December 31,
2013 |
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ASSETS
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Real estate investment, at cost:
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Building, fixtures and improvements
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$
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7,184
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$
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—
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Acquired intangible lease asset
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1,020
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—
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Total real estate investment, at cost
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8,204
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—
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Less accumulated depreciation and amortization
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(43
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)
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—
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Total real estate investment, net
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8,161
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—
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Cash
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51,161
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—
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Receivables for sale of common stock
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9,430
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—
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Prepaid expenses and other assets
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271
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—
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Deferred costs
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—
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35
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Total assets
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$
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69,023
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$
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35
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Accounts payable and accrued expenses
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$
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2,394
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$
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35
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Below-market lease liability, net
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942
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—
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Distributions payable
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186
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—
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Total liabilities
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3,522
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35
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Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding at June 30, 2014 and December 31, 2013
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—
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—
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Common stock, $0.01 par value, 300,000,000 shares authorized, 3,008,784 shares issued and outstanding as of June 30, 2014 and no shares issued and outstanding as of December 31, 2013
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30
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—
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Additional paid-in capital
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65,887
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—
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Accumulated deficit
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(416
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)
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—
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Total stockholders' equity
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65,501
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—
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Total liabilities and stockholders' equity
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$
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69,023
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$
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35
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Three Months Ended
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Six Months Ended
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June 30, 2014
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June 30, 2014
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Rental income
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$
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43
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$
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43
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Expenses:
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Property operating
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10
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10
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Acquisition and transaction related
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142
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142
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General and administrative
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62
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78
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Depreciation and amortization
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43
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43
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Total expenses
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257
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273
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Net loss
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$
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(214
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)
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$
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(230
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Comprehensive loss
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$
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(214
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$
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(230
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Basic and diluted weighted average shares outstanding
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690,143
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351,398
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Basic and diluted net loss per share
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$
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(0.31
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)
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$
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(0.65
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)
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Common Stock
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Number of
Shares
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Par Value
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Additional
Paid-in
Capital
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Accumulated Deficit
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Total Stockholders' Equity
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|||||||||
Balance, December 31, 2013
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—
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$
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—
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$
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—
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$
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—
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$
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—
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Issuance of common stock
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3,004,785
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30
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72,540
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—
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72,570
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Common stock offering costs, commissions and dealer manager fees
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—
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—
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(6,657
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)
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—
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(6,657
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)
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Share-based compensation
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3,999
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—
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4
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—
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4
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Distributions declared
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—
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—
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—
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(186
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)
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(186
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)
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Net loss
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—
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—
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—
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(230
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)
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(230
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)
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Balance, June 30, 2014
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3,008,784
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$
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30
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$
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65,887
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$
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(416
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)
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$
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65,501
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Six Months Ended
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June 30, 2014
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Cash flows from operating activities:
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Net loss
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$
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(230
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)
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Adjustment to reconcile net loss to net cash used in operating activities:
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Depreciation
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30
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Amortization of intangibles
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13
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Accretion of below-market lease liability
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(13
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)
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Share-based compensation
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4
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Changes in assets and liabilities:
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Prepaid expenses and other assets
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(271
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Accounts payable and accrued expenses
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22
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Net cash used in operating activities
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(445
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)
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Cash flows from investing activities:
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Investment in real estate and other assets
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(7,096
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Net cash used in investing activities
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(7,096
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Cash flows from financing activities:
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Proceeds from issuance of common stock
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63,140
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Payments of offering costs and fees related to common stock issuances
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(4,693
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)
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Advances from affiliate, net
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255
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Net cash provided by financing activities
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58,702
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Net change in cash
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51,161
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Cash, beginning of period
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—
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Cash, end of period
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$
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51,161
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Non-Cash Financing Activities:
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Reclassification of deferred offering costs to equity
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$
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35
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Six Months Ended
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(Dollar amounts in thousands)
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June 30, 2014
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Real estate investment, at cost:
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Building, fixtures and improvements
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$
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7,184
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Total tangible assets
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7,184
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Acquired intangibles:
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In-place lease
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1,020
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Below-market lease liability
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(955
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)
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Total assets acquired, net
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7,249
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Other liability assumed
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(153
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)
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Cash paid for acquired real estate investment
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$
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7,096
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Number of properties purchased
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1
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Six Months Ended
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(In thousands)
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June 30, 2014
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Pro forma revenues
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$
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430
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Pro forma net loss
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$
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(187
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)
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(In thousands)
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Future Minimum
Base Rent Payments
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July 1, 2014 — December 31, 2014
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$
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304
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2015
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608
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2016
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608
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2017
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608
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2018
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608
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Thereafter
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1,064
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$
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3,800
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June 30,
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Property Portfolio
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Tenant
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2014
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The Hit Factory
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Gibson Guitar Corporation
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100.0%
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Three and Six Months Ended June 30, 2014
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Payable as of
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(In thousands)
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June 30, 2014
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December 31, 2013
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Total commissions and fees incurred from the Dealer Manager
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$
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4,963
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$
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931
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$
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—
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Three and Six Months Ended June 30, 2014
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Payable as of
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(In thousands)
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June 30, 2014
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December 31, 2013
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Fees and expense reimbursements from the Advisor and Dealer Manager
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$
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542
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$
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505
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$
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—
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Three and Six Months Ended June 30, 2014
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Payable as of
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||||||||||||
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June 30,
|
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December 31,
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(In thousands)
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Incurred
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Forgiven
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2014
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2013
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One-time fees and reimbursements:
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Acquisition fees and related cost reimbursements
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$
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109
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$
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—
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$
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—
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$
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—
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Ongoing fees:
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Property management and leasing fees
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—
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1
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—
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—
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Total related party operation fees and reimbursements
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$
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109
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$
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1
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$
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—
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$
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—
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Three Months Ended June 30, 2014
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Six Months Ended June 30, 2014
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Net loss
(in thousands)
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$
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(214
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)
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$
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(230
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)
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Basic and diluted weighted average shares outstanding
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690,143
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351,398
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Basic and diluted net loss per share
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$
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(0.31
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)
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$
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(0.65
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)
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June 30, 2014
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Unvested restricted stock
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3,999
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Source of Capital
(in thousands)
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Inception to June 30, 2014
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July 1, 2014 to July 31, 2014
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Total
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Common stock
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$
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72,570
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$
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103,134
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$
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175,704
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•
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We have a limited operating history which makes our future performance difficult to predict.
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•
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All of our executive officers are also officers, managers or holders of a direct or indirect controlling interest in the Advisor, our dealer manager, Realty Capital Securities, LLC (the "Dealer Manager") and other AR Capital, LLC affiliated entities ("American Realty Capital"). As a result, our executive officers, our Advisor and its affiliates face conflicts of interest, including significant conflicts created by our Advisor's compensation arrangements with us and other investment programs advised by American Realty Capital affiliates and conflicts in allocating time among these investment programs and us. These conflicts could result in unanticipated actions.
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•
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Because investment opportunities that are suitable for us may also be suitable for other American Realty Capital advised investment programs, our Advisor and its affiliates face conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders.
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•
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No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid.
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•
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If we and our Advisor are unable to find suitable investments, then we may not be able to achieve our investment objectives or pay distributions.
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•
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If we raise substantially less than the maximum offering in our initial public offering (the "IPO" or "our offering"), we may not be able to invest in a diversified portfolio of real estate assets, which may cause the value of an investment in us to vary more widely with the performance of specific assets.
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•
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We may be unable to pay or maintain cash distributions or increase distributions over time.
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•
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We are obligated to pay fees which may be substantial to our Advisor and its affiliates.
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•
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We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants.
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•
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Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions.
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•
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We are permitted to pay distributions from unlimited amounts of any source. Until substantially all of the proceeds from our IPO are invested, we may use proceeds from our IPO and financings to fund distributions until we have sufficient cash flows from operations. There are no established limits on the amount of net proceeds and borrowings that we may use to fund distribution payments, except in accordance with our organizational documents and Maryland law.
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•
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Any distributions may reduce the amount of capital we ultimately invest in properties and other permitted investments and negatively impact the value of your investment.
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•
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We have and may not generate cash flows sufficient to pay our distributions to stockholders, as such, we may be forced to borrow at higher rates or depend on our Advisor or our property manager, New York City Properties, LLC (the "Property Manager") to waive fees or reimbursement of certain expenses and fees to fund our operations. There is no assurance that these entities will waive such amounts.
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•
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We are subject to risks associated with any dislocations or liquidity disruptions that may exist or occur in the credit markets of the United States from time to time.
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•
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We may fail to qualify, or continue to qualify, to be treated as a real estate investment trust ("REIT") for United States federal income tax purposes, which would result in higher taxes, may adversely affect our operations and would reduce our net asset value ("NAV") and cash available for distributions.
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•
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We may be deemed to be an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and thus subject to regulation under the Investment Company Act.
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•
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As of
June 30, 2014
, we only own
one
property and therefore have limited diversification.
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Portfolio
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Acquisition
Date
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Number
of Properties
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Rentable
Square Feet
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Occupancy
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Remaining
Lease Term
(1)
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Base Purchase Price
(2)
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(In thousands)
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421 W 54th Street - Hit Factory
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Jun. 2014
|
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1
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|
12,327
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100.0%
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6.3
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$
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7,250
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1
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12,327
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100.0%
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6.3
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$
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7,250
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(1)
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Remaining lease term in years as of
June 30, 2014
, calculated on a weighted-average basis, as applicable.
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(2)
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Contract purchase price, excluding acquisition related costs.
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Three Months Ended
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(In thousands)
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June 30, 2014
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Net loss (in accordance with GAAP)
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$
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(214
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)
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Depreciation and amortization
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43
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FFO
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(171
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)
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Acquisition fees and expenses
(1)
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142
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Amortization of above or accretion of below market leases and liabilities, net
(2)
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(13
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)
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MFFO
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$
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(42
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)
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Six Months Ended
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(In thousands)
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June 30, 2014
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Selling commissions and dealer manager fees
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$
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4,963
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Other offering costs
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1,694
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Total offering costs
|
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$
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6,657
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Six Months Ended
|
||
(In thousands)
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June 30, 2014
|
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Total commissions paid to the Dealer Manager
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$
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4,963
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Less:
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Commissions to participating brokers
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(2,885
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)
|
|
Reallowance to participating broker dealers
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|
(1,084
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)
|
|
Net to the Dealer Manager
|
|
$
|
994
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AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.
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By:
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/s/ Nicholas S. Schorsch
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Nicholas S. Schorsch
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Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
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By:
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/s/ Gregory W. Sullivan
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Gregory W. Sullivan
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Chief Operating Officer and Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit No.
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Description
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1.1 *
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Exclusive Dealer Manager Agreement, dated as of April 24, 2014, among the Company, New York City Advisors, LLC and Realty Capital Securities, LLC
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3.1
(1)
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Articles of Amendment and Restatement for American Realty Capital New York City REIT, Inc.
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4.1 *
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Agreement of Limited Partnership of New York City Operating Partnership, L.P., dated as of April 24, 2014
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10.1 *
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Amended and Restated Subscription Escrow Agreement, dated as of May 5, 2014, among Realty Capital Securities, LLC, the Company and UMB Bank, N.A.
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10.2 *
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Advisory Agreement, dated as of April 24, 2014, by and among the Company, New York City Operating Partnership, L.P. and New York City Advisors, LLC
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10.3 *
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Property Management and Leasing Agreement, dated as of April 24, 2014, by and among the Company, New York City Operating Partnership, L.P. and New York City Advisors, LLC
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10.4 *
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Purchase and Sale Agreement, dated June 4, 2014, by and among American Realty Capital New York City REIT, Inc., Sagamore 54th St. Investments LLC and Sagamore Arizona LLC
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10.5 *
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Purchase and Sale Agreement, dated August 7, 2014, by and between 200 Riverside Parking LLC and ARC NYC200RIVER01, LLC
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10.6 *
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Purchase and Sale Agreement, dated August 8, 2014, by and between USPF IV Laurel Retail Owner, L.P. and ARC NYC400E67, LLC
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14 *
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Code of Ethics
|
31.1 *
|
|
Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2 *
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|
Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32 *
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Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101 *
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|
XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital New York City REIT, Inc.'s Quarterly Report on Form 10-Q for the three months ended June 30, 2014, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this information in furnished and not filed for purpose of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.
|
If to the Company:
|
American Realty Capital New York City REIT, Inc.
|
|
405 Park Avenue
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New York, New York 10022
|
|
Facsimile No.: (212) 421-5799
|
|
Attention: Nicholas S. Schorsch, Chief Executive Officer and Chairman of the Board of Directors
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|
|
|
with a copy to:
|
|
|
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Proskauer Rose LLP
|
|
Eleven Times Square
|
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New York, NY 10036-8299
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|
Facsimile No.: (212) 969-2900
|
|
Attention: Peter M. Fass, Esq.
|
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If to the Dealer Manager:
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Realty Capital Securities, LLC
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Three Copley Place, Suite 3300
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Boston, MA 02116
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Facsimile No.: (857) 207-3399
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Attention: Louisa H. Quarto, President
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with a copy to:
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Proskauer Rose LLP
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Eleven Times Square
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New York, NY 10036-8299
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Facsimile No.: (212) 969-2900
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Attention: Peter M. Fass, Esq.
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If to the Advisor:
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New York City Advisors, LLC
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405 Park Avenue
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New York, New York 10022
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Facsimile No.: (212) 421-5799
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Attention: Nicholas S. Schorsch, Chief Executive Officer
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with a copy to:
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Proskauer Rose LLP
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Eleven Times Square
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New York, NY 10036-8299
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Facsimile No.: (212) 969-2900
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Attention: Peter M. Fass, Esq.
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Exhibit 4.1
AGREEMENT OF LIMITED PARTNERSHIP
OF
NEW YORK CITY OPERATING PARTNERSHIP, L.P.
Dated as of April 24, 2014
TABLE OF CONTENTS
Page | |||
Article 1 | DEFINED TERMS | 1 | |
Article 2 | ORGANIZATIONAL MATTERS | 19 | |
2.1 | Formation | 19 | |
2.2 | Name | 19 | |
2.3 | Registered Office and Agent; Principal Office | 20 | |
2.4 | Power of Attorney | 20 | |
2.5 | Term | 21 | |
Article 3 | PURPOSE | 22 | |
3.1 | Purpose and Business | 22 | |
3.2 | Powers | 22 | |
Article 4 | CAPITAL CONTRIBUTIONS | 23 | |
4.1 | Capital Contributions of the Partners | 23 | |
4.2 | Additional Funds; Restrictions on the General Partner | 24 | |
4.3 | Issuance of Additional Partnership Interests; Admission of Additional Limited Partners | 25 | |
4.4 | Contribution of Proceeds of Issuance of Common Stock | 26 | |
4.5 | Repurchase of Common Stock; Shares-In-Trust | 26 | |
4.6 | No Third-Party Beneficiary | 27 | |
4.7 | No Interest; No Return | 27 | |
4.8 | No Preemptive Rights | 27 | |
Article 5 | DISTRIBUTIONS | 28 | |
5.1 | Distributions | 28 | |
5.2 | Qualification as a REIT | 32 | |
5.3 | Withholding | 33 | |
5.4 | Additional Partnership Interests | 33 | |
Article 6 | ALLOCATIONS | 33 | |
6.1 | Allocations | 33 | |
6.2 | Revisions to Allocations to Reflect Issuance of Partnership Interests | 33 | |
Article 7 | MANAGEMENT AND OPERATIONS OF BUSINESS | 34 | |
7.1 | Management | 34 | |
7.2 | Certificate of Limited Partnership | 38 | |
7.3 | Reimbursement of the General Partner | 39 | |
7.4 | Outside Activities of the General Partner | 40 | |
7.5 | Contracts with Affiliates | 40 | |
7.6 | Indemnification | 41 | |
7.7 | Liability of the General Partner | 43 | |
7.8 | Other Matters Concerning the General Partner | 44 | |
7.9 | Title to Partnership Assets | 45 |
i |
7.10 | Reliance by Third Parties | 45 | |
7.11 | Loans By Third Parties | 46 | |
Article 8 | RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS | 46 | |
8.1 | Limitation of Liability | 46 | |
8.2 | Management of Business | 46 | |
8.3 | Outside Activities of Limited Partners | 47 | |
8.4 | Return of Capital | 47 | |
8.5 | Rights of Limited Partners Relating to the Partnership | 47 | |
8.6 | Exchange Rights Agreements | 48 | |
8.7 | Conversion and Exchange of Special Limited Partner Interests | 49 | |
Article 9 | BOOKS, RECORDS, ACCOUNTING AND REPORTS | 50 | |
9.1 | Records and Accounting | 50 | |
9.2 | Fiscal Year | 50 | |
9.3 | Reports | 50 | |
Article 10 | TAX MATTERS | 51 | |
10.1 | Preparation of Tax Returns | 51 | |
10.2 | Tax Elections | 51 | |
10.3 | Tax Matters Partner | 52 | |
10.4 | Organizational Expenses | 54 | |
10.5 | Withholding | 54 | |
Article 11 | TRANSFERS AND WITHDRAWALS | 55 | |
11.1 | Transfer | 55 | |
11.2 | Transfer of the General Partner’s General Partner Interest | 56 | |
11.3 | Limited Partners’ Rights to Transfer | 57 | |
11.4 | Substituted Limited Partners | 59 | |
11.5 | Assignees | 60 | |
11.6 | General Provisions | 60 | |
Article 12 | ADMISSION OF PARTNERS | 62 | |
12.1 | Admission of Successor General Partner | 62 | |
12.2 | Admission of Additional Limited Partners | 63 | |
12.3 | Amendment of Agreement and Certificate of Limited Partnership | 64 | |
Article 13 | DISSOLUTION, LIQUIDATION AND TERMINATION | 64 | |
13.1 | Dissolution | 64 | |
13.2 | Winding Up | 65 | |
13.3 | Obligation to Contribute Deficit | 67 | |
13.4 | Rights of Limited Partners | 67 | |
13.5 | Notice of Dissolution | 67 | |
13.6 | Termination of Partnership and Cancellation of Certificate of Limited Partnership | 68 | |
13.7 | Reasonable Time for Winding-Up | 68 | |
13.8 | Waiver of Partition | 68 |
ii |
Article 14 | AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS | 68 | |
14.1 | Amendments | 68 | |
14.2 | Meetings of the Partners | 69 | |
Article 15 | GENERAL PROVISIONS | 70 | |
15.1 | Addresses and Notice | 70 | |
15.2 | Titles and Captions | 71 | |
15.3 | Pronouns and Plurals | 71 | |
15.4 | Further Action | 71 | |
15.5 | Binding Effect | 71 | |
15.6 | Creditors | 71 | |
15.7 | Waiver | 71 | |
15.8 | Counterparts | 71 | |
15.9 | Applicable Law | 72 | |
15.10 | Invalidity of Provisions | 72 | |
15.11 | Entire Agreement | 72 | |
15.12 | Merger | 72 | |
15.13 | No Rights as Stockholders | 72 | |
Article 16 | CLASS B UNITS | 72 | |
16.1 | Designation and Number | 72 | |
16.2 | Special Provisions | 74 | |
16.3 | Voting | 75 | |
16.4 | Conversion of Class B Units | 76 | |
16.5 | Profits Interests | 78 |
EXHIBITS
Exhibit A | – | Partners’ Contributions and Partnership Interests |
Exhibit B | – | Allocations |
Exhibit C | – | Certificate of Limited Partnership |
iii |
FORM OF AGREEMENT OF LIMITED PARTNERSHIP
OF
NEW YORK CITY OPERATING PARTNERSHIP, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP OF NEW YORK CITY OPERATING PARTNERSHIP, L.P. (this “ Agreement ”) dated as of April 24, 2014, is entered into among AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC., a Maryland corporation, as general partner (the “ General Partner ”), and NEW YORK CITY ADVISORS, LLC, a Delaware limited liability company, as Limited Partner (the “ Initial Limited Partner ”), and the Limited Partners party hereto from time to time.
RECITALS
WHEREAS, New York City Operating Partnership, L.P. was formed on October 11, 2012 pursuant to the Revised Uniform Limited Partnership Act of the State of Delaware and a certificate of limited partnership was filed with the Secretary of State of the State of Delaware (the “ Certificate ”).
NOW THEREFORE, in consideration of the mutual covenants herein contained, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
Article
1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
“ Acquisition Expenses ” means any and all expenses, exclusive of Acquisition Fees, incurred by the General Partner, the Partnership, the Advisor or any of their Affiliates (as such term is defined in the Advisory Agreement) in connection with the selection, evaluation, acquisition, origination, making or development of any Real Estate Assets, whether or not acquired, including legal fees and expenses, travel and communications expenses, brokerage fees, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance premiums and the costs of performing due diligence.
“ Acquisition Fee ” means the fee payable to the Advisor or its assignees pursuant to Section 10(a) of the Advisory Agreement.
“ Act ” means the Delaware Revised Uniform Limited Partnership Act, as amended from time to time, and any successor to such statute.
“ Additional Limited Partner ” means a Person that has executed and delivered an additional limited partner signature page in the form attached hereto, has been admitted to the Partnership as a Limited Partner pursuant to Section 4.3 hereof and that is shown as such on the books and records of the Partnership.
“ Adjusted Capital Account Deficit ” means with respect to any Partner, the negative balance, if any, in such Partner’s Capital Account as of the end of any relevant fiscal year, determined after giving effect to the following adjustments:
(a) credit to such Capital Account any portion of such negative balance which such Partner (i) is treated as obligated to restore to the Partnership pursuant to the provisions of Section 1.704-1(b)(2)(ii)(c) of the Regulations, or (ii) is deemed to be obligated to restore to the Partnership pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
(b) debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
“ Adjustment Event ” has the meaning set forth in Section 16.1(b).
“ Advisor ” means the Initial Limited Partner, its successors and assignees.
“ Advisory Agreement ” means the Advisory Agreement dated as of April 24, 2014, by and among the Partnership and the General Partner, as advisees, and the Initial Limited Partner, as advisor, as the same may be amended, supplemented or restated from time to time.
“ Affected Gain ” has the meaning set forth in subparagraph 4(b) of Exhibit B .
“ Affiliate ” means,
(a) with respect to any individual Person, any member of the Immediate Family of such Person or a trust established for the benefit of such member, or
(b) with respect to any Entity, any Person which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, any such Entity. For purposes of this definition, “control”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“ Agreement ” means this Amended and Restated Agreement of Limited Partnership, as originally executed and as amended, supplemented or restated from time to time, as the context requires.
“ Articles of Incorporation ” means the General Partner’s Articles of Incorporation, filed with the Maryland State Department of Assessments and Taxation, or other organizational document governing the General Partner, as amended, supplemented or restated from time to time.
“ Assignee ” means a Person to whom one or more Partnership Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5.
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“ Available Cash ” means, with respect to the applicable period of measurement (i.e., any period (other than the first period in which this calculation of Available Cash is being made) beginning on the first day of the fiscal year, quarter or other period commencing immediately after the last day of the fiscal year, quarter or other applicable period for purposes of the prior calculation of Available Cash for or with respect to which a distribution has been made, and ending on the last day of the fiscal year, quarter or other applicable period immediately preceding the date of the calculation), the excess, if any, as of such date, of
(a) the gross cash receipts of the Partnership for such period from all sources whatsoever, including the following:
(i) all rents, revenues, income and proceeds derived by the Partnership from its operations, including distributions received by the Partnership from any Entity in which the Partnership has an interest;
(ii) all proceeds and revenues received by the Partnership on account of any sales of any Partnership property or as a refinancing of or payment of principal, interest, costs, fees, penalties or otherwise on account of any borrowings or loans made by the Partnership or financings or refinancings of any property of the Partnership;
(iii) the amount of any insurance proceeds and condemnation awards received by the Partnership;
(iv) all capital contributions and loans received by the Partnership from its Partners;
(v) all cash amounts previously reserved by the Partnership, to the extent such amounts are no longer needed for the specific purposes for which such amounts were reserved; and
(vi) the proceeds of liquidation of the Partnership’s property in accordance with this Agreement;
over
(b) the sum of the following:
(i) all operating costs and expenses, including taxes and other expenses of the properties directly and indirectly held by the Partnership and capital expenditures made during such period (without deduction, however, for any capital expenditures, charges for Depreciation or other expenses not paid in cash or expenditures from reserves described in clause (viii) below);
(ii) all costs and expenses expended or paid during such period in connection with the sale or other disposition, or financing or refinancing, of the property directly or indirectly held by the Partnership or the recovery of insurance or condemnation proceeds;
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(iii) all fees provided for under this Agreement;
(iv) all debt service, including principal and interest, paid during such period on all indebtedness (including under any line of credit) of the Partnership;
(v) all capital contributions, advances, reimbursements, loans or similar payments made to any Person in which the Partnership has an interest;
(vi) all loans made by the Partnership in accordance with the terms of this Agreement;
(vii) all reimbursements to the General Partner or its Affiliates during such period; and
(viii) the amount of any new reserve or reserves or increase in reserves established during such period which the General Partner determines is necessary or appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash received or reductions in reserves, or take into account any disbursements made or reserves established, after commencement of the dissolution and liquidation of the Partnership.
“ Business Combination ” has the meaning set forth in Section 7.1(a)(iii)(D).
“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
“ Capital Account ” means with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:
(a) to each Partner’s Capital Account there shall be credited;
(i) such Partner’s Capital Contributions;
(ii) such Partner’s distributive share of Net Income, Net Property Gain and any items in the nature of income or gain which are specially allocated to such Partner pursuant to paragraphs 1 and 2 of Exhibit B ; and
(iii) the amount of any Partnership liabilities assumed by such Partner or which are secured by any asset distributed to such Partner;
(b) to each Partner’s Capital Account there shall be debited;
(i) the amount of cash and the Gross Asset Value of any property distributed to such Partner pursuant to any provision of this Agreement;
(ii) such Partner’s distributive share of Net Losses, Net Property Loss and any items in the nature of expenses or losses which are specially allocated to such Partner pursuant to paragraphs 1 and 2 of Exhibit B ; and
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(iii) the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any asset contributed by such Partner to the Partnership; and
(c) if all or a portion of a Partnership Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Partnership Interest.
The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Sections 1.704-1(b) and 1.704-2 of the Regulations, and shall be interpreted and applied in a manner consistent with such Regulations. If the General Partner shall reasonably determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including debits or credits relating to liabilities which are secured by contributed or distributed assets or which are assumed by the Partnership, the General Partner or any Limited Partner) are computed in order to comply with such Regulations, the General Partner may make such modification; provided, that, all allocations of Partnership income, gain, loss and deduction continue to have “substantial economic effect” within the meaning of Section 704(b) of the Code and that no Limited Partner is materially adversely affected by any such modification.
“ Capital Contribution ” means, with respect to any Partner, any cash, cash equivalents or the Gross Asset Value of property (net of any liabilities secured by contributed property that the Partnership is considered to assume or take subject to under Section 752 of the Code) which such Partner contributes or is deemed to contribute to the Partnership pursuant to Article 4 hereof.
“ Capital Transaction ” means any sale, or other disposition (other than a deemed disposition pursuant to Section 708(b)(1)(B) of the Code and the Regulations thereunder) of all or substantially all of the assets and properties of the Partnership or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the assets and properties of the Partnership.
“ Cash Amount ” means an amount of cash per Partnership Unit equal to the value of one share of Common Stock as determined under the applicable Exchange Rights Agreement on the Valuation Date of the Common Stock Amount.
“ Cash Available for Distribution ” means the Available Cash other than Net Sales Proceeds.
“ Certificate ” has the meaning set forth in the Recitals.
“ Claims ” has the meaning set forth in Section 7.6(a)(i).
“ Class B Unit ” means a Partnership Unit which is designated as a Class B Unit of the Partnership.
“ Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time, as interpreted by the applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.
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“ Common Stock ” means the common stock of the General Partner, $.01 par value per share. Common Stock may be issued in one or more classes or series in accordance with the terms of the Articles of Incorporation. If, at any time, there is more than one class or series of Common Stock, the term “Common Stock” shall, as the context requires, be deemed to refer to the class or series of Common Stock that correspond to the class or series of Partnership Interests for which the reference to Common Stock is made.
“ Common Stock Amount ” means that number of shares of Common Stock equal to the product of (a) the number of OP Units offered for exchange by an exchanging Partner, multiplied by (b) the Exchange Factor as of the Valuation Date, provided , however , that if the General Partner or the Partnership issues to all holders of Common Stock rights, options, warrants or convertible, exercisable or exchangeable securities entitling the stockholders to subscribe for or purchase Common Stock, or any other securities or property (collectively, the “rights”), then the Common Stock Amount shall also include the rights that a holder of that number of shares of Common Stock would be entitled to receive.
“ Consent ” means the consent or approval of a proposed action by a Partner given in accordance with Section 14.2 hereof.
“ Consent of the Limited Partners ” means the Consent of Limited Partners (excluding for this purpose any Partnership Interests held by the General Partner, any other Person of which the General Partner owns or controls more than fifty percent (50%) of the voting interests and any Person directly or indirectly owning or controlling more than fifty percent (50%) of the outstanding voting interests of the General Partner) holding Percentage Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of all Limited Partners who are not excluded for the purposes hereof.
“ Constituent Person ” has the meaning set forth in Section 16.4(d) hereof.
“ Contributed Property ” means each property, partnership interest, contract right or other asset, in such form as may be permitted by the Act, contributed or deemed contributed to the Partnership by any Partner, including any interest in any successor partnership occurring as a result of a termination of the Partnership pursuant to Section 708 of Code.
“ Conversion Date ” has the meaning set forth in Section 16.4(a) hereof.
“ Cost of Assets ” means, with respect to a Real Estate Asset, the purchase price, Acquisition Expenses, capital expenditures and other customarily capitalized costs, but shall exclude Acquisition Fees associated with such Real Estate Asset.
“ Debt ” means, as to any Person, as of any date of determination and without duplication, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (b) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (c) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (d) obligations of such Person incurred in connection with entering into a lease which, in accordance with generally accepted accounting principles, should be capitalized.
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“ Depreciation ” means, with respect to any asset of the Partnership for any fiscal year or other period, the depreciation, depletion, amortization or other cost recovery deduction, as the case may be, allowed or allowable for U.S. federal income tax purposes in respect of such asset for such fiscal year or other period; provided , however , that except as otherwise provided in Section 1.704-2 of the Regulations, if there is a difference between the Gross Asset Value (including the Gross Asset Value, as increased pursuant to paragraph (d) of the definition of Gross Asset Value) and the adjusted tax basis of such asset at the beginning of such fiscal year or other period, Depreciation for such asset shall be an amount that bears the same ratio to the beginning Gross Asset Value of such asset as the U.S. federal income tax depreciation, depletion, amortization or other cost recovery deduction for such fiscal year or other period bears to the beginning adjusted tax basis of such asset; provided further , however , that if the U.S. federal income tax depreciation, depletion, amortization or other cost recovery deduction for such asset for such fiscal year or other period is zero, Depreciation of such asset shall be determined with reference to the beginning Gross Asset Value of such asset using any reasonable method selected by the General Partner.
“ Distribution Date ” has the meaning set forth in Section 5.1(a).
“ Economic Hurdle ” has the meaning set forth in Section 16.2(a)(ii)(A).
“ Effective Date ” means the date upon which the Registration Statement relating to the General Partner’s public offering of Common Stock has been declared effective by the Securities and Exchange Commission.
“ Entity ” means any general partnership, limited partnership, corporation, joint venture, trust, business trust, real estate investment trust, limited liability company, limited liability partnership, cooperative or association.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time (or any corresponding provisions of succeeding laws).
“ Excess Oversight Fee ” has the meaning set forth in Section 16.1(a)(i).
“ Exchange Factor ” means 1.0; provided , however , that if the General Partner: (a) declares or pays a dividend on its outstanding Common Stock in Common Stock or makes a distribution to all holders of its outstanding Common Stock in Common Stock; (b) subdivides its outstanding Common Stock; or (c) combines its outstanding Common Stock into a smaller number of shares of Common Stock, the Exchange Factor shall be adjusted by multiplying the Exchange Factor by a fraction, the numerator of which shall be the number of shares of Common Stock issued and outstanding on the record date for such dividend, contribution, subdivision or combination (assuming for such purpose that such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of shares of Common Stock (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Exchange Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.
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“ Exchange Right ” means the exchange right of a Limited Partner described in Section 8.6 and to be set forth in one or more Exchange Rights Agreements.
“ Exchange Rights Agreements ” has the meaning set forth in Section 8.6.
“ General Partner ” means New York City REIT, Inc., a Maryland corporation, and any successor as general partner of the Partnership.
“ General Partner Interest ” means a Partnership Interest held by the General Partner, in its capacity as general partner. A General Partner Interest may be expressed as a number of GP Units.
“ GP Unit ” means a Partnership Unit which is designated as a GP Unit of the Partnership.
“ Gross Asset Value ” means, with respect to any asset of the Partnership, such asset’s adjusted basis for U.S. federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, without reduction for liabilities, as determined by the contributing Partner and the Partnership on the date of contribution thereof;
(b) if the General Partner determines that an adjustment is necessary or appropriate to reflect the relative economic interests of the Partners, the Gross Asset Values of all Partnership assets shall be adjusted in accordance with Sections 1.704-1(b)(2)(iv)(f) and (g) of the Regulations to equal their respective gross fair market values, without reduction for liabilities, as reasonably determined by the General Partner, as of the following times:
(i) a Capital Contribution (other than a de minimis Capital Contribution) to the Partnership by a new or existing Partner as consideration for a Partnership Interest;
(ii) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership assets as consideration for the repurchase or redemption of a Partnership Interest;
(iii) the liquidation of the Partnership within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(iv) the grant of an interest in the Partnership (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Partnership by an existing Partner acting in a partner capacity, or by a new Partner acting in a partner capacity or in anticipation of becoming a Partner;
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(c) the Gross Asset Values of Partnership assets distributed to any Partner shall be the gross fair market values of such assets (taking Section 7701(g) of the Code into account) without reduction for liabilities, as determined by the General Partner as of the date of distribution; and
(d) the Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations (as set forth in Exhibit B ); provided , however , that Gross Asset Values shall not be adjusted pursuant to this paragraph (d) to the extent that the General Partner determines that an adjustment pursuant to paragraph (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken into account with respect to the Partnership’s assets for purposes of computing Net Income and Net Loss.
“ Gross Proceeds ” means the aggregate purchase price of all shares of Common Stock sold for the account of the General Partner through an Offering, without deduction for Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any share of Common Stock for which reduced selling commissions are paid to (i) Realty Capital Securities, LLC or any successor dealer manager to the General Partner or (ii) a broker-dealer (where net proceeds to the General Partner are not reduced) shall be deemed to be the full amount of the offering price per share of Common Stock pursuant to the Registration Statement for such Offering without reduction.
“ Incapacity ” or “ Incapacitated ” means,
(a) as to any individual who is a Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating him incompetent to manage his person or his estate;
(b) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter;
(c) as to any partnership which is a Partner, the dissolution and commencement of winding up of the partnership;
(d) as to any limited liability company which is a Partner, the dissolution and commencement of winding up of the limited liability company;
(e) as to any estate which is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership;
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(f) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee); or
(g) as to any Partner, the bankruptcy of such Partner, which shall be deemed to have occurred when:
(i) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect;
(ii) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner;
(iii) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors;
(iv) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (ii) above;
(v) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties;
(vi) any proceeding seeking liquidation, reorganization or other relief of or against such Partner under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof;
(vii) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment; or
(viii) an appointment referred to in clause (vii) which has been stayed is not vacated within ninety (90) days after the expiration of any such stay.
“ Include ”, “ includes ” and “ including ” shall be construed as if followed by the phrase “without limitation”.
“ Included Assets ” means the Investments owned as of the Termination Date or the Investment Liquidity Date, as applicable, and any Investments acquired after the Termination Date or the Investment Liquidity Date, as applicable, for which a contract to acquire such Investment had been entered into by or on behalf of the General Partner as of the Termination Date or the Investment Liquidity Date, as applicable.
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“ Indemnitee ” means
(a) any Person made a party to a proceeding by reason of:
(i) its status as the General Partner,
(ii) its status as a Limited Partner,
(iii) its status as an investment advisor to the General Partner,
(iv) its status as a trustee, director or officer of the Partnership, the General Partner, or the investment advisor to the General Partner,
(v) its status as a director, trustee, member or officer of any other Entity, each Person serving in such capacity at the request of the Partnership or the General Partner, or
(vi) his or its liabilities, pursuant to a loan guarantee or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken assets subject to); and
(b) such other Persons (including Affiliates of the General Partner, a Limited Partner or the Partnership) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.
“ Initial Limited Partner ” means New York City Advisors, LLC.
“ Investment ” or “ Investments ” means any investment or investments by the Partnership, directly or indirectly, in Properties, Loans or other Permitted Investments.
“ Investment Liquidity Amount ” has the meaning set forth in Section 5.1(e).
“ Investment Liquidity Date ” means the date on which an Investment Liquidity Event is consummated.
“ Investment Liquidity Event ” means a liquidation or the sale of all or substantially all the Investments (regardless of the form in which such sale shall occur, including through a merger or sale of stock or other interests in an entity, and regardless of whether such transaction is taxable or tax-free). For the avoidance of doubt, an Investment Liquidity Event includes a Business Combination and a Transaction (including a merger in which the General Partner is the surviving entity).
“ Investment Liquidity Value ” has the meaning set forth in Section 5.1(e).
“ IRS ” means the Internal Revenue Service of the United States (or any successor organization).
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“ Liability Shortfall ” has the meaning set forth in subparagraph 4(d) of Exhibit B .
“ Lien ” means any lien, security interest, mortgage, deed of trust, charge, claim, encumbrance, pledge, option, right of first offer or first refusal and any other right or interest of others of any kind or nature, actual or contingent, or other similar encumbrance of any nature whatsoever.
“ Limited Partner ” means, prior to the admission of the first Additional Limited Partner to the Partnership, the Initial Limited Partner, and thereafter any Person named as a Limited Partner in Exhibit A , as such Exhibit may be amended from time to time, upon the execution and delivery by such Person of an additional limited partner signature page, or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a Limited Partner of the Partnership.
“ Limited Partner Interest ” means a Partnership Interest of a Limited Partner in the Partnership representing a fractional part of the Partnership Interests of all Partners and includes any and all benefits to which the holder of such a Partnership Interest may be entitled, as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Limited Partner Interest may be expressed as a number of Partnership Units (other than GP Units).
“ Liquidating Event ” has the meaning set forth in Section 13.1(b) hereof.
“ Liquidating Gain ” means net capital gain realized in connection with an actual or hypothetical Capital Transaction, including the amount of any adjustment of the Gross Asset Value of any Real Estate Asset which requires that the Capital Accounts of the Partners be adjusted pursuant to Sections 1.704-1(b)(2)(iv)(e), (f) and (g) of the Regulations.
“ Liquidator ” has the meaning set forth in Section 13.2(a)(iii) hereof.
“ Liquidity Event ” means the first to occur of the following: (i) an OP Unit Transaction, (ii) a Listing, or (iii) a Termination Without Cause.
“ Listing ” means the listing of the shares of Common Stock on a national securities exchange.
“ Listing Note ” has the meaning set forth in Section 5.1(c) hereof.
“ Loans ” means mortgage loans and other types of debt financing investments made by the Partnership, either directly or indirectly, including through ownership interests in a joint venture or other entity and including mezzanine loans, B-notes, bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests, and participations in such loans.
“ Management Agreement ” means the Property Management and Leasing Agreement between the General Partner, the Partnership and New York City Properties, LLC, a Delaware limited liability company, as the manager.
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“ Market Value ” means the value calculated based on the average market value of the shares of Common Stock issued and outstanding at Listing over the 30 days beginning 180 days after the shares of Common Stock are first listed or included for quotation.
“ NAV ” means the General Partner’s net asset value, calculated pursuant to the valuation guidelines adopted by the General Partner’s board of directors.
“ NAV Pricing Start Date ” means the first date on which the General Partner calculates its NAV, which it expects to do beginning with the filing of the General Partner’s second Quarterly Report on Form 10-Q (or its Annual Report on Form 10-K should such filing constitute its second quarterly financial filing) with the U.S. Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as amended, following April 24, 2016.
“ Net Income ” or “ Net Loss ” means, for each fiscal year or other applicable period, an amount equal to the Partnership’s taxable income or loss for such year or period as determined for U.S. federal income tax purposes by the General Partner, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a) of the Code shall be included in taxable income or loss), adjusted as follows:
(a) by including as an item of gross income any tax-exempt income received by the Partnership and not otherwise taken into account in computing Net Income or Net Loss;
(b) by treating as a deductible expense any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (or which is treated as a Section 705(a)(2)(B) expenditure pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations) and not otherwise taken into account in computing Net Income or Net Loss, including amounts paid or incurred to organize the Partnership (unless an election is made pursuant to Section 709(b) of the Code) or to promote the sale of interests in the Partnership and by treating deductions for any losses incurred in connection with the sale or exchange of Partnership property disallowed pursuant to Section 267(a)(1) or 707(b) of the Code as expenditures described in Section 705(a)(2)(B) of the Code;
(c) by taking into account Depreciation in lieu of depreciation, depletion, amortization and other cost recovery deductions taken into account in computing taxable income or loss;
(d) by computing gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for U.S. federal income tax purposes by reference to the Gross Asset Value of such property rather than its adjusted tax basis;
(e) if an adjustment of the Gross Asset Value of any Partnership asset which requires that the Capital Accounts of the Partners be adjusted pursuant to Sections 1.704-1(b)(2)(iv)(e), (f) and (g) of the Regulations, by taking into account the amount of such adjustment as if such adjustment represented additional Net Income or Net Loss pursuant to Exhibit B ;
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(f) by excluding Net Property Gain and Net Property Loss; and
(g) by not taking into account in computing Net Income or Net Loss items separately allocated to the Partners pursuant to paragraphs 2 and 3 of Exhibit B .
“ Net Investment ” means (i) as it relates to the Stockholders, the total amount of Gross Proceeds raised in all Offerings; and (ii) as it relates to the Limited Partners (other than the General Partner in its capacity as a Limited Partner) the total amount of Capital Contributions.
“ Net Investment Balance ” means the excess, if any, of: (a) the Net Investment, over (b) in each case, without duplication, (i) as it relates to the Stockholders, all prior distributions to Stockholders of Net Sales Proceeds and any amounts paid by the General Partner to repurchase shares of Common Stock pursuant to the General Partner’s plan for redemption of Common Stock or otherwise; and (ii) as it relates to the Limited Partners, all distributions pursuant to Section 5.1(b)(i) (other than distributions to the General Partner in its capacity as a Limited Partner), and all proceeds or property used to redeem Limited Partner Interests (except those held directly or indirectly the General Partner).
“ Net Property Gain ” or “ Net Property Loss ” means, for each fiscal year or other applicable period, an amount equal to the Partnership’s taxable gain or loss for such year or period from Sales, including the amount of any adjustment of the Gross Asset Value of any Real Estate Asset which requires that the Capital Accounts of the Partners be adjusted pursuant to Sections 1.704-1(b)(2)(iv)(e), (f) and (g) of the Regulations. For these purposes, the Gross Asset Value of the Real Estate Assets shall reflect the market capitalization of the General Partner (increased by the amount of any Partnership liabilities).
“ Net Sales Proceeds ” has the meaning set forth in the Articles of Incorporation.
“ Nonrecourse Deductions ” has the meaning set forth in Sections 1.704-2(b)(1) and 1.704-2(c) of the Regulations.
“ Nonrecourse Liabilities ” has the meaning set forth in Section 1.704-2(b)(3) of the Regulations.
“ Note ” means a non-interest bearing promissory note which shall be repaid from the Net Sales Proceeds of each sale of an Investment that occurs after the date of Listing or the Termination Date, as applicable. The Partnership shall be the sole obligor with respect to any Note, and may pay at its discretion all or a portion of such Note in shares of Common Stock, which may or may not be registered under the Securities Act of 1933, as amended, or cash. Any Note shall not represent an indebtedness of the Partnership, but rather shall be evidence of a distribution obligation of the Partnership to the Special Limited Partner pursuant to the terms of Section 5.1.
“ Offer ” has the meaning set forth in Section 11.2(c)(i).
“ Offering ” means the public offering of shares of Common Stock pursuant to the Registration Statement on Form S-11.
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“ OP Unit ” means a Partnership Unit which is designated as an OP Unit of the Partnership.
“ OP Unit Economic Balance ” has the meaning set forth in subparagraph 1(c)(ii) of Exhibit B .
“ OP Unit Transaction ” means, in connection with a Class B Unit, a transaction to which the Partnership or the General Partner shall be a party, including a merger, consolidation, unit exchange, self-tender offer for all or substantially all OP Units or other business combination or reorganization, or sale of all or substantially all of the Partnership’s assets (but excluding any transaction which constitutes an Adjustment Event and any merger in which the General Partner is the surviving entity) in each case as a result of which OP Units shall be exchanged for or converted into the right, or the holders of such Units shall otherwise be entitled, to receive cash, securities or other property or any combination thereof.
“ Organization and Offering Expenses ” means all expenses incurred by or on behalf of the General Partner in connection with or in preparing the General Partner for registration of and subsequently offering and distributing its shares of Common Stock to the public, whether incurred before, on or after the date of the Advisory Agreement, which may include total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the General Partner to the underwriter or any reimbursement of expenses of the underwriter by the General Partner; expenses for printing, engraving and mailing; compensation of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the sale of the securities under U.S. federal and state laws, including taxes and fees, accountants’ and attorneys’ fees.
“ Partner ” means the General Partner or a Limited Partner, and “Partners” means the General Partner and the Limited Partners collectively. Solely for purposes of Exhibit B , “Partner” shall include the Special Limited Partner.
“ Partner Nonrecourse Debt ” has the meaning set forth in Section 1.704-2(b)(4) of the Regulations.
“ Partner Nonrecourse Debt Minimum Gain ” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations.
“ Partner Nonrecourse Deductions ” has the meaning set forth in Sections 1.704-2(i)(1) and (2) of the Regulations, and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership taxable year shall be determined in accordance with the rules of Section 1.704-2(i)(2) of the Regulations.
“ Partnership ” means the limited partnership formed under the Act and pursuant to this Agreement, and any successor thereto.
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“ Partnership Interest ” means an ownership interest in the Partnership representing a Capital Contribution by either a Limited Partner or the General Partner or the provision of services to or for the benefit of the Partnership by an existing Partner acting in a partner capacity, or by a new Partner acting in a partner capacity or in anticipation of becoming a Partner, and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Partnership Interest may be expressed as a number of Partnership Units.
“ Partnership Minimum Gain ” has the meaning set forth in Section 1.704-2(b)(2) of the Regulations, and the amount of Partnership Minimum Gain, as well as any net increase or decrease in a Partnership Minimum Gain, for a Partnership taxable year shall be determined in accordance with the rules of Section 1.704-2(d) of the Regulations.
“ Partnership Record Date ” means the record date established by the General Partner for a distribution pursuant to Section 5.1(a) hereof, which record date shall be the same as the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution.
“ Partnership Unit ” means a fractional, undivided share of the Partnership Interests of all Partners issued hereunder. Partnership Units consist of GP Units, OP Units, Class B Units and any classes or series of Partnership Units established after the date hereof. The number of Partnership Units outstanding and the Percentage Interests in the Partnership represented by such Partnership Units are set forth in Exhibit A , as such Exhibit may be amended from time to time. The ownership of Partnership Units shall be evidenced by such form of certificate for Partnership Units as the General Partner adopts from time to time unless the General Partner determines that the Partnership Units shall be uncertificated securities.
“ Partnership Year ” means the fiscal year of the Partnership, as set forth in Section 9.2 hereof.
“ Percentage Interest ” means, as to a Partner, the fractional part of the Partnership Interests owned by such Partner and expressed as a percentage as specified in Exhibit A , as such Exhibit may be amended from time to time.
“ Permitted Investments ” means all investments (other than Properties and Loans) in which the Partnership acquires an interest, either directly or indirectly, including through ownership interests in a joint venture or other entity, pursuant to the Certificate, this Agreement and the investment objectives and policies adopted by the General Partner from time to time, other than short-term investments acquired for purposes of cash management, and that allow the General Partner to meet the REIT Requirements.
“ Permitted Transferee ” means any person to whom Partnership Units are Transferred in accordance with Section 11.3.
“ Person ” means an individual or Entity.
“ Precontribution Gain ” has the meaning set forth in subparagraph 4(c) of Exhibit B .
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“ Priority Return ” means a 6% cumulative, non-compounded, pre-tax annual return (based on a 365-day year).
“ Priority Return Balance ” means, as of any date, the excess, if any, of (a) a Priority Return from the Effective Date until such Distribution Date on the Net Investment Balance (calculated like simple interest on a daily basis based on a 365-day year), over (b) distributions made under Sections 5.1(a) and (b)(ii); provided, however , that for purposes of calculating the Priority Return Balance, the Net Investment Balance shall be determined on a daily basis.
“ Property ” or “ Properties ” means any real property or properties transferred or conveyed to the Partnership or any subsidiary of the Partnership, either directly or indirectly, and/or any real property or properties transferred or conveyed to a joint venture or partnership in which the Partnership is, directly or indirectly, a co-venturer or partner.
“ PTP Safe Harbors ” has the meaning set forth in Section 11.6(f).
“ Quarter ” means each of the three-month periods ending on March 31, June 30, September 30 and December 31.
“ Real Estate Assets ” means any investment by the Partnership in unimproved and improved Real Property (including fee or leasehold interests, options and leases), directly, through one or more subsidiaries or through a Joint Venture.
“ Real Property ” means (i) land, (ii) rights in land (including leasehold interests), and (iii) any buildings, structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land.
“ Registration Statement ” means the Registration Statement on Form S-11 filed by the General Partner with the Securities and Exchange Commission, and any amendments thereof at any time made, relating to the Common Stock.
“ Regulations ” means the final, temporary or proposed income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“ Regulatory Allocations ” means the allocations set forth in paragraph 2 of Exhibit B .
“ REIT ” means a real estate investment trust as defined in Section 856 of the Code.
“ REIT Requirements ” has the meaning set forth in Section 5.2.
“ Restricted Class B Units ” has the meaning set forth in Section 16.2(a)(i) hereof.
“ Safe Harbor ” has the meaning set forth in Section 10.2(d).
“ Safe Harbor Election ” has the meaning set forth in Section 10.2(d).
“ Safe Harbor Interests ” has the meaning set forth in Section 10.2(d).
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“ Sales ” has the meaning set forth in the Articles of Incorporation.
“ Securities ” has the meaning set forth in Section 4.2(b).
“ Special Limited Partner ” means New York City Special Limited Partnership, LLC, a Delaware limited liability company, which shall be a limited partner of the Partnership and recognized as such under applicable Delaware law, but not a “Limited Partner” within the meaning of this Agreement.
“ Special Limited Partner Interest ” means the interest of the Special Limited Partner in the Partnership representing its right as the holder of an interest in distributions described in Sections 5.1(b)(iii)(A), (c), (d), (e) and (f) (and any corresponding allocations of income, gain, loss and deduction under this Agreement).
“ Stockholder ” means a holder of Common Stock.
“ Stockholder Distributions ” means any distributions of money or other property by the General Partner to Stockholders, including distributions that may constitute a return of capital for U.S. federal income tax purposes.
“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company or other entity of which a majority of (a) the voting power of the voting equity securities; or (b) the outstanding equity interests (whether or not voting), is owned, directly or indirectly, by such Person.
“ Substituted Limited Partner ” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.4.
“ Surviving General Partner ” has the meaning set forth in Section 11.2(d)(i)(A).
“ Tax Allocations ” means the allocations set forth in paragraph 4 of Exhibit B .
“ Tax Items ” has the meaning set forth in subparagraph 4(a) of Exhibit B .
“ Termination ” means the termination of the Advisory Agreement.
“ Termination Amount ” means the Termination Liquidity Amount, the Termination Listing Amount or the amount distributable pursuant to Section 5.1(d)(i) in the form of a Termination Note.
“ Termination Date ” means the date of Termination.
“ Termination Liquidity Amount ” has the meaning set forth in Section 5.1(d)(ii)(B).
“ Termination Listing Amount ” has the meaning set forth in Section 5.1(d)(ii)(A).
“ Termination Note ” has the meaning set forth in Section 5.1(d)(i).
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“ Termination Without Cause ” means the termination of the Advisory Agreement as provided in the Advisory Agreement by the Independent Directors (as defined in the Advisory Agreement) of the General Partner without Cause (as defined in the Advisory Agreement).
“ Transaction ” has the meaning set forth in Section 11.2(c).
“ Transfer ” as a noun, means any sale, assignment, conveyance, pledge, hypothecation, gift, encumbrance or other transfer, and as a verb, means to sell, assign, convey, pledge, hypothecate, give, encumber or otherwise transfer.
“ Unrestricted Class B Units ” has the meaning set forth in Section 16.2(a)(ii) hereof.
“ Valuation Date ” means the date of receipt by the Partnership and the General Partner of notice from an exchanging Partner that such Partner is exercising its Exchange Rights or, if such date is not a Business Day, the first Business Day thereafter.
“ Value ” means the Offering price for a share of Common Stock less any selling commissions and dealer manager fee that would be payable with respect to the sale of a share of Common Stock.
Certain additional terms and phrases have the meanings set forth in Exhibit B .
Article
2
ORGANIZATIONAL MATTERS
2.1 | Formation |
The General Partner has formed the Partnership by filing the Certificate on December 18, 2013 in the office of the Delaware Secretary of State. The Partnership is a limited partnership organized pursuant to the provision of the Act and upon the terms and conditions set forth in this Agreement. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Partnership Interest of each Partner shall be personal property for all purposes.
2.2 | Name |
The name of the Partnership is New York City Operating Partnership, L.P. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words “Limited Partnership”, “LP”, “Ltd.” or similar words, phrases or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole and absolute discretion may change the name of the Partnership and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
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2.3 | Registered Office and Agent; Principal Office |
The address of the registered office of the Partnership in the State of Delaware and the name and address of the registered agent for service of process on the Partnership in the State of Delaware is the Corporation Service Company, 2711 Centerville Road Suite 400, Wilmington, Delaware 19808. The principal office of the Partnership shall be 405 Park Avenue, New York, New York 10022, or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.
2.4 | Power of Attorney |
(a) Each Limited Partner and each Assignee who accepts Partnership Units (or any rights, benefits or privileges associated therewith) is deemed to irrevocably constitute and appoint the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices
(A) all certificates, documents and other instruments (including this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may or plans to conduct business or own property, including any documents necessary or advisable to convey any Contributed Property to the Partnership;
(B) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms;
(C) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including a certificate of cancellation;
(D) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article 11, 12 or 13 hereof or the Capital Contribution of any Partner;
(E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interest; and
(F) amendments to this Agreement as provided in Article 14 hereof; and
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(ii) execute, swear to, seal, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be otherwise expressly provided for in this Agreement.
(b) (i) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Limited Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee and the Transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives.
(ii) Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney, and each such Limited Partner or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney.
(iii) Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within fifteen (15) days after receipt of the General Partner’s or Liquidator’s request therefore, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.
(c) For the purposes of this Section 2.4, the term “Limited Partner” shall be deemed to include the Special Limited Partner, unless the context otherwise requires.
2.5 | Term |
The term of the Partnership shall commence on the date hereof and shall continue until December 31, 2099, unless the Partnership is dissolved sooner pursuant to the provisions of Article 13 or as otherwise provided by law.
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Article
3
PURPOSE
3.1 | Purpose and Business |
(a) The purpose and nature of the business to be conducted by the Partnership is to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act including to engage in the following activities:
(i) to acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease, transfer, encumber, convey, exchange, and otherwise dispose of or deal with the properties described in the prospectus contained in the Registration Statement;
(ii) to acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease, transfer, encumber, convey, exchange, and otherwise dispose of or deal with real and personal property of all kinds;
(iii) to enter into any partnership, joint venture, corporation, limited liability company, trust or other similar arrangement to engage in any of the foregoing;
(iv) to undertake such other activities as may be necessary, advisable, desirable or convenient to the business of the Partnership; and
(v) to engage in such other ancillary activities as shall be necessary or desirable to effectuate the foregoing purposes;
provided , however , that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT, unless the General Partner determines not to qualify as a REIT or ceases to qualify as a REIT for any reason not related to the business conducted by the Partnership.
(b) The Partnership shall have all powers necessary or desirable to accomplish the purposes enumerated.
3.2 | Powers |
(a) The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership including full power and authority to enter into, perform, and carry out contracts of any kind, to borrow money and to issue evidences of indebtedness, whether or not secured by mortgage, trust deed, pledge or other Lien, and, directly or indirectly, to acquire, own, improve, develop and construct real property, and lease, sell, transfer and dispose of real property; provided , however , that the Partnership shall not take, or refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion,
(i) could adversely affect the ability of the General Partner to continue to qualify as a REIT, unless the General Partner otherwise ceases to qualify as a REIT;
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(ii) could subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code; or
(iii) could violate any law or regulation of any governmental body or agency having jurisdiction over the General Partner or its securities, unless such action (or inaction) shall have been specifically consented to by the General Partner in writing.
(b) The General Partner also is empowered to do any and all acts and things necessary, appropriate or advisable to ensure that the Partnership will not be classified as a “publicly traded partnership” for the purposes of Section 7704 of the Code, including but not limited to imposing restrictions on exchanges of Partnership Units.
Article
4
CAPITAL CONTRIBUTIONS
4.1 | Capital Contributions of the Partners |
(a) The Partners have made the Capital Contributions as set forth in Exhibit A .
(b) To the extent the Partnership acquires any property by the merger of any other Person into the Partnership or the contribution of assets by any other Person, Persons who receive Partnership Interests in exchange for their interests in the Person merging into or contributing assets to the Partnership shall become Limited Partners and shall be deemed to have made Capital Contributions as provided in the applicable merger agreement or contribution agreement and as set forth in Exhibit A , as amended to reflect such deemed Capital Contributions.
(c) As of the effective date of this Agreement, the Partnership shall have three classes of Partnership Units, entitled “GP Units”, “OP Units” and “Class B Units”, respectively. The Class B Units shall have the same rights, privileges and preferences as the OP Units, except as set forth in Article 16. Each Partner shall own Partnership Units in the amounts set forth for such Partner in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in Exhibit A , which Percentage Interest shall be adjusted in Exhibit A from time to time by the General Partner to the extent necessary to reflect accurately exchanges, additional Capital Contributions, the issuance of additional Partnership Units, transfers of Partnership Units or similar events having an effect on any Partner’s Percentage Interest.
(d) The number of Partnership Units held by the General Partner, in its capacity as general partner, as evidenced by GP Units, shall be deemed to be the General Partner Interest.
(e) Except as otherwise may be expressly provided herein, the Partners shall have no obligation to make any additional Capital Contributions or provide any additional funding to the Partnership (whether in the form of loans, repayments of loans or otherwise) and no Partner shall have any obligation to restore any deficit that may exist in its Capital Account, either upon a liquidation of the Partnership or otherwise.
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4.2 | Additional Funds; Restrictions on the General Partner |
(a) (i) The sums of money required to finance the business and affairs of the Partnership shall be derived from the Capital Contributions made to the Partnership by the Partners as set forth in Section 4.1 and from funds generated from the operation and business of the Partnership, including rents and distributions directly or indirectly received by the Partnership from any Subsidiary.
(ii) If additional financing is needed from sources other than as set forth in Section 4.2(a)(i) for any reason, the General Partner may, in its sole and absolute discretion, in such amounts and at such times as it solely shall determine to be necessary or appropriate,
(A) cause the Partnership to issue additional Partnership Interests and admit additional Limited Partners to the Partnership in accordance with Section 4.3;
(B) make additional Capital Contributions to the Partnership (subject to the provisions of Section 4.2(b));
(C) cause the Partnership to borrow money, enter into loan arrangements, issue debt securities, obtain letters of credit or otherwise borrow money on a secured or unsecured basis;
(D) make a loan or loans to the Partnership (subject to Section 4.2(b)); or
(E) sell any assets or properties directly or indirectly owned by the Partnership.
(iii) In no event shall any Limited Partners be required to make any additional Capital Contributions or any loan to, or otherwise provide any financial accommodation for the benefit of, the Partnership.
(b) The General Partner shall not issue any debt securities, any preferred stock or any common stock (including additional Common Stock (other than (i) as payment of the Common Stock Amount or (ii) in connection with the conversion or exchange of securities of the General Partner solely in conversion or exchange for other securities of the General Partner)) or rights, options, warrants or convertible, exercisable or exchangeable securities containing the right to subscribe for or purchase any of the foregoing (collectively, “ Securities ”), other than to all holders of Common Stock, unless the General Partner shall:
(i) in the case of debt securities, lend to the Partnership the proceeds of or consideration received for such Securities on the same terms and conditions, including interest rate and repayment schedule, as shall be applicable with respect to or incurred in connection with the issuance of such Securities and the proceeds of, or consideration received from, any subsequent exercise, exchange or conversion thereof (if applicable);
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(ii) in the case of equity Securities senior or junior to the Common Stock as to dividends and distributions on liquidation, contribute to the Partnership the proceeds of or consideration (including any property or other non-cash assets) received for such Securities and the proceeds of, or consideration received from, any subsequent exercise, exchange or conversion thereof (if applicable), and receive from the Partnership, interests in the Partnership in consideration therefor with the same terms and conditions, including dividend, dividend priority and liquidation preference, as are applicable to such Securities; and
(iii) in the case of Common Stock or other equity Securities on a parity with the Common Stock as to dividends and distributions on liquidation (including Common Stock or other Securities granted as a stock award to directors and officers of the General Partner or directors, officers or employees of its Affiliates in consideration for services or future services, and Common Stock issued pursuant to a dividend reinvestment plan or issued to enable the General Partner to make distributions to satisfy the REIT Requirements), contribute to the Partnership the proceeds of or consideration (including any property or other non-cash assets, including services) received for such Securities and the proceeds of, or consideration received from, any subsequent exercise, exchange or conversion thereof (if applicable), and receive from the Partnership a number of additional Partnership Units in consideration therefor equal to the product of
(A) the number of shares of Common Stock or other equity Securities issued by the General Partner, multiplied by
(B) a fraction the numerator of which is one and the denominator of which is the Exchange Factor in effect on the date of such contribution.
4.3 | Issuance of Additional Partnership Interests; Admission of Additional Limited Partners |
(a) In addition to any Partnership Interests issuable by the Partnership pursuant to Section 4.2, the General Partner is authorized to cause the Partnership to issue additional Partnership Interests (or options therefore) in the form of Partnership Units or other Partnership Interests in one or more series or classes, or in one or more series of any such class senior, on a parity with, or junior to the Partnership Units to any Persons at any time or from time to time, on such terms and conditions, as the General Partner shall establish in each case in its sole and absolute discretion subject to Delaware law, including (i) the allocations of items of Partnership income, gain, loss, deduction and credit to each class or series of Partnership Interests, (ii) the right of each class or series of Partnership Interests to share in Partnership distributions, and (iii) the rights of each class or series of Partnership Interest upon dissolution and liquidation of the Partnership; provided, however, that, no such Partnership Interests shall be issued to the General Partner unless either (A) the Partnership Interests are issued in connection with the grant, award, or issuance of Common Stock or other equity interests in the General Partner having designations, preferences and other rights such that the economic interests attributable to such Common Stock or other equity interests are substantially similar to the designations, preferences and other rights (except voting rights) of the Partnership Interests issued to the General Partner in accordance with this Section 4.3(a) or (B) the additional Partnership Interests are issued to all Partners holding Partnership Interests in the same class in proportion to their respective Percentage Interests in such class, without any approval being required from any Limited Partner or any other Person; provided further, however , that:
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(i) such issuance does not cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA or Section 4975 of the Code, a “party in interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(e) of the Code); and
(ii) such issuance would not cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Section 2510.3-101 of the regulations of the United States Department of Labor.
(b) Subject to the limitations set forth in Section 4.3(a), the General Partner may take such steps as it, in its sole and absolute discretion, deems necessary or appropriate to admit any Person as a Limited Partner of the Partnership or to issue any Partnership Interests, including amending the Certificate, Exhibit A or any other provision of this Agreement.
4.4 | Contribution of Proceeds of Issuance of Common Stock |
In connection with any offering, grant, award, or issuance of Common Stock or securities, rights, options, warrants or convertible or exchangeable securities pursuant to Section 4.2, the General Partner shall make aggregate Capital Contributions to the Partnership of the proceeds raised in connection with such offering, grant, award, or issuance, including any property issued to the General Partner pursuant to a merger or contribution agreement in exchange for Common Stock; provided, however, that if the proceeds actually received by the General Partner are less than the gross proceeds of such offering, grant, award, or issuance as a result of any underwriter’s discount, commission, or fee or other expenses paid or incurred in connection with such offering, grant, award, or issuance, then the General Partner shall make a Capital Contribution to the Partnership in the amount equal to the sum of (i) the net proceeds of such issuance plus (ii) an intangible asset in an amount equal to the capitalized costs of the General Partner relating to such issuance of Common Stock. Upon any such Capital Contribution by the General Partner, the Capital Account of the General Partner shall be increased by the amount of its Capital Contribution as described in the previous sentence.
4.5 | Repurchase of Common Stock; Shares-In-Trust |
(a) If the General Partner shall elect to purchase from its stockholders Common Stock for the purpose of delivering such Common Stock to satisfy an obligation under any distribution reinvestment plan adopted by the General Partner, any employee stock purchase plan adopted by the General Partner, or for any other purpose, the purchase price paid by the General Partner for such Common Stock and any other expenses incurred by the General Partner in connection with such purchase shall be considered expenses of the Partnership and shall be reimbursed to the General Partner, subject to the condition that:
(i) if such Common Stock subsequently is to be sold by the General Partner, the General Partner shall pay to the Partnership any proceeds received by the General Partner from the sale of such Common Stock (provided that an exchange of Common Stock for Partnership Units pursuant to the applicable Exchange Rights Agreement would not be considered a sale for such purposes); and
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(ii) if such Common Stock is not re-transferred by the General Partner within 30 days after the purchase thereof, the General Partner shall cause the Partnership to cancel a number of Partnership Units held by the General Partner (as applicable) equal to the product of
(A) the number of shares of such Common Stock, multiplied by
(B) a fraction, the numerator of which is one and the denominator of which is the Exchange Factor in effect on the date of such cancellation.
(b) If the General Partner purchases shares of Common Stock from the Trust (as from time to time defined in the Articles of Incorporation), the Partnership will purchase from the General Partner a number of Partnership Units, at a price per Partnership Unit equal to the price per share of Common Stock paid by the General Partner, equal to the product of
(i) the number of shares of Common Stock purchased by the General Partner from the Trust, multiplied by
(ii) a fraction, the numerator of which is one and the denominator of which is the Exchange Factor in effect on the date of such purchase.
4.6 | No Third-Party Beneficiary |
No creditor or other third party having dealings with the Partnership shall have the right to enforce the right or obligations of any Partner to make Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed that the provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto and their respective successors and assigns.
4.7 | No Interest; No Return |
(a) No Partner shall be entitled to interest on its Capital Contribution or on such Partner’s Capital Account.
(b) Except as provided herein or by law, no Partner shall have any right to demand or receive the return of its Capital Contribution from the Partnership.
4.8 | No Preemptive Rights . |
Subject to any preemptive rights that may be granted pursuant to Section 4.3 hereof, no Person shall have any preemptive or other similar right with respect to
(a) additional Capital Contributions or loans to the Partnership; or
(b) issuance or sale of any Partnership Units or other Partnership Interests.
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Article
5
DISTRIBUTIONS
5.1 | Distributions |
(a) Cash Available for Distribution . Subject to the provisions of Sections 5.3, 5.4, 12.2(c) and 13.2, the General Partner shall cause the Partnership to distribute, at such times as the General Partner shall determine (each a “ Distribution Date ”), an amount of Cash Available for Distribution, determined by the General Partner in its sole discretion to the Partners holding GP Units, OP Units and/or Class B Units who are Partners on the applicable Partnership Record Date, in accordance with each such Partner’s respective Percentage Interest.
(b) Net Sales Proceeds . Subject to the provisions of Sections 5.1(f), 5.3, 5.4, 12.2(c) and 13.2, Net Sales Proceeds shall be distributed as follows:
(i) First , 100% to the Partners holding GP Units and/or OP Units in proportion to each such Partner’s respective Percentage Interest with respect to such GP Units and/or OP Units until the Net Investment Balance is zero;
(ii) Second , 100% to the Partners holding GP Units and/or OP Units in proportion to each such Partner’s respective Percentage Interest with respect to such GP Units and/or OP Units until such Partners have received in the aggregate, pursuant to this Section 5.1(b)(ii) and Section 5.1(a), an amount such that the Priority Return Balance is zero; and
(iii) Thereafter , (A) 15% to the Special Limited Partner, and (B) 85% to be distributed to the Partners holding GP Units, OP Units and/or Class B Units in proportion to their respective Percentage Interests with respect to such GP Units, OP Units and/or Class B Units.
(c) Listing Amounts . Upon a Listing and subject to Section 5.1(f), the General Partner shall cause the Partnership to distribute an amount to the Special Limited Partner in redemption of the Special Limited Partner Interest in the form of a Note (the “ Listing Note ”) equal to 15% of the amount, if any, by which (i) the sum of (A) the Market Value of all issued and outstanding shares of Common Stock plus (B) the sum of all Stockholder Distributions paid by the General Partner prior to Listing, exceeds (ii) the sum of (Y) the total Gross Proceeds in all Offerings plus (Z) the total amount of cash that, if distributed to those Stockholders who purchased shares of Common Stock in an Offering, would have provided such Stockholders a Priority Return on the Gross Proceeds raised in all such Offerings. The Listing Note will only be paid to the Special Limited Partner if the Advisory Agreement has not been terminated by the General Partner or the Advisor prior to the Listing. Notwithstanding anything herein to the contrary, in accordance with Section 736 of the Code, the Listing Note shall be disregarded for applicable income tax purposes and the Special Limited Partner shall continue to be treated as a partner of the Partnership in respect of its Special Limited Partner Interest for such purposes until the Partnership has satisfied all of its obligations under the Listing Note. Without limiting the foregoing, the Special Limited Partner shall not be required to accrue interest on the Listing Note in income and the Partnership shall not deduct such interest for such purposes; provided, that, any cash or property paid to the Special Limited Partner with respect to such interest shall be reported to the Special Limited Partner on IRS Schedule K-1 to Form 1065 (or such successor schedule or form).
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(d) Termination Amounts .
(i) Upon a Termination and subject to Sections 5.1(d)(ii) and (f), the General Partner shall cause the Partnership to distribute an amount to the Special Limited Partner in redemption of the Special Limited Partner Interest in the form of a Note (the “ Termination Note ”) equal to 15% of the amount, if any, by which (A) the sum of (1) the fair market value (determined by appraisal as of the Termination Date) of the Investments on the Termination Date, minus (2) any Loans secured by such Investments, plus (3) the sum of all Stockholder Distributions paid by the General Partner through the Termination Date on shares of Common Stock issued in all Offerings through the Termination Date, minus (4) any amounts distributable as of the Termination Date to the Limited Partners who received Partnership Units in connection with the contribution of any Investments (including cash used to acquire Investments) to the Partnership, upon the liquidation or sale of such Investments (assuming the liquidation or sale of such Investments on the Termination Date), exceeds (B) the sum of (1) the Gross Proceeds raised in all Offerings through the Termination Date (less amounts paid on or prior to the Termination Date to purchase or redeem any shares of Common Stock purchased in an Offering pursuant to the General Partner’s share repurchase plan) plus (2) the total amount of cash that, if distributed to those Stockholders who purchased shares of Common Stock in an Offering on or prior to the Termination Date, would have provided such Stockholders a Priority Return on the Gross Proceeds raised in all Offerings through the Termination Date, measured for the period from inception through the Termination Date. Notwithstanding anything herein to the contrary, in accordance with Section 736 of the Code, the Termination Note shall be disregarded for applicable income tax purposes and the Special Limited Partner shall continue to be treated as a partner of the Partnership in respect of its Special Limited Partner Interest for such purposes until the Partnership has satisfied all of its obligations under the Termination Note. Without limiting the foregoing, the Special Limited Partner shall not be required to accrue interest on the Termination Note in income and the Partnership shall not deduct such interest for such purposes; provided, that, any cash or property paid to the Special Limited Partner with respect to such interest shall be reported to the Special Limited Partner on IRS Schedule K-1 to Form 1065 (or such successor schedule or form).
(ii) Upon a Termination and subject to Section 5.1(f), the Special Limited Partner may elect to receive, in lieu of its right to receive the Termination Note, either:
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(A) If there is a Listing subsequent to the Termination Date, then the General Partner shall cause the Partnership to distribute an amount to the Special Limited Partner in redemption of the Special Limited Partner Interest, payable in one or more payments solely out of Net Sales Proceeds (the “ Termination Listing Amount ”), equal to 15% of the amount, if any, by which (1) the sum of (w) the fair market value (determined by appraisal as of the date of Listing) of the Included Assets, minus (x) any Loans secured by the Included Assets, plus (y) the sum of all Stockholder Distributions paid by the General Partner through the date of Listing on shares of Common Stock issued in Offerings through the Termination Date, minus (z) any amounts distributable as of the date of Listing to the Limited Partners who received Partnership Units in connection with the contribution of any Included Assets (including cash used to acquire Included Assets) to the Partnership, upon the liquidation or sale of such Included Assets (assuming the liquidation or sale of such Included Assets on the date of Listing), exceeds (2) the sum of (y) the Gross Proceeds raised in all Offerings through the Termination Date (less amounts paid on or prior to the date of Listing to purchase or redeem any shares of Common Stock purchased in an Offering on or prior to the Termination Date pursuant to the General Partner’s share repurchase plan), plus (z) the total amount of cash that, if distributed to those Stockholders who purchased shares of Common Stock in an Offering on or prior to the Termination Date, would have provided such Stockholders a Priority Return on the Gross Proceeds raised in all Offerings through the Termination Date, measured for the period from inception of the General Partner through the date of Listing.
(B) If there is an Investment Liquidity Event subsequent to the Termination Date, then the General Partner shall cause the Partnership to distribute an amount to the Special Limited Partner in redemption of the Special Limited Partner Interest, payable in one or more payments solely out of Net Sales Proceeds (the “ Termination Liquidity Amount ”), equal to 15% of the amount, if any, by which (1) the sum of (w) the fair market value (determined by appraisal as of the Investment Liquidity Date) of the Included Assets, minus (x) any Loans secured by the Included Assets, plus (y) the sum of all Stockholder Distributions paid by the General Partner through the Investment Liquidity Date on shares of Common Stock issued in Offerings through the Termination Date, minus (z) any amounts distributable as of the Investment Liquidity Date to the Limited Partners who received Partnership Units in connection with the contribution of any Included Assets (including cash used to acquire Included Assets) to the Partnership, upon the liquidation or sale of such Included Assets (assuming the liquidation or sale of such Included Assets on the Investment Liquidity Date), exceeds (2) the sum of (y) the Gross Proceeds raised in all Offerings through the Termination Date (less amounts paid on or prior to the Investment Liquidity Date to purchase or redeem any shares of Common Stock purchased in an Offering on or prior to the Termination Date pursuant to the General Partner’s share repurchase plan), plus (z) the total amount of cash that, if distributed to those Stockholders who purchased shares of Common Stock in an Offering on or prior to the Termination Date, would have provided such Stockholders Priority Return on the Gross Proceeds raised in all Offerings through the Termination Date, measured for the period from inception of the General Partner through the Investment Liquidity Date.
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(e) Investment Liquidity Amounts . Upon an Investment Liquidity Event and subject to Section 5.1(f), the General Partner shall cause the Partnership to distribute an amount to the Special Limited Partner in redemption of the Special Limited Partner Interest, payable in one or more payments solely out of Net Sales Proceeds (the “ Investment Liquidity Amount ”), equal to 15% of the amount, if any, by which (A) the sum of (1) the fair market value of the Included Assets or all issued and outstanding shares of Common Stock as determined in good faith by the General Partner as of the Investment Liquidity Date (the “ Investment Liquidity Value ”), plus (2) the sum of all Stockholder Distributions paid by the General Partner through the Investment Liquidity Date, exceeds (B) the sum of (1) the Gross Proceeds raised in all Offerings through the Investment Liquidity Date (less amounts paid on or prior to the Investment Liquidity Date to purchase or redeem any shares of Common Stock purchased in an Offering pursuant to the General Partner’s share repurchase plan) plus (2) the total amount of cash that, if distributed to those Stockholders who purchased shares of Common Stock in an Offering on or prior to the Investment Liquidity Date, would have provided such Stockholders a Priority Return on the Gross Proceeds raised in all Offerings through the Investment Liquidity Date, measured for the period from inception of the General Partner through the Investment Liquidity Date.
(f) Coordination .
(i) Any Net Sales Proceeds paid to the Special Limited Partner pursuant to Section 5.1(b)(iii)(A) prior to a Listing shall reduce dollar for dollar the amount of a Listing Note to be issued and distributed pursuant to Section 5.1(c). If the Special Limited Partner receives a Listing Note pursuant to Section 5.1(c), (A) the Special Limited Partner would no longer be entitled to receive distributions of Net Sales Proceeds pursuant to Section 5.1(b)(iii)(A), a Termination Amount pursuant to Section 5.1(d) or the Investment Liquidity Amount pursuant to Section 5.1(e) and (B) any Net Sales Proceeds received by the Partnership after the Listing shall be applied first to satisfy the Partnership’s obligation to make distributions pursuant to the Listing Note.
(ii) Any Net Sales Proceeds paid to the Special Limited Partner pursuant to Section 5.1(b)(iii)(A) prior to the Termination Date shall reduce dollar for dollar the Termination Amount to be distributed pursuant to Section 5.1(d). If the Special Limited Partner receives, or is entitled to receive, a Termination Amount pursuant to Section 5.1(d), (A) the Special Limited Partner would no longer be entitled to receive distributions of Net Sales Proceeds pursuant to Section 5.1(b)(iii)(A), a Listing Note pursuant to Section 5.1(c) or the Investment Liquidity Amount pursuant to Section 5.1(e) and (B) any Net Sales Proceeds received by the Partnership after the Termination Date, in connection with a Termination Note, the date of the subsequent Listing, in connection with the Termination Listing Amount, and the Investment Liquidity Date, in connection with the Termination Liquidity Amount, shall be applied first to satisfy the Partnership’s obligation to make distributions pursuant to Section 5.1(d).
(iii) Any Net Sales Proceeds paid to the Special Limited Partner pursuant to Section 5.1(b)(iii)(A) prior to an Investment Liquidity Date shall reduce dollar for dollar the Investment Liquidity Amount to be issued and distributed pursuant to Section 5.1(e). If the Special Limited Partner is entitled to receive an Investment Liquidation Amount pursuant to Section 5.1(e), (A) the Special Limited Partner would no longer be entitled to receive distributions of Net Sales Proceeds pursuant to Section 5.1(b)(iii)(A), a Listing Note pursuant to Section 5.1(c) or a Termination Amount pursuant to Section 5.1(d) and (B) any Net Sales Proceeds received by the Partnership as a result of or after the Investment Liquidity Event shall be applied first to satisfy the Partnership’s obligation to make distributions pursuant to Section 5.1(e).
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(iv) If the General Partner chooses in its discretion to satisfy all or a portion of the distributions required to be made to the Special Limited Partner pursuant to a Listing Note or Termination Note with shares of Common Stock, the amount of the Listing Note or Termination Note due to the Special Limited Partner shall be reduced by (y) the Market Value, with respect to the Listing Note, and (z) the fair market value, with respect to the Termination Note, of the Common Stock on the date such Common Stock is issued to the Special Limited Partner.
(v) If the Special Limited Partner converts all or a portion of its Special Limited Partner Interest into OP Units pursuant to Section 8.7(a), the amount of the Listing Note or Termination Note due to the Special Limited Partner shall be reduced by an amount equal to the product of (i) the number of OP Units issued in the conversion multiplied by (ii) the product of (A) the Value of one share of Common Stock on the date of conversion multiplied by (B) the Exchange Factor. If the Special Limited Partner contributes its Special Limited Partner Interest to the Partnership in exchange for OP Units pursuant to Section 8.7(b), the Special Limited Partner shall no longer be entitled the Termination Listing Amount, the Termination Liquidity Amount or the Investment Liquidity Amount or distributions of Net Sales Proceeds in respect of such Termination Listing Amount, the Termination Liquidity Amount or the Investment Liquidity Amount pursuant to Sections 5.1(f)(ii) or (iii), as the case may be.
(vi) If the priority distribution of Net Sales Proceeds to the Special Limited Partner pursuant to this Section 5.1(f) prevents the Partnership from being able to distribute sufficient amounts to the General Partner pursuant to Section 5.1(b) to enable the General Partner to satisfy the REIT Requirement, the General Partner may in its sole discretion cause the Partnership to distribute some or all of the Net Sales Proceeds subject to a priority distribution pursuant to this Section 5.1(f) to the General Partner in an amount sufficient to enable the General Partner to pay dividends to the Stockholders in order to satisfy the REIT Requirements.
(g) In no event may any Partner receive a distribution pursuant to Sections 5.1(a) or (b) with respect to a Partnership Unit if such Partner is entitled to receive a distribution with respect to Common Stock for which such a Partnership Unit has been exchanged.
5.2 | Qualification as a REIT |
The General Partner shall use its best efforts to cause the Partnership to distribute sufficient amounts under this Article 5 to enable the General Partner to pay dividends to the Stockholders that will enable the General Partner to
(a) satisfy the requirements for qualification as a REIT under the Code and Regulations (“ REIT Requirements ”), and
(b) avoid any U.S. federal income or excise tax liability;
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provided , however , that the General Partner shall not be bound to comply with this covenant to the extent such distributions would
(i) violate applicable Delaware law, or
(ii) contravene the terms of any notes, mortgages or other types of debt obligations to which the Partnership may be subject in conjunction with borrowed funds.
5.3 | Withholding |
With respect to any withholding tax or other similar tax liability or obligation to which the Partnership may be subject as a result of any act or status of any Partner or the Special Limited Partner or to which the Partnership becomes subject with respect to any Partnership Unit or the Special Limited Partner Interest, the Partnership shall have the right to withhold amounts distributable pursuant to this Article V to such Partner or the Special Limited Partner or with respect to such Partnership Units or the Special Limited Partner Interest, to the extent of the amount of such withholding tax or other similar tax liability or obligation pursuant to the provisions contained in Section 10.5, and the amount of any withholding shall reduce the right of such Partner or the Special Limited Partner to future distribution to the extent provided in Section 10.5.
5.4 | Additional Partnership Interests |
If the Partnership issues Partnership Interests in accordance with Section 4.2 or 4.3, the distribution priorities set forth in Section 5.1 shall be amended, as necessary, to reflect the distribution priority of such Partnership Interests and corresponding amendments shall be made to the provisions of Exhibit B .
Article
6
ALLOCATIONS
6.1 | Allocations |
The Net Income, Net Loss, Net Property Gain, Net Property Loss and other Partnership items shall be allocated pursuant to the provisions of Exhibit B .
6.2 | Revisions to Allocations to Reflect Issuance of Partnership Interests |
If the Partnership issues Partnership Interests to the General Partner or any additional Limited Partner pursuant to Article IV, the General Partner shall make such revisions to this Article 6 and Exhibit B as it deems necessary to reflect the terms of the issuance of such Partnership Interests, including making preferential allocations to classes of Partnership Interests that are entitled thereto. Such revisions shall not require the consent or approval of any other Partner.
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Article
7
MANAGEMENT AND OPERATIONS OF BUSINESS
7.1 | Management |
(a) (i) Except as otherwise expressly provided in this Agreement, full, complete and exclusive discretion to manage and control the business and affairs of the Partnership are and shall be vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership.
(ii) The General Partner may not be removed by the Limited Partners with or without cause.
(iii) In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to Section 7.11, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1 hereof, including:
(A) (1) the making of any expenditures, the lending or borrowing of money, including making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (so long as the General Partner qualifies as a REIT) to avoid the payment of any U.S. federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its Stockholders in amounts sufficient to permit the General Partner to maintain REIT status,
(2) the assumption or guarantee of, or other contracting for, indebtedness and other liabilities,
(3) the issuance of evidence of indebtedness (including the securing of the same by deed, mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets) and
(4) the incurring of any obligations it deems necessary for the conduct of the activities of the Partnership, including the payment of all expenses associated with the General Partner;
(B) the acquisition, purchase, ownership, operating, leasing and disposition of any real property and any other property or assets, including mortgages and real estate-related notes, whether directly or indirectly;
(C) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership or the General Partner;
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(D) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of all or substantially all of the assets of the Partnership (including the exercise or grant of any conversion, option, privilege, or subscription right or other right available in connection with any assets at any time held by the Partnership) or the merger, consolidation or other combination (each a “ Business Combination ”) of the Partnership with or into another Entity on such terms as the General Partner deems proper, provided , however , that the General Partner shall be required to send to each Limited Partner a notice of such proposed Business Combination no less than 15 days prior to the record date for the vote of the General Partner’s Stockholders on such Business Combination, if any;
(E) the use of the assets of the Partnership (including cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including,
(1) the financing of the conduct of the operations of the General Partner, the Partnership or any of the Partnership’s Subsidiaries,
(2) the lending of funds to other Persons (including the Subsidiaries of the Partnership and/or the General Partner) and the repayment of obligations of the Partnership and its Subsidiaries and any other Person in which it has an equity investment, and
(3) the making of capital contributions to its Subsidiaries;
(F) the expansion, development, redevelopment, construction, leasing, repair, rehabilitation, repositioning, alteration, demolition or improvement of any property in which the Partnership or any Subsidiary of the Partnership owns an interest;
(G) the negotiation, execution, and performance of any contracts, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement, including contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Partnership’s assets;
(H) the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;
(I) holding, managing, investing and reinvesting cash and other assets of the Partnership;
(J) the collection and receipt of revenues and income of the Partnership;
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(K) the establishment of one or more divisions of the Partnership, the selection and dismissal of employees of the Partnership (including employees having titles such as “president”, “vice president”, “secretary” and “treasurer” of the Partnership), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, and the determination of their compensation and other terms of employment or engagement;
(L) the maintenance of such insurance for the benefit of the Partnership and the Partners and directors and officers thereof as it deems necessary or appropriate;
(M) the formation of, or acquisition of an interest (including non-voting interests in entities controlled by Affiliates of the Partnership or third parties) in, and the contribution of property to, any further Entities or other relationships that it deems desirable, including the acquisition of interests in, and the contributions of funds or property to, or making of loans to, its Subsidiaries and any other Person from time to time, or the incurrence of indebtedness on behalf of such Persons or the guarantee of the obligations of such Persons; provided , however , that as long as the General Partner has determined to elect to qualify as a REIT or to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner to fail to qualify as a REIT;
(N) the control of any matters affecting the rights and obligations of the Partnership, including
(1) the settlement, compromise, submission to arbitration or any other form of dispute resolution, or abandonment of, any claim, cause of action, liability, debt or damages, due or owing to or from the Partnership,
(2) the commencement or defense of suits, legal proceedings, administrative proceedings, arbitration or other forms of dispute resolution, and
(3) the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expenses, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;
(O) the undertaking of any action in connection with the Partnership’s direct or indirect investment in its Subsidiaries or any other Person (including the contribution or loan of funds by the Partnership to such Persons);
(P) the determination of the fair market value of any Partnership property distributed in kind using such reasonable method of valuation as the General Partner, in its sole discretion, may adopt;
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(Q) the exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;
(R) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;
(S) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest pursuant to contractual or other arrangements with such Person;
(T) the making, execution and delivery of any and all deeds, leases, notes, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in writing necessary or appropriate, in the judgment of the General Partner, for the accomplishment of any of the foregoing;
(U) the issuance of additional Partnership Units in connection with Capital Contributions by Additional Limited Partners and additional Capital Contributions by Partners pursuant to Article 4 hereof;
(V) the authorization, issuance, sale, redemption or purchase of any Partnership Units or any securities of the Partnership;
(W) the opening of bank accounts on behalf of, and in the name of, the Partnership and its Subsidiaries; and
(X) the amendment and restatement of Exhibit A to reflect accurately at all times the Capital Contributions and Percentage Interests of the Partners as the same are adjusted from time to time to the extent necessary to reflect redemptions, Capital Contributions, the issuance of Partnership Units, the admission of any Additional Limited Partner or any Substituted Limited Partner or otherwise, which amendment and restatement, notwithstanding anything in this Agreement to the contrary, shall not be deemed an amendment of this Agreement, as long as the matter or event being reflected in Exhibit A otherwise is authorized by this Agreement.
(b) (i) Each of the Limited Partners agree that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the Partners, notwithstanding any other provision of this Agreement to the fullest extent permitted under the Act or other applicable law, rule or regulation.
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(ii) The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.
(c) At all times from and after the date hereof, the General Partner at the expense of the Partnership, may or may not, cause the Partnership to obtain and maintain
(i) casualty, liability and other insurance on the properties of the Partnership;
(ii) liability insurance for the Indemnitees hereunder; and
(iii) such other insurance as the General Partner, in its sole and absolute discretion, determines to be appropriate and reasonable.
(d) At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain at any and all times working capital accounts and other cash or similar balances in such amount as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time.
(e) (i) In exercising its authority under this Agreement, the General Partner may, but shall be under no obligation to, take into account the tax consequences to any Partner (including the General Partner) of any action taken (or not taken) by it. The General Partner and the Partnership shall not have liability to any Limited Partner for monetary damages or otherwise for losses sustained, liabilities incurred or benefits not derived by such Limited Partner in connection with such decisions; provided , that the General Partner has acted in good faith pursuant to its authority under this Agreement. The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, the General Partner, and the General Partner’s Stockholders, collectively.
(ii) The General Partner and the Partnership shall not have liability to the any Limited Partner or the Special Limited Partner under any circumstances as a result of an income tax liability incurred by such Limited Partner or the Special Limited Partner as a result of an action (or inaction) by the General Partner taken pursuant to its authority under and in accordance with this Agreement.
7.2 | Certificate of Limited Partnership |
(a) The General Partner has previously filed the Certificate with the Secretary of State of Delaware as required by the Act.
(b) (i) The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and any other state, or the District of Columbia, in which the Partnership may elect to do business or own property.
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(ii) To the extent that such action is determined by the General Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate and do all of the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and each other state, or the District of Columbia, in which the Partnership may elect to do business or own property.
(iii) The General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner.
7.3 | Reimbursement of the General Partner |
(a) Except as provided in this Section 7.3 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding distributions, payments, and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership.
(b) (i) The Partnership shall be responsible for and shall pay all expenses relating to the Partnership’s organization, the ownership of its assets and its operations. The General Partner shall be reimbursed on a monthly basis, or such other basis as it may determine in its sole and absolute discretion, for all expenses that it incurs on behalf of the Partnership relating to the ownership and operation of the Partnership’s assets, or for the benefit of the Partnership, including all expenses associated with compliance by the General Partner and the Initial Limited Partner with laws, rules and regulations promulgated by any regulatory body, expenses related to the operations of the General Partner and to the management and administration of any Subsidiaries of the General Partner or the Partnership or Affiliates of the Partnership, such as auditing expenses and filing fees and any and all salaries, compensation and expenses of officers and employees of the General Partner, but excluding any portion of expenses reasonably attributable to assets not owned by or for the benefit of, or to operations not for the benefit of, the Partnership or Affiliates of the Partnership; provided , however , that the amount of any such reimbursement shall be reduced by any interest earned by the General Partner with respect to bank accounts or other instruments or accounts held by it in its name.
(ii) Such reimbursement shall be in addition to any reimbursement made as a result of indemnification pursuant to Section 7.6 hereof.
(iii) The General Partner shall determine in good faith the amount of expenses incurred by it related to the ownership and operation of, or for the benefit of, the Partnership. If certain expenses are incurred for the benefit of the Partnership and other entities (including the General Partner), such expenses will be allocated to the Partnership and such other entities in such a manner as the General Partner in its reasonable discretion deems fair and reasonable. All payments and reimbursements hereunder shall be characterized for U.S. federal income tax purposes as expenses of the Partnership incurred on its behalf, and not as expenses of the General Partner.
(c) (i) Expenses incurred by the General Partner relating to the organization or reorganization of the Partnership and the General Partner the issuance of Common Stock in connection with an Offering and any issuance of additional Partnership Interests, Common Stock or rights, options, warrants, or convertible or exchangeable securities pursuant to Section 4.2 hereof and all costs and expenses associated with the preparation and filing of any periodic reports by the General Partner under U.S. federal, state or local laws or regulations (including all costs, expenses, damages, and other payments resulting from or arising in connection with litigation related to any of the foregoing) are primarily obligations of the Partnership.
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(ii) To the extent the General Partner pays or incurs such expenses, the General Partner shall be reimbursed for such expenses.
7.4 | Outside Activities of the General Partner |
(a) Without the Consent of the Limited Partners, the General Partner shall not directly or indirectly enter into or conduct any business other than in connection with the ownership, acquisition, and disposition of Partnership Interests and the management of its business and the business of the Partnership, and such activities as are incidental thereto.
(b) The General Partner and any Affiliates of the General Partner may acquire Limited Partner Interests and shall be entitled to exercise all rights of a Limited Partner relating to such Limited Partner Interests.
7.5 | Contracts with Affiliates |
(a) (i) The Partnership may lend or contribute funds or other assets to its Subsidiaries or other Persons in which it has an equity investment and such Subsidiaries and Persons may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner.
(ii) The foregoing authority shall not create any right or benefit in favor of any Subsidiary or any other Person.
(b) Except as provided in Section 7.4, the Partnership may Transfer assets to Entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law as the General Partner, in its sole and absolute discretion, may determine.
(c) Except as expressly permitted by this Agreement, neither the General Partner nor any of its Affiliates shall sell, Transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are determined by the General Partner in good faith to be fair and reasonable.
(d) The General Partner, in its sole and absolute discretion and without the approval the Limited Partners, may propose and adopt, on behalf of the Partnership, employee benefit plans, stock option plans, and similar plans funded by the Partnership for the benefit of employees of the Partnership, the General Partner, any Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the Partnership, the General Partner, any Subsidiaries of the Partnership or any Affiliate of any of them.
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(e) The General Partner is expressly authorized to enter into, in the name and on behalf of the Partnership, a “right of first opportunity” or “right of first offer” arrangement, non-competition agreements and other conflict avoidance agreements with various Affiliates of the Partnership and the General Partner, on such terms as the General Partner, in its sole and absolute discretion, believes are advisable.
7.6 | Indemnification |
(a) (i) To the fullest extent permitted by Delaware law or as provided herein, the Partnership shall indemnify each Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including reasonable attorneys’ fees and other legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (collectively, “ Claims ”), that relate to the operations of the Partnership or the General Partner as set forth in this Agreement, in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, so long as (A) the course of conduct which gave rise to the Claim was taken, in the reasonable determination of the Indemnitee made in good faith, in the best interests of the Partnership or the General Partner, (B) such Claim was not the result of negligence or misconduct by the Indemnitee, (C) the Indemnitee (if other than the General Partner) was acting on behalf of or performing services for the Partnership and (D) such indemnification is not satisfied or recoverable from the assets of the Stockholders of the General Partner. Notwithstanding the foregoing, no Indemnitee (other than the General Partner) shall be indemnified for any Claim arising from or out of an alleged violation of U.S. federal or state securities laws unless (1) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to such Indemnitee, (2) such allegations have been dismissed with prejudice on the merits by a court of competent jurisdiction as to such Indemnitee, or (3) a court of competent jurisdiction approves a settlement of such allegations against such Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which the Common Stock was offered or sold as to indemnification for violations of securities law.
(ii) Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty (except a guaranty by a limited partner of nonrecourse indebtedness of the Partnership or as otherwise provided in any such loan guaranty), contractual obligation for any indebtedness or other obligation or otherwise for any indebtedness of the Partnership or any Subsidiary of the Partnership (including any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.6 in favor of any Indemnitee having or potentially having liability for any such indebtedness.
(iii) Any indemnification pursuant to this Section 7.6 shall be made only out of the assets of the Partnership, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 7.6.
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(b) Reasonable expenses incurred by an Indemnitee who is a party to a proceeding shall be paid or reimbursed by the Partnership in advance of the final disposition of any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative made or threatened against an Indemnitee upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 7.6 has been met; and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 7.6 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnities are indemnified.
(d) The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnities and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 7.6, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by such Indemnitee of its duties to the Partnership also imposes duties on, or otherwise involves services by, such Indemnitee to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 7.6. Actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.
(f) In no event may an Indemnitee subject any of the Partners (other than the General Partner) to personal liability by reason of the indemnification provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.6 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
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(h) (i) The provisions of this Section 7.6 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.
(ii) Any amendment, modification or repeal of this Section 7.6 or any provision hereof shall be prospective only and shall not in any way affect the Partnership’s liability to any Indemnitee under this Section 7.6, as in effect immediately prior to such amendment, modification, or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
(i) If and to the extent any payments to the General Partner pursuant to this Section 7.6 constitute gross income to the General Partner (as opposed to the repayment of advances made on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.
(j) Notwithstanding anything to the contrary in this Agreement, the General Partner shall not be entitled to indemnification hereunder for any loss, claim, damage, liability or expense for which the General Partner is obligated to indemnify the Partnership under any other agreement between the General Partner and the Partnership.
7.7 | Liability of the General Partner |
(a) Notwithstanding anything to the contrary set forth in this Agreement, neither the General Partner nor the investment advisor of the General Partner, nor any of their respective officers and directors, shall be liable for monetary damages to the Partnership, any Partners or any Assignees for losses sustained or liabilities incurred as a result of errors in judgment or mistakes of fact or law or of any act or omission unless the General Partner or its investment advisor, as the case may be, acted in bad faith and the act or omission was material to the matter giving rise to the loss, liability or benefit not derived.
(b) (i) The Limited Partners and the Special Limited Partner expressly acknowledge that the General Partner (and its investment advisor) is acting on behalf of the Partnership and the Stockholders of the General Partner collectively, that the General Partner (and its investment advisor), subject to the provisions of Section 7.1(e) hereof, is under no obligation to consider the separate interest of the Limited Partners or the Special Limited Partner (including the tax consequences to any Limited Partner, the Special Limited Partner or any Assignees) in deciding whether to cause the Partnership to take (or decline to take) any actions, and that the General Partner (and its investment advisor) shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners or the Special Limited Partner in connection with such decisions; provided that the General Partner (and its investment advisor) has acted in good faith.
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(ii) With respect to any indebtedness of the Partnership which any Limited Partner or the Special Limited Partner may have guaranteed, the General Partner (and its investment advisor) shall have no duty to keep such indebtedness outstanding.
(c) (i) Subject to its obligations and duties as General Partner set forth in Section 7.1(a) hereof, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agent, including its investment advisor.
(ii) The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the General Partner in good faith.
(d) The Limited Partners expressly acknowledge that if any conflict in the fiduciary duties owed by the General Partner to its Stockholders and by the General Partner, in its capacity as a general partner of the Partnership, to the Limited Partners or the Special Limited Partner, the General Partner may act in the best interests of the General Partner’s Stockholders without violating its fiduciary duties to the Limited Partners or the Special Limited Partner, and that the General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by the Limited Partners or the Special Limited Partner in connection with any such violation.
(e) Any amendment, modification or repeal of this Section 7.7 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner’s and its officers’ and directors’ liability to the Partnership, the Special Limited Partner and the Limited Partners under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
7.8 | Other Matters Concerning the General Partner |
(a) The General Partner may rely and shall be protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
(c) (i) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and duly appointed attorneys-in-fact.
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(ii) Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform each and every act and duty which is permitted or required to be done by the General Partner hereunder.
(d) Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order
(i) to protect the ability of the General Partner to continue to qualify as a REIT; or
(ii) to avoid the General Partner incurring any taxes under Section 857 or Section 4981 of the Code,
is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners and the Special Limited Partner.
7.9 | Title to Partnership Assets |
(a) Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof.
(b) (i) Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner.
(ii) The General Partner hereby declares and warrants that any Partnership asset for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided , however , that the General Partner shall use its best efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable.
(iii) All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.
7.10 | Reliance by Third Parties |
(a) Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority, without consent or approval of any other Partner or Person, to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and take any and all actions on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if the General Partner were the Partnership’s sole party in interest, both legally and beneficially.
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(b) Each Limited Partner and the Special Limited Partner hereby waive any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing.
(c) In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expediency of any act or action of the General Partner or its representatives.
(d) Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that
(i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect;
(ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership; and
(iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.
7.11 | Loans By Third Parties |
The Partnership may incur Debt, or enter into similar credit, guarantee, financing or refinancing arrangements for any purpose (including in connection with any acquisition of property) with any Person upon such terms as the General Partner determines appropriate.
Article
8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
8.1 | Limitation of Liability |
No Limited Partner shall have any liability under this Agreement except as expressly provided in this Agreement, including Section 10.5 hereof, or under the Act.
8.2 | Management of Business |
(a) No Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any officer, director, employee, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operation, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership.
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(b) The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.
8.3 | Outside Activities of Limited Partners |
(a) Subject to any agreements entered into pursuant to Section 7.5 hereof and any other agreements entered into by a Limited Partner , the Special Limited Partner, or any of their Affiliates with the Partnership or any of its Subsidiaries, any Limited Partner, the Special Limited Partner and any officer, director, employee, agent, trustee, Affiliate or shareholder of any Limited Partner or the Special Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities that are in direct competition with the Partnership or that are enhanced by the activities of the Partnership.
(b) Neither the Partnership nor any Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner, the Special Limited Partner, any Assignee or any of their Affiliates.
(c) No Limited Partner nor any other Person shall have any rights by virtue of this Agreement or the Partnership relationship established hereby in any business ventures of any other Person and such Person shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures to the Partnership, any Limited Partner or any such other Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such Person.
8.4 | Return of Capital |
(a) Except pursuant to the Exchange Rights Agreements, no Limited Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Partnership as provided herein.
(b) Except as provided in Articles 5, 6 and 13 hereof, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee, either as to the return of Capital Contributions or as to profits, losses or distributions.
8.5 | Rights of Limited Partners Relating to the Partnership |
(a) In addition to the other rights provided by this Agreement or by the Act, and except as limited by Section 8.5(b) hereof, each Limited Partner and the Special Limited Partner shall have the right, for a purpose reasonably related to such Person’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at such Person’s own expense (including such reasonable copying and administrative charges as the General Partner may establish from time to time):
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(i) to obtain a copy of the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Securities Exchange Act of 1934; and
(ii) to obtain a copy of the Partnership’s U.S. federal, state and local income tax returns for each Partnership Year.
(b) Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners and the Special Limited Partner, for such period of time as the General Partner determines in its sole and absolute discretion to be reasonable, any information that:
(i) the General Partner reasonably believes to be in the nature of trade secrets or other information, the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or could damage the Partnership or its business; or
(ii) the Partnership is required by law or by agreements with an unaffiliated third party to keep confidential.
8.6 | Exchange Rights Agreements |
(a) Subject to Sections 11.3(c) , 11.3(d) , 11.3(e) , 11.4 and 11.6 , the Limited Partners (other than the General Partner in its capacity as a Limited Partner) will be granted the right, but not the obligation, to exchange all or a portion of their Partnership Units for cash or, at the option of the Partnership, for shares of Common Stock on such terms and subject to such conditions and restrictions as will be contained in one or more exchange rights agreements among the General Partner, the Partnership and one or more Limited Partners (as amended from time to time, the “ Exchange Rights Agreements ”); provided , however , that such Partnership Units shall have been outstanding for at least one year. The form of each Exchange Rights Agreement governing the exchange of Partnership Units hereafter shall be determined by the General Partner.
(b) The Limited Partners and all successors, assignees and transferees (whether by operation of law, including by merger or consolidation, dissolution or liquidation of an entity that is a Limited Partner, or otherwise) shall be bound by the provisions of the Exchange Rights Agreement to which they are parties.
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8.7 | Conversion and Exchange of Special Limited Partner Interests . |
(a) Conversion of Listing Note or Termination Note .
(i) If the Special Limited Partner is entitled to receive distributions of Net Sales Proceeds pursuant to the Partnership’s obligation under a Listing Note or a Termination Note, at such time as the Capital Account balance of the Special Limited Partner attributable to the Special Limited Partner Interest is equal to the remaining amount of Net Sales Proceeds distributable to the Special Limited Partner pursuant to the Listing Note or Termination Note, respectively, the Special Limited Partner shall have the right, but not the obligation, to convert all or a portion of the Special Limited Partner Interest into OP Units. The Special Limited Partner shall provide written notice to the General Partner of its intention to convert all or a portion of its Special Limited Partner Interest at least ten (10) days prior to the date on which the conversion is to occur, and such notice shall indicate the amount of the Special Limited Partner Interest that the Special Limited Partner intends to convert. The maximum number of OP Units issuable upon a conversion of the Special Limited Partner Interest shall be equal to the quotient of (i) the net amount of the Partnership’s remaining obligation pursuant to the Listing Note or Termination Note on the date of conversion divided by (ii) the product of (A) the Value of one share of Common Stock on the date of conversion multiplied by (B) the Exchange Factor. Only a whole number of OP Units may be issuable upon a conversion of the Special Limited Partner Interest. The Special Limited Partner covenants and agrees with the Partnership that the Special Limited Partner Interest shall be free and clear of all liens. The conversion of all or a portion of the Special Limited Partner Interest shall occur automatically after the close of business on the applicable date of conversion, as of which time the Special Limited Partner shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of OP Units issuable upon such conversion.
(ii) Exchange . OP Units issuable upon a conversion of the Special Limited Partner Interest as set forth in this Section 8.7(a) shall be exchangeable for cash or, at the option of the Partnership, for shares of Common Stock pursuant to Section 8.6.
(iii) Impact of Conversion for Purposes of Subparagraph 1(c)(iii) of Exhibit B . For purposes of making future allocations under subparagraph 1(c)(iii) of Exhibit B , the Special Limited Partner’s Capital Account balance shall be reduced, as of the date of conversion, by an amount equal to the product of (i) the number of OP Units issued in the conversion multiplied by (ii) the product of (A) the Value of one share of Common Stock on the date of conversion multiplied by (B) the Exchange Factor.
(b) Conversion of Termination Listing Amount, Termination Liquidity Amount or Investment Liquidity Amount . At such time as the Special Limited Partner is entitled to the Termination Listing Amount, Termination Liquidity Amount or Investment Liquidity Amount, the Special Limited Partner shall have the right, but not the obligation, to contribute the entire Special Limited Partner Interest to the Partnership in exchange for OP Units in a transaction intended to qualify as a contribution of property pursuant to Section 721 of the Code. The Special Limited Partner shall notify the General Partner of its intention to exchange its Special Limited Partner Interest as soon as reasonably practicable after learning of the event that will give rise to its right to receive the Termination Listing Amount, Termination Liquidity Amount or Investment Liquidity Amount. The number of OP Units issuable upon a conversion of the Special Limited Partner Interest shall be equal to the quotient of (i) the Termination Listing Amount, Termination Liquidity Amount or Investment Liquidity Amount, as the case may be, divided by (ii) the product of (A) in the case of the Termination Listing Amount or the Termination Liquidity Amount, the Value of one share of Common Stock, and in the case of the Investment Liquidity Amount, the Investment Liquidity Value per one share of Common Stock multiplied by (B) the Exchange Factor. The Special Limited Partner covenants and agrees with the Partnership that the Special Limited Partner Interest shall be free and clear of all liens. The conversion of all or a portion of the Special Limited Partner Interest shall occur automatically after the close of business on the applicable date of conversion, as of which time the Special Limited Partner shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of OP Units issuable upon such conversion.
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Article
9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
9.1 | Records and Accounting |
(a) The General Partner shall keep or cause to be kept at the principal office of the Partnership those records and documents required to be maintained by the Act and other books and records deemed by the General Partner to be appropriate with respect to the Partnership’s business, including all books and records necessary for the General Partner to comply with applicable REIT Requirements and to provide to the Limited Partners and the Special Limited Partner any information, lists and copies of documents required to be provided pursuant to Sections 8.5(a) and 9.3 hereof.
(b) Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device, provided that the records so maintained are convertible into clearly legible written form within a reasonable period of time.
(c) The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles, or such other basis as the General Partner determines to be necessary or appropriate.
9.2 | Fiscal Year |
The fiscal year of the Partnership shall be the calendar year.
9.3 | Reports |
(a) As soon as practicable, but in no event later than the date on which the General Partner mails its annual report to its Stockholders, the General Partner shall cause to be mailed to each Limited Partner and the Special Limited Partner as of the close of the Partnership Year, an annual report containing financial statements of the Partnership, or of the General Partner, if such statements are prepared on a consolidated basis with the Partnership, for such Partnership Year, presented in accordance with the standards of the Public Accounting Oversight Board (United States), such statements to be audited by a nationally recognized firm of independent public accountants selected by the General Partner in its sole discretion.
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(b) If and to the extent that the General Partner mails quarterly reports to its Stockholders, then as soon as practicable, but in no event later than the date such reports are mailed, the General Partner shall cause to be mailed to each Limited Partner and the Special Limited Partner a report containing unaudited financial statements as of the last day of the calendar quarter of the Partnership, or of the General Partner, if such statements are prepared on a consolidated basis with the Partnership, and such other information as may be required by applicable law or regulation, or as the General Partner determines to be appropriate.
(c) Notwithstanding the foregoing, the General Partner may deliver to the Limited Partners and the Special Limited Partner each of the reports described above, as well as any other communications that it may provide hereunder, by e-mail or by any other electronic means.
Article
10
TAX MATTERS
10.1 | Preparation of Tax Returns |
(a) The General Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for U.S. federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by the Limited Partners and the Special Limited Partner for U.S. federal and state income tax reporting purposes. The U.S. federal income tax return of the Partnership shall be filed annually on IRS Form 1065 (or such other successor form) or on any other IRS form as may be required.
(b) If required under the Code or applicable state or local income tax law, the General Partner shall also arrange for the preparation and timely filing of all returns of income, gains, deductions, losses and other items required of the Subsidiaries of the Partnership for U.S. federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by the Limited Partners and the Special Limited Partner for U.S. federal and state income tax reporting purposes.
10.2 | Tax Elections |
(a) Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code.
(b) The General Partner shall elect a permissible method (which need not be the same method for each item or property) of eliminating the disparity between the Gross Asset Value and the tax basis for each item of property contributed to the Partnership or to a Subsidiary of the Partnership pursuant to the Regulations promulgated under the provisions of Section 704(c) of the Code.
(c) The General Partner shall have the right to seek to revoke any tax election it makes, including the election under Section 754 of the Code, upon the General Partner’s determination, in its sole and absolute discretion, that such revocation is in the best interests of the Partners.
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(d) The Partners, intending to be legally bound, hereby authorize the Partnership to make an election (the “ Safe Harbor Election ”) to have the “liquidation value” safe harbor provided in Proposed Treasury Regulation Section 1.83-3(1) and the Proposed Revenue Procedure set forth in IRS Notice 2005-43, as such safe harbor may be modified when such proposed guidance is issued in final form or as amended by subsequently issued guidance (the “ Safe Harbor ”), apply to any interest in the Partnership transferred to a service provider while the Safe Harbor Election remains effective, to the extent such interest meets the Safe Harbor requirements (collectively, such interests are referred to as “ Safe Harbor Interests ”). The tax matters partner is authorized and directed to execute and file the Safe Harbor Election on behalf of the Partnership and the Partners if and when the Safe Harbor Election becomes available. The Partnership and the Partners (including any person to whom an interest in the Partnership is transferred in connection with the performance of services) hereby agree to comply with all requirements of the Safe Harbor (including forfeiture allocations) with respect to all Safe Harbor Interests and to prepare and file all U.S. federal income tax returns reporting the tax consequences of the issuance and vesting of Safe Harbor Interests consistent with such final Safe Harbor guidance. The General Partner is authorized to take such actions as are necessary to achieve, under the Safe Harbor, the effect that the election and compliance with all requirements of the Safe Harbor referred to above would be intended to achieve under Proposed Treasury Regulation Section 1.83-3, including amending this Agreement.
10.3 | Tax Matters Partner |
(a) (i) The General Partner shall be the “tax matters partner” of the Partnership for U.S. federal income tax purposes.
(ii) Pursuant to Section 6230(e) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address, taxpayer identification number, and profit interest of each of the Limited Partners, the Special Limited Partner and the Assignees; provided , however , that such information is provided to the Partnership by the Limited Partners, the Special Limited Partner and the Assignees.
(iii) The tax matters partner is authorized, but not required:
(A) to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner (including the Special Limited Partner) for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners (including the Special Limited Partner), except that such settlement agreement shall not bind any Partner or the Special Limited Partner
(1) who (within the time prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or the Special Limited Partner; or
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(2) who is a “notice partner” (as defined in Section 6231(a)(8) of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code);
(B) if a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner or the Special Limited Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the filing of a complaint for refund with the United States Claims Court or the District Court of the United States for the district in which the Partnership’s principal place of business is located;
(C) to intervene in any action brought by any other Partner or the Special Limited Partner for judicial review of a final adjustment;
(D) to file a request for an administrative adjustment with the IRS and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;
(E) to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken account of by a Partner or the Special Limited Partner for tax purposes, or an item affected by such item; and
(F) to take any other action on behalf of the Partners, the Special Limited Partner or the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.6 of this Agreement shall be fully applicable to the tax matters partner in its capacity as such.
(b) (i) The tax matters partner shall receive no compensation for its services.
(ii) All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees and expenses) shall be borne by the Partnership.
(iii) Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable.
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10.4 | Organizational Expenses |
The Partnership shall elect to deduct expenses, if any, incurred by it in organizing the Partnership ratably over a one hundred eighty (180) month period as provided in Section 709 of the Code.
10.5 | Withholding |
(a) Each Limited Partner and the Special Limited Partner hereby authorizes the Partnership to withhold from, or pay on behalf of or with respect to, such Limited Partner or the Special Limited Partner any amount of U.S. federal, state, local, or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Limited Partner or the Special Limited Partner pursuant to this Agreement, including any taxes required to be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code.
(b) (i) Any amount paid on behalf of or with respect to a Limited Partner or the Special Limited Partner shall constitute a loan by the Partnership to such Limited Partner or the Special Limited Partner, which loan shall be repaid by such Limited Partner or the Special Limited Partner as the case may be within fifteen (15) days after notice from the General Partner that such payment must be made unless
(A) the Partnership withholds such payment from a distribution which would otherwise be made to the Limited Partner or the Special Limited Partner; or
(B) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Limited Partner or the Special Limited Partner.
(ii) Any amounts withheld pursuant to the foregoing clauses (i)(A) or (B) shall be treated as having been distributed to the Limited Partner or the Special Limited Partner.
(c) (i) Each Limited Partner and the Special Limited Partner hereby unconditionally and irrevocably grant to the Partnership a security interest in such Limited Partner’s Partnership Interest and such Special Limited Partner’s Special Limited Partner Interest, as the case may be, to secure such Limited Partner’s or Special Limited Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 10.5.
(ii) (A) If a Limited Partner or the Special Limited Partner fails to pay when due any amounts owed to the Partnership pursuant to this Section 10.5, the General Partner may, in its sole and absolute discretion, elect to make the payment to the Partnership on behalf of such defaulting Limited Partner or Special Limited Partner, and in such event shall be deemed to have loaned such amount to such defaulting Limited Partner or Special Limited Partner and shall succeed to all rights and remedies of the Partnership as against such defaulting Limited Partner or Special Limited Partner.
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(B) Without limitation, in such event, the General Partner shall have the right to receive distributions that would otherwise be distributable to such defaulting Limited Partner or Special Limited Partner until such time as such loan, together with all interest thereon, has been paid in full, and any such distributions so received by the General Partner shall be treated as having been distributed to the defaulting Limited Partner or Special Limited Partner and immediately paid by the defaulting Limited Partner or Special Limited Partner to the General Partner in repayment of such loan.
(iii) Any amount payable by a Limited Partner or the Special Limited Partner hereunder shall bear interest at the highest base or prime rate of interest published from time to time by The Wall Street Journal, plus four (4) percentage points, but in no event higher than the maximum lawful rate of interest on such obligation, such interest to accrue from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full.
(iv) Each Limited Partner or the Special Limited Partner shall take such actions as the Partnership or the General Partner shall request in order to perfect or enforce the security interest created hereunder.
Article
11
TRANSFERS AND WITHDRAWALS
11.1 | Transfer |
(a) (i) The term “Transfer,” when used in this Article 11 with respect to a Partnership Interest or a Partnership Unit, shall be deemed to refer to a transaction by which the General Partner purports to assign all or any part of its General Partner Interest to another Person, or a Limited Partner purports to assign all or any part of its Limited Partner Interest to another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(ii) The term “Transfer” when used in this Article 11 does not include any exchange of Partnership Units for cash or Common Stock pursuant to the Exchange Rights Agreement.
(b) (i) No Partnership Interest shall be Transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11.
(ii) Any Transfer or purported Transfer of a Partnership Interest not made in accordance with this Article 11 shall be null and void.
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11.2 | Transfer of the General Partner’s General Partner Interest |
(a) The General Partner may not Transfer any of its General Partner Interest or withdraw as General Partner, or Transfer any of its Limited Partner Interest, except
(i) if holders of at least two-thirds of the Limited Partner Interests consent to such Transfer or withdrawal;
(ii) if such Transfer is to an entity which is wholly owned by the General Partner and is a Qualified REIT Subsidiary as defined in Section 856(i) of the Code; or
(iii) in connection with a transaction described in Section 11.2(c) or 11.2(d) (as applicable)
(b) If the General Partner withdraws as general partner of the Partnership in accordance with Section 11.2(a), the General Partner’s General Partner Interest shall immediately be converted into a Limited Partner Interest.
(c) Except as otherwise provided in Section 11.2(d), the General Partner shall not engage in any merger, consolidation or other combination of the General Partner with or into another Person (other than a merger in which the General Partner is the surviving entity) or sale of all or substantially all of its assets, or any reclassification, or any recapitalization of outstanding Common Stock (other than a change in par value, or from par value to no par value, or as a result of a subdivision or combination of Common Stock) (a “ Transaction ”), unless
(i) in connection with the Transaction all Limited Partners will either receive, or will have the right to elect to receive, for each Partnership Unit an amount of cash, securities, or other property equal to the product of the Exchange Factor and the amount of cash, securities or other property or value paid in the Transaction to or received by a holder of one share of Common Stock corresponding to such Partnership Unit in consideration of one share of Common Stock at any time during the period from and after the date on which the Transaction is consummated; provided , however , that if, in connection with the Transaction, a purchase, tender or exchange offer (“ Offer ”) shall have been made to and accepted by the holders of more than 50% of the outstanding Common Stock, each holder of Partnership Units shall be given the option to exchange its Partnership Units for the amount of cash, securities, or other property which a Limited Partner would have received had it
(A) exercised its Exchange Right and
(B) sold, tendered or exchanged pursuant to the Offer the Common Stock received upon exercise of the Exchange Right immediately prior to the expiration of the Offer.
The foregoing is not intended to, and does not, affect the ability of (i) a Stockholder of the General Partner to sell its stock in the General Partner or (ii) the General Partner to perform its obligations (under agreement or otherwise) to such Stockholders (including the fulfillment of any obligations with respect to registering the sale of stock under applicable securities laws).
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(d) (i) Notwithstanding Section 11.2(c), the General Partner may merge into or consolidate with another entity if immediately after such merger or consolidation
(A) substantially all of the assets of the successor or surviving entity (the “ Surviving General Partner ”), other than Partnership Units held by the General Partner, are contributed to the Partnership as a Capital Contribution in exchange for Partnership Units with a fair market value equal to the value of the assets so contributed as determined by the Surviving General Partner in good faith and
(B) the Surviving General Partner expressly agrees to assume all obligations of the General Partner hereunder.
(ii) (A) Upon such contribution and assumption, the Surviving General Partner shall have the right and duty to amend this Agreement and the Exchange Rights Agreement as set forth in this Section 11.2(d).
(B) (1) The Surviving General Partner shall in good faith arrive at a new method for the calculation of the Exchange Factor for a Partnership Unit after any such merger or consolidation so as to approximate the existing method for such calculation as closely as reasonably possible.
(2) Such calculation shall take into account, among other things, the kind and amount of securities, cash and other property that was receivable upon such merger or consolidation by a holder of Common Stock or options, warrants or other rights relating thereto, and which a holder of Partnership Units could have acquired had such Partnership Units been redeemed for Common Stock immediately prior to such merger or consolidation.
(C) Such amendment to this Agreement shall provide for adjustment to such method of calculation, which shall be as nearly equivalent as may be practicable to the adjustments provided for with respect to the Exchange Factor.
(iii) The above provisions of this Section 11.2(d) shall similarly apply to successive mergers or consolidations permitted hereunder.
11.3 | Limited Partners’ Rights to Transfer |
(a) Subject to the provisions of Sections 11.3(c), 11.3(d), 11.3(e), 11.4 and 11.6, a Limited Partner may, without the consent of the General Partner, Transfer all or any portion of its Limited Partner Interest, or any of such Limited Partner’s economic right as a Limited Partner. In order to effect such transfer, the Limited Partner must deliver to the General Partner a duly executed copy of the instrument making such transfer and such instrument must evidence the written acceptance by the assignee of all of the terms and conditions of this Agreement and represent that such assignment was made in accordance with all applicable laws and regulations.
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(b) (i) If a Limited Partner is Incapacitated, the executor, administrator, trustee, committee, guardian, conservator or receiver of such Limited Partner’s estate shall have all of the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of settling or managing the estate and such power as the Incapacitated Limited Partner possessed to Transfer all or any part of his or its interest in the Partnership.
(ii) The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.
(c) The General Partner may prohibit any Transfer by a Limited Partner of its Partnership Units if it reasonably believes (based on the advice of counsel) such Transfer would require filing of a registration statement under the Securities Act of 1933, as amended, or would otherwise violate any U.S. federal or state securities laws or regulations applicable to the Partnership or the Partnership Units.
(d) No Transfer by a Limited Partner of its Partnership Units may be made to any Person if
(i) it would adversely affect the ability of the General Partner to continue to qualify as a REIT or would subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code;
(ii) it would result in the Partnership being treated as an association taxable as a corporation for U.S. federal income tax purposes;
(iii) such Transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code);
(iv) such Transfer would, in the opinion of legal counsel for the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101;
(v) such Transfer would subject the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended;
(vi) such Transfer is a sale or exchange, and such sale or exchange would, when aggregated with all other sales and exchanges during the 12-month period ending on the date of the proposed Transfer, result in 50% or more of the interests in Partnership capital and profits being sold or exchanged during such 12-month period without the consent of the General Partner, which consent may be withheld in its sole and absolute discretion; or
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(vii) such Transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code.
(e) No transfer of any Partnership Units may be made to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan constitutes a nonrecourse liability (within the meaning of Section 1.752-1(a)(2) of the Regulations), without the consent of the General Partner, which may be withheld in its sole and absolute discretion; provided , however , that as a condition to such consent the lender will be required to enter into an arrangement with the Partnership and the General Partner to exchange for the Cash Amount any Partnership Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code.
(f) Any Transfer in contravention of any of the provisions of this Section 11.3 shall be void and ineffectual and shall not be binding upon, or recognized by, the Partnership.
11.4 | Substituted Limited Partners |
(a) (i) No Limited Partner shall have the right to substitute a Permitted Transferee for a Limited Partner in its place.
(ii) The General Partner shall, however, have the right to consent to the admission of a Permitted Transferee of the Partnership Interest of a Limited Partner pursuant to this Section 11.4 as a Substituted Limited Partner, which consent may be given or withheld by the General Partner in its sole and absolute discretion.
(iii) The General Partner’s failure or refusal to permit such transferee to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership or any Partner.
(b) A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement.
(c) (i) No Permitted Transferee will be admitted as a Substituted Limited Partner, unless such transferee has furnished to the General Partner evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement and, as it relates to the Substituted Limited Partners, the Exchange Rights Agreement, including the power of attorney granted in Section 2.4 hereof.
(ii) Upon the admission of a Substituted Limited Partner, the General Partner shall amend Exhibit A to reflect the name, address, number of Partnership Units, and Percentage Interest of such Substituted Limited Partner, and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Limited Partner.
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11.5 | Assignees |
(a) If the General Partner, in its sole and absolute discretion, does not consent to the admission of any transferee as a Substituted Limited Partner, as described in Section 11.4(a), such transferee shall be considered an Assignee for purposes of this Agreement.
(b) An Assignee shall be deemed to have had assigned to it, and shall be entitled to receive distributions from the Partnership and the share of Net Income, Net Losses, Net Property Gain, Net Property Loss, and any other items of gain, loss, deduction or credit of the Partnership attributable to the Partnership Units assigned to such transferee, but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement, and shall not be entitled to vote such Partnership Units in any matter presented to the Limited Partners, for a vote (such Partnership Units being deemed to have been voted on such matter in the same proportion as all other Partnership Units held by Limited Partners are voted).
(c) If any such transferee desires to make a further assignment of any such Partnership Units, such transferee shall be subject to all of the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units.
11.6 | General Provisions |
(a) No Limited Partner may withdraw from the Partnership other than as a result of a permitted Transfer of all of such Limited Partner’s Partnership Units in accordance with this Article 11 or, as it relates to the Limited Partners, pursuant to exchange of all of its Partnership Units pursuant to the applicable Exchange Rights Agreement.
(b) (i) Any Limited Partner which shall Transfer all of its Partnership Units in a Transfer permitted pursuant to this Article 11 shall cease to be a Limited Partner upon the admission of all Assignees of such Partnership Units as Substituted Limited Partners.
(ii) Similarly, any Limited Partner which shall Transfer all of its Partnership Units pursuant to an exchange of all of its Partnership Units pursuant to an Exchange Rights Agreement shall cease to be a Limited Partner.
(c) Other than pursuant to the Exchange Rights Agreement or with the consent of the General Partner, transfers pursuant to this Article 11 may only be made as of the first day of a fiscal quarter of the Partnership.
(d) (i) If any Partnership Interest is transferred or assigned during the Partnership’s fiscal year in compliance with the provisions of this Article 11 or exchanged pursuant to the applicable Exchange Rights Agreement on any day other than the first day of a Partnership Year, then Net Income, Net Losses, Net Property Gain, Net Property Loss, each item thereof and all other items attributable to such interest for such Partnership Year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying interests during the Partnership Year in accordance with Section 706(d) of the Code, using the interim closing of the books method or such other method permitted by the Code as the General Partner may select.
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(ii) Solely for purposes of making such allocations, each of such items for the calendar month in which the Transfer or assignment occurs shall be allocated to the transferee Partner, and none of such items for the calendar month in which an exchange occurs shall be allocated to the exchanging Partner, provided , however , that the General Partner may adopt such other conventions relating to allocations in connection with transfers, assignments, or exchanges as it determines are necessary or appropriate.
(iii) All distributions pursuant to Section 5.1(a) and Section 5.1(b) attributable to Partnership Units, with respect to which the Partnership Record Date is before the date of such Transfer, assignment, or exchange of such Partnership Units, shall be made to the transferor Partner or the exchanging Partner, as the case may be, and in the case of a Transfer or assignment other than an exchange, all distributions pursuant to Section 5.1(a) and Section 5.1(b) thereafter attributable to such Partnership Units shall be made to the transferee Partner.
(e) In addition to any other restrictions on transfer herein contained, including the provisions of this Article 11, in no event may any Transfer or assignment of a Partnership Interest by any Partner (including pursuant to Section 8.6) be made without the express consent of the General Partner, in its sole and absolute discretion, (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership such transfer would cause a termination of the Partnership for U.S. federal or state income tax purposes (except as a result of the exchange for Common Stock of all Partnership Units held by all Limited Partners or pursuant to a transaction expressly permitted under Section 11.2); (v) if in the opinion of counsel to the Partnership, there would be a significant risk that such transfer would cause the Partnership to cease to be classified as a partnership for U.S. federal income tax purposes (except as a result of the exchange for Common Stock of all Partnership Units held by all Limited Partners or pursuant to a transaction expressly permitted under Section 11.2); (vi) if such transfer requires the registration of such Partnership Interest pursuant to any applicable U.S. federal or state securities laws; (vii) if such transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code or such transfer causes the Partnership to become a “publicly traded partnership,” as such term is defined in Section 469(k)(2) or Section 7704(b) of the Code ( provided , however , that this clause (vii) shall not be the basis for limiting or restricting in any manner the exercise of the Exchange Right under Section 8.6 unless the General Partner determines in its reasonable discretion (which may include obtaining an opinion of outside tax counsel) that, in the absence of such limitation or restriction, there is a significant risk that the Partnership will be treated as a “publicly traded partnership” and, by reason thereof, taxable as a corporation); (viii) such transfer could adversely affect the ability of the General Partner to remain qualified as a REIT; or (ix) if in the opinion of legal counsel of the transferring Partner (which opinion and counsel are reasonably satisfactory to the Partnership), or legal counsel of the Partnership, such transfer would adversely affect the ability of the General Partner to continue to qualify as a REIT or subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code, if the General Partner has elected to be qualified as a REIT.
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(f) The General Partner shall monitor the transfers of interests in the Partnership to determine (i) if such interests are being traded on an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code; and (ii) whether additional transfers of interests would result in the Partnership being unable to qualify for at least one of the “safe harbors” set forth in Section 1.7704-1 of the Regulations (or such other guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as “readily tradable on a secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code) (the “ PTP Safe Harbors ”). The General Partner shall take all steps reasonably necessary or appropriate to prevent any trading of interests or any recognition by the Partnership of transfers made on such markets and, except as otherwise provided herein, to insure that at least one of the PTP Safe Harbors is met, including limiting or restricting the right of any holder of a Partnership Unit to exercise the Exchange Right in accordance with the terms of the applicable Exchange Rights Agreement to the extent the General Partner determines in its reasonable discretion (which may include obtaining an opinion of outside tax counsel) that, in the absence of such limitation or restriction, there is a significant risk that the Partnership will be treated as a “publicly traded partnership” and, by reason thereof, taxable as a corporation.
Article
12
ADMISSION OF PARTNERS
12.1 | Admission of Successor General Partner |
(a) (i) A successor to all of the General Partner Interest pursuant to Article 11 hereof who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective immediately following such transfer and the admission of such successor General Partner as a general partner of the Partnership upon the satisfaction of the terms and conditions set forth in Section 12.1(b).
(ii) Any such transferee shall carry on the business of the Partnership without dissolution.
(b) A Person shall be admitted as a substitute or successor General Partner of the Partnership only if the following terms and conditions are satisfied:
(i) the Person to be admitted as a substitute or additional General Partner shall have accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required or appropriate in order to effect the admission of such Person as a General Partner;
(ii) if the Person to be admitted as a substitute or additional General Partner is a corporation or a partnership it shall have provided the Partnership with evidence satisfactory to counsel for the Partnership of such Person’s authority to become a General Partner and to be bound by the terms and provisions of this Agreement; and
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(iii) counsel for the Partnership shall have rendered an opinion (relying on such opinions from other counsel as may be necessary) that the admission of the person to be admitted as a substitute or additional General Partner is in conformity with the Act, that none of the actions taken in connection with the admission of such Person as a substitute or additional General Partner will cause
(A) the Partnership to be classified other than as a partnership for U.S. federal income tax purposes, or
(B) the loss of any Limited Partner’s limited liability.
(c) In the case of such admission on any day other than the first day of a Partnership Year, all items attributable to the General Partner Interest for such Partnership Year shall be allocated between the transferring General Partner and such successor as provided in Section 11.6(d) hereof.
12.2 | Admission of Additional Limited Partners |
(a) A Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner
(i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement and the applicable Exchange Rights Agreement, including the power of attorney granted in Section 2.4 hereof, and
(ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person’s admission as an Additional Limited Partner.
(b) (i) Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner’s sole and absolute discretion.
(ii) The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the consent of the General Partner to such admission.
(c) (i) If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Partnership Year, then Net Income, Net Losses, Net Property Gain, Net Property Loss, each item thereof and all other items allocable among Partners and Assignees for such Partnership Year shall be allocated among such Additional Limited Partner and all other Partners and Assignees by taking into account their varying interests during the Partnership Year in accordance with Section 706(d) of the Code, using the interim closing of the books method or such other method permitted by the Code as the General Partner may select.
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(ii) (A) Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of any Additional Limited Partner occurs shall be allocated among all of the Partners and Assignees, including such Additional Limited Partner.
(B) distributions pursuant to Section 5.1(a) and Section 5.1(b) with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees, other than the Additional Limited Partner, and all distributions pursuant to Section 5.1(a) and Section 5.1(b) thereafter shall be made to all of the Partners and Assignees, including such Additional Limited Partner.
12.3 | Amendment of Agreement and Certificate of Limited Partnership |
For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A ) and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.4 hereof.
Article
13
DISSOLUTION, LIQUIDATION AND TERMINATION
13.1 | Dissolution |
(a) The Partnership shall not be dissolved by the admission of Substituted Limited Partners, Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General Partner, any successor General Partner shall continue the business of the Partnership.
(b) The Partnership shall dissolve, and its affairs shall be wound up, only upon the first to occur of any of the following (each, a “ Liquidating Event ”):
(i) the expiration of its term as provided in Section 2.5 hereof;
(ii) an event of withdrawal of the General Partner, as defined in the Act (other than an event of bankruptcy), unless, within ninety (90) days after such event of withdrawal, a “majority in interest” (as defined below) of the remaining Partners Consent in writing to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a successor General Partner;
(iii) an election to dissolve the Partnership made by the General Partner, with the Consent of the Limited Partners holding at least a majority of the Percentage Interest of the Limited Partners (including Limited Partner Interests held by the General Partner);
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(iv) entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;
(v) a Capital Transaction;
(vi) a final and non-appealable judgment is entered by a court of competent jurisdiction ruling that the General Partner is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the General Partner, in each case under any U.S. federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to the entry of such order or judgment a “majority in interest” (as defined below) of the remaining Partners Consent in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute General Partner.
As used herein, a “majority in interest” shall refer to Partners (excluding the General Partner) who hold more than fifty percent (50%) of the outstanding Percentage Interests not held by the General Partner.
13.2 | Winding Up |
(a) (i) Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners.
(ii) No Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership’s business and affairs.
(iii) The General Partner, or, if there is no remaining General Partner, any Person elected by the Limited Partners holding at least a “majority in interest” (the General Partner or such other Person being referred to herein as the “ Liquidator ”), shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and property and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include shares of common stock or other securities of the General Partner) shall be applied and distributed in the following order:
(A) First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the Partners;
(B) Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner;
(C) Third, to the payment and discharge of all of the Partnership’s debts and liabilities to the other Partners; and
(D) the balance, if any, shall be distributed to all Partners (including the Special Limited Partner) with positive Capital Accounts in accordance with their respective positive Capital Account balances after giving effect to all allocations in Exhibit B and all prior distributions under Section 5.1.
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(iv) The General Partner shall not receive any additional compensation for any services performed pursuant to this Article 13.
(v) Any distributions pursuant to this Section 13.2(a) shall be made by the end of the Partnership’s taxable year in which the liquidation occurs (or, if later, within 90 days after the date of the liquidation).
(b) (i) Notwithstanding the provisions of Section 13.2(a) hereof which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners (including the Special Limited Partner), the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any asset except those necessary to satisfy liabilities of the Partnership (including to those Partners, including the Special Limited Partner, as creditors) or distribute to the Partners (including the Special Limited Partner), in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2(a) hereof, undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation.
(ii) Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interests of the Partners (including the Special Limited Partner), and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time.
(iii) The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.
(c) In the discretion of the Liquidator, a pro rata portion of the distributions that would otherwise be made to the General Partner, the Limited Partners and the Special Limited Partner pursuant to this Article 13 may be:
(A) distributed to a trust established for the benefit of the General Partner, the Limited Partners and the Special Limited Partner for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or the General Partner arising out of or in connection with the Partnership; the assets of any such trust shall be distributed to the General Partner, the Limited Partners and the Special Limited Partner from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner, the Limited Partners and the Special Limited Partner pursuant to this Agreement; or
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(B) withheld or escrowed to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership, provided that such withheld or escrowed amounts shall be distributed to the General Partner, the Limited Partners and the Special Limited Partner in the manner and order of priority set forth in Section 13.2(a), as soon as practicable.
13.3 | Obligation to Contribute Deficit |
If any Partner (other than a holder of Restricted Class B Units) has a deficit balance in his Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever. If a holder of Restricted Class B Units has a deficit balance in its Capital Account attributable to such Restricted Class B Units (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during with such liquidation occurs), such holder of Restricted Class B Units shall restore and contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero, but not to exceed an amount equal to the excess of the cash distributions of Net Sales Proceeds made (if any) to such holder of Restricted Class B Units over the amount of Net Property Gain (including, to the extent necessary, individual items of income and gain comprising Net Property Gain) and Liquidating Gain allocated to such holder of Restricted Class B Units in accordance with subparagraph 1(c)(ii) of Exhibit B , in compliance with Section 1.704-1(b)(2)(ii)( b )( 3 ) of the Regulations, which restoration and contribution shall be before the later to occur of (x) the end of the taxable year in which the Partnership is liquidated, or (y) ninety (90) days after the date of the liquidation of the Partnership, which amount shall be paid to creditors of the Partnership or, if the amount contributed exceeds the amount due to creditors, shall be distributed to the Partners with positive Capital Account balances.
13.4 | Rights of Limited Partners |
(a) Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return of its Capital Contributions and shall have no right or power to demand or receive property other than cash from the Partnership.
(b) Except as otherwise provided in this Agreement, no Limited Partner shall have priority over any other Partner as to the return of its Capital Contributions, distributions, or allocations.
13.5 | Notice of Dissolution |
If a Liquidating Event occurs or an event occurs that would, but for the provisions of an election or objection by one or more Partners pursuant to Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners (including the Special Limited Partner).
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13.6 | Termination of Partnership and Cancellation of Certificate of Limited Partnership |
Upon the completion of the liquidation of the Partnership’s assets, as provided in Section 13.2 hereof, the Partnership shall be terminated, a certificate of cancellation shall be filed, and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the state of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
13.7 | Reasonable Time for Winding-Up |
A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2 hereof in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect among the Partners (including the Special Limited Partner) during the period of liquidation.
13.8 | Waiver of Partition |
Each Partner hereby waives any right to partition of the Partnership property.
Article
14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
14.1 | Amendments |
(a) The General Partner shall have the power, without the consent of the Limited Partners or the Special Limited Partner, to amend this Agreement except as set forth in Section 14.1(b) hereof. The General Partner shall provide notice to the Limited Partners and the Special Limited Partner when any action under this Section 14.1(a) is taken in the next regular communication to the Limited Partners.
(b) Notwithstanding Section 14.1(a) hereof, this Agreement shall not be amended with respect to:
(i) any Partner, including the Special Limited Partner, adversely affected without the Consent of such Partner adversely affected if such amendment would:
(A) convert a Limited Partner’s or the Special Limited Partner’s interest in the Partnership into a General Partner Interest;
(B) modify the limited liability of a Limited Partner or the Special Limited Partner in a manner adverse to such Limited Partner or the Special Limited Partner; or
(C) amend this Section 14.1(b)(i);
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(ii) any Limited Partner adversely affected without the Consent of Limited Partners holding more than fifty percent (50%) of the outstanding Percentage Interests of the Limited Partners adversely affected if such amendment would:
(A) alter or change Exchange Rights;
(B) create an obligation to make Capital Contributions not contemplated in this Agreement;
(C) alter or change the terms of this Agreement or the Exchange Rights Agreement regarding the rights of the limited partners with respect to Business Combinations;
(D) alter or change the distribution and liquidation rights provided in Section 5 and 13 hereto, except as otherwise permitted under this Agreement; or
(E) amend this Section 14.1(b)(ii).
(c) Section 14.1(b)(i) does not require unanimous consent of all Partners adversely affected unless the amendment is to be effective against all Partners adversely affected.
(d) Notwithstanding Section 14.1(a) hereof, no provision of this Agreement shall be amended or modified without the Special Limited Partner’s prior written consent if such amendment or modification (i) relates to the distributions, allocations or other rights and privileges of the Special Limited Partner or (ii) would amend this Section 14.1(d).
14.2 | Meetings of the Partners |
(a) (i) Meetings of the Partners may be called by the General Partner and shall be called upon the receipt by the General Partner of a written request by Limited Partners holding 25 percent or more of the Partnership Interests.
(ii) The request shall state the nature of the business to be transacted.
(iii) Notice of any such meeting shall be given to all Partners not less than seven (7) days nor more than thirty (30) days prior to the date of such meeting.
(iv) Partners may vote in person or by proxy at such meeting.
(v) Whenever the vote or Consent of the Limited Partners is permitted or required under this Agreement, such vote or Consent may be given at a meeting of the Partners or may be given in accordance with the procedure prescribed in Section 14.1(a).
(vi) Except as otherwise expressly provided in this Agreement, the Consent of holders of a majority of the Percentage Interests held by Partners (including the General Partner) shall control.
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(b) (i) Subject to Section 14.2(a)(vi), any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by a majority of the Percentage Interests of the Partners (or such other percentage as is expressly required by this Agreement).
(ii) Such Consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of a majority of the Percentage Interests of the Partners (or such other percentage as is expressly required by this Agreement).
(iii) Such Consent shall be filed with the General Partner.
(iv) An action so taken shall be deemed to have been taken at a meeting held on the effective date of the Consent as certified by the General Partner.
(c) (i) Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting.
(ii) Every proxy must be signed by the Partner or an attorney-in-fact and a copy thereof delivered to the Partnership.
(iii) No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy.
(iv) Every proxy shall be revocable at the pleasure of the Partner executing it, such revocation to be effective upon the General Partner’s receipt of written notice of such revocation from the Partner executing such proxy.
(d) (i) Each meeting of the Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate.
(ii) Meetings of Partners may be conducted in the same manner as meetings of the Stockholders of the General Partner and may be held at the same time, and as part of, meetings of the Stockholders of the General Partner.
Article
15
GENERAL PROVISIONS
15.1 | Addresses and Notice |
Any notice, demand, request or report required or permitted to be given or made to a Partner, the Special Limited Partner, Indemnitee or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or five days after being sent by first class United States mail or by overnight delivery or via facsimile to the Partner or Assignee at the address set forth in Exhibit A or such other address of which the Partner shall notify the General Partner in writing. Notwithstanding the foregoing, the General Partner may elect to deliver any such notice, demand, request or report by E-mail or by any other electronic means, in which case such communication shall be deemed given or made one day after being sent.
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15.2 | Titles and Captions |
All article or section titles or captions in this Agreement are for convenience of reference only, shall not be deemed part of this Agreement and shall in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.
15.3 | Pronouns and Plurals |
Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.
15.4 | Further Action |
The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
15.5 | Binding Effect |
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.
15.6 | Creditors |
Other than as expressly set forth herein with respect to the Indemnities, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.
15.7 | Waiver |
No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.
15.8 | Counterparts |
This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in counterparts, all of which together shall constitute one agreement binding on all of the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.
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15.9 | Applicable Law |
This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of laws thereof.
15.10 | Invalidity of Provisions |
If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.
15.11 | Entire Agreement |
This Agreement contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any other prior written or oral understandings or agreements among them with respect thereto.
15.12 | Merger |
Notwithstanding any provision of this Agreement, the General Partner, without the consent of the Limited Partners or any other Person, may (i) merge or consolidate the Partnership with or into any other domestic or foreign partnership, limited partnership, limited liability company, corporation or other Person or (ii) sell all or substantially all of the assets of the Partnership and may amend this Agreement in any manner or adopt a new limited partnership agreement for the Partnership in connection with any such transaction consistent with the provisions of this Section 15.12.
15.13 | No Rights as Stockholders |
Nothing contained in this Agreement shall be construed as conferring upon the holders of the Partnership Units any rights whatsoever as Stockholders of the General Partner, including any right to receive dividends or other distributions made to Stockholders or to vote or to consent or receive notice as Stockholders in respect to any meeting of Stockholders for the election of directors of the General Partner or any other matter.
Article
16
CLASS B UNITS
16.1 | Designation and Number |
(a) A series of Partnership Units in the Partnership, designated as the “Class B Units,” is hereby established. Except as set forth in this Article 16, Class B Units shall have the same rights, privileges and preferences as the OP Units. Subject to the provisions of this Article 16 and the special provisions of subparagraph 1(c)(ii) of Exhibit B , Class B Units shall be treated as Partnership Units, with all of the rights, privileges and obligations attendant thereto. In connection with services provided by the Advisor under the Advisory Agreement, the General Partner shall cause the Partnership to issue to the Initial Limited Partner within thirty (30) days after the end of each Quarter a number of Class B Units equal to the quotient of:
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(i) Prior to the NAV Pricing Start Date, (i) the excess of (A) the product of (y) the Cost of Assets multiplied by (z) 0.1875% over (B) any amounts payable as an Oversight Fee (as defined in the Management Agreement) for such Quarter divided by (ii) the Value of one share of Common Stock as of the last day of such Quarter; provided , that if the amounts payable as an Oversight Fee for such Quarter exceed the amount determined under clause (A) for such Quarter (an “ Excess Oversight Fee ”), no Class B Units shall be issued for such Quarter and the Excess Oversight Fee shall be carried forward to the next succeeding Quarter and included with and treated as amounts payable as an Oversight Fee for such Quarter for purposes of determining the amount of Class B Units issuable for such Quarter; provided further , that the sum of (I) the amounts determined under clause (i) for a calendar year plus (II) the amounts payable as an Oversight Fee for such calendar year, shall not be less than 0.75% of the Cost of Assets for such calendar year; provided further , that each quarterly issuance of Class B Units shall be subject to the approval of the General Partner’s board of directors.
(ii) After the NAV Pricing Start Date. (i) the excess of (A) the product of (y) the lower of the Cost of Assets and the General Partner’s quarterly NAV multiplied by (z) 0.1875% over (B) any amounts payable as an Oversight Fee (as defined in the Management Agreement) for such Quarter divided by (ii) the NAV per share of Common Stock as of the last day of such Quarter; provided , that if there is an Excess Oversight Fee, no Class B Units shall be issued for such Quarter and the Excess Oversight Fee shall be carried forward to the next succeeding Quarter and included with and treated as amounts payable as an Oversight Fee for such Quarter for purposes of determining the amount of Class B Units issuable for such Quarter; provided further , that the sum of (I) the amounts determined under clause (i) for a calendar year plus (II) the amounts payable as an Oversight Fee for such calendar year, shall not be less than 0.75% of the lower of the Cost of Assets and the General Partner’s NAV for such calendar year; provided further , that each quarterly issuance of Class B Units shall be subject to the approval of the General Partner’s board of directors.
(b) It is intended that the Partnership shall maintain at all times a one-to-one correspondence between Class B Units and OP Units for conversion and other purposes. If an Adjustment Event (as defined below) occurs, then the General Partner shall make a corresponding adjustment to the Class B Units to maintain a one-for-one conversion and economic equivalence ratio between OP Units and Class B Units. The following shall be “ Adjustment Events :” (A) the Partnership makes a distribution on all outstanding OP Units in Partnership Units, (B) the Partnership subdivides the outstanding OP Units into a greater number of units or combines the outstanding OP Units into a smaller number of units, or (C) the Partnership issues any Partnership Units in exchange for its outstanding OP Units by way of a reclassification or recapitalization of its OP Units. If more than one Adjustment Event occurs, the adjustment to the Class B Units need be made only once using a single formula that takes into account each and every Adjustment Event as if all Adjustment Events occurred simultaneously. For the avoidance of doubt, the following events shall not be Adjustment Events: (x) the issuance of Partnership Units in a financing, reorganization, acquisition or other similar business transaction, (y) the issuance of Partnership Units pursuant to any employee benefit or compensation plan or distribution reinvestment plan, or (z) the issuance of any Partnership Units in respect of a capital contribution to the Partnership, including a contribution by the General Partner of proceeds from the sale of securities by the General Partner. If the Partnership takes an action affecting the OP Units other than actions specifically described above as Adjustment Events and, in the opinion of the General Partner such action would require an adjustment to the Class B Units to maintain the one-to-one correspondence described above, the General Partner shall have the right to make such adjustment to the Class B Units, to the extent permitted by law, in such manner and at such time as the General Partner, in its sole discretion, may determine to be appropriate under the circumstances. If an adjustment is made to the Class B Units as herein provided, the Partnership shall promptly file in the books and records of the Partnership an officer’s certificate setting forth such adjustment and a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error. Promptly after the filing of such certificate, the Partnership shall mail a notice to each holder of Class B Units setting forth the adjustment to his, her or its Class B Units and the effective date of such adjustment.
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16.2 | Special Provisions . Class B Units shall be subject to the following special provisions: |
(a) Restrictions and Forfeiture .
(i) All Class B Units when issued shall be subject to forfeiture and shall constitute “ Restricted Class B Units ” and shall remain subject to forfeiture as provided in this Section 16.2(a) until the requirements of this Section 16.2(a) have been satisfied.
(ii) One hundred percent (100%) of the outstanding Restricted Class B Units shall no longer be subject to forfeiture and shall constitute “ Unrestricted Class B Units ” at such time as:
(A) the value of the Partnership’s assets (as determined by the General Partner) plus all distributions made under Sections 5.1(a), 5.1(b)(i) and 5.1(b)(ii) equals the cumulative Net Investment plus the Priority Return on such cumulative Net Investment (the “ Economic Hurdle ”); provided , that in the event of an OP Unit Transaction the determination of the value of the Partnership’s assets shall take into account the offering price or transaction value of the Common Stock, as appropriate; and
(B) a Liquidity Event occurs concurrently with or subsequent to the Economic Hurdle being met.
(iii) If the Advisory Agreement is terminated for any reason other than pursuant to a Termination Without Cause, any outstanding Restricted Class B Units shall be forfeited immediately. If the Advisory Agreement is terminated pursuant to a Termination Without Cause prior to the date on which the Economic Hurdle has been met, any outstanding Restricted Class B Units shall be forfeited immediately. Upon such forfeiture, such Restricted Class B Units shall immediately, and without any further action, be treated as cancelled and no longer outstanding for any purpose. No consideration or other payment shall be due with respect to any Class B Units that have been forfeited. In connection with any forfeiture of Class B Units, the balance of the Capital Account of a holder of Class B Units, if any, shall be reduced by the amount of the Capital Account attributable to the forfeited Class B Units, and such reduction shall be reallocated to all holders of OP Units, pro rata in accordance with their respective Percentage Interests with respect to OP Units.
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(iv) The General Partner may in its sole discretion provide for the acceleration, waiver or change of the forfeiture provisions contained in this Section 16.2(a), in whole or in part, based on such factors or criteria as the General Partner may determine.
(b) Distributions . The holders of Class B Units shall be entitled to (i) current distributions of Cash Available for Distribution pursuant to Section 5.1(a), (ii) distributions, if any, of Net Sales Proceeds pursuant to Section 5.1(b)(iii), and (iii) distributions in liquidation of the Partnership pursuant to Section 13.2.
(c) Allocations . Holders of Class B Units shall be entitled to certain special allocations of gain under subparagraph 1(c)(ii) of Exhibit B .
(d) Exchange Right . The right to exchange all or a portion of Partnership Units for cash or, at the option of the Partnership, for shares of Common Stock provided to Limited Partners under Section 8.6 hereof shall not apply with respect to Class B Units unless and until the Class B Units are converted to OP Units as provided in clause (e) below and Section 16.4 hereof.
(e) Conversion to OP Units . Unrestricted Class B Units are eligible to be converted into OP Units in accordance with Section 16.4 hereof.
16.3 | Voting |
(a) Holders of Class B Units shall (a) have the same voting rights as the Limited Partners, with the Class B Units voting as a single class with the OP Units and having one vote per Class B Unit; and (b) have the additional voting rights that are expressly set forth below. So long as any Class B Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least a majority of the Class B Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of this Agreement applicable to Class B Units so as to materially and adversely affect any right, privilege or voting power of the Class B Units or the holders of Class B Units as such, unless such amendment, alteration, or repeal affects equally, ratably and proportionately the rights, privileges and voting powers of the Limited Partners; but subject, in any event, to the following provisions:
(i) With respect to any OP Unit Transaction, so long as the Class B Units are treated in accordance with Section 16.4(c) hereof, the consummation of such OP Unit Transaction shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the Class B Units or the holders of Class B Units as such; and
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(ii) Any creation or issuance of any Partnership Units or of any class or series of Partnership Interest including additional OP Units or Class B Units whether ranking senior to, junior to, or on a parity with the Class B Units with respect to distributions and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers of the Class B Units or the holders of Class B Units as such.
(b) The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required, all outstanding Class B Units shall have been converted into OP Units.
16.4 | Conversion of Class B Units |
(a) Conversion . Restricted Class B Units shall not be convertible into OP Units until they become Unrestricted Class B Units. At such time as the Economic Capital Account Balance attributable to an Unrestricted Class B Unit is equal to the OP Unit Economic Balance, each such balance determined on a per unit basis as of the effective date of conversion (the “ Conversion Date ”), such Unrestricted Class B Unit shall automatically convert into one fully paid and non-assessable OP Unit, giving effect to all adjustments (if any) made pursuant to Section 16.1 hereof; provided , that an Unrestricted Class B Unit shall not be convertible into OP Units if the Economic Capital Account Balance attributable to such Unrestricted Class B Unit is negative. Each holder of Class B Units covenants and agrees with the Partnership that all Unrestricted Class B Units to be converted pursuant to this Section 16.4 shall be free and clear of all liens. The conversion of Unrestricted Class B Units shall occur automatically after the close of business on the applicable Conversion Date without any action on the part of such holder of Unrestricted Class B Units, as of which time such holder of Unrestricted Class B Units shall be credited on the books and records of the Partnership with the issuance as of the opening of business on the next day of the number of OP Units issuable upon such conversion. For purposes of determining the Economic Capital Account Balance attributable to an Unrestricted Class B Unit, allocations pursuant to subparagraph 1(c)(ii) of Exhibit B shall be made in such a manner so as to allow the greatest number of Class B Units to convert pursuant to this Section 16.4 at any time.
(b) Adjustment to Gross Asset Value .
(i) The General Partner shall provide the holders of Class B Units the opportunity but not the obligation to make Capital Contributions to the Partnership in exchange for OP Units in order to cause an adjustment to the Gross Asset Value of the Partnership’s assets within the meaning of paragraph (b)(i) of the definition of Gross Asset Value up to two (2) times each fiscal year including:
(A) if the Partnership or the General Partner shall be a party to any OP Unit Transaction; provided , that the General Partner shall give each holder of Class B Units written notice of such OP Unit Transaction at least thirty (30) days prior to entering into any definitive agreement pursuant to which the OP Unit Transaction would be consummated;
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(B) upon a Listing; provided , that the General Partner shall give each holder of Class B Units written notice of such Listing at least thirty (30) days prior to such Listing; or
(C) upon a Termination Without Cause; provided , that the General Partner shall give each holder of Class B Units written notice of such Termination Without Cause at least thirty (30) days prior to such Termination Without Cause.
(ii) For purposes of clause (i) of this Section 16.4(b), the value of each OP Unit issued in order to cause an adjustment to the Gross Asset Value of the Partnership’s assets shall be an amount equal to the product of (y) the Value of a share of Common Stock as of the date the holder of Class B Units makes a Capital Contribution to the Partnership multiplied by (z) the Exchange Factor.
(iii) For the avoidance of doubt, the issuance of Class B Units shall be treated as an event allowing for an adjustment to the Gross Asset Value of the Partnership’s assets within the meaning of paragraph (b)(iv) of the definition of Gross Asset Value.
(c) Impact of Conversion for Purposes of Subparagraph 1(c)(ii) of Exhibit B . For purposes of making future allocations under subparagraph 1(c)(ii) of Exhibit B , the portion of the Economic Capital Account Balance of the applicable holder of Unrestricted Class B Units that is treated as attributable to his, her or its Class B Units shall be reduced, as of the date of conversion, by the product of the number of Unrestricted Class B Units converted and the OP Unit Economic Balance.
(d) OP Unit Transactions . Immediately prior to or concurrent with an OP Unit Transaction the maximum number of Class B Units then eligible for conversion (in accordance with the provisions of Section 16.4(a)) shall automatically be converted into an equal number of OP Units, giving effect to all adjustments (if any) made pursuant to Section 16.1 hereof, taking into account any allocations that occur in connection with the OP Unit Transaction or that would occur in connection with the OP Unit Transaction if the assets of the Partnership were sold at the OP Unit Transaction price or, if applicable, at a value determined by the General Partner in good faith using the value attributed to the Partnership Units in the context of the OP Unit Transaction (in which case the Conversion Date shall be the effective date of the OP Unit Transaction). In anticipation of such OP Unit Transaction, the Partnership shall use commercially reasonable efforts to cause each holder of Class B Units to be afforded the right to receive in connection with such OP Unit Transaction in consideration for the OP Units into which his, her or its Class B Units will be converted the same kind and amount of cash, securities and other property (or any combination thereof) receivable upon the consummation of such OP Unit Transaction by a holder of the same number of OP Units, assuming such holder of OP Units is not a Person with which the Partnership consolidated or into which the Partnership merged or which merged into the Partnership or to which such sale or transfer was made, as the case may be (a “ Constituent Person ”), or an affiliate of a Constituent Person. In the event that holders of OP Units have the opportunity to elect the form or type of consideration to be received upon consummation of the OP Unit Transaction, prior to such OP Unit Transaction the General Partner shall give prompt written notice to each holder of Class B Units of such election, and shall use commercially reasonable efforts to afford the holders of Class B Units the right to elect, by written notice to the General Partner, the form or type of consideration to be received upon conversion of each Class B Unit held by such holder into OP Units in connection with such OP Unit Transaction. If a holder of Class B Units fails to make such an election, such holder (and any of its transferees) shall receive upon conversion of each Class B Unit held by him, her or it (or by any of his, her or its transferees) the same kind and amount of consideration that a holder of an OP Unit would receive if such OP Unit holder failed to make such an election. The Partnership shall use commercially reasonable effort to cause the terms of any OP Unit Transaction to be consistent with the provisions of this Section 16.4(d) and to enter into an agreement with the successor or purchasing entity, as the case may be, for the benefit of any holders of Class B Units whose Class B Units will not be converted into OP Units in connection with the OP Unit Transaction that will (i) contain provisions enabling the holders of Class B Units that remain outstanding after such OP Unit Transaction to convert their Class B Units into securities as comparable as reasonably possible under the circumstances to the OP Units and (ii) preserve as far as reasonably possible under the circumstances the distribution, special allocation, conversion, and other rights set forth in this Agreement for the benefit of the holders of Class B Units.
77 |
16.5 | Profits Interests |
(a) Class B Units are intended to qualify as a “profits interest” in the Partnership issued to a new or existing Partner in a partner capacity for services performed or to be performed to or for the benefit of the Partnership within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and Rev. Proc. 2001-43, 2001-2 C.B. 191, the Code, the Regulations, and other future guidance provided by the IRS with respect thereto, and the allocations under subparagraph 1(c)(ii) of Exhibit B shall be interpreted in a manner that is consistent therewith.
(b) The Partners agree that the General Partner may make a Safe Harbor Election (if and when the Safe Harbor Election becomes available), on behalf of itself and of all Partners, to have the Safe Harbor apply irrevocably with respect to Class B Units transferred in connection with the performance of services by a Partner in a partner capacity. The Safe Harbor Election (if and when the Safe Harbor Election becomes available) shall be effective as of the date of issuance of such Class B Units. If such election is made, (i) the Partnership and each Partner agree to comply with all requirements of the Safe Harbor with respect to all interests in the Partnership transferred in connection with the performance of services by a Partner in a partner capacity, whether such Partner was admitted as a Partner or as the transferee of a previous Partner, and (ii) the General Partner shall cause the Partnership to comply with all record-keeping requirements and other administrative requirements with respect to the Safe Harbor as shall be required by proposed or final regulations relating thereto.
(c) The Partners agree that if a Safe Harbor Election is made by the General Partner, (A) each Class B Unit issued hereunder with respect to which the Safe Harbor Election is available is a Safe Harbor Interest, (B) each Class B Unit represents a profits interest received for services rendered or to be rendered to or for the benefit of the Partnership by such holder of Class B Units in his, her or its capacity as a Partner or in anticipation of becoming a Partner, and (C) the fair market value of each Class B Unit issued by the Partnership upon receipt by such holder of Class B Units as of the date of issuance is zero (plus the amount, if any, of any Capital Contributions made to the Partnership by such holder of Class B Units in connection with the issuance of such Class B Unit), representing the liquidation value of such interest upon receipt (with such valuation being consented to and hereby approved by all Partners).
78 |
(d) Each Partner, by signing this Agreement or by accepting such transfer, hereby agrees (A) to comply with all requirements of any Safe Harbor Election made by the General Partner with respect to each holder of Class B Units’ Safe Harbor Interest, (B) that each holder of Class B Units shall take into account of all items of income, gain, loss, deduction and credit associated with its Class B Units as if they were fully vested in computing its U.S. federal income tax liability for the entire period during which it holds the Class B Units, (C) that neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the fair market value of such Class B Units issued to a holder of such Class B Units, either at the time of grant of the Class B Units or at the time the Class B Units becomes substantially vested, and (D) that to the extent that such profits interest is forfeited after the date hereof, the Partnership shall make special forfeiture allocations of gross items of income, deduction or loss (including, as may be permitted by or under Regulations (or other rules promulgated) to be adopted, notional items of income, deduction or loss) in accordance with the Regulations to be adopted under Sections 704(b) and 83 of the Code.
(e) The General Partner shall file or cause the Partnership to file all returns, reports and other documentation as may be required, as reasonably determined by the General Partner, to perfect and maintain any Safe Harbor Election made by the General Partner with respect to granting of each holder of Class B Units’ Safe Harbor Interest.
(f) The General Partner is hereby authorized and empowered, without further vote or action of the Partners, to amend this Agreement to the extent necessary or helpful in accordance with the advice of Partnership tax counsel or accountants to sustain the Partnership’s position that (A) it has complied with the Safe Harbor requirements in order to provide for a Safe Harbor Election and it has ability to maintain the same, or (B) the issuance of the Class B Units is not a taxable event with respect to the holders of Class B Units, and the General Partner shall have the authority to execute any such amendment by and on behalf of each Partner pursuant to the power of attorney granted by this Agreement. Any undertaking by any Partner necessary or desirable to (A) enable or preserve a Safe Harbor Election or (B) otherwise to prevent the issuance of Class B Units from being a taxable event with respect to the holders of Class B Units may be reflected in such amendments and, to the extent so reflected, shall be binding on each Partner.
(g) Each Partner agrees to cooperate with the General Partner to perfect and maintain any Safe Harbor Election, and to timely execute and deliver any documentation with respect thereto reasonably requested by the General Partner, at the expense of the Partnership.
(h) No Transfer of any interest in the Partnership by a Partner shall be effective unless prior to such Transfer, the assignee or intended recipient of such interest shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 16.5, in a form reasonably satisfactory to the General Partner.
(i) The provisions of this Section 16.5 shall apply regardless of whether or not a holder of Class B Units files an election pursuant to Section 83(b) of the Code.
79 |
(j) The General Partner may amend this Section 16.5 as it deems necessary or appropriate to maximize the tax benefit of the issuance of Class B Units to any holder of Class B Units if there are changes in the law or Regulations concerning the issuance of partnership interests for services.
[SIGNATURE PAGE FOLLOWS]
80 |
Signature Page to Agreement of Limited Partnership of New York City Operating Partnership, L.P., among the undersigned and the other parties thereto.
GENERAL PARTNER: | ||
NEW YORK CITY REIT, INC. | ||
By: | /s/ Michael A. Happel | |
Name: Michael A. Happel | ||
Title: President | ||
INITIAL LIMITED PARTNER: | ||
NEW YORK CITY ADVISORS, LLC | ||
By: | New York City Special Limited Partnership, LLC, its Member | |
By: | American Realty Capital III, LLC, its Managing Member | |
By: | AR Capital, LLC | |
By: | /s/ Nicholas S. Schorsch | |
Name: Nicholas S. Schorsch | ||
Title: Manager | ||
SPECIAL LIMITED PARTNER: | ||
NEW YORK CITY SPECIAL LIMITED PARTNERSHIP, LLC | ||
By: | American Realty Capital III, LLC, | |
its Managing Member | ||
By: AR Capital, LLC | ||
By: | /s/ Nicholas S. Schorsch | |
Name: Nicholas S. Schorsch | ||
Title: Manager |
Corporate/Limited Liability Company Additional Limited Partner Signature Page to Agreement of Limited Partnership of New York City Operating Partnership, L.P., among the undersigned and the other parties thereto.
Dated: ____________ __, 20___ | [Name of Corporation/LLC] | |
By: | ||
Name: | ||
Title: |
Individual Additional Limited Partner Signature Page to Agreement of Limited Partnership of New York City Operating Partnership, L.P., among the undersigned and the other parties thereto.
Dated: ____________ __, 20___ | |
Partnership Limited Partner Signature Page to Agreement of Limited Partnership of New York City Operating Partnership, L.P., among the undersigned and the other parties thereto.
Dated: ____________ __, 20___ | [Name of LP] | |
By: | ||
Name: | ||
Title: |
Exhibit A
Partners’ Contributions and Partnership Interests
Name and Address of Partner |
Type of Interest |
Type of Unit |
Capital
Contribution |
Number of
Partnership Units |
Percentage
Interest |
|||||||||||
New York City REIT, Inc. | General Partner Interest | GP Units | $ | 200,000 | 8,888 | 100 | % | |||||||||
405 Park Avenue
New York, New York 10022 |
Limited Partner Interest | OP Units | None | — | — | |||||||||||
New York City Advisors, LLC
|
Limited Partner Interest | OP Units | $ | 2,020 | 90 | 100 | % | |||||||||
405 Park Avenue
New York, New York 10022 |
Limited Partner Interest | Class B Units | None | — | — | |||||||||||
New York City Special Limited Partnership, LLC
405 Park Avenue New York, New York 10022 |
Special Limited Partner Interest | None | None | Not applicable | Not applicable |
A- 1 |
Exhibit B
Allocations
For purposes of this Exhibit B , the term “Partner” shall include the Special Limited Partner.
1. Allocations .
(a) Allocations of Net Income and Net Loss . Except as otherwise provided in this Agreement, after giving effect to the special allocations in subparagraph 1(c) and paragraph 2, Net Income, Net Loss and, to the extent necessary, individual items of income, gain, loss or deduction, of the Partnership for each fiscal year or other applicable period of the Partnership shall be allocated among the General Partner and Limited Partners in accordance with their respective Percentage Interests.
(b) Allocations of Net Property Gain and Net Property Loss . Except as otherwise provided in this Agreement, after giving effect to the special allocations in subparagraphs 1(c) and paragraph 2, Net Property Gain, Net Property Loss and, to the extent necessary, individual items of income, gain, credit, loss and deduction comprising Net Property Gain and Net Property Loss of the Partnership for each fiscal year or other applicable period shall be allocated among the Partners in a manner determined in the reasonable discretion of the General Partner that will, as nearly as possible cause the Capital Account balance of each Partner at the end of such fiscal year or other applicable period to equal (i) the amount of the distributions that would be made to such Partner pursuant to Section 5.1(b) of the Agreement if the Partnership were dissolved, its affairs wound up and its assets were sold for cash equal to their Gross Asset Value, taking into account any adjustments thereto for such period, all Partnership liabilities were satisfied in full in cash according to their terms (limited with respect to each nonrecourse liability to the Gross Asset Value of the assets securing such liability), and Net Sales Proceeds (after satisfaction of such liabilities) were distributed in full in accordance with Section 5.1(b) to the Partners immediately after making such allocations, minus (ii) the sum of such Partner’s share of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain and the amount, if any and without duplication, that the Partner would be obligated to contribute to the capital of the Partnership, all computed immediately prior to the hypothetical sale of assets.
(c) Special Allocations .
(i) General Partner Gross Income Allocation. After giving effect to the special allocations in paragraph 2 but prior to any allocations under subparagraphs 1(a) or 1(b), there shall be specially allocated to the General Partner an amount of (i) first, items of Partnership income and (ii) second, items of Partnership gain during each fiscal year or other applicable period in an amount equal to the excess, if any, of (A) the cumulative distributions made to the General Partner under Section 7.3(b) of the Agreement, other than distributions which would properly be treated as “guaranteed payments” or which are attributable to the reimbursement of expenses which would properly be either deductible by the Partnership or added to the tax basis of any Partnership asset, over (B) the cumulative allocations of Partnership income and gain to the General Partner under this subparagraph 1(c)(i).
B- 1 |
(ii) Special Allocations Regarding Class B Units . After giving effect to the special allocations in subparagraph 1(c)(i) and paragraph 2 but prior to any allocations under subparagraphs 1(a) or 1(b), Net Property Gain and Liquidating Gain and, to the extent necessary, individual items of income and gain comprising Net Property Gain and Liquidating Gain of the Partnership shall be allocated to the holders of Class B Units until their Economic Capital Account Balances are equal to (A) the OP Unit Economic Balance, multiplied by (B) the number of their Class B Units; provided , that no such Net Property Gain or Liquidating Gain or individual items of income and gain comprising Net Property Gain or Liquidating Gain will be allocated with respect to any particular Class B Unit unless and to the extent that the OP Unit Economic Balance exceeds the OP Unit Economic Balance in existence at the time such Class B Unit was issued. The “ Economic Capital Account Balances ” of the Class B Unit holders will be equal to their Capital Account balances to the extent attributable to their ownership of Class B Units. The “ OP Unit Economic Balance ” shall mean (Y) the aggregate Capital Account balance attributable to the OP Units outstanding, plus the amount of any Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent attributable to the ownership of OP Units and computed on a hypothetical basis after taking into account all allocations through the date on which any allocation is made under this subparagraph 1(c)(ii), divided by (Z) the number of OP Units outstanding. Any allocations made pursuant to the first sentence of this subparagraph 1(c)(ii) shall be made among the holders of Class B Units in proportion to the amounts required to be allocated to each under this subparagraph 1(c)(ii). The parties agree that the intent of this subparagraph 1(c)(ii) is to make the Capital Account balance associated with each Class B Unit to be economically equivalent to the Capital Account balance associated with the OP Units outstanding (on a per-Unit basis), but only if and to the extent that the Capital Account balance associated with the OP Units outstanding, without regard to the allocations under this subparagraph 1(c)(ii), has increased on a per-Unit basis since the issuance of the relevant Class B Unit. Any remaining Net Property Gain or Liquidating Gain not allocated pursuant to this subparagraph 1(c)(ii) shall be included in the calculation of Net Income, Net Loss, Net Property Gain and Net Property Loss and will be allocated pursuant to subparagraphs 1(a) and 1(b).
(iii) Special Allocations Regarding the Special Limited Partner Interest . After giving effect to the special allocations in subparagraphs 1(c)(i) and 1(c)(ii) and paragraph 2 but prior to any allocations under subparagraph 1(a) and 1(b), Net Property Gain and Liquidating Gain and, to the extent necessary, individual items of income and gain comprising Net Property Gain and Liquidating Gain of the Partnership shall be allocated to the Special Limited Partner until the Special Limited Partner has received aggregate allocations of income for all fiscal years equal to the aggregate amount of distributions the Special Limited Partner is entitled to receive or has received with respect to the Special Limited Partner Interest for such fiscal year and all prior fiscal years. Notwithstanding the foregoing, if the Special Limited Partner is entitled to receive distributions of Net Sales Proceeds pursuant to the Partnership’s obligation under a Listing Note or a Termination Amount, Liquidating Gain shall be allocated to the Special Limited Partner until the Special Limited Partner has received aggregate allocations equal to the aggregate amount of distributions the Special Limited Partner is entitled to receive pursuant to such Listing Note or Termination Amount.
B- 2 |
2. Regulatory Allocations . Notwithstanding any provisions of paragraph 1 of this Exhibit B , the following special allocations shall be made.
(a) Minimum Gain Chargeback (Nonrecourse Liabilities) . Except as otherwise provided in Section 1.704-2(f) of the Regulations, if there is a net decrease in Partnership Minimum Gain for any Partnership fiscal year, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain to the extent required by Section 1.704-2(f) of the Regulations. The items to be so allocated shall be determined in accordance with Sections 1.704-2(f) and (i) of the Regulations. This subparagraph 2(a) is intended to comply with the minimum gain chargeback requirement in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph 2(a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto.
(b) Partner Minimum Gain Chargeback . Except as otherwise provided in Section 1.704-2(i)(4) of the Regulations, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any fiscal year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner’s share of the net decrease in the Partner Nonrecourse Debt Minimum Gain to the extent and in the manner required by Section 1.704-2(i) of the Regulations. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2) of the Regulations. This subparagraph 2(b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this subparagraph 2(b) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto.
(c) Qualified Income Offset . If a Partner unexpectedly receives any adjustments, allocations or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Regulations, and such Partner has an Adjusted Capital Account Deficit, items of Partnership income (including gross income) and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly as possible as required by the Regulations. This subparagraph 2(c) is intended to constitute a “qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.
(d) Nonrecourse Deductions . Nonrecourse Deductions for any fiscal year or other applicable period shall be allocated to the Partners in accordance with their respective Percentage Interests.
(e) Partner Nonrecourse Deductions . Partner Nonrecourse Deductions for any fiscal year or other applicable period with respect to a Partner Nonrecourse Debt shall be specially allocated to the Partner that bears the economic risk of loss for such Partner Nonrecourse Debt (as determined under Sections 1.704-2(b)(4) and 1.704-2(i)(1) of the Regulations).
B- 3 |
(f) Section 754 Adjustment . To the extent an adjustment to the adjusted tax basis of any asset of the Partnership pursuant to Section 734(b) of the Code or Section 743(b) of the Code is required, pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations, to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated among the Partners in a manner consistent with the manner in which each of their respective Capital Accounts are required to be adjusted pursuant to such section of the Regulations.
(g) Gross Income Allocation . If any Partner has an Adjusted Capital Account Deficit at the end of any fiscal year or other applicable period which is in excess of the amount such Partner is obligated to restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, such Partner shall be specially allocated items of Partnership income (including gross income) and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this subparagraph 2(g) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit in excess of such amount after all other allocations provided for under this Agreement have been tentatively made as if subparagraph 2(c) and this subparagraph 2(g) were not in this Agreement.
3. Curative Allocations . The General Partner is authorized to offset all Regulatory Allocations either with other Regulatory Allocations or with special allocations of other items of Partnership income, gain, loss, or deduction pursuant to this paragraph 3. Therefore, notwithstanding any other provision of this Exhibit B (other than the Regulatory Allocations and Tax Allocations), the General Partner shall make such offsetting allocations of Partnership income, gain, loss or deduction in whatever manner the General Partner determines appropriate so that, after such offsetting allocations are made, each Partner’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of this Agreement.
4. Tax Allocations .
(a) Items of Income or Loss . Except as is otherwise provided in this Exhibit B , an allocation of Partnership Net Income, Net Loss, Net Property Gain, Net Property Loss or Liquidating Gain to a Partner shall be treated as an allocation to such Partner of the same share of each item of income, gain, loss, deduction and item of tax-exempt income or Section 705(a)(2)(B) expenditure (or item treated as such expenditure pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations) (“ Tax Items ”) that is taken into account in computing Net Income, Net Loss, Net Property Gain, Net Property Loss or Liquidating Gain.
(b) Section 1245/1250 Recapture . Subject to subparagraph 4(c) below, if any portion of gain from the sale of Partnership assets is treated as gain which is ordinary income by virtue of the application of Sections 1245 or 1250 of the Code or is gain described in Section 1(h)(1)(D) of the Code (“ Affected Gain ”), then such Affected Gain shall be allocated among the Partners in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated. This subparagraph 4(b) shall not alter the amount of Net Income, Net Property Gain or Liquidating Gain (or items thereof) allocated among the Partners, but merely the character of such Net Income, Net Property Gain or Liquidating Gain (or items thereof). For purposes hereof, in order to determine the proportionate allocations of depreciation and amortization deductions for each fiscal year or other applicable period, such deductions shall be deemed allocated on the same basis as Net Income, Net Loss, Net Property Gain, Net Property Loss and Liquidating Gain for such respective period.
B- 4 |
(c) Precontribution Gain, Revaluations . With respect to any Contributed Property, the Partnership shall use any permissible method contained in the Regulations promulgated under Section 704(c) of the Code selected by the General Partner, in its sole discretion, to take into account any variation between the adjusted basis of such asset and the fair market value of such asset as of the time of the contribution (“ Precontribution Gain ”). Each Partner hereby agrees to report income, gain, loss and deduction on such Partner’s U.S. federal income tax return in a manner consistent with the method used by the Partnership. If any asset has a Gross Asset Value which is different from the Partnership’s adjusted basis for such asset for U.S. federal income tax purposes because the Partnership has revalued such asset pursuant to Section 1.704-1(b)(2)(iv)(f) of the Regulations, the allocations of Tax Items shall be made in accordance with the principles of Section 704(c) of the Code and the Regulations and the methods of allocation promulgated thereunder. The intent of this subparagraph 4(c) is that each Partner who contributed to the capital of the Partnership a Contributed Property will bear, through reduced allocations of depreciation, increased allocations of gain or other items, the tax detriments associated with any Precontribution Gain. This subparagraph 4(c) is to be interpreted consistently with such intent.
(d) Excess Nonrecourse Liability Safe Harbor . Pursuant to Section 1.752-3(a)(3) of the Regulations, solely for purposes of determining each Partner’s proportionate share of the “excess nonrecourse liabilities” of the Partnership (as defined in Section 1.752-3(a)(3) of the Regulations), the Partners’ respective interests in Partnership profits shall be determined under any permissible method reasonably determined by the General Partner; provided, however, that each Partner who has contributed an asset to the Partnership shall be allocated, to the extent possible, a share of “excess nonrecourse liabilities” of the Partnership which results in such Partner being allocated nonrecourse liabilities in an amount which is at least equal to the amount of income pursuant to Section 704(c) of the Code and the Regulations promulgated thereunder (the “Liability Shortfall”). If there is an insufficient amount of nonrecourse liabilities to allocate to each Partner an amount of nonrecourse liabilities equal to the Liability Shortfall, then an amount of nonrecourse liabilities in proportion to, and to the extent of, the Liability Shortfall shall be allocated to each Partner.
(e) References to Regulations . Any reference in this Exhibit B or the Agreement to a provision of proposed and/or temporary Regulations shall, if such provision is modified or renumbered, be deemed to refer to the successor provision as so modified or renumbered, but only to the extent such successor provision applies to the Partnership under the effective date rules applicable to such successor provision.)
(f) Successor Partners . For purposes of this Exhibit B , a transferee of a Partnership Interest shall be deemed to have been allocated the Net Income, Net Loss, Net Property Gain, Net Property Loss and other items of Partnership income, gain, loss, deduction and credit allocable to the transferred Partnership Interest that previously have been allocated to the transferor Partner pursuant to this Agreement.
B- 5 |
Exhibit C
Certificate of Limited Partnership
C- 1 |
By:
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/s/ Nicholas S. Schorsch
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Name: Nicholas S. Schorsch
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Title: Chief Executive Officer
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REALTY CAPITAL SECURITIES, LLC
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By:
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/s/ Louisa H. Quarto
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Name: Louisa H. Quarto
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Title: President
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UMB BANK, N.A., as Escrow Agent
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By:
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/s/ Lara L. Stevens
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Name: Lara L. Stevens
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Title: Vice President
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1.
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Name of Investor
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2.
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Name of Investor
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Dated:
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By:
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Name: Louisa H. Quarto
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Title: President
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Name/Title
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Specimen Signature
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Nicholas S. Schorsch
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/s/ Nicholas S. Schorsch
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Chief Executive Officer and Chairman of the Board of Directors
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Signature
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Michael A. Happel
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/s/ Michael A. Happel
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President
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Signature
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Edward M. Weil, Jr.
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/s/ Edward M. Weil, Jr.
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Chief Operating Officer
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Signature
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Nicholas Radesca
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/s/ Nicholas Radesca
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Chief Financial Officer, Treasurer and Secretary
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Signature
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Name/Title
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Specimen Signature
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Edward M. Weil, Jr.
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/s/ Edward M. Weil, Jr.
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Chairman
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Signature
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Louisa H. Quarto
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/s/ Louisa H. Quarto
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President
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Signature
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John H. Grady
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/s/ John H. Grady
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Chief Operating Officer
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Signature
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By:
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Signature
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Date:
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Signature:
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Name:
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(please print)
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Date:
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TABLE OF CONTENTS
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Page
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1.
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DEFINITIONS
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1
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2.
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APPOINTMENT
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7
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3.
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DUTIES OF THE ADVISOR
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7
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4.
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AUTHORITY OF ADVISOR
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9
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5.
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FIDUCIARY RELATIONSHIP
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9
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6.
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NO PARTNERSHIP OR JOINT VENTURE
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9
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7.
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BANK ACCOUNTS
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9
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8.
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RECORDS; ACCESS
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10
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9.
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LIMITATIONS ON ACTIVITIES
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10
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10.
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FEES
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10
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11.
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EXPENSES
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12
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12.
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OTHER SERVICES
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14
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13.
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REIMBURSEMENT TO THE ADVISOR
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14
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14.
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OTHER ACTIVITIES OF THE ADVISOR
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14
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15.
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THE AMERICAN REALTY CAPITAL NAME
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14
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16.
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TERM OF AGREEMENT
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15
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17.
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TERMINATION BY THE PARTIES
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15
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18.
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ASSIGNMENT TO AN AFFILIATE
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15
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19.
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PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION
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15
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20.
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INCORPORATION OF THE ARTICLES OF INCORPORATION AND THE OPERATING PARTNERSHIP AGREEMENT
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16
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21.
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INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP
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16
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22.
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INDEMNIFICATION BY ADVISOR
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17
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23.
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NOTICES
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17
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24.
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MODIFICATION
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18
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25.
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SEVERABILITY
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18
|
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26.
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GOVERNING LAW
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18
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27.
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ENTIRE AGREEMENT
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18
|
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28.
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NO WAIVER
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18
|
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29.
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PRONOUNS AND PLURALS
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18
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30.
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HEADINGS
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18
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31.
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EXECUTION IN COUNTERPARTS
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19
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To the Company:
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American Realty Capital New York City REIT, Inc.
405 Park Avenue New York, New York 10022 |
Attention:
|
Michael A. Happel
President |
To the Operating Partnership:
|
New York City Operating Partnership, L.P.
405 Park Avenue New York, New York 10022 Attention: Michael A. Happel |
To the Advisor:
|
New York City Advisors, LLC
405 Park Avenue New York, New York 10022 |
Attention:
|
Michael A. Happel
President |
By:
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/s/ Michael A. Happel
Name: Michael A. Happel Title: President |
By:
|
American Realty Capital New York City REIT, Inc.
its General Partner |
By:
|
/s/ Michael A. Happel
Name: Michael A. Happel Title: President |
By:
|
New York City Special Limited Partner, LLC
its Member |
By:
|
American Realty Capital III, LLC
its Managing Member |
By:
|
/s/ Nicholas S. Schorsch
Name: Nicholas S. Schorsch Title: Authorized Signatory |
(a)
|
Lease Obligations
. The Manager shall perform all duties of the landlord under all leases insofar as such duties relate to the operation, maintenance, and day-to-day management of the Properties. The Manager shall also provide or cause to be provided, at the Owner’s expense, all services normally provided to tenants of like premises, including, where applicable and without limitation, gas, electricity or other utilities required to be furnished to tenants under leases, normal repairs and maintenance, and cleaning and janitorial service. The Manager shall arrange for and supervise the performance of all installations and improvements in space leased to any tenant which are either expressly required under the terms of the lease of such space or which are customarily provided to tenants.
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(b)
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Maintenance
. The Manager shall cause the Properties to be maintained in the same manner as similar properties in the area. The Manager’s duties and supervision in this respect shall include, without limitation, cleaning of the interior and the exterior of the Improvements and the public common areas on the Properties and the making and supervision of repair, alterations, and decoration of the Improvements, subject to and in strict compliance with this Management Agreement and any applicable leases. Construction and rehabilitation activities undertaken by the
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(c)
|
Leasing Functions
. The Manager shall coordinate the leasing of the Properties and shall negotiate and use its best efforts to secure executed leases from qualified tenants, and to execute same on behalf of the Owner, if requested, for available space in the Properties, such leases to be in form and on terms approved by the Owner and the Manager, and to bring about complete leasing of the Properties. The Manager shall be responsible for the hiring of all leasing agents, as necessary for the leasing of the Properties, and to otherwise oversee and manage the leasing process on behalf of the Owner.
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(d)
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Notice of Violations
. The Manager shall forward to the Owner, promptly upon receipt, all notices of violation or other notices from any governmental authority, and board of fire underwriters or any insurance company, and shall make such recommendations regarding compliance with such notice as shall be appropriate.
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(e)
|
Personnel
. Any personnel hired by the Manager to maintain, operate and lease the Property shall be the employees or independent contractors of the Manager and not of the Owner. The Manager shall use due care in the selection and supervision of such employees or independent contractors. The Manager shall be responsible for the preparation of and shall timely file all payroll tax reports and timely make payments of all withholding and other payroll taxes with respect to each employee.
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(f)
|
Utilities and Supplies
. The Manager shall enter into or renew contracts for electricity, gas, steam, landscaping, fuel, oil, maintenance and other services as are customarily furnished or rendered in connection with the operation of similar rental property in the area.
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(g)
|
Expenses
. The Manager shall analyze all bills received for services, work and supplies in connection with maintaining and operating the Properties, pay all such bills, and, if requested by the Owner, pay, when due, utility and water charges, sewer rent and assessments, any applicable taxes, including, without limitation, any real estate taxes, and any other amount payable in respect to the Properties. All bills shall be paid by the Manager within the time required to obtain discounts, if any. The Owner may from time to time request that the Manager forward certain bills to the Owner promptly after receipt, and the Manager shall comply with any such request. The payment of all bills, real property taxes, assessments, insurance premiums and any other amounts payable with respect to the Properties shall be paid out of the Account by the Manager. All expenses shall be billed at net cost (i.e., less all rebates, commissions, discounts and allowances, however designed).
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(h)
|
Monies Collected
. The Manager shall collect all rent and other monies from tenants and any sums otherwise due to the Owner with respect to the Properties in the ordinary course of business. In collecting such monies, the Manager shall inform tenants of the Properties that all remittances are to be in the form of a check or money order. The Owner authorizes the Manager to request, demand, collect and provide receipts for all such rent and other monies and to institute legal proceedings in the name of the Owner for the collection thereof and for the dispossession of any tenant in default under its lease.
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(i)
|
Banking Accommodations
. The Manager shall establish and maintain a separate checking account (the “
Account
”) for funds relating to the Properties. All monies deposited from time to time in the Account shall be deemed to be trust funds and shall be and remain the property of the Owner and shall be withdrawn and disbursed by the Manager for the account of the Owner only as expressly permitted by this Management Agreement for the purposes of performing the obligations of the Manager hereunder. No monies collected by the Manager on the Owner’s
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(i)
|
All sums received from rents and other income from the Properties shall be promptly deposited by the Manager in the Account. The Manager shall have the right to designate two (2) or more Persons who shall be authorized to draw against the Account, but only for purposes authorized by this Management Agreement.
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(ii)
|
All sums due to the Manager hereunder, whether for compensation, reimbursement for expenditures, or otherwise, as herein provided, shall be a charge against the operating revenues of the Properties and shall be paid and/or withdrawn by the Manager from the Account prior to the making of any other disbursements therefrom.
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(iii)
|
On or before the 30th day following the end of each calendar quarter during the term of this Management Agreement, the Manager shall forward to the Owner all net operating proceeds from the preceding quarter, retaining at all times, however, a reserve of $5,000, in addition to any other amounts otherwise provided in the Budget.
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(j)
|
Tenant Complaints
. The Manager shall maintain business-like relations with the tenants of the Properties.
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(k)
|
Ownership Agreements
. The Manager has received copies of the Agreement of Limited Partnership of the OP, Articles of Incorporation and the other constitutive documents of the Owner (collectively, the “
Ownership Agreements
”) and is familiar with the terms thereof. The Manager shall use reasonable care to avoid any act or omission which, in the performance of its duties hereunder, shall in any way conflict with the terms of the Ownership Agreements.
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(l)
|
Signs
. The Manager shall place and remove, or cause to be placed and removed, such signs upon the Properties as the Manager deems appropriate, subject, however, to the terms and conditions of the leases and to any applicable ordinances and regulations.
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(a)
|
Records
. The Manager shall maintain all office records and books of account and shall record therein, and keep copies of, each invoice received from services, work and supplies ordered in connection with the maintenance and operation of the Properties. Such records shall be maintained on a double entry basis. The Owner and Persons designated by the Owner shall at all reasonable times have access to and the right to audit and make independent examinations of such records, books and accounts and all vouchers, files and all other material pertaining to the Properties and this Management Agreement, all of which the Manager agrees to keep safe, available and separate from any records not pertaining to the Properties, at a place recommended by the Manager and approved by the Owner.
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(b)
|
Quarterly Reports
. On or before the 30th day following the end of each calendar quarter during the term of this Management Agreement, the Manager shall prepare and submit to the Owner the following reports and statements:
|
(i)
|
Rental collection record;
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(ii)
|
Quarterly operating statement;
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(iii)
|
Copy of cash disbursements ledger entries for such period, if requested;
|
(iv)
|
Copy of cash receipts ledger entries for such period, if requested;
|
(v)
|
The original copies of all contracts entered into by the Manager on behalf of the Owner during such period, if requested; and
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(vi)
|
Copy of ledger entries for such period relating to security deposits maintained by the Manager, if requested.
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(c)
|
Budgets and Leasing Plans
. On or before November 15 of each calendar year, the Manager shall prepare and submit to the Owner for its approval an operating budget (a “
Budget
”) and a marketing and leasing plan (a “
Plan
”) on the Properties for the calendar year immediately following such submission. Each Budget and Plan shall be in the form approved by the Owner prior to the date thereof. As often as reasonably necessary during the period covered by any Budget or Plan, the Manager may submit to the Owner for its approval an updated Budget or Plan incorporating such changes as shall be necessary to reflect cost overruns and the like during such period. If the Owner does not disapprove a Budget or Plan within thirty (30) days after receipt thereof by the Owner, such Budget or Plan shall be deemed approved. If the Owner shall disapprove any Budget or Plan, it shall so notify the Manager within said thirty (30) day period and explain the reasons therefor. The Manager will not incur any costs other than those estimated in an approved Budget except for:
|
(i)
|
maintenance or repair costs under $5,000 per Property;
|
(ii)
|
costs incurred in emergency situations in which action is immediately necessary for the preservation or safety of the Property, or for the safety of occupants or other individuals on the Property (or to avoid the suspension of any necessary service of the Property);
|
(iii)
|
expenditures for real estate taxes and assessments; and
|
(iv)
|
maintenance supplies calling for an aggregate purchase price of less than $25,000 for all Properties.
|
(d)
|
Returns Required by Law
. The Manager shall execute and file when due all forms, reports, and returns required by law relating to the employment of its personnel.
|
(e)
|
Notices
. Promptly after receipt, the Manager shall deliver to the Owner all notices, from any tenant, or any governmental authority, that are not of a routine nature. The Manager shall also report expeditiously to the Owner notice of any extensive damage to any part of the Properties.
|
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(a) The Owner shall pay the Manager property management fees (the “
Management Fees
”), on a monthly basis, equal to: (i) with respect to non-hotel Properties, four percent (4.0%) of Gross Revenues from the Properties managed, plus market-based leasing commissions applicable to the geographic location of the Property; and (ii) with respect to hotel Properties, a fee based on a percentage of Gross Revenues collected from such hotel at a market rate in light of the size, type and location of the hotel Property, plus a customary incentive fee based on performance. Except as otherwise set forth herein, the Owner shall also reimburse the Manager for any costs and expenses incurred by the Manager in connection with managing the Properties.
(b) Notwithstanding the foregoing, the Manager may be entitled to receive higher fees in the event the Manager can demonstrate to the satisfaction of the board of directors of the Company (including a majority of the Independent Directors) through empirical data that a higher competitive fee is justified for the services rendered and the type of Property managed. As described in
Section 2.6
above, in the event that the Manager properly engages one or more third parties to perform the services described herein, the fees payable to such parties for such services will be deducted from the Management Fees, or paid directly by the Manager, at the Manager’s option. The Manager’s compensation under this
Section 4.1
shall apply to all renewals, extensions or expansions of leases which the Manager originally negotiated.
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(a)
|
The Manager shall obtain and keep in full force and effect insurance on the Properties against such hazards as the Owner and the Manager shall deem appropriate, but in any event, insurance sufficient to comply with the leases and the Ownership Agreements shall be maintained. All liability policies shall provide sufficient insurance satisfactory to both the Owner and the Manager and shall contain waivers of subrogation for the benefit of the Manager.
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(b)
|
The Manager shall obtain and keep in full force and effect, in accordance with the laws of the state in which each Property is located, employer’s liability insurance applicable to and covering all employees of the Manager at the Properties and all individuals engaged in the performance of any work required hereunder, and the Manager shall furnish the Owner certificates of insurers naming the Owner as a co-insured and evidencing that such insurance is in effect. If any of the Manager’s duties hereunder are subcontracted as permitted under
Section 2.6
, the Manager shall include in each subcontract a provision that the subcontractor shall also furnish the Owner with such a certificate.
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(a)
|
One year from the date of the commencement of the term hereof. However, this Management Agreement will be automatically extended for an unlimited number of successive one year terms
|
(b)
|
Immediately upon the occurrence of any of the following:
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(iv)
|
A decree or order is rendered by a court having jurisdiction (A) adjudging the Manager as bankrupt or insolvent, (B) approving as properly filed a petition seeking reorganization, readjustment, arrangement, composition or similar relief for the Manager under the federal bankruptcy laws or any similar applicable law or practice, or (C) appointing a receiver, liquidator, trustee or assignee in bankruptcy or insolvency of the Manager or a substantial part of the Manager’s assets, or for the winding up or liquidation of its affairs, or
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(v)
|
The Manager (A) voluntarily institutes proceedings to be adjudicated bankrupt or insolvent, (B) consents to the filing of a bankruptcy proceeding against it, (C) files a petition, answer or consent seeking reorganization, readjustment, arrangement, composition or relief under any similar applicable law or practice, (D) consents to the filing of any such petition, or to the appointment of a receiver, liquidator, trustee or assignee in bankruptcy or insolvency for it or for a substantial part of its assets, (E) makes an assignment for the benefit of creditors, (F) is unable to or admits in writing its inability to pay its debts generally as they become due, unless such inability shall be the fault of the Owner, or (G) takes corporate or other action in furtherance of any of the aforesaid purposes; and
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(c)
|
Upon written notice from the Owner in the event that the Manager commits an act of gross negligence or willful misconduct in the performance of its duties hereunder.
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(a)
|
The Manager shall deliver to the Owner, or its designee, all books and records with respect to the Properties.
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(b)
|
The Manager shall transfer and assign to the Owner, or its designee, all service contracts and personal property relating to or used in the operation and maintenance of the Properties, except personal property paid for and owned by the Manager. Manager shall also, for a period of sixty (60) days immediately following the date of such termination, make itself available to consult with and advise the Owner, or its designee, regarding the operation, maintenance and leasing of the Properties.
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(c)
|
The Manager shall render to the Owner an accounting of all funds of the Owner in its possession and shall shall cause funds of the Owner held by the Manager relating to the Properties to be paid to the Owner or its designee.
|
(d)
|
The Manager shall cooperate with the Owner to provide an orderly transition of the Manager’s duties hereunder.
|
To the Owner:
|
American Realty Capital New York City REIT, Inc.
405 Park Avenue New York, NY 10022 Attention: Michael A. Happel, President |
To the Manager:
|
New York City Properties, LLC
405 Park Avenue New York, NY 10022 Attention: Michael A. Happel, President |
By:
|
/s/ Michael A. Happel
Name: Michael A. Happel Title: President |
By:
|
American Realty Capital New York City REIT, Inc.
its General Partner |
By:
|
/s/ Michael A. Happel
Name: Michael A. Happel Title: President |
By:
|
New York City Special Limited Partnership, LLC, its sole Member
|
By:
|
American Realty Capital III, LLC, its Managing Member
|
By:
|
/s/ Nicholas S. Schorsch
Name: Nicholas S. Schorsch Title: Manager |
Exhibit 10.4
PURCHASE AND SALE AGREEMENT
FOR COMMERCIAL CONDOMINIUM UNIT #C2 AT
THE HIT FACTORY® CONDOMINIUM
LOCATED AT
421-429 WEST 54 TH STREET
(1) | THE PLAN . |
Purchaser acknowledges having received and read a copy of the Offering Plan for the Hit Factory® Condominium and all amendments thereto, if any, filed with the Department of Law of the State of New York (hereinafter, collectively, referred to as the “ Offering Plan ” or the “ Plan ”) at least three (3) days prior to Purchaser’s signing this Agreement. If Purchaser has not received and read the Plan and all amendments thereto at least three (3) full days prior to Purchaser’s signing this Agreement, Purchaser shall have the right to rescind this Agreement within seven (7) days from the date of this Agreement. Such rescission must be by written notice addressed to the Sponsor and be post marked or hand delivered no later than midnight of the 7 th day subsequent to Purchaser’s delivery of the executed Purchase Agreement to the Seller. The Plan is incorporated herein by reference and made a part hereof with the same force and effect as if set forth at length. In the event of any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan will govern and be binding. Prior to execution of this Agreement, the Purchaser hereby acknowledges as having received and reviewed the Plan and all 22 Amendments to the Plan.
(2) | DEFINITIONS . |
The following terms shall have the meaning indicated for each:
(A) “ AGREEMENT ” shall mean this Purchase and Sale Agreement.
(B) “ BROKER ” shall mean Eastern Consolidated.
(C) “ CONDOMINIUM ” shall mean The Hit Factory® Condominium.
(D) “ CONDO UNIT ” shall mean individually Unit C2 of the Condominium as more particularly described on Exhibit A attached hereto, and the respective appurtenant interest in the common elements as set forth on the first page of this Agreement.
(E) “ DECLARATION ” and “ BYLAWS ” shall mean the Declaration and Bylaws for the Condominium, as amended.
(F) “ DEPOSIT ” or “ DOWNPAYMENT ” shall be the deposit of $700,000 to be paid by the Purchaser and to be held in escrow during the pendency of this Agreement, pursuant to Section 3.
(G) “ ESCROW AGENT ” shall mean Philip Brody, Esq., 55 Fifth Avenue, 15 th Floor, New York, NY 10003.
(H) “ PREMISES ” shall mean the Condo Unit.
(I) “ PERMITTED EXCEPTIONS ” or “ PERMITTED TITLE EXCEPTIONS ” shall mean the permitted title exceptions in the attached Exhibit C.
(J) “ PROPERTY ” or “ BUILDING ” shall mean the property or building located at 421-429 West 54 th Street, New York, NY.
2 |
(K) “ PURCHASER ” shall mean New York City Operating Partnership, L.P.
(L) “ SELLER ” shall mean Sagamore 54 th St. Investments LLC and Sagamore Arizona, LLC, as tenants in common.
(M) “ LEASE ” shall mean existing lease with the Tenant for leased premises in the Condo Unit. “
(N) “ TENANT ” shall mean the tenant under the Lease, which is Gibson Guitar Corp.
(O) “ TITLE COMPANY ” shall mean First American Title Insurance Company having an office at 633 Third Avenue, New York, NY 10017, Attention: Stephen Farber.
(P) “ TOTAL PURCHASE PRICE ,” “ DOWNPAYMENT ”, “ DEPOSIT ” and “ BALANCE ” shall mean the respective sums indicated on the first page of this Agreement.
(Q) “ UNIT OWNER ” shall mean the Seller as a Unit Owner in the Condominium under the Declaration.
All other terms not defined herein shall have the meanings ordinarily ascribed to them or as otherwise defined in this Agreement.
(3) | AGREEMENT WITH PURCHASER AND CLOSING DATE . |
(a) Purchaser hereby agrees to purchase from the Seller, and the Seller, in consideration for the delivery of the Total Purchase Price, subject to adjustments, agrees to sell and convey to Purchaser, the Condo Unit.
(b) The closing of the sale of the Condo Unit contemplated by this Agreement (the “ Closing ”) shall take place on the date which is the 30 th day following the receipt by the Purchaser or its attorney of a copy of this Agreement, which has been executed by the Seller an Purchaser, or such earlier date as mutually agreed upon by the Seller and Purchaser or such later date to which the Closing has been extended in accordance with the terms hereof (the “ Closing Date ”). The Purchaser shall have a one-time right to extent the Closing for a period of up to 30 days upon written notice to the Seller prior to the then-scheduled Closing Date, with the last of such 30 day extension period being time of the essence as to the performance of all of the Purchaser’s obligations under this Agreement .
3 |
(c) The Closing shall take place at the offices of the Seller or at the office of the lender or its attorney, providing the Purchaser with financing for the acquisition of the Condo Unit (provided such office is located in the New York metropolitan area). Alternatively, the Closing, at the option of the Purchaser, shall occur through an escrow style closing where Escrow Agent shall act at the settlement agent and all closing documents and payments shall be delivered or paid in advance to the Title Company (as hereinafter defined) for disbursement on the Closing Date, pursuant to the closing instructions of the Seller’s and Purchaser’s respective attorneys, which are consistent with the terms of this Agreement. If the Closing occurs through an escrow style closing, then the Seller and the Purchaser shall each pay 50% of any closing fees charged by the Title Company.
(4) | CONSIDERATION, ESCROW OF THE DOWNPAYMENT . |
The Total Purchase Price of $7,250,000 shall be paid by Purchaser to the Seller as follows:
(i) The Downpayment or Deposit of $700,000 shall be paid by Purchaser by wire transfer to the trust account of Escrow Agent or by bank cashier or certified check drawn on a New York bank which is a member of the New York Clearing House Association, made payable to the order of the Escrow Agent, within two (2) business days after the delivery to the Purchaser or its attorney of a copy of this Agreement which has been executed by the Seller. The wiring instructions for funding of the Downpayment is set forth in the attached Exhibit G. The proceeds of the Downpayment shall be held in escrow by the Escrow Agent. The Downpayment shall be deposited by Escrow Agent in Escrow Agent's account at Capital One Bank, located at 1001 Avenue of the Americas, New York, New York, which Downpayment shall earn interest, and shall be held until the Closing hereunder or until the prior termination of this Agreement. If the Closing shall take place, the Downpayment shall be paid to the Seller in addition to the Balance of the Total Purchase Price, along with any interest earned on the Downpayment (which interest will be credited against the Balance due at Closing). If Purchaser is entitled to cancel this Agreement pursuant to the express terms of this Agreement, then the Downpayment and any interest earned thereon will be refunded to Purchaser. If this Agreement shall be terminated by reason of the default of either party, then the Downpayment and any interest earned thereon shall be held by the Escrow Agent pursuant to the terms of this Section and disbursed in accordance with this Agreement. The Escrow Agent shall not be liable for any loss of the escrowed funds due to the lack of FDIC insurance in excess of $250,000.
It is understood and agreed that Escrow Agent’s only duties and obligations hereunder are as expressly set forth in this Agreement and no other. Escrow Agent shall not be liable for any action taken or omitted hereunder or for any error in judgment or mistake in fact or law, except as a result of its own willful misconduct or gross negligence. Escrow Agent shall have the right to consult with separate counsel of its own choosing (if it deems such consultation advisable) and shall not be liable for any action taken, suffered, or omitted by it in accordance with the advice of such counsel, provided such action does not constitute willful misconduct or gross negligence. Escrow Agent shall be protected in acting upon any written or oral communication, notice, certificate, or instrument or documents believed by it to be genuine and to be properly given or executed without the necessity of verifying the truth or accuracy of the same or the authority of the person giving or executing the same.
4 |
Except for the delivery of the Downpayment to the Seller at the Closing or Purchaser’s cancelation of this Agreement pursuant to the express terms of this Agreement, the Downpayment and any interest earned thereon shall not be delivered to either party unless and until Escrow Agent gives ten (10) days’ prior written notice to both parties of its intention to release the Downpayment and any interest as provided in this Agreement. In the event (a) a party objects in writing given to the other party and Escrow Agent to such release within such ten (10) day period or (b) Escrow Agent determines that a dispute or uncertainty exists as to Escrow Agent’s duties, then Escrow Agent shall refrain from releasing the Downpayment and interest and either (i) continue to hold same in escrow until Escrow Agent is otherwise directed in writing by both parties or by final judgment of a court of competent jurisdiction as to the disposition thereof, or (ii) deposit or turn over the Downpayment and any interest earned thereon to any court of competent jurisdiction and thereupon be relieved from all responsibilities with respect thereto. Nothing in this Section shall prohibit Escrow Agent from acting as the Seller's attorney in the event of any dispute under this Agreement.
Upon disposing of the Downpayment and any interest earned thereon in accordance with the provisions of this Agreement, Escrow Agent shall be relieved and discharged of all claims and liabilities relating to such funds, and shall not be subject to any claims or surcharges made by or on behalf of either party hereto. The Escrow Agent may represent the Seller in connection with any matter pertaining to this transaction, including any litigation arising out of this Agreement.
The Seller and Purchaser jointly agree to indemnify and hold Escrow Agent harmless from all liability, costs, expenses, damages, actions or other charges which may be imposed upon, or incurred by, Escrow Agent in connection with the performance of its duties hereunder, except with respect to any liability, cost and expense incurred as a result of Escrow Agent's willful misconduct or gross negligence.
(ii) Upon execution of this Agreement, the Escrow Agent, the Seller and the Purchaser shall enter into an Escrow Agreement in the form attached hereto as Exhibit I regarding the Deposit, as set forth in the 22 nd Amendment to the Offering Plan.
(iii) The Balance shall be paid at Closing by wire transfer to such account(s) designated in writing by the Seller or by an unendorsed certified check or bank cashier's check, drawn on a New York bank, which is a member of the New York Clearing House Association, made payable to the direct order of the Seller and/or to such other parties as designated by the Seller.
(5) | Emergency Repair Liens . |
All emergency repair liens assessed against the Premises prior to the Closing shall be paid and discharged by the Seller upon the Closing.
(6) | Assessments . |
If, at the time of the Closing, the Premises shall be or shall have been affected by any special or capital assessment due to the Condominium, the Seller shall be responsible for any such special or capital assessments, including any monthly installments, due prior to the Closing Date and the Purchaser shall be responsible for any special assessments, including monthly installments, due from and after the Closing Date. To the extent applicable, monthly installments for any such special or capital assessment for the month in which the Closing Date occurs shall be prorated between the Seller and the Purchaser pursuant to their respective periods of ownership of the Condo Unit. At the Closing, each of the Sellers or the Purchaser shall pay the amount of any such special or capital assessment that the Seller and/or the Purchaser is responsible for payment of same, as provided above.
5 |
(7) | Deed . |
The deed shall be the usual bargain and sale deeds with covenants against grantor's acts in proper statutory form for recording and shall be duly executed and acknowledged so as to convey to the Purchaser the fee simple of the Premises, free of all encumbrances, except as herein stated, and shall contain the covenant required by subdivision 5 of Section 13 of the Lien Law. At the Closing the Seller shall deliver to the Purchaser possession of the Premises, subject only to the Permitted Exceptions set forth in Exhibit C. Except as set forth in this Agreement and/or the documents and/or agreements to be delivered at the Closing by the Seller, the acceptance of the deed by the Purchaser shall be deemed to be full performance and discharge of every obligation on the part of the Seller to be performed under this Agreement.
(8) | Title . |
(a) Subject only to the Permitted Exceptions set forth in Exhibit C, the Seller shall give and the Purchaser shall accept title to the Premises such as the Title Company will be willing to approve and insure without any special premium in excess of the standard rates or any affirmative coverage. Purchaser shall promptly after executing this Agreement order a title examination and shall cause a copy of the title report to be delivered to Seller's attorneys concurrently with the delivery thereof to Purchaser's attorneys.
(b) Except as provided below, the Seller shall have the right but not the obligation to cure title objections constituting conditions of title varying from the state of title to be delivered in accordance with this Agreement (hereinafter, collectively, " Valid Title Objections " and, individually, " Valid Title Objection ") and to adjourn the closing from time to time to a date specified by Seller upon five (5) business days' notice to Purchaser but not beyond a date (" Adjourned Date ") which is more than thirty (30) days after the Closing Date or expiration of Purchaser’s mortgage commitment, whichever is sooner, but, in the case of such expiration of Purchaser’s mortgage commitment, in no event sooner than ten (10) business days after the Closing Date and provided the Seller cures the Valid Title Objections, as reasonably required by the Title Company, on or before the Adjourned Date, then the Closing shall occur on such Adjourned Date specified by Seller in accordance with the provisions of this Agreement. If Seller is not able to cure any Valid Title Objection or Seller fails to cure a Valid Title Objection on or before the Adjourned Date, then the Purchaser's sole right and remedy shall be, on the terms and conditions set forth below, to either:
(i) to declare this Agreement canceled and to recover the net cost actually incurred by Purchaser in examining the title, including municipal searches, which is not to exceed the reasonable charges fixed by Title Company and the net cost of any survey made or updated for the Premises, which was incurred by Purchaser and to receive the refund of the Deposit plus accrued interest thereon in accordance with the terms of this Agreement; or
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(ii) to complete the purchase in accordance with this Agreement without reduction in the Purchase Price. Purchaser shall exercise its option pursuant to subparagraphs 8(b)(i) above or this subparagraph (ii) by notice given to and received by Seller within ten (10) business days from Purchaser's receipt of notice from Seller that Seller cannot cure all of the Valid Title Objections pursuant to the terms of this Contract of Sale. If Purchaser shall fail to send a written notice to Seller exercising either of Purchaser's options set forth under Section 8(b)(i) above or this subparagraph (ii) within the required time period, then it shall be deemed that Purchaser exercised the option set forth in Section 8(b)(i) above to declare this Agreement cancelled. Except as otherwise stated herein, nothing contained in this Agreement shall be construed to require Seller to bring any action or otherwise to incur any expenses to render title to the Premises marketable and/or to cure any Valid Title Objections. Notwithstanding anything contained herein to the contrary, the Seller shall apply the Purchase Price to pay off emergency repair liens, unpaid real estate taxes, unpaid assessments, unpaid mechanics liens and/or judgments against the Seller and/or the Premises, unpaid water and sewer charges, all mortgages encumbering the Premises and/or any other Valid Title Objection which can be reduced to a liquidated amount (hereinafter collectively referred to as “ Monetary Obligations ”).
(c) If on the date of Closing there may be any liens or encumbrances which the Seller is obligated to pay and discharge, the Seller may use any portion of the balance of the Purchase Price to satisfy the same, provided that the Title Company shall omit same from Purchaser’s title insurance policy for the Premises, at standard rates and the Seller shall simultaneously either deliver to the Purchaser or the Title Company at the Closing instruments in recordable form and sufficient to satisfy such liens and encumbrances of record together with cost of recording or filing said instruments; or, provided the Seller has made arrangements with the Title Company, Seller will deposit with said Title Company sufficient monies, reasonably acceptable to and required by it to omit any such liens or encumbrances from the title policy, at standard rates. The Purchaser, if request is made by Seller at least one (1) business days prior to the Closing Date, shall provide at the Closing separate bank checks (or arrange for wire transfers), not to exceed the amount of the balance of the Purchase Price, to facilitate the satisfaction of any such liens or encumbrances. The existence of any such taxes or other liens and encumbrances shall not be deemed objections to title if the Seller shall comply with the foregoing requirements.
(d) If a search of the title discloses judgments, bankruptcies or other returns against other persons having names the same as or similar to that of the Seller, the Seller will on request deliver to the Purchaser and Purchaser’s Title Company an affidavit showing that such judgments, bankruptcies or other returns are not against the Seller.
(9) | EFFECT OF CLOSING . |
Upon consummation of the Closing, Purchaser shall be the owner of the Condo Unit and the landlord under the Lease.
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(10) | REMEDIES . |
(a) Default by Purchaser : The parties agree that if the Purchaser is in default, beyond all applicable notice and cure periods, of any of the material terms of this Agreement and Purchaser fails to close under this Agreement, the damages of Seller, while substantial, would be difficult or impossible to determine with mathematical precision. Thus, in such event, Seller's sole and exclusive remedy shall be to terminate this Agreement and retain as liquidated damages, the Downpayment and the interest, earned thereon, without any further recourse by the Seller against the Purchaser and/or its members, partners, employees and agents. The parties agree that the provisions of this Section represent an agreed measure of damages and are not to be deemed a forfeiture or penalty. In the event that any check delivered to Seller on account of the Downpayment or any other portion of the Purchase Price shall be dishonored for any reason whatsoever, it shall be deemed a material default by Purchaser hereunder and Seller may, in that event, cancel this Agreement. Notwithstanding the above provisions, if the check for the Downpayment shall be dishonored, the Seller shall notify the Purchaser of same and the Purchaser shall have one (1) business day to replace such check with a certified check made payable to the Escrow Agent or a wire transfer of Federal Funds for the amount of the Downpayment.
(b) Default by Seller : In the event that Seller should be in default under this Agreement, except as otherwise stated in this Agreement, Purchaser's sole remedies will be either to: (1) sue to specifically enforce this Agreement; or (2) to terminate this Agreement, whereupon the Escrow Agent shall return the Downpayment to Purchaser, together with all interest earned thereon, and sue for damages for costs relating title company searches actually incurred by the Purchaser. Except as otherwise stated in this Agreement, the Purchaser hereby expressly waives any and all right to seek damages as a result of Seller's default under this Agreement prior to Closing. In any action for specific performance, reasonable legal fees shall be awarded to the prevailing party.
(11) | PREMISES “AS IS”. |
Purchaser has inspected the Premises and has become thoroughly acquainted with the conditions, expenses, operation, violations and any and all other matters or things affecting or relating to the Premises, and, except as otherwise specifically provided herein, agrees to accept the Premises and/or the Property in its “as is” present condition, with all faults, including, but not limited to, the environmental condition of the Premises and/or the Property, subject to reasonable use, wear and tear between the date hereof and the Closing. Except as otherwise specifically provided herein, Purchaser acknowledges and agrees that Seller has not made and does not make any representations or warranties of any kind, and shall have no liability or obligation, with respect to any matter relating to the Premises, the Property, the Condominium or this transaction, including, without limitation: (i) expenses, operation, rental income, zoning or development potential, physical condition, gross and rentable square footage of the Premises, access, fitness for any specific use, merchantability or habitability of any portion of the Premises; (ii) any violations affecting the Premises and/or the Building now or hereinafter existing, and liens, if any, arising from any such violations after the Closing, (iii) any patent or latent defect in or about the Premises and/or the Building, or in any of the improvements and/or structures on the Premises and/or the Building; (iv) any laws, regulations, ordinances, or orders pertaining to the Premises and/or the Building; (v) the presence or absence of asbestos or any hazardous materials or wastes in, under and/or upon the Premises and/or the Building; (vi) the existence, location or availability of utility lines for water, steam, sewer, drainage, electricity, gas and/or any other utility; (vii) any licenses, permits, approvals or commitments from governmental authorities in connection with the Premises and/or the Building; (viii) the certificate of occupancy for the Premises attached hereto as Exhibit K; and (ix) any other matter affecting or relating to the Premises and/or the Building.
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(12) | CLOSING DELIVERIES . |
At the Closing, the Seller and/or the Purchaser shall execute and/or deliver the following documents and agreements:
(i) The Seller shall execute and deliver the deed described in Section 6 hereof for the Premises to the Purchaser in the form attached hereto as Exhibit H.
(ii) An Assignment & Assumption of the Lease and the Security Deposit for the Tenant, to be executed by the Seller, as the assignor and the Purchaser, as the assignee, in the form attached hereto as Exhibit D;
(iii) The Seller shall deliver a rent roll for the Tenant which includes the information set forth on the Rent Roll attached hereto as Exhibit B, and a list of any arrears in rent and additional rent for the Tenant in existence as of the Closing Date;
(iv) A tenant notice letter to the Tenant executed by the Seller, advising the Tenant of the sale of the Premises and the new instructions for payments under its Lease;
(v) Such title affidavits executed by either the Seller and/or the Purchaser, as may be reasonably required by the Title Company;
(vi) The Seller shall deliver to the Purchaser copies of the Lease and lease files for the Tenant;
(vii) Such consents and/or resolutions to be executed by the officers, owners and/or managers of the Seller and the Purchaser, as may be required under their respective organizational documents to authorize and empower the persons executing the closing documents, respectively, on behalf of the Seller and the Purchaser;
(viii) The Seller shall cause the managing agent for the Condominium to provide a letter confirming that all common charges and assessments (if any), have been paid in full through the month in which the Closing occurs;
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(ix) As a condition precedent to Purchaser’s obligation to consummate the transaction contemplated hereby, the Seller shall deliver to the Purchaser, on or prior to the Closing, a tenant estoppel certificate from the Tenant, in substantially the form attached hereto in Exhibit E or in such form as set forth in the Lease.
(x) A Bill of Sale to be executed by the Seller in the form attached hereto as Exhibit F.
(xi) The execution and delivery by the Seller of a FIRPTA Affidavit for each entity comprising the Seller;
(xii) New York State Transfer Tax Return, The New York City Transfer Tax Return, and the Equalization Form as required by Section 14 of this Agreement;
(xiii) To the extent in Seller’s or its Agent’s possession (a) those transferable licenses and permits, authorizations and approvals pertaining to the Premises which are not posted at the Premises; (b) all transferable guarantees and warranties which Seller has received in connection with any work or services performed or equipment installed in and improvements erected on the Premises; and (c) any access codes, keys, or building plans applicable to the Premises;
(xiv) A certificate by the Seller confirming that all representations and warranties of the Seller set forth in this Agreement are true, complete and correct in all material respects as of Closing;
(xv) As a condition precedent to Purchaser’s obligation to consummate the transaction contemplated hereby, the Seller shall deliver to the Purchaser, on or prior to the Closing, an estoppel certificate from the Board of Managers, in the form attached hereto as Exhibit J, with such changes as may be required by the Board of Managers and are reasonably acceptable to Purchaser; and
(xvi) Seller’s representative on the Board of Managers for the Condominium shall resign so that the Purchaser’s representative can replace such person as a member of the Board of Managers, pursuant to Section 1 of the Bylaws of the Condominium.
(13) | ADJUSTMENTS . |
(a) At the Closing, the Seller and the Purchaser shall complete the following adjustments or apportionments as to the month of the Closing as of 11:59 p.m. on the day preceding the Closing Date:
(i) | Common charges and special assessments (or capital assessments) for the Condo Unit on a per diem basis; |
(ii) | Real estate taxes on a per diem basis based on the fiscal year for which they are assessed; |
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(iii) | Rent and additional rent (including any prepaid rents) on a per diem basis to the extent collected under the Lease; |
(iv) | The Purchaser shall either receive a credit against the Purchase Price or a check for the amount of Tenant’s security deposit; and |
(v) | Such other items set forth in this Agreement and/or that are customarily prorated in transactions of this nature. |
(b) In completing such adjustments, the Seller shall be responsible for payment of all common charges (including special or capital assessments, if any) and real estate taxes through the day prior to the Closing and the Purchaser shall be responsible for such payments from and after the Closing Date. The Seller shall be entitled to all rent and additional rent under the Lease through the day prior to the Closing and the Purchaser shall be entitled to such rent and additional rent under the Lease for the period from and after the Closing Date. At the option of Seller, any adjustment due to the Purchaser may be credited at Closing against the balance of the Purchase Price.
(c) Any errors in calculation or apportionments shall be corrected or adjusted as soon as practicable, but in no event later than ninety (90) days after the Closing Date. The provisions of this Section 9 shall survive the Closing for a term of ninety (90) days.
(14) | RENT ARREARS . |
If there are any arrears in rent and additional rent as to the Lease as of the Closing Date, rent and additional rent received after the Closing Date shall be applied first to any rent and additional rent owed for the month of the Closing to be allocated amongst the Purchaser and the Seller pro-rata based upon the number of days of ownership applicable to each party; second to any other rent and additional rent due and owing Purchaser from and after the Closing Date; and third to pay any other delinquent rent and additional rent owed to the Seller for its period of ownership. To the extent either party after the Closing Date receives any rent and additional rent due to the other party, as provided herein, such party shall hold any such rent and additional rent in trust for the other party and shall promptly remit to the proper party. Neither party shall have any obligation to collect past due rent, but each party shall use commercially reasonable efforts to do so, without any obligation on the part of the Purchaser to file a lawsuit to collect any such past due rent and additional rent. The provisions contained herein shall survive the Closing.
(15) | NEW YORK STATE AND NEW YORK CITY TRANSFER TAXES . |
(a) Seller shall pay or cause to be paid at Closing, all New York City and New York State transfer taxes payable in connection with the Closing, including without limitation, the transfer of the Premises to Purchaser.
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(b) At the Closing, the Seller shall deliver to the Purchaser a certified bank check (or direct Purchaser to deliver a bank check out of the balance of the Purchase Price) to the order of the Title Company (as hereinafter defined) for the amount of the New York State Transfer Tax payable by reason of delivery of the transfer of the Premises. At the Closing, the Seller and the Purchaser will both execute and deliver the State Transfer Tax Forms (TP584) and the New York State Equalization Forms to be filed with the payment of the New York State Transfer Tax for this transaction.
(c) In addition, the Seller shall at the same time deliver to the Purchaser a certified bank check (or direct Purchaser to deliver a certified or bank check out of the balance of the Purchase Price) to the order of the Title Company for the amount of the New York City Real Property Transfer Tax imposed by Title II of Chapter 46 of the Administrative Code of the City of New York and the Seller and the Purchaser shall both execute and deliver the New York City RPT Tax Forms required to be delivered with the payment of the City Transfer Tax for this transaction.
(16) | PERSONAL PROPERTY . |
All fixtures, equipment, appliances and articles of personal property attached or appurtenant to or used in connection with the Premises, which are owned by the Seller, are included in this sale. No part of the Purchase Price is allocated to the purchase of such fixtures, equipment, appliances and other personal property owned by the Seller. At the Closing the Seller shall deliver to the Purchaser a Bill of Sale for all fixtures, equipment, appliances and other personal property owned by the Seller in the form attached hereto as Exhibit F, which shall provide that the fixtures, equipment, appliances and other personal property transferred to Purchaser, if any, shall be free and clear of all liens and encumbrances.
(17) | RENT ROLL . |
(a) Attached hereto as Exhibit B, is a true and accurate rent roll, in all material respects, for the Premises (the " Rent Roll "), which lists the Tenant, the billable rent and additional rent for the Tenant, the expiration date of the Lease, and the amount of the Tenant’s security deposit under its Lease. The Seller has delivered to the Tenant a true and complete copy of the Lease (including all amendments thereto). There are no leases, licenses or other written occupancy agreement affecting all or any portion of the Premises other than the Lease set forth on the Rent Roll. To the extent there are any differences between the information contained in the attached Rent Roll and the terms of the Lease, the term of the Lease shall control and the Rent Roll shall be deemed modified accordingly.
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(b) Any new lease or renewal of the Lease (or amendment or modification to such new lease or to the Lease) or assignment or a sublet of such new lease or the Lease by the Tenant (to the extent Seller’s approval is required under the Lease for such assignment or sublease), shall be subject to the prior written approval of the Purchaser, such approval subject to Purchaser’s sole discretion. The Seller shall submit to the Purchaser, a copy of the proposed new lease or renewal of the Lease (or amendment or modification to such new lease or to the Lease), assignment or sublet of such new lease or the Lease, financial and credit information obtained by the Seller as to any such tenant or the Tenant, or assignee, a list of any tenant improvements required to be made by the landlord under any such new lease or the Lease and the amount of any brokerage commission to be paid by the landlord under any such new lease or the Lease (hereinafter collectively referred to as the “ Leasing Documents ”). The Seller shall promptly submit for Purchaser’s approval (which approval Purchaser may grant or deny in Purchaser’s sole discretion) the Leasing Documents pertaining to any new lease, modification or renewal of such new lease or the Lease, assignment or sublet for which Seller’s approval, as landlord, is required for any space at the Premises. If the Purchaser does not respond to the Seller’s request for such approval by the Purchaser within three (3) business days after the Purchaser’s receipt of the Leasing Documents for any such new lease or the Lease, then the Purchaser shall automatically be deemed to approve any such leasing request of Seller. Purchaser shall at the Closing pay or reimburse Seller for any tenant improvements and/or leasing commissions incurred by the Seller as to any new lease and/or renewal of the Lease, which is entered into by the Seller from and after the date hereof and approved by Purchaser in accordance with the terms hereof.
(18) | SECURITY DEPOSIT . |
Subject to this Section 18, The Seller reserves the right to apply the security deposit under the Lease against any uncollected rent and additional rent under any such Lease or any other sums due Seller under any such Lease in accordance with the terms of such Lease. The Seller shall promptly notify the Tenant and the Purchaser of any such application of the security deposit. In reference to the Seller’s application or withdrawal of the security deposit held for the Tenant, the Seller shall give the Purchaser written notice of any such application or withdrawal at the same time it notifies the Tenant of same and shall only withdraw or apply same to the extent of any default, beyond all applicable notice and grace periods, of the Tenant occurring after the date hereof in the payment of rent, additional rent and/or any other sums due and owing under the Lease.
(19) | ACCESS TO BOOKS AND RECORDS . |
(a) Prior to the Closing the Seller shall permit Purchaser's staff, agents, appraisers, lenders, engineers, environmental consultants and architects (collectively " Agents ") access to the Premises during normal business hours provided that: (i) the Purchaser shall give to the Seller at least two business days' advance notice of such inspection; (ii) any such inspection shall not impede to a material extent the normal day to day operations of the Premises and the Tenant’s operation of their respective businesses in their lease premises and (iii) a representative of the Seller shall accompany the Purchaser and/or its Agents in any such inspection of the Premises, unless otherwise agreed to by the Seller. The Seller shall endeavor to make such representative reasonably available for such inspections. The Purchaser hereby agrees to indemnify, hold harmless and defend the Seller and the Condominium from and against any and all claims, damages, liabilities, costs and expenses (including reasonable attorney's fees and disbursements) to the extent incurred by the Seller as a consequence of any such inspection of the Premises by the Purchaser and/or its Agents, except if caused by the gross negligence or recklessness of Seller and/or Seller’s agents, Tenants and/or occupants. This indemnification shall survive the Closing. Notwithstanding the foregoing, this indemnity shall not be applicable to any pre-existing condition except to the extent exacerbated by Purchaser and/or its Agents.
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(b) The Seller hereby agrees, provided it is at no material cost to the Seller, to make available to the Purchaser and its Agents and accountants for their review and copying, upon at least two business days advance notice to the Seller, the books and records of the Seller to the extent in the possession or control of the Seller and/or its managing agent and/or any other agents of the Seller, relating to the Tenants and the maintenance and operation of the Premises. The Seller agrees that in connection with the examination of Seller's books and records, the Purchaser's accountants may make such tests of the accounting records and undertake such other auditing procedures as the Purchaser's accountants consider necessary in the circumstances. Prior to the Closing, any such information contained in the books and records for the Premises shall be kept confidential by the Purchaser, its Agents and accountants, except as otherwise approved by the Seller.
(20) | PURCHASER'S REPRESENTATIONS AND WARRANTIES |
(a) Purchaser represents and warrants to the Seller, as of the date hereof, which representations and warranties shall also be true and accurate in all material respects on the Closing Date, that:
(i) Purchaser is a limited partnership, duly organized and validly existing and in good standing under the laws of the State of Delaware.
(ii) Purchaser has all requisite power and authority, in accordance with the law, to enter into this Agreement and to carry out the transactions contemplated hereby. The person signing this Agreement on behalf of the Purchaser is authorized and empowered to execute and deliver this Agreement on behalf of the Purchaser. The execution, delivery and performance of this Agreement by Purchaser has been duly authorized and (1) does not violate any provision of, or require any filing, registration or consent or approval under any law, rule or regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Purchaser which has not been obtained; (2) will not result in a breach of or constitute a default or require any consent under any indenture, lease, loan, credit agreement of Purchaser or any other instrument by which Purchaser may be bound or affected; or (3) will not cause Purchaser to be in default under any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, or any such indenture, lease, agreement or instrument; and
(iii) Purchaser is not a person or entity described by Sec. 1 of the Executive Order (No. 13,224) Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, 66 Fed. Reg. 49,079 (Sept. 24, 2001).
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(21) | SELLER’S REPRESENTATIONS AND WARRANTIES |
(a) Seller hereby represents and warrants to Purchaser, as of the date hereof, which representation and warranties shall also be true and accurate in all material respects on the Closing Date, that:
(i) Each of the tenants in common comprising the Seller is a New York limited liability company, duly organized and validly existing under the laws of the State of New York.
(ii) Seller has all requisite power and authority, in accordance with applicable law, to enter into this Agreement and to carry out the transactions contemplated hereby. The execution, delivery and performance of this Agreement by Seller has been duly authorized and (1) does not violate any provision of, or require any filing, registration or consent or approval under any law, rule or regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Premises which has not been obtained; (2) will not result in a breach of or constitute a default or require any consent under any indenture, lease, loan, credit agreement of Seller or any other instrument or agreement by which Seller may be bound or affected; and (3) will not cause Seller to be in default under any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, or any such indenture, lease, agreement or instrument. The person executing this Agreement on behalf of the Seller has been authorized and empowered to execute this Agreement of behalf of the Seller;
(iii) The common charges and special or capital assessments currently payable for the Unit as of the date hereof, are specified on Page 1 hereof and all common charges and special (capital) assessment will be paid in full through the month in which the Closing occurs;
(iv) Seller has not received a written notice of default by Seller or Tenant under the Declaration that relates to the Unit and remains uncured; Seller has not delivered to the Board of Managers or the managing agent of the condominium a notice of default by the Board of Managers or the managing agent for the condominium under the Declaration; to Seller’s knowledge, no defaults by Tenant have occurred and are continuing under the Declaration.
(v) Seller is not a “ foreign person ” as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder;
(vi) There is no litigation currently pending or to the best of Seller's knowledge, threatened in writing, to which Seller is a party which would affect the transfer of Premises to the Purchaser;
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(vii) The Seller, as a unit owner in the Condominium, as of the date hereof, has not received any written notice from the Condominium or the managing agent of the Condominium to the Unit Owners concerning changes in common charges and/or special assessments;
(viii) The Seller has delivered to the Purchaser or its attorneys true and complete copies of the existing Lease (including any amendments);
(ix) The Rent Roll for the Tenant, attached hereto as Exhibit B is accurate in all material respects. The Seller, as landlord, has not received any written notice of default from the Tenant as to the landlord’s obligations under the Lease, which remain uncured. To the best of Seller’s knowledge, except as reflected on the Rent Roll, all Tenant is in possession, and the Tenant has not sublet or assigned their leased premises. As of the date hereof, the Seller has not received from the Tenant any written notice of default under the Lease, which remains uncured. As of the date hereof, to Seller’s knowledge, neither the Seller nor the Tenant is in default under the Lease. Seller has not delivered to the Tenant a written notice of default by the Tenant under the Lease, which remains uncured;
(x) There have been no prepayments of rents and additional rents by the Tenant except those which will be adjusted at the Closing; from and after the date hereof the Seller shall not collect rent more than thirty (30) days in advance for the Tenant; the Tenant has not been given any concessions or free rent for the rental of their leased premises which would be binding on the Purchaser from and after the Closing Date;
(xi) There shall not be any brokerage commissions due and owing as to the existing Lease, which would be binding on the Purchaser after the Closing. All tenant improvements required of the Seller under the Lease, as of the date hereof, have been completed and there are no outstanding tenant improvement allowances provided for under the Lease;
(xii) All bills and claims for labor performed and materials furnished at the request of the Seller or its agents or employees to or for the benefit of the Premises will be paid in full by the Seller on or before the Closing Date;
(xiii) Seller is not a person or entity described by Sec. 1 of the Executive Order (No. 13,224) Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, 66 Fed. Reg. 49,079 (Sept. 24, 2001);
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(xiv) There are no service contracts for the Premises that will be binding on the Purchaser from and after the Closing Date. There are no employees for the Premises that the Purchaser shall be required to hire or retain from and after the Closing Date;
(xv) Seller has not received notice of pending or threatened condemnation proceedings; and
(xvi) No options or rights of first refusal or other rights to acquire the Premises exist.
The above representations of Seller in this Section 21 shall survive the Closing for a period of one hundred fifty (150) days (the “ Survival Period ”) except there shall be no Survival Period after the Closing as to any material breach of Seller’s representations and warranties to which the Purchaser had knowledge on or prior to the Closing Date.
Seller may modify or update any representation or warranty in this Agreement to correct any mistake and/or to reflect any matter which arises subsequent to the date of this Agreement; provided , however , to the extent such modification or update evidences a change in any such representation or warranty that is "material" (as defined in this Section), then Purchaser’s sole remedy shall be to terminate this Agreement on or prior to the Closing Date. If Purchaser has knowledge of any matter which Purchaser claims would give rise to a right of Purchaser to terminate this Agreement pursuant to the terms hereof, Purchaser shall notify Seller in writing of such matter within the earlier of: (i) ten (10) business days of learning of same or (ii) the Closing Date, failing which any rights of Purchaser or obligation of Seller under this Agreement regarding such matter shall be waived. Purchaser’s notice shall include a reasonable estimate of the amount by which the damages arising from the alleged matter exceeds the materiality threshold as defined below (the “ Breach Amount ”), provided that such matter is susceptible to a reasonable estimation of damages. Seller shall have the right, but not the obligation, to attempt to cure such matter (but no such attempt shall constitute an acknowledgement or agreement that Purchaser has any right not to perform hereunder) or to credit Purchaser with the Breach Amount. In connection with Seller’s election to attempt to cure such matter, Seller shall have until the date that is the later of the originally scheduled Closing Date or sixty (60) days from the date of Purchaser’s notice to attempt to effectuate such cure and, at Seller’s option, the Closing Date shall be extended to such sixtieth (60 th ) day (or any earlier business day) after Purchaser's notice to permit such cure by Seller, provided that if Seller makes such election, Seller shall thereafter use commercially reasonable efforts to effect such cure as soon as reasonably practicable thereafter, and Purchaser shall be entitled to Close on or about such earlier date as such cure is completed. For the purposes of this Agreement, " material " shall mean any state of facts, taken alone or together with all other material untruths or inaccuracies and all such covenants and obligations with which Seller has not materially complied, the restoration of which to the condition represented or warranted by Seller under this Agreement, or the cost of compliance with which, would cost in excess of Twenty Five Thousand Dollars ($25,000).
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Any survival of Seller’s representation and warranties shall automatically be null and void unless, within thirty (30) days after the end of the Survival Period, the Purchaser shall have asserted in writing a specific claims as to such material breach of Seller’s representations and Purchaser’s notice of such material breach shall include a reasonable estimate by which the damages arising from the alleged matter exceeds the materiality threshold of $25,000, provided that any such matter is susceptible to a reasonable estimate of damages. The Seller, in any event, shall not have any liability as to any breach of representation and warranties in excess of $350,000 and any such liability for damages shall not include any consequential damages.
(22) | SELLER’S COVENANTS . |
Seller agrees that, prior to the Closing, it shall:
(a) Not enter into any new lease of space or other occupancy arrangement or any new contract, or materially amend or modify the same or the Lease, other than in accordance with Section 17 (b) of this Agreement;
(b) Not create, incur or suffer to exist any mortgage, lien, pledge or other encumbrance in any way affecting any portion of the Premises other than the liens encumbering the Premises on the date of this Agreement;
(c) Maintain the current insurance coverages for the Premises and otherwise operate the Premises in a manner substantially similar to the operation of the Premises prior to the date hereof; and
(d) Not terminate the Lease without Purchaser’s written consent thereto (which consent Purchaser may withhold in Purchaser’s sole discretion), unless such termination is as a result of a material default by the Tenant thereunder and such default has not been cured by the Tenant or, at Purchaser’s option, Purchaser, prior to the expiration of all notice and grace periods for the applicable material default.
(23) | PERFORMANCE BY THE SELLER . |
Acceptance by Purchaser of the deed for the Premises shall be deemed to be a full performance and discharge of each and every agreement and obligation on the part of the Seller to be performed pursuant to the provisions of this Agreement, except those herein expressly stated to survive the Closing or in the Closing documents.
(24) | NO MORTGAGE CONTINGENCY . |
Purchaser’s obligations under this Agreement are not contingent upon Purchaser's ability to obtain financing.
(25) | BROKER . |
Seller and Purchaser each represent and warrant to the other that it has not dealt with any broker other than the Broker in connection with this transaction and each party hereby agrees to indemnify and hold the other harmless from and against any and all losses, costs, damages or expenses, including without limitation, reasonable attorneys' fees, paid or incurred by reason of any inaccuracy of the foregoing representation and warranty. The Seller agrees to pay the Broker a commission pursuant to separate agreement. The provisions of this Section shall survive the Closing.
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(26) | NOTICES . |
All notices, elections, consents, demands and communications (collectively called “ Notices ” or individually called “ Notice ”) shall be in writing, delivered personally or by overnight courier or by certified mail, postage prepaid and addressed to the Seller at Seller’s address given above with copies to Philip Brody, Esq., 55 Fifth Avenue, 15 th Floor, New York, NY 10003, and to the Purchaser’s address given above, with a copy to Michael Ead, Esq, at MEad@nyrt.com . Unless otherwise provided herein, the Notices shall be deemed given when delivered, if sent by personal delivery, or on the next business day if sent by overnight courier, except that a Notice of a new address shall be deemed given when actually received.
(27) | ENTIRE AGREEMENT . |
This Agreement constitutes the entire agreement between the parties hereto as to the subject matter hereof and supersedes all prior understandings and agreements. Purchaser acknowledges having entered into this Agreement without relying upon any promises, statements, estimates, representations, warranties, conditions or other inducements, expressed or implied, oral or written, not set forth herein. Purchaser further acknowledges having had full opportunity to examine all documents and investigate all facts referred to and stated herein including without limitation the minutes of the board of directors meetings of the Condominium, the financial statements, Declaration and Bylaws of the Condominium, the Lease and tenant files for the Tenants.
(28) | MODIFICATIONS . |
This Agreement cannot be amended or modified orally, but only in writing signed by or on behalf of the party against whom same is sought to be enforced.
(29) | ASSIGNMENT OF THE AGREEMENT . |
This Agreement is not assignable by Purchaser without the prior written consent of the Seller and shall bind and apply to Purchaser and Purchaser's executors, administrators, legal representatives, heirs, successors and permitted assigns. Notwithstanding the previous sentence, Purchaser may assign its rights under this Agreement to an entity controlled by or under common control of American Realty Capital III, LLC (“ AMC III ”) or its principal. “Controlled by” or “under common control” of AMC III or its principals (including Michael Happel) as used in the preceding sentence shall mean an entity in which AMC III or its principals directly or indirectly controls and/or manages such entity.
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(30) | RISK OF LOSS/CONDEMNATION . |
(a) The risk of loss or damage to the Premises, by fire or other cause, until the time of the Closing, is assumed by the Seller, but without any obligation on the part of the Seller, except at the Seller’s option, to repair or replace any such loss or damage. The Seller shall notify Purchaser (the “ Casualty Notice ”) of the occurrence of any such loss or damage within five (5) days after such occurrence or by the Closing Date, whichever first occurs, and in the Casualty Notice shall elect whether or not the Seller will repair or replace the loss or damage, which would be the obligation of the Seller to repair and/or replace under the Declaration and Bylaws for the Condominium and if Seller elects to do so, that it will complete the same within one hundred twenty (120) day period hereinafter referred to. The Casualty Notice shall contain, to the extent available to the Seller, an estimate of the cost to repair or replace such loss or damage to the Premises from the adjuster for the Seller’s insurance carrier (the “ Cost Estimate ”). If the Cost Estimate is not available, then the Seller shall deliver same when received. If the Seller elects in the Casualty Notice to make such repairs and/or replacements, then the Casualty Notice shall set forth an adjourned date for the Closing, which shall be not more than one hundred twenty (120) days after the date of the giving of the Seller's notice. If the Seller does not elect in the Casualty Notice to make such repairs and/or replacements, or if the Seller elects in the Casualty Notice to make such repairs and/or replacements and fails to substantially complete such repairs and/or replacements on or before said adjourned Closing Date set forth in the Casualty Notice, then Purchaser shall have the following options:
(i) to declare this Agreement canceled and receive a refund, with interest from the Seller of all sums theretofore paid on account of the Total Purchase Price; or
(ii) to complete the purchase in accordance with this Agreement, without reduction in the Total Purchase Price, except as provided in the next sentence. If the insurance carried by Seller covers such loss or damage, then Seller shall turn over to or pay Purchaser at the Closing the net proceeds (after legal and other expenses of collection) actually collected by the Seller under the provisions of such insurance policies to the extent that they are attributable to loss of or damage to the Premises and the amount of the Seller’s deductible under its insurance policy which is attributable to any such loss or damage; if the Seller has not received any of such proceeds, the Seller shall request that the Seller’s insurance carrier provide a letter confirming the insured loss and shall assign (without recourse to the Seller) the Seller's claim for damages against its insurer and any recovery therefrom which is attributable to the loss of or damage to the Premises, less any sums theretofore expended by it which has not been applied to the restoration.
(b) If the Seller does not give Purchaser the Casualty Notice in the time period provided in Section 30(a) hereof or fails to elect in the Casualty Notice to make such repairs and/or replacements, then Purchaser may exercise the resulting options under clause (i) or (ii) of Section 30(a) above only by written notice given to the Seller within ten (10) business days after Purchaser’s option arises (time being of the essence with respect to such ten (10) business day period), provided that during such time period Seller deliver to Purchaser the Cost Estimate. If Seller does not give Purchaser the Cost Estimate on or prior to the commencement of such ten (10) business day period, then such period of ten (10) business days shall be extended for one (1) business day for each day after the commencement of such ten business day period until Seller gives the Cost Estimated to Purchaser. If the Seller elects in the Casualty Notice to make such repairs and/or replacements and fails to substantially complete such repairs and/or replacements on or before the adjourned Closing Date, Purchaser may exercise the resulting options under clause (i) or (ii) of Section 30(a) above within ten (10) business days after the adjourned Closing Date.
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(c) Notwithstanding anything contained therein to the contrary, if the Cost Estimate to restore the Premises is estimated to be $500,000 or greater, then Purchaser may elect to terminate this Agreement by giving notice to the Seller within ten (10) business days after the Seller gives the Cost Estimate to Purchaser (time being of the essence with respect to such ten (10) business day period), in which case this Agreement shall terminate on the date of Purchaser's notice and the Downpayment (plus any accrued interest) shall be returned to Purchaser. Failure of Purchaser to provide such notice within such ten (10) day period shall be deemed an election by Purchaser not to terminate this Agreement. To the extent the Seller elects to complete such restoration and Purchaser elects not to terminate this Agreement, the plans and specifications the contractor utilized to complete such restoration and the terms and conditions of any such construction contract for such restoration shall be subject to the approval of the Purchaser, not to be unreasonably withheld or delayed. In the event Purchaser elects to proceed with the transaction, the Seller shall not settle any insurance claims as to the Condo Unit without the prior written approval of Purchaser, not to be unreasonably withheld or delayed.
(d) In the event of a casualty and Purchaser elects to proceed with the purchase, as contemplated by this Agreement, the terms of Declaration and Bylaws shall apply to any such restoration. Any reference to the Seller’s restoration of the Premises shall include only the Seller’s obligations as the Unit Owner under the Declaration and Bylaws and any Cost Estimate required to be provided hereunder shall also relate to the cost to restore the Premises, which would be the obligation of the Seller as the Unit Owner in the Condominium.
(e) If, prior to the Closing Date, any portion of the land on which the Building is located or the Property is taken by eminent domain which results in either (i) a reduction of more than ten percent (10%) of the gross leasable area of the Condo Unit or the Property, or (ii) a material and adverse effect on access to the Condo Unit or the Property, then Seller shall promptly notify Purchaser of such fact and Purchaser shall have the option to terminate this Agreement upon notice to Seller given not later than fifteen (15) business days after Seller gives such notice to Purchaser. If this Agreement is terminated pursuant to this Section 30(e), then neither party shall thereafter have any rights or obligations hereunder (other than any such rights or such obligations that are expressly stated herein to survive the termination hereof). If Purchaser does not elect to terminate this Agreement or has no right to terminate this Agreement pursuant to this Section 30(e), then (x) Purchaser shall accept so much of the Condo Unit as remains after such casualty or taking in its “as-is” condition with no abatement of the Purchase Price, and (y) at the Closing, Seller shall assign and turn over to Purchaser, and Purchaser shall be entitled to receive and keep, all of Seller’s interest in and to all awards paid or payable to Seller for such taking by eminent domain, less, in either case, reasonable costs incurred by Seller to collect the same and the portion thereof that Seller uses to make temporary or emergency repairs to the Condo Unit. Seller shall not repair or restore any portion of the Condo Unit or the Property after the occurrence of a condemnation, or settle any condemnation claim, in either case without Purchaser’s consent, which consent Purchaser shall not unreasonably withhold, condition or delay.
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(31) | GOVERNING LAW . |
This Agreement shall be governed exclusively by and construed and enforced in accordance with the internal laws of the State of New York, without giving effect to the principles of conflicts of laws. Each of the parties hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim arising out of relating to this agreement. Any action brought hereunder shall be brought the Supreme Court of the State of New York or the United States District Court for the Southern District of New York, in all instances located in the City, County and State of New York. The prevailing party in any such litigation shall be entitled to recovery of all of its reasonable fees and expenses (including reasonable legal fees) incurred in such action.
(32) | 1031 TAX FREE EXCHANGE . |
The parties each hereby acknowledges that both the Seller and Purchaser may be disposing of or acquiring, as applicable, the Premises as part of an Internal Revenue Code Section 1031 Tax Deferred Exchange. Each party hereunder agrees to assist and cooperate in such exchange for the benefit of the other party (the “Exchanging Party”) at no cost, expense or liability to such cooperating party and each party hereunder further agrees to execute any and all documents (subject to the reasonable approval of the such party’s legal counsel) as are reasonably necessary in connection with such exchange (except that the Purchaser shall not be required to take title to any property other than the Premises). In connection with implementing such tax free exchange by Seller, the Purchaser shall at the Closing pay the cash portion of the Purchase Price to the qualified intermediary designated by the Seller in writing. As a part of such exchange, the Seller shall transfer the Premises directly to the Purchaser and the Purchaser shall not be obligated to acquire or convey any other property as part of such exchange. Any Exchanging Party further agrees to indemnify and hold the other party harmless from and against any and all causes of action, claims, damages, losses, costs, expenses, obligations, and/or liabilities, including reasonable attorneys’ fees, resulting from such Exchanging Party’s participation in such exchange. This indemnification shall survive the Closing.
(33) | DATES . |
To the extent any operative date under this Agreement is on a weekend or a national holiday, such date shall be extended to the next business day.
(34) | RECORDING . |
Seller and Purchaser hereby agree, that this Contract or a memorandum as to this Contract, may not be recorded against the Premises.
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(35) | UTILITY METER . |
To the extent there are any separate water meters and/or submeters for the Premises, that are not specifically allocated for the leased space to the Tenant for which the Tenant is responsible to pay all such charges, the Seller shall cause a final reading of the meter to be undertaken, as close as possible, to the Closing and shall pay, at the Closing, the charges or escrow with the Title Company for payment, as set forth in the bill for such final meter reading. Any interim period between the date of the final reading and the Closing shall be adjusted between the parties. The provisions of this Section shall survive Closing.
(36) | FINES FOR VIOLATIONS . |
Any actual fines, penalties and/or interest payments assessed for any violations against the Premises, environmental control board liens and judgments pertaining to the Premises and/or emergency repair liens assessed against the Premises shall on or prior to the Closing be paid, discharged or escrowed with the Title Company by the Seller.
(37) | SURVIVAL . |
Any provisions contained in this Agreement which expressly survive the Closing shall inure to the benefit of and be binding upon the heirs, personal representations, successors and permitted assigns of the parties.
(38) | CONSTRUCTION AGAINST WAIVER . |
No provision of this Agreement shall be deemed to have been abrogated or waived by reason of the failure to enforce the same, irrespective of the number of violations or breaches which may occur.
(39) | COUNTERPARTS . |
This Agreement may be executed in any number of counterparts, each of which, when executed, shall be an original, and all of which, taken together, shall constitute one and the same instrument as if all parties hereto had executed the same instrument and any party or signatory hereto may execute this Agreement by signing any such counterpart.
(40) | CAPTIONS . |
The captions used herein are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this Subscription Agreement or the intent of any provision hereof.
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(41) | SEVERABILITY . |
If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated unless such invalidity, voidance or unenforceability prevents (i) the conveyance of the Condo Unit to Purchaser as contemplated by, and in the state of title, as required by this Agreement, or (ii) the payment of the Purchase Price to Seller, in which case this Agreement shall be null and void and neither party shall have any further rights or liabilities hereunder, except that the Seller shall instruct the Escrow Agent to refund the Downpayment to the Purchaser and the Purchaser shall actually receive a refund of the Downpayment (and any interest thereon).
(42) | Third Party Rights . |
Nothing in this Agreement, express or implied, is intended to confer any rights or remedies whatsoever upon any person, other than Seller and Purchaser and their respective successors, assigns and transferees as permitted hereunder.
(43) | Exhibits . |
Exhibits A through K attached hereto are hereby incorporated by reference and made a part of this Agreement.
(44) | Changes by Attorneys . |
The parties hereto agree that any changes or additions to the Agreement may be initialed by the respective attorneys for the parties with the same force and effect as if initialed by the parties themselves.
(45) | Form of Contract . |
Submission of this form of Agreement for examination shall not bind Seller in any manner or be construed as an offer to sell, and no contract or obligation of Seller shall arise until this Agreement is executed and delivered by both Seller and Purchaser and the Downpayment has been received and collected by the Escrow Agent.
(46) | Interpretation of this Agreement . |
This Agreement shall be interpreted without the aid of any presumption against the party drafting or causing the drafting of the provision in question.
(47) | Binding Signature by E-mail . |
The delivery of an executed copy of this Agreement by e-mail to the other party shall constitute a binding and enforceable agreement as to such party, without the necessity for the other party to receive an original signed copy of this Agreement.
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(48) | SECTION 3.14 AUDIT . |
Seller covenants and agrees to cooperate with Purchaser, both prior to and after the Closing, in connection with any and all reasonable information requests made by or on behalf of Purchaser, which are required to complete a so-called “Section 314 audit”, including, but not limited to providing the following (to the extent applicable and in Seller’s possession or control or is information which Seller can obtain without undue burden or unreasonable cost on Seller): (a) monthly historical income statements for the Premises for 2013; (b) monthly historical income statements for the Premises for 2014, year to date; (c) five (5) years of annual historical occupancy and rent for the Premises; (d) back-up and supporting documents relating to the items set forth herein (such as bills, checks, etc.); and (e) the most current financial statement for each of the Tenants to the extent such current financial statements are in the possession of Seller or its managing agent. In addition, Seller shall reasonably cooperate with Purchaser, at Purchaser’s sole cost and expense, both prior to and after the Closing, in connection with any and all information requests made by or on behalf of Purchaser, provided that such information is in Seller’s possession or control or which Seller can obtain without undue burden or unreasonable cost on Seller, relating to the Premises, including the books and records of the Premises. For the avoidance of doubt, Purchaser acknowledges that to the extent such information or documentation referred to above does not exist or is not in Seller’s possession or control, Seller shall not be required to recreate or obtain such documentation or information for Purchaser. The provisions of this Section 48 shall survive the Closing until the third (3rd) anniversary of the Closing to the extent requests are made by the Securities and Exchange Commission (“ SEC ”); provided, however, that nothing in this Section 48 shall obligate Seller to remain in existence or prevent the Seller from dissolving after the Closing (subject to Seller’s other obligations pursuant to this Agreement) or require Seller to incur costs in excess of minimal costs for Seller’s compliance with this Section 48. Notwithstanding the above cooperation agreed to by the Seller in order to assist the Purchaser to complete its Section 3.14 audit, any failure of the Seller to provide such information either before or after the Closing shall not, prior to the Closing, be a condition precedent for the Closing, entitle the Purchaser to delay the Closing and/or give the Purchaser the right to terminate this Agreement and/or after the Closing give the Seller any liability to the Purchaser for damages, except if such actions of the Seller are a willful and deliberate failure of Seller to provide any cooperation to the Purchaser hereunder.
[tHE REMAINDER OF THE PAGE IS INTENTIONALLY EMPTY]
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IN WITNESS WHEREOF, Purchaser and the Seller have executed this Agreement as of the 4th day of June, 2014.
SELLER: | ||
Sagamore 54
th
St. Investments
LLC and |
||
Sagamore Arizona, LLC
, as tenants in
common |
||
By: | /s/ Richard Saunders | |
Name: Richard Saunders | ||
Title: Authorized Signatory |
PURCHASER: | ||
NEW YORK CITY OPERATING
PARTNERSHIP, L.P. |
||
By: |
American Realty Capital New York City
REIT, Inc., its general partner |
By: | /s/ Michael Happel | |
Name: Michael Happel | ||
Title: President |
The undersigned acknowledges Receipt of the Downpayment of $700,000 and agrees to hold the proceeds thereof in accordance with the terms of Section 3 hereof. |
By: | /s/ Philip Brody | |
Philip Brody, Esq. |
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SCHEDULE OF
EXHIBITS TO
agreement
Exhibit A | Legal Description for Condo Unit |
Exhibit B | Rent Roll for the Lease |
Exhibit C | Permitted Title Exceptions |
Exhibit D | Form of Assignment and Assumption of Lease and Security Deposit |
Exhibit E | Form of Tenant Estoppel Certificate for the Tenant |
Exhibit F | Form of Bill of Sale |
Exhibit G | Wiring Instructions for the Downpayment |
Exhibit H | Form of Deed |
Exhibit I | Form of Escrow Agreement |
Exhibit J | Form of Condominium Estoppel Certificate |
Exhibit K | Certificate of Occupancy |
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EXHIBIT A
Legal Description for Condo Unit
The condominium unit known as Unit No. C2 in the building designated as The Hit Factory Condominium, located at 421-429 West 54th Street, New York, New York, in the declaration establishing a plan for condominium ownership of said premises under Article 9-B of the real property law of the state of New York (the “ New York Condominium Act ”), dated December 18, 2006 and recorded in the Office of the Register of New York County (the “ Register’s Office ”) on January 18, 2007 in CRFN 2007000035128, as amended by First Amendment to Declaration of Condominium dated as of September 19, 2007 recorded October 4, 2007 in CRFN 2007000507368, and also designated as Tax Lot 1102 in Block 1064 of the borough of Manhattan on the tax map of the Real Property Assessment Department of the City of New York and on the floor plans of said building, certified by Arpad Baksa Architect, P.C., Architect, on January 18, 2007, and filed with the Real Property Assessment Department of The City of New York as Condominium Plan No. 1642, and also filed in the City Register’s Office on January 18, 2007, as Map No. CRFN 2007000035129.
Together with an undivided 17.173% interest in the common elements.
The premises within which such condominium unit is located are more particularly described as follows:
All that certain plot, piece or parcel of land, situate, lying and being in the Borough of Manhattan, City, County and State of New York, bounded and described as follows:
BEGINNING at a point on the northerly side of 54 th Street, distant 300 feet westerly from the corner formed by the intersection of the westerly side of Ninth Avenue with the northerly side of 54 th Street;
RUNNING THENCE northerly parallel with Ninth Avenue, 100 feet 5 inches to the center line of the block between 54 th and 55 th Street;
THENCE westerly along said center line of the block, 125 feet;
THENCE southerly again parallel with Ninth Avenue, 100 feet 5 inches to the northerly side of 54 th Street; and
THENCE easterly along the northerly side of 54 th Street, 125 feet to the point or place of BEGINNING.
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EXHIBIT B
Rent Roll for the Lease
29 |
EXHIBIT C
Permitted Exceptions
The Premises shall be sold and conveyed to Purchaser and the Purchaser agrees to take title to the Premises subject to the following permitted exceptions (collectively “ Permitted Exceptions ”):
1. | Rights of tenants or persons in possession pursuant to the Lease, as tenant only without any right to purchase all or any portion of the Premises. |
2. | Any state of facts which an accurate survey might show, provided the same do not render title to the Premises unmarketable. |
3. | The terms and conditions of the Declaration and Bylaws for The Hit Factory® Condominium as such may be amended. |
4. | Consents of record by the Seller or any former owner of the Premises for the erection of any structure or structures on, under or above any street or streets which said Premises may abut, provided the same do not render title to the Premises unmarketable. |
5. | The lien of any real estate taxes, and/or water meter charges, sewer rents, and assessments not due and payable as of the Closing Date, provided that apportionment thereof is made as provided in this Agreement; |
6. | Building and zoning restrictions, regulations and ordinances heretofore and hereafter adopted by any public authority; |
7. | Rights, if any, of public utility companies of record to maintain vaults and chutes under the sidewalk and rights to the construction and maintenance of electric, gas, telephone and other utility cables, wires and appurtenances on the Premises and/or the Property provided they do not render title unmarketable; |
8. | Possible minor variations between the description of the Premises on the tax maps and in this Agreement; |
9. | Minor encroachments of stoops, cellar steps, trim and cornices, fences, sheds or other such structures, if any, upon any property adjoining the Premises and/or the Property, provided the Title Company will insure at standard rates that any such structures may remain undisturbed; |
10. | Minor encroachments, if any, of retaining walls, cellar doors and steps, windows, trim, coping, coal hole covers, chimneys, cornices, ornamental projections, sidewalk elevators, fences, fire escapes, stoops, awnings, signs and air conditioners upon any street or highway adjoining Premises and/or the Property, provided that the Title Company would insure at standard rates that the building remain undisturbed; |
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11. | Encroachments, if any, of building walls, foundations or appurtenances, belonging to the Premises and/or the Property upon adjoining premises, provided that the Title Company would insure at standard rates that the building may remain undisturbed; |
12. | Printed form ALTA limitations contained in the form of title insurance policy then issued by title companies which are members of the New York Board of Title Underwriters which cannot be removed by title affidavit of Seller; |
13. | Any easement or right of use of record created in favor of any public utility company for electric, steam, gas, telephone, water, television cable or other service and the right to install, use, maintain, repair and replace wiring, cables, terminal boxes, lines, service connections, poles, mains, facilities and the like upon, under and across the Premises and/or the Property, provided further they do not materially interfere with the present use of the Premises and do not impose any material financial obligation on Purchaser; and |
14. | The lien of any unpaid federal or state income, estate, inheritance or transfer taxes (or New York State franchise taxes or New York City general corporation taxes, if applicable), provided that Seller, on the Closing Date, makes such deposit or undertaking as might be reasonably required by the Title Company in order to issue to the Purchaser a policy of title insurance which omits any such lien or tax and such lien or tax is omitted from Purchaser’s title insurance policy, without cost to Purchaser. |
15. | The Certificate of Occupancy for the Premises attached as Exhibit K to this Agreement. |
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EXHBIT D
Form of Assignment and Assumption of Lease and Security Deposit
ASSIGNMENT AND ASSUMPTION OF LEASES, AND
SECURITY DEPOSIT, FOR THE LEASE LOCATED IN
CONDOMINIUM UNIT #C2 AT
421-429 WEST 54 TH STREET
NEW YORK, NEW YORK (the “PREMISES”)
KNOW ALL MEN BY THESE PRESENTS, THAT Sagamore 54 th St. Investments LLC and Sagamore Arizona, LLC, as tenants in common, having an office at c/o Plus Properties LLC, Two Stamford Landing, 68 Southfield Avenue, Suite 115, Stamford, CT 06902, Attention: Richard Saunders (the “ Assignee ”), and _____________________________ (the “ Assignor ”) in consideration of Ten ($10.00) Dollars and other good and valuable consideration in hand paid by _______________________ , having an the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound, hereby delivers to assigns, without recourse, representation or warranty, unto the Assignee all of the Assignor’s right, title and interest in and to: (i) the Lease for the Premises, as set forth in the attached Schedule A (the “ Lease ”); and (ii) the security deposit for the Tenant as set forth in the attached Schedule A (the security deposit for the Tenant as set forth in Schedule A, are collectively hereinafter referred to as the “ Security Deposit ”). Assignee hereby acknowledges receipt of the copies of the original Lease, and any amendments thereto or renewals thereof.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns from and after the date hereof, subject to the terms, covenants, conditions and provisions contained in the Lease.
1. | Assignee’s Acceptance |
Assignee hereby accepts the transfer and assignment of the Lease and the Security Deposit, made as set forth above, and Assignee hereby assumes and agrees to perform all of the Assignor’s duties and obligations, which arise on or after the date hereof, under the Lease and the Security Deposit.
2. | Indemnification |
Assignee hereby agrees to also indemnify, defend and hold harmless the Assignor from and against any and all obligations, liabilities, claims, causes of action, losses, damages and reasonable costs and expenses incurred by Assignor, including but not limited to reasonable legal fees and disbursements, pertaining to any claims and/or causes of action of the Tenant of the Premises for a refund in whole or in part of their security deposit, to the extent that the Assignee received any such security deposit at the Closing from the Assignor.
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3. | Successors |
This Assignment and Assumption shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have entered this Agreement as of this ____ day of _________, 2014.
ASSIGNOR: |
Sagamore 54
th
St. Investments LLC and
Sagamore Arizona, LLC, as tenants in common |
|
By: | ||
Richard Saunders | ||
Authorized Signatory | ||
ASSIGNEE: | ||
By: | ||
Name: | ||
Title: |
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EXHIBIT E
Form of Tenant Estoppel Certificate for the Tenant
TENANT ESTOPPEL CERTIFICATE
The Tenant Estoppel Certificate is subject to modification or revisions by the Tenant to conform to the requirements of Paragraph 57 of the Rider to the original Lease, dated November 21, 2002.
This TENANT ESTOPPEL CERTIFICATE is executed as of this ____ day of _____, 2014 by Gibson Guitar Corp., a Delaware Corporation (“ Tenant ”), which is the current tenant under that written lease agreement dated as of November 21, 2002, as modified on January 12, 2005; July 31, 2009 and June 12, 2013 by and between Sagamore 54 th St. Investments LLC as landlord (together with its successors and/or assigns, the “ Landlord ”) and Tenant , (together with its successors and/or assigns), (the lease, together with all amendments and modifications thereto, if any, is referred to as the “ Lease ”) covering Commercial Condominium Unit #2 located in The Hit Factory® Condominium at 421-429 West 54 th Street, New York, NY, as more particularly described therein (the “ Premises ”).
Tenant represents and warrants to __________ (the “ Purchaser ”) and [Insert name of Lender if applicable] (the “Lender”) each of the following:
1. | The Lease is presently in full force and effect and has not been amended, supplemented, modified or otherwise changed except, if any, as set forth above. |
2. | Tenant has accepted possession of the Premises. |
3. | The term of the Lease expires on September 30, 2020. |
4. | The current monthly fixed base rent under the Lease is $50,658.33 . Such rent has been paid through _________. Additional rent is also payable by the Tenant under the Lease for real estate taxes over the base year of 7/1/13 – 6/30/14. Commencing on January 1, 2014, the Tenant is responsible to pay monthly additional rent in the amount of the increase in common charges and assessments for the Unit over the amount of common charges and assessments for calendar year 2013. No rent and/or additional rent has been paid more than one (1) month in advance of the due date. There is no free rent period under the Lease. |
5. | The security deposit held by the Landlord under the Lease is $152,550. |
6. | To the best of Tenant’s knowledge, except as set forth below, if any, both Tenant and Landlord have performed all of their respective obligations under the Lease and Tenant has no knowledge of any event which with the giving of notice, the passage of time or both would constitute a default by Landlord under the Lease: ______________________ |
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7. | Tenant does not currently have any claims, offsets and/or defenses against the Tenant’s obligations under the Lease. |
8. | All improvements required to be completed by Landlord, if any, have been completed and there are no contributions, credits or other sums due to Tenant from Landlord. |
9. | Tenant has not assigned the Lease and has not subleased the leased premises or any part thereof. |
10. | No voluntary actions or, to Tenant's best knowledge, involuntary actions are pending against Tenant under the bankruptcy laws of the United States or any state thereof. |
11. | The Tenant does not have any right or option to purchase the Landlord’s interest in the leased premises. |
12. | The undersigned individual hereby certifies that he or she is duly authorized to sign and deliver this tenant estoppel certificate on behalf of Tenant. |
Tenant also makes this statement for the benefit and protection of the Purchaser [and the Lender] with the understanding that the Purchaser [and the Lender] intends to rely upon this estoppel certificate in connection with the acquisition [and/or financing] of the Commercial Condominium Unit 2C located in The Hit Factory® Condominium at 421-429 54 th Street, New York, NY
IN WITNESS WHEREOF , Tenant has executed this Tenant Estoppel Certificate as of the date first above written.
TENANT: | ||
GIBSON GUITAR CORP. | ||
By: | ||
Name: | ||
Title: |
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EXHIBIT F
Form of Bill of Sale
BILL OF SALE
This instrument is being given by Sagamore 54 th St. Investments LLC and Sagamore Arizona, LLC , as tenants in common (the “ Assignor ”) in favor of _____________________ (“ Assignee ”) as of this ___ day of ________, 2014.
For valuable consideration, the receipt and adequacy of which are hereby acknowledged, Assignor does hereby grant, bargain, sell, transfer and deliver unto Assignee and the successors and assigns of Assignee, without any representation or warranty whatsoever and in “ as is ” condition, all of Seller’s right, title and interest in and to all fixtures, equipment, installations, furniture, furnishings and items of personal property, if any, owned by Assignor and located on or appurtenant to the Commercial Condominium Unit C2 in The Hit Factory® Condominium located at 421-429 West 54 th Street, New York, NY (the “ Property ”) and made a part hereof (collectively the “ Personal Property ”). In addition, Assignor does hereby grant, transfer, assign, set over, convey and deliver to Assignee, and the successors and assigns of Assignee, without any representation or warranty whatsoever, all of Assignor’s right, title and interest in and to all intangible property, names, trade names, licenses, permits, plans, specifications, warranties, guaranties and any other rights or interests which Assignor may have appurtenant or related to the Property, if any, and only to the extent same are transferable or assignable (collectively the “ Intangibles ”).
The Personal Property and Intangibles are being conveyed by Assignor to Assignee on an “ as is ” and “ where is ” basis, without any representation or warranty as to their merchantability or fitness for any particular use or purpose, except such Personal Property, is free and clear of all liens and encumbrances.
IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed as of the day and date first above written.
ASSIGNOR: | ||
SAGAMORE 54
TH
ST. INVESTMENTS LLC
and SAGAMORE ARIZONA, LLC , as tenants in common |
||
By: | ||
Richard Saunders | ||
Authorized Signatory |
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EXHIBIT G
Wiring Instructions for the Downpayment
WIRE INSTRUCTION
CAPITAL ONE BANK
1001 Avenue of the Americas
New York, NY. 10018
ABA# 021 407 912
Account Name: Philip Brody Esq. Attorney Trust Account
Account # 7024056876
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EXHIBIT H
Form of Deed
COMMERCIAL UNIT DEED
THIS INDENTURE, made the ___ day of _______ 2014 between Sagamore 54 th St. Investments LLC and Sagamore Arizona LLC, as tenants in common, having an address c/o Plus Properties LLC, Two Stamford Landing, 68 Southfield Avenue, Suite 115, Stamford, CT 06902, Attention: Richard Saunders (“ Grantor ”) and ______________________, having an address c/o American Realty Capital, 405 Park Avenue, 12 th Floor, New York, NY 10022, Attention: Michael A. Happel, President (the “ Grantee ”).
WITNESSETH:
That the Grantor, in consideration of Ten Dollars and other valuable consideration paid by the Grantee, does hereby grant and release unto the Grantee, the heirs, successors and assigns of the Grantee, forever:
The Unit known as Commercial Condominium Unit #C2 (hereinafter called the " Unit ") in the building known as The Hit Factory® Condominium and by the street address of 421-429 West 54 th Street (the " Building "), in the Borough of Manhattan, New York City, County and State of New York, designated and described as Commercial Unit #C2 in the Declaration establishing The Hit Factory® Condominium, a Condominium (hereinafter called the " Property "), made by the Grantor under (Article 9-B of the Real Property Law of the State of New York (the " Condominium Act ")), dated December 18, 2006, recorded in the Office of the City Register, New York County, on the 18 th day of January, 2007 as CRFN 2007-000035128, as amended on September 19, 2007, pursuant to the First Amendment to the Declaration, which first amendment was recorded on October 4, 2007 in the Office of the City Register, New York County as CRFN 2007-000507368 (hereinafter called the “ Declaration ”). The Unit is also designated as Tax Lot 1102 in Block 1064 of Section 4 of the Borough of Manhattan on the Tax Map of the Real Property Assessment Department of the City of New York and on the floor plans of the Building certified by Arpad Baksa Architect, P.C. on January 3, 2007 and filed in the City Register’s office on January 18, 2007 as Condominium Plan No 1642 and condominium map number CRFN 2007-000035129.
The land on which the Building is located is described on Exhibit A attached hereto and made a part hereof.
All capitalized terms herein which are not separately defined herein shall have the meanings given to those terms in the Declaration or in the By-Laws of The Hit Factory® Condominium.
TOGETHER with an undivided 17.173% interest appurtenant to the Unit in the Common Elements.
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TOGETHER with the appurtenances and all the estate and rights of the Grantor in and to the Unit;
TOGETHER with and SUBJECT to (i) all easements created in the Declaration and (ii) easements of necessity in favor of the Unit, or, to the extent required by the Declaration, in favor of other units, the Common Elements and the Limited Common Elements, and (iii) a right of way through the Common Elements or Limited Common Elements to the public streets;
TOGETHER with the benefits, rights, privileges, easements and SUBJECT to the burdens, covenants, restrictions and easements set forth in the Declaration and By-Laws;
TOGETHER with the right to the use of the Limited Common Elements (including Commercial Limited Common Elements, if any) appurtenant to the Unit if any in accordance with the Declaration and By-Laws, subject to the rights of other Unit Owners to use the Limited Common Elements as set forth in the Declaration and By-Laws;
TOGETHER with and SUBJECT also to the terms, conditions, easements, covenants and provisions of the Declaration and of the By-Laws of the Condominium recorded simultaneously with and as part of the Declaration, as the same may be amended from time to time by instruments recorded in the Office of the City Register, New York County, which terms, conditions, easements, covenants and provisions, together with any amendments thereto, shall constitute covenants running with the land and shall bind any person having at any time any interest or estate in the Unit, as if such provisions were recited and stipulated at length herein; and
TO HAVE AND TO HOLD the same unto the Grantee, the heirs or successors and assigns of the Grantee, forever.
The Unit shall be used as permitted by the Declaration, Bylaws and applicable law.
The Grantor covenants that the Grantor has not done or suffered anything whereby the Unit has been encumbered in any way whatever, except as aforesaid. The Grantor hereby warrants to the Grantee that the Unit is being transferred hereunder by the Grantor subject to only the Permitted Encumbrances and the Grantor hereby agrees to indemnify, hold harmless and defend the Grantee from and against any other claims, causes of action, costs and expenses (including reasonable attorney’s fees) incurred by the Grantee relating to any discharge and/or release of any other encumbrance and/or lien that may be in existence or affect title to the Unit, as of the date hereof, except for the Permitted Encumbrances. The Grantor, in compliance with Section 13 of the Lien Law, covenants that the Grantor will receive the consideration for this conveyance and will hold the right to receive such consideration as a trust fund for the purpose of paying the cost of the improvement and will apply the same first to the payment of the cost of the improvement before using any part of the same for any other purpose.
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The Grantee accepts and ratifies the provisions of the Declaration and the By-Laws and the Rules and Regulations of the Condominium recorded simultaneously with and as part of the Declaration and agrees to comply with all the terms and provisions thereof, as the same may be amended from time to time by instruments recorded in the Office of the New York City Register, New York County.
The term " Grantee " shall be read as " Grantees " whenever the sense of this deed so requires.
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IN WITNESSETH WHEREOF, the Grantor and the Grantee have duly executed this deed the day and year first above written.
Grantor: | Sagamore 54 th St. Investments LLC and Sagamore Arizona LLC, as tenants in common | ||
By: | |||
Richard Saunders | |||
Authorized Signatory |
Grantee: | [New York City Operating Partnership, L.P] | ||
By: | |||
[Michael A. Happel] |
State of New York | ) | |
) ss. | ||
County of New York | ) |
On the ___ day of _____________ in the year 2014 before me, the undersigned, a Notary Public in and said State, personally appeared Richard Saunders , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
Notary Public |
State of New York | ) | |
) ss. | ||
County of New York | ) |
On the ___ day of __________ in the year 2014 before me, the undersigned, a Notary Public in and said State, personally appeared [ Michael A. Happel] , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
Notary Public |
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EXHIBIT A
DESCRIPTION OF THE LAND
The condominium unit known as Unit No. C2 in the building designated as The Hit Factory Condominium, located at 421-429 West 54th Street, New York, New York, in the declaration establishing a plan for condominium ownership of said premises under Article 9-B of the real property law of the state of New York (the “ New York Condominium Act ”), dated December 18, 2006 and recorded in the Office of the Register of New York County (the “ Register’s Office ”) on January 18, 2007 in CRFN 2007000035128, as amended by First Amendment to Declaration of Condominium dated as of September 19, 2007 recorded October 4, 2007 in CRFN 2007000507368, and also designated as Tax Lot 1102 in Block 1064 of the borough of Manhattan on the tax map of the Real Property Assessment Department of the City of New York and on the floor plans of said building, certified by Arpad Baksa Architect, P.C., Architect, on January 18, 2007, and filed with the Real Property Assessment Department of The City of New York as Condominium Plan No. 1642, and also filed in the City Register’s Office on January 18, 2007, as Map No. CRFN 2007000035129.
Together with an undivided 17.173% interest in the common elements.
The premises within which such condominium unit is located are more particularly described as follows:
All that certain plot, piece or parcel of land, situate, lying and being in the Borough of Manhattan, City, County and State of New York, bounded and described as follows:
BEGINNING at a point on the northerly side of 54 th Street, distant 300 feet westerly from the corner formed by the intersection of the westerly side of Ninth Avenue with the northerly side of 54 th Street;
RUNNING THENCE northerly parallel with Ninth Avenue, 100 feet 5 inches to the center line of the block between 54 th and 55 th Street;
THENCE westerly along said center line of the block, 125 feet;
THENCE southerly again parallel with Ninth Avenue, 100 feet 5 inches to the northerly side of 54 th Street; and
THENCE easterly along the northerly side of 54 th Street, 125 feet to the point or place of BEGINNING.
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COMMERCIAL CONDOMINIUM DEED
SAGAMORE 54 TH ST. INVESTMENTS LLC AND
SAGAMORE ARIZONA LLC, as tenants in common, GRANTOR
TO
New York City Operating Partnership , L.P., GRANTEE
COMMERCIAL CONDO UNIT #C2
THE HIT FACTORY® CONDOMINIUM
421-429 WEST 54 TH STREET
NEW YORK, NY 10019
NEW YORK COUNTY
SECTION 4
BLOCK 1064
LOT 1102
RECORD AND RETURN TO:
American Realty Capital
405 Park Avenue, 15 th Floor
New York, NY 10022
Attention: Michael Ead, Esq.
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EXHIBIT I
From of Escrow Agreement
ESCROW AGREEMENT
AGREEMENT made this _____ day of __________, 2014, by and among ___________ (" PURCHASER "), Sagamore 54th Investment LLC (“ SPONSOR ”), as sponsor to the offering plan for 421-429 West 54 th Street, New York, NY (“ Plan ”) and Philip Brody, Esq. (“ ESCROW AGENT ”).
WHEREAS , SPONSOR has filed the Offering Plan with the Attorney General to offer for sale of condominium units at the premises located at 421-429 West 54 th Street, New York, NY, subject to the terms and conditions set forth in the Plan; and
WHEREAS , ESCROW AGENT is authorized to act as an escrow agent hereunder in accordance with New York General Business Law (“ GBL ”) Sections 352-e(2-b), 352-h and the New York Department of Law’s regulations promulgated thereunder; and
WHEREAS , SPONSOR and PURCHASER desire that ESCROW AGENT act as escrow agent for deposits, down payments, and advances (referred to herein as “ Deposit ”) pursuant to the terms of this Agreement.
NOW, THEREFORE , in consideration of the covenants and conditions contained herein and other good and valuable consideration, the parties hereby agree as follows:
1. | ESTABLISHMENT OF THE ESCROW ACCOUNT . |
1.1. ESCROW AGENT has established an escrow account for the purpose of holding the Deposit made by PURCHASER pursuant to that certain purchase agreement for the purchase and sale of commercial condominium unit #2 (the “ Purchase Agreement ”) at Capital One Bank located at 1001 Avenue of the Americas, New York, NY 10018, in the State of New York (" Bank "), a bank authorized to do business in the State of New York. The escrow account is entitled Philip Brody Attorney Trust Account (" Escrow Account "). The account number is 702405687.
1.2 ESCROW AGENT has designated the following attorneys to serve as signatories: Philip Brody, Esq. All designated signatories are admitted to practice law in the State of New York . The signatory on the Escrow Account have an address of 55 Fifth Avenue, 15 th Floor, New York, NY 10003 and a telephone number of 212-206-6011.
1.3 ESCROW AGENT and all authorized signatories hereby submit to the jurisdiction of the State of New York and its Courts for any cause of action arising out of this Agreement or otherwise concerning the maintenance of or release of the Deposit from escrow.
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1.4 Neither ESCROW AGENT nor any authorized signatories on the Escrow Account are the Sponsor, Selling Agent, Managing Agent (as those terms are defined in the Plan), or any principal thereof, or have any beneficial interest in any of the foregoing .
1.5 The Escrow Account is not an IOLA account established pursuant to Judiciary Law Section 497.
2. | DEPOSITS INTO THE ESCROW ACCOUNT. |
2.1 All Deposits received from PURCHASER prior to closing, whether in the form of checks, drafts, money orders, wire transfers, or other instruments which identify the payor, shall be placed into the Escrow Account. All instruments to be placed into the Escrow Account shall be made payable directly to the order of Philip Brody, Esq., as ESCROW AGENT. Any instrument payable to, or endorsed other than as required hereby, and which cannot be deposited into such Escrow Account, shall be returned to PURCHASER promptly, but in no event more than five (5) business days following receipt of such instrument by ESCROW AGENT. In the event of such return of the Deposit, the instrument shall be deemed not to have been delivered to ESCROW AGENT pursuant to the terms of this Agreement.
2.2 Within five (5) business days after the Purchase Agreement has been tendered to ESCROW AGENT along with the DEPOSIT, ESCROW AGENT shall place the DEPOSIT into the Escrow Account. Within ten (10) business days of placing the DEPOSIT in the Escrow Account, ESCROW AGENT shall provide written notice to Purchaser and Sponsor, confirming the Deposit. Such notice shall set forth the Bank, the account number, and the initial interest rate earned thereon. If the PURCHASER does not receive notice within fifteen (15) business days after tender of the Deposit, the PURCHASER may cancel the Purchase Agreement within ninety (90) days after tender of the Deposit. Complaints concerning the failure to honor such cancellation requests may be referred to the New York State Department of Law, Real Estate Finance Bureau, 120 Broadway, 23 rd Floor, New York, N.Y. 10271. Rescission shall not be afforded where proof satisfactory to the Attorney General is submitted establishing that the Deposit was timely placed in the Escrow Account in accordance with the New York State Department of Law’s regulations concerning the Deposit and requisite notice was timely mailed to the Purchaser.
3. | RELEASE OF FUNDS . |
3.1 Under no circumstances shall SPONSOR seek or accept release of the Deposit of PURCHASER to SPONSOR until after consummation of the Plan, as evidenced by the acceptance of a post-closing amendment by the New York State Department of Law. Consummation of the Plan shall not relieve SPONSOR or ESCROW AGENT of any obligation to PURCHASER as set forth in GBL §§ 352-e(2-b) and 352-h.
3.2 ESCROW AGENT shall release the Deposit to PURCHASER or SPONSOR as directed:
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3.2.1 pursuant to terms and conditions set forth in the Purchase Agreement and this Agreement, upon closing of title to the cooperative apartment;
3.2.2 in a subsequent writing signed by both SPONSOR and PURCHASER; or
3.2.3 by a final, non-appealable order or judgment of a court.
3.3 If Escrow Agent is not directed to release the Deposit pursuant to paragraph 3.2 above, and Escrow Agent receives a request by either SPONSOR or PURCHASER to release the Deposit, then Escrow Agent must give both the Purchaser and Sponsor prior written notice of not fewer than thirty (30) days before releasing the Deposit. If Escrow Agent has not received notice of objection to the release of the Deposit prior to the expiration of the thirty (30) day period, the Deposit shall be released and Escrow Agent shall provide further written notice to both PURCHASER and SPONSOR informing them of said release. If Escrow Agent receives a written notice from either PURCHASER or SPONSOR objecting to the release of the Deposit within said thirty (30) day period, Escrow Agent shall continue to hold the Deposit until otherwise directed pursuant to paragraph 3.2 above. Notwithstanding the foregoing, Escrow Agent shall have the right at any time to deposit the Deposit contained in the Escrow Account with the Clerk of New York county and shall give written notice to both SPONSOR and PURCHASER of such deposit.
4. | RECORDKEEPING . |
4.1 ESCROW AGENT shall maintain all records concerning the Escrow Account for seven years after release of the Deposit.
4.2 Upon the dissolution of the law firm which was ESCROW AGENT, the former partners or members of the firm shall make appropriate arrangements for the maintenance of these records by one of the partners or members of the firm or by the successor firm and shall notify the New York State Department of Law of such transfer .
4.3 ESCROW AGENT shall make available to the Attorney General, upon request, all books and records of ESCROW AGENT relating to the funds deposited and disbursed hereunder .
5. | GENERAL OBLIGATIONS OF ESCROW AGENT . |
5.1 ESCROW AGENT shall maintain the Escrow Account under its direct supervision and control.
5.2 A fiduciary relationship shall exist between ESCROW AGENT and PURCHASER, and ESCROW AGENT acknowledges its fiduciary and statutory obligations pursuant to GBL§§ 352-e(2-b) and 352-h.
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5.3 ESCROW AGENT may rely upon any paper or document which may be submitted to it in connection with its duties under this Agreement and which is believed by ESCROW AGENT to be genuine and to have been signed or presented by the proper party or parties and shall have no liability or responsibility with respect to the form, execution, or validity thereof.
6. | RESPONSIBILITIES OF SPONSOR . |
6.1 SPONSOR agrees that it shall not interfere with ESCROW AGENT’S performance of its fiduciary duties and statutory obligations as set forth in GBL §§ 352-e(2-b) and 352-h and the New York State Department of Law’s regulations .
6.2 SPONSOR shall obtain or cause the selling agent under the Plan to obtain a completed and signed Form W-9 or W-8, as applicable, from PURCHASER and deliver such form to ESCROW AGENT together with the Deposit and Purchase Agreement.
7. | TERMINATION OF AGREEMENT . |
7.1 This Agreement shall remain in effect unless and until it is canceled by either:
7.1.1 Written notice given by SPONSOR to ESCROW AGENT of cancellation of designation of ESCROW AGENT to act in said capacity, which cancellation shall take effect only upon the filing of an amendment to the Plan with the Department of Law providing for a successor escrow agent that meets the requirements set forth in applicable regulations of the New York State Department of Law. PURCHASER shall be deemed to have consented to such cancellation;
7.1.2 The resignation of ESCROW AGENT, which shall not take effect until ESCROW AGENT is replaced by a successor escrow agent that meets the requirements set forth in applicable regulations of the New York State Department of Law, and notice is given to PURCHASER of the identity of the successor escrow agent, the Bank in the State of New York where the Deposit is being held, and the account number therefor.
7.2 Upon termination of the duties of ESCROW AGENT as described in paragraph 7.1.1 or 7.1.2 above, ESCROW AGENT shall deliver the Deposit held by ESCROW AGENT and the Purchase Agreement and any other documents maintained by ESCROW AGENT relating to the Deposit to the successor escrow agent.
8. | SUCCESSORS AND ASSIGNS . |
This Agreement shall be binding upon SPONSOR, PURCHASER, and ESCROW AGENT and their respective successors and assigns.
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9. | GOVERNING LAW . |
This Agreement shall be construed in accordance with and governed by the laws of the State of New York.
10. | ESCROW AGENT’S COMPENSATION . |
Prior to release of the Deposit, ESCROW AGENT’S fees and disbursements shall neither be paid by SPONSOR from the Deposit nor deducted from the Deposit by any financial institution under any circumstance.
11. | SEVERABILITY . |
If any provision of this Agreement or the application thereof to any person or circumstance is determined to be invalid or unenforceable, the remaining provisions of this Agreement or the application of such provision to other persons or to other circumstances shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law.
12. | INDEMNIFICATION . |
SPONSOR agrees to defend, indemnify, and hold ESCROW AGENT harmless from and against all costs, claims, expenses, and damages incurred in connection with or arising out of this Agreement or the performance or non-performance of ESCROW AGENT’S duties under this Agreement, except with respect to actions or omissions taken or suffered by ESCROW AGENT in bad faith or in willful disregard of this Agreement or involving gross negligence of ESCROW AGENT. This indemnity includes, without limitation, disbursements and attorneys’ fees either paid to retain attorneys or representing the hourly billing rates with respect to legal services rendered by ESCROW AGENT to itself.
13. | ENTIRE AGREEMENT . |
This Agreement, read together with GBL §§ 352-e(2-b) and 352-hand the New York State Department of Law’s regulations, constitutes the entire agreement between the parties with respect to the subject matter hereof.
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IN WITNESS WHEREOF , the undersigned have executed this Agreement as of the day and year first written above.
ESCROW AGENT: | |||
By: | |||
Philip Brody, Esq. | |||
SPONSOR: | |||
SAGAMORE 54TH INVESTMENT LLC | |||
By: | |||
Richard Saunders | |||
Authorized representative | |||
PURCHASER | |||
[INSERT NAME] | |||
By: | |||
Name: | |||
Title: |
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EXHIBIT J
Form Of Condominium Estoppel Certificate
The Hit® Factory Condominum
c/o First Service Residential
622 Third Avenue, 16 th Floor
New York, NY 10017
__________, 2014
New York City Operating Partnership, L.P.
c/o American Realty Capital
405 Park Avenue, 12 th Floor
New York, NY 10022
Attention: Michael A. Happel
RE: | Estoppel Certificate as to Commercial Unit #2 (the “Unit”) at The Hit® Factory Condominium (the “ Condominium ”) located at 421-425 West 54 th Street, New York, NY 10019 |
Dear Mr. Happel:
This is to certify to New York City Operating Partnership, L.P. (the “Purchaser”) as to the Unit:
1) | As of the date hereof, there are no common charges and/or special assessments due and owing as to the Unit |
2) | To the Condominium’s knowledge, as of the date hereof, there is not any default under the Declaration and Bylaws of the Condominium as to the Unit. |
3) | It is agreed by the Condominium that such statements contained herein may be relied upon by the Purchaser. |
The Hit® Factory Condominium | ||
By: |
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EXHIBIT K
Certificate of Occupancy
(See Attached)
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Exhibit 10.5
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of August 7, 2014 by and between 200 Riverside Parking LLC, a Delaware limited liability company, having an address at 211 East 38 th Street, New York, New York 10016 (“Seller”), and ARC NYC200RIVER01, LLC, a Delaware limited liability company, having an address c/o American Realty Capital, 405 Park Avenue, 12 th Floor, New York, New York 10022 (“Purchaser”).
WITNESSETH :
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the garage condominium unit in the condominium building located at 200 Riverside Boulevard, New York, New York on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and representations herein contained, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, and subject to the terms and conditions hereof, Seller and Purchaser agree as follows:
1.
PURCHASE AND SALE
1.1 Purchase and Sale . Seller hereby agrees to sell and convey to Purchaser, and Purchaser hereby agrees to purchase, accept and acquire from Seller, at the price and upon and subject to the terms and conditions hereof the garage condominium unit (the “ 200 Unit ”) in the condominium building known as 200 Riverside Boulevard at Trump Place (the “ 200 Condominium ”) located at 200 Riverside Boulevard, New York, New York, together with a 11.22% undivided interest in the Common Elements (as such term is defined in the Declaration (as hereinafter defined)) of the 200 Condominium appurtenant to the 200 Unit (the 200 Unit and Seller’s undivided interest in the Common Elements are described in Exhibit A attached hereto and are hereinafter collectively referred to as the “ Property ”). The Unit is as designated in the Declaration of Condominium Ownership and the bylaws thereto described on Exhibit B attached hereto of the 200 Condominium (such Declaration of Condominium Ownership and the bylaws thereto are referred to herein as the “ Condominium Documents ”). Purchaser hereby adopts, accepts and approves the Condominium Documents (as well as the Rules and Regulations contained therein or promulgated pursuant thereto) and agrees to abide and be bound by the terms and conditions thereof, as well as all amendments thereto.
2.
PURCHASE PRICE
2.1 Purchase Price.
(a) The purchase price for the Property is Nine Million Dollars ($9,000,000.00) (the “Purchase Price”), payable by Purchaser as follows:
(i) | Nine Hundred Thousand Dollars ($900,000.00) (together with the interest earned thereon, the “Downpayment”) upon the execution and delivery of this Agreement by delivering to Kensington Vanguard National Land Services, as escrow agent (“Escrow Agent”), Purchaser’s unendorsed certified or bank check drawn on a bank which is a member of the New York Clearinghouse Association payable to the order of Escrow Agent, or by wire transfer of immediately available funds to the account of Escrow Agent; and |
(ii) | The Purchase Price (less the Downpayment), subject to the prorations, credits and payments specified in this Agreement, at the Closing (as hereinafter defined), by delivering to Seller one or more good, unendorsed official bank checks drawn on a bank which is a member of the New York Clearinghouse Association payable to the order of Seller or by wire transfer of immediately available funds to the account of Seller. All expenses incurred in connection with the use of Escrow Agent shall be borne by Purchaser. |
(b) The Down payment shall be held and paid by Escrow Agent in accordance with the terms and provisions of Article 12 hereof.
3.
THE CLOSING
3.1 The Closing . Subject to this Section 3.1, the closing of the sale and purchase of the Property (the “Closing”) shall take place on the date that is forty-five (45) days after the date hereof, or such earlier date as is mutually agreed upon by Seller and Purchaser (the “Closing Date”), TIME BEING OF THE ESSENCE as to Purchaser’s performance hereunder at such time and on such date except that Purchaser shall have the right on one occasion by notice given to Seller on or before the date that is five (5) days prior to the Closing Date to adjourn the Closing to a date not later than sixty (60) days after the date hereof, it being agreed that time shall be of the essence as to both such notice and the adjourned closing date. The Closing will occur through an “escrow style” closing where Escrow Agent shall act as the settlement agent with all closing documents to be delivered and payments to be made pursuant to the terms hereof to be delivered and paid to Escrow Agent not later than one (1) business day prior to the Closing Date (as the same may be adjourned pursuant to the terms hereof) for disbursement on the Closing Date (as the same may be adjourned pursuant to the terms hereof).
4.
TITLE TO THE PROPERTY
4.1 Title to the Property
(a) Prior to the execution and delivery of this Agreement, Kensington Vanguard National Land Services (the “Title Company”) delivered to Seller and Purchaser an examination and certificate of title with respect to the Property (collectively, the “Commitment”), and the Title Company has agreed with Purchaser to deliver to Seller copies of any Update (as hereinafter defined) and all documents of record reflected in either the Commitment or any such Update concurrently with the provision of same by the Title Company to Purchaser. If the Commitment or any update, amendment or supplement thereto (each such update, amendment or supplement is referred to herein as an “Update”) or any UCC search discloses any exception, lien, mortgage, security interest, claim, charge, reservation, lease, tenancy, occupancy, easement, right of way, encroachment, restrictive covenant, condition, limitation, or other encumbrance or defect affecting the Property (collectively, “Exceptions”) other than the Permitted Encumbrances (as hereinafter defined) to which Purchaser objects, Purchaser shall notify Seller in writing (each a “Title Objection Notice”) of such Exceptions (each of the Exceptions to which Purchaser objects pursuant to a Title Objection Notice is referred to herein as a “Title Objection”) within five (5) business days after the receipt of the Commitment, an Update, or any UCC search disclosing an Exception. Seller shall be entitled to adjourn the Closing, for a reasonable period or periods not to exceed sixty (60) days in the aggregate (the “Title Cure Period”) to attempt to clear a Title Objection. Any Exceptions disclosed on the Commitment, an Update or any UCC search not set forth in a Title Objection Notice shall be deemed to be Permitted Encumbrances.
(b) At the Closing, Purchaser shall accept title to the Property in such form as the Title Company would be willing to insure at regular rates subject only to the Permitted Encumbrances.
(c) Seller shall only be obligated to release or discharge of record Exceptions that: (i) may be removed of record or satisfied solely by reference to Seller’s existing title policy insuring Seller’s interest in the Property or delivery of a customary affidavit that is reasonably acceptable to Seller and the Title Company; (ii) the lien of the mortgages encumbering the Property identified on the mortgage schedule attached hereto as Exhibit M ; or (iii) were voluntarily created, or knowingly permitted, by Seller (including, without limitation, any mortgage encumbering the Property) and may be satisfied by the payment of a liquidated sum of money not to exceed $45,000.00 (an Exception meeting the criteria set forth in clauses (i), (ii) or (ii) hereof being referred to as a “ Required Cure Item ”).
(d) Seller shall take such action as is required on the part of Seller to have any Required Cure Item removed of record. Subject to Section 4.1(c) hereof, if Seller is: (i) unwilling, unable or not required hereunder to clear any Title Objection (other than the Required Cure Items); or (ii) unable to convey or cause to be conveyed title to the Property as herein agreed to be conveyed, then Seller shall so notify Purchaser and Purchaser shall have the option to either: (A) waive such Title Objection, proceed with the Closing and accept title to the Property subject to such Title Objection without any abatement or reduction to the Purchase Price; or (B) terminate this Agreement and receive the return of the Downpayment, whereupon this Agreement shall terminate and neither party hereto shall have any further obligations hereunder other than those obligations expressly stated herein to survive the termination of this Agreement.
(e) If Seller shall adjourn the Closing to cure any Title Objection in accordance with the provisions of this Article, Seller shall, upon the satisfactory cure thereof, promptly reschedule the Closing upon at least five (5) business days’ prior notice to Purchaser (the “New Closing Notice”); it being agreed, however, that if any matters which are Title Objections arise between the date the New Closing Notice is given and the Closing, Seller may again adjourn the Closing for a reasonable period or periods not to exceed thirty (30) days (provided, however, that Seller shall not have the right to adjourn the Closing for more than sixty (60) days in the aggregate with all other adjournments by Seller of the Closing permitted hereunder), in order to attempt to cause such Title Objections to be eliminated.
(f) In connection with Seller satisfying any Exceptions required to be satisfied, or which Seller elects to satisfy, under this Agreement, Seller may, at its option, either deposit with the Title Company such sum of money or deliver to the Title Company such affidavits and certificates as may be determined by the Title Company as being sufficient to induce the Title Company to insure Purchaser’s title to the Property without exception therefor.
(g) In addition, in connection with Seller satisfying any Exception required to be satisfied, or which Seller elects to satisfy, under this Agreement, Seller may direct Purchaser to apply a portion of the Purchase Price to the satisfaction of such Exceptions, provided that Seller shall, at the Closing, deliver to the Title Company instruments in recordable form sufficient to discharge such Exceptions of record, together with the cost of recording or filing any such instruments or a payoff letter and the appropriate funds to satisfy such Exceptions. If request is made by Seller prior to the Closing, Purchaser, at the Closing, shall provide Seller with separate unendorsed bank checks payable as directed by Seller and/or shall wire transfer immediately available federal funds for credit to such bank account(s) as designated by Seller, in an aggregate amount not to exceed the balance of the Purchase Price, to facilitate the discharge of any such Exceptions.
(h) If the Commitment discloses judgments, bankruptcies or other returns against other persons having names the same as, or similar to, that of Seller, Seller, on request, shall deliver to the Title Company affidavits reasonably acceptable to the Title Company showing that such judgments, bankruptcies or other returns are not against Seller.
(i) The term “Permitted Encumbrances” as used herein shall mean those matters set forth on Exhibit C and any Violations (as hereinafter defined).
(j) Subject to this Section 4.1(j), Purchaser shall be required to accept title to the Property subject to all violations of law and all notes or notices of violations of law or governmental ordinances, orders or requirements noted in or issued by the New York City Department of Housing and Buildings or any Fire, Labor, Health, Air Resource, Emergency Repair, Highway or any other federal, state or municipal department, agency or bureau having jurisdiction, in each case whether such violations, notes, notices, orders, or requirements, or the conditions giving rise thereto, existed or were noted or issued prior to the date of this Agreement, or now or hereafter exist or come into being (collectively, “Violations”). Purchaser shall accept the Property subject to all Violations without abatement against the Purchase Price, credit or allowance of any kind or any claim or right of action against Seller for damages or otherwise, and Seller shall have no obligation to remove, comply with, cure, discharge or otherwise deal with such Violations, except that Seller shall be responsible for any penalties, fees, interest or fines imposed on or prior to the Closing in connection with any Violations.
5.
REPRESENTATIONS AND WARRANTIES
5.1 Seller’s Representations and Warranties .
(a) Seller represents and warrants to Purchaser that Seller has the full right, power, and authority, without the joinder of any other person or entity, to enter into, execute and deliver this Agreement, and to perform all duties and obligations imposed on Seller under this Agreement, and none of the execution or the delivery of this Agreement, the consummation of the purchase and sale contemplated hereby or the fulfillment of or compliance with the terms and conditions of this Agreement conflict with or will result in the breach of any of the terms, conditions, or provisions of any agreement or instrument to which Seller is a party or by which Seller or any of Seller’s assets is bound. Seller represents and warrants to Purchaser that this Agreement shall, when duly executed and delivered, constitute the legal, valid and binding obligation of Seller.
(b) Seller represents and warrants to Purchaser that: (i) the Property is currently leased to a parking operator pursuant to a lease, dated as of February 1, 2002, between Hudson Waterfront Company C, LLC (predecessor in interest to Seller), as landlord, and Hudson River Garage LLC, as tenant, (the “ Existing Lease ”); (ii) there are no other leases affecting the Property; (iii) a true, correct and complete copy of the Existing Lease is attached hereto as Exhibit D ; (iv) Seller has not received any written notice of any default by Seller of any of Seller’s obligations under the Existing Lease which has not been cured; (v) the tenant under the Existing Lease is not more than a month in arrears in the payment of base rent under the Existing Lease; (vi) the tenant under the Existing Lease is, in Seller’s opinion, in default in the payment of common area maintenance charges and real estate taxes; (vii) to Seller’s knowledge, there exists no material non-monetary default on the part of the tenant under the Existing Lease; and (viii) Seller has not delivered to the tenant under the Existing Lease a written notice of default by such tenant under the Existing Lease, which remains uncured; and (ix) the only security deposit (including, without limitation, those in the form of letters of credit) presently held by or on behalf of Seller with respect to the Existing Lease is as specified in the Existing Lease .
(c) Seller represents and warrants to Purchaser that Seller is not a party to any contracts of any kind affecting the Property which will be binding on Purchaser.
(d) Seller represents and warrants to Purchaser that: (i) there are no condemnation proceedings pending on the date hereof with regard to all or part of the Property; and, to Seller’s knowledge; (ii) there is no such proceeding threatened by any governmental authority.
(e) Seller represents and warrants to Purchaser that Seller is a limited liability company, duly organized and validly existing under the laws of the State of Delaware.
(f) Seller represents and warrants to Purchaser that Seller has no employees (including, without limitation, employees of any applicable union) who service or are employed at the Property.
(g) Seller represents and warrants to Purchaser that Seller is not a “foreign person” or “foreign corporation” as those terms are defined in the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
(h) Seller represents and warrants to Purchaser that there are no legal actions, suits, or similar proceedings pending or, to Seller’s knowledge, threatened against Seller relating to the Premises or Seller’s ownership or operation of the Premises in any court of law or in equity or before any governmental instrumentality that would materially adversely affect the value of the Property, the continued operations or use thereof, or the ability of Seller to perform its obligations under this Agreement.
(i) Seller represents and warrants to Purchaser that there are no brokerage, leasing agency or similar agreements with respect to the leasing of the Property entered into by Seller that will be binding on Purchaser after the Closing and that there are no unpaid brokerage commissions, finder’s fees or similar amounts, currently due and payable or incurred with respect to any leases relating to the Property and none shall be due and payable by Purchaser after the Closing with respect to any such leases that are in effect as of the Closing Date.
(j) Seller represents and warrants to Purchaser that the only tax assessment reduction or tax certiorari proceedings pending on the date hereof with respect to the Property are as described on Exhibit K attached hereto (but the foregoing shall not in any way be deemed to prohibit Seller from hereafter initiating such proceedings with respect to the 2014/2015 tax year).
(k) Seller represents and warrants to Purchaser that there is no agreement in force and effect whereby Seller has agreed to sell or grant any person or entity an option or right of first refusal to purchase or lease all or any part of the Property.
(l) Seller represents and warrants to and for the benefit of Purchaser that it is not now nor shall it be at any time prior to or at the Closing an individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity (collectively, a “ Person ”) with whom a United States citizen, entity organized under the laws of the United States or its territories or entity having its principal place of business within the United States or any of its territories (collectively, a “U.S. Person”), is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under United States law, regulation, executive orders and lists published by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) (including those executive orders and lists published by OFAC with respect to Persons that have been designated by executive order or by the sanction regulations of OFAC as Persons with whom U.S. Persons may not transact business or must limit their interactions to types approved by OFAC (“Specially Designated Nationals and Blocked Persons”)) or otherwise. Seller represents and warrants to and for the benefit of Purchaser that neither Seller nor any Person who owns an interest in Seller (collectively, a “Seller Party”) is now nor shall be at any time prior to or at the Closing a Person with whom a U.S. Person, including a “financial institution” as defined in 31 U.S.C. 5312 (a)(z), as periodically amended (“Financial Institution”), is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under United States law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.
(m) Seller represents and warrants to Purchaser that, to the best of Seller’s knowledge, neither Seller nor any Seller Party, nor any Person providing funds to Seller: (i) is under investigation by any governmental authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti Money Laundering Laws (as hereinafter defined); (ii) has been assessed civil or criminal penalties under any Anti-Money Laundering Laws; or (iii) has had any of its funds seized or forfeited in any action under any Anti Money Laundering Laws. For purposes hereof, the term “Anti-Money Laundering Laws” shall mean all applicable laws, regulations and sanctions, state and federal, criminal and civil, that: (w) limit the use of and/or seek the forfeiture of proceeds from illegal transactions; (x) limit commercial transactions with designated countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests of the United States; (y) require identification and documentation of the parties with whom a Financial Institution conducts business; or (z) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed to include the USA PATRIOT Act of 2001, Pub. L. No. 107-56 (the “ Patriot Act ”), the Bank Secrecy Act of 1970, as amended, 31 U.S.C. Section 5311 et. seq., the Trading with the Enemy Act, 50 U.S.C. App. Section 1 et. seq., the International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et. seq., and the sanction regulations promulgated pursuant thereto by the OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957.
(n) Seller represents and warrants to Purchaser that, to the best of Sellers’s knowledge, Seller is in compliance with any and all applicable provisions of the Patriot Act.
(o) Seller represents and warrants to Purchaser that based solely on invoices it has received from the 200 Condominium the Common Charges (as defined in the Condominium Documents), and special or capital assessments, due and payable under the Condominium Documents are set forth on Exhibit E attached hereto and that Seller has not received a notice of default respecting its failure to pay Common Charges, or special or capital assessments which remains uncured.
(p) The Property is not a “plan asset” as defined in Title I of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), and the sale of the Property by Seller is not a “prohibited transaction” under ERISA.
Purchaser acknowledges and agrees that, except as expressly stated herein, Seller has not made, does not make and specifically negates and disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to: (i) the value, nature, quality or condition of the Property, including, without limitation, its structural soundness, size or the utilities serving same; (ii) the income to be derived from the Property; (iii) the suitability of the Property for any and all activities and uses which Purchaser may conduct thereon; (iv) the compliance of or by the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body; (v) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property; (vi) the manner or quality of the construction or materials, if any, incorporated into the Property; (vii) the manner, quality, state of repair or lack of repair of the Property; (viii) compliance with any environmental protection, pollution, land use or zoning laws, rules, regulations, orders or requirements, including the existence in or on the Property of Hazardous Materials (as hereinafter defined); or (ix) any other matter with respect to the Property. Additionally, no person acting on behalf of Seller is authorized to make, and by execution hereof, Purchaser acknowledges that no person has made, any representation, agreement, statement, warranty, guaranty or promise regarding the Property or the transaction contemplated hereby other than as expressly set forth herein; and no such representation, warranty, agreement, guaranty, statement or promise, if any, made by any person acting on behalf of Seller shall be valid or binding upon Seller unless expressly set forth herein. Purchaser further acknowledges and agrees that Purchaser will rely solely on its own investigation of the Property and not on any information provided or to be provided by Seller except for representations expressly set forth herein. Purchaser further acknowledges and agrees that any information provided or to be provided with respect to the Property was obtained from a variety of sources and that Seller has not made any independent investigation or verification of such information and makes no representations as to the accuracy, truthfulness or completeness of such information, except as expressly set forth herein. Seller is not liable or bound in any manner by any verbal or written statement, representation or information pertaining to the Property, or the operation thereof, furnished by any real estate broker, contractor, agent, employee, servant or other person. This paragraph shall survive the Closing or termination of this Agreement.
For purposes of this Agreement, the term “Hazardous Materials” shall mean any substance which is or contains: (i) any “hazardous substance” as now or hereafter defined in §101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. §9601 et seq.) (“CERCLA”) or any regulations promulgated under CERCLA; (ii) any “hazardous waste” as now or hereafter defined in the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.) (“RCRA”) or regulations promulgated under RCRA; (iii) any substance regulated by the Toxic Substances Control Act (15 U.S.C. §2601 et seq.); (iv) gasoline, diesel fuel, or other petroleum hydrocarbons; (v) asbestos and asbestos containing materials, in any form, whether friable or non-friable; (vi) polychlorinated biphenyls; (vii) radon gas; (viii) lead paint; and (ix) any additional substances or materials which are now or hereafter classified or considered to be hazardous or toxic under Environmental Requirements (as hereinafter defined) or the common law, or any other applicable laws relating to the Property. Hazardous Materials shall include, without limitation, any substance, the presence of which on the Property: (A) requires reporting, investigation or remediation under Environmental Requirements; (B) causes or threatens to cause a nuisance on the Property or adjacent property or poses or threatens to pose a hazard to the health or safety of persons on the Property or adjacent property; or (C) which, if it emanated or migrated from the Property, could constitute a trespass.
For purposes of this Agreement, the term “Environmental Requirements” shall mean all laws, ordinances, statutes, codes, rules, regulations, agreements, judgments, orders, and decrees, now or hereafter enacted, promulgated, or amended, of the United States, the states, the counties, the cities, or any other political subdivisions in which the Property is located, and any other political subdivision, agency or instrumentality exercising jurisdiction over the owner of the Property, the Property, or the use of the Property, relating to pollution, the protection or regulation of human health, natural resources, or the environment, or the emission, discharge, release or threatened release of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or waste or Hazardous Materials into the environment (including, without limitation, ambient air, surface water, ground water or land or soil).
Each of the representations and warranties of Seller contained in this Agreement shall be void and of no further force or effect whatsoever from and after the date that is ninety (90) days after the Closing. Purchaser stipulates and agrees that it is not entitled to and agrees not to claim any damages of any kind with respect to any alleged breach and/or violation of any of such representations and/or warranties of Seller from and after the date that is ninety (90) days after the Closing. Furthermore, if Purchaser becomes aware prior to the Closing of any breach and/or violation of any of Seller’s representations or warranties, Purchaser shall give Seller notice of any such breach or violation, and during the fifteen (15) day period after such notice, Seller shall have the right, but not the obligation, to cure any such breach or violation, and the Closing shall be adjourned for such fifteen (15) day period. In the event Purchaser becomes aware of any breach and/or violation of any of Seller’s representations and warranties prior to the Closing and, following notice thereof, Seller fails or is unable to cure any such breach or violation, Purchaser’s sole remedy for any such breach or violation shall be to terminate this Agreement by delivering notice of such termination to Seller on or before the Closing whereupon the Downpayment shall be paid to Purchaser and neither party shall have any obligation hereunder, except those obligations which expressly survive the expiration of this Agreement. Anything herein to the contrary notwithstanding, if Purchaser after the Closing timely commences any action(s) to enforce any alleged breach and/or violation of any of the representations and/or warranties of Seller as set forth in this Agreement, then Purchaser’s sole remedy shall be to seek recovery of its actual damages (but not special, speculative, punitive or other damages) and the amount of such damages, in the aggregate (with respect to any and all such breaches and/or violations) shall not exceed $45,000.
For purposes of this Section 5.1, the phrase “Seller’s knowledge” or other comparable language shall mean the actual knowledge of Larry Loeb and Michael Price, without any duty of investigation or inquiry.
5.2 Purchaser’s Representations and Warranties .
(a) Purchaser represents and warrants to Seller that: (i) Purchaser is a limited liability company, duly organized and in good standing under the laws of the State of Delaware and has the power to enter into, execute and deliver this Agreement and to perform all duties and obligations imposed upon it hereunder, and Purchaser has obtained all necessary authorizations required in connection with the execution, delivery and performance contemplated by this Agreement and has obtained the consent of all entities and parties necessary to bind Purchaser to this Agreement; and (ii) neither the execution or the delivery of this Agreement, nor the consummation of the purchase and sale contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement conflict with or will result in the breach of any of the terms, conditions, or provisions of any agreement or instrument to which Purchaser, or any partner or related entity or affiliate of Purchaser, is a party or by which Purchaser, any partner or related entity or affiliate of Purchaser, or any of Purchaser’s assets is bound. Purchaser’s representations and warranties set forth in this Section 5.2 shall survive the Closing or termination of this Agreement for a period of ninety (90) days. Purchaser’s representations and warranties contained herein must be true and correct through the date of the Closing, and Purchaser’s failure to notify Seller prior to the Closing of any inaccuracies shall be a default by Purchaser under this Agreement.
(b) Purchaser acknowledges and agrees that, except as otherwise expressly provided herein (including Purchaser’s reliance on the representations of Seller hereunder), at the Closing, it shall purchase the Property based solely upon its inspections, examinations and investigations of the Property and that Purchaser is purchasing the Property “AS IS” in its present condition, subject to reasonable use, wear, tear and natural deterioration of the Property between the date hereof and the Closing, and Purchaser further agrees that Seller shall not be liable for any latent or patent defects in the Property. It is understood and agreed that the Purchase Price has been adjusted by prior negotiation to reflect that the Property is being sold by Seller and purchased by Purchaser subject to the foregoing.
(c) Notwithstanding anything to the contrary set forth in this Agreement, if prior to the Closing Purchaser has or obtains actual knowledge that any of Seller’s representations or warranties set forth in Section 5.1 are untrue in any respect, and Purchaser nevertheless proceeds with the Closing, then the breach by Seller of the representations and warranties as to which Purchaser shall have such knowledge shall be waived by Purchaser, such representations and warranties shall be deemed modified to conform them to the information that Purchaser shall have knowledge of and Seller shall have no liability to Purchaser or its successors or assigns in respect thereof.
(d) Purchaser represents and warrants to and for the benefit of Seller that it is not now nor shall it be at any time prior to or at the Closing a Person with whom a US Person, is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under United States law, regulation, executive orders and lists published by OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise. Neither Purchaser nor any Person who owns an interest in Purchaser (collectively, a “Purchaser Party”) is now nor shall be at any time prior to or at the Closing a Person with whom a U.S. Person, including a Financial Institution, is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under United States law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.
(e) Purchaser has taken, and shall continue to take until the Closing, such measures as are required by applicable law to assure that the funds used to pay to Seller the Purchase Price are derived: (i) from transactions that do not violate United States law nor, to the extent such funds originate outside the United States, do not violate the laws of the jurisdiction in which they originated; and (ii) from permissible sources under United States law and to the extent such funds originate outside the United States, under the laws of the jurisdiction in which they originated.
(f) To the best of Purchaser’s knowledge, neither Purchaser nor any Purchaser Party, nor any Person providing funds to Purchaser: (i) is under investigation by any governmental authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti Money Laundering Laws; (ii) has been assessed civil or criminal penalties under any Anti-Money Laundering Laws; or (iii) has had any of its funds seized or forfeited in any action under any Anti Money Laundering Laws.
(g) To the best of Purchaser’s knowledge, Purchaser is in compliance with any and all applicable provisions of the Patriot Act.
6.
CLOSING
6.1 Seller’s Closing Documents . At the Closing, Seller shall deliver to Purchaser the following documents duly executed and, where appropriate, acknowledged by Seller and the following other items (the documents and other items described in this Section being collectively referred to herein as “ Seller’s Closing Documents ”):
(a) a bargain and sale deed without covenant against grantor’s acts conveying the Property to Purchaser, in the form attached hereto as Exhibit F (the “Deed”);
(b) certification from Seller pursuant to Section 1445(b)(2) of the Internal Revenue Code of 1986, as amended, and the treasury regulations promulgated thereunder (collectively, the “Code”) stating that Seller is not a foreign person within the meaning of such Section, in the form attached hereto as Exhibit G ;
(c) a duly executed New York City Real Property Transfer Tax Return (RPT), a New York State Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimate Personal Income Tax (Form TP-584), if required, a New York State Application for Certification for Recording of Deed and Nonresident Estimated Income Tax Payment Voucher (Form IT-2663), and a Real Property Transfer Report (Form RP-5217NYC) (which documents shall be executed by Purchaser at the Closing);
(d) a lease (the “ New Lease ”) and memorandum of lease as well as the tax returns necessary to record such memorandum of lease (the “ Memo of New Lease ”) in the New York County Registrar’s Office (collectively, the “ Lease Documents ”), the New Lease being in the form attached hereto as Exhibit H and the Memo of New Lease being in the form attached hereto as Exhibit I , it being understood that the Lease Documents may be executed by Seller, an affiliate of Seller or a designee or assignee of Seller;
(e) an estoppel certificate from the Condominium Board in substantially the form attached hereto as Exhibit L (the “ Condominium Estoppel ”) or if Seller is unable to obtain the Condominium Estoppel prior to the Closing despite the use of Seller’s good faith efforts to obtain the Condominium Estoppel, then Seller shall deliver a certificate from Seller certifying the items set forth in the Condominium Estoppel and Seller’s liability thereunder shall survive the Closing for the lesser of four (4) years or until such time as the Condominium Estoppel is delivered to Purchaser;
(f) if obtainable after request therefor (and the use of good faith efforts to obtain), without payment of any sum or delivery of any consideration, an estoppel certificate from the tenant under the Existing Lease in the form contemplated by the Existing Lease;
(g) a Department of Housing Preservation and Development Affidavit in Lieu of Registration Statement;
(h) evidence of authority, good standing and due authorization of Seller respecting the transaction contemplated hereby that Seller delivers to the Title Company,
(i) a closing statement;
(j) a Form 1099-S Statement for Recipient of Proceeds from Real Estate Transaction;
(k) a title affidavit in the form attached hereto as Exhibit J ; and
(l) a certificate, from Seller, restating on and as of the Closing Date, the representations made by Seller in Section 5.1 hereof, except that Seller, in such certificate, may modify (with reasonable detail) the representations made by Seller in Section 5.1 (b), (d), (e), (h) and (o) hereof to reflect facts and circumstances that exist on and as of the Closing Date, provided that any such restatement does not adversely affect the Property or Seller’s ability to consummate the transaction contemplated hereby (such certificate being referred to herein as the “ Seller’s Update Certificate ”), it being understood that nothing contained in this Section 6.1(l) shall relieve Seller of its obligation to comply with all covenants of Seller expressly set forth herein;
(m) Such other instruments or documents as by the terms of this Agreement are to be delivered by Seller at the Closing or that may be reasonably necessary or appropriate to effect the consummation of the transactions which are the subject of this Agreement.
6.2 Purchaser’s Closing Documents . At the Closing, Purchaser shall deliver to Seller the Purchase Price and pay all other amounts owed to Seller or others pursuant to this Agreement in immediately available funds and the following documents duly executed and, where applicable, acknowledged by Purchaser (the documents described in this Section being collectively referred to herein as “Purchaser’s Closing Documents”):
(a) counterparts of the documents described in Section 6.1(a), (c), (d) and (i);
(b) such organizational and authorizing documents of Purchaser as shall be reasonably required by the Title Company; and
(c) Such other instruments or documents as by the terms of this Agreement are to be delivered by Purchaser at the Closing or that may be reasonably necessary or appropriate to effect the consummation of the transactions which are the subject of this Agreement.
7.
TAXES AND OTHER EXPENSES
7.1 Transfer Taxes . At the Closing, Seller shall pay the New York City and the New York State transfer taxes due in respect of the conveyance of the Property to Purchaser. All state, city, county and municipal recording charges with respect to the deed, the Memo of New Lease and/or Purchaser’s financing shall be paid by Purchaser at the Closing.
7.2 Title Examination Fees . All premiums and fees for title examination and the title insurance obtained by Purchaser and all related charges, including without limitation, the fees of the Title Company and survey costs in connection therewith, shall be paid by Purchaser.
7.3 Attorney’s Fees . Except as otherwise expressly specified herein, each of the parties hereto shall pay its own attorney’s fees.
7.4 Survival . The provisions of this Article 7 shall survive the Closing.
8.
PRORATION
8.1 Proration . (a) Water, sewer and electric charges, real estate taxes, Common Charges and other operating expenses with respect to the Property for the month in which the Closing occurs will not be adjusted but will continue to be borne by Seller or become the responsibility of the tenant under the New Lease.
(b) Purchaser acknowledges and agrees that with respect to any dispute between Seller and the board of managers of the Condominium regarding the determination of the amount of the Common Charges assessed against the Unit, Seller shall be entitled to any refund or credit that is made after the Closing as a result of the resolution of such dispute to the extent that any such refund is related to period prior to the Closing. Purchaser further agrees that in no event shall the existence of: (i) any such dispute; and/or (ii) any claim, proceeding or other matters in connection therewith or related thereto be an impediment to the Closing; provided that the existence of any such dispute, or the outcome thereof, in not reasonably likely to adversely affect the value of the Property.
(c) The provisions of this Section 8.1 shall survive the Closing.
9.
RISK OF LOSS
9.1 Condemnation and Casualty . If, prior to the Closing, a material part (as hereinafter defined) of the Property is taken by eminent domain or destroyed by fire or other casualty, Seller shall notify Purchaser thereof and Purchaser shall have the option, to be exercised within ten (10) business days after Purchaser receives such notification from Seller, time being of the essence, to terminate this Agreement, in which case the provisions of Section 4.1(d)(ii)(B) hereof shall apply as if this Agreement was terminated pursuant to the terms thereof. For the purposes of this Section, a “material part” of the Property shall mean: (i) a part of the Property which impairs ingress to or egress from the Property: or (ii) the cost to repair the Property as a result such taking or destruction is reasonably determined to be in excess of $500,000. If Purchaser does not elect to terminate this Agreement as aforesaid, there shall be no abatement of the Purchase Price and Seller shall assign to Purchaser (without recourse) at the Closing: (A) in the event of a condemnation, the rights of Seller to any condemnation awards; and (B) in the event of destruction by fire or other casualty, the rights of Seller to the proceeds (less such amounts to which Seller is entitled by reason of repair and restoration done by, or on behalf of, Seller prior to the Closing), if any, under Seller’s insurance policies covering the Property with respect to such destruction (but not with respect to the amount of any deductibles), and Purchaser shall be entitled to receive and keep any such proceeds received from such insurance policies.
10.
REMEDIES
10.1 Seller’s Remedies .
(a) If Purchaser fails to comply with the terms of this Agreement, Seller may terminate this Agreement and thereupon shall be entitled to the Downpayment, as liquidated damages (and not as a penalty) and as Seller’s sole remedy and relief hereunder (except with respect to those obligations of Purchaser that survive the expiration or termination of this Agreement). Seller and Purchaser have made this provision for liquidated damages because it would be difficult to calculate, on the date hereof, the amount of actual damages for such breach, and Seller and Purchaser agree that these sums represent reasonable compensation to Seller for such breach.
(b) Notwithstanding the provisions of Section 10.1(a) hereof: (i) in the event of any default by Purchaser under this Agreement other than as described in Section 10.1(a) hereof (including without limitation any breach by Purchaser of the negative covenant set forth in Section 10.2 hereof), Seller shall have any and all rights and remedies available at law or in equity by reason of such default; and (ii) the provisions of Section 10.1(a) hereof shall not limit or affect any of Seller’s remedies or indemnities as provided in other Sections of this Agreement or at law.
10.2 Purchaser Remedies .
(a) Subject to Section 10.2(b), in the event that Seller fails to comply with the terms of this Agreement (other than by reason of a Willful Default) and as a result the Closing does not occur, Purchaser, as its sole and exclusive remedy may terminate this Agreement and receive a refund of the Downpayment, and neither party shall thereafter have any further right or obligation hereunder, other than with respect to those obligations that expressly survive the termination of this Agreement.
“ Willful Default ” shall mean (1) Seller’s refusal to perform its obligation to convey the Property to Purchaser in accordance with terms of this Agreement, (2) Seller’s refusal to deliver each of Seller’s Closing Documents (other than any item required pursuant to Section 6.1(m)) and (3) Seller’s refusal to remove all Required Cure Items in accordance with and subject to the limitations set forth in Section 4.1(c), provided that Purchaser has satisfied all material conditions required to be satisfied by it under this Agreement and is ready, willing and able to perform all of its obligations under this Agreement and to deliver the Purchase Price due Seller under this Agreement. If a Willful Default occurs, then Purchaser, at its sole option, may bring an action in equity against Seller for specific performance within forty-five (45) days after Purchaser has actual knowledge of a Willful Default; provided, however, that if the remedy of specific performance is not available to Purchaser, then, as Purchaser sole and exclusive remedy, Purchaser may terminate this Agreement and receive a refund of the Downpayment, whereupon Seller shall reimburse Purchaser for the reasonable out-of-pocket, third party costs and expenses theretofore incurred by Purchaser, including, without limitation, financing costs, the costs and performing title and survey examinations and reasonable attorneys’ fees and disbursements, (within ten (10) business days after the date that Purchaser submits to Seller a reasonably detailed invoice therefor), provided that such liability shall not exceed $90,000, and neither party shall thereafter have any further right or obligation hereunder, other than the other than with respect to those obligations that expressly survive the termination of this Agreement. In no event whatsoever shall Purchaser file any instrument of record against title to the Property (except as expressly set forth in Section 13.13 hereof) or seek money damages of any kind as a result of any default by Seller under any of the terms of this Agreement and in no event shall Seller be liable to Purchaser for any punitive, speculative or consequential damages.
11.
future operations
11.1 Operations and Maintenance . Seller agrees that, prior to the Closing, Seller shall:
(a) deal with the tenant under the Existing Lease and with the Property in substantially the same manner as it has heretofore dealt with such tenant;
(b) not enter into or modify any lease (other than the New Lease) or any contract relating to the Property without Purchaser’s consent (which consent will not be unreasonably withheld, conditioned or delayed) to the extent that any such lease or contract would be binding on Purchaser;
(c) not create, incur or suffer to exist any mortgage, lien, pledge or other encumbrance in any way affecting any portion of the Property;
(d) not make any capital repairs, replacements or improvements to the Property without Purchaser’s prior written consent unless required by the Condominium Documents (it being understood that the 200 Condominium has requested that Seller repair or waterproof a portion of a ramp at the Property, and Purchaser and Seller hereby agree that such repair shall be made at no cost to Purchaser);
(e) deliver to Purchaser any notice of default received, or given, by Seller pursuant to, or relating to, the Existing Lease or the Condominium Documents;
(f) maintain, or seek to cause to be maintained, the current insurance coverages for the Property; and
(g) operate the Property, or cause the Property to be maintained, in a manner substantially similar to the operation of the Premises prior to the date hereof.
11.2 Access to Property . During the period between the date of this Agreement and the Closing Date (or any earlier date of termination of this Agreement), Purchaser and its agents shall have access to the Property from time to time, upon reasonable advance notice, at reasonable times, accompanied by a representative of Seller, for the purpose of conducting inspections thereof, provided that the tenant under the Existing Lease agrees to permit such access and that Purchaser has furnished to Seller such liability insurance coverage as Seller shall reasonably require in connection therewith. Purchaser shall indemnify and hold harmless Seller from and against any and all claims, liabilities, losses, damages, liens, expenses, suits and fees (including, without limitation, reasonable attorneys’ fees, disbursements and related costs) to the extent arising out of or in connection with the entry or activities of Purchaser, its agents or contractors, on the Property, provided that Purchaser shall have no obligation to so indemnify Seller to the extent any liability results from a pre-existing condition and not from the acts of Purchaser. The provisions of the immediately preceding sentence shall survive the expiration or termination of this Agreement.
12.
DOWNPAYMENT IN ESCROW
12.1 Downpayment in Escrow . Simultaneously with the execution and delivery of this Agreement, Purchaser has delivered the Downpayment to Escrow Agent to be held in escrow by Escrow Agent on the following terms and conditions:
(a) The Downpayment shall be deposited in an interest bearing account in any New York City commercial bank selected by Escrow Agent of which Escrow Agent gives Purchaser notice. Any interest earned on the Downpayment shall be the property of the party entitled to the Downpayment, without credit against the Purchase Price or any other amount payable hereunder.
(b) Escrow Agent shall deliver the Downpayment to Seller or to Purchaser, as the case may be, upon the following conditions:
(i) | to Seller, at the Closing; or |
(ii) | to Seller, as liquidated damages, upon receipt of written demand therefor signed by Seller, stating that Purchaser has defaulted in the performance of its obligations under this Agreement and Seller has terminated this Agreement on account of said default of Purchaser (it being agreed by Purchaser that the Downpayment is a fair and reasonable amount and is not a penalty); provided, however, that Escrow Agent shall not honor such demand until not less than five (5) business days after the date on which Escrow Agent shall have delivered (by overnight courier or by registered or certified mail, return receipt requested) a copy of such demand to Purchaser, nor thereafter if during such five (5) business days period Escrow Agent shall have received written notice of objection from Purchaser in accordance with the provisions of this Section 12.1; or |
(iii) | to Purchaser, upon receipt of written demand therefor signed by Purchaser, stating that: (a) this Agreement has been terminated and that Purchaser is entitled under this Agreement to the return of the Downpayment theretofore received by Escrow Agent; or (b) Seller has defaulted in the performance of its obligations under this Agreement and Purchaser has terminated this Agreement on account of said default of Seller; provided, however, that Escrow Agent shall not honor such written demand in either case until not less than five (5) business days after the date on which Escrow Agent shall have delivered (by overnight courier or by registered or certified mail, return receipt requested) a copy of such written demand to Seller, nor thereafter if during such five (5) business day period Escrow Agent shall have received written notice of objection from Seller in accordance with the provisions of this Section 12.1. |
(c) Any notice, demand or request to Escrow Agent shall, notwithstanding anything to the contrary set forth herein or otherwise, be sufficient only if received by Escrow Agent within the applicable time period set forth herein, if any. Notices, demands and requests to Escrow Agent shall be delivered by overnight courier, by personal delivery or mailed to it by registered or certified mail, return receipt requested, at 39 West 37 th Street, New York, New York 10018 in the manner aforesaid. Notices, demands and requests from Escrow Agent to Seller or Purchaser shall be mailed to them at their respective addresses first set forth above, in the manner aforesaid.
(d) Upon receipt of a written demand for the Downpayment made by Purchaser or Seller pursuant to Section 12.1(b) hereof, Escrow Agent shall promptly deliver or mail a copy thereof (in the manner aforesaid) to the other party. The other party shall have the right to object to the delivery of the Downpayment by written notice of objection within five (5) business days after the date of receipt by the other party of Escrow Agent’s notice, but not thereafter. Upon receipt of such written notice of objection, Escrow Agent shall promptly deliver or mail a copy thereof (in the manner aforesaid) to the party who made the written demand.
(e) If: (i) Escrow Agent shall have received a notice of objection as provided in Section 12.1(b) hereof within the time therein prescribed; or (ii) any other disagreement or dispute shall arise between the parties hereto and/or any other persons resulting in adverse claims and demands being made for the Downpayment, whether or not litigation has been instituted, then Escrow Agent may refuse to comply with any claims or demands on it and continue to hold the Downpayment until Escrow Agent receives either: (x) a notice signed by both Seller and Purchaser directing the disbursement of the Downpayment; or (y) a final order, which is not (or is no longer) appealable, of a court of competent jurisdiction, entered in a proceeding in which Seller, Purchaser and Escrow Agent are named as parties, directing the disbursement of the Downpayment, in either of which events Escrow Agent shall then disburse the Downpayment in accordance with said direction. Escrow Agent shall not be or become liable in any way or to any person for its refusal to comply with any such claims or demands until and unless it has received a direction of the nature described in clause (x) or clause (y) of this Subsection (e). Notwithstanding the foregoing provisions of this Section or otherwise, Escrow Agent shall have the following rights: (A) if Escrow Agent shall have received a notice signed by either Seller or Purchaser advising that a litigation between Seller and Purchaser over entitlement to the Downpayment has been commenced, Escrow Agent may, on notice to Seller and Purchaser, deposit the Downpayment with the Clerk of the Court in which said litigation is pending; or (B) Escrow Agent may, on notice to Seller and Purchaser, take such affirmative steps as it may, at its option, elect in order to terminate its duties as Escrow Agent, including, without limitation, the deposit of the Downpayment with a court of competent jurisdiction and the commencement of an action for interpleader, the costs thereof to be borne by whichever of Seller or Purchaser is the losing party.
(f) Upon the taking by Escrow Agent of any action permitted by this Section 12.1, Escrow Agent shall be released of and from all liability hereunder except for any gross negligence or willful default. Seller and Purchaser jointly and severally shall indemnify and hold harmless Escrow Agent from and against any and all claims, liabilities, losses, damages, liens, expenses, suits and fees (including, without limitation, reasonable attorneys’ fees either paid to retained attorneys or amounts representing the fair value of legal services rendered to or for itself), disbursements and related costs) incurred by Escrow Agent arising out of or in connection with its performance of its duties as Escrow Agent. The provisions of the immediately preceding sentence shall survive the expiration or termination of this Agreement.
(g) Escrow Agent acts hereunder as a depository only and is not responsible or liable in any manner whatsoever for: (i) the sufficiency, correctness, genuineness, collection or validity of any instrument deposited with it; (ii) the form of execution of such instruments; (iii) the identity, authority or rights of any person executing or depositing the same; (iv) the terms and conditions of any instrument pursuant to which the parties may act; or (v) the loss of the Downpayment or any interest (due to early presentation for payment, insolvency of the Bank in which the Downpayment is placed or otherwise), except for its gross negligence or willful default.
(h) Escrow Agent shall not have any duties or responsibilities except those set forth in this Section 12.1, and shall not incur any liability in acting upon any signature, notice, request, waiver, consent, receipt or other paper or document believed by Escrow Agent to be genuine, and Escrow Agent may assume that any person purporting to give it any notice on behalf of any party in accordance with the provisions hereof has been duly authorized to do so, except that this will not relieve Escrow Agent of liability for its gross negligence or willful default.
(i) The terms and provisions of this Section 12.1 shall create no right in any person, firm or corporation other than the parties hereto and their respective successors and assigns, and no third party shall have the right to enforce or benefit from the terms hereof.
(j) Escrow Agent has executed this Agreement for the sole purpose of agreeing to act as such in accordance with the terms of this Section 12.1.
13.
MISCELLANEOUS
13.1 Notices . All notices, demands and requests which may be given or which are required to be given by either party to the other, and any exercise of a right of termination provided by this Agreement, shall be in writing and shall only be deemed effective: (a) on the date personally delivered to the address below, as evidenced by written receipt therefor, whether or not actually received by the person to whom addressed; (b) on the third (3rd) business day after being sent, by certified or registered mail, return receipt requested, addressed to the intended recipient at the address specified below; (c) on the first (1st) business day after being deposited into the custody of a nationally recognized overnight delivery service such as Federal Express Corporation, addressed to such party at the address specified below, for next business day delivery; or (d) on the day of delivery by electronic mail to the respective parties specified below, if receipt is verified. For purposes of this Section, the addresses of the parties for all notices are as follows (or to such other address or party as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address or addresses shall only be effective upon receipt):
If to Seller: | 200 Riverside Parking LLC |
211 East 38 th Street | |
New York, New York 10016 | |
Attention: Larry Loeb | |
Tel: (212) 686-9802 | |
Email: lloeb@IconParking.com | |
with a copy to: | Michael Price |
211 East 38 th Street | |
New York, New York 10016 | |
Tel: (212) 686-8663 | |
Email: mprice@iconparking.com | |
If to Purchaser: | c/o American Realty Capital |
405 Park Avenue | |
New York, New York 10022 | |
Tel: (212) 415-6500 | |
Email: jgalloway@arlcap.com | |
Attn: Legal Department | |
with a copy to: | c/o American Realty Capital |
405 Park Avenue | |
New York, New York 10022 | |
Tel: (212) 415-6500 | |
Email: MHappel@nyrt.com | |
Attn: Michael A. Happel | |
13.2 Brokers . Purchaser and Seller each represent and warrant to the other that it has not dealt or negotiated with, or engaged on its own behalf or for its benefit, any broker, finder, consultant, adviser, attorney or professional in the capacity of a broker or finder for the acquisition of the Property in connection with this transaction. Each of Seller and Purchaser hereby agrees to indemnify and hold the other harmless from and against any and all claims, demands, causes of action, losses, costs and expenses (including attorneys’ fees) and other liabilities arising from such party’s breach of the representations and warranties contained in this Section 13.2.
13.3 Acceptance . The acceptance by Purchaser of the Deed shall be deemed an acknowledgment by Purchaser that Seller has complied fully with all of its obligations hereunder and that Seller is discharged therefrom and that Seller shall have no further obligation or liability with respect to any of the agreements made by Seller in this Agreement, except for those provisions of this Agreement which expressly provide that such obligation of Seller shall survive the Closing.
13.4 Entire Agreement . This Agreement, together with the exhibits hereto, embodies the entire agreement between the parties hereto relative to the subject matter hereof, and there are no oral or written agreements between the parties, nor any representations made by either party relative to the subject matter hereof, which are not expressly set forth herein.
13.5 Amendment . This Agreement may be amended only by a written instrument executed and delivered by the party or parties to be bound thereby.
13.6 Headings . The captions and headings used in this Agreement are for convenience only and do not in any way limit, amplify, or otherwise modify the provisions of this Agreement.
13.7 Holidays . If the final date of any period which is set out in any provision of this Agreement falls on a Saturday, Sunday or legal holiday under the laws of the United States or the State of New York, then, in such event, the time of such period shall be extended to the next day which is not a Saturday, Sunday or legal holiday.
13.8 Governing Law . This Agreement shall be governed by the laws of the State of New York and the laws of the United States pertaining to transactions in such State.
13.9 Successors and Assigns; Assignment . This Agreement shall bind and inure to the benefit of Seller and Purchaser and their respective heirs, executors, administrators, personal and legal representatives, successors and permitted assigns. Purchaser shall not assign Purchaser’s rights under this Agreement without the prior written consent of Seller, which consent may be withheld for any reason or no reason. Notwithstanding the previous sentence, Purchaser may assign its rights under this Agreement to an entity controlled by or under common control of American Realty Capital III, LLC or its principal. No assignment of Purchaser’s rights hereunder shall relieve Purchaser of its liabilities under this Agreement. This Agreement is solely for the benefit of Seller and Purchaser; there are no third party beneficiaries hereof. Any assignment of this Agreement in violation of the foregoing provisions shall be null and void.
13.10 Invalid Provision . If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement; and, the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid, or unenforceable provision or by its severance from this Agreement.
13.11 Multiple Counterparts; Signatures . This Agreement may be executed in a number of identical counterparts which, taken together, shall constitute collectively one (1) agreement; in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart with each party’s signature. An electronically-transmitted copy of an executed counterpart of this Agreement shall be deemed an original.
13.12 Exhibits . The following exhibits are attached to this Agreement and are incorporated into this Agreement by this reference and made a part hereof for all purposes:
(a)
Exhibit A
,
the legal description of the Property
(b)
Exhibit B
, description of Condominium Documents
(c)
Exhibit C
, the Permitted Encumbrances
(d)
Exhibit D
, the Existing Lease
(e)
Exhibit E
, the charges under the Condominium Documents
(f)
Exhibit F
, the form of the Deed
(g)
Exhibit G
, the form of FIRPTA certificate
(h)
Exhibit H
, the New Lease
(i)
Exhibit I
, the Memo of New Lease
(j)
Exhibit J
, the form of title affidavit
(k)
Exhibit K
, list of
tax assessment reduction or tax certiorari proceedings
(l)
Exhibit L
, the form of Condominium Estoppel
(m)
Exhibit M
, the Mortgage Schedule
13.13 No Recordation . Seller and Purchaser hereby acknowledge that neither this Agreement nor any memorandum or affidavit thereof shall be recorded. Should Purchaser ever record or attempt to record this Agreement, or a memorandum thereof, or any other comparable document, then, notwithstanding anything herein to the contrary, said recordation or attempt at recordation shall constitute a default by Purchaser hereunder, and, in addition to the other remedies provided for herein, Seller shall have the express right to terminate this Agreement by filing a notice of said termination in the county in which the Building is located. Purchaser hereby waives, to the extent permitted by law, any right to file a lis pendens or other form of attachment against the Property in connection with this Agreement or the transactions contemplated hereby, except with respect to an action for specific performance in accordance with the provisions of this Agreement. To the extent that any such filing is made in violation of this Agreement, Purchaser shall indemnify Seller against any damage incurred by Seller in connection therewith. The provisions of this Section 13.13 shall survive the termination of this Agreement.
13.14 Merger Provision . Except as otherwise expressly provided herein, any and all rights of action of Purchaser for any breach by Seller of any representation, warranty or covenant contained in this Agreement shall merge with the Deed and other instruments executed at Closing, shall terminate at the Closing and shall not survive the Closing.
13.15 No Financing Contingency . Purchaser hereby acknowledges that its obligation to pay the Purchase Price in accordance with Section 2.1(a) hereof is not contingent on obtaining financing or the granting of a mortgage.
13.16 Jury Waiver . Purchaser and Seller do hereby knowingly, voluntarily and intentionally waive their right to a trial by jury in respect of any litigation based hereon, or arising out of, or under or in connection with this agreement, the documents delivered by Purchaser or Seller at the Closing, or any course of conduct, course of dealings, statements (whether verbal or written) or any actions of either party arising out of or related in any manner with this Agreement or the Property (including without limitation, any action to rescind or cancel this Agreement and any claims or defenses asserting that this agreement was fraudulently induced or is otherwise void or voidable). This waiver is a material inducement for Seller to enter into and accept this Agreement and shall survive the Closing or termination of this Agreement.
13.17 Section 3.14 Audit. Seller agrees at no cost to Seller to provide to Purchaser such reasonable information as is in Seller’s possession or control required by Purchaser to complete a so-called “Section 3.14 audit”. Prior to the Closing, Seller will provide Purchaser with five (5) years of annual historical occupancy and rent for the Property. For the avoidance of doubt, Purchaser acknowledges that to the extent any information does not exist or is not in Seller’s possession or control, Seller shall not be required to recreate or obtain such information for Purchaser. The provisions of this Section 13.17 shall survive the Closing until the third (3rd) anniversary of the Closing to the extent requests are made by the Securities and Exchange Commission (“ SEC ”); provided, however, that nothing in this Section 13.17 shall obligate Seller to remain in existence or prevent the Seller from dissolving after the Closing (subject to Seller’s other obligations pursuant to this Agreement).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.
SELLER :
200 Riverside Parking LLC
By: /s/ Larry Loeb
Larry Loeb, CEO
PURCHASER:
ARC NYC200RIVER01, LLC
By: /s/ Michael A. Happel
Name: Michael A. Happel
Title: President
Kensington Vanguard National Land Services
as Escrow Agent, solely to
evidence its agreement
to act under Article 12 hereof
By: /s/ L.E. Boes
Name: L.E. Boes
Title: EVP
EXHIBIT B
DESCRIPTION OF CONDOMINIUM DOCUMENTS
The Declaration establishing a plan for condominium ownership of the building located at and known as and by street number 200 Riverside Boulevard in New York, New York and the land upon which it is situate under Article 9-B of the Real Property Law of the State of New York, dated January 29, 1999 and recorded February 26, 1999 in the Office of the Register of the City of New York, County of New York in Reel 2827 Page 2470 and amended by First Amendment to Declaration dated as of 1/29/1999 and recorded on 4/26/1999 in Reel 2862 Page 680, Second Amendment to Declaration dated as of 9/15/1999 and recorded on 9/27/1999 in Reel 2961 Page 2046, Third Amendment to Declaration dated as of 1/29/1999 and recorded 12/17/1999 in Reel 3012 Page 2270, Fourth Amendment to Declaration dated 1/9/2001 and recorded 1/22/2001 in Reel 3226 Page 884, Fifth Amendment to Declaration dated as of 5/1/2001 and recorded on 7/12/2001 in Reel 3320 Page 1822 and Sixth Amendment to Declaration dated as of 11/20/2002 and recorded on 5/21/2003 under CRFN 2003000137733, the condominium unit in such building, designated as Commercial Unit 4- Garage, is also being designated as Tax Lot 1004 in Block 1171 of Section 4 of the Borough of Manhattan on the Tax Map of the Real Property Assessment Department of the City of New York and on the Floor Plans of the such building, certified by Costas Kondylis and Associates, P.C., Architect, on February 25, 1999 and filed in the Office of the Register as Condominium Plan No. 1058, Map No. 5582 on February 26, 1999, and Amendment No. 1058¬A, Map No. 5634 filed September 27, 1999
EXHIBIT C
PERMITTED ENCUMBERANCES
1. | Unrecorded Lease made between Hudson Waterfront Company C LLC and Hudson River Garage LLC, dated 2/1/2002. |
2. | Any state of facts which an accurate survey of the building and the unit would show, provided the same do not render title to the property uninsurable. |
3. | Covenants, conditions, easements, agreements of records, etc., as follows: |
a. | Terms, Covenants, Conditions and Easements set forth in deed dated March 30, 1978 by PCTC Trustees to Consolidated Rail Corporation (“Conrail”) recorded December 15, 1978 in Reel 463 Page 1563A and Correction Conveyance authorized by Order of the Special Court Regional Railway Organization Act of 1973, Misc. No. 75-3(A) dated October 29, 1981 and recorded December 3, 1981 in Reel 594 Page 491 and the Release of Easement recorded in Reel 594 Page 453. |
b. | Terms, Conditions, Reservations, Right of Re-entry and Reverter contained in the Water Grants made by the Mayor, Alderman and Commonalty of the City of New York to Upland Owners of property abutting the high water line of the Hudson River, which Water Grants were recorded in Liber 623 Cp. 33, Liber 1103 Cp. 396, Liber 1103 Cp. 404, Liber 1312 Cp. 235, Liber 1103 Cp. 411, Liber 621 Cp. 489, Liber 1064 Cp. 148, Liber 1182 Cp. 342, Liber 622 Cp. 551, Liber 1068 Cp. 116, Liber 1090 Cp. 1099, Liber 2059 Cp. 97, Liber 581 Cp. 628 and Liber 616 Cp. 477. |
c. | Restrictive Declaration made as of 12/17/92 by Penn Yards Associates recorded 1/6/93 in Reel 1934 Page 1, as supplemented by Letter Agreement between Penn Yards Associates and Members of Riverside South Planning Commission dated March 31, 1993. |
With Respect Thereto:
1) | Modification to Restrictive Declaration made as of 10/4/1994 by Hudson Waterfront Associates, L.P. recorded 12/2/994 in Reel 2159 Page 1096. |
2) | Second Modification to Restrictive Declaration made as of 1/9/1997 by Hudson Waterfront Associates, L.P. recorded on 2/13/1997 in Reel 2422 Page 424. |
3) | Third Modification of Restrictive Declaration made as of 9/13/1999 by Hudson Waterfront Associates, L.P. recorded on 1/7/2000 in Reel 3026 Page 1983. |
4) | Fourth Modification to Restrictive Declaration made as of 11/9/2001 by Hudson Waterfront Associates L.P. recorded on 1/25/2002 in Reel 3436 Page 1992. Restated Fourth Modification recorded on 3/15/2002 in Reel 3470 Page 1813. |
d. | Declaration of Public Access Corridor for Private Sewer dated 4/9/1996 made by Hudson Waterfront Associates I, L.P., recorded on 4/10/1996 in Reel 2312 Page 1805. |
e. | Declaration of Zoning Lot Restrictions made by Hudson Waterfront Associates I, L.P. and Hudson Waterfront Associates II, L.P. recorded on 2/13/1997 in Reel 2421 Page 2100. |
f. | Terms, Covenants, Easements and Provisions of an Agreement between Hudson Waterfront Associates, L.P. et al and National Railroad Passenger Corporation dated as of 8/26/97 and recorded on 3/16/98 in Reel 2554 Page 691. |
g. | Terms, Covenants, Conditions and Provisions of the Amended and Restated Operating Agreement dated as of 8/26/97 by an among Hudson Waterfront Associates I, L.P., Hudson Waterfront Associates II, L.P., Hudson Waterfront Associates III, L.P., Hudson Waterfront Associates IV, L.P., Hudson Waterfront Associates V, L.P. and Hudson Waterfront Associates L.P., a Memorandum of which was recorded on 3/16/98 in Reel 2554 Page 644. |
h. | Second Amended and Restated Operating Agreement dated as of 6/23/2003, a Memorandum of which was recorded on 1/11/2005 under CRFN 2005000019369. |
With Respect Thereto:
1) | First Amendment to Second Amended and Restated Operating Agreement dated as of 12/23/2004 by and among Hudson Waterfront Associates I, L.P., Hudson Waterfront Associates III, L.P., Hudson Waterfront Associates IV, L.P., Hudson Waterfront Associates V, L.P., Hudson Waterfront Company A, LLC, Hudson Waterfront Company D, LLC, Hudson Waterfront Company E, LLC, Hudson Waterfront Company F, LLC and Hudson Waterfront Associates, L.P., recorded on 3/30/2005 under CRFN 2005000184566. |
i. | Declaration of Covenants, Conditions and Restrictions dated as of 8/26/97 made by Riverside South Property Owners Association, Inc., a corporation formed pursuant to the New York Not-for-Profit Corporation Law, Hudson Waterfront Associates, L.P., Hudson Waterfront Associates L.P., Hudson Waterfront Associates II, L.P., Hudson Waterfront Associates III, L.P., Hudson Waterfront Associates IV, L.P. and Hudson Waterfront Associates V, L.P. and recorded on 3/16/98 in Reel 2554 Page 552. |
j. | Terms, Covenants, Conditions and Provisions of the “Mapping” Agreement dated as of 5/27/1998 between Hudson Waterfront Associates, L.P. et al (Developer) and The City of New York, recorded on 8/31/1998 in Reel 2693 Page 1897. |
k. | Encroachment Agreement dated as of 2/20/98 between Hudson Waterfront Company C, LLC and Hudson Waterfront Company D, LLC, recorded 9/3/98 in Reel 2698 Page 2234. |
4. | Terms, covenants and conditions set forth in the Declaration of Condominium and By-Laws dated 1/29/1999 and recorded on 2/26/1999 in Reel 2827 Page 2470 and amended by First Amendment dated as of 1/29/1999 and recorded 4/26/1999 in Reel 2862 Page 680, Second Amendment dated as of 9/15/1999 and recorded 9/27/1999 in Reel 2961 Page 2046, Third Amendment dated as of 1/29/1999 and recorded 12/17/1999 in Reel 3012 Page 2270, Fourth Amendment dated 1/9/2001 and recorded 1/22/2001 in Reel 3226 Page 884 and Fifth Amendment dated as of 5/1/2001 and recorded on 7/12/2001 in Reel 3320 Page 1822, Fifth Amendment to Declaration dated as of 5/1/2001 and recorded on 7/12/2001 in Reel 3320 Page 1822 and Sixth Amendment to Declaration dated as of 11/20/2002 and recorded under CRFN 2003000137733. |
5. | Possible minor variations between the description of the Premises on the tax maps and in this Agreement; |
6. | All Violations. |
7. | Rights, if any, of public utility companies of record to maintain vaults and chutes under the sidewalk and rights to the construction and maintenance of electric, gas, telephone and other utility cables, wires and appurtenances on the building and/or the Property provided they do not render title unmarketable. |
8. | The lien of any Common Charges, real estate taxes, and/or water meter charges, sewer rents, and assessments not due and payable as of the Closing Date, provided that apportionment thereof is made as provided in this Agreement; |
9. | The standard printed exceptions and exclusions from coverage normally set forth in an ALTA (New York) owner’s title insurance policy. |
EXHIBIT D
EXISTING LEASE
(See Attached)
EXHIBIT E
THE CHARGES UNDER THE CONDOMINIUM DOCUMENTS
EXHIBIT F
CONDOMINIUM UNIT DEED
EXHIBIT G
FIRPTA CERTIFICATE
The undersigned, _________________________, acting on behalf of ____________________ LLC (“Transferor”), hereby certifies in such capacity as follows:
Section 1445 of the Internal Revenue Code (the “Code”) provides that a transferee (buyer) of a United States real property interest must withhold tax if the transferor (seller) is a foreign person.
Transferor is transferring certain real property known as __________________, New York, New York (the “Property”) to ________________________, having an address at ________________________________(“Transferee”).
Transferor is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person, as those terms are defined in the Code. The office address of Transferor is 211 East 38 th Street, New York, New York 10016.
The United States taxpayer identification number of Transferor is: _____________
This certification is being given pursuant to Section 1445 of the Code to inform Transferee that withholding of tax is not required upon this disposition of United States real property interests.
Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.
__________________________
By:________________________
Name:
Title:
EXHIBIT H
THE NEW LEASE
(See Attached)
EXHIBIT I
THE MEMO OF NEW LEASE
EXHIBIT J
TITLE AFFIDAVIT
STATE OF NEW YORK | ) |
) ss.: | |
COUNTY OF NEW YORK | ) |
________________________, being duly sworn, deposes and says:
1. | I am the ________________________of ___________________, LLC (the Limited Liability Company hereinafter referred to as “Company”), the owner of the premises (the "Premises") described on Schedule A in the title certificate (the "Certificate") of __________ Title Insurance Company issued by Kensington Vanguard National Land Services (said entities being referred to herein collectively as "_________") under Title No. _________( )___. |
2. | (a) That there are no tenants or lessees affecting the Premises other than ______________; |
(b) | That there has been no work, inspections, examinations, or any other services performed, nor any demand made for payment of any such services by the City of New York or any agency or department thereof at the Premises except as set forth below: ______________________________________________________ |
(c) | That there are no Environmental Control Board Lien Judgments docketed against the Company, except as set forth in the Certificate; and |
(d) | That the Articles of Organization and Operating Agreement of the Company are in full force and effect and have not been amended. |
3. | This Affidavit is being given to induce _________ to insure title pursuant to the Certificate without taking exception for the matters described herein. |
BY: ____________________________________
Sworn to before me this
day of , 2014
_____________________________
Notary Public
EXHIBIT K
LIST OF TAX ASSESSMENT REDUCTION OR TAX CERTIORARI PROCEEDINGS
EXHIBIT L
FORM OF CONDOMINIUM ESTOPPEL
200 Riverside Boulevard at Trump Place
200 Riverside Boulevard
New York, New York
______________, 2014
ARC NYC200RIVER01, LLC
c/o American Realty Capital
405 Park Avenue, 12 th Floor
New York, NY 10022
Attention: Michael A. Happel
Re: | Estoppel Certificate relating to the garage condominium unit (the “ Garage ”) in the building known as 200 Riverside Boulevard at Trump Place (the “ Condominium ”) located at 200 Riverside Boulevard, New York, New York |
Ladies and Gentlemen:
The undersigned Board of Managers of the Condominium, hereby certifies to ARC NYC200RIVER01, LLC (“ Purchaser ”) as follows:
1) | As of the date hereof, there are no Common Charges, or special or capital assessments, due and payable with respect to the Garage. |
2) | As of the date hereof, the owner of the Garage is not in default under the Condominium Documents. |
3) | The Declaration, dated January 29, 1999 and recorded February 26, 1999 in the Office of the Register of the City of New York, County of New York in Reel 2827 Page 2470, as amended by First Amendment to Declaration dated as of 1/29/1999 and recorded on 4/26/1999 in Reel 2862 Page 680, as further amended by Second Amendment to Declaration dated as of 9/15/1999 and recorded on 9/27/1999 in Reel 2961 Page 2046, as further amended by Third Amendment to Declaration dated as of 1/29/1999 and recorded 12/17/1999 in Reel 3012 Page 2270, as further amended by Fourth Amendment to Declaration dated 1/9/2001 and recorded 1/22/2001 in Reel 3226 Page 884, as further amended by Fifth Amendment to Declaration dated as of 5/1/2001 and recorded on 7/12/2001 in Reel 3320 Page 1822 and as further amended by Sixth Amendment to Declaration dated as of 11/20/2002 and recorded on 5/21/2003 under CRFN 2003000137733 (collectively, the “ Declaration ”) and the Floor Plans of the such building, certified by Costas Kondylis and Associates, P.C., Architect, on February 25, 1999 and filed in the Office of the Register as Condominium Plan No. 1058, Map No. 5582 on February 26, 1999, and Amendment No. 1058A, Map No. 5634 filed September 27, 1999, are in full force and effect and to the Board of Manager’s knowledge have not been amended since the respective recording thereof. |
4) | The sale of the Garage is not subject to a right of first refusal or right of first offer under the Condominium Documents. |
Capitalized terms used herein and not otherwise defied herein shall have the meaning ascribed to such terms on the Declaration. The undersigned hereby acknowledges and agrees that Purchaser, its affiliates, subsidiaries and financial sources, may rely on the statements contained herein.
200 RIVERSIDE BOULEVARD AT TRUMP PLACE
By: ___________________________
EXHIBIT M
MORTGAGE SCHEDULE
(See Attached)
Exhibit 10.6
PURCHASE AND SALE AGREEMENT
by and between
USPF IV LAUREL RETAIL OWNER, L.P.,
a Delaware limited partnership
and
ARC NYC400E67, LLC
a Delaware limited liability company
Property Name: The Laurel Retail Condominium
Location: 400 East 67 th Street, New York, NY 10065
Effective Date: August 8, 2014
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made to be effective as of August 8, 2014 (the “ Effective Date ”) by and between USPF IV LAUREL RETAIL OWNER, L.P., a Delaware limited partnership (“ Seller ”), and ARC NYC400E67, LLC, a Delaware limited liability company (“ Buyer ”).
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the parties hereto do hereby agree as follows:
ARTICLE 1 - CERTAIN DEFINITIONS
In addition to terms defined elsewhere in this Agreement, as used herein, the following terms shall have the following meanings:
“ Act ” is defined in Section 4.2.5 .
“ Business Day ” shall mean any day other than Saturday, Sunday, any Federal holiday, or any holiday in the State in which the Property is located. If any period expires or action is to be taken on a day which is not a Business Day, the time frame for the same shall be extended until the next Business Day.
“ Buyer’s Representatives ” shall mean Buyer and any officers, directors, employees, agents, consultants, representatives and attorneys of Buyer or any direct or indirect owner of any beneficial interest in Buyer, but only if the same conduct due diligence or are otherwise involved in the Transaction.
“ Closing ” shall mean the closing of the Transaction.
“ Closing Date ” shall mean the day that the Transaction closes, which shall not be later than the Scheduled Closing Date.
“ Closing Documents ” shall mean all documents executed and delivered by Buyer or Seller as required by Section 6.2 and Section 6.3 or as otherwise executed and delivered by Buyer or Seller as part of the Closing.
“ Condominium” shall be The Laurel Condominium.
“ Condominium Board ” shall be the board of managers of the Condominium pursuant to the Condominium Documents.
“ Condominium Documents ” shall mean the Declaration dated October 6, 2008 recorded in the New York County Office of the Register of The City of New York on November 3, 2008 at CRFN 2008000427186 (and the By-Laws attached thereto) also designated as Tax Lots 1208, 1209 and 1210, respectively, Block 1461 on Tax Map Real Property Assessment Department of The City of New York for The Borough of Manhattan & County of New York, as amended.
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“ Contracts ” shall mean the contracts, equipment leases, and other agreements relating to the Real Property that are described in Exhibit B attached hereto, together with any additional contracts, equipment leases and agreements and any modifications of any of the foregoing that are entered into in accordance with the terms of Section 8.1 .
“ deemed to know ” (or words of similar import) shall have the following meaning: Buyer and the Buyer’s Representatives shall be “ deemed to know ” any fact, circumstance or information or shall have “ deemed knowledge ” of the same to the extent (a) any Buyer’s Representative has actual knowledge of a particular fact or circumstance or information that is inconsistent with any Seller’s Warranty, or (b) this Agreement, the Closing Documents executed and delivered by Seller, the documents and materials with respect to the Property delivered or made available to any Buyer’s Representative in connection with the Transaction, any estoppel certificate executed by any tenant of the Property, or any reports prepared or obtained by any Buyer’s Representatives in connection with Buyer’s due diligence discloses a particular fact or circumstance or contains information which is inconsistent with any Seller’s Warranty. For purposes of this Agreement, documents and materials shall be deemed to have been “ made available ” to Buyer’s Representatives only if the same are located at a designated physical or on-line location.
“ Deposit ” shall mean the sum of Seven Million Six Hundred Thousand Dollars ($7,600,000), together with any interest earned thereon.
“ Disclosure Statement ” is defined in Section 4.2.5 .
“ Escrow Agent ” First American Title Insurance Company, in its capacity as escrow agent, whose mailing address is 633 Third Avenue, New York, New York 10017, Attention: Stephen Farber (telephone number: (212) 551-9402, e-mail address: sfarber@firstam.com).
“ Laws ” shall mean all municipal, county, State or Federal statutes, codes, ordinances, laws, rules or regulations.
“ Leases ” shall mean, collectively, (i) that certain Lease, dated as of October 5, 2007, between 1240 First Avenue LLC and Cornell University for and on behalf of its Joan & Sandford I. Weill Medical College, as affected by that certain Stipulation of Settlement Entered by the Civil Court of the City of New York, New York County on July 6, 2011, (ii) that certain Lease, dated as of March 30, 2009, between 1240 First Avenue LLC and Quik Park East 67 th Street LLC, as affected by that certain First Amendment of Lease, dated as of November 15, 2011, between USPF IV Laurel Retail Owner, L.P. and Quik Park East 67 th Street LLC and (iii) that certain Lease, dated as of January 8, 2010, between 1240 First Avenue LLC and TD Bank, NA.
“ Liabilities ” shall mean, collectively, any and all conditions, losses, costs, damages, claims, liabilities, expenses, demands or obligations of any kind or nature whatsoever.
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“ Owner’s Title Policy ” shall mean an ALTA owner’s extended coverage title insurance policy issued by the Title Company in the amount of the Purchase Price.
“ Permitted Exceptions ” shall mean and include all of the following: (a) applicable zoning, building and land use Laws, (b) such state of facts as would be disclosed by a physical inspection of the Property, (c) the lien of taxes, assessments and other governmental charges or fees not yet due and payable, (d) any exceptions caused by any Buyer’s Representative, (e) any exception that the Title Company agrees to affirmatively insure over in accordance with the terms hereof, (f) the rights of the Tenants under the Leases, (g) any matters which Buyer is deemed to know about prior to the Effective Date, including, without limitation, all matters listed in Seller’s Title Policy and/or in any title report obtained by Buyer on or before the Effective Date, and (h) any matters deemed to constitute additional Permitted Exceptions under Section 3.1 . Permitted Exceptions shall not include any matters of record created by Seller in violation of Section 8.1 . Notwithstanding any provision to the contrary contained in this Agreement or any of the Closing Documents, any or all of the Permitted Exceptions may be omitted by Seller in the Deed (as hereinafter defined) without giving rise to any liability of Seller, irrespective of any covenant or warranty of Seller that may be contained in the Deed (which provisions shall survive the Closing and not be merged therein).
“ Property ” shall mean, collectively, (a) the Real Property, (b) the “ Personal Property ” as defined in the Bill of Sale attached hereto as Exhibit E , (c) the Leases, and (d) the “ Intangible Property ” as defined in the Assignment Agreement attached hereto as Exhibit F .
“ Protected Information ” shall mean any books, records or files (whether in a printed or electronic format) that consist of or contain any of the following: Seller’s organizational documents or files or records relating thereto; appraisals; budgets; strategic plans for the Property; internal analyses; information regarding the marketing of the Property for sale; submissions relating to obtaining internal authorization for the sale of the Property by Seller or any direct or indirect owner of any beneficial interest in Seller; attorney and accountant work product; attorney-client privileged documents; internal correspondence of Seller, any direct or indirect owner of any beneficial interest in Seller, or any of their respective affiliates and correspondence between or among such parties; or other information in the possession or control of Seller, Seller’s Property Manager or any direct or indirect owner of any beneficial interest in Seller which such party reasonably deems confidential, proprietary, or privileged.
“ Real Property ” shall mean the three (3) condominium units legally described in Exhibit A attached hereto, together with all improvements and fixtures located thereon and owned by Seller as of the Closing and any rights, privileges and appurtenances pertaining thereto.
“ Remove ” with respect to any exception to title shall mean that Seller causes the Title Company to remove of record or affirmatively insure over the same, without any additional cost to Buyer, whether such removal or insurance is made available in consideration of payment, bonding, indemnity of Seller or otherwise; provided , however , Seller shall only be permitted to cause the Title Company to insure over the following title exceptions: (a) any liens evidencing monetary encumbrances not exceeding individually or in the aggregate $100,000, and (b) other title encumbrances (other than Required Removal Exceptions) to the extent that Buyer consents thereto (which consent shall not be unreasonably withheld, conditioned or delayed).
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“ Report ” is defined in Section 4.2.5 .
“ Required Removal Exceptions ” shall mean, collectively, (i) liens evidencing monetary encumbrances (other than liens for non-delinquent real estate taxes that are to be apportioned at Closing pursuant to the terms hereof) created as a result of the intentional acts or omissions of Seller, its agents or affiliates, (including, without limitation the liens of any mortgages), (ii) liens evidencing monetary encumbrances (other than liens for non-delinquent real estate taxes and liens described in item (i) of this definition) that do not individually or in the aggregate exceed $100,000, (iii) title matters created by Seller, its agents or affiliates in violation of the terms of this Agreement, and (iv) mechanics liens resulting from work performed by Seller for any of the Tenants; and (v) any exception to title that Seller has specifically agreed in writing to Remove pursuant to the terms of Section 3.1(c) .
“ Scheduled Closing Date ” shall mean September 4, 2014, as the same may be extended pursuant to the express terms of this Agreement.
“ Seller Parties ” shall mean and include, collectively, (a) Seller; (b) its counsel; (c) Seller’s Broker; (d) Seller’s Property Manager; (e) any direct or indirect owner of any beneficial interest in Seller; (f) any officer, director, employee, or agent of Seller, its counsel, Seller’s Broker, Seller’s Property Manager or any direct or indirect owner of any beneficial interest in Seller; and (g) any other entity or individual affiliated or related in any way to any of the foregoing.
“ Seller’s Broker ” shall mean Savills Studley.
“ Seller’s Knowledge ” or words of similar import shall refer only to the current actual knowledge of (i) James L. Street, an officer of Prudential Investment Management, Inc. responsible for the Transaction, (ii) Gregory Killeen, the asset manager employed by Prudential Investment Management, Inc. with primary responsibility for the Property, (iii) Barry Howell, and (iv) David Pahl (collectively, the “ Designated Representatives ”) and shall not be construed to impose upon the Designated Representatives any duty to investigate (beyond inquiry of Seller’s Property Manager) the matters to which such knowledge, or the absence thereof, pertains, including, but not limited to, the contents of the materials delivered or made available to Buyer’s Representatives or the contents of files maintained by the Designated Representatives. There shall be no personal liability on the part of the Designated Representatives arising out of any of the Seller’s Warranties.
“ Seller’s Property Manager ” shall mean MadCap Partners LLC, a New York limited liability company.
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“ Seller’s Title Policy ” shall mean the title insurance policy issued to Seller by Commonwealth Land Title Insurance Company provided to Buyer prior to the Effective Date.
“ Seller’s Warranties ” shall mean Seller’s representations and warranties set forth in Section 7.2 and in the Closing Documents executed by Seller for the benefit of Buyer, as such representations and warranties may be deemed modified or waived by Buyer pursuant to the terms of this Agreement.
“ Survey ” shall mean the survey delivered by Seller to Buyer prior to the Effective Date.
“ Tenants ” shall mean, collectively, (i) Cornell University for and on behalf of its Joan & Sandford I. Weill Medical College, (ii) Quik Park East 67 th Street LLC and (iii) TD Bank, N.A.
“ Title Company ” shall mean First American Title Insurance Company.
“ Transaction ” shall mean the transaction contemplated by this Agreement.
ARTICLE 2 - SALE OF PROPERTY
Subject to the terms of this Agreement and the Closing Documents, Seller agrees to sell and Buyer agrees to purchase all of Seller’s right, title and interest in and to the Property. In consideration therefor, Buyer shall pay to Seller Seventy-Six Million Dollars ($76,000,000) (the “ Purchase Price ”). The Purchase Price shall be paid as follows:
2.1 Payment of Deposit . Buyer has paid the Deposit to Escrow Agent. .
2.2 Applicable Terms . Except as expressly otherwise set forth herein, the Deposit shall be applied against the Purchase Price at the Closing and shall otherwise be held and delivered by Escrow Agent in accordance with the provisions of Exhibit C .
2.3 Cash at Closing . On the Scheduled Closing Date, Buyer shall (a) deposit into escrow with the Escrow Agent an amount equal to the balance of the Purchase Price in immediately available funds as more particularly set forth in Section 6.1 , as prorated and adjusted as set forth in Article 5 , Section 6.1 , or as otherwise provided under this Agreement, and (b) authorize and direct the Escrow Agent to simultaneously pay the Deposit into such escrow.
ARTICLE 3 - TITLE MATTERS
3.1 Title Defects .
(a) Buyer hereby confirms receipt of: (y) Seller’s Title Policy and (z) the Survey. From and after the Effective Date, Buyer shall have the right to object in writing to any title and/or survey matters which are not Permitted Exceptions and which materially adversely affect title to or the marketability of the Real Property (as reasonably determined by Buyer in good faith) if such objection is made to Seller by written notice from Buyer within five (5) Business Days after Buyer becomes aware of such matters (but, in any event, prior to the Scheduled Closing Date) (each such written notice, a “Buyer Objection Notice” and each such matter to which Buyer objects in writing, an “Objectionable Matter”). Unless Buyer is entitled to and timely objects to such title matters (other than Required Removal Exceptions), all such title matters shall be deemed to constitute additional Permitted Exceptions.
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(b) If this Agreement is not terminated by Buyer in accordance with the provisions hereof, Seller shall, at Closing, Remove all Required Removal Exceptions. If Seller is unable to Remove any Required Removal Exceptions prior to the Closing, Buyer may at Closing elect to either (i) exercise Buyer’s rights under Section 9.2 , or (ii) accept such exceptions to title and the Closing shall occur as herein provided without any reduction of or credit against the Purchase Price.
(c) With respect to any Objectionable Matter that is not a Required Removal Exception, Seller may elect to Remove such Objectionable Matter and Seller may notify Buyer in writing within five (5) Business Days after receipt of a Buyer Objection Notice listing any such Objectionable Matters (but, in any event, prior to the Scheduled Closing Date) whether Seller elects to Remove the same. Failure of Seller to respond in writing within such period shall be deemed an election by Seller not to Remove Buyer’s Objectionable Matters. If Seller elects or is deemed to have elected not to Remove one or more of such Objectionable Matters, then, within five (5) Business Days after Seller’s election or deemed election (but, in any event, prior to the Scheduled Closing Date), Buyer may elect in writing to either (i) terminate this Agreement, in which event the Deposit shall be paid to Buyer and, thereafter, the parties shall have no further rights or obligations hereunder except for obligations which expressly survive the termination of this Agreement, or (ii) waive such Objectionable Matters and proceed to Closing without any reduction of or credit against the Purchase Price. Failure of Buyer to respond in writing within such period shall be deemed an election by Buyer to waive such Objectionable Matters and proceed to Closing. Any such Objectionable Matter so waived (or deemed waived) by Buyer shall constitute a Permitted Exception.
(d) Seller shall be entitled to one or more extensions of the Scheduled Closing Date (not to exceed forty-five (45) days in the aggregate) with all other extensions of the Scheduled Closing Date contained herein) for the purpose of the Removal of any Objectionable Matter. Seller shall have the right to replace the Title Company with another nationally recognized title insurance company reasonably satisfactory to Buyer if the Title Company fails or refuses to Remove any Objectionable Matter that Seller elects or is required to Remove.
3.2 Title Insurance . At Closing, the Title Company shall issue the Owner’s Title Policy to Buyer, insuring that title to the Real Property is vested in Buyer subject only to the Permitted Exceptions. Buyer may request that the Title Company provide endorsements to the Owner’s Title Policy, provided that (a) such endorsements shall be at no cost to, and shall impose no additional liability on, Seller, (b) Buyer’s obligations under this Agreement shall not be conditioned upon Buyer’s ability to obtain such endorsements, and (c) the Closing shall not be delayed as a result of Buyer’s request.
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ARTICLE 4 - BUYER’S DUE DILIGENCE/AS-IS SALE
4.1 Buyer’s Due Diligence . All due diligence performed by Buyer’s Representatives shall have been performed in accordance with and subject to the terms of that certain Property Access Agreement, dated as of August 4, 2014, by and between Seller and Buyer (or Buyer’s predecessor), which agreement is hereby incorporated herein and Buyer and Seller hereby ratify and confirm their respective obligations under the aforementioned agreement. To the extent any provisions of the Property Access Agreement conflict with the provisions of this Agreement, the provisions of this Agreement shall control. Buyer, in its sole and absolute discretion, has performed such due diligence with respect to the Property and the Transaction as Buyer has elected, and Buyer is satisfied with the results of all of such due diligence. Accordingly, Buyer shall be deemed to have waived its rights to terminate this Agreement, except as otherwise expressly provided herein.
4.2 As-Is Provisions .
4.2.1 As-Is Sale . Buyer acknowledges and agrees that:
(a) Buyer has conducted such due diligence as Buyer has deemed necessary or appropriate.
(b) Subject to Seller’s Warranties, the Property shall be sold, and Buyer shall accept possession of the Property as of the Closing, “AS IS, WHERE IS, WITH ALL FAULTS”, with no right of setoff or reduction in the Purchase Price, except as expressly set forth to the contrary in this Agreement and the Closing Documents.
(c) Except for Seller’s Warranties, none of the Seller Parties shall be deemed to have made any verbal or written representations, warranties, promises or guarantees (whether express, implied, statutory or otherwise) to Buyer with respect to the Property, any matter set forth, contained or addressed in the materials delivered or made available to Buyer’s Representatives or the results of Buyer’s due diligence.
(d) Buyer has independently confirmed to its satisfaction all information that it considers material to its purchase of the Property or the Transaction.
4.2.2 Release . By accepting the Deed and closing the Transaction, Buyer, on behalf of itself and its successors and assigns, shall thereby release each of the Seller Parties from, and waive any and all Liabilities against each of the Seller Parties for, attributable to, or in connection with the Property, whether arising or accruing before, on or after the Closing and whether attributable to events or circumstances which arise or occur before, on or after the Closing, including, without limitation, the following: (a) any and all statements or opinions heretofore or hereafter made, or information furnished, by any Seller Parties to any Buyer’s Representatives; and (b) any and all Liabilities with respect to the structural, physical, or environmental condition of the Property, including, without limitation, all Liabilities relating to the release, presence, discovery or removal of any hazardous or regulated substance, chemical, waste or material that may be located in, at, about or under the Property, or connected with or arising out of any and all claims or causes of action based upon CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§9601 et seq ., as amended by SARA (Superfund Amendment and Reauthorization Act of 1986) and as may be further amended from time to time), the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§6901 et seq ., or any related claims or causes of action (collectively, “ Environmental Liabilities ”); and (c) any implied or statutory warranties or guaranties of fitness, merchantability or any other statutory or implied warranty or guaranty of any kind or nature regarding or relating to any portion of the Property. Notwithstanding the foregoing, the foregoing release and waiver is not intended and shall not be construed as affecting or impairing any rights or remedies that Buyer may have against Seller with respect to (i) a breach of any of Seller’s Warranties, (ii) any of the obligations of Seller under this Agreement or the Closing Documents that expressly survive the Closing, or (iii) any acts constituting fraud by Seller.
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4.2.3 Assumption of Liability . By accepting the Deed and closing the Transaction, as between the Seller Parties and Buyer (but without limiting any rights of Buyer as against the Tenant or any third parties), Buyer shall thereby assume and take responsibility and liability for the following: (a) any and all Liabilities attributable to the Property to the extent that the same arise or accrue on or after the Closing and are attributable to events or circumstances which arise or occur on or after the Closing; and (b) any and all Liabilities with respect to the structural, physical or environmental condition of the Property, whether such Liabilities are latent or patent, whether the same arise or accrue before, on or after the Closing, and whether the same are attributable to events or circumstances which may arise or occur before, on or after the Closing, including, without limitation, all Environmental Liabilities; and (c) any and all Liabilities that arose or accrued prior to the Closing or are attributable to events which arose or occurred prior to the Closing, but only if Buyer is deemed to know about the same on or before the Closing; and (d) any and all Liabilities to the extent that the same arise or accrue as a result of any tort claims in connection with any injury that arose or occurred prior to Closing, but only if Buyer has the right to seek recovery from any tenants or previous tenants of the Property with respect to such tort claims; and (e) any and all Liabilities with respect to which Buyer receives a credit at Closing, but only to the extent of such credit. Buyer acknowledges and agrees that the Liabilities to be assumed by Buyer pursuant to each of the foregoing clauses are intended to be independent of one another, so Buyer shall assume Liabilities described in each of the clauses even though some of those Liabilities may be read to be excluded by another clause. Notwithstanding the foregoing, (1) the foregoing release and waiver is not intended and shall not be construed as affecting or impairing any rights or remedies that Buyer may have against Seller with respect to (i) a breach of any of Seller’s Warranties, (ii) any of the obligations of Seller under this Agreement or the Closing Documents that expressly survive the Closing, or (iii) any acts constituting fraud by Seller, and (2) any tort claims brought with respect to the Property, to the extent that the same arise or accrue as a result of events that occurred prior to the Closing, shall not be assumed by Buyer as a result of clause (b) or clause (c) except to the extent the same are caused by the acts or omissions of any Buyer’s Representatives.
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4.2.4 Successors and Assigns . The provisions of this Section 4.2 shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
4.2.5 Intentionally Omitted .
4.2.6 Intentionally Omitted .
4.2.7 Reaffirmation and Survival . The provisions of this Section 4.2 shall be deemed reaffirmed by Buyer by acceptance of the Deed and shall survive the Closing.
4.3 Limitation on Seller’s Liability .
4.3.1 Maximum Aggregate Liability . Notwithstanding any provision to the contrary contained in this Agreement or the Closing Documents, the maximum aggregate liability of the Seller Parties, and the maximum aggregate amount which may be awarded to and collected by Buyer, in connection with the Transaction, the Property, under this Agreement, and under all Closing Documents (including, without limitation, in connection with the breach of any of Seller’s Warranties for which a claim is timely made by Buyer) shall not exceed One Million Nine Hundred and Forty Thousand Dollars ($1,940,000). Notwithstanding the foregoing, the foregoing liability cap shall not apply to claims by Buyer against Seller for (i) fraud, (ii) reimbursements actually owed to the Tenants on account of periods prior to the Closing Date for reimbursements under their Leases, (iii) amounts owed to Seller’s Broker in connection with the Transaction, and (iv) amounts owed by Seller under Section 8.3 or Section 8.6(b) .
4.3.2 Survival . The provisions of this Section 4.3 shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS
5.1 Proration of Income .
5.1.1 Rents . For purposes of this Agreement, “ Rents ” shall mean all base rents, additional rent and any tax and operating expense reimbursements and escalations due from the Tenants under the Leases. All collected Rents and other income from Property operations shall be prorated between Seller and Buyer as of 12:01 a.m. on the Closing Date. Rents or other income from Property operations not collected as of the Closing shall not be prorated at the time of Closing.
5.1.2 Post-Closing Collections . After Closing, Buyer shall make a good faith effort to collect any Rents or other revenues not collected as of the Closing on Seller’s behalf and to tender the same to Seller upon receipt; provided , however , all Rents collected by Buyer or Seller after the Closing shall first be applied to all amounts due under the Leases at the time of collection ( i.e. , current Rents and sums due Buyer as the current owner and landlord) with the balance (if any) payable to Seller, but only to the extent of amounts delinquent and actually due Seller. Buyer shall not have an exclusive right to collect Rents or other revenue due Seller and Seller hereby retains its rights to pursue claims against Tenants or any other party for sums due with respect to periods prior to the Closing Date; provided , however , with respect to any legal proceedings against any tenant under a Lease, Seller (a) shall be required to notify Buyer in writing of its intention to pursue such legal proceedings; (b) shall only be permitted to pursue any legal proceedings after the date which is ninety (90) days after the Closing Date; and (c) shall not be permitted to pursue any legal proceedings against Tenants seeking eviction of the Tenants or the termination of the underlying Leases. The terms of this section shall survive the Closing and not be merged therein.
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5.1.3 Cash Security Deposits . At Closing, Seller shall give Buyer a credit against the Purchase Price in the aggregate amount of any cash security deposits and/or impound accounts, if any, held by Seller under the Leases.
5.2 Proration of Taxes and Other Property Expenses .
5.2.1 Proration of Ad Valorem Taxes . All general real estate and ad valorem taxes and other state, county or municipal taxes, charges and assessments affecting the Property will be prorated as of 12:01 a.m. on the Closing Date, based on (if applicable) the maximum discount available for early payment. In the event final, current bills for such taxes are not available at Closing, such taxes will be prorated on the basis of the taxes for most recent year for which final bills are available.
5.2.2 Common Condominium Charges and Special Assessments . Seller shall pay all installments of Condominium common charges under the Condominium Documents and special assessments due and payable prior to the Closing Date and Buyer shall pay all installments of Condominium common charges under the Condominium Documents and special assessments due and payable on and after the Closing Date; provided , however , if the owner of the Property has the election to pay any such special assessment over time, Seller may elect to do so, which election shall be binding on Buyer.
5.2.3 Other Property Operating Expenses . Operating expenses for the Property shall be prorated as of 12:01 a.m. on the Closing Date. To the extent that the amount of actual consumption of any utility services is not determined prior to the Closing Date, a proration shall be made at Closing based on the last available reading and post-closing adjustments between Buyer and Seller shall be made within twenty (20) days of the date that actual consumption for such pre-closing period is determined, which obligation shall survive the Closing and not be merged therein. Seller shall not assign to Buyer any deposits which Seller has with any of the utility services or companies servicing the Property. Buyer shall arrange with such services and companies to have accounts opened in Buyer’s name beginning at 12:01 a.m. on the Closing Date.
5.2.4 Expenses Payable by Tenants . Notwithstanding anything to the contrary herein, there shall be no proration of real estate taxes or other operating expenses (and, as between Buyer and Seller, Buyer shall be responsible for the same) if and to the extent the same are payable by Tenants under the Leases, except to the extent that Seller has collected payment of such amounts.
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5.2.5 Lease Expenses . At Closing, (a) Buyer and Seller shall prorate any and all Lease Expenses (as hereinafter defined) paid or incurred by Seller prior to Closing arising out of or in connection with any modifications of any Lease approved by Buyer in writing entered into between the Effective Date and the Closing; and (b) Seller shall give Buyer a credit for any and all unpaid and due and owing Lease Expenses owed to or for the benefit of Tenants with respect to the Leases. For purposes of determining Buyer’s and Seller’s pro rata share of the amounts to be prorated pursuant to clause (a) , such Lease Expenses shall be amortized over the full term of the subject Lease or modification, as the case may be, and apportioned between Buyer and Seller as of 12:01 a.m. on the Closing Date based upon the proportion of the affected term of the applicable Lease or modification that falls within each of Buyer’s and Seller’s period of ownership of the Property. “ Lease Expenses ” shall mean, collectively, any and all costs, expenses and fees paid or incurred by Seller prior to Closing in connection with the Leases or any modification thereof, including, without limitation, (i) brokerage commissions, (ii) expenses incurred for improvements to the premises, (iii) legal fees reasonably and actually incurred, (iv) free rent, rent abatements, or rent concessions, and (v) expenses reasonably and actually incurred to satisfy or terminate the obligations of a tenant under another lease.
5.3 Closing Costs . Closing costs shall be allocated between Buyer and Seller in accordance with local custom. For the avoidance of doubt:
(a) Buyer shall pay the following closing costs: (i) all premiums and charges of the Title Company for extended coverage and all endorsements desired by Buyer with respect to the Owner’s Title Policy, (ii) the cost of any update to the Survey, (iii) all recording and filing charges in connection with the Deed, (iv) one half of all escrow or closing charges, (v) the commission due any broker representing Buyer, (vi) all fees due its attorneys and all costs of Buyer’s due diligence, including fees due its consultants, and (vii) all lenders’ fees, mortgage taxes, and similar charges, if any, related to any financing to be obtained by Buyer.
(b) Seller shall pay the following closing costs: (i) one half of all escrow or closing charges, (ii) the commission due Seller’s Broker, (iii) all fees due its attorneys, (iv) any transfer taxes applicable to the transfer of the Property to Buyer, and (v) all costs incurred in connection with causing the Title Company to Remove any Required Removal Exceptions.
The obligations of the parties under this section shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.
5.4 Delayed Adjustment; Delivery of Financial Data . No later than March 31 of the first calendar year following the year in which the Closing occurs, Buyer shall prepare and present to Seller a recalculation of any and all amounts due or subject to proration under this Article 5 (taking into consideration any errors and changes necessary because of the lack of complete or accurate information as of the Closing Date) as well as supporting documentation for such recalculation. The parties shall make the appropriate adjusting payment between them within thirty (30) days after delivery of any such recalculation. The provisions of this section shall survive the Closing and not be merged therein.
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ARTICLE 6 - CLOSING
6.1 Closing Mechanics .
(a) The parties shall conduct an escrow-style closing through the Escrow Agent so that it will not be necessary for any party to attend the Closing.
(b) Provided all conditions precedent to Seller’s obligations hereunder have been satisfied, Seller agrees to convey the Property to Buyer upon confirmation of receipt of the Purchase Price by the Escrow Agent as set forth below. Provided all conditions precedent to Buyer’s obligations hereunder have been satisfied, Buyer agrees to pay the amount specified in Section 2.3 by timely delivering the same to the Escrow Agent on the Scheduled Closing Date and unconditionally authorizing and directing the Escrow Agent no later than 2:00 p.m. Eastern Time on the Scheduled Closing Date to deposit the same in Seller’s designated account.
(c) The items to be delivered by Seller or Buyer in accordance with the terms of Sections 6.2 or 6.3 shall be delivered to Escrow Agent no later than 5:00 p.m. Eastern Time on the last Business Day prior to the Scheduled Closing Date except that (i) the items in the paragraph entitled “Keys and Original Documents” shall be delivered by Seller at the Property or made available for pick-up from Seller’s Property Manager on the Closing Date, and (ii) the Purchase Price shall be delivered by Buyer in accordance with the terms of Section 6.1(b) .
6.2 Seller’s Closing Deliveries . At Closing, Seller shall deliver the following:
(a) Deed . A deed in the form of Exhibit D attached hereto (“ Deed ”), executed and acknowledged by Seller.
(b) Bill of Sale . A bill of sale in the form of Exhibit E attached hereto, executed by Seller.
(c) Assignment Agreement . An assignment and assumption of the Leases and Intangible Property, in the form of Exhibit F attached hereto (“ Assignment Agreement ”), executed by Seller.
(d) Notice to Tenants . A letter in the form of Exhibit G attached hereto, executed by Seller, which shall be sent by Buyer after Closing to the Tenants.
(e) Intentionally Omitted.
(f) Evidence of Authority . Documentation to establish to the Title Company’s reasonable satisfaction the due authorization of Seller’s consummation of the Transaction, including Seller’s execution of this Agreement and the execution and delivery of the Closing Documents required to be delivered by Seller.
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(g) Other Documents . A title affidavit in the form of Exhibit I-1 attached hereto, a gap indemnity in the form of Exhibit I-2 attached hereto, applicable transfer or sales tax filings, and such other documents as may be reasonably required by the Title Company or as may be agreed upon by Seller and Buyer to consummate the Transaction, each executed by Seller.
(h) Letters of Credit as Tenant Security Deposits . If applicable, all original letters of credit which are security deposits under the Leases and the transfer documentation as described in Section 8.1 .
(i) Closing Statement . A mutually acceptable form of a joint closing statement, setting forth the prorations and adjustments to the Purchase Price respecting the Property to be made pursuant to this Agreement (the “ Closing Statement ”), executed by Seller.
(j) Keys and Original Documents . Keys to all locks on the Real Property in Seller’s or Seller’s Property Manager’s possession or control and originals or, if originals are not available, copies, of the Leases, all of the Contracts, and other Property documents, to the extent not previously delivered to Buyer.
(k) Estoppels . Each Tenant Estoppel (as hereinafter defined) and the Condominium Estoppel (as hereinafter defined).
(l) 1099-S . A completed Form 1099-S or other documents required by the Code (as hereinafter defined), duly executed and acknowledged by Seller.
(m) Affidavit in Lieu of Registration Statement . A City of New York Department of Housing Preservation and Development Affidavit in Lieu of Registration Statement.
6.3 Buyer’s Closing Deliveries . At the Closing, Buyer shall deliver the following:
(a) Purchase Price . The Purchase Price, as adjusted for apportionments and other adjustments required under this Agreement, plus any other amounts required to be paid by Buyer at Closing.
(b) Assignment Agreement . The Assignment Agreement, executed by Buyer.
(c) Evidence of Authority . Documentation to establish to Seller’s reasonable satisfaction the due authorization of Buyer’s consummation of the Transaction, including Buyer’s execution of this Agreement and the Closing Documents required to be delivered by Buyer.
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(d) Other Documents . Applicable transfer or sales tax filings and such other documents as may be reasonably required by the Title Company or may be agreed upon by Seller and Buyer to consummate the Transaction.
(e) Closing Statement . The Closing Statement, executed by Buyer.
6.4 Conditions to Buyer’s Obligations . Buyer’s obligation to close the Transaction is conditioned on all of the following:
(a) Representations True . All Seller’s Warranties in this Agreement, as the same may be deemed modified as provided in Section 7.3 , shall be true and correct in all material respects on and as of the Scheduled Closing Date, as if made on and as of such date except to the extent that they expressly relate to an earlier date.
(b) Title Conditions Satisfied . At the time of the Closing, title to the Property shall be as provided in Article 3 of this Agreement.
(c) Estoppel Certificate . Buyer shall have received an executed estoppel certificate from each Tenant with respect to its Lease (each a “Tenant Estoppel”) and an executed estoppel certificate from the Condominium Board with respect to the Property (the “Condominium Estoppel”). Buyer shall be required to accept any such Tenant Estoppel if the same: (x) is dated no earlier than forty-five (45) days prior to the initial Scheduled Closing Date, (y) is substantially in the form of Exhibit K attached hereto with any modifications made by a Tenant which are consistent with the minimum requirements set forth in its Lease or are otherwise reasonably acceptable to Buyer, and (z) does not disclose any information or facts that would (i) constitute a default by Seller under a Lease, (ii) with the giving of notice or passage of time or both would constitute a default by Seller under a Lease, and (iii) which differ in any material respect from the information or facts that Buyer is deemed to know (but excluding such Tenant Estoppel for purposes of Buyer’s deemed knowledge under this clause (iii)) about prior to the Effective Date. Either Buyer or Seller may elect to postpone the Scheduled Closing Date for a period not to exceed ten (10) days in order to provide additional time for Seller to satisfy the foregoing estoppel requirement. Notwithstanding any provisions in this Agreement to the contrary, if Buyer fails to object in writing to a Tenant Estoppel executed by a Tenant within five (5) Business Days after the date a copy of the same has been delivered to Buyer, Buyer shall be deemed to have approved the same.
(d) Seller’s Deliveries Complete . Seller shall have delivered all of the documents and other items required pursuant to Section 6.2 and shall have performed all other material obligations to be performed by Seller at or prior to the Closing.
6.5 Conditions to Seller’s Obligations . Seller’s obligation to close the Transaction is conditioned on all of the following:
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(a) Seller’s Corporate Approval . The unconditional approval of the Transaction by the investment committee of Prudential Real Estate Investors, the real estate investment management business unit of Prudential Investment Management, Inc.; provided, however, Seller shall be required to exercise its right to terminate this Agreement as a result of the fact that it is unable to obtain the approval referenced in this Section 6.5(a) no later than seven (7) calendar days following the Effective Date. If Seller terminates this Agreement pursuant to this Section 6.5(c) , Seller shall reimburse Buyer for its reasonable out of pocket third party due diligence costs incurred by Buyer prior to the date of termination in connection with the Transaction in no event to exceed $100,000.
(b) Representations True . All representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects on and as of the Scheduled Closing Date, as if made on and as of such date except to the extent they expressly relate to an earlier date.
(c) Buyer’s Deliveries Complete . Buyer shall have delivered the funds required hereunder and all of the documents to be executed by Buyer set forth in Section 6.3 and shall have performed all other material obligations to be performed by Buyer at or prior to the Closing.
6.6 Waiver of Failure of Conditions Precedent . At any time on or before the date specified for the satisfaction of any condition, Seller or Buyer may elect in writing to waive the benefit of any such condition to its obligations hereunder. By closing the Transaction but subject to Section 7.3.3 , Seller and Buyer shall be conclusively deemed to have waived the benefit of any remaining unfulfilled conditions set forth in this Article 6 , except to the extent that the same expressly survive Closing. In the event any of the conditions set forth in this Article 6 are neither waived nor fulfilled, Seller or Buyer (as appropriate) may terminate this Agreement (subject to the notice and cure rights set forth in Article 9 and elsewhere in this Agreement) and exercise such rights and remedies, if any, that such party may have pursuant to the terms of Article 9 . If this Agreement is terminated as a result of the failure of any condition described in Section 6.4(b) , (other than the failure to Remove a Required Removal Exception), Section 6.4(c) , or Section 6.5(a) , then the Deposit shall be returned to Buyer and, thereafter, neither party shall have any further rights or obligations hereunder except for obligations which expressly survive termination of this Agreement.
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES
7.1 Buyer’s Representations . Buyer represents and warrants to Seller as follows:
7.1.1 Buyer’s Authorization . Buyer (a) is duly organized (or formed), validly existing and in good standing under the Laws of its State of organization and, to the extent required by applicable Laws, the State in which the Property is located, and (b) is authorized to execute this Agreement and consummate the Transaction and fulfill all of its obligations hereunder and under all Closing Documents to be executed by Buyer and such instruments, obligations and actions are valid and legally binding upon Buyer, enforceable in accordance with their respective terms. The execution and delivery of this Agreement and all Closing Documents to be executed by Buyer and the performance of the obligations of Buyer hereunder or thereunder will not (x) result in the violation of any Law or any provision of Buyer’s organizational documents, (y) conflict with any order of any court or governmental instrumentality binding upon Buyer, or (z) conflict or be inconsistent with, or result in any default under, any contract, agreement or commitment to which Buyer is bound.
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7.1.2 Buyer’s Financial Condition . No petition has been filed by or against Buyer under the Federal Bankruptcy Code or any similar Laws.
7.1.3 Patriot Act Compliance . None of Buyer, any owner of more than a 25 % ownership interest, directly or indirectly, in Buyer, nor any other person, group, entity or nation (other than the investors in American Realty Capital New York City REIT, Inc.) that Buyer is intentionally or knowingly acting for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, and Buyer is not intentionally or knowingly engaging in this Transaction on behalf of, or instigating or facilitating this Transaction on behalf of, any such person, group, entity or nation. Buyer is not engaging in this Transaction, directly or indirectly, in violation of any Laws relating to drug trafficking, money laundering or predicate crimes to money laundering. None of the funds of Buyer have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Buyer is prohibited by Law or that the Transaction or this Agreement is or will be in violation of Law. Buyer has and will continue to implement procedures, and has consistently and will continue to consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times prior to Closing .
7.1.4 Survival . Buyer’s representations and warranties in this section shall survive the Closing and not be merged therein.
7.2 Seller’s Representations . Seller represents and warrants to Buyer as follows:
7.2.1 Seller’s Authorization . Seller (a) is duly organized (or formed), validly existing and in good standing under the Laws of its State of organization and, to the extent required by applicable Laws, the State in which the Property is located, and (b) is authorized to execute this Agreement and, subject to obtaining the approvals described in Section 6.5(a) , consummate the Transaction and fulfill all of its obligations hereunder and under all Closing Documents to be executed by Seller and such instruments, obligations and actions are valid and legally binding upon Seller, enforceable in accordance with their respective terms. The execution and delivery of this Agreement and all Closing Documents to be executed by Seller and the performance of the obligations of Seller hereunder or thereunder will not (x) result in the violation of any Law or any provision of Seller’s organizational documents, (y) conflict with any order of any court or governmental instrumentality binding upon Seller, or (z) conflict or be inconsistent with, or result in any default under, any contract, agreement or commitment to which Seller is bound.
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7.2.2 Seller’s Financial Condition . No petition has been filed by Seller, nor has Seller received written notice of any petition filed against Seller under the Federal Bankruptcy Code or any similar Laws.
7.2.3 Patriot Act Compliance . Seller is not acting, directly or indirectly for, or on behalf of, any person, group, entity or nation named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or other banned or blocked person, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control and Seller is not engaging in this Transaction, directly or indirectly, on behalf of, or instigating or facilitating this Transaction, directly or indirectly, on behalf of, any such person, group, entity or nation. Seller is not engaging in this Transaction, directly or indirectly, in violation of any Laws relating to drug trafficking, money laundering or predicate crimes to money laundering. None of the funds of Seller have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Seller is prohibited by Law or that the Transaction or this Agreement is or will be in violation of Law. Seller has and will continue to implement procedures, and has consistently and will continue to consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times prior to Closing.
7.2.4 Delivery of Documents . Seller has requested that Seller’s Property Manager give or otherwise make available to Buyer’s Representatives all books, records, and other writings in such manager’s possession related in any material way to the use, ownership or operation of the Property, other than Protected Information. To Seller’s Knowledge, the documents heretofore or hereafter delivered or otherwise made available to Buyer’s Representatives prior to Closing (a) include the documents (other than the Protected Information) that are used by Seller in the day-to-day operation and management of the Property, and (b) are the same documents (other than the Protected Information) that are prepared by the Seller’s Property Manager for reporting to Seller in connection with (i) the performance by Seller of its fiduciary obligations to its clients and investors, and (ii) the preparation of financial statements and reports submitted to the clients and investors of Seller.
7.2.5 Designated Representatives . The Designated Representatives include those individuals who are currently responsible for the asset management of the Property and the Transaction on behalf of Seller.
7.2.6 Tenants of the Property . As of the Effective Date, the only tenants of the Property are the Tenants and the Tenants are not entitled to any free rent periods or rental abatements, concessions or other inducements for any period subsequent to the Closing Date; provided , however , the foregoing is not intended (and shall not be construed) as a representation by Seller of the parties that are in actual possession of any portion of the Property.
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7.2.7 Personal Property . Except as set forth in Exhibit M attached hereto, the personal property to be transferred to Buyer is free and clear of liens, security interests and other encumbrances arising by, through or under Seller, except as a result of instruments securing a loan that shall be paid in full by Seller at or prior to Closing.
7.2.8 Rents . Neither the Rents nor the Leases have been assigned, transferred or hypothecated by Seller, except by virtue of instruments securing a loan that shall be paid in full by Seller at or prior to Closing.
7.2.9 Third-Party Rights . Seller has not entered into any agreements currently in effect pursuant to which Seller has granted any rights of first refusal to purchase all or any part of the Property, options to purchase all or any part of the Property or other rights whereby any individual or entity has the right to purchase all or any part of the Property (except for any options to purchase the Property or a portion thereof that may be contained in the Leases).
7.2.10 Notice of Lease Defaults . As of the Effective Date, except as set forth on Exhibit M attached hereto and except for defaults cured on or before the Effective Date, Seller has neither (i) received any written notice from any Tenant asserting or alleging that Seller is in default under such Tenant’s Lease, nor (ii) sent to any Tenant any written notice alleging or asserting that such Tenant is in default under its Lease. If Buyer receives an estoppel certificate from a Tenant that complies with the terms of Section 6.4(c) as to such Tenant’s Lease, the representation and warranty of Seller contained in this paragraph shall be without further force or effect with respect to such Tenant or its Lease as of the date of the Tenant’s estoppel certificate to the extent such representation and warranty is covered by the applicable estoppel certificate.
7.2.11 Seller’s Knowledge Representations . To Seller’s Knowledge:
(a) As of the Effective Date, except as listed in Exhibit M attached hereto, Seller has not received any written notice of any current or pending litigation against Seller or the Property (including, without limitation, any condemnation proceedings) which would, in the reasonable judgment of Seller, adversely affect the Property.
(b) As of the Effective Date, Seller has not entered into or assumed any contracts, equipment leases or other agreements affecting the Property which will be binding upon Buyer after the Closing other than (i) the Contracts listed in Exhibit B attached hereto, (ii) the Lease, and (iii) liens, encumbrances, covenants, conditions, restrictions, easements and other matters of record. True, correct and complete copies of the Contracts listed on Exhibit B attached hereto and the Leases have been provided to Buyer. The Contracts and the Leases are in full force and effect and have not been modified, amended, reminted, renewed or extended, except as otherwise set forth on Exhibit B attached hereto or in the definition of Leases contained in Article 1 hereof. If Buyer receives an estoppel certificate from a Tenant that complies with the terms of Section 6.4(c) as to such Tenant’s Lease, the representation and warranty of Seller contained in this paragraph shall be without further force or effect with respect to such Tenant or its Lease as of the date of the Tenant’s estoppel certificate to the extent such representation and warranty is covered by the applicable estoppel certificate.
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(c) As of the Effective Date, except for defaults cured on or before the Effective Date and except as listed in Exhibit M attached hereto, Seller has not received, or delivered, any written notice of default under the terms of any of the Contracts.
(d) Except for violations cured or remedied on or before the Effective Date and except as listed in Exhibit M attached hereto, as of the Effective Date, Seller has not received any written notice from any governmental authority of any violation of any Law applicable to the Property.
(e) As of the Effective Date, except as set forth in Exhibit M attached hereto, Seller has not received any written notice of violation with regard to any law, covenant, condition or restriction relating to the present use or occupancy of the Property from any person, authority or agency having jurisdiction over the Property.
7.2.12 Intentionally Omitted .
7.2.13 Notification . Should Seller receive a written notice or obtain Seller’s Knowledge, after the Effective Date and prior to the Closing Date, that any of the representations set forth in this Section 7.2 are untrue, Seller will promptly notify Buyer of the same in writing.
7.2.14 Brokerage Agreements . There are no agreements in effect relating to the payment of leasing commissions or similar fees in connection with the Leases or the leasing of the Property (or any portion thereof). There are no Lease Expenses currently outstanding.
7.2.15 Condemnation . Seller has not received written notice of any pending or threatened condemnation or eminent domain proceedings that would affect the Property.
7.2.16 Security Deposits . There are no security deposits (including, without limitation, those in the form of letters of credit) presently held by or on behalf of Seller with respect to the Leases, except as set forth on Exhibit N attached hereto.
7.2.17 Condominium . The Seller, as a unit owner in the Condominium, as of the date hereof, has not received any written notice from the Condominium or the Condominium Board concerning changes in Condominium common charges due pursuant to the Condominium Documents and/or special assessments. Seller has neither (i) received any written notice from the Condominium or the Condominium Board asserting or alleging that Seller is in default under the Condominium Documents, nor (ii) sent to the Condominium any written notice alleging or asserting that the Condominium is in default under Condominium Documents
7.2.18 Employees. Neither Seller, nor any Seller Parties, has any employees at the Real Estate.
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7.3 General Provisions .
7.3.1 Seller’s Warranties Deemed Modified . To the extent that Buyer is deemed to know prior to the Effective Date that Seller’s Warranties are inaccurate, untrue or incorrect in any way, Buyer shall proceed to Closing notwithstanding such knowledge, such Seller’s Warranties shall be deemed modified to reflect Buyer’s deemed knowledge.
7.3.2 Breach of Warranties prior to Closing . If after the Effective Date but prior to the Closing, either Buyer or Seller obtains actual knowledge that any of the representations or warranties made herein are untrue, inaccurate or incorrect in any material respect, such party shall give the other party written notice thereof within five (5) Business Days of obtaining such knowledge (but, in any event, prior to the Closing). In the event of any breach of a Seller Warranty, Seller shall have the right to cure such misrepresentation or breach and shall be entitled to a reasonable extension of the Scheduled Closing Date (not to exceed forty-five (45) days in the aggregate with all other extensions of the Scheduled Closing Date by Seller permitted under this Agreement) for purposes of such cure. The untruth, inaccuracy or incorrectness of Seller’s Warranties shall be deemed material for all purposes of this Agreement only if Buyer’s aggregate damages resulting from the untruth, inaccuracy or incorrectness of Seller’s Warranties are reasonably estimated to exceed $50,000. If any such untruth, inaccuracy or incorrectness of Seller’s Warranties shall be deemed material and Seller fails to cure such untruth, inaccuracy or incorrectness, then Buyer shall have the remedies available to Buyer pursuant to and subject to the terms of Section 9. 2 hereof. If any of Seller’s Warranties are untrue, inaccurate or incorrect but are not, in the aggregate, untrue, inaccurate or incorrect in any material respect as set forth herein, Buyer shall be deemed to waive such misrepresentation or breach of warranty, and Buyer shall be required to consummate the Transaction without any reduction of or credit against the Purchase Price.
7.3.3 Survival; Limitation on Seller’s Liability . Seller’s Warranties shall survive the Closing and not be merged therein for a period of one hundred eighty (180) days and Seller shall only be liable to Buyer hereunder for a breach of a Seller’s Warranty with respect to which Seller receives a written notice of a claim from Buyer on or before the one hundred eightieth (180 th ) day after the Closing Date. Notwithstanding the foregoing, however, if the Closing occurs, Buyer hereby expressly waives, relinquishes and releases any rights or remedies available to it at law, in equity, under this Agreement or otherwise, including any claim against Seller for damages that Buyer may incur, as the result of any of Seller’s Warranties being untrue, inaccurate or incorrect if (a) Buyer is deemed to know that any Seller’s Warranties were untrue, inaccurate or incorrect at the time of the Closing, or (b) the untruth, inaccuracy or incorrectness of such Seller’s Warranties is not material.
7.3.4 Survival . The provisions of this Section 7.3 shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.
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ARTICLE 8 - COVENANTS
8.1 Contracts, Title Instruments, and the Leases .
(a) Without Buyer’s prior consent, between the Effective Date and the Closing, Seller shall not (i) extend, renew, replace or otherwise modify any Contract or enter into any new service contract or agreement, or (ii) execute any instrument which affects title to the Property, or (iii) enter into any new lease with respect to the Property or modify any Lease or any part thereof, or terminate, amend, modify, extend or waive any rights under any Lease (except pursuant to the exercise by a Tenant of a renewal, extension or expansion option or other right contained in its Lease). Seller shall furnish Buyer with a copy of the proposed agreement which shall contain such information reasonably necessary to enable Buyer to make informed decisions with respect to the advisability of the proposed transaction. If Buyer fails to object in writing to any such agreement within three (3) Business Days after receipt thereof, Buyer shall be deemed to have approved the terms of the proposed transaction. Buyer, in its sole and absolute discretion, shall be entitled to grant or withhold its consent with respect to any such transaction that is proposed between the Effective Date and the Closing. Any notice from Buyer rejecting the proposed transaction shall include a description of the reasons for Buyer’s rejection.
(b) Notwithstanding the foregoing terms of this section, if the Lease requires that the landlord’s consent be given under the applicable circumstances (or not be unreasonably withheld, conditioned or delayed), then Buyer shall be held to the same standard of approval.
(c) Between the Effective Date and the Closing, Seller shall not negotiate or enter into any agreement pursuant to which Seller shall grant any rights of first refusal to purchase all or any part of the Property, or any options to purchase all or any part of the Property or other rights whereby any individual or entity has the right to purchase all or any part of the Property.
(d) Subject to Section 8.1(a) hereof, Seller shall enforce the rights and remedies of the landlord under the Leases in a manner consistent with its past practices, including without limitation, to apply all or any portion of any security deposits then held by Seller toward any loss or damage incurred by Seller by reason of any defaults by the Tenants, and the exercise of any such rights or remedies shall not affect the obligations of Buyer under this Agreement or entitle Buyer to a reduction in, or credit or allowance against, the Purchase Price or give rise to any other claim on the part of Buyer.
(e) With respect to any security deposits which are letters of credit, (i) at Closing, Seller shall execute and deliver to Buyer such instruments as the issuers of such letters of credit shall reasonably require in order to transfer the same to Buyer, and (ii) after Closing, Seller shall cooperate with Buyer to change the named beneficiary under such letters of credit to Buyer so long as Seller does not incur any additional liability or expense in connection therewith. Buyer shall be liable for payment of any fees imposed by the issuer of any letter of credit to be transferred. The provisions of this section shall survive the Closing and not be merged therein.
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(f) On or before the Closing, Seller shall terminate any management agreements currently in effect with respect to the Property at the sole cost and expense of Seller.
(g) Maintain the current insurance coverages for the Property and otherwise operate the Property in a manner substantially similar to the operation of the Property prior to the Effective Date.
8.2 Maintenance of Property . Except to the extent Seller is relieved of such obligations by Article 10 , between the Effective Date and the Closing, Seller shall operate and maintain the Property in a manner consistent with Seller’s past practices with respect to the Property; provided , however , Seller shall not be obligated to perform any capital improvements or any deferred maintenance repairs. Seller shall not perform any capital improvement or any deferred maintenance repairs without the prior consent of Buyer, except that Seller shall have the right to perform without Buyer’s consent any of the foregoing required by any Law. Buyer hereby agrees that, except for breaches of this Section 8.2 , Buyer, shall accept the Property subject to, and Seller shall have no obligation to cure, (a) any violations of Laws, or (b) any physical conditions which would give rise to violations of Laws, whether the same now exist or arise prior to Closing. Between the Effective Date and the Closing, Seller will advise Buyer of any written notice Seller receives after the Effective Date from any governmental authority of the violation of any Laws regulating the condition or use of the Property. Seller, on or before the Closing Date, shall pay any fines (but not costs to cure) levied against the Property resulting from any violations of Law existing at the Property on or before the Closing Date.
8.3 Brokers . Seller and Buyer expressly acknowledge that Seller’s Broker has acted as the exclusive broker with respect to the Transaction and with respect to this Agreement. Seller shall pay any brokerage commission due to Seller’s Broker in accordance with the separate agreement between Seller and Seller’s Broker. Seller agrees to hold Buyer harmless and indemnify Buyer from and against any and all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) suffered or incurred by Buyer as a result of any claims by Seller’s Broker or any other party claiming to have represented Seller as broker in connection with the Transaction. Buyer agrees to hold Seller harmless and indemnify Seller from and against any and all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) suffered or incurred by Seller as a result of any claims by any party (other than Seller’s Broker) claiming to have represented Buyer as broker in connection with the Transaction. The provisions of this section shall survive the Closing (and not be merged therein) or the earlier termination of this Agreement.
8.4 Tax Protests; Tax Refunds and Credits . Subject to any contrary provisions in the Leases, Seller shall have the right to control the progress of and to make all decisions with respect to any contest of the real estate taxes and personal property taxes for the Property due and payable during the tax year in which Closing occurs (the “ Closing Tax Year ”) and all tax years prior to the Closing Tax Year, provided Seller shall keep Buyer reasonably informed regarding the status of any contest with respect to the taxes attributable to the Closing Tax Year. Subject to any contrary provisions in the Leases, Buyer shall have the right to control the progress of and to make all decisions with respect to any contest of the real estate taxes and personal property taxes for the Property due and payable during all years subsequent to the Closing Tax Year. To the extent any real estate or personal property tax refunds or credits are received after Closing with respect to the Property and such refunds or credits are attributable to real estate and personal property taxes paid for any tax year prior to the Closing Tax Year, Seller shall be entitled to the entirety of such refunds and credits (except to the extent due to any past or present tenant of the Property). To the extent any such refunds or credits are attributable to real estate and personal property taxes paid during the Closing Tax Year, such amounts shall be prorated between the parties in the manner provided in Section 5.2 , less costs incurred in obtaining such refund or credit and any amounts due to any past or present tenant of the Property. The provisions of this section shall survive the Closing (and not be merged therein).
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8.5 Publicity . Seller and Buyer each hereby covenant and agree that (a) prior to the Closing neither Seller nor Buyer shall issue any press release or similar public statement with respect to the Transaction or this Agreement (a “ Press Release ”) without the prior consent of the other, except to the extent required by applicable Law, and (b) after the Closing, any Press Release issued by either Seller or Buyer shall be subject to the review and approval of both parties (which approval shall not be unreasonably withheld, conditioned or delayed and such response shall be provided within two (2) Business Days after submission of a draft of the Press Release to the other party for review), except to the extent required by applicable Law. If either Seller or Buyer is required by applicable Law to issue a Press Release, such party shall, at least two (2) Business Days prior to the issuance of the same, deliver a copy of the proposed Press Release to the other party for its review. The provisions of this section shall survive the Closing (and not be merged therein) or the earlier termination of this Agreement.
8.6 Confidentiality .
(a) Buyer shall hold, and shall cause the other Buyer’s Representatives and any prospective investors in Buyer to hold in strict confidence and not disclose to any other person without the prior written consent of Seller: (i) the terms of the Agreement, (ii) unless and until the Closing occurs, any of the information in respect of the Property delivered or made available to any Buyer’s Representatives, and (iii) the identity of any direct or indirect owner of any beneficial interest in Seller. In the event the Closing does not occur or this Agreement is terminated, Buyer shall promptly return to Seller all copies of documents containing any of such information without retaining any copy thereof or extract therefrom. Notwithstanding the foregoing, Buyer may disclose such information (A) on a need-to-know basis to its employees, agents, consultants, and members of professional firms serving it or potential lenders or investors, or (B) as any governmental agency (including, without limitation, the Securities and Exchange Commission) may require in order to comply with applicable Laws or a court order, or (C) to the extent that such information is a matter of public record. Buyer hereby agrees to indemnify, defend, and hold each of the Seller Parties free and harmless from and against any and all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) arising out of or resulting from the breach of the terms of this section.
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(b) Seller shall hold, and shall cause the other Seller Parties to hold in strict confidence and not disclose to any other person without the prior written consent of Seller: (i) the terms of the Agreement, and (ii) the identity of any direct or indirect owner of any beneficial interest in Buyer. Notwithstanding the foregoing, Seller may disclose such information (A) on a need-to-know basis to its employees, agents, consultants, and members of professional firms serving it or potential lenders or investors, or (B) as any governmental agency (including without limitation, the Securities and Exchange Commission) may require in order to comply with applicable Laws or a court order, or (C) to the extent that such information is a matter of public record. Seller hereby agrees to indemnify, defend, and hold each of the Buyer’s Representatives free and harmless from and against any and all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) arising out of or resulting from the breach of the terms of this section.
(c) The provisions of this section shall survive the Closing (and not be merged therein) or earlier termination of this Agreement.
8.7 Delivery of Information Regarding Compliance . (a) No later than the seventh (7 th ) day following the Effective Date, Buyer agrees to provide documentation reasonably necessary or desirable for Seller to verify that the representations and warranties made in Section 7.1.3 are true, accurate and complete, which documentation shall include, without limitation, information regarding the ownership of Buyer and a list of any person or entity that directly or indirectly owns more than a 25% interest in Buyer. In addition, if after review of such information Seller determines that it needs additional information regarding the owners of Buyer, Buyer agrees to provide Seller with the Social Security number, FEIN number, or a copy of the passport, as applicable, for each such person or entity or such other information that Seller requires in lieu thereof.. Notwithstanding any provision in this Agreement to the contrary, Seller may disclose such information, without notice to Buyer, to any government agency or regulators in connection with any regulatory examination or if such disclosure is required by Law or its regulatory compliance policies.
(b) No later than the seventh (7 th ) day following the Effective Date, Seller agrees to provide documentation reasonably necessary or desirable for Buyer to verify that the representations and warranties made in Section 7.2.3 are true, accurate and complete, which documentation shall include, without limitation, information regarding the ownership of Seller and a list of any person or entity that directly or indirectly owns more than a 25% interest in Seller. In addition, if after review of such information Buyer determines that it needs additional information regarding the owners of Seller, Seller agrees to provide Buyer with the Social Security number, FEIN number, or a copy of the passport, as applicable, for each such person or entity or such other information that Buyer requires in lieu thereof. Notwithstanding any provision in this Agreement to the contrary, Buyer may disclose such information, without notice to Seller, to any government agency or regulators in connection with any regulatory examination or if Buyer reasonably believes that such disclosure is required by Law or its regulatory compliance policies.
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ARTICLE 9 - DEFAULTS
9.1 Seller’s Remedies for Buyer Defaults . If, (i) on the Scheduled Closing Date Buyer fails to deliver the balance of the Purchase Price in accordance with Sections 2.3 and 6.1 , and fails to cure the same within two (2) Business Days after the Scheduled Closing Date, or (ii) on or before the Scheduled Closing Date Buyer is in default of any of its other material obligations hereunder or any of Buyer’s representations or warranties are, in the aggregate, untrue, inaccurate or incorrect in any material respect, and any such circumstance described in this clause (ii) continues for five (5) Business Days after written notice (which written notice shall detail such default or breach), then Seller shall have the right to elect as its sole and exclusive remedy, to (a) terminate this Agreement by written notice to Buyer, promptly after which the Deposit shall be paid to Seller as liquidated damages and, thereafter, the parties shall have no further rights or obligations hereunder except for obligations which expressly survive the termination of this Agreement, or (b) waive the default or breach and proceed to close the Transaction. Seller and Buyer have discussed the possible consequences to Seller in the event that the Closing does not occur by reason of any of the events described in this section. The parties agree that it would be impractical or extremely difficult to determine the actual damages to Seller in such event and that a reasonable estimate of such damages is an amount equal to the Deposit. THE AMOUNT PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES PURSUANT TO THE FOREGOING PROVISIONS SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY IF BUYER FAILS TO CLOSE THE PURCHASE OF THE PROPERTY. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE AMOUNT OF THE DEPOSIT PLUS ANY INTEREST ACCRUED THEREON REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES.
9.2 Buyer’s Remedies for Seller Defaults . If, on or before the Scheduled Closing Date, Seller is in default of any of its material obligations hereunder, or any of Seller’s Warranties are, in the aggregate, untrue, inaccurate or incorrect in any material respect, and any such circumstance described in this sentence continues for five (5) Business Days after written notice (which written notice shall detail such default or breach), then Buyer shall have the right to elect, as its sole and exclusive remedy, to (a) terminate this Agreement by written notice to Seller, promptly after which (i) the Deposit shall be returned to Buyer and (ii) if the Seller default of a material obligation hereunder is willful, all reasonable third party due diligence costs incurred by Buyer prior to the date of termination in connection with the Transaction and this Agreement shall be reimbursed by Seller up to an aggregate amount not to exceed $100,000, and, after such termination, the parties shall have no further rights or obligations hereunder except for obligations which expressly survive the termination of this Agreement, or (b) waive the default or breach and proceed to close the Transaction, or (c) seek specific performance of this Agreement by Seller; provided , however , if specific performance of this Agreement is not available as a remedy to Buyer as a result of Seller’s intentional acts, then Buyer shall be entitled to (x) the return of the Deposit, and (y) pursue a claim against Seller for damages but specifically excluding any claim for special, consequential or punitive damages. As a condition precedent to Buyer exercising any right it may have to bring an action for specific performance hereunder, Buyer must commence such an action within ninety (90) days after the occurrence of Seller’s default. Buyer agrees that its failure to timely commence such an action for specific performance within such ninety (90) day period shall be deemed a waiver by it of its right to commence an action for specific performance as well as a waiver by it of any right it may have to file or record a notice of lis pendens or notice of pendency of action or similar notice against any portion of the Property.
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9.3 Indemnity Obligations . Notwithstanding any provision in this Agreement to the contrary, in no event shall the provisions of this Article 9 limit the rights of either party against the other party due to the other party’s obligation to indemnify such party in accordance with this Agreement or the damages recoverable pursuant to such indemnification obligations. This section shall survive the Closing (and not be merged therein) or the earlier termination of this Agreement.
ARTICLE 10 - CASUALTY/CONDEMNATION
10.1 Right to Terminate . If, after the Effective Date, (a) written notice of a proposed condemnation or taking of all or any part of the Property is received, a condemnation proceeding is commenced as to all or any part of the Property, a condemnation proceeding is concluded as to all or any part of the Property, or all or any part of the Property is conveyed in lieu of condemnation (any of the foregoing a “ Condemnation ”); or (b) any portion of the Property is damaged or destroyed (excluding routine wear and tear and damage caused by any Buyer’s Representative) (a “ Casualty ”), Seller shall notify Buyer in writing of such fact promptly after obtaining knowledge thereof. If the Property is the subject of a Major Casualty/Condemnation (as hereinafter defined) that occurs after the Effective Date, Buyer shall have the right to terminate this Agreement by giving written notice to Seller no later than ten (10) Business Days after the giving of Seller’s notice, and the Scheduled Closing Date shall be extended, if necessary, to provide sufficient time for Buyer to make such election. The failure by Buyer to terminate this Agreement within such ten (10) Business Day period shall be deemed an election not to terminate this Agreement, provided, however, such ten (10) Business Day period shall be extended, if necessary, to provide the parties sufficient time to determine if a Major Casualty has occurred. If this Agreement is terminated pursuant to this section, the Deposit shall be returned to Buyer and, thereafter, the parties shall have no further rights or obligations hereunder except for obligations which expressly survive the termination of this Agreement. For the purposes of this Agreement, “ Major Casualty/Condemnation ” shall mean any Casualty or Condemnation with respect to which (i) the portion of the Property that is the subject of such Casualty or Condemnation has a value in excess of Five Million Eight Hundred Thousand Dollars ($5,800,000), as reasonably determined by an engineer selected by Seller and reasonably acceptable to Buyer, (ii) such Casualty or Condemnation gives rise to a right by any Tenant to terminate its Lease, (iii) such Casualty results in a full or partial abatement of rent under the Leases and Seller, in its sole and absolute discretion, does not elect to assign the proceeds of any rental loss insurance to Buyer or give Buyer a credit at Closing for the cost of such rent abatement, or (iv) such Casualty is an uninsured casualty and Seller, in its sole and absolute discretion, does not elect to cause the damage to be repaired or restored or give Buyer a credit at Closing for the cost of such repair or restoration.
10.2 Allocation of Proceeds and Awards . If a Condemnation or Casualty occurs after the Effective Date and this Agreement is not terminated as permitted pursuant to the terms of Section 10.1 , then this Agreement shall remain in full force and effect, and Buyer shall acquire the remainder of the Property upon the terms set forth herein. Any awards or proceeds from the condemning authority or Seller’s insurance company, as the case may be (the “ Casualty/Condemnation Proceeds ”) shall be allocated between Buyer and Seller as follows: (a) Seller shall be entitled to be reimbursed from the Casualty/Condemnation Proceeds for (i) all costs, expenses and fees, including reasonable attorneys’ fees, expenses and disbursements, reasonably and actually incurred by Seller in connection with negotiating the settlement of such award or proceeds, (ii) proceeds of any rental loss, business interruption or similar insurance, or other compensation or loss of use, that are allocable to the period prior to the Closing Date, and (iii) the reasonable and actual costs incurred by Seller in physically stabilizing the Property following a Casualty; and (b) Buyer shall be entitled to (i) the balance of the Casualty/Condemnation Proceeds, and (ii) a credit from Seller equal to Seller’s deductible with respect to a Casualty, if the same is an insured casualty.
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10.3 Insurance . Seller shall maintain the property insurance coverage currently in effect for the Property, or comparable coverage, through the Closing Date.
10.4 Waiver . The provisions of this Article 10 supersede the provisions of any applicable Laws with respect to the subject matter of this Article 10 .
ARTICLE 11 - MISCELLANEOUS
11.1 Buyer’s Assignment .
(a) Buyer shall not assign this Agreement or its rights hereunder without the prior written consent of Seller, which consent Seller may grant or withhold in its sole and absolute discretion, and any such attempted assignment shall be null and void ab initio ; provided , however , Buyer may assign this Agreement and/or its rights hereunder to an Affiliate without the consent of Seller or a subsidiary of American Realty Capital New York City REIT, Inc. or New York REIT, Inc. As used herein, “Affiliate” means any legal entity that is directly or indirectly through one or more intermediaries, controlled by or under common control with Buyer. As used in this paragraph only, the term “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of management and policies, whether through the ownership of voting securities, by contract or otherwise. Any transfer, directly or indirectly, of any stock, partnership interest or other ownership interest in Buyer shall constitute an assignment of this Agreement; provided , however , the foregoing shall not be construed to prohibit the transfer of stock in a public company. Buyer’s request that Seller direct deed the Property to anyone or anything other than Buyer shall constitute an assignment of this Agreement.
(b) In the event Buyer intends to assign its rights hereunder to an entity that is not an Affiliate, Buyer shall send Seller written notice of its request at least ten (10) Business Days prior to the Scheduled Closing Date, which notice shall include the legal name and structure of the proposed assignee and Buyer shall provide Seller any other information that Seller may reasonably request with respect to the proposed assignee. Notwithstanding any provision in this Agreement to the contrary:
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(i) Any permitted assignment by Buyer shall not relieve Buyer of any of its obligations and liabilities hereunder, nor shall any such assignment alter, impair or relieve such assignee from the waivers, acknowledgements and agreements of Buyer set forth herein, including those set forth in Section 4.2 , Article 7 and Article 8 , all of which will be binding upon any assignee of Buyer.
(ii) No transfer by Buyer of any interest in this Agreement and no transfers of direct or indirect interests in Buyer shall be permitted if the same would cause the representations and warranties made in Section 7.1 or Section 11.13 to be untrue, inaccurate or incomplete and Buyer covenants to cooperate with Seller’s requests to provide the information required by Section 8.7 and other documentation reasonably necessary or desirable for Seller to verify that such representations and warranties are true, accurate and complete at all times prior to Closing. If Buyer fails to provide the requested documentation to Seller at least ten (10) Business Days prior to the Scheduled Closing Date, then Seller shall have the right, at its election, to postpone the Scheduled Closing Date for a reasonable period until such verification has been made.
11.2 Survival/Merger . Except for the provisions of this Agreement which are explicitly stated to survive the Closing, (a) none of the terms of this Agreement shall survive the Closing, and (b) the delivery of the Purchase Price, the Deed and the other Closing Documents and the acceptance thereof shall effect a merger, and be deemed the full performance and discharge of every obligation on the part of Buyer and Seller to be performed hereunder.
11.3 Integration; Waiver . This Agreement embodies and constitutes the entire understanding between the parties with respect to the Transaction and all prior agreements, understandings, representations and statements, oral or written, are merged into this Agreement. Neither this Agreement nor any provision hereof may be waived, modified, amended, discharged or terminated except by an instrument signed by the party against whom the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument. No waiver by either party hereto of any failure or refusal by the other party to comply with its obligations hereunder shall be deemed a waiver of any other or subsequent failure or refusal to so comply.
11.4 Governing Law . This Agreement shall be governed by, and construed in accordance with, the law of the State in which the Real Property is located.
11.5 Captions Not Binding; Exhibits . The captions in this Agreement are inserted for reference only and in no way limit the scope or intent of this Agreement or of any of the provisions hereof. All Exhibits attached hereto shall be incorporated by reference as if set out herein in full.
11.6 Binding Effect . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.
11.7 Severability . If any term or provision of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.
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11.8 Notices . Any notices or other communications under this Agreement must be in writing, and shall be deemed duly given or made at the time and on the date when received by e-mail transmittal of pdf files or similar electronic means or when personally delivered as shown on a receipt therefor (which shall include delivery by a nationally recognized overnight delivery service) to the address for each party set forth below. Any party, by written notice to the other in the manner herein provided, may designate an address different from that set forth below.
IF TO BUYER :
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c/o American Realty Capital 405 Park Avenue, 12 th Floor New York New York 10022 Attention: Legal Department Telephone #: (212) 615-4500 E-Mail Address: mead@arlcap.com
c/o American Realty Capital 405 Park Avenue, 12 th Floor New York New York 10022 Attention: President Telephone #: (212) 615-4500 E-Mail Address: MHappel@arlcap.com |
IF TO SELLER :
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USPF IV Laurel Retail Owner, L.P.
c/o Prudential Real Estate Investors
180 N. Stetson Street
Chicago, IL 60601
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COPY TO :
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Prudential Real Estate
Investors
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COPY TO :
Prudential Real Estate Investors
Telephone #: (404) 704-3788 E-Mail Address: gregory.killeen@prudential.com
COPY TO :
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Goodwin Procter LLP
Boston, MA 02109
Attention: Minta E. Kay, Esq.
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11.9 Counterparts; Electronic Signatures . This Agreement may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same agreement. Signatures to this Agreement transmitted by electronic means shall be valid and effective to bind the party so signing. Each party agrees to promptly deliver an execution original to this Agreement with its actual signature to the other party, but a failure to do so shall not affect the enforceability of this Agreement.
11.10 No Recordation . Seller and Buyer each agrees that neither this Agreement nor any memorandum or notice hereof shall be recorded and Buyer agrees (a) not to file any notice of pendency or other instrument against the Property or any portion thereof in connection herewith, and (b) to indemnify Seller against all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) incurred by Seller by reason of the filing by Buyer of such notice of pendency or other instrument. Notwithstanding the foregoing, if the same is permitted pursuant to applicable Laws, Buyer shall be entitled to record a notice of lis pendens if Buyer is entitled to seek (and is actually seeking) specific performance of this Agreement by Seller in accordance with the terms of Section 9.2 .
11.11 Additional Agreements; Further Assurances . Each of the parties hereto shall execute and deliver such documents as the other party shall reasonably request in order to consummate and make effective the Transaction; provided , however , the execution and delivery of such documents shall not result in any additional liability or cost to the executing party.
11.12 Construction . The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement, any modification hereof or any of the Closing Documents.
11.13 Intentionally Omitted .
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11.14 Time of Essence . Time is of the essence with respect to the Closing and all of the provisions of this Agreement.
11.15 Resolutions of Disputes .
11.15.1 WAIVER OF JURY TRIAL . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT BETWEEN THE PARTIES RELATING TO THIS AGREEMENT, THE PROPERTY OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THAT RELATIONSHIP, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, ANTITRUST CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON-LAW OR STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT AND ALL OTHER AGREEMENTS AND INSTRUMENTS PROVIDED FOR HEREIN, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH LEGAL COUNSEL OF ITS OWN CHOOSING, OR HAS HAD AN OPPORTUNITY TO DO SO, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS HAVING HAD THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT ENTERED INTO BETWEEN THE PARTIES IN CONNECTION WITH THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY.
11.15.2 Intentionally Omitted .
11.15.3 RELEASES . WITH RESPECT TO ANY RELEASE SET FORTH IN THIS AGREEMENT RELATING TO UNKNOWN AND UNSUSPECTED CLAIMS, THE PARTIES HERETO HEREBY ACKNOWLEDGE THAT SUCH WAIVER AND RELEASE IS MADE WITH THE ADVICE OF COUNSEL AND WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE CONSEQUENCES AND EFFECTS OF SUCH RELEASE.
11.16 Audit . Seller shall provide Buyer and/or its auditors, at no cost or expense to Seller, in a timely fashion (Seller acknowledging that Buyer may be required to make the below-referenced filing within seventy-one (71) days following Closing), with copies of, or access to, such factual and financial information as may be reasonably requested by Buyer or its designated accountants, and as is in the possession of or under the reasonable control of Seller and as relates to the Property, in connection with filings of Buyer required by the Securities and Exchange Commission on account of Buyer’s purchase of the Property.
31 |
11.17 Withholding . Buyer shall be entitled to deduct and withhold, or cause the Escrow Agent to deduct and withhold, from the Purchase Price, such amounts as may be required to be deducted and withheld with respect to the making of such payment under Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”) and under any similar provision of state, local or foreign Law. To the extent that amounts are so deducted and withheld by Buyer or Escrow Agent, the same shall be treated for all purposes of this Agreement as having been paid to Seller. In addition, Seller and Buyer shall complete at Closing Form 8288-A and any other forms which Buyer shall file with the Internal Revenue Service in connection therewith.
[Remainder of page intentionally blank]
32 |
IN WITNESS WHEREOF , each party hereto has caused this Agreement to be duly executed to be effective as of the day and year first above written.
SELLER:
USPF IV Laurel Retail Owner, L.P. , a Delaware limited partnership
By: | USPF IV Laurel Retail GP LLC, |
A Delaware limited liability company, its general partner
By: | U.S. Property Fund IV GmbH & Co., KG , |
A German limited partnership
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | /s/ Barry L. Howell |
Barry L. Howell
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | /s/ James L. Street |
James L. Street
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
BUYER:
ARC NYC400E67, LLC , a Delaware limited liability company
By: /s/ Michael A. Happel
Name: Michael A. Happel
Title: Authorized Officer
33 |
LIMITED JOINDER
U.S. Property Fund IV GmbH & Co. KG hereby executes and delivers this Limited Joinder for the sole purpose of being bound jointly and severally with Seller under Section 4.3 of this Agreement.
U.S. Property Fund IV GmbH & Co., KG,
A German limited partnership
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | /s/ Barry L. Howell |
Barry L. Howell
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | /s/ James L. Street |
James L. Street
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
34 |
AGREEMENT OF ESCROW AGENT
The undersigned has executed this Agreement solely to confirm its agreement to hold the Escrow Deposits in escrow in accordance with the provisions and otherwise comply with the provisions of Exhibit C to this Agreement.
In witness whereof, the undersigned has executed this Agreement as of August 8, 2014.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ Stephen Farber
Name: Stephen Farber
Title: VP
35 |
EXHIBIT A
LEGAL DESCRIPTION
Units RET1, RET2 and GAR (a/k/a the Garage
Unit) of The Laurel Condominium established pursuant to that certain Declaration dated October 6, 2008 recorded in the New York
County Office of the Regsiter of The City of New York on November 3, 2008 at CRFN 2008000427186, also designated as Tax Lots 1208,
1209 and 1210, respectively, Block 1461 on Tax Map Real Property Assessment Department of The City of New York for The Borough
of Manhattan & County of New York.
Exhibit A, Page 1 |
EXHIBIT B
LIST OF CONTRACTS
Property Management Agreement
Exhibit B, Page 1 |
EXHIBIT C
ESCROW PROVISIONS
The Deposit and any other sums (including, without limitation, any interest earned thereon) which the parties agree shall be held in escrow (herein collectively called the “ Escrow Deposits ”), shall be held by the Escrow Agent, in trust, and disposed of only in accordance with the following provisions:
1. The Escrow Agent shall invest the Escrow Deposits in government insured interest-bearing instruments reasonably satisfactory to both Buyer and Seller and shall promptly provide Buyer and Seller with confirmation of the investments made. Because Escrow Agent is not itself a bank, it may commingle the Escrow Deposits with other escrow deposits in a trust account in order to facilitate placing the Escrow Deposits in a segregated interest bearing account and to disburse the Escrow Deposits once they have been removed from said segregated interest bearing account in accordance with the terms of this Agreement, but shall not otherwise commingle the Escrow Deposits with any funds of the Escrow Agent or others.
2. If for any reason the Closing does not occur and either party makes a written demand upon the Escrow Agent for payment of the Escrow Deposits, the Escrow Agent shall give written notice to the other party of such demand. If the Escrow Agent does not receive a written objection from the other party to the proposed payment within ten (10) days after the giving of such notice, the Escrow Agent is hereby authorized to make such payment. If the Escrow Agent receives such written objection within such period, the Escrow Agent shall continue to hold such amount until otherwise directed by written instructions signed by Seller and Buyer or a final judgment of a court.
3. If the Closing occurs, the Escrow Agent shall deliver the Escrow Deposits to, or upon the instructions of, Seller on the Closing Date.
4. The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of either of the parties, and that the Escrow Agent shall not be liable to either of the parties for any action or omission on its part taken or made in good faith, and not in disregard of this Agreement, but shall be liable for any Liabilities (including reasonable attorneys’ fees, expenses and disbursements) incurred by Seller or Buyer resulting from actions or omissions taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving negligence on the part of the Escrow Agent. Seller and Buyer shall jointly and severally indemnify and hold the Escrow Agent harmless from and against all Liabilities (including reasonable attorneys’ fees, expenses and disbursements) incurred in connection with the performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving negligence on the part of the Escrow Agent.
5. Buyer shall pay any income taxes on any interest earned on the Escrow Deposits. Buyer represents and warrants to the Escrow Agent that its taxpayer identification number is ________.
Exhibit C, Page 1 |
6. Section 6045(e) of the United States Internal Revenue Code and the regulations promulgated thereunder (herein collectively called the “ Reporting Requirements ”) require an information return to be made to the United States Internal Revenue Service, and a statement to be furnished to Seller, in connection with the Transaction. Escrow Agent is either (x) the person responsible for closing the Transaction (as described in the Reporting Requirements) or (y) the disbursing title or escrow company that is most significant in terms of gross proceeds disbursed in connection with the Transaction (as described in the Reporting Requirements). Accordingly:
(a) Escrow Agent is hereby designated as the “ Reporting Person ” (as defined in the Reporting Requirements) for the Transaction. Escrow Agent shall perform all duties that are required by the Reporting Requirements to be performed by the Reporting Person for the Transaction.
(b) Seller and Buyer shall furnish to Escrow Agent, in a timely manner, any information requested by Escrow Agent and necessary for Escrow Agent to perform its duties as Reporting Person for the Transaction.
(c) Escrow Agent hereby requests Seller to furnish to Escrow Agent Seller’s correct taxpayer identification number. Seller acknowledges that any failure by Seller to provide Escrow Agent with Seller’s correct taxpayer identification number may subject Seller to civil or criminal penalties imposed by Law. Accordingly, Seller hereby certifies to Escrow Agent, under penalties of perjury, that Seller’s correct taxpayer identification number is __________.
(d) Each of the parties hereto shall retain this Agreement for a period of four (4) years following the calendar year during which Closing occurs.
7. The provisions of this Exhibit C shall survive the Closing (and not be merged therein) or earlier termination of this Agreement.
[Remainder of page intentionally blank]
Exhibit C, Page 2 |
EXHIBIT D
FORM OF DEED
[TO BE SAME AS DEED INTO SELLER]
Exhibit D, Page 1 |
EXHIBIT E
FORM OF BILL OF SALE
THIS BILL OF SALE (this “ Bill of Sale ”), is executed as of _____ , 2014 by USPF IV LAUREL RETAIL OWNER, L.P., a Delaware limited partnership (“ Seller ”) for the benefit of ARCP [TBD], LLC , a Delaware limited liability company (“ Buyer ”).
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Purchase and Sale Agreement, dated as of August ___, 2014, by and between Buyer (as successor by assignment to ARC NYC400E67, LLC, a Delaware limited liability company) and Seller (as the same may have been amended, modified or assigned, the “ Sale Agreement ”), Seller agreed to sell to Buyer, inter alia , certain real property, the improvements located thereon and certain rights appurtenant thereto, all as more particularly described in the Sale Agreement (collectively, the “ Real Property ”). Initially capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such terms in the Sale Agreement; and
WHEREAS, by deed of even date herewith, Seller conveyed the Real Property to Buyer; and
WHEREAS, in connection with the above described conveyance Seller desires to sell, transfer and convey to Buyer certain items of tangible personal property as hereinafter described.
NOW, THEREFORE, in consideration of the receipt of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration paid in hand by Buyer to Seller, the receipt and sufficiency of which are hereby acknowledged, Seller has SOLD, TRANSFERRED, and CONVEYED and by these presents does hereby SELL, TRANSFER, and CONVEY to Buyer and Buyer hereby accepts all right, title and interest in and to all tangible personal property owned by Seller that is located on the Real Property and used in the ownership, operation and maintenance of the Real Property, including all books, records and files of Seller relating to the Real Property, but specifically excluding any Protected Information and any computer software that is licensed to Seller (herein collectively called the “ Personal Property ”).
This Bill of Sale is made without any covenant, warranty or representation by, or recourse against, Seller other than Seller’s Warranties (as defined in the Sale Agreement).
Seller’s liability under this Bill of Sale shall be limited as set forth in Section 4.3 of the Sale Agreement.
[Remainder of page intentionally blank]
Exhibit E, Page 1 |
IN WITNESS WHEREOF, the undersigned has executed this Bill of Sale to be effective as of the date first set forth hereinabove.
SELLER:
USPF IV Laurel Retail Owner, L.P. , a Delaware limited partnership
By: | USPF IV Laurel Retail GP LLC, |
A Delaware limited liability company, its general partner
U.S. Property Fund IV GmbH & Co., KG,
A German limited partnership
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
Exhibit E, Page 2 |
EXHIBIT F
FORM OF ASSIGNMENT OF LEASE AND INTANGIBLE PROPERTY
THIS ASSIGNMENT OF LEASE AND INTANGIBLE PROPERTY (this “ Assignment ”), is made as of ____ , 2014 by and between USPF IV LAUREL RETAIL OWNER, L.P., a Delaware limited partnership (“ Assignor ”) and ARCP [TBD], LLC , a Delaware limited liability company (“ Assignee ”).
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Purchase and Sale Agreement, dated as of August ___, 2014, by and between Assignee (as successor by assignment to American Realty Capital III, LLC, a Delaware limited liability company) and Assignor (as the same may have been amended, modified or assigned, the “ Sale Agreement ”), Assignor agreed to sell to Assignee, inter alia , certain real property, the improvements located thereon and certain rights appurtenant thereto, all as more particularly described in the Sale Agreement (collectively, the “ Real Property ”). Initially capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such terms in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, inter alia , that Assignor shall assign to Assignee the Lease and rights to certain intangible property and that Assignor and Assignee shall enter into this Assignment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Assignment of Lease . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the Lease identified on Exhibit A attached hereto. Assignee hereby accepts the foregoing assignment of the Lease and assumes the obligations with respect thereto as and to the extent provided in the Sale Agreement.
2. Assignment of Intangible Property . Assignor hereby assigns, sets over and transfers to Assignee all of Assignor’s right, title and interest in, to and under the following, if and only to the extent the same may be assigned or quitclaimed by Assignor without expense to Assignor in excess of a nominal transfer fee:
(a) the contracts, equipment leases, and other agreements relating to the Real Property that are described in Exhibit B attached hereto; and
(b) any licenses, permits and other written authorizations in effect as of the date hereof with respect to the Real Property; and
(c) any guaranties and warranties in effect as of the date hereof with respect to any portion of the Real Property or the personal property conveyed to Assignee by Assignor concurrently herewith.
Exhibit F, Page 1 |
Assignee hereby accepts the foregoing assignment of the interests described in this Section 2 (collectively, the “ Intangible Property ”) and assumes the obligations with respect thereto as and to the extent provided in the Sale Agreement.
3. Reservation of Benefits . Notwithstanding anything to the contrary in this Assignment, to the extent that Assignor continues to have liability after the date hereof with respect to the Property, Assignor reserves and retains such benefits under the Lease and the Intangible Property as are necessary or desirable for Assignor to defend or protect itself with respect to or to assert any rights relating to any matter for which Assignor may continue to have liability from and after the date hereof; provided , however , said benefits reserved and retained by Assignor pursuant to this Section shall exist jointly with Assignee’s benefits under the Lease and Intangible Property, and such benefits may be enforceable by each of Assignor and Assignee to the extent of their respective liability or damages for any matters relating thereto. Assignee and Assignor agree to cooperate with the reasonable requests of the other party in enforcing their respective benefits under the Lease and the Intangible Property to the extent such benefits are reserved by Assignor pursuant to the terms of this Section.
4. Limitation on Liability . Assignor’s liability under this Assignment shall be limited as set forth in Section 4.3 of the Sale Agreement.
5. Miscellaneous . This Assignment and the obligations of the parties hereunder shall be binding upon and inure to the benefit of the parties hereto, their respective legal representatives, successors and assigns, shall be governed by and construed in accordance with the laws of the State in which the Real Property is located applicable to agreements made and to be wholly performed within said State and may not be modified or amended in any manner other than by a written agreement signed by the party to be charged therewith.
6. Severability . If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforced to the fullest extent permitted by law.
7. Counterparts . This Assignment may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same agreement.
[Remainder of page intentionally blank]
Exhibit F, Page 2 |
IN WITNESS WHEREOF, the undersigned have executed this Assignment to be effective as of the date first set forth hereinabove.
ASSIGNOR:
USPF IV Laurel Retail Owner, L.P. , a Delaware limited partnership
By: | USPF IV Laurel Retail GP LLC, |
A Delaware limited liability company, its general partner
By: | U.S. Property Fund IV GmbH & Co., KG , |
A German limited partnership
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
ASSIGNEE:
ARCP [TBD], LLC, a Delaware limited liability company
By: [TBD], its manager
By: ___________________________________
Name: _________________________________
Title: __________________________________
Exhibit F, Page 3 |
EXHIBIT G
FORM OF NOTICE TO TENANT
____ ___, 2014
Re: | Notice of Change of Ownership of |
The Laurel Retail and Garage Condominium
400 East 67 th Street, New York, NY 10065
Ladies and Gentlemen:
You are hereby notified as follows:
That as of the date hereof, USPF IV LAUREL RETAIL OWNER, L.P., a Delaware limited partnership has transferred, sold, assigned, and conveyed all of its interest in and to the above-described property (the “ Property ”) to ___________________________, a Delaware limited liability company (the “ New Owner ”).
Future notices and rental payments with respect to your leased premises at the Property should be made to the New Owner in accordance with your lease terms at the following address:
_______________________________
_______________________________
_______________________________
Attn: _______________________________
If there is a security deposit with respect to your lease, it has been transferred to the New Owner and the New Owner shall be responsible for holding your security deposit in accordance with the terms of your lease and applicable laws.
We expect that New Owner or its property management agent will contact you shortly with respect to other information regarding New Owner, the Property and your lease.
Sincerely,
USPF IV Laurel Retail Owner, L.P. , a Delaware limited partnership
By: | USPF IV Laurel Retail GP LLC, |
A Delaware limited liability company, its general partner
By: | U.S. Property Fund IV GmbH & Co., KG , |
A German limited partnership
Exhibit G, Page 1 |
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
Exhibit G, Page 2 |
EXHIBIT H
Intentionally Omitted
Exhibit H, Page 1 |
EXHIBIT I-1
FORM OF TITLE AFFIDAVIT
Dated as of: __ ___, 2014
Title Order No.
The undersigned (“ Owner ’) hereby represents and warrants as follows to and for the benefit of First American Title Insurance Company (the “ Title Company ”):
1. Representatives of Owner have reviewed the preliminary report/commitment with an effective date of ___ , 2014 (the “ Title Report ”).
2. To the knowledge of Owner, there are no unrecorded leases or occupancy agreements affecting the property described in Schedule A of the Title Report (the “ Property ”), or other parties in possession of the Property, except for the lease with the tenant shown on Exhibit A attached hereto.
3. To the knowledge of Owner, there are no unrecorded claims against the Property, nor any set of facts by reason of which Owner’s title to the Property might be disputed or questioned except for (a) the lease with the tenant shown on Exhibit A , (b) matters shown on the Title Report, (c) matters as disclosed on the survey previously delivered to the Title Company, and (d) current taxes not delinquent. To the knowledge of Owner and except as aforesaid, Owner has been in peaceable and undisputed possession of the Property since title was acquired.
4. Except as set forth on Exhibit B attached hereto:
(a) within the last six (6) months, Owner has not (i) made, ordered or contracted for any construction, repairs, alterations or improvements to be made on or to the Property which have not been paid for in full, (ii) ordered materials for any such construction, repairs, alterations or improvements which have not been paid for in full, or (iii) attached any fixtures to the Property which have not been paid for in full; and
(b) there are no outstanding or disputed claims for any work or item referred to in paragraph (a) .
5. To the knowledge of Owner, Owner has not received written notice of any violation of any covenants, conditions or restrictions of record affecting the Property and there are no disputes with any adjoining property owners as to the location of property lines, or the encroachment of any improvements.
All references herein to the “ knowledge ” of Owner or words of similar import shall refer only to the actual knowledge of James L. Street and Gregory Killeen, and shall not be construed to refer to the knowledge of any other officer, director, shareholder, employee, agent or representative of Owner, any direct or indirect owner of any beneficial interest in Owner, or any affiliate of any of the foregoing, or to impose or have imposed upon such individuals any duty to investigate the matters to which such knowledge, or the absence thereof, pertains. There shall be no personal liability on the part of the aforementioned individuals arising out of any representations or warranties made herein.
Exhibit I-1, Page 1 |
This affidavit is made for the purpose of aiding the Title Company in determining the insurability of title to the Property, and to induce the Title Company to issue its policy of title insurance and for no other purpose. This affidavit may be relied upon by the Title Company but may not be relied upon by any other person or entity.
[Remainder of page intentionally blank]
Exhibit I-1, Page 2 |
IN WITNESS WHEREOF, Owner has executed this affidavit as of the date first set forth above.
USPF IV Laurel Retail Owner, L.P. , a Delaware limited partnership
By: | USPF IV Laurel Retail GP LLC, |
A Delaware limited liability company, its general partner
By: | U.S. Property Fund IV GmbH & Co., KG , |
A German limited partnership
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
Exhibit I-1, Page 3 |
EXHIBIT I-2
FORM OF GAP INDEMNITY
Dated as of: ___ ___, 2014
Title Order No.
Title Commitment Effective Date: ___ , 2014
WHEREAS, First American Title Insurance Company (the “ Title Company ”) has been asked to issue its owner’s policy(ies) of title insurance in the aggregate amount of $_____ in favor of ARCP [TBD], LLC , a Delaware limited liability company (“ Buyer ”) covering premises being acquired from USPF IV LAUREL RETAIL OWNER. L.P. , a Delaware limited partnership (“ Seller ”) as more particularly described in Exhibit A attached hereto (the “ Real Property ”);
AND WHEREAS, the Title Company is unwilling to give title insurance coverage to Buyer with respect to the Real Property until the instruments under which Buyer acquires title are filed for record in the appropriate registry;
AND WHEREAS, the parties to the transaction have requested that the Title Company disburse amounts to Seller that the Title Company holds in escrow prior to such time as the deed for the Real Property is recorded in the applicable records of New York County, New York;
NOW, THEREFORE, it is agreed that in consideration of the Title Company issuing its title insurance policy to Buyer effective as of the date closing occurs without making exception therein to matters which may arise between the Title Commitment Effective Date referenced above (being the last effective date of the title insurance commitment issued by the Title Company in connection with Buyer’s title insurance) and the date the documents creating the interest being insured have been filed for record and which matters may constitute an encumbrance on or affect said title, Seller agrees to promptly defend, remove, bond or otherwise dispose of any encumbrance, lien or objectionable matter to title caused by the acts of Seller, its agents or representatives which may arise or to be filed, as the case may be, against the Real Property during the period of time between the Title Commitment Effective Date referenced above and the date of recording of all closing instruments, and to hold harmless, and indemnify the Title Company against all expenses, costs, and reasonable attorneys’ fees, which may arise out of Seller’s failure to so remove, bond or otherwise dispose of any said liens, encumbrances or objectionable matters caused by the acts of Seller, its agents or representatives; provided , however , the Title Company shall use good faith and diligent efforts to cause all documents to be recorded as soon as possible but, in any event, no later than three (3) business days after the date hereof and Seller shall have no obligations or liability hereunder with respect to any objections to title which may arise or be filed after such three (3) business day period nor shall Seller have any obligations or liability hereunder with respect to any objections to title which may arise or be filed as a result of the acts or by permission of Buyer, its agents or representatives.
This indemnity is given to induce the Title Company to issue its policy of title insurance and for no other purpose. This indemnity may be relied upon by the Title Company but may not be relied upon, and is not enforceable, by any other person or entity.
Exhibit I-2, Page 1 |
IN WITNESS WHEREOF, Seller has executed this Gap Indemnity as the date first set forth above.
USPF IV Laurel Retail Owner, L.P. , a Delaware limited partnership
By: | USPF IV Laurel Retail GP LLC, |
A Delaware limited liability company, its general partner
By: | U.S. Property Fund IV GmbH & Co., KG , |
A German limited partnership
By: | USPF IV-Verwaltungs-GmbH & Co., KG, |
A German limited partnership, its sole general partner
By: | TMW USPF-Verwaltungs-GmbH, |
A German corporation, its sole general partner
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
By: | _________________________________ |
As attorney-in-fact pursuant to that certain
Power of Attorney dated July 30, 2014
Exhibit I-2, Page 2 |
EXHIBIT J
INTENTIONALLY OMITTED
Exhibit J, Page 1 |
EXHIBIT K
FORM OF TENANT ESTOPPEL CERTIFICATE
TENANT’S ESTOPPEL CERTIFICATE
LEASE: | Lease dated as of October 5, 2007 between 1240 First Avenue LLC, as owner, and Cornell University for and on behalf of its Joan & Sanford I. Weill Medical College, as tenant (the “Lease”) |
LEASED PREMISES: | Space on the ground floor, the second floor and basement levels 1 and 2 in the building erected at 1240 First Avenue, New York, New York (collectively, the “Premises”) |
LANDLORD: | USPF IV Laurel Retail Owner, L.P. (“Landlord”) |
TENANT: | Cornell University for and on behalf of its Joan and Sanford I. Weill Medical College (“Tenant”) |
This Estoppel Certificate (“Estoppel Certificate”) is given to Landlord, ___________________________ and any permitted assignee (“Buyer”) and any lender (“Lender”) to which the Buyer or any party described in the foregoing clause grants a deed of trust, mortgage or other lien upon the Property (defined below) (together, the “Benefitted Parties”), by Tenant with the understanding that the Benefitted Parties will rely on this Estoppel Certificate in connection with Buyer’s acquisition of, and Lender’s financing of, the Commercial Units (including the Premises) of the Property known as “The Laurel,” located at 1240 First Avenue, New York, New York (the “Property”). All capitalized terms not otherwise defined herein shall have the meanings provided in the Lease.
In consideration of Buyer’s intended purchase of the Property and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Tenant hereby certifies to the Benefitted Parties as follows:
1. | The Lease is in full force and effect and has not been amended, modified or supplemented except pursuant to that certain stipulation of settlement dated July 6, 2011 relating to that certain proceeding entitled 1240 First Avenue LLC v. Cornell University, Civil Court, New York County, Index Number L&T 77596/09 (the “Stipulation of Settlement”). Tenant is in material compliance with all terms and conditions of the Stipulation of Settlement and has neither given nor received written notice that it or the plaintiff under such litigation is in breach or default of such terms or conditions. There are no other agreements or understandings, whether written or oral, between Tenant and Landlord with respect to the Lease, the Premises or the Property. |
2. | The Commencement Date is March 1, 2008, the Rent Commencement Date is July 1, 2009 and the Expiration Date is June 30, 2024, subject to the following renewal options: three (3) successive five (5)-year options to renew. |
Exhibit K, Page 1 |
3. | The minimum annual Base Rent presently payable under the Lease is at the following rates for the periods indicated: (i) $2,000,000.00 per annum for the period commencing on the Rent Commencement Date through and including the day immediately preceding the fifth (5th) anniversary of the Rent Commencement Date; (ii) $2,300,000.00 per annum for the period commencing on the fifth (5th) anniversary of the Rent Commencement Date through and including the day immediately preceding the tenth (10th) anniversary of the Rent Commencement Date; and (iii) $2,645,000.00 per annum for the period commencing on the tenth (1Oth) anniversary of the Rent Commencement Date through and including the Expiration Date. The current monthly Base Rent is $166,666.67 and has been paid through August 31, 2011. |
4. | Additional rent in respect of escalations in Taxes has been paid through June 30, 2012. Tenant’s obligation to pay additional rent on account of increases in Condominium Common Charges commenced on July 6, 2011 but no such charges have yet been billed to Tenant. All additional rent billed to Tenant to date has been paid. There are no pending disputes or contests between Landlord and Tenant in respect of additional rent payable under the Lease. |
5. | No rent has been or will be paid more than (1) month in advance of its due date. |
6. | The base year for Condominium Common Charges is the calendar year 2009. The base year for Taxes is the July 1, 2010 - June 30, 2011 fiscal year of the City of New York. |
7. | There is no security deposit under the Lease. |
8. | All work required to be performed to the Premises by Landlord under the Lease has been completed, however, there is a single meter measuring the heated and chilled water for all of the retail space and one sub-meter after the retail space meter which measures the hot and chilled water delivered to the TD Bank space. As a result, the only way to accurately measure the Tenant’s use of hot and chilled water is to take the meter reading of the retail space meter minus the meter reading of the TD Bank meter (TD Bank and the Tenant are the only retail space tenants). All payments, free rent or other credits, allowances or abatements required to be &riven under the Lease to Tenant with respect to work to be performed to the Premises by Tenant have been received by Tenant. Tenant has accepted possession of and is in physical occupancy of the entire Premises. |
9. | The Lease or any rights in or to the Premises have not been assigned, subleased, transferred or otherwise hypothecated. The undersigned does not have (a) any option or preferential right to purchase all or any part of the Premises or the Property, or (b) any right title or interest with respect to the Premises or the Property other than as tenant under the Lease. |
10. | To the best of Tenant’s knowledge: (i) there exists no breach, default or event or condition which, with the giving of notice or the passage of time or both, would constitute a breach or default by Tenant or Landlord under the Lease; and (ii) Tenant has no existing claims, defenses or offsets against rental due or to become due under the Lease. |
Exhibit K, Page 2 |
11. | No actions, whether voluntary or otherwise, are pending against Tenant under the bankruptcy laws of the United States or any state. |
12. | Tenant has no option to expand, rent additional space within the Property or any right of first refusal with regard to any additional space within the Property. Tenant has no right to occupy any additional space at the Property. |
13. | Lender shall not be liable for or bound by any modification or amendment of the Lease, or any waiver of any terms of the Lease. that (i) materially modifies the economic terms of the Lease, or (ii) materially and adversely affects Landlord’s obligations under the Lease or Lender’s rights, duties or obligations, unless such modification, amendment, or waiver is consented to in writing by Lender. |
14. | Tenant is not aware of the presence of any hazardous materials at the Premises or the Property. Tenant represents that, to the best of its knowledge, it has not brought any hazardous materials into the Premises or the Property, nor to the best of its knowledge, has it caused or permitted any affiliate or third party to do so. |
The person executing this certificate on behalf of Tenant is duly authorized to execute this certificate. This certificate is binding on Tenant and its successors and assigns and may be relied upon by Lender and its successors and assigns, any purchaser of the Premises, and any lender of said Purchaser.
Executed by Tenant on ____________, 2014
TENANT:
CORNELL UNIVERSITY FOR AND ON
BEHALF
OF ITS JOAN & SANFORD I. WEILL
MEDICAL COLLEGE
BY: ______________________________
Name:
Title:
Exhibit K, Page 3 |
TENANT’S ESTOPPEL CERTIFICATE
LEASE: | Lease dated as of March 30, 2009 between 1240 First Avenue LLC, as owner, and Quik Park East 67th Street LLC, as tenant (the “Lease”) |
LEASED PREMISES: | The-garage space in the building erected at 1240 First Avenue, New York, New York (the “Premises”) |
LANDLORD: | USPF IV Laurel Retail Owner, L.P. (“Landlord”) |
TENANT: | Quik Park East 67th Street LLC (“Tenant”) |
This Estoppel Certificate (“Estoppel Certificate”) is given to Landlord, _______________ (“Buyer”) and any lender (“Lender”) to which the Buyer or any party described in the foregoing clause grants a deed of trust, mortgage or other lien upon the Property (defined below) (together, the “Benefitted Parties”), by Tenant with the understanding that the Benefitted Parties will rely on this Estoppel Certificate in connection with Buyer’s acquisition of, and Lender’s financing of, the Commercial Units (including the Premises) of the Property known as “The Laurel,” located at 1240 First Avenue, New York, New York (the “Property”). All capitalized terms not otherwise defined herein shall have the meanings provided in the Lease.
In consideration of Buyer’s intended purchase of the Property and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Tenant hereby certifies to the Benefitted Parties as follows:
1. | The Lease is in full force and effect and has not been amended, modified or supplemented |
2. | The Commencement Date is August 21, 2009, the Rent Commencement Date is February 17, 2010 and the Expiration Date is November 30, 2011. Tenant has no renewal options. |
3. | The minimum Fixed Rent payable under the Lease is at the rate of $54,166.67 per month. Tenant has paid Rent through _______________ except that Tenant has paid Net Profit Additional Rent through _____________. |
4. | No Additional Rent in respect of Tenant’s Tax Payment is currently due or payable. Any other Additional Rent billed to Tenant to date has been paid. There are no pending disputes or contests between Landlord and Tenant in respect of Additional Rent payable under the Lease. |
5. | No Rent has been or will be paid more than (1) month in advance of its due date. |
6. | The base year for Taxes is the July 1, 2009- June 30, 2010 fiscal year of the City of New York. |
Exhibit K, Page 4 |
7. | Tenant has delivered a letter of credit in the amount of $162,500.00. To the extent applicable, Tenant waives collection of the deposit against Lender or any purchaser at a foreclosure sale, unless Lender or such purchaser actually receives the deposit from Landlord. |
8. | All work required to be performed to the Premises by Landlord under the Lease has been completed. All payments, free rent or other credits, allowances or abatements required to be given under the Lease to Tenant with respect to work to be performed to the Premises by Tenant have been received by Tenant. Tenant has accepted possession of and is in physical occupancy of the entire Premises. |
9. | The Lease or any rights in or to the Premises have not been assigned, subleased, transferred or otherwise hypothecated. The undersigned does not have (a) any option or preferential right to purchase all or any part of the Premises or the Property, or (b) any right, title or interest with respect to the Premises or the Property other than as tenant under the Lease. |
10. | To the best of Tenant’s knowledge: (i) there exists no breach, default or event or condition which, with the giving of notice or the passage of time or both, would constitute a breach or default by Tenant or Landlord under the Lease; and (ii) Tenant has no existing claims, defenses or offsets against rental due or to become due under the Lease. |
11. | No actions, whether voluntary or otherwise, are pending against Tenant under the bankruptcy laws of the United States or any state. |
12. | Tenant has no option to expand, rent additional space within the Property or any right of first refusal with regard to any additional space within the Property. Tenant has no right to occupy any additional space at the Property. |
13. | Lender shall not be liable for or bound by any modification or amendment of the Lease, or any waiver of any terms of the Lease, that (i) materially modifies the economic terms of the Lease, or (ii) materially and adversely affects Landlord’s obligations under the Lease or Lender’s rights, duties or obligations, unless such modification, amendment, or waiver is consented to in writing by Lender. |
14. | Attached hereto as Exhibit A is a true copy of the Lease. |
The person executing this certificate on behalf of Tenant is duly authorized to execute this certificate. This certificate is binding on Tenant arid its successors and assigns and may be relied upon by Lender and its successors and assigns, any purchaser of the Premises, and any lender of said Purchaser.
Executed by Tenant on _______, 2014.
Exhibit K, Page 5 |
TENANT:
QUIK PARK EAST 67 th STREET LLC
By: ______________________________
Name:
Title:
Exhibit K, Page 6 |
TENANT'S ESTOPPEL CERTIFICATE
TO: | CERTIFICATE HOLDER: USPF IV Laurel Retail Owner, L.P. and [INSERT BUYER] |
RE: | LEASE AGREEMENT |
DATED: | January 8, 20 I 0, as amended by a Letter Agreement dated March 17, 2010, as amended by Subordination, Non-Disturbance and Attornment Agreement dated March 23, 2010, as amended by a Letter Agreement dated March 29, 2010, as amended by an Estoppel Certificate dated December 16, 2010, as amended by an Estoppel Certificate dated April 13, 2011, (herein after referred to as the "Lease") |
TENANT: | TD BANK, N.A. |
TENANT'S NOTICE ADDRESS:
TD Bank,N.A
Enterprise Real Estate I Lease Administration
12000 Horizon Way
Mount Laurel, NJ 08054
cc: | TD Bank, N.A. Legal Department |
75 John Roberts Road
Building A
South Portland, ME 041 06
Attn: Real Estate Attorney
LANDLORD: | USPF IV Laurel Retail Owner, L.P. |
PREMISES: | 1240 First Avenue | |
Retail Unit #2 | ||
New York, NY |
As of the date listed below, Tenant hereby certifies the following to the Certificate Holder, to Tenant's present knowledge:
1. | The Lease is in full force and effect. |
2. | Except as provided on Exhibit A, (i) any improvements to the Premises required by the Lease to be provided by Landlord prior to delivery to Tenant have been completed in accordance with the provisions of the Lease, (ii) Tenant has accepted the Premises and the improvements thereto and has taken possession of the Premises; and (iii) the Construction Allowance (as defined in the Lease), if any, has been paid to Tenant. |
3. | Except as provided on Exhibit A, Landlord is not in default of the Lease, and no event has occurred and no situation exists which, with notice or the passage of time or both, would constitute a default by Landlord under the Lease. Except as provided on Exhibit A, no setoffs or credits against rent have presently accrued. Tenant has no present knowledge of any circumstances which would give rise to any setoff or credit against rental obligations, and Tenant has no defenses to enforcement of any of Tenant's covenants or obligations under the Lease. |
Exhibit K, Page 7 |
4. | Except as provided on Exhibit A, Tenant has not assigned or sublet the Premises, or transferred its interest under the Lease. |
5. | The Lease is for a term beginning and ending on the dates specified on Exhibit A. Tenant has option(s) to extend the term of the Lease for the period(s) set forth on Exhibit A. |
6. | The Lease has not been modified, altered or amended except as provided above and contains the entire existing agreement between Landlord and Tenant. |
7. | Rent currently payable by the Tenant under the Lease is specified on Exhibit A and has been paid through the date listed on Exhibit A. |
8. | Tenant has made no payment to Landlord as a security deposit except as indicated on Exhibit A and Tenant has not prepaid any rent under the Lease more than thirty (30) days prior to its due date. |
9. | As of the date hereof, no actions, whether voluntary or otherwise, are pending against Tenant under the bankruptcy laws of the United States or any state thereof. |
10. | Tenant does not have any preferential right or option to purchase all or any part of the Premises except as provided in the Lease. |
11. | Except as provided on Exhibit A, there are no uncured defaults by Tenant under the Lease, and no event has occurred and no situation exists which, with notice or the passage of time or both, would constitute a default by Tenant under the Lease. |
Tenant makes the foregoing statements subject to the following qualifications: (i) Tenant has not verified the presence and/or absence of any particular co-tenancy in the Shopping Center and makes no representation concerning co-tenancy or the present availability of any rent concessions and/or termination right resulting from the failure of any co-tenancy requirement; (ii) Tenant has not verified whether the manner or nature of the use of other tenants' premises entitles Tenant to any rent concessions and/or termination right and makes no representation with respect thereto; (iii) Tenant does not represent that any specific item billed to Tenant by Landlord under any additional rent or other charges section or article of the Lease (e.g., common area maintenance charges, real estate taxes, insurance charges, electricity, HVAC and the like) is proper and appropriate since Tenant has not audited Landlord's books and records; (iv) Tenant may be entitled to certain late delivery credits and/or rent abatements or credits pursuant to the terms of the Lease which are not described on Exhibit A hereto; and (v) Tenant shall not be subject to any liability in damages or otherwise if any statement made by Tenant herein is found to be untrue.
DATED: ____ , 2014
Exhibit K, Page 8 |
TENANT:
TD BANK, N.A.
By: _____________________________
Elizabeth Anela, Vice President,
Lease Administration Lead
Exhibit K, Page 9 |
ESTOPPEL
EXHIBIT A
1240 First Avenue
Retail Unit #2
New York, NY
This Exhibit is an integral part of the Tenant's Estoppel Certificate to which the Exhibit is attached, given by Tenant to USPF IV Laurel Retail Owner, L.P. and [INSERT BUYER] ("Certificate Holder") as of August 11, 2011.
Exhibit K, Page 10 |
EXHIBIT L
Intentionally Deleted
Exhibit L, Page 1 |
EXHIBIT M
EXCEPTIONS TO SELLER’S WARRANTIES
Liens on Personal Property
None
Notices of Litigation
None
Notices of Contract Defaults
None
Notices of Governmental Violations
None
Notices of Lease Defaults
None
Exhibit M, Page 1 |
EXHIBIT N
SECURITY DEPOSITS
TD Bank – None.
Cornell University – None.
Quik Park - $162,000 Letter of Credit
Exhibit N, Page 1 |
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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
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full, fair, accurate, timely, and understandable disclosure in the periodic reports required to be filed by the Company;
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compliance with applicable governmental rules and regulations; and
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accountability for adherence to this Code.
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Make sure you have all the facts.
To reach the right solutions, we must be as fully informed as possible.
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Ask yourself:
What specifically am I being asked to do? Does it seem unethical or improper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
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Clarify your responsibility and role.
In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
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Discuss the problem with your supervisor.
This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Remember that it is your supervisor’s responsibility to help solve problems.
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Seek help from Company resources.
In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it with your supervisor’s superior or the chief executive officer.
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Always ask first, act later.
If you are unsure of what to do in any situation, seek guidance before you act.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital New York City REIT, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated this 14th day of August, 2014
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/s/ Nicholas S. Schorsch
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Nicholas S. Schorsch
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Chief Executive Office and
Chairman of the Board of Directors
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(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital New York City REIT, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated this 14th day of August, 2014
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/s/ Gregory W. Sullivan
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Gregory W. Sullivan
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Chief Operating Officer and Chief Financial Officer
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(Principal Financial Officer and Principal Accounting Officer)
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/s/ Nicholas S. Schorsch
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Nicholas S. Schorsch
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Chief Executive Officer and Chairman of the Board of Directors
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(Principal Executive Officer)
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/s/ Gregory W. Sullivan
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Gregory W. Sullivan
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Chief Operating Officer and Chief Financial Officer
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(Principal Financial Officer and Principal Accounting Officer)
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